(2023.10.26-ны өдрийн орчуулга)                                                         Unofficial translation

Entry into force date: December 1, 2023

LAW OF MONGOLIA

June 16, 2023                                                          Ulaanbaatar city

ON PROCUREMENT OF GOODS, WORKS AND SERVICES WITH STATE AND LOCAL FUNDS

/Revised edition/

CHAPTER ONE

GENERAL PROVISIONS

Article 1.Purpose of the Law

1.1.The purpose of this Law shall be to regulate relations in connection with planning, organizing, concluding a contract, reporting,  exercising oversight, and resolving a complaint on the procurement of goods, works and services with state and local funds.

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, this Law, and other legislative acts enacted in conformity therewith.

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

Article 3.Scope of the application of the Law

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

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

3.3.This Law shall not apply to regulating the following relations in connection with procurement of goods, works and services:

3.3.1.the 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;

3.3.2.the procurement in connection with 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;

3.3.3.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;

3.3.4.the procurement on organization of the election of the President of Mongolia, the State Great Khural of Mongolia, as well as the election of Citizens' Representatives' Khurals of aimags, soums, the Capital city, and districts, as well as the procurement on election automation toolkits, voter registration hardware, software and telecommunications services by the General Election Committee and the election committees of aimags, soums, the Capital city, and districts within the budget approved;

3.3.5.the procurement in foreign countries for the needs of diplomatic missions of Mongolia abroad;

3.3.6.the procurement of goods and services from foreign countries in connection with the promotion of Mongolia in foreign countries by the Government, and the procurement of tangible cultural heritage and its copies from foreign countries in agreement with the owner;

3.3.7.the procurement on involving expert participation in the auditing specified in the Law on State Audit.

3.4.Procedure on regulating the procurement belong to state secrets specified in sub-paragraph 3.3.1 of this Law shall be developed by the intelligence agency, and approved by the Government.

Article 4.Definitions of the terms of the Law

4.1.The following terms used in this Law shall have the following meanings:

4.1.1."works" shall mean a work to be performed by using of a combination of manpower, machinery, equipment, materials and technology for the purpose of constructing, repairing, expanding, demolishing, and modernizing buildings and engineering infrastructure, conducting geological surveys, and assembling, installing, testing and adjusting the equipment related to them, as well as the goods to be supplied accompanying the respective work;

4.1.2."business operators" shall mean a natural person or a legal entity";

4.1.3."lifetime cost" shall mean a numerical value calculated by taking into account of the life-time costs over the comparative price;

4.1.4."goods" shall mean items with economic importance and value, possible to be sold, exchanged or rented, intangible asset/property with off-the-shelf solution, or works and services required to be supplied with such goods;

4.1.5."off-the-shelf solution" shall mean a solution that is ready for the market and can meet the client's needs and demands without modification;

4.1.6."foreign body" shall mean a foreign legal entity incorporated in accordance with foreign legislation, a foreign national or a stateless person;

4.1.7."domestic goods" 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; 

4.1.8."master agreement method" shall mean a procurement of goods and services from the electronic store/shop by concluding with one or more participants a master agreement which established the maximum unit price and other conditions of goods and services that are frequently purchased by the client at certain period or that are constantly needed by the client;

4.1.9."client" shall mean:

4.1.9.a.state- and locally-owned legal entities;

4.1.9.b.legal entities with 50 percent or more state and/or local ownership;

4.1.9.c.Project implementer specified in sub-paragraph 4.1.21 of Law on Debt Management;

4.1.9.d.other parties specified in the law to be organized the procurement in accordance with this Law.

4.1.10."the person dependent on the client" shall mean:

4.1.10.a.the Client appoints and dismisses the composition of the highest governing body of the relevant legal entity;

4.1.10.b.the Client determines or participates in determining the goals and objectives of the activity of the respective legal entity.

4.1.11."the announcement" shall mean information in the electronic system in regards with conducting a tender;

4.1.12."participant" shall mean a business operator which submitted a tender as specified in the paragraph 6.1 of this Law;

4.1.13."goods, work, and services to be procured for personal use" shall mean goods, work, and services that are only required for maintaining the day-to-day operations of the Client normally and constantly;

4.1.14."interested person" shall mean a business operator expressed its interest to participate in tender selection, or received an invitation specified in this Law;

4.1.15."tender" shall mean a proposal by the participant to provide goods, execute works or render services;

4.1.16."tender selection" shall mean a process of publishing an announcement, delivering an invitation, receiving, opening, examining, and evaluating a tender, and making a decision by the Client in accordance with procedure specified in this Law;

4.1.17."tender documents" shall mean a document defining conditions, requirements, and methodologies for tender selection by client;

4.1.18."technical specification" shall mean requisites defining technical indicators, production and operation methods, technology, and technological requirements and assignments for goods, works or services to be procured;

4.1.19."joint venture" shall mean several business operators submitted one tender in accordance with the contract;

4.1.20."service" shall mean a professional activity on assembly, installation, testing and adjustment not related to the execution of work specified in sub-paragraph 4.1.1 of this Law, or professional services to be provided on the bases of special knowledge and qualifications;

4.1.21."invitation" shall mean a document inviting business operators to participate in the tender selection process;

4.1.22."comparative price" shall mean a numerical value for the purpose of ranking eligible tenders in accordance with this Law;

4.1.23."procurement" shall mean proceedings including planning of procurement of goods to be purchased and rented, works to be executed, and services to be rendered, selecting the method of tender selection, establishing an evaluation committee, organizing a tender selection, exercising oversight on the implementation of the contract made at the result of the tender selection, and reporting thereto;   

4.1.24."electronic store" shall mean the component of the electronic system for the purchase of goods and services under the master agreement;

4.1.25."electronic catalog" shall mean the component of the electronic system on classifying and defining information on the goods, works, and services;  

4.1.26."electronic system" shall mean the information system based on the internet for organizing procurement operations using the software.

Article 5.Principles of Procurement

5.1.The principles of equal opportunity for competition, transparency, efficiency, cost-saving, and accountability shall be adhered to in the implementation of this Law.

Article 6.Participant, joint venture, and sub-contractor  

6.1.A business operator may submit a tender to the tender selection individually or in the form of joint venture.

6.2.The role of each member of the joint venture shall be more than 20 percent of the tender price.

6.3.The joint venture members shall submit tenders on the basis of contracts that meet the following requirements:

6.3.1.to be specified the duties and liabilities of all members jointly and individually in performing contractual obligations;

6.3.2.to be appointed one member which will represent the joint venture in the procurement process and to be responsible for the implementation of the contract before the client and other parties.

6.4.The participant may submit a proposal to be subcontracted up to 20 percent of the tender price by one or more parties.

Article 7.Evaluation of General Conditions of the Participant

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

7.1.1.the participant becomes insolvent, undergoes liquidation, has started the insolvency proceedings, its business activities are terminated, or is in any condition similar to the aforementioned under the laws of the jurisdiction of establishment; 

7.1.2.being under the court decision enforcement proceedings to be paid the debt, or have an overdue debt on taxes or social insurance under the laws of Mongolia, or under the laws of its jurisdiction of establishment;

7.1.3.submitted a bid to tender selection and their packages in which the related parties participated as specified in sub-paragraph 4.1.6 of the Law on Competition;

7.1.4.concluded a contract or transaction aimed to restrict a competition with other participant when participating in tender selection or negotiated in advance the price, other conditions and criteria;

7.1.5.a person specified in sub-paragraph 4.1.10 of this Law;

7.1.6.a court decision establishing that one of the following persons has committed a crime of corruption or money laundering has entered into force:

7.1.6.a.the participant or a person authorized to represent it;

7.1.6.b.the ultimate beneficial owner specified in paragraph 3.1.6 of the Law on Combating Money Laundering and Terrorist Financing;

7.1.6.c.a competent official of the participant specified in paragraph 84.1 of the Law on Company Law.

7.1.7.advised or participated in the preparation of tender documents, or is related to the person who provided advice or participated;

7.1.8.the period of registration in the list of persons whose right to participate in the tender has been restricted has not expired;

7.1.9.a legal entity established by or registered as the ultimate beneficial owner of a person whose right to participate in the tender has been restricted on the grounds specified in sub-paragraphs 56.5.3, 56.5.4, and 56.5.5 of this Law.

