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LAW OF THE REPUBLIC OF ARMENIA

of January 14, 2017 No. ZR-21

About purchases

(as amended on 17-06-2021)

Accepted by National Assembly of the Republic of Armenia on December 16, 2016

Section 1. General provisions

Article 1. Subject of regulation of the Law

1. This Law governs the relations connected with procurement process by customers of goods, works and services, establishes basic rights and obligations of the Parties of these relations.

Article 2. The basic concepts used in the Law

1. In this Law the following basic concepts are used:

1) customer:

a) state bodies and local self-government, the public or local government offices provided by the Constitution of the Republic of Armenia and the laws of the Republic of Armenia

b) Central Bank of the Republic of Armenia,

c) state or municipal non-profit organizations,

d) the organizations having more than fifty percent of share of the state or municipalities

e) the funds created by the state or municipality or the state or municipal non-profit organizations or the organizations having more than fifty percent of share of the state or municipalities or created by them associations (association)

e) the legal entities who received according to the procedure of donation or in the form of means grant from the state or municipality or the non-profit state or municipal organization, or the organizations having more than fifty percent of share of the state or municipalities - regarding the purchases made at the expense of the means received according to the procedure of donation or in the form of grant

g) the funds reformed by means of reorganization of the state or municipal non-profit organizations or organizations having more than fifty percent of share of the state or municipalities

h) public organizations;

2) public organizations:

a) included in the list of person approved by the Commission on regulation of public services of the Republic of Armenia which perform activities in the regulated sphere of public services, except for persons who are included in the list specified by this paragraph on the circumstance caused by possession of dominant position regarding the services rendered within operation of public network in the sphere of electronic communication

b) other organizations of the sphere of public services which on special or exclusive right perform established by this article one or more than one type of the related activity if purchase is made for the purpose of implementation of this type of the related activity;

3) purchase – acquisition, leasing with payment by the customer of all types of goods, works and services by means of the conclusion of the contract with the selected participant, acquisition by the customer of goods, the works and services at the expense of means provided to legal entities according to the procedure of donation, purchase of goods, works or services in the form of exchange and also assignment of the rights to the partner of private sector within transactions on partnership the state - private sector, including transactions on trust management and concession;

4) the contract – the written bargain concluded for the purpose of performing purchase;

5) the participant – person participating in process of purchases for the purpose of the conclusion of the contract with the customer;

6) the selected participant - the participant (participants) to whom, (which) the customer suggests to sign the contract;

7) the invitation – terms offered to the participant for the purpose of the conclusion of the contract;

8) the request - the offer represented by the participant based on the invitation;

9) tender security - the means providing accomplishment of obligations assumed by the participant according to the request in the cases provided by this Law;

10) providing the contract - the means providing accomplishment of the contract obligations assumed by the selected participant in the cases provided by this Law;

11) electronic auction - process of representation of new reduced prices with use of electronic means which allows to determine by methods (means) of automatic assessment the places taken by the participants who submitted applications, their sequence;

12) electronic means - electronic, including program and the hardware necessary for the purpose of the processings and data storage transferred, moved and received by means of cable, radio optical means or other electromagnetic means;

13) authorized body - the state body of the executive authority of the Republic of Armenia developing and performing policy of the Government of the Republic of Armenia in the field of management of public finances;

14) the bulletin – the Internet the website with the address www.procurement.am operating for the purpose of publication of the information which is subject to publication provided by this Law;

15) special or exclusive right - the right which follows from the competences provided by competent authority the legal or administrative act which purpose is assignment of the right to implementation of certain activities (including the sphere of public services) to one organization or limited number of the organizations and which essentially limits possibility of other organizations on implementation of such activities. Special or exclusive rights are not the rights which are granted as a result of public tender and their provision was not based on non-discriminatory criteria, except as specified, when the right appropriated as a result of public tender in the procedure established by the law is considered exclusive;

16) purchase subject - the purchased goods, work or service;

17) the characteristic of subject of purchase - property of subject of purchase, condition of its acquisition and payment;

18) consulting services – services as a result of which rendering intangible assets (values) deprived of physical substance are created;

19) the consultant – person participating in process of purchases for the purpose of the conclusion with the customer of the agreement of rendering consulting services;

20) the selected consultant - the consultant (consultants) to whom, (which) the customer suggests to sign the agreement of rendering consulting services;

21) basic purchase unit - one million dram of the Republic of Armenia;

22) the related activity - the mentioned below types of activity performed in the sphere of public services, to the purchases made within which extends this Law. Those are:

and. production of electrical and heat energy (including their combined production), transfer (transportation) and distribution of electrical, heat energy and natural gas, implementation of services of the operator of systems of spheres of power industry and natural gas, construction new or reconstruction of production capacities in the sphere of power industry and natural gas, construction of networks of transfer (transportation) or distribution in the sphere of power industry, power system and natural gas,

. supply with drinking, irrigating, industrial water, water disposal and sewage treatment,

century operation of public electronic network in the field of electronic communication,

of service in the field of mail service, rail transport and carrying out obligatory technical inspection of vehicles, subject to tariff regulation by the Commission on regulation of public services of the Republic of Armenia,

provision or operation of the networks provided (existing) for rendering public services in the transport sphere. The network of rendering transport services is considered existing when conditions of its operation, including its subjects to servicing routes or the allocated capacity or frequency of servicing are established by competent state body,

e. operation of the geographical area:

- for the purpose of investigation or oil recovery, gas, coal or other solid fuel,

- for the purpose of provision of the airports or other terminals to persons performing transportation on air or to waterways;

23) procurement process - set of actions for implementation of the procedures, the rights and obligations provided for the purpose of performing purchase by the legislation of the Republic of Armenia on purchases including procurement planning, approval of nature of subject of purchase, contract performance and contract management;

24) purchase price – the estimate price of purchase of goods, work, service estimated according to the procedure, established by the Government of the Republic of Armenia.

Article 3. Purpose, principles and coverage of the Law

1. The purpose of this Law is providing in the course of purchases of cost on account of compensation as that:

1) acquisition for accomplishment of the powers of goods, works and services, necessary according to its needs, with equivalent payment allocated for the customer;

2) economical, effective and useful implementation of purchases and process of purchases.

2. Process of purchases is based on the following principles:

1) the organization of process of purchases for the unified rules on the basis of competition, transparency, uniformity, publicity and nondiscrimination;

2) expansion for the purpose of the conclusion of the contract of circle of participants and stimulation of the competition between them;

3) equality of participation in process of purchases for any person, irrespective of circumstances that it is foreign physical person, the foreign organization or the stateless person.

3. In sense of this Law purchase is considered the Republic of Armenia made outside the territory if the contract is signed also goods, work or service in its framework are acquired or used outside the territory of the Republic of Armenia.

4. Operation of this Law does not extend to the following types of transactions:

1) employment contracts;

2) acquisition of the services rendered by particular persons provided by decisions of the officials performing criminal, administrative or judicial proceedings in the cases provided by the law;

3) the transactions connected with trust management of securities.

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