Russia’s Finance Ministry says almost all state procurement purchases are non-competitive

According to a new report by the Finance Ministry, more than 96 percent of all purchases by Russian state companies and government enterprises in 2017 were made outside a competitive process.

The Finance Ministry reviewed more than 5,000 options state companies have when making purchases and found that only three qualify as competitive: bidding, auctions, and requests for quotes. In 2016, the Finance Ministry found that 95 percent of all state purchases were made under non-competitive circumstances.

The biggest spenders among Russian state companies in 2017 were Rosneft and its affiliates (with 7.7 trillion rubles, or $133.7 billion), and the Russian Railways (with 1.3 trillion rubles, or $22.6 billion).

It’s not as bad as it seems

Several experts told the magazine RBC that purchases aren’t necessarily noncompetitive just because the Finance Ministry says they are. For instance, purchases from a single supplier, which the report considers to be non-competitive, are often the only option, especially when it comes to certain high-tech products with few suppliers on the market.