Ulaanbaatar /MONTSAME/ A draft law on amendments to the Law on Procurement of Goods, Works and Services with State and Local Funds was adopted at the plenary meeting of the irregular session of the State Great Khural (Parliament) on March 22.

The following amendments were made to the law which came into effect a year after its approval in 2005 to enhance the legal environment for encouragement of domestic manufacturers through public procurement, transparency of tendering process, improvement of e-tendering system, introduction of environmentally friendly procurement, implementation of pre-procurement activities, and management of bidding-related complains.

Government Ministries to be kept away from tendering process. A Ministry shall be responsible for its internal procurement activities. Other tendering activities shall be dealt with by an independent agency.

Domestic manufacturers to be encouraged. Priority will be given to domestic products that satisfy the quality and standard requirements. Foreign suppliers will not be allowed to take part in tenders for the supply of goods that can be provided by domestic manufacturers.

Transparency to be increased. A proposal made by a bidder will be available to the other bidders. In doing so, the bidders will be able to oversee tender selection.

Blacklist to come into effect. A list of entities blacklisted in bidding will be compiled. Those who breached the agreement will be restricted from participating in further tender selections.

Pre-procurement activities to be implemented. Pre-procurement activities will be implemented for projects financed by international organizations. Previously, such projects have been experiencing a 6-12-month delay until their approval by the parliament, causing MNT400-500 million unproductive expenditure annually.

E-tendering system to be bettered. Public procurement will be fully digitized as a legal environment was created for electronic call for tender, publication of bid results, and bid evaluation.

Accountability to be imposed to restrict unjustified complaints. Around 10000 calls for tenders were announced in 2018 and 1446 bidding-related complaints were brought to corresponding organizations. Unjustified complaints have been one of the causes of delays in project implementation. Therefore, tender related complaint will be considered in relation with the tender guarantee, according to the amended law.  

Environmentally friendly procurement to be introduced. A legal environment was formed for procurement of goods, works and services that ensure economical use of energy and natural resources, are harmless to the environment and human health, and generate less greenhouse gas and waste.

The amendments will come into effect on June 1, 2019.