The Law Of The Republic Of Azerbaijan
On Public Procurements
Present Law determines economic, legal and organizational basis of public procurements in the Republic of Azerbaijan, sets principles and rules of effective and economical use of state funds during procurements, creation of equal competitive environment for all consignors (contractors) on the basis of competition and publicity.
CHAPTER I
General Provisions
Article 1. Law applicability area
Present Law extends to procurement of goods (works and services) performed in the Republic of Azerbaijan by state enterprises and organizations (administrations), enterprises and organizations, state share in charter fund of which is 30 and more percents at the account of state funds, loans and grants obtained by state and received under state guarantee.
Article 2. Basic definitions
Definitions used in present Law shall have following meanings:
“procurement” – acquisition of goods (works and services) as established by present Law;
“procurement agency” – state enterprises and organizations (administrations), enterprises and organizations procuring goods (works and services), state share in charter fund of which is 30 and more percents;
“tender” – competition held to select the most efficient procurement contract performance proposals submitted by bidders in writing;
“goods” – product with certain quantitative and qualitative features, products in solid, fluid and gaseous state, equipment, raw materials as well as electric energy;
“works” – projecting, construction, reconstruction, destruction, repair of building or object including preparation of construction site, installation of equipment, construction, assembling, finishing or ground works, as well as associated drilling, geodesic, scientific-construction, exploration, publishing and printing works, satellite survey works, seismic survey and other kind of works under procurement contract;
“services” – any other subject of procurement except goods and works;
“consignor” (contractor)" – potential or actual party to the procurement contract entered into with procurement agency;
"bidder" – legal or physical persons or union of legal persons which submitted proposal and paid tender participation fee under tender conditions;
"bid security" – guarantee for obligations on tender proposal taken by bidder to procurement agency. Such guarantee may be bank guarantee, letter of credit, securities, cash, deposits and other financial assets;
"Tender Committee" – temporary workgroup set up by procurement agency and performing tender procedures on its behalf;
"Bidding Documents" – document submitted to bidders and reflecting tender conditions of procurement agency;
"procurement contract" – document concluded between procurement agency and tender winner (winners) and setting obligations of the parties in connection with procurement of goods (works and services);
"contract performance security" – contract performance security provided by tender winner (winners) to procurement agency. Such guarantee may be bank guarantee, letter of credit, securities, cash, deposits and other financial assets;
"preferential correction" – benefit set by procurement agency in Bidding Documents for local consignors (contractors);
"state funds" – funds of state budget of the Republic of Azerbaijan, loans, grants, foreign aid received under international agreement and contracts entered into by the state, means of out-of-budget funds of organizations funded from budget and other means related by legislation to state funds;
"issuer" – financial institution ensuring tender proposal of consignor (contractor), obligations on performance of procurement contract and other payment instruments;
"estimated price of goods (works and services)" – average market price of goods (works and services) set by procurement agency prior to announcement of tender in accordance with current regulations.
Article 3. Legislation of the Republic of Azerbaijan on public procurements
Relations associated with public procurements shall be governed by present Law, other laws and regulations of the Republic of Azerbaijan.
Article 4. Respective executive authority on public procurements
4.1. Respective executive authority on public procurements shall carry out state policy in the field of procurement of goods (works and services) at the account of state funds and perform the following for this purpose:
4.1.1. take part in creation and improvement of legal base governing public procurements in the Republic of Azerbaijan, work out rules, instructions, other documents on public procurements and submit them to respective executive authorities for approval;
4.1.2. supervise over legality of procurement of goods (works and services) on competitive basis at the account of state funds and performance of contracts, consider disputes, suspend procurement procedures for up to 7 banking days in case of discovery of breach of law and if necessary raise the matter of cancellation of tender results to procurement agency;
4.1.3. consider disputes in public procurement procedures and in case of breach of law take measures in accordance with present law provisions;
4.1.4. provide procurement agencies with methodical and organizational assistance on organization and conducting of public procurements, give recommendations, set up specialists’ professional level improvement courses, hold seminars and conferences, prepare relevant study and methodical materials;
4.1.5. set rules of production of reports on public procurements, ensure that regulations, documents and information governing public procurements are brought to public’s attention;
4.1.6. produce and submit annual reports on public procurements to respective executive authorities.
