Legal basis for procuring ultrasound systems in Russia

In the Russian Federation, budgetary institutions procure the goods in accordance with 2 federal laws:

1. Federal Law No. 44-ФЗ On the Contract System in the Procurement of Goods, Works, Services for State and Municipal Needs dated April 5, 2013, regulates the procurement operations of budgetary institutions fully owned by the state. It applies to procurement operations of all public sector customers and regulates all transaction stages. The customers departing from the rules face fines and procurement cancellation, and entrepreneurs face being entered into the supplier blacklist. The method of determining the initial procurement price is strictly regulated.
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2. Federal Law No. 223-ФЗ On the Procurement of Goods, Works, Services by Certain Types of Legal Entities dated July 18, 2011, regulates the procurement of the companies 50% or more in which are owned by the state, establishes only general procurement principles for the customers. Key requirement: the company shall independently develop the requirements for the bidders and ways for selecting the supplier. The customers are entitled to prescribe their own conditions for bidding, select the procurement options, and ways to determine the initial price of the contract. Law 223 is aimed at supporting small enterprises and developing the tender system as a whole.
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Restrictions and conditions for admitting foreign goods to the bidding process

There are two major lines of state support for Russian medical equipment manufacturers:

1. Regulatory legal acts establishing restrictions and conditions for admitting the goods originating from foreign states for the purposes of goods procurement for state and municipal needs:

• Order of the Ministry of Finance of the Russian Federation No. 126н dated June 4, 2018.
• Resolution of the Government of the Russian Federation No. 878 dated July 10, 2019.

2. Legal acts establishing the minimum share of the Russian goods in the procurement by the customers in the bidding process (quotas):

• Resolution of the Government of the Russian Federation No. 2013.
• Resolution of the Government of the Russian Federation No. 2014.

Order of the Ministry of Finance of the Russian Federation No. 126н "On the Conditions for Admitting the Goods Originating from a Foreign State or a Group of Foreign States for the Purposes of Goods Procurement for State and Municipal Needs" dated June 4, 2018
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According to Order No. 126н, the priority of goods originating from the EAEU countries is established. The essence of the Order’s application is that the bidders having offered the products manufactured in the EAEU member states are granted a 15% price preference (or 20% for national projects).

Thus, during the auction, the Order provides for the obligation of the customer to additionally reduce by 15% (20%) the price offered by the winner if their application contains a proposal for the supply of foreign-manufactured goods. During the tendering process, request for quotations, the Order is applied in an inversed manner: During bid assessment, a 15% (20%) reduction coefficient is applied to the bids containing a proposal for the supply of goods exclusively from the EAEU countries.

The "second is odd one out" rule (Resolution of the Government of the Russian Federation No. 878)

For ultrasound equipment, the primary document establishing the restrictions and conditions for admitting the goods originating from foreign countries for the purposes of goods procurement for state and municipal needs is Resolution of the Government of the Russian Federation No. 878 dated July 10, 2019

"On the Measures to Stimulate the Manufacture of Radio-Electronic Products in the Russian Federation in the Procurement of Goods, Works, Services for State and Municipal Needs, on Amendments to Resolution of the Government of the Russian Federation No. 925 dated September 16, 2016 and the Invalidation of the Certain Acts of the Government of the Russian Federation"
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This document applies to radio-electronic products manufactured in the Russian Federation or the countries of the Eurasian Economic Union (Armenia, Belarus, Kazakhstan, Kyrgyzstan).

Therewith, the equipment shall be entered in the appropriate registers:

• The Unified Register of Russian Radio-Electronic Products
  https://gisp.gov.ru/
• The Eurasian Register of Industrial Products
  https://erpt.eecommission.org/

When considering the bids at the auction, the public sector customers use the following system for assessing the Russian origin of radio-electronic products:

• Level 1 – Level 1 equipment shall be made with the use of the Russian Electronic Component Base (ECB applying the central processors manufactured in Russia).
• Level 2 – Level 2 equipment included in the Unified Register of Russian Radio-Electronic Products may include a foreign ECB, provided that the remaining requirements for confirming the Russian origin are observed.

