Procurement

The Company carries out procurement activities in line with Federal Law No. 223-FZ On Procurement of Goods, Works and Services by Certain Types of Legal Entities dated 18 July 2011 based on the Regulation on the Procedure for the Procurement of Goods, Work and Services for TransContainer’s needs approved by the resolution of the Company’s Board of Directors.

The procurement activities are aimed at catering to own needs with regard to required products and their price, quality, and reliability in a full and timely manner, as well as at using relevant funds efficiently.

The procurement objectives include:

• market pricing for products purchased by clients, contributing to the reasonable reduction of clients’ costs;
• promoting and fostering procurement participation, encouraging fair competition;
• ensuring procurement visibility and transparency.

Procurement principles:

• availability of procurement information;
• equality and fairness, with no discrimination or unreasonable restrictions on competition among the participants;
• intended and efficient use of funds allocated for purchasing goods, works and services (taking into account their life cycle cost, where applicable), and implementation of cost-cutting initiatives;
• no restrictions on participation in the procurement in the form of non-measurable requirements for the participants;
• compliance with the Russian laws, including the antitrust law.

According to the Unified Procurement Information System (https://zakupki.gov.ru) and the Company’s website, there were 446 procurement procedures held (for 496 items) in 2018Including three procurement procedures that are not subject to publication in the Unified Procurement Information System as per the Government Directive No. 51r dated 20 January 2018., down 21.5% year-on-year.

The downtrend is due to the fact that procurement procedures followed by signing long-term agreements were carried out in the previous period.

Based on the results of the procurement procedures, the Company signed contracts worth over RUB 28.6 billion (net of VAT).

Framework contracts with subcontractors engaged in transportation and forwarding services accounted for the most part (about RUB 12.8 billion).

The Company works to reduce the share of procurement from a single supplier (contractor). In 2018, the share of single-source procurement in monetary terms accounted for 2.1% (RUB 812 million out of RUB 38,217 million) of the total number of announced purchases. A total of 84 contracts were signed with single suppliers in the reporting year.