MISTAKES MADE BY THE SUBJECTS OF THE PUBLIC PROCUREMENT SYSTEM
Subjects of the public procurement system are a potential supplier, supplier, customer, organizer of public procurement, a single organizer of public procurement, a single operator in the field of public procurement, an authorized body, an expert (subparagraph 19 of Article 2 of the Law). The study of judicial practice has shown that the subjects of the civil defense system make a number of mistakes during public procurement.
a) mistakes made by the tender organizer:
- indication of the description of the required functional, technical, quality, operational and other characteristics in the technical specification of the purchased goods as "not less than ... no more", leads to the complexity of determining and choosing a supplier;
- Technical specifications contain incomplete or inaccurate information that potential suppliers pay attention to
- a reference to the lack of technical possibility to apply the previous indicators of a potential supplier on the public procurement web portal (if CEF JSC approves such technical capability if there is a corresponding request from the organizer);
- failure to send appropriate requests to the operator of the web portal;
- unjustified amendments to the tender documentation of a potential supplier (in case No 6001-22-00-6AP/439), which resulted in the recognition of a person who did not have the right to participate in the tender as the winner
- information on the sending of requests is not indicated in the protocol of the results;
- the chairman of the tender commission is replaced without issuing a corresponding document;
- judicial acts are unreasonably appealed in order to delay the conclusion of a civil defense agreement. As a result of such actions, the allocated budget funds are not properly disbursed, and the term for the execution of the contract by a potential supplier is reduced.
b) mistakes made by customers:
- sending a contract to the winner of the tender for signing in violation of the deadlines established by the legislation on civil defense, thereby shortening the deadline for the supplier to fulfill the terms of the contract;
- if the supplier fails to provide a security for the performance of the contract and/or the amount in accordance with Article 26 of the Law (if any) within three working days from the date of receipt of the notice via the web portal, the customer shall send a notice of termination of the contract upon the expiry of one month or more; - during tenders, the information attached by potential suppliers is not properly checked;
- the protocol of the results does not indicate information about the sending of requests;
- refusal to create a conciliation commission by preschool institutions, which entailed repeated requests from a potential supplier to consider the issue of exclusion from the RPD;
- formal consideration of applications from potential suppliers by conciliation commissions for exclusion from the RPD for the so-called insignificant amounts of tenders.
- due to the lack of proper control on the part of the Customer, tenders cannot find their logical conclusion for a long time, which, of course, affects the service recipients (catering, medical devices, water supply, etc.) and the state budget.
(d) Mistakes made by potential suppliers:
- entering information confirming work experience that does not correspond to reality (indicate themselves as the general designer);
- To confirm labor resources, information is provided about employees who are listed as dead, as well as about those persons with whom labor contracts have not been concluded.
q) mistakes made by the tender commission:
- does not check the verification of information about the experience of a potential supplier in the electronic depository.
For example, a potential supplier of VMP LLP entered information confirming its work experience for 2012 into the electronic depository, indicating itself as the general designer, which is not true.
The court requested documents relating to the disputed working projects from the customer, the State Institution "Construction Management B".
It follows from the submitted documents that there are conclusions of the state non-departmental examination dated September 26, 2012 and February 27, 2012 for these disputed objects, where the customer is the State Institution "Construction Department of East Kazakhstan region", the general designer is indicated as the KGP "Oblzhilkomkhozstroy", and VMP LLP is indicated as a subcontractor.
The tender commission was obliged to check all the attached documents for compliance with the specified information.
In accordance with Article 27 of the Law, applications for participation in the tender are considered by the tender commission in order to determine potential suppliers who meet the qualification requirements and the requirements of the tender documentation.
In the event that potential suppliers who do not meet the qualification requirements and the requirements of the tender documentation are identified, the tender commission shall grant such potential suppliers the right to bring applications for participation in the tender in line with the qualification requirements and the requirements of the tender documentation within three working days from the date of posting of the minutes of preliminary admission to participate in the tender on the public procurement web portal.
Thus, the court found that the tender commission improperly examined the bids of the participants for their compliance with the qualification requirements and the requirements of the tender documentation.
e) mistakes made by internal public audit bodies
- there is no description of the characteristics of violations in the notification identified by the results of the in-house audit;
reference is not made to the details and names of documents confirming the violations, which entails the recognition of the administrative act as illegal;
- initiation of inspections by the Committee in relation to an entity that did not claim to conclude a public procurement contract and did not participate in the contested tenders, that is, was not a potential supplier (subparagraph 2 of Article 2 of the Law). The established circumstance excludes the possibility of the Department conducting an audit on the grounds provided for in paragraph 3 of Article 18 of the Law.
- in accordance with paragraph 8 of Rules No 598, in-house control of public procurement procedures is carried out before the conclusion of public procurement contracts.
