4. MANAGEMENT EFFICIENCY

4.1. Corporate Governance 4.2. Internal Control and Auditing 4.3. Risk Management 4.4. Property Management 4.5. Purchase Management 4.6. Quality Assurance

4.5. Purchase Management

The Concern's purchasing activity is governed by the Federal Law No. 223-FZ dated July 18, 2011 on Purchasing of Products, Work, and Services by Specific Corporate Entities, and the Unified Industry-Level Purchasing Standard (Regulations on Purchasing Activities) of Rosatom State Corporation approved by the resolution of Rosatom State Corporation Supervisory Council dated February 7, 2012 No. 37, as amended (the Standard), and other local regulatory acts and administrative documents of Rosatom State Corporation and the Concern related to purchasing activity.

Pursuant to the Federal Law and the Standard, information on goods, work or services to be purchased is published on the official website of the government: www.zakupki.gov.ru, and the official website on purchasing in the nuclear sector: www.zakupki.rosatom.ru; thus, a wide range of bidders may join the procedure, and a competitive environment is created.

The Concern's purchasing activity regulates the relations arising from purchasing for the needs of Rosatom State Corporation and its organizations with a view to promote fair competition and fair market prices, ensure efficient use of funds, transparency of order placement, and integrity of the economic space.

Among the basic principles are purchasing information transparency, equality, uniform and cost-efficient spending.

According to the Standard, the Concern developed and enacted the regulatory documents that govern the purchasing activities and the procedure of interaction among the Concern's Headquarters, branches, and subsidiaries when carrying out purchasing activities.

The Concern's long-term development instruments include introduction and improvement of the system for logistics support, purchasing of materials and equipment, as well as work and services for the Power Engineering Division headed by Rosenergoatom Concern JSC.

Optimal development is ensured by the logistics support system management — a series of measures aimed at satisfying the demand of order initiators. The logistics support system comprises planning of the demand covering, shaping of the purchasing object, and requirements for contract terms and conditions, execution and administration of contracts, as well as inventory management.

Long-term development and stability of the processes related to the logistics support system are ensured by the category management introduced in the Division. Category management is an industry-wide group of processes corresponding to Rosatom Process Model.

The key instrument for further development of the logistics support system is a category purchasing strategy — action plan for efficient management of purchases, supplies, inventory, and interaction with suppliers in the categories of materials, resources, equipment, work, services.

Planned and actual results are achieved through long-term planning of purchases, development of strategies for purchasing procedures, aggregation of orders, automation of business processes within the logistics support system, laying the cornerstones for unified technical policies as part of centralized procurement of materials, equipment, work, and services.

We are constantly streamlining the purchasing procedures in order to increase the efficiency of procurement activities. Respective indicators of efficiency are monitored by heads of the Procurement and Logistics Support Service of the Concern's Headquarters, as well as Procurement Directorates created in the Concern's branches.

In 2015, the Concern's procurement performance indicators were fulfilled in full.

CONCERN'S PURCHASING OBJECTIVES FOR 2016:

  • Share of non-competitive purchases — 5%;
  • Share of purchases from small and medium businesses — 18%;
  • Streamlining of category management of the logistics support system, categorized procurement of materials, equipment, work, and services.