7.2.The Participant shall issue a written notification of whether the conditions specified in paragraph 7.1 of this Law have occurred or not.

7.3.If it is specified in the tender documents to submit documents in connection with verifying the conditions specified in paragraph 7.1 of this Law, the participant shall submit them upon obtaining them from the competent authorities of Mongolia or the country of its jurisdiction of establishment.

7.4.Each member of the joint venture shall meet the general requirements and submit relevant notifications and documents in accordance with paragraphs 7.2 and 7.3 of this Law.

Article 8.Supporting a domestic production and granting a margin of preference    

8.1.It shall be indicated in the tender documents that goods that meet the quality and standard requirements that can be provided by domestic production are to be purchased from domestic factories.

8.2.The list of names and types of goods specified in paragraph 8.1 of this Law shall be jointly developed by the state central administrative bodies in charge of economy, development, heavy and light industry, and approved by the Government.

8.3.The client may not prohibit foreign parties from participating in tenders with a budget of more than MNT 30 billion for work, MNT 1 billion for goods, and MNT 300 million for services.

8.4.Margin of preference shall be granted if the participant offers domestic goods that meet any of the following conditions except for those specified in paragraph 8.2 of this Law:

8.4.1.recycled the waste;

8.4.2.submitted an offer to reclaim consumer waste for reuse or processing;

8.4.3.produced using raw materials, goods, and materials produced in localities other than the Capital city, district, and state-ranked city;

8.4.4.innovation products specified in sub-paragraph 3.1.4 of the Law on Innovation;

8.4.5.produced by business operator with 25 or more employees in which 30 percent or more of the labor force is made up of persons with disabilities.

8.5.If the participant offers domestic foods in executing a work, a margin of preference shall be granted.

8.6.In the case of granting margin of preference to the bodies provided in paragraphs 8.4 and 8.5 of this Law, the price of part on domestic goods shall be subject to abstract reduction by 10 percent, if the body provided in paragraph 8.4 of this Law is the small and medium production and service provider set out in paragraph 5.1 of the Law on Supporting Small and Medium Production and Services, the price of the part on domestic goods shall be subject to abstract reduction by 15 percent,

8.7.One of the following margin of preferences shall be granted in the tender selection for the execution of works, and the bid price shall be subject to abstract reduction:

8.7.1.if a participant in a tender selection announced by a local budget organization, or a locally owned legal entity or a legal entity with participation of local ownership with jurisdiction other than the Capital city, district or state-ranked city, has operated and created jobs in that locality for at least two years, 5 percent of the price of the part of the tender price excluding domestic goods;

8.7.2.if a participant of which the ultimate beneficial owner is a citizen of Mongolia, have submitted a proposal to perform the work with a budget higher than specified in paragraph 8.3 of this Law individually, or to perform at least 50 percent of the contractual obligations and as a member of a joint venture to exercise the rights specified in sub-paragraph 6.3.2 of this Law, 7.5 percent of the price of the part of the tender price excluding domestic goods.

8.8.A margin of preference shall not be given to the procurement of goods specified in paragraph 8.1 of this Law, and the procurement of goods and services by the master agreement method.

8.9.The information and evidence necessary for the granting the margin of preference as specified in this Law shall be stated in the tender documents.

Article 9.Electronic procurement system

9.1.Unless otherwise specified by law, the proceedings on organizing a procurement, exchanging information, and ensuring the information transparency shall be carried out by electronic system.

9.2.Information shall be stored in the electronic system in the form of open data.

9.3.Documents related to procurement shall be deemed to be made in writing if they are certified by digital signatures specified in the Law on Electronic Signatures and sent by electronic system in accordance with this Law.

9.4.A Cabinet member in charge of finance and budget issues shall approve the procedures for organizing procurement through the electronic system, and ensuring its continuous and safe operation, and shall determine the amount of the service fee to be paid for sending tenders through the electronic system.

9.5.If the tender selection is interrupted due to the operation of the electronic system, or if it is considered that there will be a situation of interruption, a state administrative body in charge of procurement matters shall inform the Client thereof and extend the relevant period for the tender selection.

CHAPTER TWO

ORGANIZING A TENDER SELECTION

Article 10.Organization of tender selection

10.1.The Client shall organize the tender selection in the manner specified in Chapter Four of this Law.

10.2.Except as specified in paragraph 31.2 of this Law, the Client may directly procure goods, works, and services which total budgeted cost does not exceed the upper limit of the budgeted cost that can be directly procured.

10.3.It shall be prohibited for the Client to organize procurement by dividing the approved budget for the purpose of using the methods of direct procurement and/or the comparison method.

10.4.When organizing a tender for the procurement of goods, the goods specified in paragraph 8.2 of this Law shall be packaged separately from other goods.

10.5.Client may package the goods, works or services into the same type or in a similar manner based on their purpose, types and geographic locations in order to promote competition.  

10.6.Client shall not restrict number of bids that the participant can submit for the tender selection.

10.7.The Government shall approve the list of goods and services to be procured by methods of the master agreement specified in sub-paragraph 4.1.8 of this Law.

10.8.The open tender selection method may not be used if the Client considers it is efficient to be executed the goods, works and services for the special needs of armed forces, units, border protection, emergency organizations, police, internal military, and prisons by the state-owned enterprises of the respective sector or to be performed the prison's own work according to the relevant law.

10.9.Client may indicate in the tender document to be performed the contractual obligation by the state or locally owned legal entity operating in the field of providing education and allowing to participate in social life by the person with disabilities in accordance with the special requirements specified in paragraph 12.7 of this Law.

10.10.The open tender selection method may not be used for the procurement of press and media services necessary to provide and inform the public in regards with the Government policies and decisions, their implementation, and timely information urgently, as well as the procurement of cultural and artistic events, performances and works of art that promote national values and cultural heritage in connection with the celebration of national festivals as stipulated in the Law on National Festival Naadam.

10.11.Unless otherwise specified in paragraph 31.2 of this Law, the Client may organize a tender selection with the condition to determine the unit price and other conditions of goods, works, services which are permanently needed to the Client for a period of up to three years.

10.12.The Government shall determine the upper limit of the budgeted costs specified in paragraphs 10.2 and 34.1 of this Law.

10.13.Every time the consumption price index changes by more than 10 percent, the Government shall set a new upper limit of the budgeted cost specified in paragraph 10.12 of this Law based on the proposal of the state central administrative body in charge of finance and budget issues.

Article 11.Tender documents

11.1.The tender documents shall be prepared and approved by the Client in accordance with the standard documents, forms, contract terms and related procedures and methodologies approved by the Cabinet member in charge of finance and budget issues.

11.2.The information required for the participant to prepare and submit a tender, the requirements and instructions for the participant, the criteria and methodologies for selecting the best tender, the terms of the contract proposed by the Client, technical specifications, and the standard tender form shall be included in the tender documents.

11.3.Tender announcements, documents and invitations with a budget higher than that specified in paragraph 8.3 of this Law may be prepared in languages widely used in international trade in addition to Mongolian language.

11.4.The Client shall select one of the following basic criteria for evaluating the tenders that meet the requirements and indicate in the tender documents:

11.4.1.comparative price;

11.4.2.lifetime cost;

11.4.3.combination of quality and price.

11.5.By taking into account of the characteristics of the goods, works and services to be procured by the Client, whichever of the following criteria is appropriate can be included in the tender documents to be calculated abstractly on the comparative price upon expressing in the monetary value:

11.5.1.time period of delivery of goods, completion of work and services;

11.5.2.post-contract performance services;

11.5.3.impact on the environment;

11.5.4.other criteria that comply with this Law.

11.6.The criteria specified in paragraph 11.5 of this Law shall apply only to the goods, works and services offered.

11.7.If the Client applies the criteria specified in sub-paragraph 11.4.3 of this Law, the points to be given for each quality and price criteria shall be indicated in the tender documents.

11.8.The combined evaluation criteria of quality and price shall be used only for the purchase of medicines and medical devices.

11.9.The conditions for possession of intellectual property rights resulting from goods, works and services by the Client or the person designated by it shall be specified in the tender documents.

11.10.If it is allowed to submit an alternative proposal that meets the needs and requirements of procuring goods, works, and services, this shall be indicated in the tender documents.

