OREANDA-NEWS.  July 17, 2012. The Federal Antimonopoly Service (FAS Russia) initiated a case against the Ministry of Defence of the Russian Federation in the person of the Navy of the Russian Federation. FAS suspects that the Navy violated Part 1 Article 15 of the Federal Law “On Protection of Competition” (competition-restricting actions of federal executive bodies), reported the press-centre of FAS Russia.

The Navy appointed “RNK” Ltd. the only supplier of special-purpose components required by “Zelenodolsk Plant Named after Gorky” OJSC to execute a government contract for supplying weapons and military equipment.

Following the above decision, “Zelenodolsk Plant Named after Gorky” OJSC terminated a supply contract, concluded earlier with the manufacturer of special-purpose product – “PNPPK” OJSC and concluded and new contract with “RNK” Ltd.

Thus, the Navy restricted “Zelenodolsk Plant Named after Gorky” OJSC in its choice of a supplier of the required component, which could have resulted in restricting competition on the relevant market.

FAS established that “RNK” Ltd. did not manufacture the product in question and did not have the product available at the time of concluding the contract with “Zelenodolsk Plant Named after Gorky” OJSC.

As a result, “RNK” Ltd. was unable to honor its obligations for supplying the product, which put “Zelenodolsk Plant Named after Gorky” OJSC under a threat of failing to execute the government contract on schedule and imposing a heavy fine.

“The Commission shall have to understand how the Navy substantiated appointing “RNK” Ltd as a supplier”, commented Deputy Head of FAS Department for Control over Industry and Defence Complex, Andrei Greshnyov.

The case is scheduled for 15th August 2012.

Reference:

Part 1 Article 15 of the Federal Law “On Protection of Competition” prohibits competition-restricting acts and actions (omissions) of federal executive bodies, the authorities of the constituent territories of the Russian Federation, local self-government bodies, other bodies and organizations exercising the functions of the above bodies engaged in providing state or municipal services, that lead or can lead to preventing, restricting, eliminating competition.