Tenders participation legal support

Prime Legal Law Firm offers a special service: Tenders participation legal support, including:

• Tenders and auctions for state (municipal) contract procurement;
• Privatization (purchase of ownership) auctions in respect of property objects, stocks of shares, and other federally or municipally owned property;
• Tenders to determine the rental rate and lease contract execution in respect of non-residential properties of the city of Moscow.

Legal support of participation in tenders, auctions, procurement by way of request for quotations for the execution of state (municipal) contract.

Current legislation stipulates for the unified procedure of state and municipal procurement of goods, works, and services, which makes it possible for a wide range of individuals and legal entities to participate in the procurement procedure and stimulates such participation in order to develop fair competition, ensure openness and transparency of order placement, avoid corruption and other abusive practices in the sphere of procurement.

An order is considered to be placed from the day when a state or municipal contract is concluded. State or municipal contract is understood as a contract executed by customer on behalf of the Russian Federation, constituent entities of the Russian Federation or municipal entity for the purposes of state or municipal procurement. The price of state or municipal contract is fixed and cannot be changed during the contract performance.

A state or municipal customer can be a state agency (including government authorities), management bodies of state non-budgetary funds, local government authorities, as well as state-financed organizations, other recipients of funds from federal budget authorized to effect procurement by agencies of state power of constituent entities of the Russian Federation or local government authorities, other recipients of funds from budgets of constituent entities of the Russian Federation or local budgets.

A customer or its authorized agency is entitled to employ a legal entity (a specialized organization) to effect order placement functions by holding a competitive bidding or auction for the right to conclude a state or municipal contract.

A participant of the order placement procedure who offers to provide their goods or services under a state or municipal contract can be any legal entity irrespective of its form of incorporation, form of ownership, location of the company and place of origin of its capital, or any individual, including individual entrepreneurs.

Orders can be placed:

• By bidding process in the form of a competition, auction, including an online auction;
• Without a bidding process (request for quotations from a single supplier (provider, contractor), on commodity exchanges.

Placement of orders is effected by competitive bidding in all the cases except when federal legislation provides for other procedures. The decision on the method of order placement is taken by the client or an authorized agency in compliance with the provisions of the legislation.

Competitive tendering is a competitive bidding process where the winner is the entity/person who has offered the best terms for the performance of state or municipal contract, and whose bid is assigned number one. Competitive tendering can be open or closed.

Tender documents are developed by the client, authorized agency or a specialized organization and are approved by the client or its authorized agency. Tender documents have to include the requirements set by the client or its authorized agency, to quality or technical characteristics of the goods, works or services, requirements to their safety, requirements to the functional characteristics (consumer properties) of the goods, requirements to the size, packaging, shipment of the goods, requirements to the results of the works and other indicators used to determine compliance of the goods supplied, work performed or services provided with the needs of the customer.

The competition committee evaluates and compares the competitive bids submitted by the participants of the order placement procedure who were admitted to participate. The winner is the participant who has offered the best terms for the performance of the contract and whose bid is assigned number one. Any participant of a competitive bidding procedure has a right to lodge a complaint against the results of the competitive bidding pursuant to the procedure stipulated for in the federal legislation.

An auction for the right to conclude a state or municipal contract is competitive bidding where the winner is the person/entity who has offered the lowest price for the performance of a state or municipal contract. An auction can be open or closed. An open auction can be held online on a website.

A participant of the order placement procedure has a right to submit only one bid in respect of each object (lot) of the auction. Only those participants of order placement who were admitted as the participants of the auction can take part in the procedure. The auction committee examines the auction participation application from the point of view of their compliance with the requirements stipulated for in the auction documentation and the compliance of the participants of the order placement with the requirements of the federal legislation.

The bids submitted in an auction are to be considered within ten days from the date when the auction application acceptance is closed. The auction is held by the customer, its authorized authority in the presence of the members of the auction committee, the participants of the auction or their representatives. The auction is conducted by decreasing the initial (maximum) contract price (lot price) specified in the call for bids in the public auction by a bidding step. The winner of the auction is the participant who offers the lowest contract price. Within three working days of the execution of the minutes of the auction, the customer or its authorized authority provide the winner of the auction with one copy of the minutes and the project of the contract which is prepared by specifying the contract price offered by the winner of the auction in the draft of the contract included in the auction documentation.

If the winner of the auction is declared to evade the conclusion of state or municipal contract, the customer is entitled to take legal action to enforce the winner of the auction to execute the contract, as well as to indemnify for the losses inflicted by the evasion of the execution of the contract, or to conclude such state or municipal contract with the participant of the auction who made the second to last contract price offer. The conclusion of the state or municipal contract is compulsory for the participant of the auction who made the second to last contract price offer.

When an open auction is held online, no bidding step is established. An online auction is considered to have finished if no offers for performing the contract for a lower price were submitted within an hour from the moment when the last contract price offer was published on the website. Within one hour from the closing of an online electronic auction, the decision on the declaration of the auction participant as the winner of the auction is published on the said website along with the information on the contract price, the last and the second to last contract price offer, company name (for a legal entity) or surname, name and patronymic (for an individual) of the winner of the auction.