11.11.If the Client adjusts the contract price due to changes in equipment, basic materials, raw materials, or labor fees of the goods, work, service for reasons beyond the control of the contractor during the implementation of the contract, the conditions and methodologies of the adjustment shall be specified in the tender documents.

11.12.Whenever changes are made to the tender documents, the changes shall be reflected in the relevant part of the electronic system.

11.13.Unless otherwise specified in the Law on Payment Settlement in National Currency, it shall be indicated in the tender document that the tender price will be expressed in local currency MNT in accordance with paragraphs 4.1 and 4.2 of the given law.

11.14.The standard terms of the contract to be included in the tender documents shall be approved by the Cabinet member in charge of finance and budget matters.

Article 12.Technical Specification

12.1.The Client shall include in the technical specification the characteristics of the goods, works and services considered necessary, the requirements, designs and drawings, relevant standards, norms, rules and instructions related to their purpose and use in accordance with the purpose.

12.2.In the technical specification, the raw materials and materials used for the supply of goods, execution of work, and provision of services and the criteria of the goods to be supplied within the scope of the work shall be determined.

12.3.In the technical specification, the impact on human health, the environment, climate, and accessibility criteria for people with disabilities may be included.

12.4.It shall be prohibited to indicate the trade name, patent, and their owner, manufacturer, supplier, or production method and origin of a particular business operator's goods and services in the technical description.

12.5.If it is not possible to define the technical specification in detail, the requirements and conditions specified in paragraph 12.4 of this Law may be set only in relation to the respective goods on the basis of stipulating a reasonable explanation, and in this case,   the clarification "… or equivalent to these …" shall be used.

12.6.The technical specifications related to buildings and infrastructure shall reflect the appropriate materials and common models stipulated by the law.

12.7.Special requirements to be adhered to during the production and supply of goods, execution of work and provision of service may be included in the technical specification.

12.8.Unless otherwise specified in this Law, the Client may obtain advice on not restricting competition in the preparation of technical specifications for goods, works, and services from civil society organizations and business operators in the respective field.

12.9.The methodology and instructions for developing the technical specification in an environment-friendly manner shall be jointly approved by the Cabinet members in charge of environmental and financial and budget issues.

Article 13.Evidence, models and samples proving the compliance with technical specifications

13.1.The Client may require the participant to submit evidence or relevant information on the inspection and testing performed by a competent independent person to determine whether the goods, works, or services meet the technical specifications or fulfill the contractual obligations.

13.2.If the Client deems it is necessary, it may organize the inspection and testing specified in paragraph 13.1 of this Law by itself.

13.3.The tender documents shall state how to organize the inspection and testing specified in paragraph 13.2 of this Law, and provide the participant with the opportunity to participate in this proceeding.

13.4.The Client shall document the proceedings of inspection and testing of received models and samples with photographs and video recordings.

13.5.The goods that can be used from the models and samples submitted by the participant, other than the participant who has awarded the right to enter into the contract, shall be returned to the participants after the final decision of the tender.

13.6.The goods that can be used from the models and samples submitted by the participant who has awarded the right to enter into a contract may be returned during the work handing over period under the contract, or may be considered as part of the performance of the contractual obligations.

Article 14.Tender Guarantee

14.1.Unless otherwise stipulated in this Law, the Client shall indicate in the tender document to submit the tender guarantee in the following cases:

14.1.1.if the budgeted cost of tender selection without a package is more than 100 million MNT;

14.1.2.if the budgeted cost of the respective package of tender selection with packages is more than 100 million MNT.

14.2.The Client shall determine the tender guarantee at the 0.5 percent of the budgeted cost.

14.3.The Participant shall submit tender guarantee in the form of a bank guarantee or the security guarantee of the Government of Mongolia, or guarantee issued by the Insurer of Mongolia.

14.4.If the amount of the tender guarantee is expressed in foreign currency, the conversion rate of the guarantee shall be determined by the official exchange rate of the Central Bank /Mongol bank/ on the day of the tender announcement.

14.5.In the event that a foreign party obtains a guarantee from a foreign bank, the tender guarantee shall be submitted in accordance with the procedures specified in the tender documents.

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

14.6.1.after the opening of tender and prior to the expiration of the tender validity term, the participant withdrew from own tender in whole or in part;

14.6.2.the participant which has awarded a right to conclude a contract fails to conclude a contract or to fulfill the duty to submit the performance guarantee as specified in the tender document;

14.6.3.it was decided by the state central administrative body in charge of finance and budget issues that a complaint filed by the participant was groundless completely.

14.7.In the case specified in sub-paragraph 14.6.3 of this Law, up to 20 million MNT of the tender guarantee of the participant in tender selection with a budget of up to 20 billion MNT, 40 million MNT of the tender guarantee of the participant in the tender selection with a budget of 20-100 billion MNT, 60 million MNT of the tender guarantee of the participant in the tender selection with a budget of more than 100 billion MNT shall be seized for the benefit of the state.

14.8.The tender guarantee shall be valid until the conclusion of the contract or for the period specified in the tender documents.

Article 15.Grounds for setting the requirements of capabilities and experiences

15.1.The Client shall indicate in the tender documents the appropriate minimum requirements and criteria on the financial and technical capabilities and experience based on the necessary requirements to be set on the interested parties and participants to perform the contractual obligations.

15.2.The Participant shall not be required to provide evidence of publicly available information that can be checked through the electronic system, as well as in the database maintained and created by the competent organization in accordance with the law.

15.3.Paragraph 15.2 of this Law shall not apply to documents to be prepared by foreign entities from foreign countries.

15.4.Unless otherwise specified in this Law, it shall be prohibited to the Client from specifying in the tender documents requirements that do not apply to the performance of contractual obligations.

15.5.If a permit or certificate is required in accordance with the legislation to perform the contractual obligations, it shall be indicated in the tender documents.

15.6.The Client may specify in tender documents to submit information on contract performance being implemented by the participant.

Article 16.Requirements on the Financial Capacity

16.1.Client may demand from participant to submit a proof of meeting the requirements on the financial capacity.

16.2.Participant may prove its financial capacity by the following documents:

16.2.1.statement from the corresponding bank;

16.2.2.financial reports issued in accordance with the law of the country of incorporation for the period up to last three years;

16.2.3.information on income from the sale of goods, works, and services performed by the participant for the period up to last three years.

16.3.The Client shall indicate in the tender documents which of the documents specified in paragraph 16.2 of this Law are required to be submitted.

16.4.An audit opinion made on the financial statements may be required from the participant who has a duty to make an audit in the financial statements in accordance with law.

16.5.The participant must meet the financial capacity requirements set by the Client.

16.6.The minimum requirements of the financial capacity of each member of the joint venture individually or jointly shall be specified in the tender documents.

Article 17.Requirements on the Technical Capacity and Experience

17.1.The Client may demand from the participant to submit a proof of meeting the requirements on the technical capacity and experience.

17.2.Information on the technical capacity and experience can be proven by the following documents:

17.2.1.as for the tender selection on execution of work, a list of all works performed by the participant during up to the past 3 years, and evidence on cost, duration, location and complete performance of the works similar to the given one amongst them;

17.2.2.as for the tender selection on supplying the goods and rendering the services, a list of all goods or services supplied by the participant during up to the past 3 years, and evidence on cost, duration, location and complete performance of the goods and services similar to the given one amongst them;

17.2.3.a name and information on education and professional qualifications of employee who is in charge of contract obligation performances;

17.2.4.information on machinery, equipment, and production premises in connection with the performance of contractual obligations;

17.2.5.evidence, models and samples specified in Article 13 of this Law.

17.3.The Client shall indicate in the tender documents which of the documents specified in paragraph 17.2 of this Law are required to be submitted.

17.4.The participant shall have met the technical capacity and experience requirements set by the Client.

17.5.The minimum requirements of technical capacity and experience to be met individually and/or jointly by members of the joint venture shall be specified in the tender documents.

17.6.If a permit or certificate as specified in paragraph 15.5 of this Law is required in order to perform obligations stated in the contract to be performed by the sub-contractor, the subcontractor shall meet this requirement.

