The National Association of Builders opposed electronic auctions

Yefim Basin, President of the National Association of Builders, signed a letter to Evgeny Elin, Deputy Minister of Economic Development of the Russian Federation, on the impossibility of making purchases for the construction, reconstruction, and major repairs of capital construction facilities at electronic auctions.

On August 15, 2013, the National Association of Builders received an appeal from the Ministry of Economic Development of the Russian Federation with a request to approve a draft decree of the Government of the Russian Federation establishing a list of goods, works and services, in case of procurement of which the customer is required to conduct an electronic auction. The draft order was prepared pursuant to paragraph 16 of the action plan for the implementation of Federal Law No. 44-FZ of April 5, 2013 "On the Contract System for Procurement of Goods and Services for State and Municipal Needs", approved by order of the Government of the Russian Federation No. DM-P13-3339 of May 21, 2013.

According to the draft list, electronic auctions are held for construction works where the initial (maximum) contract price is below RUB 500 million. This form of bidding also does not apply to construction, reconstruction, or major repairs of particularly dangerous or technically complex capital construction projects, as well as artificial road structures included in federal, regional, or inter-municipal or local highways.

The National Association of Builders insists on the impossibility of making purchases for the construction, reconstruction, and major repairs of capital construction objects at electronic auctions, regardless of the cost of the contract for performing such works.

This position is due to the inadmissibility of formal division of purchases at the initial (maximum) contract price. This approach will lead to a violation of Part 3 of Article 55 of the Constitution of the Russian Federation. Under the new contract system, dumping and unjustified reduction of contract prices by up to 40-50% will continue to be possible, as well as other violations in the absence of qualifications and work experience, which result in human casualties and additional government expenditures to assist in eliminating the consequences of such violations.

The letter from NOSTRA states that there is no international practice in conducting purchases in the form of electronic auctions, and therefore the National Association of Builders strongly requests that the reference to the possibility of making purchases for the construction, reconstruction, and major repairs of capital construction objects at electronic auctions be excluded from the draft order.

Letters from self-regulatory organizations received by the National Association of Builders and the Ministry of Regional Development of the Russian Federation also indicate that electronic auctions for construction works are unacceptable.