4.1.7. creates an official website for public procurements (from now on shall be called official website) where announcements regarding tender/bidding, requests for proposals, requests for quotations as well as information about their results are located.
4.2. In case of failure by officials and other responsible employees of executive authority on public procurements to perform their service duties, they shall bear responsibility as per respective legislation.
Article 5. Coming of procurement contract into effect and public notification
5.1. Acceptance of tender proposal and coming of procurement contract into effect at application of tender procedures shall be made in accordance with article 40 of present Law.
5.2. If all other procurement methods are applied, consignors (contractors) shall be notified of rules of coming of procurement contract into effect at time when request relating to proposals, offers or quotations is received by procurement agency.
5.3. Information about procurement contract entered into as a result of tender shall be published within 5 banking days in organ of press where announcement about tender was publishedand also will be posted on the official website.
Article 6. Requirements to qualification of consignor (contractor)
6.1. This article applies to determine and assess by Tender Committee of consignors (contractors) qualification indices at any stage of procurement procedures.
6.2. In order to participate in procurement procedures, consignors (contractors) qualification indices shall meet the following criteria:
6.2.1. availability of professionalism, experience, technical and financial possibilities, workforce, competency in management, reliability in relevant field to ensure performance of procurement contract;
6.2.2. authority to enter into procurement contract;
6.2.3. possibility of free and unlimited use of its assets as well as solvency;
6.2.4. consignors (contractors) shall not declared bankrupt, their property shall not seized, mortgaged or otherwise charged, they shall not persons, which commercial activity has been suspended by court decision;
6.2.5. absence of tax and other mandatory payment obligations in the Republic of Azerbaijan which execution is overdue;
6.2.6. absence of previous conviction within 5 years preceding to commencement of procurement procedures for crime connected with their professional activity as well as professional activity of their business-managers and employees or incorrect indication of their qualification indices for conclusion of procurement contract or absence of court ban to deal with respective professional activity.
6.3. Procurement agency may in view of right of consignors (contractors) on protection of intellectual property or commercial secrets request from them documentary proofs or other information, confirming that they possess qualification indices in accordance with criteria indicated in article 6.2 of present Law.
6.4. Requirements meeting this article shall be interpreted in qualification compliance determination documents (if qualification compliance determination procedure is held) or Bidding Documents or in other documents relating to attraction of proposals, offers or quotations and apply to all consignors (contractors) at the same extent. Procurement agency cannot set any other criteria, requirements or procedures relating to qualification indices of consignors (contractors), which are not provided for by this article.
6.5. Procurement agency shall assess qualification indices of consignors (contractors) on the basis of criteria and qualification procedures interpreted in qualification compliance determination documents and in Bidding Documents or in other documents, relating to attraction of proposals, offers or quotations.
6.6. In view of articles 8.1, 36.9, 44.2 of present Law, procurement agency shall not set criteria, requirements or procedures assuming discrimination between consignors (contractors).
6.7. If procurement agency discovers at any time that consignor (contractor) provided fictitious information about its qualification indices, it shall exclude such consignor (contractor) from tender.
6.8. If in view of essence insignificantly inaccurate and incomplete information provided by consignor (contractor) about its qualification indices, will upon request of procurement agency be immediately removed as provided by present Law, such consignor (contractor) cannot be excluded from tender.
6.9. Procurement agency may in course of procurement procedures request approval and legalization of documents reflecting bidder’s qualification indices as provided by legislation of the Republic of Azerbaijan.
Article 7. Determination of qualification compliance of consignors (contractors)
7.1. Procurement agency prior to submission of tender proposals or offers may hold consignors (contractors) qualification compliance determination procedures.