Article 18.Tender Selection Announcement  

18.1.The Client shall publicize an announcement of the tender selection above the budgeted cost that can be directly procured as stated in the paragraph 10.2 of this Law in the electronic system together with the tender documents, and provide the business operators with opportunities to get acquainted with them.

18.2.In cases specified in paragraph 11.3 of this Law, the tender selection announcement may be published in foreign newspapers, media, and websites in addition to the electronic system.

18.3.Tender announcement shall include the following information:

18.3.1.name and address of the Client;

18.3.2.tender selection name, number, budgeted cost;

18.3.3.method of tender selection;

18.3.4.deadline for receipt of tenders;

18.3.5.date of opening of tender;

18.3.6.whether to accept the alternative tender proposal;

18.3.7.whether foreign persons are allowed for participation;

18.3.8.whether to demand to submit a tender guarantee;

18.3.9.the package information, if the tender selection is divided into packages.

Article 19.Clarifying the tender documents  

19.1.An interested party may submit a written request to the Client for clarification on the issues specified in the tender documents at least five working days before the opening of the tender.

19.2.After receiving a request for clarification, the Client shall make the clarification in writing at least two working days before the deadline for receipt of tenders.

19.3.It shall be considered that the information has been delivered to the interested party by posting it openly in the electronic system.

19.4.If the Client will organize a meeting to answer questions related to the preparation of the tender or introduce the work site with interested parties or their representatives before submitting a tender, this shall be indicated in the tender documents.

Article 20.Deadline for receipt of the tender

20.1.Client shall provide to all interested parties an equal period of time for the preparation and submission of tender documents, and the deadline for the receipt of the tender shall be set no less than the period that specified in Chapter Four of this Law.

20.2.In the case of necessity of screening the workplace for tender preparation, the required time shall be included in the tender timeframe specified in paragraph 20.1 of this Law.

20.3.The deadline for receipt of tender shall run from the day of tender announcement at the first time.

20.4.The Participant shall submit the tender within the period specified in paragraph 20.1 of this Law and shall have a right to change or withdraw the tender before that period.

20.5.It shall be prohibited to change or withdraw the tender after the deadline for receipt of tenders.

20.6.If the Client makes amendments to the tender documents and publishes them in the electronic system within five working days from the opening of the tender, the deadline for receipt of the tender shall be estimated to be at least five working days and shall be extended as required.

20.7.If the date of opening of tender specified in paragraph 20.6 of this Law shall be more than five working days after the date of publication of the amendments in the electronic system, the date of opening of tender may not be extended.

Article 21.Tender preparation

21.1.Interested parties and participants shall prepare technical and price proposals in accordance with the tender documents, and the tender shall meet the following requirements:

21.1.1.to indicate that the validity period of the tender should be at least 30 working days after the opening of the tender;

21.1.2.to be allowed to obtain documents and information necessary for the examination and evaluation of tenders from the competent authorities, and to obtain inquiries and clarifications from the relevant persons;

21.1.3.to send the information specified in the tender documents according to the form created in the electronic system.

21.2.Interested parties and participants shall be fully responsible for the costs related to the preparation and submission of tenders and participation in tender selection.

21.3.If the information sent according to sub-paragraph 21.1.3 of this Law is inconsistent with other documents of tender, the information of the electronic system shall be governed.

21.4.If alternative offers of the tender are allowed, alternative offers may be submitted together with the main tender.

21.5.If a participant in the tender selection of projects and measures to be financed with state budget funds offers a price lower than 80 percent of the budgeted cost, it shall submit a reasonable explanation to the tender that the price does not have a negative impact on the scope, quality and performance of goods, works and services.

Article 22.Submission of Tenders

22.1.Unless otherwise specified by law, the tender shall be digitally signed and sent through electronic system by the participant.

22.2.Participant shall submit one tender for tender selection.

22.3.The submission of tenders with alternative proposals, in accordance with paragraphs 11.10 and 21.4 of this Law, shall not be considered as a violation of paragraph 22.2 of this Law.

22.4.If a foreign person who participates in the tender specified in paragraph 8.3 of this Law does not have a digital signature certificate in Mongolia, it may use a digital signature certificate of a foreign country in accordance with the relevant legislation.

22.5.The Participant shall send the information related to the sensitive information of the person specified in the law without disclosure as specified in the paragraph 29.2 of this Law.

22.6.The participant shall submit the following tender documents and information upon agreeing to disclose them:

22.6.1.a document proving that the general requirements specified in Article 7 of this Law have been met;

22.6.2.information sent according to the form specified in the tender documents;

22.6.3.if there are any documents or information that cannot be disclosed on the grounds of paragraph 22.5 of this Law, a statement explaining the legal grounds thereof;

22.6.4.other documents specified to be disclosed in the tender documents.

22.7.The participant shall submit the tender guarantee through the electronic system, and submit the tender.

22.8.Information on the experience and the performance of contractual obligations confirmed and registered in the electronic system as specified in paragraph 54.6 of this Law, shall be sent selectively, and it is not necessary to send a proof of that information.

22.9.In the event that the Client organizes examination and testing, the participant shall submit the models and samples in connection with the goods, works, and services offered by it in accordance with the tender documents.

22.10.The participant shall pay a service fee for sending tenders through the electronic system.

CHAPTER THREE

MAKING A DECISION BY THE CLIENT

Article 23.Opening of Tenders 

23.1.Client shall open the tender within 1 hour following the deadline for receipt of the tenders.

23.2.Upon opening of tenders, the Client shall announce the following information:

23.2.1.names of participants;

23.2.2.tender price;

23.2.3.price discounts proposed;

23.2.4.price of alternative proposal, if that was allowed;

23.2.5.whether a tender guarantee has been submitted or not for tenders requiring a tender guarantee.

23.3.In the case where a tender guarantee is required, failure to submit it as specified in paragraph 22.7 of this Law shall be grounds for refusing to open the tender.

Article 24.Deadline for making a decision by the Client 

24.1.Immediately after the opening of the tender, the Client shall start the examination and evaluation of the tender and make one of the decisions specified in paragraph 28.1 of this Law within 15 working days after the opening of the tender.

24.2.If the Client concludes a contract on the grounds specified in paragraph 35.1 of this Law, one of the decisions specified in paragraph 28.1 of this Law shall be issued within five working days after the opening of tenders.

24.3.When the state central administrative body in charge of finance and budget issues has made a decision specified in paragraph 59.10 of this Law, or due to unexpected or force majeure special circumstances, the Client may extend the period specified in paragraph 24.1 of this Law once by up to 15 working days.

24.4.If the Client does not make a decision within the period specified in paragraph 24.1 of this Law, it shall be prohibited to reorganize the procurement of the respective goods, works and services in the current fiscal year.

24.5.If no tenders are received in the tender selection proceedings, the Client shall investigate the reasons for the non-receipt of tenders and decide whether to reorganize the procurement proceedings or not.

Article 25.Obtaining clarifications in regards with the tender

25.1.If obtaining clarifications on unclear or conflicting issues of the tender does not adversely affect the competition of other participants, the Client shall indicate the deadline to submit a written request for clarification from the participant and the deadline for submitting a response to the request.

25.2.The Client may obtain the clarification specified in paragraph 25.1 of this Law from other relevant persons through electronic system, e-mail, or official letter in writing.

25.3.The Client shall not require to submit additional documents, models or samples in order to comply with the requirements specified in the tender documents.

25.4.Except for the correction of arithmetic errors specified in paragraph 27.3 of this Law, the Client shall not request any clarification on the tender price or price discount.

25.5.The failure of the participant to respond to the Client's request for clarification in regards with the tender within the specified period shall not be a ground for delaying the examination and evaluation proceedings.

25.6.Requests of the Client and responses thereto specified in paragraphs 25.1 and 25.2 of this Law shall be kept in the personal file of the tender selection.

Article 26.Tender examination

26.1.The Client shall examine the tenders submitted by the participants for qualifying with the requirements as specified in this Article.

26.2.The Client shall examine the general requirements of the participant based on the statement specified in paragraph 7.2, the documents specified in paragraph 7.3, and the information specified in paragraph 15.2 of this Law.

26.3.The Participant shall be responsible for the accurateness of the documents and statements submitted to the tender.

