Ministry of Finance of the Republic of Kazakhstan

ASTANA-2016

Part I

Public Procurement System in the Republic of Kazakhstan

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OVERVIEW

Legislation:1. The Law of the Republic of Kazakhstan as of December 4, 2015, “ON PUBLIC PROCUREMENT “2. By-laws and regulations of the Republic of Kazakhstan (around 30)

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The authorized agency (policy development): Ministry of Finance of the Republic of Kazakhstan The authorized agency (control): Financial Control Committee under the Ministry of Finance of the Republic of Kazakhstan

Public procurement coverage: - Budget units (state organizations)- State enterprises- JSC, LLP with state share (excluding national companies)

Annual value (in average): 2.5 – 3 trillion KZT (around $9 bln USD)

Number of contracting agencies (clients): more than 19,000

Number of potential suppliers: around 70,000

Achievements

1. The new Law “On Public Procurement” was adopted on December 4, 2015

2. The new “Public Procurement Rules” were approved on December 11, 2015

3. The new platform of public procurement web-portal was commenced on January 1, 2016

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Full automation of public procurement system

Before

Now

Paper format -

Electronic format -

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Progressive norms of the new Law

This allows for the contracting agencies not awaiting for budget approval and based on the positive opinion of budget commission to start

procurement procedures.

2. Preliminary discussion of technical specificationsThe mandatory condition for approving

technical specifications is their preliminary discussion. It provides an opportunity for

potential suppliers to review the tech.specs in advance and in case of having any comments to

appeal them.

1. Preliminary annual plan

This allows for potential suppliers to finalize their bids within 3 days period

3. Preliminary Minutes of access

Reciprocal bids review ensures transparency and allows for evaluating the objectiveness of

the decisions made by contracting agencies

4. Reciprocal bids review process

In case of receiving a complaint during these 5 days the contract award is stayed for 10

business days during which the complaint is being considered

5. Time lag before contract award (5 business days)

5. Purely electronic formatof public procurement

All public procurement processes, starting from planning and up to the payment are

done electronically

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Preliminary outcomes

3 мес. 2015г. 3 мес.2016г.

1,2

5,8

AVERAGE NUMBER OF BIDDERS PER COMPETITIVE BIDDING

5 TIMES MORE

3 MONTHS OF 2015 3 MONTHS OF 2016 3 мес. 2015г. 3 мес. 2016г.

13 BLN

25 BLN

2 TIMES MORE

3 MONTHS OF 2015 3 MONTHS OF 2016

CONDITIONAL SAVINGS

Note: Maximum number of bidders per lot reaches 51

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Outcomes of in-house audit

The audit is performed Without visits to the objects of

control!!!

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9.2 THOU

4.6 thou

2015

3 moths of 2016

PREVENTIVENESS

NUMBER OF CALLS FOR RESPONSIBILITY

NUMBER OF THOSE FREED FROM RESPONSIBILITY

0

356

- Violations identified AT EARLY STAGE

- Violations identified EX POST FACTO

Total value of violations

116 bln KZT

Total value of violations232 bln kzt

Number of persons who corrected violations

following notifications after in-house audit

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Ministry of Finance of the Republic of Kazakhstan

ASTANA-2016

Part II

Enhancing the function of procurement professionalization in Kazakhstan

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Current situation with improving professionalization

Existing regulatory framework: The Rules of retraining and advancing

qualification of public procurement staff were approved(Order of the Ministry of Finance of the Republic of Kazakhstan as of December 30,2015, #697)

According to the Rules the training is conducted by educational facilitiescompliant with the educational programs approved

Problems:

No control over quality of education

2. Insufficient competence of the tutors

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The Strategy of sustainable development of procurement professionalization system

• Development of academic educational programs with the testing system of certifying knowledge and skills

• Introduction of mandatory certification for procurement specialists

• Close collaboration with the international institutions (the World Bank, ADB, IDB) to study the advance practice

• Expanding online training programs of the Center for E-Commerce

• Involvement of universities in the process of training to develop qualified procurement specialists.

The structure of procuring entities

The number of contracting agencies registered on the portal :

19 755

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Structure of educational facilities

Structure of health care facilities

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Hospitals, policlinics Adaptation and rehabilitation centers Narcological, psycho, cancer hospitals etc. Other camps, boarding schools etc.

Proposed tools to boost professionalization

Solutions: The new Law provides for establishment of Single Purchaser Organizations on republican, oblast and rayon levels.

In this regard currently there is an ongoing work to develop the legislative framework for centralization of procurement for educational and health care facilities meaning to free these facilities from public procurement function by transferring this function to the single purchaser organizations.

Problem:Based on the analysis above it is evident that significant part of procuring entitiesbelong to educational and health care sector (schools, kindergartens, hospitals andpoliclinics).At the same time the aforementioned organizations do not have structuralsubdivisions responsible for public procurement function which accountantsresponsible for that.

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