CONTROL IN THE AREA OF PROCUREMENT - RUSSIAN FEDERATION FEDERAL LAW ON THE CONTRACT SYSTEM IN S

Article 99. Control in the area of procurement

1. In accordance with this Federal Law and other laws and regulations, legal acts defining the functions and powers of state and municipal authorities control in the area of procurement shall be exercised by the following control authorities within their powers:

1) federal government agency authorized to exercise control in the area of procurement, control authority in the area of the state defence order, government agencies of the constituent entity of the Russian Federation, local government authorities of the municipal district, local governments authorities of the urban district authorized to exercise control in the area of procurement;

2) federal government agency performing law enforcement functions for cash service of implementation of the budgets of the Russian Federation budget system, financial authorities of the constituent entities of the Russian Federation and municipal entities, bodies for management of the

state non-budgetary funds;

3) internal state (municipal) financial control authorities defined in accordance with the Fiscal Code of the Russian Federation.

2. Control in the area of procurement shall be exercised in relation to customers, contract services, contract managers, procurement commissions and their members, competent authorities, authorized agencies, specialized organisations, operators of electronic trading platforms (hereinafter, the control entities).

3. Control in the area of procurement, except for the control provided for by Parts 5, 8 and 10 of this Article, subject to Part 4 of this Article shall be exercised by:

1) the federal government agency authorized to exercise control in the area of procurement through:

а) scheduled inspection in relation to customers, contract services, contract managers, procurement commissions and their members, competent authorities, authorized agencies in procurement for federal needs, in relation to specialized organizations exercising certain powers in procurement for federal needs under this Federal Law, in relation to operators of electronic trading platforms;

b) unscheduled inspections in relation to the control entities;

2) the government agency of the constituent entity of the Russian Federation authorized to exercise control in the area of procurement through:

а) scheduled inspection in relation to customers, contract services, contract managers, procurement commissions and their members, competent authorities, authorized agencies in procurement for needs of the constituent entity of the Russian Federation, in relation to specialized organizations exercising certain powers in procurement for needs of the constituent entity of the Russian Federation under this Federal Law;

b) unscheduled inspection in relation to customers, contract services, contract managers, procurement commissions and their members, competent authorities, authorized agencies in procurement for needs of the constituent entity of the Russian Federation and municipal needs of municipal entities within the territory of the Russian Federation constituent entity, in relation to specialized organizations exercising certain powers in procurement for needs of the constituent entity of the Russian Federation and municipal entities within the territory of the Russian Federation constituent entity under this Federal Law;

3) the local government authority of the municipal or urban district authorized to exercise control in the area of procurement through scheduled and unscheduled inspections in relation to customers, contract services, contract managers, procurement commissions and their members, competent authorities, authorized agencies in procurement for municipal needs, in relation to specialized organizations exercising certain powers in procurement for municipal needs under this Federal Law.

4. Control in relation to operators of electronic trading platforms, as well as in relation to other regulated entities (customers, contract services, contract managers, procurement commissions and their members, competent authorities, authorized agencies, specialized organizations) during an electronic auction (upon placing notice of an electronic auction in the unified information system up to conclusion of the contract) shall be exercised by the federal government agency authorized to exercise control in the area of procurement, control authority in the area of the state defence order.

(Part 5 of Article 99 shall become effective as of January 1, 2016 (Article 114 hereof).

5. The federal government agency performing law enforcement functions for cash service of implementation of the budgets of the Russian Federation budget system, financial authorities of the constituent entities of the Russian Federation and municipal entities, bodies for management of the state non-budgetary funds shall control:

1) compliance of information about the amount of financial support included in procurement plans with information about the amount of financial support for procurement approved and presented to the customer;

2) compliance of information about identification codes and the amount of procurement for this

procurement included financial support for the implementation of this procurement contained in:

a) in schedule plans with the information contained in procurement plans;

b) in notices of procurement, procurement documents with the information contained in the scheduled plans;

c) in the supplier (contractor, performer) selection reports with the information contained in procurement documentation;

d) in terms of draft contracts sent to participants of procurement, with which contracts are concluded, with the information contained in the supplier (contractor, performer) selection reports;

e) in the register of contracts concluded by customers with contractual terms.

6. Procedure for exercising the control provided for by the Part 5 of this Article including the procedure for actions of control authorities when revealing non-conformance of controlled information shall be established by the Government of the Russian Federation. In addition to the information specified in Part 5 of this Article other information subject to the control may be determined in accordance with such a procedure by the Government of the Russian Federation.

7. Based on the agreements with bodies for management of the state non-budgetary funds, supreme government agencies of the constituent entities of the Russian Federation, local administrations powers to exercise control provided for by Part 5 of this Article of bodies for management of the state non-budgetary funds, financial authorities of the constituent entities of the Russian Federation, financial authorities of municipal entities respectively can be delegated to the federal government agency performing law enforcement functions for cash service of implementation of the budgets of the Russian Federation budget system.

