R.Petrosyan: participation of foreign companies in the efforts for government orders is a pledge of international competitiveness of Russian suppliers

Preferences such as denial of access of foreign companies to government orders hamper development of Russian market and unreasonably increase budgetary expenses

Deputy Head of the Antimonopoly Service, Rachik Petrosyan had a meeting with representatives of the Federal Ministry for Economy and Energy of the Federal Republic of Germany, the Russian-German Foreign Trade Chamber, the Eastern Committee of German Economy and the East European Union of German Economy.  

The parties discussed the key issues of foreign companies, particularly, German, participating in government orders and procurement by state-run companies in Russia. They discussed current difficulties facing foreign procurement participants, the differences in approaches to this issue, and compared legislative regulation of government orders in Russia and in Germany.

“It is important to point out that FAS sees great benefits for Russian markets in presence of foreign suppliers. It includes not only and not so much expanding supply for consumers but primarily that this is the only serious incentive for development of Russian companies. For Russian suppliers to grow and be competitive on the international market, competition with foreign companies should exist on the domestic market. And the market government orders and procurement by state-run companies are not an exception”, explained Rachik Petrosyan.

As an example, Deputy Head of FAS mentioned a project on a three-stage competitive procedure for purchasing medical drugs for public needs. According to the initial idea given to FAS from the Ministry of Industry and Commerce, only bids filed by the suppliers that have full production cycle in Russia (production of active pharmaceutical ingredients, finished dosage form, primary and secondary package and release quality control) should be accepted for procurement. According to the projects, the ordering party must reject any other bids even if the drug prices are considerably lower.  

“FAS supports the idea of granting preferences to domestic manufacturers of pharmaceutical medical drug substances, but we do not agree completely with the suggested approach. Purchasing drugs, one cannot but take into account the savings to the budget that can be achieved by choosing a particular supplier. If the benefits from a contract with a supplier that does not have a full production cycle in Russia will exceed, say, 20-25 %, such savings to the budget should not be neglected. Granting “percentage” preferences to Russian drug producers will stimulate production localization in Russia and maintain competition on the market. Some other bodies, NGOs and business associations adhere to the same position”, pointed out Rachik Petrosyan.