1.6. Responsible Supply Chain
- Federal Law No. 223-FZ On Procurement of Goods, Works, and Services by Certain Types of Legal Entities dated July 18, 2011.
- Regulation on Procurement of Goods, Works, and Services by PJSC Gazprom and Gazprom Group Companies (the “Procurement Regulation”)Approved by resolution of the Board of Directors of PJSC Gazprom No. 3168 dated October 19, 2018 (as amended by resolutions of the Board of Directors of PJSC Gazprom No. 3337, 3580 and 3625 dated November 19, 2019, May 20, 2021 and July 6, 2021, respectively).
Gazprom’s procurement system relies on the following principles:
- safe operation of hazardous production facilities;
- information transparency;
- zero discrimination;
- targeted and economically efficient spending;
- ties with suppliers and contractors of shared corporate and ethical values;
- stimulation of competitive environment;
- balanced ratio of costs and expected economic benefits.
Gazprom’s procurement activities are governed by the Group’s Central Procurement Office. Acting under the Procurement Regulation, it is responsible for:
- planning of the Gazprom Group’s procurements;
- defining a customer/organizer interaction procedure and distributing tasks to both parties in preparing, arranging and holding the Gazprom Group’s procurement activities;
- staging and conducting pre-qualification procedures, compiling and keeping a Register of the Gazprom Group’s potential bidders;
- arranging and conducting the Gazprom Group’s procurement activities;
- exercising control over the Gazprom Group’s procurement activities;
- establishing the form, content of, as well as the procedure for submitting, information required from the Gazprom Group regarding procurement and signed contracts for goods, works and services;
- providing methodological guidance to the Gazprom Group in respect of procurement activities;
- advising on the procedure for applying the Procurement Regulation and other procurementrelated matters;
- coordinating the work of the Gazprom Group’s structural units for preparing and conducting procurement activities.
PJSC Gazprom has put in place the Automated Electronic Procurement System (AEPS), covering the pre-qualification of potential bidders and the entire procurement cycle, from needs planning to signing and executing contracts. As regards electronic procurement, the Group employs the Electronic Trading Platform of Gazprombank (GPB ETP)Electronic Trading Platform (the Gazprom Group’s Procurement section) integrated with the Unified Information System (UIS) for public and municipal procurement of goods, works and servicesUIS, and with the AEPS.
Procurement of materials and equipment
- Gas, energy, liquid hydrocarbons
- Gas pumping units and components
- Nonstandard equipment
- Large-diameter pipes and pipeline valves
- Electrical equipment, instrumentation and automation
- General plant equipment and gas equipment
- Pump and compressor equipment
- Gas production and drilling equipment
Procurement of works and services
- Gas and liquid hydrocarbons transportation and storage services
- Construction and installation works
- Construction of wells (production drilling and related works)
- Seismic research and exploration
- Transportation and logistics services
- Engineering and survey activities
- Maintenance and routine repairs
- IMS development and servicing
When conducting procurement activities, the Group relies on corporate anti-corruption and anti-fraud principles and takes measures to settle conflicts of interest and prevent violations.
A collegial body, i.e. a Procurement Committee, is set up to approve the results of bidding and marketing research. The Group strictly monitors the Committee membership to avoid conflicts of interest. Following the bidding, the Сommittee selects a supplier (contractor, service provider) based on the principles of fair, equal and objective treatment of bidders while also taking into account criteria for evaluating and comparing bids specified in the procurement documentation (notice of request for proposal). Committee meetings are held in line with effective practices and the procedure to prepare and hold such meetings and issue electronic minutes via the AEPS. Violations of procurement procedures are punishable by administrative sanctions.
Procurement participants have the right to challenge the results within ten days. They may also submit proposals on improving PJSC Gazprom’s procurement procedures, as well as comments and complaints regarding the actions or failure to act by customers, organizers and their officers. Procurement participants can inform the Group of unreasonable requirements for procured items, suppliers (service providers), delivery (work/ service) deadlines and conditions, and other cases of unreasonably restricted competition. A feedback page is available for potential bidders in the Procurement section of the PJSC Gazprom’s official website.
The Gazprom Group’s procurement practices comply with Article 13.3 of Federal Law No. 273-FZ On Combating Corruption dated December 25, 2008, which obliges companies to develop and implement anti-corruption measures according to the Anti-Corruption PolicyApproved by resolution of the Board of Directors of PJSC Gazprom No. 2846 dated November 15, 2016. In addition, the Group follows the Code of Corporate Ethics of PJSC GazpromApproved by resolution the Board of Directors of OJSC Gazprom No. 2309 dated February 25, 2014 setting out business conduct rules aimed, inter alia, at preventing and minimizing the negative impact of conflicts of interest.
The Gazprom Group adheres to anti-monopoly laws, assigning relevant responsibilities to the Central Procurement Office. This body is in charge of ensuring legal compliance when drafting regulations and other documents governing procurement procedures. PJSC Gazprom put in place criteria for material violations of procurement procedures to hold culprits liable.
In the reporting year, the Group signed contracts with over 26,400 suppliers of goods, works and services, including 26,200 external providers (99%) and 274 interdependent entities (1% of all PJSC Gazprom’s counterparties).
In 2021, we made procurement procedures as simple as possible to attract more small and medium enterprises (SMEs). Now SMEs have access to electronic procurement, with the list required documents reduced and no financial security needed. In addition, payment period is reduced to 15 business days after the goods (works, services) delivery certificate has been signed by the customer.
In 2021, the Gazprom Group entered into more than 42,000 contracts with businesses from the Unified Register of SMEs worth over RUB 248.5 billion, including 4,800 in excess of RUB 83.5 billion signed after competitive bidding and marketing research involving SMEs only. SMEs accounted for 60.5% of the total number of the Gazprom Group’s counterparties (26,400) under contracts for goods, works and services signed in 2021.
As of February 1, 2022, the Register of the Gazprom Group’s potential bidders included 881 pre-qualified participants, 632 of which are SMEs. In 2022, Gazprom will continue to improve its procurement practices, including as part of the efforts to comply with directives of Government of the Russian Federation and changes to the legislation of the Russian Federation.
Key procurement indicators
|Total value of bidding and marketing research, RUB billion||520.1||548.4||454.3||—17.2%|
|Total number of contracts signed after bidding and marketing research, thousand||16.9||14.6||11.7||—19.9%|
|Savings due to bidding for contracts, RUB billion||19.6||32.2||29.9||—7.1%|
|Share of domestic materials and equipment in centralized supplies to the Gazprom Group1, %||99.5||97.6||97.4||—0.2 p.p.|
|Economic benefit of import substitution, RUB billion||14.8||16.6||21.9||31.9%|
|Share of SME suppliers in the total number of the Gazprom Group’s counterparties, %||59.4||59.6||62.1||2.5 p.p.|
|Value of contracts signed with SMEs, RUB billion||381.4||300.5||248.5||—17.3%|