Procurement activities

Procurements resulting from competitive procedures totalled RUB 567.9 bln in 2014, or 62.8% of the total procurement volume.

Russian Railways performs procurement activities in accordance with the Regulation on the Procedure for Placing Orders for Goods, Performing Work and Rendering Services for the Core Activities of Russian Railways, which was developed based on the requirements of the legislation of the Russian Federation:

• Federal Law No. 223-FZ dated 18 July 2011 “On the Procurement of Goods, Work and Services by Certain Types of Legal Entities”;
• Resolutions of the Russian Government and other documents adopted pursuant to the requirements of Federal Law No. 223-FZ dated 18 July 2011

Procurements by Russian Railways during the reporting year totalled RUB 904.9 bln. Procurements resulting from competitive procedures totalled RUB 567.9 bln in 2014, or 62.8% of the total procurement volume, with procurements based on Russian Railways administrative documents making up RUB 167.3 bln, or 18.5%, and procurements on other legitimate grounds accounting for RUB 169.7 bln, or 18.8% (purchase of electricity, utility services and medical services, among other things).

The structure of procurements changed over the course of 2013–2014. In particular, whereas in 2013 the ratio of competitive procurements to procurements from a single supplier was 46/54, in 2014 the ratio was 63/37.

Positive trends were also seen in electronic ordering procedures. The proportion of procurements processed electronically increased compared with 2013. Whereas in 2014 such procurements made up 21% of all procurements, in 2014 it increased to 28%.

Large-scale work was carried out in 2014 to improve the efficiency of procurement activities.

The Company has developed and approved a new Regulation on Procurements by Russian Railways that takes into account the individual requirements of Federal Law No. 44-FZ dated 5 April 2013 “On the Contractual System in the Procurement of Goods, Work and Services for the Support of Government and Municipal Needs” as well as current requirements for procurement activities, including mechanisms utilised in best practices in this area.

The new Regulation expands the list of procurement methods and also provides a number of tools to improve the competitive and economic effectiveness of procurements, including:

• the ability to provide procurement participants with alternative proposals;
• the ability to rebid;
• the ability to use anti-dumping measures.

Procurement structure in 2013–2014, RUB bln

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Change in percentage of contracts concluded using electronic procedures in 2013–2014.

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