Since January 1, 2025, a new Law of the Republic of Kazakhstan "On Public Procurement" (hereinafter referred to as the PP Law) has come into effect in Kazakhstan.
New Rules for Public Procurement (hereinafter referred to as the PP Rules) will also come into effect (approved by Order of the Minister of Finance of the Republic of Kazakhstan dated October 9, 2024 No. 687), the document defines the procedure for public procurement and does not apply to public procurement using a special procedure.
The law is aimed at optimizing the procedures of the procurement process, improving the quality of purchased goods, works and services, strengthening the responsibility of public procurement participants and developing competition.
The first block of innovations: The PP Law is aimed at simplifying and reducing procurement procedures.
In order to conduct purchases promptly, provide greater powers to customers, and avoid delays in procurement procedures, complaints will now be considered directly by the procurement organizer himself (paragraph 1 of article 25 of the PP Law, paragraph 588 of the PP Rules). The appeal of the procurement results will be carried out through the web portal and only for procurement, where the winner is determined by the tender commission (paragraph 7 of article 25 of the PP Law).
In order to reduce the time required for procurement procedures, the time limits explicitly set in the Law have been moved to the level of the PP Rules. (subparagraph 3) of paragraph 208, paragraph 517 of the PP Rules).
The grounds for recognizing public procurement as invalid have been revised to simplify procedures and eliminate corruption risks. Previously, purchases could be declared invalid when only 1 supplier participated in them. Now it is allowed to conclude a contract with such a supplier, if it is recognized as meeting the qualification requirements (paragraphs 278, 409, 474, 490, the PP Rules).
In general, the accelerated acceptance of goods, work and maintenance by customers and providing them with greater independence provides for the right to purchase goods from one source up to 100 MCI, work and maintenance up to 500 MCI. For rural akimats, the threshold for purchasing such goods, work and services has been increased from 3,000 to 4,000 MCI. (subparagraph 28) of paragraph 316 of the PP Law) It is also possible to obtain from one source the goods, works and services necessary to prevent fraught situations (now only for emergency response). (part one, subparagraph 3), paragraph 3 of article 16 of the PP Law).
The second block of innovations: It is aimed at improving the quality of purchased goods, work and services.
To improve the qualifications of procurement participants and develop non-price criteria for selecting suppliers, a registry of potential suppliers has been introduced. This will allow procurement to be carried out among suppliers with a positive reputation and transition to selecting suppliers based on a combination of price and quality criteria for all types of procurement.
Information about the supplier will be generated through the extensive use of data from government information systems (such as work experience, financial stability, absence of tax arrears, publication of financial reports in the public domain, etc.).
The law establishes the possibility of entering into a "turnkey" construction contract, which involves comprehensive work on the construction of a facility with the assignment of responsibility to a single supplier at all stages of the project, from design to commissioning, as well as the supply of goods and provision of services related to the aforementioned work (article 19 of the PP Law, paragraphs 298-305 of the PP Rules).
The law provides for the possibility of entering into a "turnkey" construction contract, which covers comprehensive work on the construction of a facility, with the establishment of a single supplier's responsibility at all stages of project implementation, from design to commissioning, as well as the supply of goods and provision of services related to the aforementioned work (article 19 of the PP Law, paragraphs 298-305 of the PP Rules).
The third block of innovations: Aimed at strengthening the responsibility of suppliers.
The possibility of conducting public monitoring of public procurement has been introduced (paragraph 2, article 24 of the PP Law).
A ban has been established on the participation of potential suppliers in public procurement if their director or founder has previously committed corruption offenses (subparagraph 8, paragraph 1, article 7 of the PP Law). Additionally, potential suppliers with overdue wage arrears will also be excluded from public procurement (subparagraph 4, paragraph 1, article 11 of the PP Law).
The maximum volumes of work and services transferred by the supplier to subcontractors (co-executors) for the performance of work or provision of services have been reduced from 50% to 30% (paragraph 8, article 17 of the PP Law).
The fourth block of innovations is aimed at promoting competition.
The law establishes the possibility of transferring all state and quasi-state organizations to a unified procurement platform (subparagraph 7, article 3 of the PP Law).
