In connection with taking effect of the Law of the Republic of Azerbaijan “On public procurements” and in order to provide activity of the State Agency of the Republic of Azerbaijan on procurement I hereby resolve:

1. To approve “Provisions on State Agency of the Republic of Azerbaijan on procurement”.

2. The Cabinet of Ministers of the Republic of Azerbaijan shall solve issues arising from this Decree.

3. This decree takes effect from the day of its signing.

Baku, 20 February 2003 No. 855

I. General provisions

1. State Agency of the Republic of Azerbaijan on procurement (hereinafter referred as to Agency) has been established by decree of the President of the Republic of Azerbaijan No. 583 of 16 May 1997.

2. Agency is the central executive authority, which conducts state policy in field of procurement of goods (works and services) at the account of state funds of the Republic of Azerbaijan.

3. Agency in its activity is guided by the Constitution of the Republic of Azerbaijan, Laws of the Republic of Azerbaijan, decrees and resolutions of the President of the Republic of Azerbaijan, decisions and resolutions of the Cabinet of Ministers of the Republic of Azerbaijan, other regulations, international agreements, which the Republic of Azerbaijan is supporter of, and these Provisions.

4. Agency has independent balance, property being at state ownership, bank accounts, seal with its name and description of State Emblem of the Republic of Azerbaijan, relevant stamps and letterheads.

5. Activity of State agency is funded at the account of the budget of the Republic of Azerbaijan and other sources not prohibited by legislation.

6. Agency is located in city of Baku.

II. Duties of the agency

7. The basic duties of the agency are as follows:

7.1. To conduct state policy in field of procurement of goods (works and services) at the account of state funds;

7.2. To take part in production and improvement of legal base, governing public procurements in the Republic of Azerbaijan, prepare rules, instructions and other documents on public procurements and submit them to the President of the Republic of Azerbaijan and the Cabinet of Ministers of the Republic of Azerbaijan;

7.3. To supervise over legality of procurement of goods (works and services) on the basis of competition at the account of state funds and implementation of contracts, investigate disputes, if cases of breach of law are discovered, suspend performance of procurement procedures for the period set by legislation (law) and if required raise a matter on cancellation of tender results to procurement agency;

7.4. To carry out measures for improvement of qualification level of experts of procurement agencies in field of public procurements as determined in legislation;

7.5. To determine procurement report production procedures, provide bringing of regulations, documents and information governing public procurements to public;

7.6. To produce annual procurement reports and submit them to the President of the Republic of Azerbaijan and the Cabinet of Ministers of the Republic of Azerbaijan;

7.7. To establish database in field of public procurement;

7.8. To cooperate with respective organizations of foreign countries in field of public procurements as determined in legislation;

7.9. To investigate disputes in public procurement procedures, if legislation requirements are broken, take relevant measures in accordance with provisions of the Law of the Republic of Azerbaijan “On public procurements”;

7.10. To perform other duties determined by legislation of the Republic of Azerbaijan.

III. Functions of the agency

8. Agency performs the following functions in accordance with duties determined in these provisions:

8.1. To supervise over legality of procurement of goods (works and services) on the basis of competition at the account of state funds and over performance of the contracts.

8.2. To render procurement agencies methodical and organizational assistance on organization and conducting of public procurements, give recommendations, set up specialists professional level improvement courses, hold seminars and conferences, produce relevant study and methodical materials in field of public procurement, carry out other measures for this purpose within its authority;

8.3. To hold negotiations and participate in preparation of international agreements as determined by legislation within cooperation of the Republic of Azerbaijan with foreign countries in field of public procurement;

8.4. To ensure protection of state interests of the Republic of Azerbaijan and take relevant measures for this purpose as determined in legislation on procurement.

8.5. To submit proposals on volume and application procedure of preferential corrections to the Cabinet of Ministers of the Republic of Azerbaijan;

8.6. To determine procurement report production rules, provide bringing of regulations, documents and information governing public procurements to public;

8.7. To prepare annual procurement reports and submit them to the President of the Republic of Azerbaijan and the Cabinet of Ministers of the Republic of Azerbaijan;

8.8. To render written decision on processed complaints in terms provided for by legislation, justify its reasons in such decision and indicate provided remedies (if such remedies are provided).

8.9. Perform other functions provided for in legislation of the Republic of Azerbaijan.

IV. Rights of the agency

9. Agency has the following rights to perform its duties and functions:

9.1. To participate in production and improvement of regulations governing public procurements, prepare and approve the same within its authority.

9.2. To supervise over legality of procurement of goods (works and services) on the basis of competition at the account of state funds and implementation of contracts, investigate disputes and take measures as provided for by legislation to prevent cases of violation of legislation.

