On the application of legislation on public procurement by courts
Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan dated April 21, 2022 No. 4
In connection with the issues that have arisen in judicial practice when considering disputes on public procurement, in order to ensure the correct and uniform application of legislation, the plenary session of the Supreme Court of the Republic of Kazakhstan decides to provide the following clarifications:
According to Article 3 of the Law of the Republic of Kazakhstan dated December 4, 2015 No. 434-V "On Public Procurement" (hereinafter referred to as the Law), the legislation of the Republic of Kazakhstan on public procurement is based on the Constitution of the Republic of Kazakhstan (hereinafter referred to as the Constitution) and consists of the norms of the Civil Code of the Republic of Kazakhstan (hereinafter referred to as the Civil Code), the Law and other regulatory legal acts acts of the Republic of Kazakhstan.
When considering cases of this category, courts should be guided by the Law, and in matters not regulated by Law, by the norms of the Civil Code, the Civil Procedure Code of the Republic of Kazakhstan (hereinafter referred to as the CPC), the Administrative Procedural Procedure Code of the Republic of Kazakhstan (hereinafter referred to as the APPC), and the Law of the Republic of Kazakhstan dated November 12, 2015 No. 392-V "On State Audit and Financial Control Act" (hereinafter referred to as the Law on State Audit) and other regulatory acts. Courts should distinguish between disputes arising in the process of selecting a supplier and concluding a public procurement contract with him, the procedure for which is regulated by the rules of the CPC, and disputes arising from a public procurement contract, which are considered in civil proceedings in accordance with the norms of the CPC.
If an international treaty ratified by the Republic of Kazakhstan establishes rules other than those provided for by Law, the rules of the international treaty shall apply. In accordance with paragraph 3 of article 4 of the Constitution, international treaties ratified by the Republic have priority over its laws.
In accordance with Article 29 of the CPC, claims arising from public procurement contracts are filed at the location of the defendant.
Claims arising from public procurement contracts that specify the place of execution may also be filed at the place of execution of the contract, at the choice of the plaintiff, in accordance with part six of Article 30 of the CPC.
In accordance with paragraph 1 of Article 24, paragraph 4 of Article 38 of the Law, the submission of an application for participation in public procurement (price offer) is a form of consent to supply goods, perform work, and provide services in accordance 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.
Challenging the results of public procurement, decisions of the authorized body on the inclusion of a potential supplier in the register of unscrupulous participants in public procurement, as well as decisions, conclusions, instructions, notifications of the authorized body based on the results of the audit of public procurement, is carried out in accordance with the procedure provided for in part three of Article 106 of the CPC, at the place of residence (location) of the plaintiff.
If the plaintiff, along with the claim for recognition of the results of the tender as illegal, demands that the concluded public procurement contract be declared invalid on this basis, then such claims are subject to joint consideration in a specialized interdistrict administrative court, taking into account the requirements of part three of Article 84, part three of Article 155, part two of Article 156 of the CPC.
In this case, regarding the claim for invalidation of the contract, the plaintiff is not required to comply with the pre-trial dispute settlement procedure provided for in the contract.
Claims of a potential supplier against actions (inaction), decisions of the customer, the organizer of public procurement, the single organizer of public procurement, commissions, an expert, a single operator in the field of public procurement, as well as actions (inaction), decisions of the authorized body and bodies of state audit and financial control are subject to consideration by a specialized interdistrict administrative court.
Claims of organizers of public procurement, customers related to the application of subitems 1) and 3) of the first part of paragraph 4 of Article 12 of the Law, as well as claims arising from the execution of public procurement contracts, are subject to consideration by a specialized interdistrict economic court.
Claims challenging the decision of the authorized body to recognize a potential supplier as an unscrupulous participant in public procurement, recognized as such in accordance with subparagraph 2) The first part of paragraph 4 of Article 12 of the Law is subject to review by a specialized interdistrict administrative court.
The bodies that have established the fact that a potential supplier has provided false information on qualification requirements and (or) documents affecting the competitive price offer, the customer, in the case provided for in paragraph 4 of Article 12 of the Law, are obliged, within the time limits established by Law, to file a lawsuit with the court to recognize the potential supplier (supplier) as an unscrupulous participant in public procurement.