7.2. If procurement agency holds qualification compliance determination procedures, it shall give or send collection of documents relating to such procedures to consignor (contractor), which made an application and paid participation fee (if provided).
7.3. Collection of documents on qualification compliance determination procedures shall include:
7.3.1. instruction on production and submission of proposals on qualification compliance determination procedures;
7.3.2. summary of basic conditions of procurement contract to be entered into as a result of procurement procedures;
7.3.3. method, place and deadline for submission of documents for determination of qualification compliance with indication of specific day and hour of production and submission by consignors (contractors) of their proposals;
7.3.4. in accordance with legislative acts on procurements – other requirements relating to submission of documents and preparation to conduct qualification compliance determination procedures by procurement agency;
7.3.5. information to be indicated in tender invitation in accordance with articles 26.1.1, 26.1.2, 26.1.7-26.1.10 and 26.1.13 of present Law;
7.3.6. information provided for by articles 42.1.1-42.1.3, 42.1.6, 42.1.14, 42.1.17 of present Law.
7.4. In order to give consignor (contractor) an opportunity to submit its proposal in provided term, procurement agency shall for the purpose of determination of qualification compliance respond to its any request within 3 banking days. Response to any request shall be sent to consignors (contractors), which received qualification compliance determination documents without notification of requester.
7.5. When decision about qualification indices of consignor (contractor) which submitted proposal for qualification compliance determination is made, procurement agency shall be guided by criteria set by present Law only.
7.6. Procurement agency shall inform consignor (contractor) about results of determination of qualification compliance. Successful consignors (contractors) shall be entitled to continue participation in tenders.
7.7. Procurement agency shall provide unsuccessful consignors (contractors) with justified information about it.
7.8. Procurement agency may request successful consignor (contractor) to reconfirm its qualification indices. Unsuccessful consignor (contractor) shall be excluded from tender. Each consignor (contractor), which received request to reconfirm its qualification indices and responded to such request shall be immediately informed to what extent its qualification indices suit the procurement agency.
Article 8. Participation of consignors (contractors) in public procurements
8.1. Except the cases indicated in regulations governing public procurements, all resident and non-resident legal or physical persons or union of legal persons irrespective of state belonging shall be entitled to take part in public procurement procedures held in the Republic of Azerbaijan as bidders.
8.2. If participation of consignors (contractors) in procurement procedures is limited because of state belonging, procurement agency shall interpret appropriate reasons in procurement procedures report.
8.3. In view of provisions of article 8.1 of present Law, if consignors (contractors) are invited by procurement agency to participate in procurement procedures, procurement agency cannot later exclude them from procurement procedures because of state belonging.
Article 9. Procurement procedures notification forms
9.1. Documents, notices, decisions and other information provided for by present Law, sent by procurement agency and consignors (contractors) to each other shall be provided in writing.
9.2. Consignor (contractor) or procurement agency shall be entitled to transfer information provided for by articles 7.4, 7.6, 11.4, 28.4, 32.2, 33.3, 36.1, 36.2, 40.1, 41.3, 47.1 and 47.2 of present Law via communications, which do not allow for their content to be recorded. In such case written confirmation of information shall be immediately informed to receiving party.
9.3. Irrespective of form, the documents, notices, decisions or other information were sent or received, procurement agency shall not allow for discrimination among consignors (contractors).
