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Legal framework for conducting tenders in the Republic of Uzbekistan

Botschaft Usbekistan, December 29, 2015

A tender is a competitive form used for selecting proposals to supply goods, to render services and to fulfill works in accordance with the terms specified in appropriate tender documentation beforehand, by the time fixed there, on the principles of competition, justice and efficiency. A contract is concluded with a tender winner or a participant that has submitted a tender proposal fully meeting the requirements specified in tender documentation, which offers the best conditions.

The procedure for conducting tenders and auctions in the Republic of Uzbekistan is reflected, among other legislative documents, in Articles 379-381 of the Civil Code of the Republic of Uzbekistan, which specify, in particular, that a contract (agreement) may be concluded by means of tenders. In this case a contract is signed with a tender winner.

The tender may be organized by an object’s owner, a person possessing the property right or a specialized organization. The latter acts on the basis of an agreement signed with an object’s owner or a person possessing the property right, and speak on their behalf or on its own behalf.

Actions and competitions may be open and closed. Any entity may take part in an open auction and open competition. As for a closed auction or a closed competition, only entities specifically invited for this purpose may participate.

The main documents designed to regulate state purchases include:

- Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No 456, “On measures to improve the organization of tenders” dated 21st November, 2000;

- Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No 302, “On measures to improve the system of tenders in the field of major construction” dated 3rd July, 2003;

- Resolution of the President of the Republic of Uzbekistan No ПП-1475, “On optimization of the state purchases system and greater attraction of small businesses to the field” dated 7th February, 2011;

- Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No 100, “On measures to improve the regulatory-legal framework for the organization of state purchases” dated 1st April, 2011.

With a view to effectively tackling the tasks set in the field of tender (competition) organization, a special agency was established at the Ministry of Foreign Economic Relations, Investment and Trade of the Republic of Uzbekistan, amenably to the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No 454 as of 26th September 1997. Called Uzbektenderconsulting, the Agency is engaged in conducting tenders.

So, not only a comprehensive legal mechanism was formed, but the entire institute of state support was created to assist indigenous enterprises in realizing their import-related plans and intentions.

In this connection, one should mention the Regulations No 456, “On the conduct of tenders to purchase raw materials, components and equipment” as one of the main documents designed to raise the efficiency, with which foreign credit lines and grants are used, to facilitate the development of competition between domestic and overseas suppliers, to ensure the attraction of more small and medium-sized businesses to the state purchases sector as well as to improve the organization and conduct of tenders to purchase raw stuff, materials, components and equipment. A given document was put into effect by the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No 456 dated 21st November, 2000.

In particular, Regulations in question stipulate the following:

- Purchases of imported and local raw stuff, materials, components and equipment, to the tune in excess of US 100,000 under a single contract, which are financed out of the state budget, non-budget funds of budgetary organizations, state purpose-oriented and other non-budget foundations, set up in keeping with Presidential Decrees or Resolutions of the government of the Republic of Uzbekistan, and foreign grants that are provided within the framework of agreements signed by the President and the government of the Republic of Uzbekistan with donating countries, international, foreign governments and non-governmental organizations, and foreign credit lines allocated against the guarantee of the Republic of Uzbekistan;

- The selection of transport-forwarding companies to convey goods under tender contracts concluded with foreign suppliers.
Tenders are not conducted in the following cases:

- Purchases of goods (works, services) are carried out in accordance with Presidential Decrees and resolutions of the Cabinet of Ministers of the Republic of Uzbekistan;

- Donating countries, corresponding international, foreign governmental and non-government organizations have other procedures for purchasing goods (works, services) or other terms on which foreign credits are given under the guarantee of the Republic of Uzbekistan.

At the same time, the Regulations, “On the conduct of tenders to purchase raw materials, components and equipment “deal with the following issues:

- Financial responsibility for the initiation of purchases;

- The organizational model of purchasing procedures, with a focus on tender commissions and working bodies of such commissions;
- Advantages of open tenders and terms for using closed tenders;

- Tender initiation procedures;

- Preparation of tender documentation;

- Evaluation of qualification characteristics of tender participants;

- The schedule and the terms fixed for different tender stages;

- Submission of applications , procedures for their receipt, unsealing and estimation, guarantees, supporting tender proposals;

- The procedure for registering contracts and the responsibility borne by state authorities and tender participants for any infringements.

In order to back indigenous producers, a number of amendments concerning the provision of price-related preferences are inserted in the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No 456 as of 21st November, 2000.

As well as that, Article 14 of the Law of the Republic of Uzbekistan, “On competition” stipulates a package of anti-trust requirements to the way tenders are conducted.

When conducting tenders, the following actions that lead or can lead to the limitation of competition are banned:

- any infringement of the procedure for conducting tenders specified by legislation;

- coordination by organizers and/or tender customers of the activity performed by tender participants;

- ungrounded refusal to accept documents from economic establishments required for their participation in tenders;

- ungrounded disqualification of tender participants;

- creation of preferential conditions for one or several tender participants making it easier for them to take part in tenders, including by providing access to information, with the exception of cases stipulated in legislation;

- indication of a concrete commodity producer, with the exception of cases where commodities fail to correspond to producers, and other cases stipulated in legislation.

The infringement of the anti-trust requirements specified in Part 1 of a given Article is viewed as the ground, on which tender decisions as well as agreements signed on their basis, may be declared invalid.

It is also directly relevant to mention here the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No 264, “On measures to further improve the conduct of tenders” dated 14th September, 2015.

The document is intended to increase the efficiency and to ensure the rational use of funds provided to finance investment projects that are implemented in different industries of the national economy and in the social sphere; to speed up the realization of projects; and to improve the organization and conduct of tenders for the selection of suppliers of goods, works and services.

The Resolution under discussion has created sectoral interdepartmental tender commissions for the purchase of goods, works and services, and approved their members.

In addition, the document specifies that:

- the interdepartmental tender commission jointly conducts tenders and determines winners on the basis of tenders for the purchase of goods, works and services, within the framework of investment projects, which are realized in corresponding economic sectors and in the social sphere, and whose total value exceeds US $5 million under a single contract;

- tenders, whose total value under a single contract is less than US $5 million, are conducted by tender commissions, set up by customers in conformity with legislation;

- tenders, which have been started earlier and consisted of several stages, but not yet brought to completion, are conducted by the tender commissions that existed before the present Resolution comes into effect.

For the time being, the competent ministries and departments of the Republic of Uzbekistan are working on the introduction or approval of amendments and additions to a new version of the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No 456 dated 21st November, 2000.

Passing a corresponding legislative document and bringing the entire regulatory-legal framework to a single format with a view to further optimizing and perfecting the mechanisms of tender purchases in the Republic of Uzbekistan will promote the development of legislation for the conduct of state purchases on a tender basis.

Source: «Business partner.uz» newspaper


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