These deadlines are restrictive, the expiration of which is the basis for refusing to satisfy the application for recognition of a potential supplier as an unscrupulous participant in public procurement.
By virtue of subparagraph 1) of paragraph 1 of Article 12 of the Law, the authorized body shall form and maintain the republican register of unscrupulous participants in public procurement. In this regard, in accordance with subparagraph 1) According to the first part of Article 151 of the CPC, the judge should refuse to accept a claim for inclusion in the register of unscrupulous participants in public procurement under subparagraph 2) of the first part of paragraph 4 of Article 12 of the Law as not subject to consideration and resolution in civil proceedings. If the claim is accepted by the court, the court issues a ruling on the termination of the proceedings in this part on the basis of subparagraph 1) of Article 277 of the CPC. Upon receipt of such a claim in a specialized interdistrict administrative court, on the basis of subparagraph 11) of part two of Article 138 of the CPC, the court (judge) issues a ruling on the return of the claim as not subject to consideration in administrative proceedings.
The courts should keep in mind that the Annexes to the Rules for Public Procurement, approved by the Order of the Minister of Finance of the Republic of Kazakhstan dated December 11, 2015 No. 648 (hereinafter referred to as the Rules), approved a number of Standard Contracts (a Standard contract for public procurement of services provided for by a state social order, a Standard contract for Public Procurement of Goods, a Standard Contract for public procurement of services and others) (hereinafter referred to as the Standard Contract).
All Standard Contracts provide for a "Dispute resolution" section with identical content, according to which the Customer and the Supplier must make every effort during direct negotiations to resolve all disagreements or disputes arising between them under or in connection with the public procurement contract. If, after such negotiations, the Customer and the Supplier are unable to resolve the dispute under the contract, either party may request a resolution of this issue in accordance with the legislation of the Republic of Kazakhstan.
The parties, having signed a Standard Contract on these terms, follow the prescribed procedure for pre-trial dispute settlement.
Consequently, when filing a claim, the plaintiff is obliged to attach documents confirming compliance with the procedure for preliminary pre-trial settlement of the dispute provided for in the contract.
The absence of relevant evidence confirming compliance with the procedure for preliminary pre-trial or out-of-court dispute settlement is the basis for returning the claim on the basis of subparagraph 1) of the first part of Article 152 of the CPC.
These provisions do not apply to claims for recognition of a potential supplier (supplier) as an unscrupulous participant in public procurement.
In accordance with paragraph 24 of article 43 of the Law, in case of non-fulfillment or improper fulfillment of obligations assumed by the supplier under the public procurement contract, the customer ensures the recovery of penalties (fines, penalties).
The procedure for collecting penalties is regulated by the Rules. The standard contract on public procurement of goods contains a provision stating that in case of delay in the delivery of Goods, the Customer withholds (collects) a penalty (fine, fine) from the Supplier in the amount of 0.1% of the total amount of the Contract for each day of delay in case of complete non-fulfillment by the supplier of obligations, or withholds (collects) a penalty (fine, fine) in the amount of 0.1% of the amount of outstanding obligations for each day of delay in case of improper fulfillment (partial non-fulfillment) of obligations. In this case, the total amount of the penalty (fine, fine) should not exceed 10% of the total amount of the contract. All Standard Contracts contain similar conditions. After signing the contract, these conditions are binding on the parties and the customer has the right to deduct the penalty from the amount of the contract to be paid. Before applying to the court for a penalty, the customer follows the procedure for the preliminary pre-trial settlement of the dispute, taking into account the terms of the agreement on the procedure for resolving disputes. When filing a claim for the recovery of a penalty, the customer is obliged to indicate the circumstances preventing the self-retention of the penalty.
The grounds for forming a register of unscrupulous participants in public procurement are established by paragraph 4 of article 12 of the Law, this list of grounds is exhaustive and cannot be interpreted broadly.
When considering administrative claims against decisions of the authorized body on the inclusion of a potential supplier (supplier) in the register of unscrupulous participants in public procurement, in connection with evasion from concluding a public procurement contract, the courts should proceed from the requirements of paragraph 3 of Article 43 of the Law, which establishes the obligation of the winner of public procurement to sign the contract.