In the case of a civil defense contract, the internal state audit bodies may carry out an inspection at the request of a person (subparagraph 4) of paragraph 5 of Article 18 of the Law) only by conducting an unscheduled audit in strict accordance with Rules No 392, and in case of detection of any violations, the state audit body in accordance with paragraph 107 of Rules No 392 forms an order to eliminate the identified violations and to consider the liability of persons who allowed them.
This instruction is formed after the audit report (conclusion) is drawn up with the right to file an objection by the audited entity.
However, there are facts when the Department, in violation of the above norms, having accepted the Committee's instruction as a guide to action, conducts an in-house audit, while it does not have the right to conduct it after the conclusion of contracts.
The list of response measures provided for in Article 30 of the Law is exhaustive, and it does not contain an order to eliminate the identified violations based on the results of an in-house audit.
Despite this, the Committee does not respond appropriately when a potential vendor files a complaint against an order issued by the Department.
Thus, the administrative body violates the obligation to maintain objectivity and impartiality, to ensure equal opportunities and conditions for the participants of the administrative procedure to exercise their rights to a comprehensive and complete investigation of the circumstances of the administrative case.
- The Committee considers complaints of potential suppliers superficially, without establishing all the circumstances of the administrative case, without conducting a proper check in accordance with the procedure established by law.
All this causes complaints from the participants in the process about the impartiality of officials of the state body in resolving appeals.
Participants in the CD must comply with the principle of ensuring information openness and transparency of procurement
Pre-trial dispute resolution procedure
In accordance with paragraphs 6, 7 of Article 47 of the Law on Civil Defense, based on the results of consideration of a complaint received within the time limits established by paragraph 2 of this Article, the authorized body shall make a decision in accordance with subparagraph 6) of Article 16 of this Law or on refusal to satisfy the complaint.
In case of disagreement with the decision of the authorized body taken in accordance with paragraph 6 of this Article, the potential supplier shall have the right to appeal it to the appeal commission in the manner provided for by the legislation of the Republic of Kazakhstan on state audit and financial control.
It follows from the meaning of this provision of the Law that in case of disagreement of a potential supplier with the decision of the authorized body, when appealing against actions (inaction), decisions of the customer, public procurement organizer within five working days from the date of posting the protocol on the results of public procurement by means of a tender (auction), appealing against its decision to a higher body is the right of a potential supplier.
However, paragraph 9 of the Law regulates that the pre-trial dispute resolution procedure provided for by this article is mandatory.
According to paragraph 2 of Article 58-6 of the Law "On State Audit and Financial Control", appellate settlement of disputes in cases provided for by this Law is mandatory.
By virtue of Clause 33 of the Rules for In-House Audit, in case of disagreement with the decision of the department of the authorized body and (or) with the notification of the territorial subdivision sent in accordance with subparagraphs 2 and 3) of part two of Clause 26 of these Rules, the potential supplier who has submitted an application for participation in the relevant tender (auction) and (or) the object of state audit shall file a complaint with the Appeal Commission through publicly available information systems, including through the web portal in the form in accordance with Appendix 7 to these Rules, or apply to the court.
JURISDICTION OF ADMINISTRATIVE CASES
In accordance with Part 2 of Article 102 of the APC, the courts have jurisdiction over disputes arising from public law relations provided for by this Code in administrative proceedings.
Clause 2 of the NPVS No4 clarifies that the challenges to the results of the CD, the decisions of the authorized body on the inclusion of a potential supplier in the RPD, as well as the decisions, conclusions, instructions, notifications of the authorized body based on the results of the inspection of the PP are carried out in accordance with the procedure provided for by Part 3 of Article 106 of the CAPP, at the place of residence (location) of the claimant.
If the plaintiff, along with the claim to recognize the results of the tender as illegal, demands on this basis to recognize the concluded contract on civil defense as invalid, then such claims are subject to joint consideration in the SIAC taking into account the requirements of Part 3 of Article 84, Part 3 of Article 155, Part 2 of Article 156 of the APC.
NPVS No4 also provides that in this case, in the part of the claim for invalidation of the contract, the plaintiff is not required to comply with the procedure for pre-trial settlement of the dispute provided for by the contract.
Claims of a potential supplier against actions (inaction), decisions of the customer, organizer, single organizer of civil defense, commissions, expert, single operator in the field of civil defense, as well as actions (inaction), decisions of the authorized body and bodies of the State Aviation and Physical Culture are subject to consideration by the SMAS.
Claims of CD organizers, customers related to the application of subparagraphs 1) and 3) of part one of paragraph 4 of Article 12 of the Law on CD, as well as claims arising from the performance of CD contracts, are subject to consideration by the SIEC.
Claims to challenge the decision of the authorized body to recognize a potential supplier as an unscrupulous CD participant, recognized as such in accordance with subparagraph 2) of part one of paragraph 4 of Article 12 of the Law on CD, are subject to consideration by the SMAS.
