Figure of the Day: Zero Contracts


Center for Strategic Research (CSR) has published a report "Public procurement. What does the contract system need to look like?" Authors of the study spoke of spending on the contract system of state purchases, shortcomings and errors of the site, as well as loopholes in the law.

One of the paradoxes of public procurement is the so-called "zero" contracts, in the trading cards of which the sum of a contract is 0, not indicated at all or is "insignificant" (for example, one ruble). As noted in the report, 1890 of such contracts were concluded in 2015, and 1109 contracts were concluded in the first nine months of 2016.

There are several reasons why "zero" contracts appear in state procurements. The first one is a supplier’s mistake during a tender.

"This usually happens when participants lower their price below a reasonable limit. After the win, a supplier and a customer conclude and immediately terminate a contract by agreement of the parties, " the CSR explains. These contracts are 56% of all "zero" contracts.

15% of contracts have no price specified at all because of a technical error. "Information about a terminated contract with no transactions can be presented in the system as a contract with "zero" price. This makes it possible to hide mistakes in the work of a contract department, " the report says.

The remaining 28% are real "zero" contracts. It may seem that when a supplier agrees to a free contract, the state saves budgetary funds. In fact, concluding of such contracts means at least lost profits, and as a maximum - inefficient spending of budget funds.

These contracts, for example, for placement of budget funds on accounts (about 30% of all "zero" contracts), are very profitable for suppliers: a bank not only provides the state with a service, but also benefits from it. Such cases should be considered a sale, not a purchase.

Experts believe appearance of "zero" contracts is a "disturbing tendency", demonstrating distortion of pricing and mismanagement.

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