26.4.The Client shall examine the tender whether it is qualifying or not with the requirements specified in the tender documents as follows:

26.4.1.to have met the minimum capacity and experience requirements specified in Articles 15, 16, and 17 of this Law;

26.4.2.to have complied the proposed goods, works and services with the technical specifications;

26.4.3.to have accepted the rights and obligations of the parties determined by the Client or defined by the terms of the relevant contract;

26.4.4.to have met other conditions and requirements specified in the tender documents.

26.5.It may be examined whether the participant's capacity and experience information is consistent with the financial and social insurance report information verified upon reporting them to the state competent authorities.

26.6.Submission of documents not specified in the tender documents by the participant shall not be a ground for rejection of the tender.

26.7.When examining tenders in accordance with sub-paragraphs 26.4.2 and 26.4.3 of this Law, the Client shall take into account whether acceptance of the following differences will have a negative impact on competition or not:

26.7.1.does not adversely affect the scope, quality and performance of goods, works and services;

26.7.2.does not include restrictions that are inconsistent with the law in the conditions of the contract offered by the Client;

26.7.3.whether it is in conformity with the Client's purpose of procuring the goods, works, and services.

26.8.A participant who offers other goods in the technical specification used a clarification  "… or equivalent to these …" as specified in paragraph 12.5 of this Law, shall be deemed to have met the technical specification if it proves with the documents specified in Article 13 of this Law or in other ways that the goods are equivalent to those specified in the technical specification.

26.9.A tender that meets all the requirements of the tender documents simultaneously shall be considered as qualified tender for the requirements.

26.10.Tenders other than those specified in paragraph 26.9 of this Law and the following tenders shall be rejected as unqualified:

26.10.1.the tender price exceeds the budgeted cost, or exceeds the maximum unit price specified in paragraph 10.11 of this Law;

26.10.2.offered imported goods in the package of domestic goods organized in accordance with paragraph 8.1 of this Law;

26.10.3.did not accept the obligations and liabilities of the participant required in the tender documents, or failed to issue the statements accurately;

26.10.4.except for the procurement of goods and services by methods of a master agreement, failed to submit the relevant explanation specified in paragraph 21.5 of this Law, or the submitted explanation was considered unreasonable.

Article 27.Tender Evaluation

27.1.Tenders qualified for the requirements shall be evaluated by the Client in accordance with the basic evaluation criteria specified in paragraph 11.4 of this Law. 

27.2.Based on the tender price and price discount announced at the tender opening, the comparative price shall be calculated as follows:

27.2.1.calculate the price discount according to the methodology submitted by the participant, and if no methodology is submitted, calculate it from the tender price;

27.2.2.the bid price submitted in foreign currency as specified in the tender documents shall be calculated and converted at the official exchange rate of the Central Bank/Mongol Bank on the day of the tender announcement;

27.2.3.abstractly reduce the comparative price by granting the margin of preference;

27.2.4.if the tender documents reflect to apply criteria to be taken into account to the evaluation as specified in paragraph 11.5 of this Law, to express them in monetary value and to increase the comparative price abstractly.

27.3.If there is an arithmetical error when evaluating a tender price, the Client shall correct it according to the tender documents, inform the participant in regards with it, and request to submit a written response on whether to accept it or not.

27.4.If the Participant admits an arithmetical error in accordance with the notice specified in paragraph 27.3 of this Law, the corrected price shall be evaluated in accordance with paragraph 27.2 of this Law.

27.5.When evaluating tenders according to sub-paragraph 11.4.1 of this Law, the comparative price, and when evaluating according to sub-paragraph 11.4.2 of this Law, the price calculated according to the methodology and instructions approved by the Cabinet member in charge of finance and budget issues, shall be ranked in ascending order, and the tender ranked first shall be considered "the best tender".

27.6.When evaluating tenders for medicines and medical devices, they shall be ranked according the scores calculated in accordance with the methodology and instructions approved by the Cabinet member in charge of finance and budget issues, and the tender with the highest score shall be considered "the best tender".

27.7.If two or more tenders have the same comparative price or score, the tender that entered the electronic system at the first in terms of time shall be ranked first.

27.8.If the alternative offer is allowed, the alternative offer of the best tender may be examined, and selected if the comparative price of the offer is not higher than the comparative price of the tender.

27.9.Each package of tender with packages shall be evaluated, and if the participant submits the best bid in two or more packages, the capacity of the participant to execute the contract shall be verified.

27.10.When verifying the capacity of a participant selected for several packages, if one of the packages does not meet the requirements, the contract shall be awarded to one or more packages with the highest contract price among the packages that meet the requirements of its capacity.

27.11.In the first stage of the master agreement method, the tenders shall be examined and the participants who submitted tenders that meet the requirements shall be granted a right to conclude a master agreement.

27.12.The Client's abstract calculation of the comparative price of the tender shall not a ground to change the contract price.

27.13.Taxes, insurance, transportation and all other costs necessary for the performance of the contract under the conditions specified in the tender documents shall be considered included in the tender price.

27.14.Preferential fulfillment of the participant's capacity and experience requirements shall not be a ground for giving priority to its tender.

27.15.The provisions specified in paragraph 27.2 of this Law shall not apply to procurement by the tender selection specified in paragraph 10.11 of this Law and by method of the master agreement.

27.16.The methodology and instructions for evaluating tenders, granting a priority, and calculating scores on lifetime cost, quality and price shall be approved by the Cabinet member in charge of finance and budget issues.

Article 28.Making a decision by the Client and notifying it

28.1.The Client shall make the following decisions for each tender:

28.1.1.to award a right to conclude a contract to the participant who submitted the best tender;

28.1.2.in regards with non-awarding of bids of other participants who submitted eligible bids but did not submit the best bids;

28.1.3.to reject the bid of the participant who submitted a bid that does not meet the requirements.

28.2.In the decision specified in sub-paragraphs 28.1.2 and 28.1.3 of this Law, each participant shall be notified at the same time, indicating the grounds for not winning or rejecting the bid, the name of the participant awarded to enter into the contract, and the contract price.

28.3.The Client shall be deemed to have been notified of the decision specified in paragraph 28.1 of this Law by publishing it in the electronic system.

28.4.If the Client rejects all tenders, the reasons for not receiving qualified tenders shall be investigated, and the decision on whether to announce a new tender shall be indicated in the decision specified in sub-paragraph 28.1.3 of this Law.

28.5.In case of re-tendering due to rejection of all tenders by the Client, it shall be prohibited to open the subsequent tender before the deadline for filing a complaint according to paragraph 59.1 of this Law.

28.6.Upon the occurrence of the conditions specified in sub-paragraph 14.6.2 of this Law, the Client shall revoke the right to conclude the contract and award the right to conclude the contract to the participant who submitted the next ranked tender.

28.7.If the price of the best tender has been adjusted by the Client, price discount has been calculated, and it has been converted into one currency, the price shall be determined as the contract price and indicated in the decision to award the right to conclude the contract.

28.8.During the period until the Client makes a decision or concludes the contract, it may request from the participant to extend the validity period of the tender, and if the participant extends the period, it shall notify the client in writing.

28.9.Failure of the participant to extend the validity period of the tender shall not be a ground to seize the tender guarantee for the benefit of the state.

Article 29.Disclosure of tender selection information to participants

29.1.Unless otherwise provided by law, the tender examination and evaluation proceedings, tender information and documents shall not be disclosed until the issuance of the decision specified in paragraph 28.1 of this Law.

29.2.The non-confidential part of the successful participant's bid and the clarifications made by the participants in regards with the tender shall be disclosed to other participants through the electronic system within five working days after the award of the right to conclude the contract.

29.3.Minutes of the meeting of the evaluation committee shall be presented to the participants who made the request within five working days after the issuance of the decision specified in paragraph 28.1 of this Law.

29.4.It shall be prohibited to copy or distribute the successful tender in any form by the participant or his representative.

Article 30.Concluding a contract

30.1.The successful participant shall confirm the contract and deliver it to the Client in the original or by electronic system within the period set by the Client, not less than six working days after notification of the award of the right to conclude the contract.

30.2.The Client may not adhere to the contract conclusion period after expiration of the period specified in paragraph 30.1 of this Law in the following cases:

30.2.1.one participant submitted a tender and was selected;

30.2.2.to enter into a contract on the grounds specified in paragraph 35.1 of this Law;

30.2.3.to conclude a master agreement, and to procure goods and services from the electronic store.