8. Internal state (municipal) financial control authorities shall exercise control in relation to:

Paragraph 1 of Part 8 of Article 99 shall become effective as of January 1, 2016 (Article 114 hereof).

1) compliance with the requirements for justification of procurement provided for by Article 18 of this Federal Law in forming procurement plans and justification;

2) standardization in the area of procurement provided for by Article 19 of this Federal Law in procurement planning;

3) determination and substantiation of the initial (maximum) contract price, price of the contract concluded with the sole supplier (contractor, performer) in forming scheduled plans;

4) application of sanctions and commission of other actions by the customer in the event of violation of the contract by the supplier (contractor, performer);

5) conformity of goods delivered, work performed (result thereof) or service rendered with the contract terms;

6) timeliness, completeness and accuracy of recognition of goods delivered, work performed (result thereof) or service rendered;

7) conformity of using goods delivered, work performed (result thereof) or service rendered with the procurement objectives.

9. Control in the area of procurement in accordance with Part 8 of this Article shall be exercised in order to establish the legitimacy of managing budgets of the Russian Federation budget system in relation to the costs associated with the procurement, accuracy of accounting of such costs and reporting in accordance with this Federal Law, the Fiscal Code of the Russian Federation and laws and regulations of the Russian Federation adopted in accordance therewith by:

1) the federal government agency authorized to exercise the internal state financial control in relation to procurement for federal needs;

2) the government agency of the constituent entity of the Russian Federation authorized to exercise the internal state financial control in relation to procurement for needs of the constituent entity of the Russian Federation;

3) the local government authority of the municipal entity authorized to exercise internal municipal

financial control in relation to procurement for municipal needs.

10. Control authority in the area of the state defence order shall exercise control in the area of procurement, except for the control provided for by Parts 5 and 8 of this Article, through scheduled and unscheduled inspections in relation to the control entities specified in Part 2 of this Article in the area of procurement as part of the state defence order, as well as in procurement of goods, works and services for federal needs, which do not relate to the state defence order and information constituting a state secret, and shall exercise control under this Federal Law in relation to:

1) compliance with the requirements for justification of procurement made as part of the state defence order;

2) standardization in the area of procurement provided for by Article 19 of this Federal Law in procurement as part of the state defence order;

3) determination and substantiation of the initial (maximum) contract price, price of the contract concluded with the sole supplier (contractor, performer) in procurement as part of the state defence order;

4) application of sanctions and commission of other actions by the customer in the event of violation of the contract terms by the supplier (contractor, performer) in procurement as part of the state defence order;

5) conformity of goods delivered, work performed (result thereof) or service rendered in procurement as part of the state defence order with the contract terms;

6) timeliness, completeness and accuracy of recognition of goods delivered, work performed (result thereof) or service rendered in procurement as part of the state defence order;

7) conformity of using the goods delivered, work performed (result thereof) or service rendered in procurement as part of the state defence order with the procurement objectives.

11. Government of the Russian Federation, the supreme government agency of the constituent entity of the Russian Federation, local administration establish procedure for exercising the control of compliance with this Federal Law by the relevant internal state (municipal) financial control authorities.

This procedure provides for in particular:

1) grounds, procedure for organisation, object, form, timing, frequency of inspections of control entities and presentation of the results of such inspections;

2) procedure, deadlines for submission of, compliance with, revocation of the control authority instructions;

3) a list of the officials authorized to conduct inspections, their rights, obligations and responsibilities;

4) procedure for actions of control authorities and their officials in case the control entities do not comply with the control authority instructions, as well as when obtaining information about actions (inaction) bearing the elements of an administrative or criminal offence committed by the control entities;

5) procedure for use of the unified information system, as well as document management in the unified information system upon exercising the control.

12. The results of evaluation of procurement participant applications shall not be subject to control during scheduled and unscheduled inspections in accordance with the criteria established in paragraphs 3 and 4 of Part 1 of Article 32 of this Federal Law. Such results may be challenged in a judicial procedure by procurement participants.

13. Scheduled inspections in relation to each customer, contract service of the customer, contract manager, standing procurement commission and its members, competent authority, authorized agency, operators of electronic trading platforms shall be conducted by the control authority in the area of procurement not oftener than once in six months.

14. Scheduled inspections shall be conducted in relation to each specialized organisation, procurement commission, except for the commission specified in Part 13 of this Article by the control authority in the area of procurement not oftener than once during the period of each supplier (contractor, performer) selection.

15. The control authority in the area of procurement shall conduct unscheduled inspections on the following grounds:

1) receiving of a complaint about actions (inaction) of the customer, the competent authority, the authorized agency, the specialized organization, the operator of the electronic trading platform or the procurement commission, its members, officials of the contract service, the contract manager made by a procurement participant or public association or association of legal entities exercising public control.

Such a complaint shall be considered in accordance with the procedure established by Chapter 6 of this Federal Law. If the unscheduled inspection is conducted based on the procurement participant complaint, unified decision shall be made according to the results of the mentioned inspection and consideration of such a complaint;

2) input of information about violation of the Russian Federation legislation of and other laws and regulations on the contract system in the area of procurement;

3) expiration of the deadline for compliance with the instructions previously issued in accordance with paragraph 2 of Part 22 of this Article.

