Stakeholders > Suppliers and contractors > Key purchasing principles

Key principles of purchasing activities

Our purchasing policy is directed at ensuring target and efficient spending of the Company’s monetary funds, as well as receiving economically feasible costs (market prices for products) and preventing possible misuse by purchasing personnel.

Regulation of purchasing activities

  • is carried out by application of mandatory procedures to be complied with by the purchasing personnel for each purchase with the cost of over RUB500,000 (inclusive of VAT) (these procedures can be also applied for lower priced purchases, when deemed to be reasonable). It is prohibited to divide up purchases to make the regulations inapplicable thereto;
  • is based on the system approach, which stipulates that the Company should have the regulation environment, established of the organizational structure of purchase management and control, trained purchasing personnel, organized purchase infrastructure;
  • ensures compliance with the corporate integrity of purchase rules;
  • sets authorities and responsibilities of purchasing personnel;
  • is based on a reasonable use of special methods for strengthening of market rules for each particular purchase.

Conventionally continued purchases

The quantity of conventionally continued purchases for the year of 2012 was 164 for the total amount of RUB17,495.5 million (inclusive of VAT). No such statistical analysis was conducted in 2011.

  • Purchases of electric energy transmission services of JSC FGC UPS
  • Purchases of housing and utility services for the Company’s needs.
  • Purchase of electric energy for the purpose of network loss compensation.
  • Lease of land plots and premises (long-term).
  • Other purchases of goods, works and services at the rates/prices regulated by the legislation of the Russian Federation.

Managing purchasing activities

The sphere of actions of the Central purchasing authority — Central Tender Committee (hereinafter referred to as CTC) the composition of which shall be approved by the Company’s Board of Directors includes acceptance of carrying out the purchases of products as well as control and coordination of the Company’s purchasing activities. The Central Tender Committee ensures the creation and conduct of a unified policy for purchase of goods, works and services for the Company’s needs.

Its activities are aimed to ensure the maximum economic efficiency. A regional purchasing body in the Company’s branches is the Regional Tender Committee (RTC) of the Company’s branch.

In order to carry out planning and operational management of the purchasing activity, Management Department for Tender Procedures is formed in the Company, which carries out the following functions:

  • development of purchasing activity methodology documents;
  • ensuring of operation of the central tender committee working on a permanent basis;
  • implementation of the Company’s purchase procedures;
  • monitoring of the Company’s purchasing activity performance;
  • conduct of expertise of the Company’s documents for compliance thereof with effective purchasing activity standards;
  • conduction of checks of the company’s branches’ purchasing activity;
  • participation in purchase, tender and expert committees of the Company and committees of external Organizers of purchases for the Company’s needs;
  • participation in the work of committees for review of complaints filed by purchasing activity participants against the activity of purchase and tender committees of the Company.

In order to carry out planning and operational management of the purchasing activity in JSC IDGC of the North-West separate structural subdivisions involved in purchase of goods, works and services are formed.

Purchasing methods applied and conditions of selection thereof

In order to carry out purchasing activities the Company applies the following purchasing methods provided for by the Regulation on the Procedure for Regulated Purchases of Goods, Works, Services for the Needs of JSC IDGC of the North-West:

Purchasing method Application
Single source Applied in cases set forth in clause 11.8 of the Regulation on the procedure for regulated purchases of goods, works, services for the Company’s needs.
Open methods Main methods are applied in most cases.
Closed methods Applied, if at least one of the following factors exists:
  • direct address attraction of participants serves a means of guarantee of confidentiality, required in the customer’s interests;
  • closed procedure is carried out according to the results of an open procedure for products purchase on a regular basis (for a long time, regularly) (an example of closed price request based on the results of open competitive negotiations);
  • procurement procedures related to strategic objects, security services, services on conduction of a special expert examination by checking compliance with necessary secrecy requirements.
Tenders Offer requests Price requests
Main procurement procedure, unless otherwise provided in section 11.8 of the Regulation or by a special decision of the Central Procurement Commission Period from the announcement to the opening of applications is not less than 30 days Simplified tender Fewer requested documents Amount:
  • RUB 10 million for construction materials and contractor works;
  • RUB 7 million for other goods, works, services
  • Period from the announcement to the opening of applications is 10 days
 Simple products, for which the market is formed (automobiles without special equipment, piles, cables, isolators); Amount:
  • Up to RUB 5 million for works, goods, services;
  • Period from the announcement to the opening of applications is 5 days

The main criteria affecting the choice of a purchasing method other than an open tender are:

  • level of complexity of purchased products;
  • peculiarities of market of purchased products;
  • purchasing cost;
  • necessity to ensure confidentiality required for the benefit of the Company;
  • purchasing period.