Representation in the FAS Russia on the issue of inclusion in the RNP

Reasons for inclusion in the RNP

Inclusion in the RNP is possible in the following cases provided for by law:

1. Evasion of contract (Part 2 of Article 104 of Law No. 44-FZ, Part 6 of Article 5 of Law No. 223-FZ). Occurs when the winner of a procurement does not sign the contract within the established time frame or does not provide security for the performance of the contract. Or when the participant does not send the signed contract or bank guarantee within the time frame specified in the procurement documentation.

2. Unilateral refusal of the customer to perform the contract (Part 2 of Article 104 of Law No. 44-FZ). When the Customer terminated the contract unilaterally due to a material breach of the terms by the supplier, contractor or performer (for example, late delivery, poor quality work, refusal to fulfill obligations).

3. Termination of contract by court order (Part 2 of Article 104 of Law No. 44-FZ, Part 6 of Article 5 of Law No. 223-FZ). This occurs when a government contract is terminated by a court decision at the initiative of the customer due to a material breach of the terms (for example, systematic failure to fulfill obligations, delivery of goods that do not meet the technical specifications).

Procedure for considering a case in the FAS

The consideration of the case for inclusion in the RNP in the FAS takes place in several stages:

1. Submission of information by the customer. According to 44-FZThe customer is obliged to notify the FAS within 3 working days of the fact of evasion from concluding a contract or unilateral termination of a contract (Part 4 of Article 104 of Law No. 44-FZ). The information includes information about the violation, copies of the contract, documents confirming the violation (for example, a notice of unilateral refusal, acts on identified deficiencies).

2. Participant notification. The FAS sends the procurement participant a notice of the date, time and place of consideration of the case on inclusion in the RNP (clause 13 of the Rules for maintaining the RNP, approved by RF Government Resolution No. 1211 of 22.11.2012). The notice must be sent in a manner that ensures confirmation of receipt (for example, by registered mail or through the EIS). Failure to receive the notice before the meeting is a violation of the procedure and may serve as grounds for challenging the decision.

3. Consideration of the case. The FAS holds a meeting of the commission, during which it considers the information provided by the customer, as well as the explanations and evidence of the procurement participant. The participant has the right to attend the meeting, provide written and oral objections, and submit documents confirming the absence of bad faith or violation of procedure on the part of the customer or the FAS.

Evidence for protection in the FAS

In order to ensure as successfully as possible that the participant is not included in the RNP, he/she must provide convincing evidence of the absence of bad faith. It is necessary to prove that:

• The contract was not concluded due to the fault of the customer (for example, the customer offered a contract at a price lower than that offered by the participant, did not provide the necessary documents or access to the site).

• It is also possible that the participant took measures to conclude or execute the contract (for example, sent a protocol of disagreements, ensured the delivery of goods, provided a bank guarantee). Or the termination of the contract was unjustified (for example, the customer did not prove the materiality of the violations), the Customer did not comply with the procedure for unilateral refusal (for example, did not send a notice of termination or did not provide the participant with a period to eliminate the violations, Art. 95 of Law No. 44-FZ).

• The contract was not concluded or executed for other reasons beyond the control of the participant. It should be noted that this concept is broader than force majeure and the participant can avoid inclusion in the RNP even in the absence of evidence of force majeure. COVID restrictions were often classified this way, it can also be a consequence of the actions or inaction of the operator of the electronic platform, etc. But this is not a universal reason, the violation of deadlines by the subcontractor is unlikely to be regarded as a circumstance beyond your control.

• Other grounds: the violation is not significant (for example, the delay is caused by the actions of the customer or force majeure).

Based on this, evidence of the absence of bad faith is provided:

• Procurement documents: Protocol of disagreements, participant's application, draft contract confirming the customer's errors (for example, discrepancy in price or conditions). Protocol of summing up the results of the repeat purchase, signed contract with another participant.

• Correspondence with the customer: Letters, notices, requests confirming the intention of a party to enter into or perform a contract.

• Documents confirming execution: Invoice, payment order, supply agreement, consignment note, specification, indicating the availability of goods or readiness to perform work.

• Evidence of technical problems: A certificate from the provider about the lack of access to the EIS, notification to the customer about a technical error and measures to eliminate it.

• Evidence of the customer's guilt: A printout from the EIS confirming the customer's refusal to conclude a contract, or documents indicating the failure to provide materials, access or approvals. A bank certificate on the delay in issuing a bank guarantee due to errors by the customer (for example, failure to indicate the amount of security in the draft contract).

• Other circumstances: Certificates of conformity, letters from the manufacturer confirming the conformity of the goods to the procurement requirements, previously successful purchases can also serve as a reason not to consider you as a systematic violator. A customer review confirming the absence of claims is also important.