16. The unscheduled inspection on the ground specified in paragraph 3 of Part 15 of this Article shall be conducted by the control authority in the area of procurement that issued the instructions in accordance with paragraph 2 of Part 22 of this Article, compliance with which is controlled.

17. Decisions of the local government authority of the municipal district or local government authority of the urban district authorized to exercise control in the area of procurement made according to the results of schedules and (or) unscheduled inspection can not contradict the decisions of the federal government agency, government agency of the constituent entity of the Russian Federation authorized to exercise control in the area of procurement made according to the results of unscheduled inspections of the same procurement.

18. A decision of government agency of the constituent entity of the Russian Federation authorized to exercise control in the area of procurement made according to the results of schedules and (or) unscheduled inspection can not contradict a decision of the federal executive body authorized to exercise control in the area of procurement made according to the results of unscheduled inspections of the same procurement.

19. When taking a decision according to the results of the unscheduled inspection conducted by the federal government agency authorized to exercise control in the area of procurement, the arguments contained in the decisions previously made by the government agency of the constituent entity of the Russian Federation, the local government authority of the municipal district or the local government authority of the urban district authorized to exercise control in the area of procurement according to the results of scheduled and (or) unscheduled inspections, the object of which is the same planned or made procurement, are subject to consideration and evaluation. If the federal government agency, government agency of the constituent entity of the Russian Federation, local government authority of the municipal district or the local government authority of the urban district authorized to exercise control in the area of procurement according to the results of scheduled and (or) unscheduled inspections conducted in accordance with Part 3 of this Article made decisions on the same action (inaction) of the control entities related to the same procurement, a decision made by the federal government agency authorized to exercise control in the area of procurement shall be implemented.

20. When making a decision according to the results of the unscheduled inspection conducted by the government agency of the constituent entity of the Russian Federation authorized to exercise control in the area of procurement, the arguments contained in the decisions previously made by the local government authority of the municipal district or the local government authority of the urban district authorized to exercise control in the area of procurement according to the results of scheduled and (or) unscheduled inspections, the object of which is the same planned or made procurement, are subject to consideration and evaluation. If the government agency of the constituent entity of the Russian Federation, local government authority of the municipal district or the local government authority of the urban district authorized to exercise control in the area of procurement according to the results of scheduled and (or) unscheduled inspections conducted in accordance with Part 3 of this Article made decisions on the same action (inaction) of the control entities related to the same procurement, a decision made by the government agency of the constituent entity of the Russian Federation authorized to exercise control in the area of procurement shall be implemented.

21. Information about scheduled and unscheduled inspections conducted by control authorities in

the area of procurement, about their results and issued instructions is placed in the register of complaints, scheduled and unscheduled inspections, decisions made in relation to them and instructions issued. Procedure for maintenance of this register, which includes, in particular, a list of documents and information placed, deadline for placement of such documents and information in this register shall be approved by the Government of the Russian Federation.

22. When detecting violations of the Russian Federation legislation and other laws and regulations on the contract system in the area of procurement as result of scheduled and unscheduled inspections conducted by the control authority in the area of procurement, as well as consideration of a complaint about actions (inaction) of the customer, the competent authority, the authorized agency, the specialized organization, the operator of the electronic trading platform or the procurement commission, the control authority in the area of procurement may:

1) prepare reports on administrative offences involving violations of the Russian Federation legislation and other laws and regulations on the contract system in the area of procurement, consider cases concerning such administrative offences and take measures to prevent them in accordance with the legislation on administrative offences;

2) issue binding instructions to rectify such violations in accordance with the Russian Federation legislation, as well as to cancel the supplier (contractor, performer) selection;

3) file actions for invalidation of procurement made in accordance with the Civil Code of the Russian Federation with a court, an arbitration court.

23. The instruction to rectify violations of the Russian Federation legislation and other laws and regulations on the contract system in the area of procurement issued in accordance with paragraph 2 of Part 22 of this Article shall specify actions that should be committed by a person who has received such an instruction to rectify the mentioned violation. The contract may not be concluded prior to the date of compliance with such an instruction.

24. Within three working days upon the date of issuance of the instructions in accordance with paragraph 2 of Part 22 of this Article the control authority in the area of procurement must place this instruction in the unified information system.

25. In case of receipt of the information about failure to comply with the instructions issued in accordance with paragraph 2 of Part 22 of this Article the control authority in the area of procurement may apply sanctions to that person who has not complied with such instructions in accordance with the Russian Federation legislation.

26. During scheduled and unscheduled inspections the officials of the control authority in the area of procurement may request and receive the documents and information necessary for the inspection based on the motivated written request in accordance with their powers, as well as shall have the right to unimpeded access to the premises and territories occupied by customers, specialized organizations, operators of electronic trading platforms upon the presentation of staff passes and the order (direction) of the head (deputy heads) of the mentioned authority concerning such inspections to receive

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