The Ministry of Finance does not comment on procurements allegedly made in violation of the law, while it has to

According to the charter of the Ministry of Finance of the Republic of Armenia, one of the functions of the Ministry is to assess whether the procurement of public organizations comply with the legislation of the Republic of Armenia.

According to the Law on Procurement, there are four procurement procedures: single procurement, request for quotation, electronic auction, and tender.

The purchase can be made through the “Quotation Request” procedure, if the purchase price does not exceed 80 times the purchase base unit (80 million drams) and the purchase object is not included in the list of goods, works and services purchased through electronic auction.

However, it appears that the prohibition of the maximum procurement limit under the “Request for Quotation” procedure does not prevent government agencies from purchasing under this procedure exceeding the specified limit. And the body responsible for its control, the Ministry of Finance, in fact, does not fulfill its statutory obligations.

Only in 2021-2023, more than 60 procurements were made under the “Request for Quotation” procedure.

For instance, in 2021, the Ministry of Defense made 9 procurements exceeding AMD 80 million using this procedure, the total amount of which exceeds AMD 1.2 billion. And in the previous year, in 2023, Yerevan Municipality made 8 procurements exceeding AMD 80 million using this procedure. The total value of the contracts exceeded AMD 1 billion 158 million.

In contrast to the “Single-person Procurement” procedure where the legislation has provided for restrictions in order to create obstacles for its unnecessary use, for the RFQ procedure, only the limitation of the value of procurement has been provided.

Considering the limitation of AMD 80 million defined for the RFQ procedure, clarification is needed for circumstances  related to a number of procurements made in 2021-2023.

On November 15, 2023, Union of Informed Citizens sent a inquires to the Ministry of Finance of the Republic of Armenia regarding transactions exceeding AMD 80 million, requesting to present the legal grounds of these procurements. In response, the Ministry of Finance offered UIC to contact the contracting authorities who organized the procurement processes.

The response of the RA Ministry of Finance regarding transactions exceeding AMD 80 million under the RFQ procedure

It follows from the response of the Ministry of Finance of the Republic of Armenia that the Ministry is not responsible for overseeing the fulfillment of the requirements of the Law on Procurement, and it is not interested in alleged (or probable) cases of violation of the law by the contracting authorities, and is not going to evaluate the compliance of procurements of public sector organizations with the RA legislation as required by its statutory obligations.

Thus, this invites the question as to who in Armenia is responsible for evaluating the compliance of procurement of public sector organizations with RA legislation.

Authored by Artak Kyurumyan