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2009 Assessment

Azerbaijan: Integrity Indicators Scorecard

Azerbaijan: Integrity Scorecard Report > Sub-Category: Procurement
Indicators		Score
51	Is the public procurement process effective?	85
52	Can citizens access the public procurement process?	83

Indicator and sub-Indicator Details

Is the public procurement process effective?

51a: In law, there are regulations addressing conflicts of interest for public procurement officials.

Score:

YES

Comments: Article 13 of the Law on Public Procurement regulates conflicts of interests for public procurement officials. According to it, public procurement officials, their relatives and dependents do not have the right to participate in the procurement. Furthermore, under Article 11.3 of the Law on Rules of Ethics Conduct of Civil Servants, a civil servant shall not allow influence of his/her private interests or interests of stakeholders on fulfillment of other service duties and create conditions for such influence. Under Article 15 of the same Law, a civil servant shall not allow conflict of interests while performing his/her service duties and shall not illegally use his/her service authorities for private interests. In case of a contradiction between the service duties and the private interests of a civil servant, he/she under the legislation must give information on the character and volume of the conflict of interests when recruited to civil service, also including future period. Moreover, the Draft Law on Prevention of Conflict of Interests in the Activity of Public Officials, which is now under the consideration in Parliament, specifically regulates conflicts of interests.

References: The Law on Public Procurement [ LINK ]

51b: In law, there is mandatory professional training for public procurement officials.

Score:

YES

Comments: Under Article 4.1.4 of the Law on Public Procurement, the Agency on Public Procurement shall organize professional development courses, seminars, and conferences as well as prepare educational materials for its officials.

References: The Law on Public Procurement [ LINK ]

51c: In practice, the conflicts of interest regulations for public procurement officials are enforced.

Score:

100

Comments: In practice, conflict of interest regulations are generally not enforced. There is no transparent mechanism to control it and, as a result, relatives or people close to procurement officials regularly participate in procurement processes.

References: 1) Reports by the State Agency On Procurement of the Republic of Azerbaijan [ LINK ] 2) 2008 Report of the Commission for Combating Corruption on Implementation of the National Strategy (2007-2011) for Increasing Transparency and Combating Corruption [ LINK ] 3) Newspaper materials and articles of the Radio Liberty-Azerbaijan [ LINK ]

51d: In law, there is a mechanism that monitors the assets, incomes and spending habits of public procurement officials.

Score:

YES

Comments: Under Article 4.1.2 of the Law on Public Procurement, the Public Procurement Agency shall supervise the 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 seven banking days in case of revealing breach of law, and, if necessary raise the matter of cancellation of tender results.

Furthermore, under Article 5 of the Law on Combating Corruption, public officials should file regular asset disclosure forms, illustrating sources, types, and amount of income, stock holdings, taxable properties, and other assets. Article 3.1 of the Law on Approval of the Rules on Filing Financial Data by Public Officials stipulates that public officials are required to file an asset disclosure form to the Commission on Combating Corruption.

References: State Agency on Procurement [ LINK ]; The Law on Public Procurement; The Law on Combating Corruption; The Law on Approval of the Rules on Filing Financial Data by Public Officials [ LINK ]

51e: In law, major procurements require competitive bidding.

Score:

YES

Comments: Under the Law on Public Procurement, major procurements require competitive bidding. Article 11.1 states that if the number of submitted tender proposals to take part at the tender is less than three, the procurement agency shall refuse to continue the tender and shall publish relevant information in the press, where announcements about tenders must be published within five banking days.

References: The Law on Public Procurement [ LINK ]

51f: In law, strict formal requirements limit the extent of sole sourcing.

Score:

YES

Comments: Under Article 45 of the Law on Public Procurement, strict formal requirements limit the extent of sole sourcing. All negotiations should be secret and information cannot be disclosed without consent.

References: The Law on Public Procurement [ LINK ]

51g: In law, unsuccessful bidders can instigate an official review of procurement decisions.

Score:

YES

Comments: Under Article 56-59 of the Law on Public Procurement, unsuccessful bidders can instigate an official review of procurement decisions.

References: The Law on Public Procurement [ LINK ]

51h: In law, unsuccessful bidders can challenge procurement decisions in a court of law.

Score:

YES

Comments: Under Article 60 of the Law on Public Procurement, unsuccessful bidders can challenge procurement decisions in courts.

References: The Law on Public Procurement [ LINK ]

51i: In law, companies guilty of major violations of procurement regulations (i.e. bribery) are prohibited from participating in future procurement bids.

Score:

YES

Comments: It can be inferred from the wording of Article 4 of the Law on Public Procurement that the State Agency on Public Procurement has the right to prohibit companies guilty of major violations of procurement regulations from participating in future procurement bids. It is also stated in the National Strategy on Increasing Transparency and Combating Corruption, 2007-2011, that the mechanism to prevent convicted companies from doing business with the government should be established.

References: The Law on Public Procurement [ LINK ]; National Strategy on Increasing Transparency and Combating Corruption, 2007-2011 [ LINK ]

51j: In practice, companies guilty of major violations of procurement regulations (i.e. bribery) are prohibited from participating in future procurement bids.

