On claims for recognition as an unscrupulous participant in public procurement and collection of penalties

Jurisdiction.

In accordance with Article 29 of the CPC, lawsuits in public procurement disputes are filed at the location of the defendant. By virtue of the first part of Article 27 of the CPC, cases on public procurement disputes in which the parties are citizens engaged in business activities without forming a legal entity are considered by specialized inter-district economic courts.

Claims arising from public procurement contracts that specify the place of execution, at the choice of the plaintiff, are also filed at the place of execution of the contract in accordance with part six of Article 30 of the CPC.

In accordance with paragraph 1 of Article 24, paragraph 4 of Article 32, paragraph 4 of Article 38 of the Law, the submission of an application for participation in public procurement (price offer) is a form of agreement with the requirements and conditions established by the tender documentation. In this regard, claims for recognition of a potential supplier as an unscrupulous participant in public procurement conducted by these methods, at the choice of the plaintiff, may also be filed at the place of performance of the contract.

Definition of the legal relations of the parties and the law to be followed.

In accordance with subparagraph 3) According to paragraph 1 of Article 12 of the Law, one of the types of registers in the field of public procurement formed by the authorized body is the register of unscrupulous participants in public procurement.

In turn, according to the first part of paragraph 4 of Article 12 of the Law, the register of unscrupulous participants in public procurement is a list:

1) suppliers with whom the customers unilaterally terminated public procurement contracts, during the execution of which it was established that the supplier did not meet the qualification requirements and requirements of the tender documentation (auction documentation) or provided false information about his compliance with such requirements, which allowed him to become the winner of the tender (auction), the results of which concluded such an agreement;

2) potential suppliers identified by the winners (potential suppliers who took second place) who evaded the conclusion of a public procurement contract;

3) suppliers who have not fulfilled or improperly fulfilled their obligations under the public procurement contracts concluded with them.

However, by virtue of paragraph 5 of Article 12 of the Law, on the basis of court decisions that have entered into force, the register of unscrupulous participants in public procurement is formed only in the cases provided for in subparagraphs 1) and 3) of the first paragraph of paragraph 4 of this article.

The register of unscrupulous participants in public procurement on the grounds provided for in subparagraph 2) Paragraph 4 of Article 12 of the Law is formed on the basis of the decision of the authorized body on recognition of potential suppliers as unfair participants in public procurement. Consequently, in the case of a lawsuit to recognize a potential supplier as an unscrupulous participant in public procurement on this basis, in accordance with subparagraph 1) In the first part of Article 151 of the CPC, the judge refuses to accept the statement of claim, since it is not subject to consideration and resolution in civil proceedings, and if such a claim is accepted by the court, the proceedings in the case are subject to termination in accordance with subparagraph 1) of Article 277 of the CPC.

When considering cases of this category, courts should take into account that the legal relations of the parties in cases related to the recognition of suppliers as unfair participants in public procurement arise from the application of the Law when organizing and conducting a public procurement tender, submitting applications and documents for participation in a tender by a potential supplier, and concluding and executing public procurement contracts.

Thus, the subject of the dispute is the dishonesty (illegality) of suppliers' actions when participating in a public procurement tender, concluding and executing public procurement contracts.

The basis of the claim filed with the court is violations of the requirements of the law committed by the supplier (potential supplier), which led to the recognition of the potential supplier as the winner, violation or improper fulfillment by the supplier of obligations under the public procurement contract.

Persons involved in the case.

The plaintiff is the customer – state bodies, state institutions, as well as state-owned enterprises, legal entities, fifty or more percent of the voting shares (participation shares in the authorized capital) of which belong to the state, and legal entities affiliated with them, with the exception of national management holdings, national holdings, national management companies, national companies and legal entities affiliated with them, The National Bank of the Republic of Kazakhstan, its departments, organizations within the structure of the National Bank of the Republic of Kazakhstan, and legal entities, fifty or more percent of the voting shares (stakes in the authorized capital) of which belong to the National Bank of the Republic of Kazakhstan or are in its trust management, and legal entities affiliated with them (subparagraph 27) of Article 2 of the Law);

The obligation of the customer to file a lawsuit to recognize a potential supplier or supplier as an unscrupulous participant in public procurement in the cases established by subitems 1) and 3) of the first part of paragraph 4 of Article 12 of the Law is established by the norms of the second part of paragraph 4 of Article 12 of the Law.

Respondent is a potential supplier who participated in a tender for public procurement of goods, works or services; a supplier with whom a public procurement contract has been concluded.

