5.3

Suppliers

The bylaw on the procedure of procurements of goods and services for Company’s needsNo.79-ref regulated procurement activities during the reported period.

Company’s principles for procurement build-up:

Principle 1:

Reasonable use of special techniques to amplify the effects of market laws in each procurement.

Principle 2:

Application of compulsory procedures to each procurement over a certain value (also applicable to smaller procurements, if deemed required) that imply:

  • Market analysis and planning of demand
  • Transparency of procurements; equality of rights, justice, lack of discrimination or limitation of competition with regard to other participants
  • Honest and reasonable choice of the most preferable proposals after thorough analysis of benefits and expenses (primarily, price and quality of service)
  • Target and efficient expenditures to acquire goods and services and to promote measures aimed at cost-cutting
  • No limitations of access to procedures by setting immeasurable requirements for a bidder

Principle 3:

Systemic approach, including regulatory environment, set organization structure of procurement administration and oversight, trained employees, smooth-running procurement infrastructure (information support, e-commerce means, certification, professional advisors)

Principle 4:

Compliance with corporate unity of procurement rules

Principle 5:

Oversight of authorities and liability of procurement employees

he bylawNo.79-ref describes the following types of procurement: tender, auction, request for proposals, vendor quotations, competitive dialogue, simple procurement, small procurement and single vendor procurement.

During the reported period we conducted 3,344 procurements worth RUB 15,907,101.84 thous, excl. VAT, namely:

Open tender: 244 procurements worth RUB 8,449,855.87 thous., excl. VAT (7.3% of total procurements, 53.2% of total value of procurements);

Open request for proposals: 869 procurements worth RUB 3,701,699.07 thous., excl. VAT (25.987% of total procurements, 23.271% of total value of procurements);

Open vendor quotations: 538 procurements worth RUB 333,703.75 thous., excl. VAT (16.089% of total procurements, 2.098% of total value of procurements);

Closed vendor quotations after open competitive dialogue: 1,433 procurements worth RUB 2,490,075.69 thous., excl. VAT (42.853% of total procurements, 15.654% of total value of procurements);

Single vendor procurements: 236 procurements worth RUB 490,601.67 thous., excl. VAT (7.058% of total procurements, 3.085% of total value of procurements);

Open competitive dialogue: 18 procurements worth RUB 0.0 thous., excl. VAT (0.539% of total procurements, 0.0% of total value of procurements);

Closed vendor quotations after open tender: 3 procurements worth RUB 5,728.098 thous., excl. VAT (0.09% of total procurements, 0.036% of total value of procurements);

Open auction: 3 procurements worth RUB 435,437.70 thous., excl. VAT (0.09% of total procurements, 2.738% of total value of procurements).

The amount of e-commerce procurements totaled 3,105 procurements worth RUB 15,406,316.27 thous., excl. VAT (99.904% of total procurements, 99.930% of total value of procurements, except for single vendor procurements). The savings post-effect from procurements during the period totaled RUB 1,960,332.430 thous., excl. VAT or 10.972% of total announced value. Open procurements (open tenders, requests for proposals, competitive dialogue, closed vendor quotations after open competitive dialogue) contribute 92.942% to total completed procurements and 96.915% to total value of procurements.

Procurements from small and medium-size businesses totaled RUB 7,554,337.81 thous., excl. VAT (2,548 procurements) or 71.803% of total value and 76.609% of total procurements, excl. procurements of financial services. Procurements from small and medium-size businesses only totaled RUB 1,830,858.97 thous., excl. VAT (515 procurements) or 17.402% of actual value and 15.484% of total procurements (excl. procurements of financial services).

To enhance economic metrics, to improve and promote transparency of procurements we conduct the following activities:

  • Max portion of procurements should be performed on electronic trading platforms (b2b-energo.ru and etp.rosseti.ru);
  • Revisions of specifications to exclude unnecessary requirements to procurement participants;
  • Negotiations with manufacturing plants to invite them to apply on the ETP directly (without intermediaries);
  • Additional requests for documents, required from participants via ETP;
  • Arrangement of a council with regard to securing of efficiency of procurements from small and medium-size businesses, conducted by IDGC of Urals (OAO);
  • Arrangement of seminars for prospective contractors to explain requirements of tender documentation and filing procedure;
  • Conduct of pre-contract negotiations;
  • Conduct of repeated rebiddings.