OREANDA-NEWS. April 21, 2008. In the three quarters of 2007 budget savings due to auctions for the needs of Roszdrav (the Federal Agency for Healthcare and Social Development) was on average 30% of the initial contract price, according to the information of the Department for State Procurement Supervision, of the Federal Antimonopoly Service (FAS Russia), reported the press-centre of FAS Russia.

One of the most striking examples of the auction effectiveness is the 2008 auction for supplying medical immune-biological drugs for the population. The initial contract price for this lot was 3,57 bln Rubles, while the final contract price – 1,03 bln Rubles.

Therefore, savings only for a single lot reached 2,54 bln Rubles or more than 70%. "If instead of auctions the organizations held tenders as before, I think the final contract price would not be much different from the initial price", - believes the Head of the Department for State Procurement Supervision Mikhail Evraev.

Another excellent example - the auction for technical support and IT-infrastructure maintenance organized by the Federal Migration Service. The initial contract price - 720 mln Rubles, the final price - 295 mln Rubles. Savings made 425 mln Rubles or nearly 60% of the initial price.

Overall savings in 2006 - 106 bln Rubles, in 2007 - already more than 168 bln Rubles.

The ordering party can immediately use the savings from the auction to conclude a contract for purchasing more products (which are the subject of the auction) at the price per unit that was formed as a result of the bidding. Therefore, procurement through auctions enables the ordering party to purchase considerably more goods, than initially planned, with the allocated funds. In the case with purchasing medication for the population, it means that the number of people for whom the medication will become available is increased by 3,5 times.

However, the regions currently have different approaches towards auctions.

For instance, according to FAS Russia, in St Petersburg public contracts allocated through auctions since the Law "On State and Municipal Procurement of Goods, Works and Services" came into force (1st January 2006) have reached only 1,1%. One of the best results in Russia is in the Republic of Tatarstan: as of 2nd April 2008, 41,9% of all contracts were concluded through auctions.

To exclude arbitrariness in determining the winner and ensure maximum transparency and openness of the state procurement procedures, in spring 2007 the Russian Government approved the list of goods (works, services) for which the supply (execution, offering) orders can be placed only through auctions. The Governmental decree established the list of goods, works and services that state and municipal ordering parties can purchase exclusively through auctions, rather than tenders. The list included approximately 30% of all goods, works and services; first of all, fuel and oil refining and gas products, food products, pharmaceuticals and medications, cosmetic products, etc.

In February 2008, the list was considerably expanded: now the orders for supply (execution, offering) of 70-80% of the goods, works and services must be placed through auctions. Furthermore, the amendments to the Federal Law "On State and Municipal Procurement of Goods, Works and Services", which came into force on 1st January 2008, oblige to place the orders for the works on construction, reconstruction or capital repairs of capital projects for the state or municipal needs through auctions, which should radically improve the situation in the filed.

As stated by the Head of the FAS Russia's Department for State Procurement Supervision Mikhail Evraev, "Before we could have only assumed that auctions are the most transparent and efficient form of state procurement. Now it is not an assumption but a reality corroborated by the facts".