According to subparagraph 2) of article 2 of the Law, a potential supplier may be a person applying for a public procurement contract.:

- an individual engaged in entrepreneurial activity,

- a legal entity (with the exception of government agencies, unless otherwise provided for by law;

- temporary association of legal entities (consortium),

- an individual who is not a business entity, in the case of the customer's purchase of a dwelling owned by such an individual.

Facts to be established and proved. Evidence and proof.

In this category of cases, in the preparatory part of the process, it is proposed that the judge also carry out the following procedural actions:

- to find out from the applicant (potential supplier) information about his out-of-court appeal to the authorized body or to the state audit and financial control body of actions (omissions) of decisions of tender commissions in the field of public procurement, with a proposal to submit supporting documents about this, as well as the final decisions of these bodies. If it is difficult for the applicant to provide such documents, resolve the issue of requesting these documents by the court from the persons whose actions are being challenged.;

- resolution of the issue of the circle of persons involved in the case, the need to involve in the case (including at the initiative of the court) and other persons whose rights and interests may be affected by the application under consideration;

- clarification by the court of the requirements of the norms of Article 72 of the CPC on assigning the duty of proof in cases specified in Chapter 29 of the CPC to organizations, officials whose acts, actions (inaction) are being appealed.

When resolving and considering cases of the above category of applications, the judge must take into account the reduced time limits for their consideration – 10 working days from the date of completion of the preparation of the case for trial in accordance with part two of Article 183 of the CPC (Terms of consideration and resolution of civil cases by the court of first instance).

When considering this category of cases, it is necessary to establish whether the supplier has obligations under the public procurement contract on the basis of the public procurement contract that has entered into force.

Thus, according to paragraph 1 of article 46 of the Law, a public procurement contract comes into force after it is signed by the customer and the supplier or the latter fully ensures the execution of the public procurement contract provided for in the tender documentation (auction documentation). If the public procurement contract is subject to registration, it shall enter into force after its registration in accordance with the legislation of the Republic of Kazakhstan.

If the potential supplier, recognized as the winner or runner-up, has not submitted a signed public procurement contract to the customer within the time limits established by Law, or, having concluded a public procurement contract, has not provided security for the execution of the public procurement contract and (or) the amount in accordance with article 26 of the Law, then according to paragraph 1 of Article 44 of the Law Such a potential supplier is recognized as having evaded the conclusion of a public procurement contract. Consequently, it is the prerogative of the authorized state body to resolve the issue of including such a potential supplier in the register of unscrupulous participants in public procurement by virtue of the second part of paragraph 5 of Article 12 of the Law.

Courts should also determine whether a public procurement contract has been registered, in cases where it is subject to registration.

Paragraph 5 of Article 96 of the Budget Code establishes that civil law transactions of state institutions enter into force after their mandatory registration in the territorial divisions of the central authorized body for budget execution.

Example. The Judicial Board for Civil Cases of the Supreme Court upheld the judicial acts issued by local courts in a civil case on the claim of the State Institution "DIA" for recognizing LLP "A" as an unscrupulous participant in public procurement.

The claim was motivated by the failure of LLP "A" to fulfill the obligations established by the contract for the development of design and estimate documentation for the metal fence of the administrative building.

The courts found that LLP "A", having failed to fulfill its obligations within the time period specified in the contract, subsequently sent a letter of refusal to perform the work to the State Institution "DVD".

The courts refused to satisfy the claim, since the public procurement contract was not registered with the treasury authorities in accordance with the requirements of the Law and the norms of the Budget Code, therefore, this contract did not enter into force and LLP "A" had no obligations to the State Enterprise "DIA".

The Judicial Board of the Supreme Court recognized the conclusions of the courts as justified, since, according to paragraph 1 of Article 96 of the Budget Code, state institutions assume obligations on the specifics of the economic classification of expenses both with and without the conclusion of civil law transactions.

The need to register the public procurement contract concluded between the State Enterprise "DIA" and LLP "V" follows from the content of paragraph 4 of Article 97 of the Budget Code, according to which payments and money transfers are not allowed without a registered civil law transaction according to the specification of the economic classification of expenses for which the registration of concluded civil law transactions it is mandatory.

The list of specifics of the economic classification of expenses, including the types of expenses for which registration of concluded civil law transactions is mandatory, is determined by the central authorized body for budget execution.

By Order of the Minister of Finance No. 588 dated December 19, 2008, which was in force during the period of the tender on public procurement of services and the conclusion of the contract with the defendant, a List of specifics of the economic classification of expenses was approved, including the types of expenses for which registration of concluded civil law transactions is mandatory (hereinafter referred to as the List).

