On 26 December 2018, the Kazakh Parliament adopted legislative amendments constituting a substantial reform of public procurement (Law of 26 December 2018 No. 202-VІ ЗРК, amendments of December 2018). It is therefore important to take into account the impact of these changes on the public procurement framework. The Ministry of Finance organized public debates with the participation of civil society to discuss the main policy measures of these changes. Stakeholder engagement meetings were held in the cities of Almaty, Astana and Uralsk with the active participation of businesses and local authorities (Beketaev, 2018[5]). The use of lots and the issue of consolidation may be relevant to the purchase of goods, work and services by a housing association. Under the Government Procurement Regulations, 2015, the treatment of lots/aggregation is addressed in sections 6(11) to 6(15), which set out the rules for calculating the value of the contract in order to assess whether the threshold is exceeded. In addition to these two priorities, the December 2018 amendments include numerous other revisions to the public procurement framework and the procurement framework for national holding companies and national companies (« broader public sector »). In this section, some of the most important are presented. The development of uniform technical specifications for popular and homogeneous goods and services is a powerful tool that goes hand in hand with the centralization and standardization of public procurement.
As of today, standard technical specifications are only available for furniture. The development of standard technical specifications for other goods and services is one of the keys to aggregate procurement, as it will make it easier for central purchasing bodies (former individual organisers) to group similar lots from different contracting authorities together. The Department of Finance plans to develop a catalogue of standard technical specifications in 2019. This is a positive development that will improve the efficiency of public procurement procedures and support an increase in the centralisation of public procurement by individual organisers. The development of standardized technical specifications could focus on consistent goods and services that are in demand in all types of government organizations. According to the Ministry of Finance, public procurement in Kazakhstan totaled about KZT 4.15 trillion (€10.2 billion) in 2018. This represented about 7.1% of GDP in 2018, up from 5.4% in 2017. Public procurement expenditure accounted for 35.6% of public expenditure in 2018, up from 22% in 2017. While the share of government procurement in GDP is below the OECD average (11.8% of GDP in 2017), public spending is higher than the OECD average (29.1% in 2017) (OECD, 2019[1]). As a result, public procurement is an important market in Kazakhstan. Several public services are provided by state-owned enterprises, which are not included in the figures above. This highlights the fact that the government has a significant economic footprint in Kazakhstan.
Governments can use UCIs as tools to implement policy objectives in specific sectors, such as: promoting green public procurement, innovation and SME participation in public tenders. Framework contracts generally involve the publication of an opportunity by one or more contracting authorities. That contracting entity shall then conclude a contract or other agreement with one or more economic operators for the supply of works, supplies or services to different contracting authorities during a specified period. The rationale for the procurement framework approach is to achieve savings, both in terms of procurement costs and time spent on the procurement process. In general, the greatest savings in public procurement are achieved when framework agreements are combined with centralised public procurement and e-procurement (OECD, 2011[12]). Framework agreements have a number of other benefits for stakeholders: they are summarised in Box 1.2. Government procurement in the Republic of Kazakhstan is governed by several laws and regulations, which are discussed in this section. In addition, Kazakhstan is a party to several international agreements that also have an impact on government procurement. In general, the normative framework for public procurement consists of the provisions of the following laws and regulations: Previously, PPL 54 contained exceptions providing for direct award on the basis of exceptions, i.e. direct procurement without advertising. After the December 2018 changes, there are now 50.
In addition to removing certain exceptions, the amendments added a new exception and expanded the scope of at least two exceptions. In terms of the value of procurement, the most important exception, which has now been removed, was for contracts proposed by the President. At present, Kazakhstan has not concluded framework agreements that are not envisaged for inclusion in government procurement legislation. Regarding national reform in Kazakhstan, the December 2018 amendments mention public tenders with prequalification, which the government intends to use on a large scale for construction work. This change creates the status of pre-qualified supplier. A single qualification body will be created to pre-qualify suppliers, who will then be able to submit a request for tenders with prequalification. In February 2019, the Ministry of Finance drew up a list of constructions and properties for which a public tender with prequalification is the mandatory award method (Ministry of Finance of the Republic of Kazakhstan, 2019[6]). In addition, the European Commission has highlighted the benefits of making the use of existing framework agreements widely mandatory (PWC & European Commission, 2017[14]).
However, whether or not framework agreements should be binding also depends on a country`s ability to implement different models. The voluntary use of framework agreements reinforces the need to develop attractive and attractive value propositions for contracting authorities and suppliers. A binding system offers more security and potential additional spillovers to the entire administration. As stated above, government procurement can be carried out by all « governmental organizations » (Russian: Государственные органы) in Kazakhstan. Government organizations at the central level are usually ministries and their subordinate committees. The law does not provide for a standard method. Organizers and individual organizers are free to choose the method they deem most appropriate, unless an Order in Council of the Minister of Finance prescribes a specific method of procurement. For all methods, rules and thresholds define the circumstances under which they can be applied.
However, many other OECD or EU countries insist that all public procurement should be open and competitive by default. The December 2018 amendments also empower the Department of Finance to determine which contracting methods must be applied to certain goods, services or works. Until now, contracting authorities have been free to choose the method of award within the limits provided for in the context of public procurement. There is no standard method as in other countries. According to the Ministry of Finance, this additional prerogative will streamline public procurement by accompanying the centralization of markets while increasing efficiency. In February 2019, the Ministry of Finance established a list of construction and property works (including furniture, construction and installation works, preparation of construction and design documents, software and electronic products) for which a public tender with prequalification is the mandatory award method (Ministry of Finance of the Republic of Kazakhstan, 2019[6]). The Ministry of Finance could balance the need for reform with the disadvantages of frequent changes in the legal framework for public procurement: public procurement practitioners and potential bidders need time to familiarize themselves with the new procedures and rules. This can lead to a loss of efficiency and should be taken into account before implementing reforms to increase the efficiency and effectiveness of public procurement. Disclaimer – This guide is intended to inform registered housing associations operating in Northern Ireland. It does not purport to be a binding interpretation of the various EU public procurement directives and requirements, and its sole purpose is to draw the attention of housing associations as bodies governed by public law (BGPL) to the requirements and the need for the association to ensure compliance.
Associations should refer to relevant legislation when implementing the requirements and, where necessary, obtain appropriate legal and professional procurement advice. Advice can also be obtained from NIHE as a CoPE. Saer NIANG has been Director General of the French Public Procurement Regulatory Authority of Senegal since January 2011. Previously, he worked at the institution as Technical and Training Director. Mr. Niang has a diverse and rich professional experience in the public and private sectors as Commercial and Commercial Director of the National Lottery of Senegal, where he worked for nine years, and as Marketing and Sales Director of TIGO, the second largest telecommunications operator, for eight years. As a procurement expert, Mr. Niang has been involved in various international activities, including as co-chair of MAPS, member of the EIP (Effective Institution Platform) and former chair of the African Network on Public Procurement. Lord. Niang holds a bachelor`s degree in economics and an MBA in management.
As a result, the government is aligning procurement policy with this legal framework as well as its broader policy objectives. The procurement system in Kazakhstan can be considered decentralized, with various governmental organizations and state-owned enterprises managing specific procurement projects.