OREANDA-NEWS. October 24, 2008. Budgetary saving is self-explanatory: if in the first six months of 2007 it was 66 billion Rubles, then in the first six months of 2008 it has already reached 117 billion Rubles" - said Mikhail Evraev, the Head of the Department for Control over State Procurement, of the Federal Antimonopoly Service (FAS Russia), at a press-conference. Therefore, the increase was over 77 %, while budget expenditures increased only by 5.4 %, reported the press-centre of FAS Russia.

"The saving has been achieved primarily by replacing arbitrary administrative pre-qualification with economic guarantees of suppliers' obligations. Now the subjective preferences of officials will not give the companies access to governmental orders", - emphasized Mikhail Evraev.

Earlier the ordering party could set any requirements to the bidders, which often resulted in describing their "crony" company. It was replaced with the right of the ordering party to request the winner to present economic guarantees of contract obligations (bank guarantee, liability insurance, monetary funds) for up to 30% of the contract price. As a result of introducing this norm, the range of bidders for state and municipal procurement increased considerably, which created real competition and radically cut bidding prices without decreasing the quality of services, and, therefore, led to significant saving of budgetary funds. It also has direct impact on fighting corruption and developing competition.

FAS Russia conducted a survey among entrepreneurs to find out their attitudes to the reform of state and municipal procurement.

The most interesting survey findings:

1. In your opinion, which federal law has created a better competitive environment for participating in state procurement procedures?

No.94-FZ Federal Law of 21st July 2005 "On State and Municipal Procurement of the Goods, Works and Services"- 74%

No.97-FZ Federal Law of 6th May 1999 "On Competitive Tenders for State procurement of Goods, Works and Services" (was into force until 1 January 2007) - 13%

Abstained - 13 %

2. Evaluate the degree of transparency for state procurement procedures, using a five-grade scale (from 1 to 5, best - 5, worst - 1):

Quotation request - 1.5 grades

Auctions (including electronic auctions) - 4.15 grades

Competitive tenders - 2.6 grades

"Therefore, stated Mikhail Evraev, 74 % of entrepreneurs voted for No.94-FZ Federal Law of 21st July 2005 "On State and Municipal Procurement of the Goods, Works and Services", that is, for the new economic ideology represented by the Law".

Further advancement of the state procurement reform will be creating a unified national electronic portal and making transition of state and municipal procurement to electronic auctions, because auctions are most open and transparent form of bidding.

"When reform will bring the state and municipal procurement system to its "normal capacity", we expect not only significant effect on competition development and fight against corruption but also saving of budgetary funds up to 1 trillion Ruble, or 40 billion Rubles every year", - said Mikhail Evraev.

Mikhail Evraev also said that control over state procurement demonstrated sharp increase of complaints: the number of complaints in the three quarters of 2008 equaled the number of complaints in 2007; typically majority of complaints are sent at the end of the year - in the IV quarter. The work of regional and local controlling agencies has been really helpful in processing the complaints and already gives good results.

"In the period of financial crisis the government must pay serious consideration to development of competition and careful spending of the budgetary funds: the principles that in these latter days of "big revenue" we tend to forget" - summed up Mikhail Evraev.