RusHydro procurement tenders. RusHydro and the unified electronic trading platform signed a cooperation agreement. Better doesn't mean cheaper
As part of the Eastern Economic Forum, RusHydro and the Unified Electronic Trading Platform signed a cooperation agreement. The document was signed by the Deputy general director for Economics, Investments and Procurement Activities of RusHydro Viktor Khmarin and First Deputy General Director of the Unified Electronic Trading Platform Andrey Kashutin.
The agreement is aimed at interaction in the field of organizing procurement for the needs of PJSC RusHydro using a specialized electronic trading platform " Commercial purchases» JSC “Unified Electronic Trading Platform”, located on the Internet at the address: https://com.roseltorg.ru. Currently, RusHydro is creating, including the RAO ES of the East Holding, to increase the transparency of procurement activities and create the most comfortable competitive environment. Cooperation between RusHydro and the Unified Electronic Trading Platform, the largest operator of electronic trading for government customers and commercial enterprises- an important step in end-to-end efficiency improvement.
JSC "Unified Electronic Trading Platform" (JSC "EETP") was selected in 2009 by the Government of the Russian Federation to conduct public procurement in accordance with the Law on the Contract System and is currently the federal operator of its own platform on which tenders are held for government and corporate customers . In total, more than 1.87 million purchases worth over 8.84 trillion rubles were carried out on the site. The company was one of the first to begin conducting an open auction procedure in electronic form according to the new edition Federal Law 94-FZ as part of an experiment to implement pilot electronic trading for government customers. EETP JSC provides services to a wide range (more than 270 thousand) of various types of customers, including: the Ministry of Defense of the Russian Federation, the Federal Agency for Tourism, the Ministry of Internal Affairs, the Ministry of Emergency Situations, as well as the largest subjects of 223-FZ: Rosatom State Corporation, PJSC Inter RAO, PJSC T Plus, LLC Siberian Generating Company, JSC SO UES, etc. The functionality of JSC EETP covers all types of interaction: from collecting and coordinating primary needs to supporting contractual activities. Today, EETP JSC is shaping trends in the government procurement market, using a high-quality technological base, modern software and a developed infrastructure that greatly simplifies access to bidding for suppliers and small businesses.
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Information in this press release may contain estimates or projections or other forward-looking statements regarding future events or future business and financial activities PJSC RusHydro and/or its subsidiaries and affiliates. Some statements are purely estimates or forward-looking statements, and actual events or results may differ materially. PJSC RusHydro does not undertake any obligation to revise these statements in order to correlate them with actual events and circumstances that may arise after the date of this communication, or to reflect events that are not currently reasonably expected to occur.
Denis Vladimirovich, RusHydro is one of largest companies in the country and, accordingly, a very significant customer. What is the company's total annual purchases?
The total volume of purchases for the RusHydro Group is approximately 200-250 billion rubles per year. Last year it amounted to 225 billion rubles.
- How much did you manage to save?
In 2015, we managed to reduce procurement costs by 10.8 billion rubles, in 2016 - 18.5 billion, in the first half of this year this figure reached 10.9 billion. That is, we hope to exceed the results achieved previously.
- What part is made up of purchases from a single source?
In 2015 - 39% of the total volume of purchases, in 2016 - 35%. RusHydro's procurement regulations contain a clear list of cases when and what can be purchased directly, without competitive procedures. These mainly include purchases of electricity, gas, real estate rental, and payments for water use. There are exceptions - for example, purchases from monopolists, emergency situations, etc. urgent cases when the central procurement commission, if certain justifications are available, decides to purchase goods or services without holding a tender. Exceptions, for example, may include purchases from our specialized institutes.
They are the general designers of a number of company facilities, and if there is a need to carry out any additional design work, there is no point in entrusting this task to third parties. The same situation is possible with equipment suppliers, if these supplies have already been contracted and similar products are being purchased in addition.
- How many purchases take place on the electronic platform and why is this indicator so important?
Approximately 95%. The purpose of the electronic platform is to cover the entire market as much as possible. Accordingly, when we purchase through electronic auctions, this becomes known throughout the country, which ensures serious competition, maximum transparency and reduced corruption risks. In addition, electronic procurement also reduces labor costs for buyers.
Are there representatives of small and medium-sized businesses among the company’s partners? And what can they offer the holding?
The share of RusHydro procurement contracts carried out from such companies (taking into account legally established exceptions) is 56.8%, despite the fact that the mandatory indicator established by law is at least 10%. If we talk about the range of goods, these are mainly household goods, services of security companies, simple equipment, and construction work.
Lower risks, higher effect
RusHydro includes different enterprises, and each has its own specifics. Can centralization of procurement activities take into account all these aspects?
The experience of large Russian and foreign companies shows that they are all following the path of centralization. It allows you to save on scale when purchasing similar products, interact more effectively with manufacturers, and ensure the unity of the procurement methodology. From the point of view of the specifics of the holding, we adhere to a reasonable approach to centralization and maintain a certain balance. If you look at the total value of our purchases, about 70% of them are decided centrally. That is, we do not take away the entire volume, thereby ensuring mobility.
Over the past year, have Far Eastern enterprises managed to fully integrate into a unified procurement management system?