From the content of the public procurement agreement concluded between the State Enterprise "DIA" and LLP "A", it follows that the amount for payment for services under the agreement is allocated from the regional budget according to the specifics of 159 "Payment for other services and works".

The specified specifics are attributed by the List to expenses for which registration of concluded civil law transactions is mandatory.

The agreement concluded between the parties in this case is not classified as a civil law transaction, registration of which is not required in accordance with the note to the specifics of 159 of the List.

Thus, there were no legal grounds for satisfying the claim of the State Institution "DVD".

With regard to subparagraph 1) of paragraph 4 of article 12 of the Law, the courts should in each case establish the reasons why the customers unilaterally terminated the public procurement contract with the supplier.

The law establishes 3 such reasons:

- establishment of non-compliance of the supplier with the qualification requirements;

- establishment of the supplier's non-compliance with the requirements of the tender documentation;

- providing false information about compliance with qualification requirements or requirements of the tender documentation.

An exhaustive list of qualification requirements for potential suppliers is established by paragraph 1 of Article 9 of the Law.

Example.

The court's decision satisfied the claim of the State Institution "Akim's Office of the district of K" for recognition of LLP "C" as an unfair participant in public procurement in connection with the defendant's submission of false information on qualification requirements when submitting an application for participation in the competition.

It was established that when announcing an electronic tender for public procurement of works on the improvement of courtyards and adjacent territories of houses of participants in the program "Modernization of housing and communal services", one of the special qualification requirements was the availability of the necessary special equipment – a bulldozer with a capacity of 118 kW.

LLP "C", having submitted an application for participation in the competition, indicated in the qualification information about the availability of a bulldozer leased from LLP "A".

By the protocol on the results of public procurement, LLP "S" was recognized as the winner of the competition and a public procurement contract was concluded with it.

An inspection of the application of legislation on public procurement conducted by the prosecutor's office of the K. district established that the bulldozer specified by LLP "C" in the qualification information as leased from LLP "A" was removed from registration by the authorized body before the conclusion of the lease agreement and the announcement of the public procurement tender and could not be owned by LLP "A", and, accordingly, could not be the subject of a lease under an agreement concluded with LLP "S".

Thus, the presentation of false information on compliance with qualification requirements served as the basis for recognizing LLP "S" as an unscrupulous participant in public procurement.

Courts should keep in mind that, by virtue of paragraph 6 of article 9 of the Law, this list also applies to legal entities that a potential supplier intends to involve as subcontractors for the performance of work or co-executors for the provision of services that are the subject of ongoing public procurement.

Along with meeting the qualification requirements, the application for participation in the tender must contain reliable information about the absence of violations of the restrictions provided for in article 6 of the Law allowing participation in public procurement.

The establishment of such facts after the conclusion of a public procurement contract is the basis for its termination in accordance with subparagraph 1) of paragraph 19 of Article 43 of the Law and applying to the court for recognition of the supplier who concluded this contract as an unfair participant in public procurement.

Example.

The State Institution "Construction Management" filed a lawsuit with the court to recognize LLP "P" as an unscrupulous participant in public procurement of works on the construction of the facility, since the control conducted by the authorized body established the fact that the defendant provided false information.

The court, having established that LLP "P" participated as a sub-designer in the development of design estimates for the construction of the facility, by virtue of subparagraph 2) of paragraph 1 of Article 6 of the Law, could not participate as a potential supplier in the public procurement tender for the construction of the facility.

With regard to subparagraph 3) of paragraph 4 of Article 12 of the Law, when considering cases on recognizing suppliers as unfair participants in public procurement in connection with non-fulfillment or improper fulfillment of their obligations under public procurement contracts concluded with them, it is necessary to proceed from the terms of the contract concluded between the parties.

At the same time, it should be borne in mind that the concept of improper performance of an obligation is contained in paragraph 1 of Article 349 of the Civil Code, which includes the performance of an obligation untimely, with deficiencies in goods and works, with violations of other conditions determined by the content of the obligation.

However, not every improper fulfillment of an obligation by a supplier may result in its recognition as an unscrupulous participant in public procurement.

Thus, in accordance with paragraph 5 of the regulatory decree of the Supreme Court "On the Application of legislation on public Procurement by Courts", when considering claims for recognizing suppliers who have failed to fulfill or improperly fulfilled their obligations under public procurement contracts concluded with them as unscrupulous participants in public procurement, the courts must take into account the supplier's guilt as the basis of civil law liability in accordance with Article 359 of the Civil Code and the resulting negative consequences for the customer, based on the criteria of fairness and reasonableness in accordance with part six of Article 6 of the CPC. Negative consequences should be understood as causing such damage to a party to a contract that it has largely lost what it was entitled to expect when concluding the contract (paragraph 2 of Article 401 of the Civil Code).