• Etc.

Legal support in FAS

Representation in the FAS requires professional legal support, including:

1. Analysis of the situation:

• Study of procurement documents, contract, correspondence with the customer, FAS decision and circumstances of the case.

• Assessment of the legality of the actions of the customer and the FAS, as well as the prospects for challenging it.

2. Preparation of evidence base:

• Collection of documents confirming the absence of dishonesty or violation of procedure (correspondence, reports, screenshots from the EIS, payment documents).

• Preparation of written explanations and objections with references to the provisions of the law (Article 104 of Law No. 44-FZ, Article 5 of Law No. 223-FZ, paragraph 13 of the Rules for maintaining the RNP).

3. Representation at the meeting:

• Participation of a lawyer in a meeting of the FAS commission, oral presentation of the position, presentation of evidence and answers to questions.

• Argumentation in favor of exclusion from the RNP on the basis of absence of bad faith or procedural violations.

4. Preparing for a Court Appeal:

• If the FAS makes a decision to include the company in the RNP, the lawyer will prepare an application to the arbitration court, including a motion to suspend the decision if its execution may hinder the protection of rights.

5. Risk mitigation consulting:

• Recommendations on interaction with the customer, compliance with deadlines and procedures, as well as prevention of reputational and financial losses.

Judicial appeal of the FAS decision

If the FAS makes a decision to include the participant in the RNP, the participant can appeal it in an arbitration court:

1. Application deadline:

• 3 months from the moment when the participant became aware of the violation of his rights (Part 4 of Article 198 of the Arbitration Procedure Code of the Russian Federation). The period is calculated from the date of receipt of the FAS decision or publication in the EIS.

• If the deadline is missed for a valid reason (for example, late notification), you can file a Petition to Reinstate the Deadline.

2. Drawing up an application:

• The application is submitted to the arbitration court at the location of the FAS body (Article 35 of the Arbitration Procedure Code of the Russian Federation) and includes (Part 1 of Article 199 of the Arbitration Procedure Code of the Russian Federation):

• Name of the court.

• Information about the plaintiff (name, address, TIN for legal entities; full name, place of residence, registration details for individual entrepreneurs).

• Name and address of the FAS body.

• Details of the contested decision (name, number, date).

• Description of violated rights and legitimate interests.

• References to laws that the decision does not comply with (for example, Article 104 of Law No. 44-FZ, paragraph 13 of the Rules for maintaining the RNP).

• A request to declare the decision illegal.

• Attachments: a copy of the FAS decision, procurement documents, evidence (correspondence, acts), a document on payment of the state fee, an extract from the Unified State Register of Legal Entities/Unified State Register of Individual Entrepreneurs (no older than 30 days), a power of attorney of the representative.

3. Motion to Stay the Effect of a Decision:

• Submitted as part of the application or separately to prevent the execution of the FAS decision (Part 2 of Article 90 of the Arbitration Procedure Code of the Russian Federation). It is necessary to justify why the execution of the decision may complicate the protection of rights (for example, limiting participation in tenders).

• The petition in electronic form is signed with an enhanced qualified electronic signature (Part 3 of Article 199 of the Arbitration Procedure Code of the Russian Federation).

4. Submission procedure:

• The application is submitted in paper form (by mail or to the court office) or electronically through the public services portal or the electronic document management system (Part 7 of Article 4, Part 1 of Article 125 of the Arbitration Procedure Code of the Russian Federation).

• Copies of the application and documents are sent to the persons involved in the case, with confirmation of sending preserved.

5. Consideration of the case:

• The court accepts the application within 5 days, issuing a ruling on the initiation of the case (Article 127 of the Arbitration Procedure Code of the Russian Federation).

• The court recognizes the FAS decision as illegal if it does not comply with the law or violates the applicant’s rights, or refuses to satisfy the claims (Part 2, 3, Article 201 of the Arbitration Procedure Code of the Russian Federation).

6. Execution of a court decision:

• A court decision to recognize an FAS act as invalid is subject to immediate execution or execution within the specified time frame (Part 7 of Article 201 of the Arbitration Procedure Code of the Russian Federation).

Grounds for challenging inclusion in the RNP

A procurement participant may challenge the FAS decision to include in the RNP if it is proven:

1. Absence of bad faith and immateriality of the violation.

Consequences of inclusion in the RNP and the importance of protection

Inclusion in the RNP limits participation in procurement for 2 years, which may lead to:

• Loss of opportunity to participate in government and corporate procurement.

• Reputational and financial losses.

• Restrictions on business activity, especially for companies dependent on government contracts.
  Timely representation in the FAS allows you to prevent inclusion in the RNP, minimize risks and protect the interests of the procurement participant.