If the contract is not signed, the potential supplier must prove that he took all necessary measures to sign it, but due to objective circumstances beyond his control, he was unable to sign it.
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 for civil liability in accordance with Article 359 of the Civil Code and the negative consequences for the customer, based on the criteria of fairness and reasonableness. according to the fifth part 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). Additional agreements concluded by the parties to the public procurement contract regarding changes in the deadline for work are also subject to evaluation by the courts. Article 45 of the Law establishes the grounds for making amendments to the draft public procurement contract or the concluded public procurement contract. In this regard, the courts should keep in mind that if the parties have not amended the contract, design estimates in accordance with paragraphs 7), 8), 9) paragraph 2 of Article 45 of the Law, the reference to additional agreements regarding the modification of the deadline provided for in the concluded public procurement contract is unreasonable.
In accordance with paragraph 1 of Article 11 of the Law, a potential supplier or supplier is recognized as an unscrupulous participant in public procurement when it is established that false information has been provided on qualification requirements and (or) documents affecting the competitive price offer.
Courts need to distinguish this fact from the failure or submission of an improperly executed document(s) on qualification requirements, which, according to subparagraph 1) of paragraph 1 of Article 10 of the Law, are the basis for recognizing a potential supplier as not meeting the qualification requirements.
In accordance with paragraph 6 of Article 9 of the Law, the qualification requirements established by subparagraphs 1), 2), 3) of the first paragraph of paragraph 1 of Article 9 also apply to individuals and 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.
A potential supplier who intends to involve subcontractors (co-executors) of works or services must submit to the organizer of public procurement documents confirming the compliance of the subcontractors (co-executors) with the qualification requirements. A potential supplier who involves subcontractors (co-executors) to participate in public procurement is responsible for the accuracy of the information provided, including subcontractors (co-executors), when submitting bids. In case of providing false information by the subcontractor (co-executor), the potential supplier or supplier is also subject to recognition as an unscrupulous participant in public procurement in accordance with paragraph 1 of Article 11 of the Law.
Based on paragraph 1 of Article 11 of the Law, a potential supplier or supplier may be recognized as an unscrupulous participant in public procurement when providing false information.:
1) according to the qualification requirements;
2) according to the documents affecting the competitive price offer.
In these cases, any false information regarding qualification requirements and/or documents affecting the competitive price offer is the basis for recognizing the supplier as an unfair participant in public procurement.
The documents affecting the competitive price offer include documents containing information on: whether a potential supplier has experience in the market of goods, works, and services that are the subject of public procurement over the past ten years preceding the current year; on the indicators of taxes paid; on the functional, technical, qualitative, and operational characteristics of the goods. and (or) the costs of operation, maintenance and repair of the purchased goods.
The criteria affecting the competitive price offer and their calculation are determined by the Rules.
In accordance with paragraph 2 of Article 43 of the Law, the Customer sends to the winner a draft public procurement contract, certified with an electronic digital signature through the public procurement web portal.:
1) within five working days from the date of expiry of the time limit for appealing the protocol on the results of public procurement by means of a tender (auction);
2) within five working days from the date of determining the winner of public procurement by requesting price proposals.
In cases where the procedures for selecting a supplier, including procedures for appealing the results of public procurement conducted under the preliminary annual public procurement plan, are completed before the approval of the relevant budget (development plan), the draft public procurement contract is sent to the winner within five working days from the date of approval of the relevant budget (development plan).
The draft public procurement contract must be certified by the winner of the public procurement by means of a tender, auction, request for price proposals through an electronic digital signature within three working days from the date of receipt on the public procurement web portal of the notification with the attachment of the draft public procurement contract.
Upon filing an administrative claim for the cancellation of the order of the authorized body on the inclusion of a potential supplier in the register of unscrupulous participants in public procurement on the grounds of evading the conclusion of a public procurement contract, the customer, in accordance with subparagraph 1) According to the second part of Article 129 of the CPC, he is obliged to provide evidence of sending them a draft contract and notification of the need to sign a draft public procurement contract. The obligation to send the contract is considered to have been duly fulfilled by the customer or the single organizer if there is evidence that the potential supplier has received a notification on the public procurement web portal about the need to sign a draft public procurement contract (the contract approval log received from the web portal) or the reasons for his failure to fulfill the obligation to send a draft contract and (or) notification of the need signing of the draft public procurement contract within the time limit prescribed by law.
