Karen Brutyan - A case of Armenia

A case of Armenia: Legal
framework for E-procurement in
Public Procurement Sector
Mr Karen Brutyan, PhD, PFM and PP
EBRD Consultant, Wolf Theiss
1-2 December 2011
EGP Reforms strategy and Legal framework
• As a part of the “Procurements reform strategy” “Roadmap of
the introduction of E-procurement system” has been
approved in 2009 by the Republic of Armenia Government
• General Rules are adopted by the Republic of Armenia
parliament, “Law on Procurement”,
• The Republic of Armenia Government approves “The
procedure for E-procurement”
• The Republic of Armenia Ministry of Finance approves Eprocurement manuals for:
o Economic operators,
o Contracting authorities,
o System administrators.
EGP Roadmap
Gap analyses:
Limited scope of competition and introduction of strict control procedures make
procurement process less effective. This leads to delays of contract implementation
and increase of data processing costs both for the Government and suppliers. Prices of
purchased goods and services grow. In addition, timing permitted for some types of
contracts becomes too long, since it is not practical to draft a number of contracts
within more reasonable time.
New technology can essentially improve procurement management and efficiency
and modernize public administration. This technology is capable to deepen
procurement reforms and do it in a more comprehensive manner than other measures
can do.
Reforms facilitated by electronic public procurement are not just a direct output of this
technology. They result from institutional changes which were made possible due to
use of this technology. In other words, such changes do not take place through just
introduction of new hardware or software for management of public agencies.
Instead, their reformative impacts are transferred through well developed policy and
actions, which use these new technologies to modernize the processes and principles.
The expected output
The output expected from the program implementation is establishment of a
modern, fully operative national system.
The program has two core components:
o Component 1. Introduction of electronic tender (E-Tendering) system. At
this stage the target is to automate to the maximum possible level
procurement carried out through competitive methods:
• issue of announcements and provision of invitations to participate;
• acceptance of bids, evaluation and contract award;
• contract signing.
o Component 2. Introduction of e-purchase system (E-Purchasing). The
objective of measures carried out at this stage is to create a unified and
complete procurement data base and automate the following:
• E- contracting,
• E- catalogues,
• E- payments, etc.)
EGP system management structure
• Ministry of Finance - Development and introduction of e-procurement
• Procurements Support Center - Organization and governance of
electronic procurement operation, including
Organization of e-procurement system operation
Technical assistance to users of e-procurement system
Technical control over e-procurement system operation
Technical assistance for introduction of e-procurement system in
communities, non-commercial organization and other entities
EGP Legal framework: General Rules (i)
The tools to be used for communication by electronic means, as well as
their technical characteristics, must be non-discriminatory, generally
available to any potential bidder and interoperable with information
and communication technologies means in general use.
The following rules are mandatorily applicable to means for the
electronic transmission and receipt of bids:
1) The information regarding the specifications necessary for the
electronic submission of bids, including encryption, shall be available to
any interested bidders;
2) The electronic devices for electronic receipt of bids must guarantee
the integrity and confidentiality of the received data, fulfilling at least
the following conditions:
a. The exact time and date of the receipt of bids can be precisely
EGP Legal framework: General Rules (ii)
b. Before the time limits laid down for the transmission of the data, no one can
have access to the transmitted data;
c. In the case when the interdiction of access to the transmitted data has been
breached, the unauthorized access can be clearly detectable;
d. Only authorized persons may set or modify the dates for opening data
e. During the different stages of procurement procedure, the access to received
data is possible only by an simultaneous action of at least two authorized
persons/systems and only after the date established according to provisions of
subparagraph b) of this paragraph;
f. Data received and opened in accordance with the requirements of this
paragraph must remain accessible only to persons authorized to acquaint
themselves therewith.
3) The bidders, before the deadline laid down for submission of bids, shall submit
certificates, declarations and other documents, in case these are not available in
electronic format.
EGP Legal framework: General Rules (iii)
The law on Procurements establishes specific general
regulations and rules for Electronic auction:
• Article 38: Conditions for conducting an electronic
• Article 39: Limitations for conducting an electronic
• Article 40: The procedure for conducting an
electronic auction
• Article 41: Completion of an electronic auction
The procedure for E-procurement
Adopted by the Republic of Armenia Government,
Based on the General Rules set up by the “Law on procurement” and
regulates all legal issues which are not regulated by the law,
Provides legal rules for using the system, including responsibilities of
the users and system administrators.
USER MANUALS – Step by Step guide
Adopted by the Republic of Armenia Ministry of Finance,
Based on the General Rules set up by the “Law on procurement” and
regulations set up by the Republic of Armenia Government
Provides detailed depiction of the workflow of the ARMEPS platform so
as for the user to gain an insight on the different steps of the
procurement procedure and understand the exact points were
his/her involvement may be required.

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