The method of procurement through commodity exchanges has been excluded.
Procurements from a single source through direct contracts with a specific supplier, as determined by the Government, will now be carried out only in exceptional cases when necessary for the implementation of critically important facilities and nationwide projects (subparagraph 41, paragraph 3, article 16 of the PP Law).
The procedure for challenging the results of public procurement has also been changed.
In administrative cases challenging the decisions, conclusions, and directives of the authorized body following a public procurement audit, as well as the decisions of the customer, procurement organizer, or the unified procurement organizer made in the course of reviewing complaints about the results of public procurement, and the actions (or inactions) of bailiffs, the preliminary hearing must be held no later than 20 working days from the date the lawsuit is filed in court (part 1, article 143 of the APC of the RK).
Such cases are considered and resolved within 10 working days from the date they are scheduled for a hearing in court (part 2, article 146 of the APC of the RK).
An appeal, or a prosecutor's petition in administrative cases challenging the decisions, conclusions, and directives of the authorized body following a public procurement audit, as well as the decisions of the customer, procurement organizer, or the unified procurement organizer made in the course of reviewing complaints about the results of public procurement, and the actions (or inactions) of bailiffs, may be submitted within 10 working days from the date the decision in its final form is issued, which must be produced no later than 10 working days from the announcement of the decision (part 4, article 168 of the APC of the RK).
Administrative liability for violating the public procurement legislation of the Republic of Kazakhstan has been strengthened.
Failure or untimely filing by the customer, procurement organizer, or unified procurement organizer with the court to recognize a potential supplier or supplier as an unscrupulous participant in public procurement in the event that the potential supplier or supplier provides false information regarding the qualification requirements and/or documents that affect the competitive price proposal, -
This results in a fine of 30 MCI for officials (Part 10, Article 207 of the CAO of the RK).
Failure to submit or untimely submission by the customer to the authorized body in the field of public procurement of information about the supplier's refusal to enter into a public procurement contract by not providing contract performance security and/or anti-dumping amounts in accordance with the public procurement legislation of the Republic of Kazakhstan -
This results in a fine of 30 MCI for officials (part 10-1, article 207 of the CAO of the RK).
Failure or untimely filing by the customer with the court to recognize suppliers as unscrupulous participants in public procurement in the event of non-performance or improper performance by the supplier of obligations under the public procurement contract, except in cases provided for by the public procurement legislation of the Republic of Kazakhstan -
This results in a fine of 30 MCI for officials (part 10-2, article 207 of the CAO of the RK).
New Rules for establishing exceptions to the national regime in public procurement are being introduced. (The Rules for Establishing Exceptions to the National Regime in Public Procurement were approved by the Resolution of the Government of the Republic of Kazakhstan No. 853, dated October 15, 2024).
An exception to the national regime in public procurement is a restriction, established by the act of the government of one EAEU member state, on the access of potential suppliers (contractors, co-executors) from other EAEU member states to participate in public procurement procedures for specific goods (works, services) or a restriction on access to public procurement carried out in certain sectors of the economy.
The Government of the Republic of Kazakhstan, in order to protect the foundations of the constitutional order, ensure national defense and state security, protect the domestic market, develop the national economy, and support domestic producers of goods, establishes exceptions to the national regime for a period of no more than two years.
New Rules for the formation and maintenance of registries in the field of public procurement will come into effect (approved by the order of the Minister of Finance of the Republic of Kazakhstan No. 646, dated September 26, 2024).
Registries in the field of public procurement (hereinafter referred to as registries) are divided into the following types:
1) Registry of potential suppliers;
2) register of customers;
3) register of public procurement contracts;
4) register of unscrupulous participants in public procurement;
5) register of complaints;
6) the register of work experience of potential suppliers.
The registries in the field of public procurement are formed and maintained by the authorized body in the field of public procurement in both Kazakh and Russian languages, in electronic form through the unified procurement platform.
The information is posted on the web portal and is available for review by interested parties free of charge.
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What goods, works, and services will be purchased from small and medium-sized businesses under the PP? (paragraph 7, article 27 of the PP Law)
In order to support domestic producers, a separate list of GWS has been defined, which must be procured exclusively from small and medium-sized enterprises.