30.3.The Client shall conclude a contract with the selected participant, except for the following cases:

30.3.1.the condition specified in sub-paragraph 14.6.2 of this Law has occurred;

30.3.2. the tender selection was suspended, the decision awarding a right to enter into a contract was annulled, or the tender selection was considered to be invalid by the competent body for settling complaints specified in this Law, or the decision of the court.

30.4.If the Client does not sign and confirm the contract within five working days after receiving the contract certified by the selected participant, or within 10 working days in the case of concluding a contract in accordance with the notification specified in sub-paragraph 49.4.13 of this Law, the contract shall be considered as concluded under the conditions specified in the decision on awarding the right to conclude the contract.

30.5.Paragraph 30.4 of this Law shall not apply in the event that there is no need to procure the goods, works, or services due to reasons beyond the control of the Client, or there is no source of financing for the procurement of goods, works, or services.

30.6.Unless the source of financing is specified in the state budget, the Client shall be prohibited from re-procuring goods, works, and services that were not procured on the basis of paragraph 30.5 of this Law in the current budget year.

30.7.If an open tender has been organized in advance as specified in this Law, it shall be prohibited to enter into a procurement contract until the relevant loan or aid agreement is concluded.

CHAPTER FOUR

METHODS FOR TENDER SELECTION

Article 31.Methods for Tender Selection

31.1.Unless the Client procures through the master agreement method, the tender shall be organized according to one of the following methods based on the budgeted cost stipulated by law:

31.1.1.open tendering;

31.1.2.comparison;

31.1.3.concluding a contract directly;

31.1.4.procurement from a single source.

31.2.Unless otherwise specified in this Law, the Client as determined in sub-paragraph 37.2.4 of this Law shall procure the goods and services concluded a master agreement from the electronic store.

31.3.In matters not specifically stated otherwise in the regulations pertaining to the tender selection method in Articles 32, 33, 34, 35, 36, 37, and 38 of this Law, the provisions of the second and third chapters of this Law shall be adhered to.

31.4.In cases specified in paragraphs 10.8 and 10.10 of this Law, the Client may organize a tender in the manner specified in sub-paragraphs 31.1.3 and 31.1.4 of this Law.

Article 32.Open tendering method

32.1.Unless otherwise specified in this Law, the Client shall use the open tendering method for the procurement of goods, works and services.

32.2.The open tendering announcement shall be published in accordance with paragraph 18.1 of this Law.

32.3.The deadline for receiving bids for open tendering shall be no more than 15 working days, and no more than 20 working days for tenders specified in paragraph 8.3 of this Law.

32.4.Except as specified in Article 33 of this Law, open tendering shall be organized in one stage.

32.5.Open tendering for the procurement of goods, works, and services in accordance with projects and measures to be implemented with loans and aid funds from foreign governments and international organizations may be organized in advance prior to ratification of the relevant Mongolian international treaties or the conclusion of a special agreement by the Government.

32.6.The procedure for organizing tender selection in advance shall be approved by the Cabinet member in charge of finance and budget issues.

Article 33.Organizing the open tendering in two stages

33.1.The Client may conduct open tendering in two stages if it is needed to be performed excessive scope of the work, high budgeted cost, or 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 it assesses as having two or more potential technical solutions deserving equal recognition and satisfaction of the given requirements. 

33.2.When organizing an open tendering in two stages, a tender document with a technical specification defining the Client's needs and requirements shall be developed, and the announcement specified in paragraph 18.3 of this Law shall specify the organization of the tender in two stages.

33.3.In the first stage, interested parties to be submitted technical proposals shall propose solutions of the goods, works, and service that meet the requirements specified in the tender documents.

33.4.The Client shall study the technical solution submitted in the first stage, and if necessary, after obtaining clarifications from interested parties, finalize the tender documents, and deliver the invitation to the tender to the parties who participated in the first stage.

33.5.In the second stage of the tender selection to be organized in accordance with the invitation specified in paragraph 33.4 of this Law, the period specified in paragraph 32.3 of this Law shall be adhered to.

33.6.In the second stage of the open tendering, the person who participated in the first stage shall submit a tender.

Article 34.Comparison method

34.1.The Client may organize tenders for goods, works and services which total budgeted cost does not exceed the upper limit of the budgeted cost that can be purchased by comparison method by calling for the price proposals in the electronic system.

34.2.In addition to the provisions specified in paragraph 18.3 of this Law, the Client shall include the following information in the announcement:

34.2.1.the number of participants required for the calling for the price proposals to be valid;

34.2.2.procedure and period of registration for calling for the price proposals.

34.3.The Client shall send an invitation to call for price proposals to business operators registered in the electronic system specified in this Law.

34.4.Price proposals shall be called after at least five working days from the date of delivery of the invitation, and the duration shall be indicated in the invitation to be at least two hours.

34.5.Interested parties registered in the calling for the price proposals shall have a right to participate in this proceeding.

34.6.If the number of registered interested parties does not reach the required number specified in the announcement, the Client shall cancel the call for price proposals and notify the Client through the electronic system.

34.7.The interested party shall submit the tender to the electronic system as specified in the tender documents before the deadline of the receipt of tenders.

34.8.During the calling for price proposals proceedings, the participant's information shall be confidential, and the participant may submit a reduced-price proposal in any number of times within the specified period using the identification number provided by the electronic system.

34.9.When the calling for the price proposals proceeding is closed, the final price shall be ranked in ascending order, and the price proposal of the participant ranked at the beginning shall be reviewed, and if qualified, the contract shall be awarded.

34.10.If the tender does not meet the requirements upon examination according to paragraph 34.9 of this Law, the next ranked tender shall be examined.

34.11.Under the conditions specified in paragraph 9.5 of this Law, the Client shall inform the participants of the re-announcement of the calling for the price proposals proceeding through the electronic system.

34.12.Goods to be procured by comparison method shall be registered in the electronic catalog.

Article 35.Method of concluding a contract directly

35.1.The Client may conclude a contract directly through making negotiations among business operators on the following grounds:

35.1.1.in case of impossibility to observe the minimum timeframe for receiving tenders by other methods specified in this Law under the occurrence of the urgent need to procure goods, works, and services due to circumstances unforeseeable by the Client;

Interpretation: The direct conclusion of the contract in accordance with this sub-paragraph shall not apply to the situation where the previous tender was unsuccessful, the procurement proceeding was delayed due to reasons dependent on the Client, or there is no funding source at the end of the fiscal year.

35.1.2.in case of impossibility to observe the minimum timeframe for receiving tenders by other methods specified in this Law under the occurrence of the urgent need to procure goods, works, and services directly connected to overcoming the needs and requirements arising due to circumstances of the state of emergency, disasters, and accidents;

35.1.3.the number of persons who can supply the reagents necessary for specialized analysis of the forensic organization is limited.

35.2.The announcement of the direct conclusion of the contract shall be published in the electronic system along with the general information of the goods, works, and services, and the business operators shall be invited to negotiate in accordance with paragraph 54.8 of this Law.

35.3.An invitation to negotiate may be sent to a foreign party deemed by the Client to have the capacity and resources to perform goods, work, or services within the day of publication of the announcement in the electronic system.

35.4.It shall be reflected in the announcement and invitation that the deadline for expressing interest in negotiations shall be five working days after the publication of the announcement and delivery of the invitation, and the deadline for starting negotiations shall be at least three working days after the deadline for expressing interest, respectively.

35.5.The Client shall conduct negotiations with interested parties at the same time as specified in the announcement.

35.6.The Client shall present to the interested parties the order to be followed for negotiations and shall keep a record of the negotiations.

35.7.Failure of the interested party to arrive or participate within the time specified in the announcement shall not be a ground for delaying the negotiations.

35.8.Under the negotiations, information on technical specifications, financing and contract terms shall be exchanged.

35.9.The Client shall publish the tender documents approved on the basis of negotiations in the electronic system, and specify the deadline for receiving tenders to be no less than seven working days.

35.10.The person participating in the negotiation shall have a right to submit a tender.

