Russia Country Profile

Public Procurement and Contracting

Business Corruption

Public procurement regulations can be found at the official public procurement website. At the local level, depending on the region in question, tender notices can be publicly available or information can be totally lacking to everyone except for a few selected bidders.

Many companies consider information regarding rules and regulations on public tendering inadequate or have regularly witnessed non-transparent practices. Sometimes the state only shares information with selected bidders, spawning accusations of pre-selecting winners. In other instances, the terms and conditions for bidding are specified so that few companies can actually bid (single sourcing). Kickbacks are common, and there are reports of companies paying no less than a 16% kickback in order to obtain a government contract. In 2005, the United Nations procurement department exposed a Russian procurement agent who received more than USD 1 million in kickbacks from companies doing business with the United Nations, according to the Washington Post. Companies are recommended to use a specialised public procurement due diligence tool in order to mitigate the corruption risks associated with public procurement in Russia.

See more on public procurement under 'Public Anti-Corruption Initiatives' in the Initiatives section.

Frequency

World Economic Forum: The Global Competitiveness Report 2009-2010:
- Business executives give the diversion of public funds due to corruption a score of 2.7 on a 7-point scale (1 'common' and 7 'never occurs').

- Business executives give the favouritism of government officials when deciding upon policies and contracts a score of 2.7 on a 7-point scale (1 'always show favouritism' and 7 'never show favouritism').

The World Bank & IFC: Enterprise Surveys 2009:
- More than 46% of the companies surveyed expect to give gifts to secure a government contract.

- The average value of gift given to secure a government contract amounts to almost 4% of the contract value.

OECD: Investment Policy Reviews 2006 (in Russian):
- More than 40% of the companies interviewed considered information on rules and requirements for public tendering to be inadequate or untimely.

- This trend is even stronger in the regions, where 60% of companies see the rules and requirements for public tendering to be inadequate or out of date.

EBRD & World Bank: BEEPS 2005:
- 22% of the companies state that bribery is frequently needed in order to obtain government contracts compared to the CIS average of 14% in 2005.