Article 10. Procurement procedures report
10.1. Procurement agency shall produce procurement procedures report with indication of the following information:
10.1.1. brief description of procured goods (works and services);
10.1.2. names and addresses of consignors (contractors) submitted tender proposals, offers or quotations, name and address of consignor (contractor), which procurement contracts is entered into with, value of such contract;
10.1.3. information about qualification indices of consignors (contractors) submitted tender proposals, offers or quotations or note on absence of such information;
10.1.4. estimated price of procured goods (works and services) or basis for its determination, brief summary of basic condition of each tender proposal, offer, quotation and procurement contract;
10.1.5. brief description of assessment and comparison of tender proposals, offers or quotations including application of any preferential correction in accordance with articles 36.9 and 44.2 of present Law;
10.1.6. if all tender proposals, offers or quotations are rejected, information about it with indication of appropriate reasons in accordance with article 11 of present Law;
10.1.7. if procurement contract is not concluded as a result of procurement procedures conducted with application of procurement methods except open tender - information about it with indication of appropriate reasons;
10.1.8. if tender proposal, offer or quotation is rejected under articles 12 or 13 of present Law - information about it;
10.1.9. if procurement method is used in accordance with articles 16.2 and 16.3 of present Law – interpretation of circumstances taken by procurement agency as a basis for selection of used procurement method;
10.1.10. if participation of consignors (contractors) in procurement procedures is limited by procurement agency in accordance with article 8.2 of present Law because of state belonging – interpretation of circumstances taken by procurement agency as a basis for application of such limitation;
10.1.11. summary of any request on explanation of qualification compliance documents or tender documents, responses to such requests as well as any change in such documents.
10.2. In view of article 35.2 of present Law, part of procurement procedures report indicated in articles 10.1.1 and 10.1.2 after acceptance of tender proposal, offer or quotation as the case may be or upon completion of procurement procedures, which have not resulted in conclusion of procurement contract, they can on the basis of request be transferred to concerned person.
10.3. In view of article 35.2 of present Law, part of procurement procedures report indicated in articles 10.1.3 - 10.1.7 and 10.1.11, after acceptance of tender proposal, offer or quotation or upon completion of procurement procedures, which have not resulted in conclusion of procurement contract, they shall on the basis of request be transferred to consignors (contractors) submitted tender proposal, offer or quotation or consignors (contractors), which submitted proposal for determination of qualification compliance. Except for cases provided by legislation, procurement agency shall not disclose the following information:
10.3.1. information, disclosure of which does not meet state interests as well as damage commercial interests of the parties or prevent fair competition;
10.3.2. information relating to study, assessment and comparison of tender proposals, offer and quotations, apart from summary of information provided for by article 10.1.5 of present Law.
Article 11. Failure of tender and refusal for its continuation
11.1. If number of bidderswho submitted tender proposals to take part at the tender is less than three, procurement agency shall refuse to continue tender and publishes relevant information in organ of press andand also posts on the official websitewhere announcement about tender was published within 5 banking days.
11.2. For the purpose of protection of state interests, procurement agency shall be entitled to make a decision to reject all tender proposals, offer and quotations before acceptance in following cases:
- if bargain between bidders with aim to increase the price is discovered at conducting of tender procedures;
- if tender proposals are not in compliance with Bidding Documents;
- if financing of subject of tender is suspended.
Such decision shall be approved by respective executive authority. On the basis of request of consignor (contractor) submitted tender proposal, offer or quotation procurement agency shall notify him (her) of rejection of all tender proposals, offers or quotations.
11.3. Procurement agency shall bear no responsibility to consignors (contractors) submitted tender proposal, offer or quotation for application of articles 11.1 and 11.2 of present Law.
11.4. Notice on rejection of tender proposals, offers and quotations shall be immediately sent to all consignors (contractors), which submitted them.
11.5. In case of refusal from continuation of tender or rejection of all tender proposals, offers and quotations, procurement agency shall be entitled to announce new tender to procure such goods (works and services) or with no change of essence divide them into parts, if it is allowed by properties of procured goods (works and services) and conduct separate tender on each part. Amount of divided parts cannot be less than amount fixed by respective executive authority.
Article 12. Cases of falsification at public procurements
If procurement agency determines that consignor (contractor) deals with falsification in order to influence taking of any decision relating to procurement procedures and if it is approved by respective executive authority, it shall:
- reject tender proposals, offers and quotations submitted by such consignor (contractor);
- prohibit participation of consignor (contractor) in further procurement procedures for indefinite term or for the term fixed by respective executive authority;
- submit information for investigation of falsification facts to respective competent bodies;
- indicate rejection of tender proposal, offer or quotation and reasons of rejection in procurement procedures report and immediately notify consignor (contractor) about it.