RuScan units are considered Level 2 equipment.

In all tenders for the supply of radio-electronic products (including ultrasound systems), the "second is odd one out" rule applies:

• In case a Level 1 product that meets the procurement conditions enters the auction, all other products, including the Russian products using foreign ECBs, will be rejected.
• The Level 2 products manufactured in Russia from the Unified Register of Russian Radio-Electronic Products will be procured only in the absence of an offer for the supply of Level 1 products.
• Other products not included in the Unified Register of Russian Radio-Electronic Products are treated similarly to the foreign products and will be considered for procurement last.

The priority of the products manufactured in Russia according to Federal Law 223

When publishing tenders for the procurement of ultrasound equipment under 223-ФЗ, the customers shall establish the priority of the products manufactured in Russia over the products originating from a foreign state.

Resolution of the Government of the Russian Federation No. 925 "On the Priority of Goods Manufactured in Russia, Works, Services Performed, Rendered by Russian Persons in relation to Goods Originating from a Foreign State, Works, Services Performed, Rendered by Foreign Persons" dated September 16, 2016.
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The priority consists in establishing 15% price preferences for the products manufactured in Russia.

In case the product is included in the Unified Register of Russian Radio-Electronic Products, the preferences amount to 30% of the price.

Quotas for procuring ultrasound scanners manufactured in Russia

In the Russian Federation, Resolutions No. 2013 and No. 2014 apply establishing the minimum share of the Russian goods in the procurement by the customers in the bidding process (quotas).

1. Resolutions No. 2013 regulates the quotas as per Law 223. The Resolution specifies the following shares for procuring the ultrasound equipment:

The equipment procured under quotas shall be included in the Register of Russian Industrial Products and/or the Unified Register of Russian Radio-Electronic Products.

2. Resolution No. 2014 regulates the quotas as per Law 44. The Resolution specifies the following shares for procuring the ultrasound equipment:

Medical device type codes

For the purpose of achieving the minimum share in the procurement, the goods produced in the EAEU countries are taken into account.

Catalogue of Goods, Works and Services

Resolution of the Government of the Russian Federation No. 145 "On the Approval of the Rules for the Formation and Maintenance in the Unified Procurement Information System of a Catalogue of Goods, Works and Services for State and Municipal Needs and Rules for the Use of a Catalogue of Goods, Works and Services for State and Municipal Needs" dated February 8, 2017
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Resolution No. 145 approves the rules for the formation and maintenance of a Catalogue of Goods, Works and Services, on the basis of which the customers shall describe the item procured to meet state and municipal needs.

The customers shall apply the information included in the Catalogue entry from the date of mandatory application specified therein.

The code in the Catalogue of Goods, Works and Services for the ultrasound systems

26.60.12.132-00000036 Universal ultrasound imaging system, mains-powered
https://zakupki.gov.ru/

26.60.12.132-00000037 Universal ultrasound imaging system, mains-powered (extended code)
https://zakupki.gov.ru/

Technical specifications for radio-electronic products (including the ultrasonic systems) shall be filled in only in accordance with the description in the Catalogue of Goods, Works and Services, additional information is not allowed.

The point-based system for assessing import substitution in the Russian production of medical devices

On August 08, 2023, Russian Government Decree No. 1293 was adopted, establishing changes in the assessment of the level of localization of medical equipment. The new rules apply to 18 types of medical equipment, including ultrasound diagnostic systems.

To confirm Russian production, the criteria for awarding points must be met.

The evaluation criteria include the use of Russian raw materials, the use of the components manufactured in Russia, the performance of process operations during assembly and the scope of research work. Points will be awarded for performing a particular operation and making components.

By 2025, the percentage of the Russian components required for the manufacture of goods is planned to be gradually increased. Such a gradual transition will contribute to the development of the Russian medical industry, in particular, the manufacture of medical equipment and medical devices.