35.11.If there are real conditions that make it impossible to comply with the minimum period and procedure specified in this article in order to overcome the conditions specified in paragraph 35.1 of this Law, or to preserve historical and cultural immovable memorials, the time limit shall be reduced to the necessary period, and the procedures for sending invitations, negotiating, and accepting tenders may not be adhered to.

35.12.After the opening of the tender, the Client shall have no right to request clarification according to Article 25 of this Law.

35.13.The amount and duration of the contract concluded in accordance with this article shall be consistent with the amount and duration necessary to overcome the emergency situation that led to the selection of the respective method.

35.14.If the remaining budgeted cost after limiting the quantity and period of procurement of goods, works, and services in accordance with paragraph 35.13 of this Law exceeds the upper limit of the budgeted cost that can be purchased directly, the procurement proceeding shall be started as soon as possible.

35.15.If the Client announces a re-tendering based on the rejection of all bids in the tendering organized according to paragraph 35.1 of this Law, the provisions specified in paragraph 28.5 of this Law may not be adhered to.

35.16.The Cabinet member in charge of finance and budget issues shall approve the regime/order to be followed by the Client in the negotiations specified in this article.

Article 36.Method of procuring from a single source

36.1.The Client may use the method of procuring from a single source under the following conditions:

36.1.1.in case of possibility to perform it by the holder of the intellectual property rights who produces the goods, works and services, or by the single official person who has obtained the right to use them according to the license agreement from the respective holder, for the purpose of protection of intellectual property right;

36.1.2.in case of procurement of human medicines, medical devices, biopreparation, and vaccines that meet international quality standards from foreign manufacturers or international organizations directly or through them;

36.1.3.if 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

36.1.4.if the 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;

36.1.5.if there is a need to procure movable historical and cultural memorials from one owner in order to enrich the treasury of state and local owned museums and galleries;

36.1.6.in case of procurement from the manufacturer of the goods and equipment,  if the change of the manufacturer will cause the Client to procure materials with different technical specifications, or cause technical difficulties in operation and maintenance, when replacing or repairing some parts of the equipment necessary for the production of a state and locally owned legal or a legal entity with state and local ownership participation.

36.2.The tender announcement specified in this Article may not be published in accordance with paragraph 18.1 of this Law.

36.3.A tender guarantee or a performance guarantee may not be required for tenders organized by the method specified in this article.

36.4.The Government shall approve the procedure on procurement in accordance with sub-paragraph 36.1.2 of this Law based on the proposal of the state central administrative body in charge of health issues.

Article 37.Master agreement method

37.1.Procurement of goods and services by the method of master agreement shall be organized in the following two stages:

37.1.1.in the first stage, the state administrative body in charge of procurement issues shall select the suppliers and service providers that meet the needs and requirements of the goods and services to be procured by the Client, conclude a master agreement with the selected participants, and register them in the electronic store;

37.1.2.in the second stage, the Client shall call for a price proposal and buy the goods and services from the electronic store.

37.2.In the first stage of the master agreement method, the tendering for the conclusion of the master agreement shall be organized by the open tendering method specified in Article 32 of this Law under the following conditions, and the maximum unit price of goods and services and other conditions based on the Client's needs shall be determined in advance:

37.2.1.to be valid for up to three years;

37.2.2.not to limit the number of participants to be concluded the contract;

37.2.3.to be able to add qualified participants during the validity period of the contract;

37.2.4.to be determined the Client based on the sector of activity and geographical location.

37.3.The tender announcement for the first stage of the master agreement shall include the validity period of the contract in addition to the information specified in paragraph 18.3 of this Law.

37.4.The tender submitted by the participant in the tender selection specified in paragraph 37.2 of this Law shall be examined in accordance with Article 26 of this Law and a contract shall be concluded in accordance with paragraph 27.11 of this Law.

37.5.The goods and services to be procured according to the master agreement concluded with the selected participant shall be placed in the electronic store at a unit price.

37.6.The conditions stipulated in paragraphs 37.2 and 39.3 of this Law shall be included in the master agreement to be concluded between the state administrative body in charge of procurement issues and the selected participant.

37.7.The procedures specified in paragraphs 39.4, 39.5, and Article 41 of this Law shall be adhered to in the master agreement.

Article 38.Procurement of goods and services from electronic stores

38.1.In the second stage of the master agreement method, the Client shall send the order form to the electronic system with the quantity of goods and services to be procured, the place of delivery, and the schedule, call for a price proposal, and purchase from the electronic store.

38.2.The invitation to call for price proposals shall be sent to the contractors of the goods and services with whom the master agreement has been signed through the electronic system.

38.3.Price proposals shall be called after at least two working days from the date of delivery of the invitation, and the duration shall be indicated in the invitation to be at least two hours.

38.4.When the call for price proposal organized in accordance with the procedure specified in paragraph 34.8 of this Law is closed, the Client shall conclude a contract with the contractor who submitted the first ranked price proposal.

38.5.If there is only one contractor in the electronic store, or if no price proposals are received when the it is called, the Client may purchase goods and services with the lowest price proposal registered in the electronic store.

38.6.For the procurement of goods and services by a method of a master agreement, the tender and performance guarantees specified in sub-paragraphs 14.1 and 42.1 of this Law shall not be required, and the tender shall be confirmed by a statement issued by the participant or contractor.

38.7.The tender selection method and instructions for the procurement of goods and services by a method of a master agreement shall be approved by the Cabinet member in charge of finance and budget issues.

CHAPTER FIVE

CONTRACT OBLIGATION PERFORMANCES

Article 39.Contract for Procurement

39.1.The main conditions of the contract for the procurement of goods, works and services to be made between the Client and the successful participant /hereinafter referred to as "procurement contract"/ shall be the tender documents and the tender submitted by the successful participant.

39.2.The price of the procurement contract shall be set at the price specified in the decision on awarding a right to enter into the contract.

39.3.The following conditions shall be reflected in the procurement contract:

39.3.1.contract price;

39.3.2.contract subject and information on goods, works and services;

39.3.3.terms and conditions of payment;

39.3.4.amount of advance payment and performance guarantee;

39.3.5.the person to be implemented the Client's control and its form;

39.3.6.schedules on the delivery of goods, execution of work and provision of services;

39.3.7.information on granting margin of preferences of the goods, materials, and workforce;

39.3.8.if the contract price is adjusted, the conditions and methods of adjustment;

39.3.9.information on the joint venture and subcontractor;

39.3.10.grounds and procedures for contract termination and contract rejection;

39.3.11.other conditions specified in the tender documents.

39.4.The Client shall register the procurement contract and its amendments in the electronic system and make it available to the public.

39.5.Unless otherwise provided by law, the relations on the performance of obligations under the procurement contract shall be governed by the Civil Code.

Article 40.Making amendments to the contract

40.1.The procurement contract and the master agreement may be amended in the following cases:

40.1.1.to extend the term of performance of the contractual obligations due to unexpected and force majeure special circumstances that cannot be foreseen by the Client and on the grounds specified in the contract;

40.1.2.to adjust the contract price according to the terms and methodologies specified in paragraph 11.11 of this Law.

40.2.The followings shall be prohibited during the performance of the obligations of the procurement contract and the master agreement:

40.2.1.to amend the contract on grounds other than those specified in paragraph 40.1 of this Law;

40.2.2.to transfer the performance of the contract obligations to a third party.

40.3.Due to the reorganization of the legal entity, if the conditions set forth in sub-paragraphs 7.1.1, 7.1.6, 7.1.8, and 7.1.9 of this Law have arisen to the Contractor, the contractor shall be deemed to have violated the contractual obligations.

40.4.It shall be prohibited to extend the term of the contract concluded in accordance with paragraph 10.11 of this Law.

Article 41.Void contracts

41.1.A procurement contract shall be void if it is subject to any of the following conditions:

41.1.1.concluded a contract directly in violation of this Law;

41.1.2.purchased from one source in violation of this Law;

41.1.3.did not publish an announcement or send an invitation as specified in the Law;

41.1.4.restricted a right to get acquainted with the tender as specified in paragraph  29.2 of this Law;

41.1.5.did not adhere to the deadline for receipt of tenders, or the deadline for concluding a contract specified in paragraph 30.1 of this Law;

41.1.6.other violations of the Client specified in this Law by clearly affected the final outcome of the tender.

