OREANDA-NEWS. As termination of state and municipal contracts by supplies becomes more frequent, the Federal Antimonopoly Service (FAS Russia) forwarded to the authorities of the constituents of the Russian Federation clarifications regarding enforcement of the Federal Law "On State and Municipal Procurement of Goods, Works and Services" with account of the new amendments, reported the press-centre of FAS Russia.

In its letter, FAS Russia explains, in particular, how the ordering parties should act if suppliers fail to honour their obligations on state (municipal) contracts.

A recent amendment to the law allows to promptly resolve the issue (the set of amendments came into force on 1st October 2007).

Part 8.2. Article 9 of the Federal Law "On State Procurement …" provides that if "a court of law passes a ruling on securing a claim to terminate a state or municipal contract for supplying food products, means required to render emergency or first-aid medical services, medications, and fuel necessary to ensure normal support infrastructure, and if the absence of such goods and services would prevent providing normal life necessities, the ordering party can place an order for supplying such goods by quotation request regardless of the contract price".

It means that failure to perform and improper performance of a state or municipal contract by a supplier allows the ordering party to file a lawsuit on terminating a state or a municipal contract and simultaneously petition for suspending execution of such a contract.

Within four days after the Court passes a ruling on suspending execution of the contract, the ordering party can place an order for supplies of food products, means required to render emergency or first-aid medical services, medications, and fuel necessary to ensure normal support infrastructure, if the absence of such goods and services would prevent providing normal life necessities, by quotation request regardless of the contract price.

Contract for supplying the above goods can be concluded before the court ruling on the lawsuit comes into force and before the results of the new bidding are announced. The amount of supplied goods must match the amount required to ensure normal life infrastructure in the designated period.

Furthermore, after the court passes the judgment on terminating a state or municipal contract, the ordering party must inform FAS Russia about the supplier in question so it can be included into the Register of unfair suppliers. It results in supplier's disqualification from bidding for a period of two years.

Notably, the supplier will not be redeemed the cover funds for state or municipal contract equal to 30% of the original contract price as set by the ordering party.