19%

of the cost of small state procurements are expenses associated with conducting a competitive bid process for suppliers.

In Russia, government agencies are required to hold a competitive bid if a purchase amount exceeds 100,000 roubles. However, Russian buyers often prefer to carry out formal procedures for contracts valued at lesser amounts in order to avoid problems during audits and possible corruption charges.

For procurements that are medium-sized by Russian standards (ranging from 100,000 to 500,000 roubles), expenses are at 6.2%. Only for large purchases over 500,000 roubles do they fall to 1.1% of the cost. By comparison, in the EU, expenses during procurement process do not exceed 0.4%.

These data are presented in a joint study by researchers at the Higher School of Economics and Voronezh State University entitled ‘How Much do State Procurement Procedures Cost? An Empirical Assessment from the Buyer’s Perspective.’

More on the results of the study will be available on November 27 on the OPEC.ru website (in Russian).