9.3. To approve decisions relating to application of procurement procedures, conducting of tender procedures of procurement agencies and performance of procurement contracts as provided for in legislation.

9.4. For the purpose of assistance to establishing of institutional base in field of public procurement, to use grants and credits allocated to the Agency from international financial organizations.

9.5. If law violations are discovered in work of tender commissions, to take appropriate measures within its authority as determined in legislation.

9.6. To cooperate with state and non-state organizations of foreign countries as provided for by legislation.

9.7. To invite experts from state agencies or employ independent experts under the contract for the purpose of performance of its duties including working out of regulations, holding of expertise and making consultations as for provided by legislation.

9.8. To establish scientific-technical, economic and legal database in field of public procurement, arrange for provision of consulting services, take certain measures, provide information and publish bulletins for the purpose of study and wide distribution of experience gained in field of public procurement.

9.9. Within its authority and as provided for by legislation, to give certain proposals and provide information relating to observance of legislation of the Republic of Azerbaijan on public procurement, international agreements on public procurement, which the Republic of Azerbaijan is supporter of, as well as performance of obligations arising from international agreements.

9.10. For the purpose of protection of state interests of procurement agency, to approve decision on rejection of all tender proposals, offers and quotations determined by law until their acceptance.

9.11. If procurement agency determines that consignor (contractor) deals with falsification to effect making of any decision with regard to procurement procedures, to take measures as determined by legislation.

9.12. If supposed price of goods (works and services) is higher than minimal amount set by the Ministry of Finance of the Republic of Azerbaijan, to approve their implementation using other procurement methods.

9.13. To approve decision on use of procurement method from one source as provided for by legislation.

9.14. If price of any tender proposal significantly differs from supposed price of relevant goods (works and services), to approve decision on rejection of such proposal adopted by procurement agency.

9.15. To process complaints lodged as provided for by legislation by consignor (contractor) which states that he suffered or will suffer losses or damage as a result of performance by procurement agency of duties by legislation and send notice about it to procurement agency (or confirming body) immediately after complaint is received.

9.16. To send notice on lodging of complaints and its consent to all consignors (contractors) participating in procurement procedures and relating to such complaint after complaint is lodged as provided for in legislation.

9.17. In terms provided for in legislation, to send one copy of rendered decision to consignor (contractor), which lodged a complaint, procurement agency and any other consignor (contractor), which participated at processing of complaint.

9.18. If received complaint is not rejected, recommend one or several remedies provided for in legislation.

9.19. To receive copy of final protocol of tender and procurement report.

9.20. To give consent on increase or decrease of volume of goods (works and services) by 15% when procurement contract is entered into, subject to remaining prices and criteria of each unit of goods (works and services) by procurement agency.

9.21 To perform other rights provided for in legislation of the Republic of Azerbaijan.

V. Organization of activity of agency

10. Activity of Agency is headed by director, who is appointed and dismissed by the President of the Republic of Azerbaijan and who bear personal responsibility for performance of duties and implementation of functions charged to the Agency.

11. Director of Agency has one deputy appointed and dismissed by the President of the Republic of Azerbaijan.

12. Director of the Agency has the following authority:

12.1. To organize and manage work of the Agency;

12.2. In accordance with current legislation, to dispose property and assets of Agency as determined in legislation.

12.3. To provide implementation of record-keeping in the Agency in accordance with legislation.

12.4. To organize and supervise over accounting and reporting in the Agency as provided for by legislation.

12.5. To approve structure of Agency’s office and subordinating entities, staff schedule and provisions in duly order within determined labor remuneration fund and number of employees.

12.6. To employ, dismiss employees of central office of Agency and subordinating entities and take measures on promotion and disciplinary penalty as per legislation.

12.7. To issue decrees, resolutions, sign (approve) relevant instructions and other regulations within its competence with binding effect for office of the Agency and its subordinating agencies, arrange for and inspect their implementation within its authority.

12.8. To execute other rights in accordance with legislation of the Republic of Azerbaijan.

13. The Board consisting of director (chairman of Board), deputy director because of his duty and managers of structural divisions shall be established in the Agency.

14. Number and staff of the members of Board of Agency shall be approved by the Cabinet of Ministers of the Republic of Azerbaijan.

15. Board of Agency at its meetings discusses issues relating to Agency’s activity and makes relevant decisions about such issues.

Board meetings of the Agency are competent if more than half of members are present. Decisions of the Board of Agency are taken by simple majority of votes.

Decisions of the Board shall be recorded at protocols and as a rule shall be carried out under director’s decree.

16. In case of discrepancies between chairman of Board and board members, chairman of board shall perform his justified decision and provide the Cabinet of Ministers of the Republic of Azerbaijan about it.

17. Respective state procurement agency of the Nakhchivan Autonomous Republic is included into general structure of the Agency.