Procurement of budget organizations: the choice between the Contract System and the Federal Law № 223

<p>Procurement of budget organizations: the choice between the Contract System and the Federal Law № 223.</p><p>This paper addresses the problem of the choice faced by budgetary institutions as to the legislative application. Structure of the paper presented an introduction, three chapters, conclusion, bibliography and two applications.</p><p>The Federal Law of 05.04.2013 No. 44-FL &ldquo;On the Contract System in State and Municipal Procurement of Goods, Works and Services&rdquo; (hereinafter referred to Law 44-FL) came into force on 01.01.2014. The law specially applies to public sector institutions, as far as such institutions are given the choice of legislative regulation of their procurement activities. Budget institutions will have the right to regulate their public procurement activity either in accordance with the norms of the Law 44-FL or the Federal Law № 223-FL &quot;On procurement of goods , works and services by certain types of legal entities&quot; (hereinafter referred to Law 223 -FL) .</p><p>The main objective of this study is to solve the problem of choice the budgetary institutions face in relation to the legislative application. To achieve this goal, it is necessary to solve a number of problems:</p><p>- to analyze legislation regarding the regulation of budget institutions procurement activity in accordance with the Law 94-FZ , FZ - Law 44 and Law 223 -FZ;</p><p>- to determine the place of public institutions in the system of Russian legal entities, to classify the types of public institutions;</p><p>- to conduct a comparative analyses of a budgetary institution and of such public legal entity as public agency ;</p><p>- to identify the main benefits of the Law 223 -FZ;</p><p>- to carry out the monitoring of procurement practices by budgetary institutions .</p><p>In this regard, the author makes a hypothesis that the procurement activity by budget institutions in accordance with the Law 223-FL will improve the efficiency of the procurement system of an institution, since the Law 223-FL allows, to a large extent, to establish procurement rules according to the needs and specific characteristics of the organization. Therefore, the object of the study is budget institutions. The subject of this study is to analyze the application of the laws 94-FL, 44-FL and 223-FL to the budget institutions.</p><p>Summarizing, we can say that the Law 44-FL regulates in detail each step of the procedure for the customer, establishing mandatory rules for all customers and in all cases of procurement activities the rules for their implementation. On the contrary, the Law 223 -FZ sets nothing like that, and only requires customers to establish these rules in its provisions on procurement. In this case the customer decides on how detailed and tough standards established by him will be.</p><p>Based on the results it was concluded that:</p><p>&bull; Law 223-FL promotes the usage of non-competitive procurement by budget educational institutions;</p><p>&bull; the usage of both laws showed the same level of relative competition;</p><p>&bull; transition to corporate procurement does not lead to the conclusion of contracts at higher prices (contrary results of the study demonstrate that the savings in procurement on the basis of the Law 223-FL are higher than in similar purchases by Law 44-FL).</p>