Uzbekistan: Filling The Legal Gaps In Public Procurement In Uzbekistan

Last Updated: 14 November 2018
Article by Eldor Mannopov and Bobur Shamsiev

The Law of the Republic of Uzbekistan "On public procurement" (hereinafter referred to as the 'Law') adopted on April 9, 2018, defines the main principles and subjects of public procurement, general requirements for the process of public procurement, and the instructions governing procurement procedures. Article 1 of the Law also provides for the following types of procurements (seven in total) that do not fall under the Law:

  1. Procurements made by the strategic subjects of the public procurements according to the list approved by the President of the Republic of Uzbekistan except for public procurement of goods, works, services made under the implementation of the state development programs, projects provided for by the decrees, resolutions and orders of the President of the Republic of Uzbekistan and decisions of the Government of the Republic of Uzbekistan;
  2. Procurements made with the purpose of ensuring security of the persons eligible for state protection, national defence, security and maintenance of the order in the Republic of Uzbekistan, and also related to the state secrets;
  3. Procurements of goods (works, services) necessary to meet the needs of the Republic of Uzbekistan in force-majeure situations;
  4. If the procedures of donating countries, relevant international, foreign governmental and non-governmental organisations or terms of provision of foreign credits raised under the guarantee of the Republic of Uzbekistan and foreign credits provide for another procedure for procuring goods (works, services);
  5. Procurements made for preparation and conduct of the elections of the President of the Republic of Uzbekistan, to the Oliy Majlis of the Republic of Uzbekistan, regional, district and city congress of the people's deputies and referendums of the Republic of Uzbekistan;
  6. Procurements related to the appointment of the advocate (representative) to participate in court proceedings;
  7. Procurement of goods (works, services) with fixed prices in accordance with the law.

Resolution of the President of the Republic of Uzbekistan No. PP-3953 dated 27.09.2018 "On the measures for implementation of the Law of the Republic of Uzbekistan "On public procurement'" (hereinafter referred to as the 'Resolution'), in turn, defines that procurements specified in para. 2 and 5 above shall be made by selecting the best offers, whereas procurements under the para. 3, 6 and 7 shall be made under the direct contracts.

This Resolution also approves the list of goods, works and services (29 items in total) that shall be procured only by the public customers under the direct contracts in accordance with the procedure established by the National Project Management Agency under the President of the Republic of Uzbekistan, the Accounts Chamber and the Ministry of Finance. In analyzing the above list, it is possible to divide goods (works, services) into the following categories:

  • Goods (works, services) with fixed prices (fuel, liquid and compressed gas, diesel fuel, coal products, etc.);
  • Goods (works, services) sold by the unified suppliers or within the system of the same public authority (for example, tickets (air, railway and road transport) for business trips and other cases related to the operational activities of a public customer; procurement of goods (works, services) between the organizations (departments) within the same ministry (public authority, institution); new motor vehicles, specialized and agricultural equipment by the manufacturers of the Republic of Uzbekistan or their official dealers and distributors, etc.);
  • Procurement of goods (works, services) by means of conducting procurement-related procedures is unreasonable (for example, subscription to periodicals (newspapers, magazines) including electronic versions; tickets for cultural and entertainment events; accommodation during business trips and in other cases related to the implementation of the operational activities by the public customer);
  • Procurement of goods (works, services) is caused by the conditions requiring immediate decision-making, and conducting procurement-related procedures will have negative consequences (for example, goods (works, services) for the elimination of the consequences of the force-majeure events and technological disasters or emergency response in case of communications, mechanisms, devices and other equipment malfunction affecting the full functioning of the public customer's operational activities); 
  • Procurement of goods (works, services) under the previously concluded contracts (communication services, internet and broadcasting payments for the subsequent year under the previously concluded contracts; post-warranty and day-to-day service (for example, procurement of spare parts) by the supplier of the goods (works, services) previously supplied by him, in case such service cannot be provided by another supplier, and also maintenance and (or) functional expansion of the previously procured software product).

The Ministry of Justice, the Ministry of Finance together with the National Project Management Agency under the President of the Republic of Uzbekistan are required to analyze law enforcement practice in this area on a regular basis to reveal and resolve problems. The National Project Management Agency under the President of the Republic of Uzbekistan is required to prepare amendments and additions to the law within a two-month period in order to resolve these problems.

It should be reminded that the Resolution of the President of the Republic of Uzbekistan No. PP-3487 dated 22.01.2018 "On measures for supporting the activities of the business and strategic entities" approves the list of 19 business and strategic entities, which are entitled to enter into contracts for the goods, works and services procurement, regardless of the amount, by means of selecting the best offers assessed by the institutional bidding commissions, established by the business and strategic entities under the chairmanship of their Heads.

In case of procuring goods (works, services) for the amount exceeding the equivalent of US$50 thousand, technical tasks are subject to the compulsory expert examination, and contracts are subject to the expert examination and registration in the Centre for the Complex Expert Examination of Projects and Import Contracts of the National Project Management Agency under the President of the Republic of Uzbekistan.

Furthermore, the Resolution reduces the term of posting the announcement on the informational portal:

  • On conducting an auction – up to 5 (five) days (previously 10 (ten) days – part three of the Article 47 of the Law);
  • On conducting one-stage tender – up to 10 (ten) days (previously 30 (thirty) days – part one of the Article 52 of the Law).

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