Alexander Ananenkov, Acting Chairman of Gazprom’s Management Committee conducted today a meeting dedicated to the Gazprom Group’s shifting over to contest-based awards of contracts while identifying suppliers and service providers. Attending the meeting were the leadership of Gazprom’s Contest Commission and Tender Committee as well as experts of the Company’s core business units.

The meeting addressed paramount measures aimed at producing a package of documents regulating activities of Gazprom’s subsidiaries’ contest commissions and tender committees. The required documentation was targeted for completion over a two-week term.

Reference:

Gazprom’s Contest Commission was established in June 2003. The Provision on Gazprom’s Contest Commission was ratified in September 2003.

The Provision on preferentially contest-based awards of contracts on supply of goods, completion of works and rendering of services for the Gazprom Group’s needs was developed with the view of:

• enhancing the efficiency of contract awards;
• promoting competition;
• taking an objective and impartial approach to selecting suppliers;
• achieving procurement openness;

Under the Provision, tender procedures are organized by Gazprom’s Contest Commission (which arranges for and coordinates contest-based awards of contracts by Gazprom’s administrative units and subsidiaries) and by Gazprom’s Tender Committee or its subsidiaries’ tender committees (executive bodies formed by tenderees).

The tenderee provides the Contest Commission with a request for supplies of goods, completion of works and rendering of services as well as produces terms and conditions of goods supply.

Gazprom’s Contest Commission coordinates activities of tender committees, decides on contest-related documentation and procedures and determines a bidding winner or winners.

Persons interested in the contest outcomes, including persons who submit bidding requests or are employed by the company submitting a respective application, are not eligible to be the Contest Commission members.

The Tender Committee invites contenders to take part in a bidding, produces documents on preliminary participants, evaluates whether the applications submitted are in line with the requirements set in the contest regulations and officially sums up tender results.

The bidding announcement is published by the Tender Commitee in the Contest Results Information and Analytic Bulletin and is posted on Gazprom’s corporate Web-site. The Committee assumes the responsibility to keep confidential registers of information submitted to this body by suppliers prior to holding a bidding. Talks between the Tender Committee and suppliers on a request to take part in a contest are inadmissible.

The bidding involving just one supplier is regarded upon as invalid.

A 2-phase bidding is summoned if a tenderee is unable to make up detailed technical specifications and has to make an anticipated study of potential suppliers’ propositions.

Sole-source awarding of contracts on supply of goods, completion of works and rendering of services without bidding procedures is only possible provided:

• goods, works and services can be only purchased from a concrete supplier due to their technical complexity and specific nature;
• there is an urgent need in certain goods, works and services in case of emergencies (accidents, catastrophes and other unforeseen circumstances)

In 2003, Gazprom channeled RUR 88.13 billion for procurement purposes only, including RUR 68.12 billion (77.3%) earmarked for centrally-controlled deliveries through Gazkomplektimpex.

The contest-based procurement share is predicted to grow from 20% in 2004 to 50% in 2005 and will reach 80% of overall procurement.

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