Federal Law No. 174-FZ on Amendments to the Federal Law on the Procurement of Goods, Work and Services by Certain Types of Legal Entities1 and to the Federal Law on the Contract System in the Procurement of Goods, Work and Services for State and Municipal Needs2 entered into force on June 29, 2018. The law makes important changes to how unitary enterprises do procurement (the "Amendments").
The Amendments entered in force as of June 29, 2018, except for certain provisions that apply as of July 1, 2018.
We remind readers that since January 1, 2017 procurement by state unitary enterprises ("GUP") and municipal unitary enterprises ("MUP") has been regulated by Federal Law No. 44-FZ, except for GUP and MUP procurement that is regulated by the procurement regulation (Article 2(3) of Federal Law No. 223-FZ) published in the unified information system for the procurement of goods, work and services for state and municipal needs (the "EISZ") when they do procurement:
- Using grants
- In certain cases when they act as the contractor under a contract
- Without using Russian Federation budgetary system budget funds (only for GUPs and MUPs that are pharmacies)
The new approach will remove GUPs and MUPs doing procurement without using budgetary funds from the scope of procurement and contract system laws altogether.
In addition, the Amendments affect the procurement of federal GUPs,3 which are very important for protecting Russian citizens' rights and legitimate interests, for the defense capability and security of the state, which are carried out using budget subsidies for capital investments in state-owned permanent structures and/or for the state to acquire ownership of real estate. Such procurement will now be done under Federal Law No. 44-FZ.
Already this year the new developments could impact how GUPs and MUPs handle procurement procedures, including for medicines and medical devices. According to the Amendments, those legal entities can change and/or approve their procurement regulations and procurement plan for 2018 procurement by October 1, 2018.
Dentons' team is prepared to provide its clients with any assistance needed to participate in public procurement and advise on any issues related to the amendments.
1. Federal Law No. 223-FZ on the Procurement of Goods, Work and Services by Certain Types of Legal Entities of July 18, 2011 ("Federal Law No. 223-FZ").
2. Federal Law No. 44-FZ on the Contract System in the Procurement of Goods, Work and Services for State and Municipal Needs of April 5, 2013 ("Federal Law No. 44-FZ").
3. The list of these GUPs is approved by the Russian Government by agreement with the Russian President's Administration.
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