The Federal Contract System: a new game by old rule?

Well known federal statute №94 “The law on order placing, execution of work, state and municipal needs”, which got a lot of blames for its crudity and inefficiency when companies offered the less price instead of better quality win contests, will give place to Federal Contact System from 1 January 2014.

Under the current legislation, an inequality principle of a customer and supplier of goods and services is laid down. Thus in a case of overstepping or improper execution of a contract for the customer, the penalty is 1/300 of a refinancing entry for each overstepping. For the supplier the penalty is 1/300 of a refinancing entry without upper threshold limitation. Practically it means the customer could demand overstepping overpassing a contract value. It is nonsense in itself, which did not embarrass a legislator in time. It is easy to assume that many of the potential contractors of state or municipal customer, which make responsible use of their finances, think twice whether they should get involved in such a "gamble". In the result “owns” suppliers win tenders, and alike sanctions has declarative character for them. In case of default new tenders are organized, new agreements and other procedures are negotiated for liberation from economic responsibility.

The Ministry of Finance worked out regulations which will work in Federal Contract System. Following these regulations, the customer will be able to amerce the supplier in certain circumstances to the value of 100% from a price of a contract for sale of defective products. In due course the maximum amount of liability could be 20% of a contract. Inequality of the customer and supplier keeps again, but the upper threshold of the penalty amount, which is limited by the contract price, is denoted.

Information about State contracts and their deadlines can be obtained from daily update Globas-i® system of The CredInform information agency.