RUSSIAN TENDERS
In Russia all purchases of products and services for large state-owned companies are conducted through the state tenders.
We have been working with large state-owned companies in Russia for more than 20 years. The companies spend millions of U.S. dollars for different products every year through the special tenders.
We can represent you as your agent and sell your products as your Agent in Russia.
You do not have to open a representative office in Russia and you do not have to register an affiliate in Russia which saves you money and time.
We are located in Moscow in Russia.
We also would love towork for you as your agent and sell your products in the United States, as well as in 8 CIS countries (Armenia, Azerbaijan, Balarus, Kazakstan, Kyrgyzstan, Moldova, Tajikistan, Uzbekistan), Ukraine and Poland where our local agents reside permanently.
Please read the following brief information about the tenders in Russia which the Russian state-owned companies have to purchase through.
1. Tenders for the state-owned companies in Russia
Today, tenders are widely used in Russian business.
Tender is understood as competitive bidding of open type (for an unlimited number of bidders) or closed (for a limited number of bidders), procurement from a single supplier, competitive procurement process, auction, request for proposals, request for quotations, competitive negotiations, etc.
Tenders can be organized by state customers and many commercial entities, as well as owners of property rights. As participants can be any legal or natural persons capable of fulfilling their obligations.
Public sector customer is a government organization that needs goods and services and pays for the purchase.
Supplier is an incorporated person that participates in the procurement and supplies goods and services.
As supplier can be any legal entity that:
- has no tax arrears,
- does not belong to offshore companies,
- is not on the Register of mala fide suppliers.
All information on purchases and reports is published by the Customers in the Unified Information System. The EIS has registers of all concluded contracts, unscrupulous suppliers, customer complaints, and other important information.
Placement by the Customers of procurement notices, the submission by the Suppliers of relevant bids, electronic bidding and other stages are carried out on electronic trading platforms, both state (including specialized, on which closed purchases are conducted), and commercial.
A feature of tenders is that this procedure makes it possible, on the basis of free and transparent competition, to conclude agreements on the most favorable conditions for all parties. The organizer meets his needs by purchasing or selling with the best conditions at a bargain price. Participants get the opportunity on an equal footing to participate in the competition.
All state tenders are governed by federal law dated 05.04.2013 No. 44-FZ “On the contract system in the field of procurement of goods, work, and services to meet state and municipal needs”. In such cases, the organizers are state institutions and public authorities. The tendering process, the selection of participants is strictly regulated by the law.
2. Volumes of purchases by the state-owned companies on tenders in Russia
The volume of public procurement in Russia in 2019 increased by 15%, to 9.6 trillion rubles ($147.8 billion), which follows from the data of the Unified Information System (UIS) in the field of procurement, for which the Russian Federal Treasury is responsible.
According to the EIS, in 2019, public sector customers issued 2.9 million procurement summons for a total of 9.6 trillion rubles ($147.8 billion). A year earlier, these figures amounted to 3.2 million procurement summons worth 8.3 trillion rubles ($127.7 billion).
At the end of 2019, public sector customers concluded 3.4 million contracts for 7.7 trillion rubles ($118.5 billion) versus 3.6 million contracts for 6.9 trillion rubles ($106.2 billion) in 2018.
In turn, state-owned companies placed 1.2 million procurement summons in the EIS for 13.9 trillion rubles (($213.5 billion). At the end of 2018, the companies published 1.3 million procurement summons worth 16.9 trillion rubles (($260 billion) in the system.
At the same time, the volume of contracts of state-owned companies with suppliers placed in the EIS amounted to 18.5 trillion rubles (($284.6 billion) (1.4 million contracts). A year earlier, these figures amounted to 1.2 million contracts for 18 trillion rubles ($277 billion).
The real volume of purchases of state-owned companies is slightly higher than indicated in the EIS. The fact is that since 2018, norms have begun to apply that allow state-owned companies not to post part of the information on their purchases in the EIS.
3. Major Electronic trading platforms
4. Foreign legal entities’ participation in the tender procedures
In accordance with the Russian legislation, a foreign legal entity is entitled to legally conduct entrepreneurial activity only through its branches and representative offices, duly accredited in the Russian Federation.
Accreditation is carried out by the Federal Tax Service of the Russian Federation and requires compliance with a strict registration procedure, additional costs of time and money.
Representing a foreign legal entity and conducting business (including participation in government procurements) in the Russian Federation is also possible by concluding an agency agreement with a Russian resident agent, which greatly simplifies the procedure for conducting foreign business activities by a foreign legal entity and saves time and money.