Ministry of Finance of the Republic of Kazakhstan

SYSTEMOF STATE PROCUREMENT

IN KAZAKHSTAN

ASTANA

2017

Institutional Structure of the Public Procurement System

of the Republic of Kazakhstan

Web portalwww.goszakup.gov.kz

Ministry of Finance of the Republic of Kazakhstan

MethodologyTechnical Support

Web PortalMonitoring

Department of Public Procurement Legislation

LLP “Center of Electronic Commerce” Committee for Internal State Audit

Customers Suppliers

State InstitutionsState-owned Enterprises

JSCs, LLPs at Central State and Local Exec. bodies Total: over 20 thousand

Legal EntitiesIndividual Entrepreneurs

Total: about 110 thousand

Other Controlling Bodies

Accounting CommitteeProsecution authorities, state

bureaus, etc.Auditing

CommissionsInternal Audit Services

Single Organizer

Public Procurement Committee

LEGAL FRAMEWORKThe Eurasian Economic Union (EAEU) Treaty (Article 88 and Annex 25)WTO CommitmentsLaw “On Public Procurement” and by-laws of the Republic of Kazakhstan

GENERAL FIGURESAnnual Volume (average): 2.5–3.2 trln tengeNumber of customers: over 20 thousand Number of potential suppliers: about 110 thousand

HISTORY1. Law on Public Procurement of 1997. 2. Law on Public Procurement of 2002.3. Law on Public Procurement of 2007.4. Law on Public Procurement of 2015.

1

1.Preliminary Annual PlanThis allows customers to initiate procurement procedures based on the positive conclusion by the budgeting commission without waiting for the approval of the budget.

2.Preliminary Discussion of Technical SpecificationsPreliminary Discussion is a prerequisite for approval of the technical specification. This allows the suppliers to familiarize themselves with the project in advance and, if there are any comments, appeal against it.

3.Preliminary Clearance ProtocolThis allows suppliers to finalize the tender application within 3 days.

4.Mutual Review of ApplicationsMutual review of applications ensures transparency and allows evaluating feasibility of the decisions made by the customer.

5.Contract Conclusion Waiting Period (5 working days)If complaint is received within this period, the concluding of the contract is suspended for the period of consideration (10 working days).

6. Exceptionally Electronic Format of Public Procurement

All public procurement processes from planning to payments are carried out in electronic format only.

Progressive Norms of the Law

2

Advantages of the New PlatformHigh resistance to loads

Adaptability of business processes to

any changes in the PPL

Risk Management System

+ Remote Desk Review

Open source technologies

Simplified use of EDSs

+ Vendor price encryption

Easy integration with data

recipient systems

Availability of national staff for further

support and development of the system

Import substitution

Annual saving of over $ 1 mln

on tenders only

Low computing requirements (no

need to purchase powerful servers)

3

In the Past

Now

— electronic format

— paper format

Automation of procurement processes

4

PREVENTIVITY

of Desk Review

2015г. 2016г.

Кол-во конкурсов, охваченных контролем

Кол-во выявленных нарушений

70,000

8,500

201,000

40,000

Камеральным контролем

3 times more

DESK REVIEW COVERS 100 % OF TENDERS

5 times more

The review is carried out online, without visiting the site.

9,200

0

TOTAL COST OF VIOLATIONS KZT 232 BLN

NUMBER OF DEFENDATNTS

— violations detected POST FACTUM

Over10,000

986

TOTAL COST OF PREVENTED VIOLATIONS

KZT 370 BLN

NUMBER OF EXEMPTOF LIABILITY

— violations detected at EARLY STAGES

Number of entities having eliminated violations following

the desk review reports

2015

2016

For the purposes of quality desk review, fromJuly 2016, the review is applied to the tenderswith the cost over KZT 5 mln (about 90 % ofthe total amount of procurement undertenders).

5

Number of tenders covered by the reviewNumber of violations detected

2015 2016

Every othertender

documentundergoeschanges!

Number of Complaints

Accepted Tender Applications

6

3778TDs

3396

Ts

Измененные КД

Без изменений

7174 TDs

Results of Preliminary Discussion of Tender Documents

2016

40%

60%60%

40%

2015г. 2016г.

Не подтвержденные жалобы

Подтвержденные жалобы

4 377

8 359Number of complaints

increased2 times!

40%

70%

60%

30%

2015г. 2016г.

отклоненные заявки

допущенные заявки

102 083

446 438

4 timesmore!

2015г. 2016г.

3 timesmore

Conditional Savings

43 BLN

130 BLN

Changed TDsUnchanged TDs

Not confirmed complaints

Confirmed complaints

Rejected applications

Accepted applications

2015 2016

2015 2016

2015 2016