Prime Minister Vladimir Putin holds a meeting on improving legislation on state and municipal purchases and forming a federal contract system
29 september 2011
Vladimir Putin's opening remarks:
Today we will discuss the formation of a comprehensive federal contract system. We have long been working on this, and I'll admit that we are a little behind. However, we cannot afford to make mistakes here, so let's be very attentive. Both the government and the presidential administration have been involved in this discussion. We must work together to reach acceptable and effective solutions. We will have to carry out a serious reform of state contracts and introduce modern methods and professional skills into this sphere.
We must purchase quality and innovative products for government and social needs and form a system that will reduce corruption and ensure maximal transparency of this work – starting with purchase plans and ending with the performance of contracts.
We hope that the federal contract system will become an effective tool of state investment policy and will play a major role in modernising the entire economy. And, of course, it should considerably enhance the effectiveness of budget expenditures. Both goals are very important because they involve huge expenses.
I must admit that the current mechanism for drawing up and performing state contracts is seriously flawed and has many omissions and drawbacks. In fact, right now we only have regulations on awarding a state contract, and even these are inadequate. The number of non-tender procedures and contracts concluded with one and the same producer is growing. There are problems with conducting tenders in education, science, arts and the purchase of sophisticated equipment. Regrettably, many cases here are more like a bad joke. There are no regulations whatsoever on the planning of state contracts or clear-cut substantiation of the need for them and their timeliness. There are no sensible mechanisms of control over performance or follow-up.
All these factors are creating fertile soil for corruption, leading to the delay in the performance of contracts, a several-fold increase in their real value and a rush to use budget resources. As a result, the state and taxpayers have to bear tremendous expenses. There are many instances like this.
As I've already said, we are allocating handsome budget funds on government spending and municipal orders. We must be very careful at this point. It is vital for us to use budget funds rationally in any circumstances regardless of whether we are going through economic upsurge or facing problems. It is all the more important to think about this now that we have limited budget resources.
I consider the rapid formation of a modern state contract system to be one of our priorities. The new contract system must regulate and structure all contract stages, make them an integral whole and make them more transparent and understandable, and also accessible to public oversight.
Obviously, we should start by creating a solid legal and methodological foundation with detailed rules on all stages of state and municipal purchases, starting with forecasting and planning and ending with the complete performance of contracts. It is necessary to determine procedures for planning purchases and reporting on their use (which we do not have now). We must elaborate a library of standard contracts, determine a procedure for calculating the highest price and, most important, strictly regulate the mechanism of auditing and monitoring at all stages.
In addition, we must create a common database for the federal contract system on contracts that have been planned, signed and are currently being performed. In the long-run it will help us monitor market prices and coordinate the work of customers and suppliers.