Score:

100

Comments: According to paragraph 39 of the National Strategy on Increasing Transparency and Combating Corruption 2007-2011, the mechanism should be established which will prohibit physical and legal persons, being guilty of major violations of procurement regulations, to participate in future procurement bids for a certain period. Under paragraph 42 of the 2008 Report of the Commission for Combating Corruption on Implementation of the mentioned National Strategy, preparation of the mechanism is currently underway.

Can citizens access the public procurement process?

52a: In law, citizens can access public procurement regulations.

Score:

YES

Comments: Under Article 5.3 of the Law on Public Procurement, public procurement rules should be available under the procedure prescribed by law. Furthermore, citizens can access public procurement regulations either through the website of the State Agency on Public Procurement or the official newspaper.

References: The Law on Public Procurement [ LINK ]

State Agency on Public Procurement [ LINK ]

52b: In law, the government is required to publicly announce the results of procurement decisions.

Score:

YES

Comments: Under Article 5.3 of the Law on Public Procurement, information on procurement contract, concluded as a result of tender, shall be published within five working days in the press entity where the announcement about the tender was published.

References: The Law on Public Procurement [ LINK ]

52c: In practice, citizens can access public procurement regulations within a reasonable time period.

Score:

100

Comments: According to the 2008 Report of the State Agency on Public Procurement, public procurement regulations are posted online on the website of the State Agency on Public Procurement (see [ LINK ]). As it is seen from the web site, all rules and regulations that govern the procurement process are available on www.tender.gov.az/LawAz.html

It should also be noted that, according to paragraph 42 of the 2008 Report of the Commission for Combating Corruption on Implementation of the National Strategy 2007-2011, the Agency on Public Procurement is currently working on preparing the electronic procurement competition as well.

The rules and regulations are publicly accessible even if details of the results of the tender are not always available after the procurement has been completed.

References: 1) Reports by the State Agency On Procurement of the Republic of Azerbaijan [ LINK ] 2) 2008 Report of the Commission for Combating Corruption on Implementation of the National Strategy (2007-2011) for Increasing Transparency and Combating Corruption [ LINK ] 3) Interview with Hafiz Babali, Turan Information Agency, journalist on economic issues, September 2009 4) Newspaper materials and articles of the Radio Liberty-Azerbaijan www.azadliqradiosu.az

Peer Review Comments: SAP disclosed a general report on state purchases, but information about which companies participated in which tender (essence of terms and names of victorious companies) are not regularly disclosed. Tender on the majority of investment projects realized on the basis of the state budget has not held, and contractors are defined on the basis of mysterious decisions. Many problems in this sphere happen, especially in the Ministry of Transport, Ministry of Labor and Social Protection of Population, Ministry of Education and State Oil Company.

52d: In practice, citizens can access public procurement regulations at a reasonable cost.

Score:

100

Comments: According to the 2008 Report of the State Agency on Public Procurement, public procurement regulations are posted on the website of the State Agency on Public Procurement in Azerbaijani, English, and Russian (see [ LINK ]). As it is seen from the web site, all rules and regulations that govern the procurement process are available on www.tender.gov.az/LawAz.html. So, it is free of charge.

References: 1) Reports by the State Agency On Procurement of the Republic of Azerbaijan [ LINK ] 2) Interview with Hafiz Babali, Turan Information Agency, journalist on economic issues, September 2009 3) Newspaper materials and articles of the Radio Liberty-Azerbaijan www.azadliqradiosu.az

52e: In practice, major public procurements are effectively advertised.

Score:

100

Comments: According to the 2008 Report of the State Agency on Public Procurement, major public procurements are posted on the website of the State Agency on Public Procurement (see [ LINK ]) It should also be noted that according to paragraph 42 of the 2008 Report of the Commission for Combating Corruption on Implementation of the National Strategy 2007-2011, the Agency on Public Procurement is currently working on preparing the electronic procurement competition as well.

52f: In practice, citizens can access the results of major public procurement bids.

Score:

100

Comments: Public procurement bids are usualy announced on offical newspapers as well as posted on the web site of the State Agency on Public Procurement (see the link: [ LINK ]). Yearly procurement outcomes are also published as a report on the web site. For instance, according to the 2008 Report of the State Agency on Procurement, in 2008, 8,839 procurements were implemented by state-owned companies. The Report is available at [ LINK ] However, it should be noted that although the Agency disclosed general report on state purchases and stated general numbers, but information about which companies participated in which tender, essence of terms and names of victorious companies are not disclosed. Tender on majority of investment projects realized on the basis of state budget has not held and contractors are defined on the basis of mysterious decisions. Many problems in this sphere happen especially in the Ministry of Transport, Ministry of Labor and Social Protection of Population, Ministry of Education, and State Oil Company. The relevant bodies such as Chamber of Accounts, the Ministry of Finance as well as the State Agency on Public Procurement close their eyes to all this. As a result, citizens cannot access the results of major procurement bids. They can only see the announcement; as to outcomes it is usually not available to public.

Peer Review Comments: The State Agency On Procurement disclosed a general report on state purchases, but information about which companies participated in which tender (essence of terms and names of victorious companies) is not regularly disclosed. Otherwise, it is impossible to find this information.