Gaps in the Legislation and Violation of the Procurement Policy, Expert
22.10.2015
12:00
The centralization ration in the state procurement system is increasing while the competition is distorted, said Artak Manukyan from the Transparency International Anticorruption Center.

Manukyan shared the results of the survey he conducted in the state procurement system in 2014-2015.

Procuring from a single source is the main issue, Artak Manukyan believes.

The TIAC conducted its survey in this system in 2014-2015. It is the only NGO in Armenia that has been carrying out such monitoring in four directions since 2008.

According to the expert, single-source procurement leads to lack of transparency.

"Procuring from a single source is observed in every sector. On the whole, a new actor, new participant can win only in low cost tenders while large-scale tenders are won by companies that remain dominant on the market, and it is senseless to speak about a competition. The ratio of the centralization is increasing," said Manukyan.

The survey does not embrace the electronic procurement since the previous survey revealed there is no real system of electronic purchases because it is not applied, Manukyan said.

"Some of our proposals were accepted, some got rejected as it was with our proposal to define the cooperation formats for the private and public sectors. We also proposed that the Government make purchases at exchanges. Our proposal was accepted and there is a provision in the law which, though, reads the Government is to fix the format but it has not been done so far. It is essential that we gain another competitive element and eventually minimize the current tendencies at the market," Manukyan said.

Another major challenge, the expert believes, is the participation of a company founded by one and the same person in the same tender, which is a vivid example of corruption, Manukyan believes.

"The Public Procurement Law is to maintain interests on the market balanced, and our legislation is more client-oriented. TheProcurement Complaint Review Board upheld 46 percent of appeals … This system must see a change of the game rules, and clients must be punished for their wrong decisions. Secondly, the market is hypercentralized: there are 200 companies which control 80 percent of purchases. Procuring from a single source is too frequent - almost 65 percent which means the process cannot be transparent. In addition, the participation is 1.7 while the state procurement is a sector which must constantly be competitive," Manukyan said.

The invitation sent to the Procurement Support Center was rejected.

Lilit Arakelyan, Editor-Coordinator

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