FAS to have less oversight over private tenders

Currently, says Yaroslav Kulik, Senior Associate at ART DE LEX, most examples of applying the law “On Protection of Competition” to private tenders concern the actions of management companies when conducting tenders for major repairs to residential buildings, including those being repaired with monies from the Fund to Advance Reform of Housing Services and Utilities. At the same time, the law on placing orders does not apply, and the state authorities of constituent entities a local government establish their rules. Management companies are also not obliged to sign agreements following the results of such tenders, given that the work is partially financed by the owners of the apartments in the residential buildings.

Last year, for example, the FAS for the Vladimir Region suspected that the local companies Management Company and Stroyitel-S agreed to hold a fictitious tender to repair the roofs of residential buildings. Even though the above-stated companies were not formally obliged to select a contractor via a tender, the FAS cited them as being in violation of the law “On Protection of Competition”. The two companies attempted to dispute the decision; however, the Vladimir Region Arbitration Court upheld the FAS decision.

“The proposed amendment to the law ‘On Protection of Competition’ will be very beneficial to private business, given that administrative oversight over their activities will most likely reduce; there will not be any risk of the FAS being used to resolve disputes between competitors; and companies will be able to opitimise expenditures when purchasing or selling assets at the maximum price, without having to be concerned with limiting the number of participants; and this will most likely improve competitive tender practice in private business”, believes Mr. Kulik.