Example.

The Judicial Board for Civil Cases of the Supreme Court considered a case on the claim of RSU "G" to LLP "B" for recognition as an unscrupulous participant in public procurement in connection with the defendant's violation of the delivery time of goods.

It follows from the case file that a public procurement contract was concluded between RSU "G" and LLP "V", under the terms of which LLP "V" undertook to supply furniture to military units.

Subsequently, an additional agreement was signed between the parties to extend the delivery time of the goods.

It is established that LLP "B" violated the terms of delivery of the goods provided for in the contract and the additional agreement to it from 2 to 15 days. However, all the goods were accepted by the commission, and the plaintiff has no complaints about the quality and quantity of the delivered goods.

According to the payment order, the defendant has paid the amount of the penalty for late delivery of the goods.

The courts of the first and appellate instances, satisfying the claims, proceeded from the established fact of violation by LLP "B" of the delivery time of the goods, the requirements of Article 272 of the Civil Code on the fulfillment of obligations properly in accordance with the terms of the obligation and the requirements of the law.

The Judicial Board of the Supreme Court overturned the judicial acts issued in this case and made a new decision to dismiss the claim, pointing out that the courts, when considering the case, should not have proceeded solely from the fact of improper fulfillment of the obligations of LLP "V", but were obliged to clarify the issue of the contractor's guilt and the negative consequences for the customer. The courts did not take into account that the actual delivery of the goods to the customer was carried out, the Russian State Institution "G" accepted the goods without any complaints about their quality and assortment, which is confirmed by the acts of acceptance of the goods. Improper fulfillment of the obligations of LLP "V" entailed its financial liability in the form of payment of a penalty. The absence of negative consequences and damage caused to the customer is not a reason for recognizing LLP "V" as an unscrupulous participant in public procurement.

It should be noted that, despite the establishment of the existence of grounds for recognizing a supplier (potential supplier) as an unscrupulous participant in public procurement, such a claim is not always subject to satisfaction.

Thus, according to the second part of paragraph 4 of Article 12 of the Law, in the cases specified in subparagraphs 1) and 3) of the first paragraph, the customer is obliged, no later than thirty calendar days from the day when he became aware of the fact that the supplier violated the legislation of the Republic of Kazakhstan on public procurement, to file a lawsuit with the court for recognition of such a potential a supplier or supplier by an unscrupulous participant in public procurement.

According to paragraph 3 of the Supreme Court's regulatory resolution No. 5 dated December 14, 2012 "On the application of Legislation on public Procurement by Courts", these deadlines are prohibitive, the expiration of which is the basis for refusing to satisfy an application for recognition of a potential supplier as an unscrupulous participant in public procurement.

Example.

The Judicial Board for Civil Cases of the Supreme Court annulled judicial acts of local courts on the refusal to satisfy the claim of RSU "N" to LLP "S" for recognition as an unfair participant in public procurement.

It has been established that the parties have concluded an agreement on public procurement of services for the shipment of registered mail, under which S LLP has undertaken to ensure timely receipt and shipment of the customer's shipments across the territory of the Republic of Kazakhstan, CIS countries and far abroad in accordance with the annexes to the agreement, as well as on time and conditions stipulated by by agreement. According to Appendix No. 1 to the contract, the period for the provision of services on the territory of the Republic of Kazakhstan is 3-5 business days.

The case materials confirmed the late fulfillment by S LLP of its obligations to deliver shipments to the recipients T., S. and M.

The local courts, having established the fact of violation of the obligations assumed by LLP "S", at the same time, as an independent reason for rejecting the claim, indicated the omission of the pre-trial period for applying to the court, established by paragraph 4 of Article 11 of the Law.

The conclusions of the local courts were found to be not based on the law and the factual circumstances of the case.

Indeed, on August 25, 2016, RSU "N" became aware of the violation of contractual obligations by LLP "S" during the delivery of postal correspondence to T. and S., whereas the lawsuit was filed on September 29, 2016.

At the same time, the conclusions of the courts that the subsequent violation of the delay in the delivery of M.'s correspondence, which the plaintiff became aware of on September 8, 2016, has no legal significance for the case under consideration, were recognized by the judicial board for civil cases of the Supreme Court as unfounded, since the RSU "N" requirement to recognize LLP "S" as an unscrupulous participant in state For the first time in the present case, the Ministry of Public Procurement stated all the cases of violations of its obligations during the period of validity of the public procurement contract. Each case is an independent violation of the terms of the contract and, accordingly, could be an independent basis for filing a claim for recognition of the supplier as an unscrupulous participant in public procurement.