Undoubtedly. Now we are united normative base and center of responsibility, unified approaches to decision making. This is, of course, a plus. But taking into account the specifics of the activities of Far Eastern companies, we are developing more flexible approaches to the procurement of certain goods and services, simplified approval procedures. For example, one of the problems in terms of timing is procurement for technological connection to the networks of new consumers. The deadlines here are quite strict and are established by law, so a simplified scheme applies: our Far Eastern colleagues can form and dispose of some lots without the approval of the central purchasing commission. Also, in the near future, we plan to introduce a new procedure, designed primarily for purchases for technical connection: pre-qualification selection of companies (with the possibility of updating the list of companies that have passed pre-qualification, which is especially important) and quick purchases among these companies that have passed pre-qualification.
By elimination
- There are situations when a particular purchase needs to be carried out as soon as possible. How are such issues resolved?
In such cases, exceptions to the general rules are provided. All decisions on sole source procurement are made by the central purchasing committee, subject to certain justifications. But if an emergency situation arises or if the slightest delay can lead to significant damage, then the procurement regulations normatively establish a scheme for making an expedited decision by the chairman of the commission alone. Then, of course, this decision is de facto submitted to the Central Control Commission, which checks its validity. Let me give you this case as an example. A company employee was seriously injured; it was necessary to urgently transport him to a Moscow clinic, since in the region where the person was located, they could not provide the necessary assistance. It was necessary to conclude an agreement for the transportation of the victim and an agreement with a medical institution ready to receive him. The decision was made in a matter of hours - a person's life was at stake.
- And yet, most purchases take quite a long time to be approved...
We are seriously working on process optimization. Recently, the head of the RusHydro company, Nikolai Shulginov, signed an order that contains a list of fairly fundamental optimization decisions regarding the procurement planning process, the work of the central control center and the start of procurement procedures. Thanks to this, the time required for a number of procedures should be reduced by almost half. Now we are integrating these solutions into current processes and making changes to information systems.
Better doesn't mean cheaper
- Is low price always decisive?
There is a stereotype that buyers always choose what is cheaper. This is completely untrue. It is clear that for the purchase of simple products, price is the determining criterion. And it’s a completely different matter when it comes to high-tech, complex products. Low cost does not guarantee victory in the competition. One of the key factors is compliance with customer technical requirements. Simply put, we will never buy a cheap transformer with minimal characteristics. Our procurement system involves the evaluation of applications using a specific methodology, which includes scoring based on various criteria. It applies, for example, when we purchase consulting services or R&D. Here the price is definitely not of decisive importance; the qualifications and experience of each specific performer of work and services are paramount. In the end, the one who scores the maximum score wins, that is, provides the optimal ratio of quality and price.
- How does the import substitution policy affect the procurement system?
Let me emphasize once again: we purchase only those goods and services whose characteristics suit us. Now the products of domestic manufacturers successfully compete with Western models. In addition, in January of this year, Russian Government Decree No. 925 came into force, according to which the state provides Russian manufacturers with a 15 percent preference. And if domestic and foreign suppliers with similar goods participate in the tender, the one who offers the best conditions wins, taking into account the reduction in the price of the Russian supplier by 15% at the evaluation stage.
- It turns out that this resolution greatly complicated access to Russian market foreign manufacturers...
This measure encourages foreign partners to create joint ventures, invest more actively in the Russian economy, look for partners and engage in localization of production in the Russian Federation. So the market reacted positively to this innovation.
Difficulties of transition
- Among the main tasks of your department is logistics and inventory management...
The word “supply” in the company’s name did not appear by chance. The supply policy approved by RusHydro is a strategic level document, which states that we must gradually move from procurement management to a full-fledged supply process. This is a large-scale and long-term task affecting both logistics and inventory management, as well as positional formation of needs, the introduction of a unified system of regulatory and reference information, category management, and so on. It is impossible to solve such a problem quickly, only gradually, step by step. And we are moving towards this.
- What are the main problems you face?
A classic problem for any buyer is poor quality of technical requirements. Customers, especially technical services, are far from working with the market, which requires clear formulations. One requirement that is unclear, but key for us, can almost halve the number of bidders. We work closely with functional customers to ensure maximum competition, and develop guidelines for the development of technical requirements. Improving the quality of procurement planning and its systematization is also one of the key tasks of our division. Another project we are working on together with the information technology department is automation of the planning and procurement process. In the near future, we plan to create a unified information platform that will automate all processes - from procurement planning to concluding a contract, as well as approval stages throughout the RusHydro Group. It will also include a block of operational reporting on the Group’s purchases, which is also very important. We expect that already in next year procurement planning for 2019 will be entirely carried out in a single system.
- Are there any difficulties with suppliers?
Our main task when working with suppliers is to ensure an optimal level of competition between qualified market participants who are interested in our purchases. And here we have achieved positive results. In 2016, compared to 2015, the total number of unique companies that took part in the Group’s procurement increased by 24%. This suggests that more and more companies trust the RusHydro procurement system. Another key task is to minimize the number of intermediaries and contact manufacturers directly. Unfortunately, many of our factories are not always ready for this. The reasons are different: in some places it happened historically, some do not agree with some aspects of the contracts, some are not satisfied with the lack of an advance payment. In all cases we try to find a compromise solution.
