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The term "public procurement" hardly touches the philistine - you will think, the state somewhere is buying something for itself. Meanwhile, public roads, schools, hospitals and other social facilities are being constructed through public procurement, medical equipment, medicines in hospitals, food in schools and equipment of training classes are being built, buses, trams and other public transport are being purchased, streets and parks are being renovated. If you add purchases of state-owned companies and corporations, then without them there could not exist in Russia whole industries - pipe, cable, energy, nuclear and transport engineering. In aggregate in 2017, the amount of state purchases and purchases of state-owned companies amounted to 36.5 trillion rubles, or 40% of the countrys GDP.
Author: Alexey Ulyanov, PhD in Economics, Director of the Institute for Enhancing Competitiveness. The article is prepared for the analytical project "Plan of Changes" .
It is not surprising that recently the population has more and more questions about unreasonable budgetary spending (let us recall the notorious golden toilet bowl), corruption, inefficiency. The authorities and regulators also state a steady increase in violations and total cartelization - suppliers conspiracies among themselves and with state customers. Entrepreneurs trying to get state orders complain about high entrance admi-barriers, predetermined tenders, dumping, "greenmail" and other dishonest practices, delays in paying for contracts and all the same corruption. Thus, public procurement needs a plan for change.
The Russian system of public procurement is unique
Paradoxically, the creators of our public procurement system did not hide that they were creating a unique system, nowhere else in the world, that did not exist. In Russia, 60% of government procurement is carried out at auctions , where the only criterion is price, while in developed countries the share of public procurement auctions is close to zero . Moreover, the EU directive recommends that members of the EU prohibit such methods of public procurement.
How so, after all, economics has recently been increasingly advocating the use of auctions? Yes, but we are talking about auctions for the sale of radio frequencies, state property and state assets, bankruptcy and confiscation property, quotas for harmful emissions, rights to use subsoil and so on (and our country should, by the way, expand the use of auctions for sales of the above goods and services and rights). Perhaps the most famous literary example of the auction, from the "12 chairs", and the famous Sothbeys and Christies are sales auctions. But we did not find any serious theoretical work on auctions in public procurements and purchases in general. By the way, private business neither in Russia, nor abroad also does not use auctions on purchases.
Why auctions do not work in public procurement
At sale all properties of the goods are set by definition. The buyer can familiarize himself with these characteristics - see a plot of land or a work of art. In this case, the price may well serve as the sole criterion of profit.
But if you are the customer and decided to hold a tender, who will offer the lowest price (there are no other selection criteria, as well as the opportunity to refuse the service or the goods themselves, who offered the lowest price, he won), you should accurately and correctly describe all your requirements for the service and product properties. However, it is extremely difficult to describe what you do not have. If you use someones help, you will have to pay for it, or it will be a potential seller, who will make sure that only his products fit the description.
It turns out that the auction during the purchase turns into an absurdity and pushes the state customer either to backstage arrangements, or to buy not what is needed. Moreover, this form of procurement actually impedes the development of competition and leads to monopolization based on the principle that "the winner gets everything". What happens to those companies that did not win the auction? Often they are forced to leave the market and even from business. 35-40% of state purchases are construction in one form or another, 20-25% - drugs. It is thanks to the auctions that these areas have become so monopolized. In developed countries, contracting with not one, but several tender winners is universally applied. For example, according to the 60:40 principle, 60% of the tenderer gets the first place, the second - 40%. This allows not only to reduce all possible risks, but also to support competition,
A cruel joke played auction roll in specific Russian conditions. A significant part of the domestic industrys output loses the Chinese at a price, and the western one - in quality. But if the evaluation goes according to the "price-quality" criteria, our products have a chance. However, the introduction from 2006-2007. auctions in the state order this chance was taken away from the Russian industry: either the conditions were described for a specific supplier, often a well-known western brand with more budgets, or the suppliers of cheap Chinese products won the auctions.
And another weighty argument against the auctions. In real life and business, prices for goods and services are determined by the seller. Of course, it responds to customer demand, and buyers can influence the price through bargaining and negotiation. But the first word in setting the price is always the seller. However, Russian legislation requires the state customer first to determine the initial (maximum) price of the contract. This puts the state customer in an extremely difficult situation. After all, anyone who has ever used Yandex-Markets knows that prices even for simple standard goods can differ at times and even on orders (unless, of course, we are talking about a specific brand of goods, but then the sense of auction and competition again turns into profanation). Establishing an initial price requires huge human and financial costs and opens up enormous opportunities for abuse, for which we taxpayers pay twice (increase in budget expenditures and state officials). According to the Ministry of Economic Development, public procurement is busy900 thousand people . This figure is comparable to the number of the Russian Armed Forces or the Ministry of Internal Affairs. And, to a large extent, the customers staff has become inflated precisely because of the auction roll, imposing on the state customer uncharacteristic functions of the price determination for the buyer, the need to write very detailed technical assignments. And as a consequence - the need for control over unfortunate customers, which does not and can not give a result.
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