Presentation by Bahadir Gasimov, Azerbaijan (ENG) Second SIGMA Regional ENP East Conference on Public Procurement, Kyiv 29-30 May 2018.

1. PUBLIC PROCUREMENT
IN AZERBAIJAN
Bahadir Gasimov
SIGMA Regional ENP East Conference on Public Procurement
Kiev, 29 – 30 May 2018

2. Legislation governing Public Procurement
- The Law on “Tender” was adopted on February 11, 1997;
- The State Procurement Agency was established on May 16, 1997;
- The Law on “Public Procurement” was adopted on December 29, 2001;
- The Law on “Public Procurement” entered into force pursuant to the Decree of the President of the Republic of
Azerbaijan in 2002;
- For drafting this Law, UNCITRAL Model Law on “Procurement of Goods, Construction and Services” was employed.
- In accordance with the above-mentioned Decree, procurement of the goods (works and services), estimated price
of which is 50.000 AZN and higher, shall be carried out by open tendering;
- Any procurement method (excluding single-source procurement) may be employed for procurement of the goods,
estimated price of which is less than 50.000 AZN.
- The Law envisages procurement by way of closed tendering, tendering with limited participation, two-stage
tendering, request for proposals, and single-source procurement, as well as open tendering.

3. Notice on procurement and their results
- Notices on procurement by way of open tendering have been being published on www.tender.gov.az since 2003;
- The Law on “Public Procurement” was amended in 2009.
- Content of the amendment was as follows:
- An official website of public procurement should be created in order to publish notices about tenders on public
procurement, request for proposals, and request for quotations, and to share information about the results of these
procedures;
- The procurement organized by other procurement methods as well as open tendering and the notices about their
results are published on www.tender.gov.az from 2009.
- In 2006, pursuant to the amendments made into the Code of Administrative Offences, administrative responsibility
(up to AZN 2000) was established for not publishing procurement and their results.

4. Amendments to the Legislation Governing Public
Procurement
- In 2016, the State Procurement Agency was shut down and its duties and functions were assigned to the State
Service for Anti-monopoly Policy and Consumer Rights Protection under the Ministry of Economy.
- Law No. 105-VQD on “Amendments into the Law on “Public Procurement” of the Republic of Azerbaijan” was
adopted on January 19, 2016. In accordance with Article 2 of the abovementioned law, during the evaluation of
tender proposals, a procuring entity shall be required to give preference to local goods (works and services),
provided that those goods (works and services) meet the quality requirements defined in tender announcement
and apply a 20% add-on to the prosed price of the similar goods imported.
- In accordance with Law 158-VQD on “Amendments into the Law on “Public Procurement” of the Republic of
Azerbaijan” dated March 4, 2016, procurement of food products (save for wheat purchased for the State Grain
Fund) by government agencies and organizations shall not be governed by the Law on “Public Procurement”.
- In accordance with the amendments made into the Code of Administrative Offences and the Criminal Code in
2017, administrative and criminal responsibilities shall be established for the breach of legislation in the filed of
public procurement.
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5. New Draft Law on “Public Procurement”
- The Ministry of Economy was assigned to prepare a new Draft Law on “Public Procurement” pursuant to the Decree
dated April 28, 2016 of the President of the Republic of Azerbaijan;
- For preparing the new draft law , UNCITRAL Model Law on “Procurement of Goods, Construction and Services” was
employed;
- This draft law envisages implementation of e-procurement;
- For implementation of electronic public procurement, the draft law stipulates creation of single Internet portal and
organization of e-procurement via this portal;
- The portal will support respective stages of public procurement from the preparation of a public procurement notice
until the conclusion of a public procurement contract
- As well, annual procurement plans will be published by procuring entities; and invalid contractors and signed
procurement contract will be registered via the portal;

6. New Draft Law on “Public Procurement”
The Draft Law stipulates:
- to establish a single register of procurement contracts;
- to list invalid contractors;
- to plan public procurement in advance and publish them on the single internet portal of public procurement prior to
the commencement of financial year so as to prevent the avoidance of open tendering;
- to exclude contractors from procurement procedures due to bribery, uneven competitive edge and conflict of interest,
so as to prevent corruption in procurement procedures;
- to set out a code of ethics for the staff of procuring entity involved in public procurement procedures; to implement
framework agreements and competitive negotiation procedures;
- to improve the complaint management procedures;

7. New Draft Law on “Public Procurement”
Terms of implementation of e-procurement
- It is planned to implement electronic public procurement on the voluntary basis at the initial stage;
- In accordance with the draft law, procuring entity shall be entitled to implement procurement with e-procurement
method on the single Internet portal of public procurement in the following circumstances:
- when it is possible to describe procurement in a detailed manner;
- when it is possible to specify, the criteria used for selection of winning bid, with quantity and money.
- Furthermore, in accordance with the draft law, the procuring entity shall be entitled to use e-procurement method
as a stage of procurement as part of any procurement method before making a decision about contract award. But in
this case, the above-mentioned requirements will be met.

