More than 70% of Large State Contracts Awarded in Legal “Gray Area”

(Moscow Times – themoscowtimes.com – August 15, 2013) The Audit Chamber has found gross violations in the processes through which authorities award state orders of 1 billion rubles ($30 million) or more.

More than 70 percent of the contracts, as calculated by their quantity and value, were finalized in a “gray area,” the Chamber said on its website Thursday. There was no competitive process to win the order and instead government workers signed contracts with one single supplier.

The data showed that there was an increased risk of violations for especially large orders, with “the presence of conditions that allow clients and contractors not to perform their roles properly,” the statement said.

Russia allocated 458 large state contracts in the period between July 1, 2011, and December 31, 2012. The total sum of the contracts was 1.5 trillion rubles in federal budget money.

The number of such large contracts increases every year as do the values of individual contracts. Some contracts reached record highs of over 44 billion rubles over the audit period.

The Audit Chamber proposed solutions included additional conditions on how large state orders are allocated, monitored and audited.