The auction is considered to have not taken place if there was only one bidder or if no contract price offers have been submitted within an hour from the beginning of the auction with the price lower than the initial price. In this case, the customer or the authorized committee is entitled to announce a re-auction or place the order by quotation request of the contract price does not exceed to amount stipulated for in the legislation.

A quotation request is a method of order placement when the information on the goods, works or services required for state or municipal needs is provided to an unlimited number of persons by publishing the announcement on the quotation request process on the official website, and the winner in the quotation request procedure is the participant who offers the lowest contract price. When the order is placed by a bidding procedure, the participants of the order placement are subject to a number of compulsory requirements. The participants who do not comply with the requirements to order placement stipulated in the legislation are not allowed by the competitive bidding or auction committee to participate in the bidding procedure or apply to participate in an auction. The decision of the customer, authorized authority, competitive bidding or auction committee to exclude the participant of contract placement procedure from participation in competitive bidding or auction or the decision of bidding or auction committee to refuse to allow such person/entity to participate in the bidding or auction can be appealed against by such participant pursuant to the procedure stipulated for in the legislation. Any participant of the order placement procedure is entitled to appeal through the courts, as well as pursuant to the administrative procedure stipulated for in the federal legislation, against the actions (omission) of the customer, authorized body, specialized organization, bidding, auction or quotation committee if such actions (omission) infringe the rights and legal interests of the participant of the order placement process. Order placement can be declared invalid pursuant to the suit of the interested party or pursuant to the suit of the agent authorized to implement supervision in the sphere of order placement of the federal body of executive power, a body of executive power of a constituent entity of the Russian Federation or a local government authority only in a judicial procedure.

Services provided to the participants of state (municipal) contract competitive bidding

• Expert examination of tender documents of the customer with respect to its compliance with the requirements of the existing legislation in the sphere of public contract placement.
• Analysis of the candidate’s competitive bid in respect of its compliance with laws and the requirements to competitive or auction documents.
• Expert examination of competitive (tender) bid to analyze the possibility of submitting a complaint to FAS and further appeal process in FAS to the actions of the public sector customer.
• Lodging a complaint to FAS and further appeal process in FAS to the actions of the competitive bidding/auction or unified committee of the public sector customer (appealing of the results of competitive bidding or auction in FAS).
• Preparation of auction or competitive bids or quotations required for the participation in tender bidding.
• Representation of the bidding participant in the authorities in charge of the settlement of disputes between the bidders, customers, and organizers of competitive biddings and auctions, including preparation of a complaint to the Federal Antimonopoly Service (complaint to FAS), to Rosoboronzakaz (complaint to Rosoboronzakaz), and representation of the client’s interests in FAS and Rosoboronzakaz when the appeal against the actions of the public sector customer is examined in FAS.
• Representation of interests in the Arbitration Court.
• Preparation of all the documents required for dispute settlement: claim, application, complaint to FAS, statement of claim, petition etc.
• Preparation of the points of defense to the application of the state or municipal customer to the local agencies of FAS of the Russian Federation on the inclusion of the participant of the bidding into the bad supplier list.
• Legal counseling on any issues related to conclusion, performance and termination of state or municipal contracts, appealing against the actions of the public sector customer to FAS, as well as on any other issues of preparation and administration of the tender (competitive bidding or auction).

Participation in privatization (purchase of ownership) auctions in respect of property objects, stocks of shares, and other federally or municipally owned property

According to Article 1 of Federal Law “On the Privatization of State and Municipal Property,” privatization of the state-owned and municipal property is understood as the alienation for compensation of the property of the Russian Federation, constituent entities of the Russian Federation, municipal entities, to be acquired by individuals and/or legal entities.

According to Article 13 of the Law, the following methods of state and municipal property privatization can be used:

• Sale of state or municipal property at an auction;
• Sale of shareholdings of open joint-stock companies at a specialized auction;
• Sale of state or municipal property in competitive bidding procedure;
• Sale of state-owned shareholding in open joint-stock companies outside the Russian Federation;
• Sale of shareholdings of open joint-stock companies via a trade organizer on the securities market;
• Sale of state or municipal property by public offer;
• Sale of state or municipal property without a price announcement;
• Contribution of state or municipal property into authorized capital of open joint-stock companies;
• Sale of shareholdings of open joint-stock companies pursuant to the results of fiduciary management.

Our specialists represent the interests of clients on all the stages of the auction. We provide assistance in filing your application for the participation in the auction, prepare and execute the comprehensive package of documents required for the participation in the auction in compliance with the legislation of the Russian Federation, obtain our client’s approval for the price offer for the property acquisition, represent the client when the results of the auction are announced. If the client wins the auction, our specialists provide their assistance in course of the procedure of purchase and sale contract conclusion for the state or municipally owned object and its state registration in cases when this is required pursuant to the current legislation of the Russian Federation.

Participation in state (municipal) procurement tenders enhances a company’s opportunities and gives a chance to receive log-term orders with secure financing from the budget of the corresponding level or extra-budgetary sources.