Selection of Inappropriate Types of Price Dumping in Construction and Design Works
To prevent unacceptable forms of price dumping in procurements that involve price ceilings, legislative restrictions have been established. According to Kazakhstan’s legislation, the permissible limit for price dumping in construction and design works is set between 5-10%. The buyer (Contracting Authority) can choose another rate of dumping, which may result in lowering the dumping threshold from suppliers.
To identify such violations, the following measures are necessary:
- Verify the presence of specific procurement criteria in the announcements on the public procurement portal, such as:
- “Work with TEA (Technical and Economic Justification) and PSD (Project Cost Documentation)/Maintenance work on existing roads”;
- “Work on developing TEA/PSD”.
2. Cross-reference the bid prices submitted by potential suppliers with the Order No. 249-нқ issued on November 14, 2017, by the Chairman of the Committee for Construction and Housing and Utilities under the Ministry for Investments and Development of Kazakhstan, which confirms normative documents for pricing in construction.
Internal Government Audit Committee of the Ministry of Finance of the Republic of Kazakhstan (IGAC)
Oversight of Compliance with the Republic of Kazakhstan’s Procurement Legislation, including Desk Audits
010000, Nur-Sultan city, Zhenis Avenue, 11.gov.kz/memleket/entities/kvga/about/structure/departments/leadership/1188/1?lang=ru
Regional Internal Audit Departments of the Republic of Kazakhstan (RIADs)
Territorial Divisions of the Internal Government Audit Committee of the Ministry of Finance of the Republic of Kazakhstan
Conducting Scheduled On-Site Audits
010000, Nur-Sultan city, Zhenis Ave, 11.gov.kz/memleket/entities/kvga/about/structure/100/1?lang=ru
Non-compliance Due to Undersold Dumping
"LLC 'Rost Ltd' won the tender for the renovation of the 'Daulet' sports school with a dumping rate of 51%. It only renovated part of the facade before moving on to another project. The сustomer filed a lawsuit, and the court recognized the contractor as an unscrupulous supplier. LLC 'Bitline' began renovating a table tennis school in the Southeast but then the workers disappeared for two months; the roof is still not repaired. The LLC won the bid by offering a 47% discount on prices."