PROCEDURAL TIME LIMITS IN COURTS
In accordance with Parts 1 and 2 of Article 9 of the CAPP, everyone has the right, in accordance with the procedure established by this Code, to apply to an administrative body, an official or a court for the protection of violated or disputed rights, freedoms or legitimate interests.
Waiver of the right to appeal to an administrative body, an official or a court is invalid. Participants of the CD have the right to apply to the court within the time limits established by the APPC.
Potential suppliers challenge the decisions of the authorized bodies, decisions, actions (inaction) of the customer, organizers of the tender in the field of public procurement in accordance with Article 132 of the CAPP.
At the same time, Article 136 of the APC establishes preclusive terms for filing a claim with the court.
Claims for contestation, for coercion are filed with the court within a month from the date of delivery of the decision of the body considering the complaint based on the results of the consideration of the complaint.
In the event that the law does not provide for a pre-trial procedure or there is no body considering the complaint, the claim shall be filed within one month from the date of delivery of the administrative act or from the date of notification in the manner established by this Code and the legislation of the Republic of Kazakhstan.
A missed deadline for filing a claim for a valid reason may be restored by the court in accordance with the rules of the Civil Procedure Code.
The reasons for missing the deadlines for filing a claim with the court and their importance for the correct resolution of the administrative case are clarified by the court at the preliminary hearing.
Failure to meet the deadline for filing a claim with the court without a valid reason, as well as the impossibility of restoring the missed deadline for filing a claim with the court, are grounds for returning the claim.
The court finds out the reasons for missing the deadline at the preliminary hearing and resolves the issue of restoring the missed deadline.
In case of refusal to restore the missed deadline by the court, the claim is returned.
REGULATORY FRAMEWORK
- Constitution of the Republic of Kazakhstan;
- Civil Code of the Republic of Kazakhstan (CC);
- Civil Procedure Code of the Republic of Kazakhstan (CC)
- Administrative Procedural Code of the Republic of Kazakhstan (APPC); - Budget Code of the Republic of Kazakhstan;
- Tax Code of the Republic of Kazakhstan;
- Law of the Republic of Kazakhstan "On Public Procurement" (Law on Civil Procurement);
- Law of the Republic of Kazakhstan "On State Audit and Financial Control" (Law on State Audit and Financial Control);
- Law of the Republic of Kazakhstan "On Legal Acts";
- Law of the Republic of Kazakhstan "On the National Welfare Fund";
- Law of the Republic of Kazakhstan "On Procurement of Certain Entities of the Quasi-Public Sector";
- Rules for public procurement, approved by Order No. 648 of the Minister of Finance of the Republic of Kazakhstan dated December 11, 2015 (Rules No648);
- Rules for the Formation and Maintenance of Registers in the Field of Public Procurement, approved by Order No. 694 of the Minister of Finance of the Republic of Kazakhstan dated December 28, 2015 (Rules No694);
- Rules for conducting in-house audits, approved by Order No. 598 of the Minister of Finance of the Republic of Kazakhstan dated November 30, 2015 (Rules No598);
- Rules for Internal State Audit and Financial Control, approved by Order No. 392 of the Minister of Finance of the Republic of Kazakhstan dated March 19, 2018 (Rules No. 392);
- Special Procedure for Public Procurement, approved by the Decree of the Government of the Republic of Kazakhstan dated March 20, 2020 No127 (valid until December 31, 2020)
- Rules for public procurement using a special procedure, approved by the Decree of the Government of Kazakhstan dated December 31, 2015 No1200 (Rules No1200);
- Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan dated April 21, 2022 No4 "On the Application of Public Procurement Legislation by the Courts" (NPVS No4);
- Procurement Management Standard of the Fund, approved by the decision of the Board of Directors of the Fund No31/19 dated September 3, 2019; - other regulatory legal acts of the Republic of Kazakhstan.
REDUCE
admakt – administrative act
CD - public procurement;
RPD – Register of Unscrupulous Participants in Public Procurement;
SIAS – Specialized Inter-District Administrative Court;
SCAD – Judicial Chamber for Administrative Cases of the Regional Court;
SCAD of the Supreme Court of the Republic of Kazakhstan – Judicial Chamber for Administrative Cases of the Supreme Court of the Republic of Kazakhstan;
SIEC – Specialized Inter-District Economic Court;
Ministry of Finance - Ministry of Finance of the Republic of Kazakhstan;
Treasury – the Treasury Committee of the Ministry of Finance of the Republic of Kazakhstan;
KVGA – Internal State Audit Committee of the Ministry of Finance of the Republic of Kazakhstan;
DVGA – Department of Internal State Audit of the Internal State Audit Committee of the Ministry of Finance of the Republic of Kazakhstan;
State Audit and Financial Control;
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