The list of procured goods, works, and services (GWS) includes:
At the same time, the cost of the specified GWS should not exceed 50,000 MCI.
The rules do not apply to public procurement of GWS carried out in accordance with the list of GWS, for which the method of procurement is determined by the authorized body, as well as to public procurement of GWS for which exceptions to the national regime have been established by a government decision (The Order of the Minister of Finance of the Republic of Kazakhstan No. 677, dated October 8, 2024).
The Ministry of Finance has also approved the Rules for Public Procurement using a special procedure (The Order of the Minister of Finance of the Republic of Kazakhstan No. 671, dated October 7, 2024).
Public procurement using a special procedure is carried out in cases of acquiring:
1) goods, works, and services required to ensure law enforcement and national security, the information about which constitutes state secrets in accordance with the legislation of the Republic of Kazakhstan on state secrets and/or contains official information with limited distribution;
2) goods, works, and services, the information about which constitutes state secrets in accordance with the legislation of the Republic of Kazakhstan on state secrets.
A decision on the implementation of public procurement is made by the customer based on the approved or updated annual plan. Public procurement is then carried out using one of the following methods:
1) the competition;
2) from a single source.
The Rules for the use of the unified procurement platform have been updated, effective from January 1, 2025 (The Order of the Minister of Finance of the Republic of Kazakhstan No. 627, dated September 16, 2024).
The Unified Procurement Platform (web portal) is an information system of the authorized body in the field of public procurement, providing a single point of access to electronic public procurement services and procurement services for certain entities in the quasi-public sector.
To work on the web portal, it is necessary to:
Services to users for using the web portal are provided on a paid basis. However, information on published procurement can be viewed free of charge.
What functions are available on the web portal:
The list of services for public procurement has been expanded with additional requirements for suppliers. (Order of the Minister of Finance of the Republic of Kazakhstan No. 613, dated September 10, 2024).
The Ministry of Finance has approved the list of specific goods, works, and services for which additional requirements may be imposed on potential suppliers and suppliers in public procurement
The list includes services:
The list also includes works related to the maintenance of roads.
The Ministry of Finance has approved a new list of goods for public procurement with standard tender documentation (The Order of the Minister of Finance of the Republic of Kazakhstan No. 593, dated August 29, 2024).
The new "List of types of goods, works, and services for which public procurement is carried out in accordance with standard tender documentation and auction documentation" includes the following: goods from the light and furniture industries, office equipment, motor vehicles, diesel fuel. It also includes services for periodical printed publications and communication services.
The GWS for daily and weekly needs in public procurement has been approved (The Order of the Minister of Finance of the Republic of Kazakhstan No. 559, dated August 20, 2024).
The list of goods, works, and services for daily and/or weekly needs, valid until the conclusion of public procurement through a tender or auction and the entry into force of the public procurement contract, will be applied starting from January 1, 2025.
The new list for maintenance remains unchanged and fully corresponds to the previously approved list, which is valid until December 31, 2024.
Public procurement under the list is carried out in an amount that does not exceed the volume of public procurement of such goods, works, and services necessary to meet the customer's needs during the procurement process, but for no longer than two months.
The lists of goods, works, and services for public procurement by unified organizers have been updated.
The new version outlines the lists of goods, works, and services for which public procurement is carried out by a unified procurement organizer (The Order of the Minister of Finance of the Republic of Kazakhstan No. 589, dated August 28, 2024):
The list of goods, works, and services purchased from public associations of persons with disabilities has been updated. (The Order of the Minister of Labor and Social Protection of the Population of the Republic of Kazakhstan No. 345, dated September 3, 2024).
In particular, in the list of manufactured goods, each product has been assigned a separate position.
Additionally, all goods, works, and services have been assigned codes according to the unified nomenclature directory of goods, works, and services.
The list of goods, works, and services for which the method of public procurement is determined by the authorized body has been approved (The Order of the Minister of Finance of the Republic of Kazakhstan No. 546, dated August 15, 2024):
The method of competition is used to procure:
The method of competition with the use of a rating-point system is used to procure: