(2022.12.15-ны өдрийн орчуулгын хяналт)                               Unofficial translation

LAW OF MONGOLIA

December 1, 2005                                           Ulaanbaatar city

ON PROCUREMENT OF GOODS, WORKS AND SERVICES

WITH STATE AND LOCAL FUNDS

CHAPTER ONE

GENERAL PROVISIONS

Article 1.Purpose of the Law

1.1.The purpose of this Law shall be to regulate relations concerning planning and organizing procurement of goods, works and services with state and local funds, exercising oversight of the procurement procedures, making and disposing of complaints, and imposing liability for violators breach of this law.

Article 2.Legislation on Procurement of Goods, Work and Service with State and Local Funds

2.1.Legislation on procurement of goods, works and services with state and local funds shall consist of the Constitution of Mongolia, the Civil Code, Law on Public Information Transparency, Law on Glass Account, this Law, and other legislative acts enacted in conformity therewith.

/This paragraph was amended by the law as of December 17, 2021/

/Addendum to this paragraph was made by the laws as of June 16, 2011 and July 1, 2014/

2.2.If an international agreement to which Mongolia is a party provides otherwise than this Law, the provisions of international treaties shall prevail.

Article 3.Scope of the Law

3.1.This Law shall apply to procurement of goods, works, and services with state and local funds.

3.2.Unless otherwise provided in international agreements to which Mongolia is a party, this Law shall apply to the regulating procurement of goods, works and services with funds generated from foreign aid and loans.

3.3.Law on Public Information Transparency and Law on Glass Account shall regulate specifically the relations with respect to ensuring transparency of the procurement of goods, works and services with state and local budget.

/This paragraph was amended by the law as of December 17, 2021/

/This paragraph was added by the law as of June 16, 2011, and addendum to this paragraph was made by the law as of July 1, 2014/

3.4.This Law shall not regulate relations arising from procurement of firearms and specially designated equipment, tools, technique, facilities, works and services categorized as classified to the state secret under the law and/or related to ensuring national security.

/The addendum to this paragraph was made by the law as of May 14, 2020/

3.5.This Law shall not apply to procurement of works and services related to repair and maintenance of national automobile roads undertaken by state-owned legal entities under the rights conferred by legislation.

3.6.This Law shall not regulate relations arising from procurement of goods and services relating to the activities of the Development Bank of Mongolia.

/This paragraph was added by the law as of February 10, 2011/

/This paragraph was repealed by the law as of March 22, 2019/

3.7.The law shall not regulate relations on the procurement of goods, works and services with respect to the election that is organized by the consultative poll or central election body within the budget specified in Article 38.1 of the Law on Election.

/This paragraph was added by the law as of February 5, 2016/

/The amendment to this paragraph was made by the law as of February 9, 2017/

/This paragraph was repealed by the law as of March 22, 2019/

3.8.This Law shall not regulate relations with respect to the procurement of goods, works and services regarding the operations of Future Heritage Fund and Future Heritage Fund Corporation.

/This paragraph was added by the law as of February 5, 2016/

/This paragraph was repealed by the law as of March 22, 2019/

3.9.This Law shall not regulate relations with respect to implementation of the monetary policy which is specifically set forth in the Law on Central Bank (Bank of Mongolia) including purchasing securities and currencies, printing, storing, and transporting banknotes, as well as purchasing, refining and transporting foreign currency or gold in order to establish foreign currency state reserves, receiving consulting services for bank inspection, establishing national payment system software and its equipment, and creating treasury reserves fund.

/This paragraph was added by the law as of January 12, 2018/

3.10.This law shall not regulate relations on the procurement of services by the Government and state-owned legal entities or legal entities with state ownership with respect to the offering and trading of securities on the domestic and international financial markets, and borrowing loan with commercial conditions from international markets, banks, and financial institutions.

/This paragraph was added by the law as of March 22, 2019/

3.11.This law shall not apply to the matters relating to take consultancy service, have expert participated in the audit stated in Law on State Audit. 

(This paragraph was added by the law as of May 1, 2020)

3.12.This law shall not regulate relations on the procurement of works and services related to city improvement, automobile road repair and maintenance, and waste management to be performed by legal entities owned by the capital city.

/This paragraph was added by the law as of July 7, 2021/

3.13.This law shall not regulate relations on procurement of consulting services by the involvement of qualified persons in the implementation of the supervision and inspection by the Financial Regulatory Commission provided by the Law on Virtual Asset Service Providers.

/This paragraph was added by the law as of December 17, 2021/

Article 4.Client

4.1.The following bodies shall be clients:

4.1.1.State- and locally-owned legal entities;

4.1.2.Legal entities with 50 percent or more state and/or local ownership;

4.1.3.Project implementer specified in Article 4.1.21 of Law on Debt Management. 

Article 5.Definitions

5.1.The following definitions used in this law shall have the following meaning:

5.1.1."Tender" shall mean a proposal by interested person to provide goods, works or services in accordance with requirements and conditions set by client;

5.1.2."Tender selection" shall mean a process of selecting the tender evaluated the best in accordance with the procedures prescribed by this Law, awarding of contract to perform goods, works or services and concluding of contract;

5.1.3."Threshold" shall mean the minimum or maximum price set for tender selection in accordance with the procedures prescribed by this Law, depending on the budgeted cost of goods, works or services;

5.1.4."Tender invitation" shall mean client's document notifying of tender selection or document announced through media;

5.1.5."Tender documents" shall mean a document containing requirements and conditions for tender selection provided by client to tender participants;

5.1.6."Tender participant" shall mean the following persons that are independent from client:

5.1.6.a.A person that independently submits tender;

5.1.6.b.Several persons that submit a single tender under joint venture agreement.

5.1.7."Tender guarantee" shall mean a bank guarantee, Government bond or securities recognized by the Government, provided to client by tender participant in order to certify that tender shall be valid until conclusion of a contract or until expiration of the tender effective date, to conclude a contract in the case of being selected, as well as to participate responsibly in tender selection;

/This sub-paragraph was amended by the law as of March 22, 2019/

5.1.8."Advance payment guarantee" shall mean a bank guarantee, Government bond or securities recognized by the Government, provided to client by tender participant as a security of spending payment according to its purpose as set forth in contract, in case of advance payment to be paid by client;

5.1.9."Evaluation committee" shall mean a working group formed by client in accordance with the procedure prescribed by this Law to organize tender selection;

5.1.10."Goods" shall mean items with economic importance and value, possible to be sold or exchanged, or works required to be supplied with such goods. In the case where the cost of work exceeds the price of goods, contract shall be considered as "contract for works";

5.1.11."Works" shall mean construction of buildings or facilities; installation, testing and adjustment of construction equipment; or supply of goods required for the performing of such works. In the case the price of supply of goods exceeds the cost of work, the contract shall be considered as "contract for goods";

5.1.12."Construction work" shall mean works performed by combining of manpower, materials, devices and technology for building, refurbishing, repair or reconstruction of buildings, as well as drilling and exploration works;

5.1.13."Installation, testing and adjustment of equipment" shall mean installation, testing and adjustment of construction equipment other than those specified in Article 5.1.11 of this Law;

5.1.14."Services" shall mean consulting and other services;

5.1.15."Consulting services" shall mean professional services provided on the bases of special knowledge and qualifications for drafting and implementing of projects, providing technical assistance, conducting research and analysis, engineering and architect designing, as well as monitoring the performance of a contract;

5.1.16."Turnkey contract" shall mean a single contract comprising of several correlated goods, works and services for engineering and architect designing of building and facilities, installation, testing and adjustment of equipment, and preparing such construction for exploitation;

5.1.17."Performance guarantee" shall mean a bank guarantee, Government bond or securities recognized by the Government, provided to client by tender participant who is awarded to conclude a contract prior to signing a contract, certifying complete performance of contractual obligations;

5.1.18."Award of contract" shall mean a notice of client's decision to conclude a procurement contract with participant that submits the best evaluated tender;

5.1.19."Technical specification" shall mean requisites consisting of technical data, production and operation methods, technology and its requirements for goods, works or services to be procured as defined by client;

5.1.20."Goods of Mongolian origin" shall mean goods explored, planted, grown, produced, processed or made in Mongolia, or new goods with obviously modified basic characteristics, purpose and form of use, created by assembling the majority of their parts in Mongolia;

5.1.21."Foreign body" shall mean a foreign or international organization, foreign legal entity, foreign national or stateless person interested in the procurement;

/This sub-paragraph was revised by the law as of February 6, 2007/

5.1.22."Lowest price method" shall mean selection of consultant proposing the lowest price from amongst the consultants receiving the scores equal to or more than the lowest points set by client for technical proposal.

5.1.23."Master agreement" shall mean an agreement entered by the client with one or more suppliers, service providers and contractors at certain price and conditions for supply of goods and services that the client needs permanently, effective for a term of up to 3 years.

/This sub-paragraph was added by the law as of June 09, 2011/

/This sub-paragraph was revised by the law as of March 22, 2019/

5.1.24."goods, work, and services to be procured for personal use" shall mean goods, work, and services that are only required for the day-to-day operations of such organization;

/This paragraph was added by the law as of March 22, 2019/

5.1.25."electronic procurement system" shall mean the complex operations and information system for planning, organizing, reporting, and monitoring procurement operations using electronic software;

/This paragraph was added by the law as of March 22, 2019/

5.1.26."electronic procurement" shall mean procurement organized using the electronic procurement system;

/This paragraph was added by the law as of March 22, 2019/

5.1.27."electronic store" shall mean the component of the electronic procurement system for the purchase of goods and services under the general contract;

/This paragraph was added by the law as of March 22, 2019/

5.1.28."green procurement" shall mean the procurement of goods, works, and services aimed at ensuring the stability of economical and economically efficient use of energy and natural resources, having no negative impact on the environment and human health, reducing greenhouse gas emissions and waste, adapting to climate change, and creating a green environment;

/This paragraph was added by the law as of March 22, 2019/

5.1.29."preliminary procurement" shall mean organizing in advance the procurement of projects and measures to be implemented with the state budget, loans and aid at the stage prior to approval of the state budget and ratification of the international loan and aid agreements with foreign countries and international organizations by the State Great Khural.

/This paragraph was added by the law as of March 22, 2019/

Article 6.Principles of Procurement

6.1.The principles of transparency, equal opportunity for competition, efficiency, cost-saving and accountability shall be adhered to in procurement procedure.

Article 7. Rules of Procurement

7.1.For procurement of goods, works and services client shall select contractor and conclude contract on the basis of the following rules of tender selection procedure:

7.1.1.Rules for open tender selection;

7.1.2.Special rules for tender selection;

7.1.3.Rules for selection of consulting service provider.

7.1.4.Sourcing procedure with public involvement.

/This sub-paragraph was added by the law as of December 23, 2011/

7.2.Unless law specifically provides for application of the procedure prescribed by the Articles 7.1.2–7.1.4 of this Law, rules for open tender selection shall apply.

/This paragraph was amended by the law as of December 23, 2011/

7.3.Client may directly procure goods, works and services with budgeted cost lower than the threshold set in the Article 8.1.2 of this Law, without observing the rules prescribed by the Article 7.1 of this Law.

7.4.Client may select projects and measures to be implemented with loans and aid from foreign countries, international organizations, and state budget funds through the preliminary procurement procedure.

/This paragraph was added by the law as of  March 22, 2011/

7.5.The procedure for preliminary procurement specified in Article 7.4 of this law shall be approved by the state central administrative body in charge of budget matters.

/This paragraph was added by the law as of March 22, 2011/

7.6.The list of projects and measures to be financed with state budget funds organized by the procedure of preliminary procurement shall be developed by the state central administrative body in charge of budget matters and approved by the Government.

/This paragraph was added by the law as of March 22, 2011/

Article 71.Public involvement in procurement activities

71.1.The central budget governor, described in Article 15 of the Budget Law, may select supplier and provider of similar goods, works and services to be procured within the budget limit of the organization, as approved by General Budget Administrator.

71.2.Procurement of goods and services worth up to MNT 20 million budgeted by soum or district may be carried out with public involvement.

71.3.Procedures, guidelines and standard documents relating to public-involved procurement shall be approved and enforced by state central administrative body in charge of finance and budget. 

71.4.Tender selection for public-involved procurement shall be carried out with the involvement of representatives of local citizens, and principle of ensuring broad participation by local citizens in implementation and performance of the project shall be adhered to.

/The Article was added by the law as of December 23, 2011/

Article 8.Selection of Rules for Procurement Procedure

8.1.The Government shall define the following thresholds separately for goods, works and services:

8.1.1.Highest price of goods, works and services that are possible to be procured through comparison;

8.1.2.Highest price of goods, works and services that are possible to be procured through direct procurement;

8.1.3.Highest price of consulting services that is possible to be procured through the lowest cost-consultant selection method;

8.1.4.Lowest price of goods, works and services subject to procurement with approval by the state central administrative body in charge of budget matters;

/This sub-paragraph was annulled by the law as of June 9, 2011/

8.1.5.Lowest price of goods, works and services subject to procurement through posting of tender invitation on the website specified in the Article 52.1.12 of this Law.

8.2.Unless otherwise provided in this Law, rules for open tender selection shall apply to the procurement of goods, works and services with prices higher than the threshold as set forth in the Article 8.1.1 of this Law.

8.3 In each case of change of the commodity price index by more than 10 per cent, the Government shall redefine the threshold, based on the recommendations by the state central administrative body in charge of budget matters.

/This paragraph was amended by the law as of February 06, 2007/

8.4.Rules for tender selection shall be chosen upon consideration of the total budgeted cost of the given goods, works and services.

8.5.Dividing of the total budgeted cost and conducting of several tender selections for the purpose of fitting into the threshold as provided in the Article 8.1 of this Law or avoiding the rules for open tender selection shall be prohibited.

8.6.Client may conduct tender selection by dividing the goods, works or services into several packages of the same type or in a similar manner based on their purpose, types and geographic locations in order to promote competition.

8.7.Client shall, when dividing tender selection into packages in accordance with Article 8.6 of this Law, fulfill the following requirements:

8.7.1.Use the total cost of all packages as the basis when choosing the rule for tender selection;

8.7.2.Include the information about the packages in the tender invitation, as well as notifying that the participants may tender for one, several or all packages simultaneously;

8.7.3.Evaluate each of the packages;

8.7.4.Choose the option of the lowest total sum of all tender contracts to be concluded upon the given tender selection results;

8.7.5.package separately goods available to be procured from domestic factories stated in the Article 101.1 of this law from imported goods.

/This paragraph was added by the law as of December 23, 2011/

8.8.Contracts can be awarded on a package-by-package basis, on the basis of several packages, or on the basis of all packages.

8.9.In the case of decision to award contract to one tender participant on more than one package of goods, works and services, this shall be included in the procurement procedure report.

8.10.A tender for execution of design drawings, construction works and adjustment works may be announced to be performed completely by entering into a turnkey contract, as required by procedure set forth in the Article 5.1.16 of this Law.

/This paragraph was added by the law as of February 06, 2007/

8.11.A tender may be announced for procuring of goods and service upon making a master agreement.

/This paragraph was amended by the law as of June 10, 2022/

/This paragraph was added by the law as of June 09, 2011/

8.12.Procedure and guidelines for execution of Master Agreement shall be approved by a cabinet member in charge of budget issues.

/This paragraph was added by the law as of June 9, 2011/

8.13.Goods and services to be procured from the electronic store under the master agreement shall not be purchased from a person other than those placed in the electronic store.

/This paragraph was added by the law as of March 22, 2019/

8.14.Except for procurement under the master agreement, the client may enter into a contract by holding a tender selection upon determining up to three years, the unit price and other terms of works and non-consulting services which recure per annum.

/This paragraph was added by the law as of June 10, 2022/

Article 9. Participation of Foreign Bodies in Tender Selection

9.1.Foreign bodies shall have, in accordance with procedures prescribed by this Law, the right to participate in tender selections.

9.2.Client shall not prohibit a foreign body from participating in a tender selection for works with budgeted cost of more than 10,000,000,001 togrogs, and those for goods and services with budgeted cost more than 100,000,001 togrogs.

/This paragraph was amended by the law as of February 6, 2007/

9.3.A foreign body shall not be permitted to participate in any tender selection other than those specified in the Article 9.2 of this Law.

/This paragraph was revised by the law as of July 16, 2009/

Article 10.Granting Margin of Preference to Tender Participants   

10.1.Client may, during tender evaluation, grant margin of preference to the following bodies:

10.1.1.A party who submits a tender proposal to supply goods of Mongolian origin or recycled goods;

10.1.2.The following bodies submitting tenders for individual implementation of at least 50 per cent of works:

10.1.2.a.Mongolian citizens and legal entities;

10.1.2.b.Legal entities with foreign investment registered in Mongolia of which at least 50 per cent of assets are owned by Mongolian citizens or legal entities;

10.1.3.using most of all locally-produced goods, materials or locally- provided services except in the capital city, district or city with national level;

/The addendum to this sub-paragraph was made by the law as of April 22, 2022/

10.1.4.that recruited the most manpower from the local area not included in the capital city, district or city with national level.

/The addendum to this sub-paragraph was made by the law as of April 22, 2022/

10.1.5.minimum 90% of the legal body's workforce of which are Mongolian citizens

/This sub-paragraph was added by the law as of July 16, 2009/

10.1.6.a domestic entity which manufactures innovation products.

/This paragraph was added by the law as of May 22, 2012/

10.1.7.business entity with 25 or more employees, where 30% or more of the workforce is made up of disabled citizens.

/This paragraph was added by the law as of February 5, 2016/

10.2.In the case of granting margin of preference to the bodies provided in the Articles 10.1.1, 10.1.3 and 10.1.6 of this Law, the price of goods of Mongolian origin included in tender proposals by such bodies shall be subject to abstract reduction by 10 percent, if the body provided in the Article 10.1.1 of this law is the small and medium enterprises set out in the Article 5.1 of the Law on Support to Small and Medium Enterprise the price of goods of Mongolian origin included in tender proposals by such body shall be subject to abstract reduction by 15 percent, and the work tender price proposed by bodies specified in the Articles 10.1.2, 10.1.4 and 10.1.7 of this Law shall be subject to abstract reduction by 7.5 percent respectively, and such reductions shall be evaluated in comparison with tender prices of other participants.

/This paragraph was amended by the law as of February 5, 2016/

/This paragraph was amended by the law as of March 22, 2019/

/The addendum to this paragraph was made by the law as of June 6, 2019/

10.3.The abstract evaluation of tender of works to be performed and goods to be supplied as specified in the Article 10.2 of this Law shall not become the grounds for decreasing or changing the tender price of the bodies set forth in the Articles 10.1.1, 10.1.2, 10.1.3, 10.1.4, 10.1.6, and 10.1.7 of this Law.

/This paragraph was amended by the law as of February 5, 2016/

/The addendum to this paragraph was made by the law as of March 22, 2019/

10.4.In case of issuing margin of preference to the party specified in Article 10.1 of this Law during tender evaluation, it shall be clearly provided in the tender documents. A bidder requesting margin of preference shall deliver information on the origin and cost of goods or evidences specified in the Articles 10.1.1, 10.1.2, 10.1.3, 10.1.4, 10.1.6, and 10.1.7 of this Law.

/This paragraph was amended by the law as of February 5, 2016/

/The addendum to this paragraph was made by the law as of March 22, 2019/

10.5.Methods and rules for granting margin of preference shall be approved by the Cabinet Member in charge of budget matters.

Article 101.Purchase of goods from domestic factories

101.1.It shall be prohibited to participate foreign supplier in tender process if goods meeting quality and standard requirements are available from the domestic factories.

/The amendment to this paragraph was made by the law as of March 22, 2019/

101.2.The list of goods to be purchased from domestic factories stipulated in the Article 101.1 of this law shall be developed by the state central administrative body in charge of production matters, and shall be approved by the Government.

/This paragraph was revised by the law as of March 22, 2019/

101.3.the Article 9.2 of this law shall not be applicable to the Article 101.1 of this law.

(This paragraph was added by the law as of July 9, 2015)  

101.4.The Government shall annually evaluate and analyze the implementation and results of the Resolution approving the list of goods to be purchased from domestic industries, and make necessary amendments from time to time.

/This paragraph was added by the law as of March 22, 2019/

Article 11.Technical Specification

11.1.Client shall satisfy the following requirements when preparing technical specifications:

11.1.1.Defining of the given goods, works or services not by external indicators or qualitative data, but by their purpose, by energy and natural resource conserving and economically efficient maintenance, use, and quality level, by technical indicators, as well as by indicators that such goods, works and services are not adversely impacted to the environment and human health, with low greenhouse gas emissions and waste, and aimed to create a green environment;

/This paragraph was revised by the law as of March 22, 2019/

11.1.2.To be based on national standards, technical requirements, norms, normative, rules and regulations, if there is no such national standard or technical norms, to be based on international standards recognized in Mongolia;

/This paragraph was revised by the law as of March 22, 2019/

11.1.3.To not set specific requirements and conditions as to trademark, name, brand, type, place of origin, methods of production, producer or supplier;

11.1.4.In the case of required inclusion of conditions specified in the Article 11.1.3 of this Law, to add the clause "… or equivalent to these …" .

11.2.Client shall be prohibited from receiving from interested tender participant consultancy that may lead to limitation of the competition when preparing the technical specification.

Article 12.Evaluation of Tender Participant's Capabilities

12.1.For the purpose of allowing equal opportunities to and fair competition between tender participants, general, financial, technical qualifications and experiences of the bodies interested in tender selection shall be evaluated in accordance with the criteria set forth in Articles 14-16 of this Law.

12.2.Client shall, in accordance with the Articles 14-16 of this Law, define and include in the tender documents the qualification selection criteria for particular tender selection.

12.3.Client may, as provided in the Article 12.2 of this Law, deny the tenders that do not satisfy the qualifications and requirements, set forth by client and shall notify the respective tender participants in writing.

12.4.Client may, prior to awarding a contract, re-verify the qualification requirements set forth in the Article 12.2 of this Law for the tender participant evaluated as "the best".

12.5.Client shall keep tender participant's technical and business secrets learnt in the course of evaluation of qualifications of the tender participants.

Article 13.Preliminary Selection

13.1.Client may, for the purpose of verifying the qualifications of the bodies interested in tender selection, conduct preliminary selection. The following rules shall apply to preliminary selection:

13.1.1.Prepare a preliminary selection document containing qualification selection criteria and requirements and a proof of satisfying such criteria and requirements; 

13.1.2.Announce preliminary selection in accordance with the Articles 21.1 – 21.4 of this Law;

13.1.3.Notify tender participants who satisfy requirements for preliminary selection to submit their tender.

13.2.For the purposes of preliminary selection process, the term "tender invitation" used in the Articles 17.1, 21.1, 21.3 and 21.4 of this Law, shall be interpreted as "preliminary selection invitation," and whereas the term "tender documents" used in the Articles 19, 22 and 23 of this Law, shall be interpreted as "preliminary selection invitation" respectively. 13.3.Member of Government in charge of budget matters shall approve the rules and instruction for conducting preliminary selection.

Article 14.Evaluation of General Conditions

14.1.In the case the following circumstances are established, a tender participant shall be considered as not satisfying the general conditions:

14.1.1.The tender participant becomes insolvent, undergoes liquidation, has concluded a deal with a loan provider to avoid bankruptcy, its business activities are terminated, or is in any condition similar to the aforementioned under the laws of the jurisdiction of establishment; 

14.1.2.Has failed to pay taxes, charges or fees under the laws of Mongolia, or under the laws of its jurisdiction of establishment;

14.1.3.A state-owned, or partially state- owned legal entity operates under the scrutiny of client;

14.1.4.It is established by court or competent state inspector specified in Article 521 of this Law that the tender participant during the past 3 years has materially violated or failed to perform a procurement contract when engaged in procurement, or committed breaches in professional activities;

14.1.5.The tender participant has common interest with the entity that has provided the design, technical specification, or other documents for goods, works or services, or that is nominated to provide monitoring of or consulting services for the performance of the contract;

14.1.6.It is established by a competent state inspector specified in Article 521 of this Law that tender participant has submitted the tender containing obviously false information;

14.1.7.It is established by court that tender participant committed a corruption crime during the past 3 years.

14.2.In the field of its main activity, a legal entity may participate in tenders announced in a given year no more than six times, and if the tender is won 3 times, it is prohibited to participate in tenders again in the same year.

/This paragraph was annulled by the law as of February 6, 2007/

14.3.The following documents of Mongolia or the jurisdiction of establishment of tender participant may serve as the proof of occurrence of the conditions specified in the Article 14.1 of this Law:

/This paragraph was amended by the law as of March 22, 2019/

14.3.1.A court decision or documents issued by relevant competent administrative authority;

14.3.2.Certificates or other similar documents issued by the competent state authority of the jurisdiction of establishment.

14.4.The documents necessary to be submitted other than those specified in the Article 14.3 of this Law, shall be specifically indicated in the tender documents.   

14.5.The state central administrative body in charge of budget matters shall keep the registry of the entities denied of tender participation, based on the decisions of competent state inspector specified in the Article 521 of this Law, confirming the occurrence of the conditions specified in the Articles 14.1.4 and 14.1.6 of this Law, and publicize such decision.

/The paragraph was amended by the law as of June 10, 2022/

/The paragraph was amended by the law as of June 9, 2011/

14.6.A tender participant shall provide a written notification on the absence of the conditions specified in the Article 14.1 of this Law.

14.7.In case where client demands so tender participant shall provide written information concerning contracts being performed, or those which are awarded.

14.8.Client shall take into account the information specified in Article 14.7 of this Law when evaluating the technical and financial qualifications of tender participant to perform the contract.

Article 15.Evaluation of Financial Capacity

15.1.Client may demand from tender participant a proof of financial capacity adequate to performing the contract.

15.2.Client shall include the financial capacity evaluation requirement in the tender documents and in the preliminary selection document.

15.3.Financial capacity can be proven by the following documents:

15.3.1.Statement from the bank of which the tender participant is client;

15.3.2.Certified financial reports of the tender participant, accompanied, where necessary, by an auditing report;

15.3.3.Expenditure chart, including the number of consultants, their salaries and other expenses;

15.3.4.Information on annual sale of goods, works and services on the basis of contracts similar to the given one, for the past five years executed by the tender participant.

15.4.Documents necessary to be submitted other than those specified in the Article 15.3 of this Law for the particular tender shall be specifically stated in tender documents.     

Article 16.Evaluation of Technical Capacity and Experience

16.1.Technical capacity and experience of tender participants shall be evaluated on the basis of one of the following criteria, by taking into consideration the content, specifics, quality and quantity of the goods, works or services to be provided:

16.1.1.Education and professional qualifications of managing, supervising and executing personnel of the tender participant;

16.1.2.A list of all works performed by the tender participant during up to the past 5 years, letters of reference from previous clients on cost, duration, location and complete performance of the works similar to the given one;

16.1.3.A list of all goods or services supplied by the tender participant during the past 5 years, their cost, term, list of clients, and where necessary, letters of reference from previous clients on performance of the goods and services;

16.1.4.List of the specification of participant's technical devices, production facilities and equipment;

16.1.5.Measures for direct quality control, or indirect quality control measures through concluding subcontract;

16.1.6.Samples, specifications or photographs of the goods to be supplied, proof of their authenticity;

16.1.7.Quality certificate and producer's power of attorney if it is the good.

16.2.The documents and requirements set for them required for the particular tender from amongst of those specified in the Article 16.1 of this Law, shall be specifically stated in the tender documents.  

CHAPTER TWO

PROCEDURE FOR OPEN TENDER SELECTION

Article 17.Open Tender Selection

17.1.Open tender invitation shall be publicized in accordance with the Article 21 of this Law, and the tender participants shall be given equal opportunities to participate.

17.2.A person interested in tender participation shall submit the technical and financial tender simultaneously within the period set by Client.  

17.3.In cases other than those specified in the Article 18 of this Law, an open tender shall be conducted in one stage.

Article 18.Undertaking of Open Tender Selection in Two Stages

18.1.Client may, in the following circumstances, conduct an open tender selection in two stages:

18.1.1.Excessive scope of the work, high budgeted cost, or the necessity to conclude a contract to supply a set of or a combination of several interrelated types of goods, works or services which may potentially attract unequal technical proposals, or those Client assesses as having two or more potential technical solutions deserving equal recognition and satisfaction of the given requirements;

18.1.2.Inability of Client to predetermine the technical specification, or requiring assistance from an experienced contractor or supplier in determining final scope of work or preparing the technical specification.

18.2.An open tender selection in two stages shall be conducted as follows:

18.2.1.the tender participant shall submit the technical proposal, and Client shall evaluate and negotiate with the participant on its amendments or revisions;

18.2.2.The tender participant shall submit a financial proposal including the revisions or amendments to the technical proposal, and Client shall evaluate the amended proposal.

18.3.Client shall indicate in the tender document and invitation its intention to conduct a two-stage open tender selection procedure.  

Article 19.Preparing Tender Documents

19.1.Client shall prepare the tender documents, in the forms of standard tender documents and contract approved by the Member of Government in charge of the budget matters as well as in accordance with other relevant regulations and methodologies.

19.2.The tender documents shall incorporate all information required for the tender participant to prepare and submit tender which meets appropriate requirements, all the requirements for tender participants, guidance for them, criteria and methodology for the selection of the tender document evaluated as 'the best,' the contract conditions proposed by Client, the technical specifications, designs and charts, the standard tender forms, and for the consulting service, shall also include the work assignment.

Article 20.Tender Guarantee

20.1.Client may require the tender participants bidding for procurement of goods, works or non-consulting services with price more than the threshold specified in the Article 8.1.1 of this Law or consulting service with value of more than MNT 100 million to submit tender guarantee.

/This paragraph was amended by the law as of June 9, 2011/

20.2 Mongolian legal entities may submit tender guarantee in the form of a bank guarantee or the Government bond, and foreign legal entities in the form of a Mongolian or foreign bank guarantee, a Mongolian Government bond, or in the form of securities approved by the Government of Mongolia.

20.3.The Government of Mongolia shall approve the list of securities that can be used as tender guarantee, performance guarantee, or advance payment guarantee for foreign legal entities.

20.4.Client shall specify in tender documents the amount of tender guarantee by setting it at 0.5 per cent of the budgeted cost of the given goods, works or services.

/This paragraph was revised by the law as of June 10, 2022/

20.5.Client shall, if tender participant fails to submit tender guarantee where required, or if the tender guarantee submitted by such participant fails to meet the requirements set forth in this Law, deny the given tender document.

20.6.Client shall, upon conclusion of contract with the tender participant evaluated as 'thebest', cancel the tender guarantee.

20.7.In the following circumstances tender guarantee shall be seized for the benefit of the state:    

20.7.1.Following the opening of tender and prior to the expiration of the tender term tender participant withdrew from own tender;

20.7.2.The tender participant evaluated as 'the best' fails to submit the performance guarantee within the period specified in the notification to award of the contract or refused to conclude a contract;

20.7.3.it was decided that a complaint filed by the tender participant was groundless.

/This sub-paragraph was added by the law as of March 22, 2019/

Article 21.Publicizing Tender Invitation

21.1.Client shall publicize tender invitation through nation-wide daily newspapers, electronic procurement system, and other types of media.

/The addendum to this paragraph was made by the law as of March 22, 2019/

21.2.Client shall announce the detailed information on tender transparently and openly, and provide free access to such information for all interested persons.

21.3.Tender invitations for tender participants stated in the Article 9.2 of this law shall be announced through the media in the languages widely used in the international trade.

/The amendment  to this paragraph was made by the law as of June 9, 2011/

/This paragraph was revised by the law as of March 22, 2019/

21.4.Client shall place tender invitation on the website specified in the Article 52.1.12 of this Law and shall each time announce the results of tender selection.

/The amendment to this paragraph was made by the law as of June 9, 2011/

/The amendment to this paragraph was made by the law as of March 22, 2019/

21.5.Tender invitation shall include the following information:

21.5.1.description about Client;

21.5.2.brief content of the goods, works or services to be procured;

21.5.3.postal address to receive tender documents and other information, and to submit tenders;

21.5.4.price of tender documents;

21.5.5.specific requirements for tender selection;

21.5.6.deadline for receipt of tenders;

21.5.7.date of opening of tender;

21.5.8.whether foreign persons shall be allowed for participation;

21.5.9.whether margin of preference shall be granted.  

Article 22.Issuance of Tender documents and Relevant Information

22.1.Client shall be obliged to prepare tender documents prior to the date of the tender invitation publication.

22.2.Tender documents shall be evaluated by the actual costs of organizing of tender selection and shall be sold for such price without any hindrance to all persons interested.

/This paragraph was revised by the law as of March 22, 2019/

22.3.Tender participants may, within not less than five business days prior to the deadline for receiving tenders submit a written request to Client to obtain clarifications and additional information concerning tender documents.

22.4.Client shall send copies of the request specified in the Article 22.3 of this Law, along with its reply clarifications and additional information, simultaneously to all the persons who have purchased tender documents, and such reply clarifications and additional information shall be considered as delivered on the day of the transfer of such letter to the postal service, or publication of it on the electronic procurement system.

/The addendum to this paragraph was made by the law as of March 22, 2019/

Article 23.Publication and Distribution of Tender documents and invitation in Foreign Languages

23.1.In the following circumstances tender documents and invitation shall, besides Mongolian, be executed in the language(s) widely used in international trade:

/The amendment to this paragraph was made by the law as of June 10, 2022/

23.1.1.If foreign persons are entitled to participate in procurement procedure as provided in the Article 9 of this Law;

23.1.2.If Client believes that the budgeted cost and nature of the goods, works or services shall attract foreign persons.  

Article 24.Timeframe for Tender Submission and Validity

24.1.Client shall provide to all participants an equal period of time, adequate enough for the preparation and submission of tender documents.

24.2.The deadline for receiving tender documents shall run from the day of tender announcement at the first time.

24.3.For open tender selection, the deadline for receiving tender documents shall be 30 days or more from the day of tender announcement.

24.4.In the case of necessity of screening the workplace for tender preparation, the required time shall be included in the tender timeframe.

24.5.Tender participant shall specify in its tender that the tender shall be valid for at least 30 days. 

/This paragraph was revised by the law as of June 10, 2022/

/This paragraph was revised by the law as of June 9, 2011/

/The amendment to this paragraph was made by the law as of March 22, 2019/

Article 25.Submission of Tenders

25.1.Tenders shall be submitted within the timeframe specified in tender documents, to the address specified therein, in the specified form; and tender participants may, within such period, deliver proposals to amend or withdraw from the tender.

25.2.Tenders received later than the timeframe set forth in the Article 21.5.6 of this Law, or submitted in the form other than the one prescribed by tender documents shall be considered invalid and sent back.

25.3.Content of tender documents, progress of evaluation and all the information related to evaluation of tender participants' qualifications, except for the information specified in the Article 26 of this Law shall be confidential until the contract is concluded.

Article 26.Opening of Tenders 

26.1.Client shall publicly open all tender documents at the time and location as specified in tender documents and set the time for opening of tenders within 1 hour following the deadline for receiving tenders.

26.2.Tender participants or their representatives, as well as other interested persons shall be entitled to be present at opening of tenders.

26.3.During opening of tenders Client shall announce the names of tender participants, tender price, price of alternative tender, if that was allowed, price discounts specified in the tender, whether tender guarantees are received, and whether participants have amended or withdrawn from the tender, and keep protocols of all such information.

26.4.The persons specified in the Article 26.2 of this Law and representatives of the Clients shall sign the protocols referred to the Article 26.3 of this Law.

26.5.The protocols specified in the Article 26.3 of this Law shall be introduced to the interested persons.

26.6.No activities or decisions other than those specified in the Articles 26.3–26.5 of this Law shall be allowed during the opening of tenders.

26.7.Tender prices, price discounts and prices for alternative tender, unannounced and unrecorded during opening of tenders shall not be taken into account during the evaluation.

26.8.Client shall be prohibited from engaging in discussions with tender participants concerning content of tender and prices after opening of tenders.

26.9.Client may demand tender participants to submit written explanation and clarification on the matters other than amending the content of tender document or tender price.

26.10.Client shall register and keep the explanations and clarifications submitted pursuant to the Article 26.9 of this Law.

Article 27.Tender examination

27.1.Following opening of tenders, all tender documents shall be examined whether they meet the following requirements:

27.1.1.Qualification requirements set by Client pursuant to the Articles 14-16 of this Law;

27.1.2.Technical specification;

27.1.3.Other conditions and requirements set in tender documents.

27.2.In examining whether the tender materials meet the requirements set forth in the Article 27.1 of this Law, the following criteria shall be used:

27.2.1.Factors that may adversely impact the scope of goods, works or services, their quality or performance;

27.2.2.Whether there are illegal limitations on contract terms proposed by Client;

27.2.3.Whether there is an unfair influence upon competition of other tender participants after accepting the requirements set forth in Articles 27.2.1 and 27.2.2 of this Law.

27.3.The tender that satisfies all the conditions specified in Article 27.1 of this Law simultaneously shall be considered as qualified for the requirements.

27.4.All tenders other than those specified in the Article 27.3 of this Law, shall be considered unqualified and Client shall refuse such tenders.

Article 28.Tender Evaluation

28.1.During one-stage tender selection, tenders shall be subject to examination in accordance with Article 27 of this Law, and all tenders qualified for the requirements shall be evaluated.

28.2.Tender evaluation shall be conducted in shortest possible time within the term of tender validity.

28.3.Tender price shall be the basic criteria for evaluating the tenders meeting requirements.

28.4.Client may, taking into consideration the specific nature of the goods, works or services to be procured other than consulting services, select the appropriate ones from the following factors affecting the economic benefit, monetize them and add to tender price:

28.4.1.Timeframe for completing works or services or delivering goods;    

28.4.2.Calculations of current expenses or of expenses and profit;

28.4.3.After-sale service and technical assistance;

28.4.4.Guarantees to be given for supply of spare parts and with respect to pricing;

28.4.5.Quality and technical data of the goods, works or services;

28.4.6.Other criteria in conformity with this Law.

28.5.The additional calculations specified in the Article 28.4 of this Law shall be aimed only at comparing tenders and shall not serve as the basis for changing tender price. 

28.6.Unless otherwise provided in tender documents, tender price shall include all expenses related to tax, insurance as well as transportation and miscellaneous costs required for executing the contract, and if such expense items are not specifically estimated in tender price, Client shall consider them as included in tender price.

28.7.Tenders meeting the requirements shall be compared as follows:

28.7.1.For rectifying the small-scale errors or arithmetical miscalculations, reducing tender price based on price discount, or, in the case if Client selects other selection criteria based on the provisions of this Law Client shall estimate such proposals in monetary terms and add to or subtract from tender price, and define the compared tender price accordingly; 

28.7.2.If tender documents provide for granting of margin of preferences, the proportions set forth in the Article 10.2 of this Law shall apply to estimating compared tender price of tender submitted by the person granted margin of preferences;

28.7.3.All tenders that have been satisfied requirements set forth in the Article 27 of this law and evaluated in accordance with this law shall be arranged from the ones with lowest compared price to the ones with highest compared price, and the tender with the lowest compared price shall be selected;

/This sub-paragraph was revised by the law as of March 22, 2019/

28.7.4.The tender with the lowest compared price shall be evaluated as 'the best.'   

28.7.5.When purchasing medicine, medical equipment, or hospital device, the tender with highest compared price in terms of quality and evaluation will be considered as 'the best'.

/This sub-paragraph was added by the law as of June 9, 2011/

28.8.Procedures prescribed by the Articles 37, 38 and 39 of this Law shall apply to the evaluating proposals for consulting service.

28.9.If Client selects from amongst the selection criteria specified in the Article 28.4 of this Law, Client shall express them in monetary terms and set appropriate conditions and methodology for evaluation in accordance with this Law and include them in tender documents.

28.10.Selection criteria set forth in the Article 28.4 of this Law shall not pertain to the qualification criteria of tender participant and satisfaction of the minimum requirements set by Client as provided in the Articles 14-16 of this Law shall not serve as the basis for selection.

28.11.Client, when evaluating the tenders meeting the requirements and selecting the tender evaluated as 'the best,' shall use the selection criteria in the rules prescribed by tender documents.

28.12.In case of using foreign currency in tender evaluation, this shall be specified in tender documents.

28.13.In case of using foreign currency other than that prescribed by tender documents for payment settlement, the rate of conversion thereof shall be the Bank of Mongolia exchange rate announced on the day of tender announcement.

28.14.For undertaking open tender selection in two stages, tender evaluation shall be conducted as follows:

28.14.1.Technical proposal shall be subject to review as to the satisfaction of the requirements set forth in the Article 27 of this Law;

28.14.2.On each of the technical proposals that meet the requirements set forth in the Article 27.1 of this Law, Client shall exchange views with tender participants to prepare standard technical specification that provides more satisfactory performance;

28.14.3.Client shall, following the exchange of views, issue standard technical specification;

28.14.4.Tender participant shall, re-evaluate its technical specification in conformity with the standard technical specification specified in the Article 28.14.3 of this Law and submit it along with financial proposal;

28.14.5.Client shall publicly open financial proposal on the designated date;

28.14.6.Client shall evaluate financial proposals in accordance with the Articles 28.2 – 28.7 of this Law, and award contract to the tender participant evaluated as 'the best'.

28.15.If tender participant considers amending its proposal in accordance with the standard technical specification set by Client as impossible, Client shall be entitled to refuse the given tender.

28.16.Methodology and guidelines for evaluation of tenders shall be approved by the Government Member in charge of budget issues.

/This paragraph was added by the law as of February 6, 2007/

Article 29.Awarding a Contract

29.1.Client shall decide within 15 working days after opening of the tenders to award a contract to the participant that has submitted the tender which meets the requirements set forth in the Article 27 of this Law and is evaluated as 'the best' in accordance with the procedures prescribed by the Article 28 of this Law, and shall simultaneously inform in writing in regards with it to the participant and all other participants of the decision with unqualified grounds.

/The addendum to this paragraph was made by the law as of June 10, 2022/

/The addendum to this paragraph was made by the law as of June 9, 2011/

29.2.Contract shall be concluded in no less than 6 business days within the period of tender validity after the notification of awarding a contract.

/The amendment to this paragraph was made by the law as of June 10, 2022/

/The amendment to this paragraph was made by the law as of March 22, 2019/

29.3.In case the tender participant evaluated as 'the best' refuses to conclude a contract, or in the case of occurrence of conditions specified in the Article 20.7.2 of this Law, Client may cancel the award of contract and shall, in accordance with this Law, conclude a contract with the first runner-up; or, in the case of absence of such a participant, shall make one of the decisions specified in the Article 30.4 of this Law.

29.4Client may, if for reasons not related to its supervision, contract could not be concluded within the period of tender validity, extend the period by 15 days once upon getting permission from the State Central Administrative Body in charge of budget matters after making a request.

/This paragraph was revised by the law as of June 9, 2011/

/The amendment to this paragraph was made by the law as of March 22, 2019/

29.5.State Central Administrative Body in charge of budget matters shall review the request specified in the Article 29.4 of this law within five business days and process the request based on documents, information and other clarifications submitted by Client.

/This paragraph was revised by the law as of June 9, 2011/

29.6.It is prohibited to conclude a contract with the successful tender participant in the preliminary tender selection if the relevant international loan or aid agreement or state budget financing is not approved.

/This paragraph was added by the law as of March 22, 2019/

29.7.After the expiration of the validity period of the tender specified in the Article 29.4 of this Law, the tender selection shall be considered as valid if the international loan and aid agreement and the state budget financing specified in the Article 29.6 of this Law are approved.

/This paragraph was added by the law as of March 22, 2019/

Article 30.Refusal of All Tenders   

30.1.Client shall refuse all tenders in the following situations:

30.1.1.No tenders meeting the requirements were received;

30.1.2.Participation in tender by an advance deal on prices, misleading the competitors from the real conditions of tender, or pressure upon them proved by a court or competent authorities;

30.1.3.Prices of all tenders meeting the requirements exceed the budgeted cost estimated by Client over 5 percent;

30.1.4.Failure of the negotiations specified in the Article 30.2 of this Law.

30.2.If prices of all tenders meeting the requirements exceed the budgeted cost estimated by Client then Client may negotiate with tender participants whose tender prices exceed those set by Client over 5 percent; and during negotiation, Client shall be prohibited from demanding tender participant to reduce the proposed price without any grounds.

30.3.Client shall not, in case of refusal from all tenders as provided in the Article 30.1 of this Law, bear any liabilities for tender participants.

30.4.In case of refusal from all tenders, Client shall make one of the following decisions:

30.4.1.To examine the reasons of unsuccessful tender, make necessary amendments to the content of tender documents and conduct open tender selection again; 

30.4.2.In case of occurrence of the conditions specified in the Articles 30.1.3 and 30.1.4 of this Law where the reasons for unsuccessful tender are only related to the amount and scope of the goods, works or services to be procured, Client shall make necessary amendments to the content of tender documents and conduct limited tender selection;

30.4.3.In case of re-occurrence of the conditions specified in the Article 30.1 of this Law at the result of tender selection pursuant to the rules prescribed by the Articles 30.4.1 and 30.4.2 of this Law, Client shall immediately conclude a contract.

CHAPTER THREE

SPECIAL RULES FOR TENDER SELECTION

Article 31.Applying Special Rules for Tender Selection

31.1.The following methods shall be used in conducting tender selection under special procedures:

31.1.1.Limited tender selection;

31.1.2.Comparison;

31.1.3.Immediate conclusion of a contract.

31.2.The relationships concerning tender selection under special rules which are not governed by the Articles 32-34 of this Law shall be governed by relevant articles, paragraphs and sub-paragraphs of Chapter Two of this Law.

Article 32.Limited Tender Selection

32.1.Limited tender selection method shall apply in the following conditions:

32.1.1.Limited number of qualified persons capable of executing the complex tasks for goods, works or services requiring high professional skills, experience, technical and technological abilities;

32.1.2.cases specified in the Articles 30.4.2 of this Law.

32.2.When conducting limited tender, Client shall publish tender invitation in the electronic website stated in the Article 52.1.12 of this law, and provide all interested persons with equal opportunities for fair participation.

/This paragraph was revised by the law as of June 9, 2011/

/The amendment to this paragraph was made by the law as of March 22, 2019/

32.3.Tender invitation shall contain the information specified in the Article 21.5 of this Law.

32.4.Tender documents shall be freely available, without any hindrance, to all interested parties in accordance with the Article 22.2 of this Law.  

32.5.The deadline for receiving tenders shall be set at 15 or more business days from the dissemination of tender invitation.

Article 33.Comparison Method

33.1.Comparison method can be used where the budgeted cost for goods, works or services does not exceed the threshold set in the Article 8.1.1 of this Law.

33.2.Comparison method shall be used as follows:

33.2.1.announcement of invitation to submit the price proposal on the electronic procurement system set forth in the Articles 51.1.12 and 53.5.4 of this law, and to inform the result from time to time;

/This paragraph was revised by the law as of March 22, 2019/

33.2.2.Awarding a contract to the tender participant from amongst those who meet technical and other conditions, and requirement and who has submitted the lowest price in accordance with the Article 29.1 of this Law.

33.3.The timeframe for the submission of the price proposal referred to in the Article 33.2.1 of this Law shall be set at least for 5 business days from dissemination of the tender invitation.

/This paragraph was amended by the law as of March 22, 2019/

33.4.If awarding a contract is not permitted due to unsuccessful comparison, the method of immediate contract conclusion can be used.

/This paragraph was annulled by the law as of March 22, 2019/

Article 34.Immediate Contract Conclusion Method

34.1.Immediate contract conclusion method can be only used in the following circumstances:

34.1.1.In cases specified in the Article 30.4.3 and 36.18 of this Law; 

34.1.2.In case of possibility to conclude contract with one person, for the purpose of protection of intellectual property right and physical cultural heritage, where there is no other persons capable of replacing of it;

34.1.3.The change of the supplier during the replacement, repair or additional supply of some parts of the goods and equipment supplied under the original contract under the condition that such additional supply does not exceed 20 percent of the original contract will cause to the Client to procure materials with different technical specifications which will make to occur technical difficulties in operation and maintenance, or to make unnecessary expenses;

34.1.4.If Client believes that a new tender selection shall not bring about a better proposal outcome in case of performing additional and/or partial repeated task of the procured work, where the cost of additional work is not more than fifteen per cent of the original contract price;

/This sub-paragraph was amended by the law as of June 10, 2022/

34.1.5.In case of impossibility to observe the minimum timeframe for receiving tenders for open and limited tenders due to extraordinary circumstances of a sudden or force majeure nature, which have been declared a state of emergency and transferred to the degree of preparedness for disaster protection;

34.1.6.In case the investment size of highway and power projects are equal to or exceeds the funding capacity of all domestic enterprises in the given sector, the Government considers the immediate selection of the contractor based on the model price;

/This sub-paragraph was added by the law as of February 6, 2007, and it was annulled by the law dated June 9, 2011/

34.1.7.In case some medicine and medical equipment related to the human health are considered to be purchased directly or indirectly from international organizations;

/This sub-paragraph was added by the law as of June 9, 2011/

34.1.8.Procurement of manufactured goods, works and services from prison;

/This sub-paragraph was added by the law as of June 9, 2017/

34.1.9.Direct procurement of international reference laboratory-certified vaccines from their manufacturers that are required for immediate vaccination;

/This sub-paragraph was added by the law as of December 8, 2017/

34.1.10.in case of getting grain seeds that meet the quality requirements from the manufacturers upon unavoidable necessity to ensure food safety;

/This sub-paragraph was added by the law as of March 22, 2019/

34.1.11.If goods and products included in a list of products to be purchased from domestic manufacturers specified in the Article 101.2 of this Law were manufactured by small and medium enterprises and service providers set out in the Article 5.1 if the Law of Mongolia on Small and Medium Enterprises.

/This sub-paragraph was added by the law as of June 06, 2019/

34.2.For immediate conclusion of contract under the conditions specified in the Article 34.1 of this Law, Client shall negotiate with one or more persons capable of providing the goods, works or services which satisfy the requirements set forth in the Articles 14-16 of this Law, and shall conclude a contract with the person that qualifies the best for technical specification, and other conditions and requirements as provided in this Law, and any agreements reached during the negotiation shall be included in the contract.  

34.3.In case of immediate contract conclusion as specified in the Article 34.1 of this law, Client shall submit a copy of this contract specifying the reasons for choosing this method to the state central administrative body in charge of budget matters.

34.4.A list of the projects for immediate selection of contractors specified in the Article 34.1.6 of this law shall be approved by the Government.

/This paragraph was added by the law as of February 6, 2007, and it was invalidated by the law as of June 9, 2011/

CHAPTER FOUR

RULES ON PROCUREMENT OF CONSULTING SERVICES

Article 35.Selection of Consultants

35.1.Legal entities and individuals may engage in consulting services.

35.2.Consulting firms shall be used where the work requires multi-disciplinary expertise and personnel with special qualifications.

35.3.Individual consultants shall be selected where an individual expert with the required qualifications and experience can best carry out a particular assignment.

Article 36.Common Procedure for Consultant Recruitment

36.1.Client shall prepare work assignment that include the purpose, intended result and other necessary information for the required service.

36.2.Assignment given to the consultants, with consequential modifications, shall form an integral part of the contract concluded with consultant.

36.3.Client shall make a cost estimate based on the qualification level and type of personnel, the period to be spent in the field and in the home office and stationaries or any other items reasonably required for the provision of the services.

36.4.Once the work assignment and a cost estimate have been prepared, Client shall publish in the daily and other press an invitation to potential consultants to apply for.

36.5.The detailed list may include:

36.5.1.Respondents to invitation of the proposed contract specified in the Article 36.4 of this Law;

36.5.2.Domestic and international consultants operating in Mongolia;

36.5.3.Consultants registered in the Registry specified in the Article 51 of this Law;

36.5.4.Consultants of professional associations, international financial and other institutions.

36.6.The proposal submission period for the detailed list shall be no less than 7 business days.

/This paragraph was added by the law as of June 9, 2011/

36.7. Client shall draw up from the detailed list, in accordance with the Articles 14-16 of this Law and the selection criteria of capabilities established by Client, a short list of 3 or more consultants appearing in the list.

36.8. Client shall send an invitation for proposals together with the terms of reference to the consultants appearing in the short list.

36.9. Invitation for proposals shall contain:

36.9.1.description of assignment and financing;

36.9.2.work assignment;

36.9.3.selection criteria to be used based on the Articles 14-16 of this law; evaluation criteria established by Client in accordance with the Article 28.11 of this law;

36.9.4.names of consulting legal entities and individuals being invited;

36.9.5.draft contract;

36.9.6.instructions for submitting proposals;

36.9.7.evaluation method chosen.

36.10.The period to receive proposals shall be not more than 60 days, but more than 30 days for legal entities and more than 7 days for individuals, and such period shall be indicated clearly in the invitation for proposal.

36.11.Consultant shall prepare and submit the technical and financial proposals separately.

36.12.The technical proposal shall contain information relating to the consultant's professional capabilities, and experiences for the individual, key experts and methodological approach for the legal entity.

36.13.The financial proposal shall contain the price for which the contract shall be performed on the terms of the technical proposal.

36.14.The financial proposal shall be evaluated after evaluation of the technical proposal.

36.15.Both proposals shall be submitted at the same time, and, where specifically provided in the letter of invitation, shall be contained in two separate sealed envelopes.

36.16.Client in accordance with the Articles 37-39 of this Law shall evaluate both technical and financial proposals and in case a negotiation with the selected consultant succeeds the consultant shall be awarded the contract as provided in the Article 29 of this Law.

36.17.A short list for consultants shall be re-drawn up when the selection of consultant services fails and the invitation period shall be established as 5 or more business days.

/This paragraph was added by the law as of June 9, 2011/

36.18.An immediate contract conclusion can be made if the tender for the selection of a consultant specified in the Article 35 of this law was unsuccessful twice.

/This paragraph was added by the law as of March 22, 2019/

Article 37.Methods of Evaluation for Recruitment of Consultants

37.1.Before issuing invitation for proposals, Client shall determine the method of evaluation to be used.

37.2.Method of evaluation shall be competence evaluation method, quality evaluation method or combined evaluation method.

37.3.Competence evaluation method based on personal knowledge, experience, professional level and other skills shall be used for recruitment of individual consultant.

37.4.In selection of consulting legal entity, quality evaluation method or combined evaluation method shall be used.

37.5.Quality evaluation method shall be used for the selecting of consulting legal entity, in the case of technically complex contracts or contracts requiring simultaneous accomplishment of several interrelated services.

37.6.In all cases other than those specified in the Articles 37.3 and 37.5 of this Law, combined evaluation method shall be used.

Article 38.Quality Evaluation Method

38.1.Proposals received shall be analyzed and compared with respect to the proposed consulting methodology, schedules of work, experience and capabilities of the personnel, quality of service and technical facilities.

38.2.Technical proposals shall be assigned scores on the basis of the requirement criteria set forth in the Article 14-16 of this Law.

38.3.Client may open the financial proposal submitted by the technically first ranked consultant and negotiate with such consultant financial and other terms of the contract.

38.4. During the negotiation procedure specified in the Article 38.3 of this Law Client may not require to reduce the price proposed by consultant without objective reason.

38.5.Consultant or its authorized representative shall be obliged to provide Client with documents, estimates, researches and other required information and evidence necessary for conducting negotiations.

38.6.If the parties fail to reach agreement on the financial or other terms of the contract, Client may terminate negotiations with the selected consultant and open the financial proposal of the next ranked consultant and negotiate with that consultant.

Article 39.Combined Evaluation Method

39.1.In the combined evaluation method, Client shall specify in the invitation the minimum score of the technical proposal which must be attained.

39.2.Technical proposals shall be assigned score on the basis of the requirements and criteria set forth in the Articles 14-16 of this Law.

39.3.All tenders which attain the minimum score for technical capability set in the invitation or higher shall be notified of the opening data of financial proposals and financial proposals of consultants who fail to attain the minimum score shall be returned unopened.

39.4.Financial proposals of consultants that have attained the minimum or higher score for the technical proposal shall be publicly opened at specified time with minutes kept.

39.5.Consultant or its representatives shall be entitled to be present during the opening of financial proposals.

39.6.All financial proposals opened shall be evaluated and assigned a score according to requirements and criteria set forth in the Article 36.9.3 of this Law.

/The amendment to this paragraph was made by the law as of June 9, 2011/

39.7.Total quality and price score shall be calculated by adding the proportions of scores for the technical and financial evaluations in the percentage set in the invitation.

39.8.Client shall enter into negotiations with the consultant who achieves the highest score.

39.9.Negotiations may be conducted in order, where necessary, to modify the number of man-months or man-days, the periods to be spent in the field or home office, stationary and other requirements for the given service.

39.10.No proposed unit price, including cost of man-months or man-days may be modified

by negotiations.

39.11.If parties fail to reach agreement on the non-financial terms of the contract, Client shall terminate negotiations with the selected consultant and invite the next ranked consultant for negotiations.

39.12.For contracts for auditing, ordinary engineering design and other common assignments in which the contract value does not exceed the threshold set forth in the Article 8.1.3 of this Law, a simplified modification of the combined evaluation method, the "least cost method" may be used.

39.13.When the "least cost method" is used, the technical proposal shall be evaluated in accordance with the Articles 39.2-39.4 of this Law, then the financial proposal shall be opened.

39.14.Negotiations with the consultant who provides the lowest cost proposal shall be conducted in accordance with the Articles 39.9-39.11 of this Law.

39.15.When using the "least cost method", the proposal submission period shall be 5 or more calendar days.

/This paragraph was added by the law as of June 9, 2011/

CHAPTER FIVE

CONTRACT FOR PROCUREMENT OF GOODS, WORKS OR SERVICES

Article 40.Contract for Procurement of Goods, Works or Services

40.1.Unless otherwise provided in this Law, relationships concerning contracts for procurement of goods, works or services (hereinafter referred to as "procurement contract") to be concluded between Client and procurer shall be governed by the Civil Code.

40.2."Best" qualified tender and technical and trade requirements defined by Client in the tender documents shall be the basic condition of a procurement contract.

40.3.A procurement contract shall contain the following terms, in addition to those specified in the Article 40.2 of this Law:

40.3.1.Contract price;

40.3.2.Terms and form of payment;

40.3.3.Amount and form of advance payment guarantee, in case of advance payment;

40.3.4.Client's supervision and other terms;

40.3.5.Amount and forms of the performance guarantee, where such is required;

40.3.6.Terms of sale;

40.3.7.Schedule of supply of goods or performance of works or services;

40.3.8. In case adjustment is to be made to the contract price, its terms and methodology.

/This sub-paragraph was annulled by the law as of June 10, 2022/

40.4.In the following cases, Client may define in the contract to modify the prices of procuring goods, works, service equipment, main facilities, raw materials and wage payments:

40.4.1.in case the contract is for more than 2 years, commodity price index changes;

40.4.2.abrupt change of the base prices.

40.5.Member of Government in charge of budget matters shall approve standard conditions of procurement contract.

40.6.If the budgeted cost is increased by the law due to changes in the bill of quantities of works or of the projects and measures to be implemented with state budget funds, the Client may change the price and bill of quantities of the contract made with the contractor once within the approved increased budgeted cost.

/This paragraph was added by the law as of June 10, 2022/

Article 41.Prohibition of Amendments to Procurement Contract

41.1.It shall be prohibited to make the following amendments to procurement contract:

41.1.1.Client to modify contract terms related to its content in cases other than necessary amendments made as the result of unforeseen circumstances;

41.1.2.Increasing the contract price in any case except for the conditions specified in the Articles 40.4 and 40.6 of this Law.

/This paragraph was amended by the law as of June 10, 2022/

41.2.Procurer shall be prohibited from assigning to any third party its obligations under contract.

Article 42.Void Contract 

42.1.Procurement contract shall be void in the following cases:

42.1.1.Client's failure to obtain a permission to award the contract as provided in the Article 53 of this Law;

/This sub-paragraph was invalidated by the law as of June 9, 2011/

42.1.2.Client concluded the contract in breach of the Articles 27, 28 or 29 of this Law;

42.1.3The breaches made in the course of implementation of the procurement rules prescribed by this Law materially affecting the final result of tender procedures.  

Article 43. Performance Guarantee, its Amount and Issuing of it

43.1.Prior to concluding a contract, Client may demand issuing a performance guarantee from the participant who provides the "best" qualified tender.

43.2.Client shall set up the amount of performance guarantee equal to 3 per cent of the amount to be financed under the given budget year, and specify it in the tender documents.

/This sub-paragraph was amended by the law as of June 10, 2022/

43.3.Performance guarantee shall be valid until the final assessment of the contract and handing in of goods, works or services.

43.4.Client shall demand performance guarantee from procurer in the following cases:

43.4.1.concluding of a work procurement contract with budgeted cost of more than 150 million togrogs;

43.4.2.concluding of goods or service procurement contract with budgeted cost of more than 100 million togrogs;

43.4.3.concluding of procurement contract to be implemented for more than 2 years.

43.5.In the case if the duration of performance of a procurement contract is more than 2 years Client may reduce the amount of performance guarantee in proportion to the percentage of works performed by procurer.

43.6.To secure the procurer's performance of overall tasks during the warranty period and fixing of goods, works or services, Client may include in the tender documents a term that allows Client to pledge 5-10 per cent of the contract price until the expiration of the warranty period.

/The addendum to this sub-paragraph was made by the law as of February 5, 2016/

43.7.A contractor/procurer may provide bank guarantee, insurance certificate or government bond as security of its obligations set forth in Article 43.6 of this Law, in which case, a client shall prepay the pledged money equal to the amount specified in such guarantee.

/The addendum to this sub-paragraph was made by the law as of February 5, 2016/

43.8.The contractor of projects and measures implemented during the fiscal year shall renew the performance guarantee to the customer before the end of the performance guarantee period.

/This paragraph was added by the law as of June 10, 2022/

43.9.If the contractor does not fulfill his obligation to renew the performance guarantee specified in the Article 43.8 of this law, he shall be considered to have breached his contractual obligations and the performance guarantee shall be forfeited.

/This paragraph was added by the law as of June 10, 2022/

Article 44.Prepayment and its Guarantee

44.1.Client may make prepayment to procurer to ensure the preparation of work.

44.2.Client shall make prepayment equal to the amount proposed by procurer and based on the guarantee specified in the Article 20.2 of this Law.  

44.3.The performance guarantee sum may be included in the prepayment guarantee sum.

/This paragraph was added by the law as of June 9, 2011/

44.4.In the case prepayment is not provided in tender documents, Client shall not make prepayment.

CHAPTER SIX

MANAGEMENT OF PROCUREMENT

Article 45.Arranging of Procurement by client

45.1.Client shall make arrangements of procurement of goods, works or services with the funds allocated from the state and local budget for expenses other than those for investments, funds from other sources, as well as those to be financed from own funds in accordance with the rules prescribed by this Law.

45.2.The following shall be clients in case of procurement of goods, works or services with the investment sources of the state budget:

45.2.1.Secretariats of the President and the State Great Khural, Secretariat of Government, National Security Council, state central administrative bodies and the bodies accountable to the State Great Khural, Constitutional Court (Tsets), Supreme Court, Office of the Prosecutor General, General Counsel of Courts, agencies and authorities within the matters under the charge of the Prime Minister and Member of Government, aimag, soum, capital city and district Governors for procurement of overall goods, works and services for own needs;  /This sub-paragraph was amended by the law as of April 22, 2022/

45.2.2.aimag and capital city governor for procurement of goods, works and services to be procured for the local territory;

/This sub-paragraph was amended by the law as of April 22, 2022/

/This sub-paragraph was revised by the law as of June 9, 2011/

45.3.The Governor of respective instance shall be client in case of procurement of goods, works and services with the local budget investment sources.

/This paragraph was amended by the law as of April 22, 2022/

/This paragraph was revised by the law as of June 9, 2011/

45.4.A state administrative body in charge of government procurement matters shall be client of procurement of goods, works and services other than those specified in the Articles 45.2 and 45.3 of this law, and/or those of state and local nature that specified in the Article 45.5 of this law.

/This paragraph was revised by the law as of June 9, 2011/

/This paragraph was amended by the law as of July 21, 2016/

/This paragraph was amended by the law as of March 22, 2019/

45.5.The Government shall approve the list of projects and measures of state and local nature which will be implemented by the state administrative body in charge of government procurement matters within a fiscal year, within five (5) working days following the approval of the state budget.

/This paragraph was revised by the law as of June 9, 2011/

/This paragraph was amended by the law as of July 21, 2016/

/This paragraph was amended by the law as of March 22, 2019/

45.6.Aimag or capital city Governor, if deemed necessary, may assign its rights under the Article 45.2.2 of this Law to the Offices of soum and district Governors.

/This paragraph was amended by the law as of April 22, 2022/

/This paragraph was revised by the law as of June 9, 2011/

45.7.If client deems efficient to have goods, works, and services for the special needs of the armed forces, units, border protection and emergency management organizations, police, internal military, and prisons executed by the state-owned enterprises of the relevant industry, and to perform the work of the prisons for their own needs in accordance with the relevant laws, as well as in the organization of the procurement of diplomatic missions abroad, then the rule for open tender selection may be disregarded, subject to approval by the state central administrative body in charge of budget matters.

/This paragraph was revised by the law as of June 9, 2011/

/This paragraph was revised by the law as of March 22, 2019/

/The addendum to this paragraph was made by the law as of May 14, 2020/

Article 46.Rights and Obligations of Client

46.1.Client shall have the following rights and obligations with respect to procurement of goods, works and services:

46.1.1.To establish evaluation committee as provided in this Law;

46.1.2.To oversee whether the activities of the evaluation committee and evaluation conclusions are in conformity with applicable legislation and to remedy the breaches committed;

46.1.3.To make decisions to award contracts on the basis of conclusions of evaluation committee;

46.1.4.To fit in the budget approved and effectively plan and organize procurement of goods, works and services;

46.1.5.To commence procurement process, after the source for financing the good, works or services is approved;

46.1.6.To conduct the quality and performance control under the enforcement of the contractor's contractual obligations, and to enter progress information into the electronic procurement system every six months;

/This sub-paragraph was revised by the law as of March 22, 2019/

46.1.7.To not amend the contract otherwise than provided in the law or contract;

46.1.8.To have commenced procurement of seasonal goods, works or services, including construction, roads and engineering lines upon approval of budget of the given year;

46.1.9.To demand for mandatory placement of an information board, at visible spots of every settlement in question and during guarantee period of works and services, which display a brief introduction to contractor, contact numbers, contract value of works and services, financing schedule, start and end date, and in case of road and engineering utility, a route it passes.

/This sub-paragraph was added by the law as of June 09, 2011/

46.2.General Budget Manager shall act as representative of the client specified in the Article 4.1.1 of this Law, and executive director as representative of the client specified in the Article 4.1.2 of this Law respectively, where the representatives shall exercise the rights and duties provided in the Article 46.1 of this Law.

46.3.The person authorized to represent client specified in the Article 46.2 of this law may transfer its rights conferred by this law but such transfer shall not serve as a reason to release from liability.

46.4.Client's communications in the matters in connection with procurement shall only be in writing.  

Article 47.Evaluation Committee

47.1.Client shall establish evaluation commission where the budget cost exceeds the maximum threshold set in the Article 8.1.1 of this law.

47.2.Evaluation Committee shall have no permanent operation and shall exercise the following functions:

47.2.1.To prepare technical specification, develop invitation for tender and tender documents, receive tenders, and to conduct tender opening according to relevant instructions;

47.2.2.to review and evaluate tender, to issue evaluation conclusion, and to submit a decision authorizing the client to award a contract. An official, specified in the Article 46.2 of this Law, who is authorized to represent the client, is not allowed to change such decision unreasonably.

/This sub-paragraph was revised by the law as of June 9, 2011/

47.3.Officials on the evaluation committee shall satisfy the following requirements:

47.3.1.Be specialized in field of procurement or in the field of the given goods, works or services;

47.3.2.Not be parent, parent-in-law, spouse, sibling, son or daughter of the tender participant or its representative;

47.3.3.Within past 3 years not be in labor relationships with tender participant;

47.3.4.Within past 1 year have not violated the duties of civil servants provided in the Article 50.1 of this law.

47.4.In order to ensure transparency of procurement process, the evaluation committee shall include a representative from the professional associations of the sector; no less than two representatives from the private sector or non-governmental organizations; and in case of a local area other than those capital city and/or national level city, a citizen appointed by the Citizens Representative Khural, and an officer from the Governor's Office.

/The addendum and amendment to this paragraph was made by the law as of April 22, 2022/

/This paragraph was revised by the law as of June 9, 2011/

47.5.A Cabinet Minister in charge of budget matters shall approve a procedure on the creation of an integrated database of citizens to be entered into evaluation committee specified in the Article 47.4 of this Law, making amendments, appointing them to the evaluation committee, training them at the expense of the state, and working procedures.

/This paragraph was added by the law as of June 9, 2011/

/This paragraph was revised by the law as of March 22, 2019/

47.6.Members of the evaluation commission shall be specialized in procurements.

/The amendment to this paragraph was made by the law as of June 9, 2011/

47.7.Decision of evaluation committee (hereinafter referred to as 'assessment conclusion') shall be in the form of minutes of meeting and shall contain decision taken by majority of vote of evaluation committee members, its basis and other relevant information.

47.8.Assessment conclusion shall be endorsed by signatures of all committee members and those who voted against shall make and sign notice to this effect in the conclusion.

47.9.Organization, operation and incentive of evaluation committee shall be regulated by a procedure approved by the Cabinet member in charge of budget matters.

/This paragraph was revised by the law as of June 9, 2011/

Article 48.Planning of Procurement

48.1.Client shall formulate draft plan for procurement of goods, works or services along with a feasibility study if necessary, as well as following year's draft budget, and submit to the relevant General Budget Manager.

48.2.General Budget Manager compile draft plans for procurement of goods, works and services to be purchased within its budget authority, and deliver it to the Central State Administrative Body in charge of budget matters along with draft budget.

48.3.General Budget Manager shall submit order for procurement of goods, works and services specified in the Article 45.4 of this law along with technical specifications, feasibility studies, design/map, work assignment and other necessary information for every project or work to the professional procurement organization within ten days after the state budget is approved.

48.4.General Budget Manager and state administrative body in charge of government procurement matters shall approve the united plan for procurement of goods, works and services, and submit to the State Central Administrative Body in charge of budget matters within ten days after the state budget is approved.

/The amendment to this paragraph was made by the law as of July 21, 2016/

/The amendment to this paragraph was made by the law as of March 22, 2019/

48.5.Client shall publish the procurement activity plan through the public media within one month after the state budget for the certain year is approved.

48.6.Government Member in charge of budget matters shall approve the procedure for the planning of the procurement activities.

/This Article was revised by the law as of June 9, 2011/

Article 49.Reporting of Procurement Procedures

49.1.Client in each case of conducting procurement shall compile tender documents into a file and keep as an archive unit.

49.2.Tender file shall consist of the following documents and materials:

49.2.1.procurement plan, its implementation, and comments, where necessary;

49.2.2.basis of selection, in case where method other than open tender is used;

49.2.3.brief description of goods, works or services to be procured, and tender documents;

49.2.4.letters exchanged with client and tender participant;

49.2.5.tender submitted by tender participant;

49.2.6.notice about tender opening, assessment conclusion and recommendation to award the contract;

49.2.7.reasons or grounds, in cases tender procedures are unsuccessful or all tenders are rejected;

49.2.8.decision to award contract, and the contract;

49.2.9.other documents related to tender;

49.2.10.documents concerning review of performance of contract and acceptance of goods, works or services.

49.3.The state central administrative body in charge of budget matters and relevant central law-enforcement authorities and officials thereof shall have the right of access to the documents specified in the Article 49.1 of this Law.

49.4.The persons who participated in the given tender may access the documents specified in the Articles 49.2.2, 49.2.6, 49.2.7 and 49.2.8 of this Law by making a request in writing.

49.5.Client shall submit report of the goods, works and services procured in the given year to  the General Budget Manager within 1st December of the same year and the General Budget Manager, in turn, shall submit report to the state central administrative body in charge of budget matters within 15th January of the subsequent year.

49.6.The member of the Government in charge of budget matters shall approve the procedure for reporting.

49.7.The state central administrative body in charge of budget matters shall sum up report of procurement procedures submitted pursuant to the Article 49.5 of this law and report to the Government in the first quarter of the subsequent year.

49.8.The Government shall include the results of Government procurement in the report of budget performance of each year.

Article 50.Obligations of Civil Servants Participating in Procurement Procedures

50.1.The civil servants participating in procurement procedures with the duties such as to plan, prepare, carry out, supervise and others shall have the following duties:

50.1.1.To create conditions for fair competition;

50.1.2.To respect the state interests;

50.1.3.To not issue violation or illegal action including to make or receive illegal proposals for private benefit;

50.1.4.In case where tender participant is the civil servant's family member or employment of his/her family member in the tender participant-legal entity or receive salary as well as other circumstances creating possible conflict of interests inform the direct supervising official and refrain from participating in the organizing of the given tender procedure;

50.1.5.To immediately inform the direct supervising official and law-enforcement authorities in the cases if tender participants attempt to influence tender results by proposing a bribe or exerting pressure.

Article 51.Registration System

51.1.In order to increase the number of tender participants, to encourage competition, to provide client with information, the relevant state central administrative body shall keep a registry and create a database of the legal entities and citizens interested to participate in the procurement procedures pursuant to the rules prescribed by this Law under the matter in charge of such Member of the Government.

51.2.The Member of Government in charge of budget matters shall approve the procedure of keeping the registry specified in the Article 51.1 of this Law.

51.3.Legal entities and individuals may at any time make requests for registration along with information on the areas of activity and experiences to the registration body personally or through representatives.

51.4.The fact of inclusion or non-inclusion in the registry shall not affect the right of the person interested to participate in tender according to the procedures prescribed by this Law.

51.5.When inviting a fixed number of participants due to using special tender procedure, client may request information on the registered legal entities and individuals.

51.6.The registry shall satisfy the following common requirements:

51.6.1.Be based on the capability criteria set forth in Articles 14-16 of this Law;

51.6.2.Provide equal conditions to all the persons wishing to be included in the registry;

51.6.3.The request to be included in the registry shall be in writing;

51.6.4.Pursuant to requests of the registered persons, appropriate amendments or modifications shall be made to the registry each time;

51.6.5.The interested persons shall have access to the registry;

51.6.6.The decision regarding a request to be included in the registry shall be made within 1 month.

51.7.The registration body may require clarifications to the request and additional explanations or clarifications from legal entities, individuals or their representatives.

51.8.The registration body shall observe the following procedure when keeping the registry:

51.8.1.define capabilities of tender participants with respect to each matter in own charge;

51.8.2.Upon clarification of assessment criteria of capabilities pursuant to the Article 51.8.1 of this Law, announce registration in a national daily newspaper.

51.9.In defining criteria of capabilities, professionals in the given field or consultants selected as provided in this law may be involved.

51.10.In case the registration body refuses to accept request for registration, or for amendments to the registry, the registration body shall give written explanation of the grounds for such refusal.  

Article 52.Powers of State Central Administrative Body in Charge of Budget Matters

52.1.Pursuant to this Law, the state central administrative body in charge of budget matters shall be in charge of the state procurement policies, matters related to its methodology and oversight and shall exercise the following powers:

52.1.1.to develop proposals for improvement of the procurement legislation;

52.1.2.to provide client with the advice on professional and methodological matters related to procurement;

52.1.3.to approve procurement related rules, procedures, instructions, methodologies and standard documents drafts, procedures on electronic tender selection, procedures on disclosure of tender selection materials to the tender participants, procedures on announcing and informing electronic procurement plan, tender invitation, and result of the tender selection, as well as conditions and procedures for introduction of electronic equipment and information technology in to the procurement procedure;

/This paragraph was revised by the law as of March 22, 2019/

52.1.4.To annually report to the Government the implementation of the procurement legislation;

52.1.5.To oversee and assess client's observance of relevant procurement procedures;

52.1.6.To sum up the reports received from client, to create and keep unified nation-wide database of procurement procedures and prepare general statistics and information;

52.1.7.to approve procedures on review and resolution of complaints submitted by tender participants in accordance with this law;

/This sub-paragraph was revised by the law as of March 22, 2019/

52.1.8.To provide law-enforcement authorities at their requests with recommendations and explanations on particular matters regarding implementation of this Law;

52.1.9.To review the proposals submitted pursuant to the Article 53.1 of this Law and give approvals to award contracts;

/This sub-paragraph was annulled by the law as of June 09, 2011/

52.1.10.To train the experts specified in the Article 55 of this Law and keep their registry;

/This sub-paragraph was annulled by the law as of June 09, 2011/

52.1.11.Jointly with the state central administrative body in charge of education matters, to set up the level, quality and standards of training in procurement procedures, to support and assist in conducting trainings, and to approve a procedure on conducting training of specialized workers;

52.1.12.To maintain a website with the purpose to provide the public with news and information on procurement procedures and announce results thereof, to define methods and forms of placing tender invitation and other information on such website;

52.1.13.To cooperate in procurement procedures with international organizations and foreign other organizations, plan and coordinate technical assistance rendered therefrom in the concerned field;

52.1.14.To keep registry of persons with restricted rights to participate in tender as referred to in the Article 14.5 of this Law, to control and inform;

52.1.15.To define a procedure on conducting the progress and final control, monitoring, and auditing over the client's activities, and the fulfillment and quality of contract.

/This sub-paragraph was added by the law as of June 9, 2011/

/This sub-paragraph was annulled by the law as of March 22, 2019/

52.1.16.Other powers provided by law.

52.2.The state central administrative body in charge of budget matters shall define conditions and procedures for introduction of information technology and electronic devices into procurement procedures.

/This paragraph was annulled by the law as of March 22, 2019/

52.3.A private entity or non-governmental organization may be competitively selected in accordance with the Articles 35 - 39 of this Law, and have conducted the progress and final control, monitoring, and auditing over the client's activities, and the fulfillment and quality of contract.

/This paragraph was added by the law as of June 9, 2011/

/This paragraph was annulled by the law as of March 22, 2019/  

Article 521.State Inspector for Procurement

521.1.State General Inspector, State Senior Inspector, and State Inspector authorized to inspect implementation of procurement activities shall work for the state central administrative body in charge of budget matters.

/The addendum to this paragraph was made by the law as of June 10, 2022/

521.2.When implementing specialized inspection for procurement activities, the State Inspector for Procurement shall exercise following powers, in addition to the common powers prescribed in the Article 10.9 of the Law on State Control and Inspection.

521.2.1.To propose inclusion of the bidder, proved to be subject to the conditions specified in the Articles 14.1.4 and14.1.6 of this law, into the record of restricted/disqualified bidders;

/The amendment to this paragraph was made by the law as of June 10, 2022/

521.2.2.To draw and present a conclusion to the competent body on resignation/dismissal from civil service the official in breach as prescribed in the Article 57.2 of this law;

521.2.3.To terminate an invalid agreement specified in the Article 42 of this law;

521.2.4.To terminate agreement, where contractual obligations have been assigned to third party without approval of the Client and where payment has been made in excess from the amount, pre-determined in the tender document.

/This paragraph was added by the law as of June 9, 2011/

521.3.The rules of the state inspector for procurement and the procedure for keeping records of persons with restricted rights to participate in tenders shall be developed by the state central administrative body in charge of budget matters and approved by the Government.

/This paragraph was added by the law as of March 22, 2019/

Article 53.State administrative body in charge of government procurement matters, and its Functions

53.1.Functions to organize procurement authorized by this law shall be implemented by the state administrative body in charge of government procurement matters.

/This paragraph was revised by the law as of July 21, 2016/

/This paragraph was amended by the law as of March 22, 2019/

53.2.It shall have a unit under Aimag, city and district Governors with functions to organize and implement procurement activities for goods, works and services, funded by the state and local budgets. 

53.3.Aimag and city Governor, in consultation with the Head of state administrative body in charge of government procurement matters, shall appoint and dismiss Head of the procurement units under aimag and city Governors, whereas, district Governor, in consultation with the capital city Governor, shall appoint and dismiss the Head of the procurement unit under the district Governor. 

/This paragraph was amended by the law as of July 21, 2016/

/This paragraph was amended by the law as of March 22, 2019/

53.4.Heads of the state administrative body in charge of government procurement matters and Procurement Unit shall have no criminal record and at least 10 years work experience in civil service, out of which at least 3 years' experience in procurement sector.

/This paragraph was amended by the law as of July 21, 2016/

/This paragraph was amended by the law as of March 22, 2019/  

53.5.In addition to the rights and responsibilities of the Client, as specified in this law, the state administrative body in charge of government procurement matters shall implement following functions:

/This paragraph was amended by the law as of July 21, 2016/

/This paragraph was amended by the law as of March 22, 2019/

53.5.1.provide professional and methodological guidance to and monitor operations of the procurement unit;

53.5.2.to provide and arrange working condition and social guarantee for the employees of the state administrative body in charge of government procurement matters;

53.5.3.to combine and conclude enforcement of procurement laws and regulations and present comments to the state central administrative body in charge of budget matters;

53.5.4.to operate a webpage to publish publicly procurement news, information, tender announcement and results, determine means and forms of placing tender invitations and other information, and improve it;

53.5.5.to provide professional and methodological guidance on procurement to and organize trainings for the Client and bidders;

53.5.6.to improve capability, technology and software capacity of the state administrative body in charge of government procurement matters by a unified policy and planning;

53.5.7.to arrange establishment and implementation of the Master Agreement, prescribed in the Article 5.1.23 of this law;

53.5.8.other functions specified in procurement related laws.

53.6.The Government shall approve a procedure on arranging, implementing and monitoring/inspecting performance of procurement activities by the state administrative body in charge of government procurement matters.

/This paragraph was amended by the law as of July 21, 2016/

/This paragraph was amended by the law as of March 22, 2019/

53.7.State administrative body in charge of government procurement matters shall contract out specific portion of the tasks to private sector or specialized non-governmental organizations, and minimum 20 per cent of the overall tenders shall be procured electronically.

/This paragraph was revised by the law as of June 9, 2011/

/This paragraph was amended by the law as of July 21, 2016/

/This paragraph was amended by the law as of March 22, 2019/

CHAPTER SEVEN

DISPUTE SETTLEMENT AND REMEDIES

Article 54.Filing Complaints to Client and its Settlement

54.1.In the event tender participant believes the Client is in breach of its tender related duties, it can file a complaint in writing to the Client within 5 working days since becoming aware of such breach along with evidence documents enclosed.

54.2.Client shall notify all tender participants about the content of complaint and invite the tender participants, whose interests may be affected by any relevant decision, to participate in complaint settling processes.

54.3.In case the tender participant, specified in the Article 54.2 of this law, fails to participate the complaint settling processes, the tender participant shall not further exercise the right to file complaints on the same subject matter.

54.4.Within 10 working days from receipt of the complaint, the Client shall review and make a decision where it shall state the grounds if rejected the complaint or redressing measures if accepted the complaint.

54.5.Following submission of complaint, no contract shall be awarded unless Client decides that continuing of tender without interruption is required for public interests.

54.6.If a decision has been made to proceed tender process pursuant to the Article 54.5 of this Law, the complainant shall be officially notified of its grounds at minimum 5 working days prior to such decision takes effect.

54.7.Client shall not accept complaints made after award of contract.  

Article 55.Complaints with Respect to Client's Decision

55.1.If the tender participant considers that the Client violated the provisions of Article 11.2 of this law or believes that there is any violation that restricts competition during the preparation of tender documents, the complaint shall be submitted to the Authority of Fair Competition and for Customers at least 10 working days before the opening of the tender, and a complaint in regards with disagreement of the decision made by Client regarding the compliant, or no decision is made within the period set forth in the law, or Client awarded contract, may be made within 5 working days only to the central state administrative organization in charge of budget matters.

/This paragraph was revised by the law as of June 9, 2011/

/The addendum to this paragraph was made by the law as of March 22, 2019/

55.2.The state central administrative body in charge of budget matters and the Authority of Fair Competition and for Customers shall settle the complaint stated in the Article 55.1 of this law within 14 days since the receipt. If the tender participant will submit a complaint again in regards with same subject matter which was settled and replied, it will be rejected.

/This paragraph was revised by the law as of June 9, 2011/

/This paragraph was revised by the law as of March 22, 2019/

55.3.Having reviewed the complaint, if it is considered that the Client is in breach of this law, the state central administrative body in charge of budget matters and the Authority of Fair Competition and for Customers shall make the following decisions:

/The amendment to this paragraph was made by the law as of June 10, 2010, and the addendum and amendment to this paragraph were made by the law as of June 9, 2011/

55.3.1.To annul or modify whole or part of the Client's act or decision in breach of this Law;

55.3.2.To indicate the legal provisions to be applied to the given matter;

55.3.3. To require Client to proceed with tender based on remedying the breach.

55.4.The state central administrative body in charge of budget matters and the Authority of Fair Competition and for Customers may suspend the enforcement of any decision or act by the Client until the complaint on the matters are reviewed and settled, in the following cases:

/The amendment to this paragraph was made by the law as of June 10, 2010, and the addendum and amendment to this paragraph were made by the law as of June 9, 2011/

55.4.1.if satisfying the tender participant's complaint is better justified;

55.4.2.if tender participant is likely to suffer significant loss in the case no suspension is made;

55.4.3.if suspension is not obviously harmful to the relevant state authority, Client or to other tender participants.

55.5.When reviewing compliant concerning contract award, pursuant to the Article 53.1 of this Law the state central administrative body in charge of budget matters shall obtain an opinion of an expert team, based on which it shall make own decision thereon.

/This paragraph was annulled by the law as of June 9, 2011/

55.6.The expert team shall be composed of three experts who shall be selected within 3 days since complaint filing under the following procedure:

55.6.1.complainant and Client shall each select one expert;

55.6.2.the experts selected by complainant and Client shall select the third expert by mutual agreement.

/This paragraph was annulled by the law as of June 9, 2011/

55.7.In the event parties fail to select the experts, the state central administrative body in charge of budget matters may select them on behalf of parties.

/This paragraph was annulled by the law as of June 9, 2011/

55.8.The Government shall approve the procedure on expert team operations and authorization as experts.

/This paragraph was annulled by the law as of June 9, 2011/

Article 56.Filing a Complaint to Court

56.1.If the complaint hasn't been settled within the period set in the Article 55.2 of this law or disagrees the decision made; the tender participant can file a complaint to the court.

/This paragraph was revised by the law as of June 9, 2011/

56.2.After contract conclusion complaints concerning tender selection process shall only be made to court.

56.3.In events other than stated in Articles 55.4.1-55.4.3 of this law, the court that received tender selection related complaints is prohibited to suspend decision by the state central administrative body in charge of budget matters. 

/This paragraph was added by the law as of February 06, 2007/  

Article 57.Liabilities to be imposed for law violators

57.1.If the action by an official who breached this Law does not have criminal characteristics, liabilities specified in the Law on Civil Service shall be imposed.

57.2.A person or a legal entity that breached this law shall be imposed with the liabilities specified in the Criminal Code or Law on Offense/Infringement.

/This Article was revised by the law as of December 4, 2015/  

Article 58.Entry into force of this law

58.1.This Law shall enter into force from February 1, 2006.  

CHAIRMAN OF THE STATE GREAT KHURAL (PARLIAMENT) OF MONGOLIA NYAMDORJ.TS