Failure by the customer to fulfill the obligation assigned to him to send a draft public procurement contract to a potential supplier and a notification of the need to sign a draft public procurement contract is the basis for satisfying an administrative claim to cancel the order of the authorized body to include the potential supplier in the register of unscrupulous participants in public procurement on the grounds of evading the conclusion of the contract.
Courts should keep in mind that an administrative claim for the cancellation of an order of an authorized body to include a potential supplier in the register of unscrupulous participants in public procurement on the grounds of evading the conclusion of a contract is not subject to satisfaction in cases of receipt from a potential supplier.:
written refusal to conclude an agreement;
proposals for amendments to the essential terms of the agreement;
any other written request, the execution of which prevents the customer from concluding a contract on the terms specified in the announcement of public procurement.
Inconsistency in the description of the characteristics of the purchased goods (works, services) indicated in the information posted on the public procurement web portal in accordance with paragraph 1 of Article 38 of the Law, with the actual terms of the draft contract submitted by the customer for conclusion, exempts the potential supplier from concluding the contract and excludes the inclusion of the potential supplier in the register of unscrupulous participants in public procurement grounds for evading the conclusion of a public procurement contract.
According to paragraph 4 of article 43 of the Law, the requirements for concluding a public procurement contract through the public procurement web portal do not apply to the cases provided for in paragraphs 4), 9), 17), 18), 20), 21), 23), 26), 31), 32), 35), 40), 41) of paragraph 3 of Article 39 and Article 50 of the Law.
Courts should take these features into account when considering disputes arising on the basis of a public procurement tender, which are regulated by the Rules for Public Procurement using a Special Procedure approved by Resolution No. 1200 of the Government of the Republic of Kazakhstan dated December 31, 2015, and disputes where procurement was carried out on a general basis.
Formation of the register of unscrupulous participants in public procurement provided for in subparagraph 2) paragraph 4 of Article 12 of the Law, potential suppliers who evaded the conclusion of a public procurement contract, on the basis of a decision of the authorized body, is not applicable to legal relations arising in the framework of public procurement using a special procedure.
Since the web portal of public procurement does not contain data on a tender conducted using a special procedure, therefore, claims for recognition of such a potential supplier as an unscrupulous participant in public procurement while evading the conclusion of a contract are considered in court.
According to subparagraph 10) of paragraph 3 of the Rules, an electronic depository in the field of public procurement (hereinafter referred to as an electronic depository) is an electronic database containing information and documents confirming the work experience of potential suppliers, generated on the web portal of public procurement.
The electronic depository is formed by the authorized body and its territorial divisions.
Applications from potential suppliers for entering information and documents confirming work experience over the past ten years, including for the current year, into the electronic depository are formed by the potential supplier and submitted via the web portal, in accordance with Appendix 5 to the Rules.
Applications from potential suppliers are reviewed by the authorized body and its territorial divisions within ten working days.
Information and documents are entered into the electronic depository by the authorized body after confirmation of their authenticity.
The decisions of the authorized body and its territorial divisions specified in paragraphs 96 and 101 of the Rules are appealed in administrative proceedings.
The list of qualification requirements for a potential supplier is defined by paragraph 1 of Article 9 of the Law.
It is not allowed to establish qualification requirements not provided for in paragraph 1 of Article 9 of the Law, with the exception of public procurement using special and special procedures for public procurement by tender, provided for in articles 31, 50 and paragraph 6 of Article 51 of the Law.
The general provision of the Law is based on the principles of optimal and efficient spending of public funds, providing potential suppliers with equal opportunities to participate in the public procurement procedure, fair competition, openness and transparency of the public procurement process and support for domestic entrepreneurs, and responsibility of participants in public procurement.
Article 45 of the Law provides for the grounds for making amendments to the draft contract or the concluded public procurement contract.
