On the recognition of illegal and cancellation of the notification, as well as the invalidation of the public procurement contract

No. 6001-24-00-6ap/2266 dated January 21, 2025

Plaintiff: "S" LLP

Respondents: RSU "Department of Internal State Audit" (hereinafter referred to as DVGA), State Institution "Department of Public Procurement of Akimat" (hereinafter referred to as UGZ)

Interested party: Russian State Institution "Treasury Committee of the Ministry of Finance of the Republic of Kazakhstan" (Treasury Committee)

The subject of the dispute: on the recognition as illegal and cancellation of the DVGA notification dated April 4, 2024, the protocol on the results dated April 9, 2024, the invalidation of the public procurement contract dated April 16, 2024 and the obligation to review the results of the competition

Review of the cassation appeal of the person concerned PLOT:

According to the results of the competition dated February 23, 2024 "Implementation of technical support (technical supervision) during the average repair of the highway section of regional significance "S-B" 32-56 km" (hereinafter referred to as the Competition), LLP was recognized as the winner.

According to complaints from other potential suppliers of the DVGA, a desk control was conducted, as a result of which a Notification was issued on the unlawful assignment of a conditional discount of 5% to LLP instead of 4% for work experience in 2021, according to which the act of acceptance of the facility into operation does not correspond to the form approved by the authorized body in the field of architectural, urban planning and construction activities.

According to the protocol of the review of the results of the Competition dated April 9, 2024, LLP "B" was recognized as the winner, and LLP "K" was recognized as the potential supplier who took the second place.

No contract has been concluded between the Customer and the winner of B LLP, as this supplier is in accordance with Article 6 of the Law of the Republic of Kazakhstan.

The Law on Public Procurement had restrictions related to participation in public procurement. In this regard, on April 16, 2024, the contract was concluded with the potential supplier who took the second place, K LLP.

LLP "S", disagreeing with the Notification and the results of the review of the Competition, appealed to the court with the above requirements. The claim is motivated by the fact that his conditional work experience discount was unlawfully reduced to 4%.

Judicial acts:

1st instance: the claim is satisfied. It was decided to declare illegal and cancel the notification of the DVGA on the elimination of violations identified by the results of desk control No. dated April 4, 2024. To declare illegal and cancel the protocol on the results of April 9, 2024 for the competition "Implementation of technical support (technical supervision) during the average repair of a section of the highway of regional significance "S-B". To invalidate the public procurement contract dated April 16, 2024, concluded between the State Institution "Management of Passenger Transport and Highways of the Akimat" and LLP "K". To force the UGZ to review the results of public procurement from April 9, 2024 by tender

"Implementation of technical support (technical supervision) during the average repair of a section of the highway of regional significance "S-B" within 10 (ten) working days from the date of entry into force of the decision.

Appeal: the decision of the court of first instance remains unchanged.

Cassation: judicial acts in this case have been annulled. A new decision has been made  on the refusal to satisfy the claim  LLP "S"  to the Russian State University

"Department of Internal State Audit", State Institution "Department of Public Procurement of the Akimat" on the recognition and cancellation of the notification dated April 4, 2024, the protocol on the results dated April 9, 2024, the invalidation of the public procurement contract dated April 16, 2024 and the obligation to review the results of the competition.

Conclusions: the courts, satisfying the claim, proceeded from the fact that the disputed work experience of the plaintiff for 2021, "Construction of an 80-apartment apartment building in the area at the end of the street. Site No. 11, spot 1" was confirmed in the electronic depository, this object was commissioned by authorized bodies in the field of architectural, urban planning and construction activities, this is confirmed by the relevant acts.

LLP, in confirmation of its experience in the market of purchased services, announced information on previously provided engineering services, including for 2021 on the provision of engineering services for technical supervision of "Construction of an 80-apartment residential building in the area at the end of the street. Site No. 11, spot 1".

The essence of the dispute was whether the LLP was subject to assignment of a conditional discount for the provision of engineering services for technical supervision at the specified facility for 2021.

The courts, agreeing with the plaintiff's position on this issue, did not take into account the requirements of the "Rules for Public Procurement" approved by Order of the Minister of Finance of the Republic of Kazakhstan No. 648 dated December 11, 2015 (hereinafter referred to as the Rules).

According to paragraph 244 of the Rules, when considering the availability of work experience of a potential supplier participating in the competition, the competition commission considers work experience only in the market of work and services purchased at this competition, including similar types of work and services.

As mentioned above, the subject of the contested Competition is "The implementation of technical support (technical supervision) during the average repair of a section of the highway of regional significance "C-B" 32-56 km".

To confirm the experience for 2021, LLP has provided an act of acceptance of the facility into operation, confirming the provision of engineering services for technical supervision during the Construction of an 80-apartment residential building.

That is, the previously performed services of LLP for technical supervision during the Construction of an 80-apartment residential building do not relate to the experience in the market of work and services acquired at this Tender similar to the subject of the disputed purchase.

Accordingly, experience was reasonably not taken into account when assigning a conditional discount to the plaintiff.

In such circumstances, the judicial board concluded that there were no grounds for satisfying the claims.

Considering that the case does not require the collection and additional verification of evidence, the judicial board considered it necessary to cancel the judicial acts of the first and appellate instances and make a new decision to dismiss the claim.

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