8. New Draft Law on “Public Procurement”
Electronic procurement as an independent procurement method
- Procuring entity publishes an invitation to bid and, thus, attracts bids related to e-procurement procedure.
- Invitation to bid shall contain the following data:
- name and address of procuring entity;
- detailed description of purchase item, time and location for submitting it;
- form and terms of procurement contract to be signed;
- criteria and procedures which are implemented to evaluate qualifications of contractors ;
- criteria and procedures used to determine compatibility of bids with the description of purchase item;
- criteria and procedures used for evaluation of bids;
- information whether other costs (transportation and insurance costs, taxes and duties) are included in the price of the
bid other than the cost of the purchase item, and method for calculation and specification of the bid price
- currency (currencies) to be used to calculate and specify the bid price;
- minimum number of contractors to be registered for provision of efficient competition and execution of e-
procurement procedure;
- allowed maximum number of contractors and criteria and procedures which will be implemented to select contractors,
when the number of contractors to be registered is limited;
- information about the form of joining to e-procurement procedure.

9. New Draft Law on “Public Procurement”
- deadline of registration of contractors in the e-procurement procedure and requirements on registration;
- date and time of opening of e-procurement procedure and requirements on identification of bidders in the opening
of e-procurement procedure;
- criteria which regulate closing of e-procurement;
- other rules of organizing the electronic procurement procedure, including the information to be provided to the
bidders during the electronic procurement procedure, language of the information and the terms of submission of
bids by the bidders;
- right to protest against the decisions and actions of the procuring entity, information about the dates of the waiting
period, and the reasons for the relevant decision if such period is not applied;
- formalities required for the entry into force of the procurement contract after the electronic procurement procedure,
including the criteria for determining required qualifications and compliance with formal procedures, if required;
- Procuring entity may limit the number of contractors where the communication means does not allow large number
of contractors to be involved in electronic procurement procedure. In this case, the procuring entity may determine
the registered contractors without any discrimination.

10. New Draft Law on “Public Procurement”
Requirements during public procurement
- Electronic procurement procedures are carried out on the basis of the following:
- on the basis of price, when the decision on contract award is made on the basis of the lowest price;
- on the basis of the price submitted to contractors and other criteria by selecting the most efficient bid as the result
of evaluation.
During electronic procurement procedures:
- Equal and permanent conditions are created for all bidders to submit their bid;
- Automatic evaluation of all bids based on the criteria and procedures submitted to the contractors is ensured;
- Equal conditions are provided for each bidder of e-procurement procedure to observe the process of opening and
evaluation of its bid;
- Procuring entity shall keep confidential identification data of all bidders during the e-procurement procedure.
- When errors occur in the communication system, which leads to interruption of e-procurement procedure, or other
circumstances specified in the e-procurement rules happen, the procuring entity may cancel this procedure. When
the e-procurement procedure is cancelled or suspended, the procuring entity shall keep confidential the
identification data of the bidders.

11. New Draft Law on “Public Procurement”
Requirements after the electronic procurement procedure
- Depending on the implementation of e-procurement procedure, the lowest price bid or the most efficient bid will be
considered a winner as a result of the electronic procurement procedure.
- In case initial evaluation of bids is not carried out, the procuring entity verifies compliance of the winning bid with
the formal requirements and compatibility, of the contractor submitting that bid, with the qualification criteria after
the e-procurement procedure.
- In case the procuring entity finds out that the bid doesn’t comply with the formal requirements and that the
qualification of the contractor is not compatible with the established criteria, the bid will be pushed away.
- Without prejudice to the right to cancel the procurement, the procuring entity shall choose the next low price or
most efficient bid which complies with the formal requirements and is compatible with the qualification criteria for
the closing date of the e-procurement procedure.

12. DİQQƏTİNİZƏ GÖRƏ TƏŞƏKKÜR EDİRƏM
THANK YOU FOR YOUR ATTENTION!