Subparagraph 2) of paragraph 2 of Article 45 of the Law provides that an increase in the amount of the contract may take place if changes have been made to the design and estimate documentation that has been reviewed in accordance with the legislation of the Republic of Kazakhstan and a decision has been made to allocate additional money for the amount of such a change, adopted in accordance with the procedure established by the legislation of the Republic of Kazakhstan.
Failure to comply with the procedure for making changes to the contract and design estimates provided for by Law and Articles 654, 655 of the Civil Code, deprives the contractor of the right to demand payment from the customer for additional work performed by him.
Amendments to the public procurement contract may be made during its validity period, since, in accordance with Article 386 of the Civil Code, the expiration of the contract entails the termination of the obligations of the parties under the contract.
To explain to the courts that, with regard to subitems 2) of paragraphs 218, paragraph 229 of the Rules, the tender commission has the right to request the necessary information in writing and (or) in the form of an electronic document from relevant government agencies, individuals and legal entities only in order to clarify the information contained in applications for participation in the tender. It is not allowed to send a request and perform other actions by the competition commission related to supplementing the application for participation in the competition with missing documents, replacing submitted documents, or adjusting improperly executed documents after the expiration of the period specified in paragraph 219 of the Rules.
The submission of documents containing incomplete and (or) unreliable information by a participant in the competition is the basis for rejecting the application, regardless of whether the competition commission has the opportunity to request information about the participant.
In accordance with article 26 of the Law, dumping price issues are subject to discussion only when evaluating and comparing competitive price proposals for works and services in the course of public procurement through a tender.
The procedure for determining the dumping price is regulated by Chapter 16 of the Rules.
When determining the dumping price, it is necessary to proceed from the price offered by the bidder to pay for works and services, without taking into account the amounts spent by the customer on the preparation of documentation, expertise and technical and author supervision of construction.
According to subparagraph 2) of article 2 of the Law, a potential supplier may be a temporary association of legal entities (consortium) applying to conclude a public procurement contract.
The calculation of the conditional discount (including according to paragraph 243 of the Rules) should be applied not to the consortium member, but to the consortium that is a potential supplier.
Subject to the provisions of paragraph 245 of the Rules, the calculation of a conditional discount for having work experience in the market of purchased works and services is carried out only on the basis of documents submitted as part of a potential supplier's tender application.
A potential supplier has the right to appeal against the actions (inaction), decisions of the customer, the organizer of public procurement, the single organizer of public procurement, commissions, experts, a single operator in the field of public procurement, if their actions (inaction), decisions violate the rights and legitimate interests of the potential supplier.:
1) to the authorized body;
2) to court.
The plaintiff's compliance with the pre-trial dispute settlement procedure established by law for this category of cases is mandatory, otherwise the claim must be returned in accordance with subparagraph 1) of part 2 of Article 138 of the CPC.
Actions (inaction), as well as decisions of the state audit and financial control bodies and their officials, may be appealed in administrative proceedings.
In accordance with subparagraph 1) According to paragraph 2 of Article 5 of the Law on State Audit, the response measure of financial control is the issuance of mandatory instructions for all government agencies, organizations and officials to eliminate identified violations and to consider the responsibility of those who committed them.
The order imposes on the object of control the obligation to eliminate violations and to consider the responsibility of the persons who committed them, and may be appealed by the applicant directly to the court in accordance with the procedure provided for by the APPC.
In case of termination by the customer of the contract concluded as a result of public procurement through commodity exchanges, due to the inexpediency of further execution, the costs of paying exchange fees and brokerage services are not reimbursable.
To invalidate the regulatory resolution of the Supreme Court of the Republic of Kazakhstan dated December 14, 2012 No. 5 "On the application of legislation on public procurement by courts".
According to article 4 of the Constitution, this normative resolution is included in the current law, is generally binding and comes into force from the day of the first official publication.
Chairman of the Supreme Court
Republic of Kazakhstan
J. Asanov
Judge of the Supreme Court
Republic of Kazakhstan,
Secretary of the plenary session
G. Almagambetova
© 2012. RSE na PHB "Institute of Legislation and Legal Information of the Republic of Kazakhstan" of the Ministry of Justice of the Republic of Kazakhstan
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