In this regard, the judicial board for civil Cases of the Supreme Court, having established that each of the facts of violations indicated in the statement of claim is subject to mandatory, appropriate legal assessment, including in terms of time, recognized the violations committed by S LLP as evidence of its bad faith. Since, based on the moment of the admission of the last violation of the obligations of S LLP, the claim was filed within the time limit established by Law, the claims of RSU "N" are satisfied.

When filing claims for recognition of a supplier as an unscrupulous participant in public procurement, the plaintiffs may simultaneously file claims for the recovery of penalties in connection with the defendant's violation of obligations under the contract.

According to paragraph 13 of article 43 of the Law, a public procurement contract must provide for a penalty (fine, fine) for non-fulfillment or improper fulfillment of obligations under a public procurement contract. The amount of the penalty is determined in accordance with the civil legislation of the Republic of Kazakhstan.

The list of the main documents attached to the statement of claim

In accordance with the requirements of Article 149 of the CPC, including documents confirming the circumstances on which the plaintiff bases his claims.:

- a copy of the tender documentation developed by the customer (organizer of public procurement), posted on the web portal of public procurement, the list of which is set out in paragraph 2 of Article 12 of the Law of December 4, 2015 "On Public Procurement";

- if it is impossible to submit documents, the plaintiff's request for evidence from the defendant is attached to the statement of claim in accordance with subparagraph 6) of the first part of Article 149 of the CPC.;

- a copy of the application of the plaintiff (potential supplier) for participation in the competition, as well as copies of the documents submitted by the potential supplier for participation in the competition when submitting the application;

- a copy of the protocol of preliminary admission to participate in the competition;

- protocol on the results of public procurement;

- a copy of the concluded public procurement contract;

- claims of the customer sent to the supplier and other correspondence that took place between the parties in the process of fulfilling the obligations of the parties under the public procurement contract;

- invoices, acts of completed works, acts of acceptance and transfer of goods, works or services,

- other documents that, in the plaintiff's opinion, confirm the unreasonableness of the refusal of the customer (organizer) to participate in the competition or the rejection of the tender application;

- copies of the charter, certificate or certificate of state registration (re-registration), if the claim is filed by a legal entity, or a copy of the identity document and the document on registration as an individual entrepreneur, if the claim is filed by an individual entrepreneur.

The statement of claim, filed in the form of an electronic document, shall be accompanied in electronic form by copies of the documents specified in the first part of Article 149 of the CPC.

Laws to be applied in the consideration and resolution of cases

The Constitution.

GK.

GPC.

The Business Code.

The Budget Code.

The Environmental Code.

Laws:

- dated December 4, 2015 "On Public Procurement" (hereinafter referred to as the Law);

- dated July 16, 2001 No. 242-II "On Architectural, urban planning and construction activities in the Republic of Kazakhstan";

- dated November 9, 2004, No. 603 "On Technical Regulation";

- dated March 15, 1999, No. 349-I "On State Secrets";

- May 16, 2014 No. 202-V "On Permits and Notifications";

- dated November 12, 2015 No. 392-V "On State Audit and Financial Control".

Normative Resolution of the Supreme Court of December 14, 2012 No. 5 "On the application of legislation on public procurement by courts".

Government Resolutions:

- dated April 2, 2014 No. 300 "On the formation of the Public Procurement Committee of the Ministry of Finance of the Republic of Kazakhstan";

- dated December 31, 2015, No. 1200 "On Public Procurement using a special procedure".

Orders of the Minister of Finance:

- No. 648 dated December 11, 2015 "On Approval of the Rules for Public Procurement" (hereinafter referred to as the Rules for Public Procurement);

- No. 694 dated December 28, 2015 "On Approval of the Rules for the Formation and Maintenance of Registers in the field of public procurement";

-dated February 22, 2017 No. 130 "On approval of the List of goods, works, and services for which the organization and conduct of public procurement is carried out by a single organizer";

- dated February 29, 2016 No. 91 "On Approval of the List of Goods, Works, and Services for which Public Procurement is carried out by Means of a Tender with Preliminary Qualification Selection and Amendments and Additions to the Order of the Minister of Finance of the Republic of Kazakhstan dated December 28, 2015 No. 694 "On Approval of the Rules for the Formation and Maintenance of Registers in the field of public procurement"

 

 

 

 

 

 

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