The Law on the contract system - «light at the end of the tunnel» or increasing the efficiency of budget expenditures through the law of contract system

Further development of government procurement in Russian Federation is based on transition to the federal contract system. The Contract System Act performs a fundamentally new regulation of government and municipal procurement, since its gist is to bring the whole procurement process under regulation: including the planning stage, the choice of supplier, performance of the contract and the procurement effectiveness evaluation. With the help of the contract system, the elements of the budget process and procurement process became tightly interconnected in developed countries. Besides, there has been an implementation of those particular principles and approaches, which conduce not only the existence of government procurement itself, but also its planning, monitoring, audit and control at all stages. All these goals are to be achieved with the help of the CS in Russia as well. Based on a comparative analysis, this paper considers major changes in legislation concerning the procurement cycle. Below are the key findings: With the introduction of the Contract System Act the government centralizes the process of government procurement, makes procurement regulations more complex, tightens conditions of participation, increases control to satisfy state needs, finds better methods to prevent and curb violations at all stages of the procurement cycle. It is important to realize that Russian history had no natural prerequisites for the establishment of the government procurement institution, relevant to a certain stage of historical development, therefore, Russian government procurement institution was established in a revolutionary way: by its artificial implementation based on international practice; for that reason it is not considered perfect and cannot resolve all the problems of the budget system. Consequently, Russian economy is specific, so finalization of new Act and achieving significant results with its help will require a lot more time. On the other hand, some of the new rules look promising in terms of an increase in the confidence of entrepreneurs and society in government institutions and the selection process of state and municipal contracts contenders, according to the principals, which are stated in the Act and ensure economic efficiency of the procurement activity in general. Thus, among the major advantages of the new legislation we can point out: control over the whole procurement process, from the stage of planning to the postaudit; compulsory justification of not only the initial maximum contract price, but also the subject matter of procurement, procurement method and requirements as to the participants of the procurement process; introducing the new procedures of supplier selection allowing to choose the best suitable variant for a certain subject matter; implementing anti-dumping measures and obligatory banking supervision; establishing the institution of contracting officers. These steps will stimulate the implementation of the efficient procurement process, which will promote effective expenditure of budgetary funds and a high-quality and timely realization of the goals and obligations set by the government regarding the public.

Keywords

Authors

References