41.2.If the provisions specified in Article 40 of this Law are not adhered to when making amendments to procurement contracts and master agreements, the respective amendments shall be void.  

Article 42.Guarantee of performance and orientation and adjustment period

42.1.If the budgeted cost of the tender is more than MNT 100 million, a performance guarantee shall be required in order to secure the fulfillment of the contractual obligations.

42.2.The Client shall determine the amount of the performance guarantee at three percent of the financing amount in the current fiscal year and reflect it in the tender documents.

42.3.The contractor can submit the performance guarantee in the following form:

42.3.1.the guarantee of the bank or the insurer of Mongolia to fulfill the obligation of monetary payment not less than the amount specified in paragraph 42.2 of this Law at the request of the Client;

42.3.2.the guarantee of the competent person on the transfer of Mongolian Government securities/bond and Mongolian Government-approved securities with a nominal value not less than the amount specified in paragraph 42.2 of this Law at the request of the Client.

42.4.A foreign person shall have the right to issue a guarantee from a foreign bank, and in this case, a bank or financial institution established in Mongolia shall be designated as the person authorized to communicate with the Client and receive notifications on behalf of the guarantor.

42.5.In order to guarantee the quality of goods, work, and services, and to ensure the performance of the contractor's obligations during the orientation and adjustment period, the Client may include in the tender documents the conditions for the pledge of 5-10 percent of the value of the procurement contract.

42.6.The contractor may provide the deposit specified in paragraph 42.5 of this Law in the form specified in paragraph 42.3 of this Law.

42.7.As specified in this Law, if the contract is amended or modified, or if the performance guarantee becomes invalid during the validity period of the contract, the contractor shall be obliged to renew the performance guarantee in accordance with the relevant requirements and replace it with a valid performance guarantee.

42.8.The contractor of projects and measures to be implemented during the several fiscal years shall renew the performance guarantee to the Client before the end of the performance guarantee period.

42.9.If the contractor does not fulfill the obligation to renew the performance guarantee specified in paragraph 42.8 of this Law, it shall be considered a breach of contractual obligations, and the performance guarantee shall be seized on behalf of the Client.

Article 43.Advance payment and its guarantee

43.1.If a guarantee is issued in accordance with the tender documents, an advance payment shall be made to the contractor for preparation of the work.

43.2.The guarantee shall be not less than the advance payment.

43.3.If the advance payment guarantee is not issued, the Client shall be prohibited from making an advance payment.

43.4.The amount of the performance guarantee issued in accordance with Article 42 of this Law can be calculated to be included in the amount of the advance payment guarantee.

43.5 Advance payment guarantee shall be issued in the form specified in paragraph 42.3 of this Law.

43.6.If the guarantee specified in Articles 42 and 43 of this Law is expressed in foreign currency, it shall be determined by the official exchange rate of the Central Bank/Mongolian Bank on the day of issuing the respective guarantee.

CHAPTER SIX

MANAGEMENT OF PROCUREMENT

Article 44.Planning of Procurement

44.1.The Client shall efficiently plan and approve procurement for each project and measure included in the approved budget.

44.2.The Client shall indicate the goods and services to be procured by the master agreement method in the procurement plan.

44.3.Within 10 working days after the source of funding is approved, the Client shall send the procurement plan to the relevant higher-level budget manager via the electronic system.

44.4.Within one month after the approval of the funding source for the current year, the general budget administrator shall examine and confirm the procurement plans of the affiliated clients upon integrating them and publish them in the electronic system.

44.5.The procedure for planning the procurement activities shall be approved by the Cabinet member in charge of finance and budget issues.

Article 45.Arranging of Procurement

45.1.The state administrative body in charge of procurement issues and the Governor of the aimag or the Capital city shall be the Client for the goods, works, and services to be financed by the investment source of the state budget reflected in the list specified in paragraph 45.2 of this Law.

45.2.The list of projects and measures specified in Paragraph 45.1 of this Law shall be approved by the Government within 10 working days after the official publication of the budget law for the subsequent year.

45.3.In terms of goods, works and services to be procured for its own needs upon financing by the investment source of the state budget, which are not included in the list specified in paragraph 45.2 of this Law, the direct administrator of the budget shall be the Client.

45.4.Except as specified in paragraphs 45.1, 45.2, and 45.3 of this Law, the Client shall arrange the procurement of goods, works, and services to be financed with state budget funds, the Client's funds, and other sources.

45.5.For goods, works, and services to be financed from the budget funds of aimags, soums, the Capital city, and districts, the Governor of that level shall be the Client.

45.6.Unless the Client as specified in paragraph 45.5 of this Law purchases goods, works, and services with the budget funds of the aimags, the Capital city, or district for its own needs, the tender selection shall be organized by the unit of the professional procurement organization in the aimags, the Capital city, or district.

45.7.If the general budget administrator decides to transfer a right to organize tenders for projects and measures other than those specified in paragraphs 45.1, 45.2, 45.3, and 45.4 of this Law to be implemented in the current budget year, to the lower-level budget governor or to the procurement professional organization, it shall be transferred within 10 working days.

Article 46.Reporting on procurement

46.1.The Client shall report the implementation and results of the procurement proceedings for each project and measure specified in the procurement plan of the current year to the relevant higher-level budget administrators through an electronic system.

46.2.The general budget administrator shall integrate the procurement reports of the subordinated Clients and report it through an electronic system to the state central administrative body in charge of finance and budget issues within January 15 of the subsequent year.

46.3.The state central administrative body in charge of finance and budget issues shall summarize the reports submitted by the general budget administrators upon integrating them and report it to the Government in the first quarter of the subsequent year.

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

46.5.The procedure on reporting the procurement activities shall be approved by the Cabinet member in charge of finance and budget matters.

Article 47.Arranging the tender selection upon centralizing and integrating them

47.1.With the approval of the general budget administrator, within the budget of the subordinate organization, the budget administrator may organize upon centralizing a tender selection for the contractor of one type of goods and services not posted in the electronic store.

47.2.Two or more direct budget administrators may submit a request to the procurement professional organization to jointly organize a tender selection based on one of the following conditions:

47.2.1.if a certain goal is jointly implemented;

47.2.2.if organizing procurement of similar goods, works and services jointly can increase competition.

47.3.The direct budget administrators to be procured the goods, works and services jointly shall conclude a contract for the respective goods, works and services, and monitor the implementation of the contract.

Article 48.Rights and Obligations of Client

48.1.The direct budget administrator and other persons representing the Client without a power of attorney shall exercise the rights and obligations of the Client specified in this Law.

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

46.2.1.to organize procurement within the approved budget within the period specified by law

48.2.2.to establish evaluation committee;

48.2.3.to oversee whether the recommendations of the evaluation committee are in conformity with applicable legislation;

48.2.4.to make decisions within the period specified in this Law;

48.2.5.to publish the results of the tender selection in the electronic system from time to time;

48.2.6.to enter into a procurement agreement;

48.2.7.to regularly monitor and provide with management on the implementation of the procurement agreement, and record the implementation in the electronic system;

48.2.8.to plan and report procurement activities as specified in this Law;

48.2.9.to ensure the performance of the contractor's duties specified in paragraph 54.6 of this Law and to be responsible for the accuracy of information;

48.2.10.to submit the information in regards with the participant revealed the conditions specified in paragraph 56.5 of this Law, together with the relevant evidence, to the state central administrative body in charge of finance and budget matters to be examined by the state inspector of procurement;

48.2.11.to make payments according to the conditions specified in the contract;

48.2.12.to organize procurement based on the recommendations and conclusions specified in paragraph 29.1 of the Law on Transparency of Public Information;

48.2.13.others prescribed by law.

48.3.The transfer of the rights and obligations granted by this Law by the person representing the Client to other relevant persons of the organization shall not be a ground to exempt him/her from liability.

48.4.Every time the Client organizes a procurement proceeding, it shall prepare a personal file of tender selection, and attach the following documents to it:

48.4.1.decision on approval of the financing source;

48.4.2.if a method other than the open tendering method is used, the ground for choosing that method;

48.4.3.tender documents approved by the Clients and amendments made to them;

48.4.4.official correspondence with the Client and Participant;

48.4.5.tenders submitted by participants;

48.4.6.evaluation committee meeting minutes and recommendations;

48.4.7.the reasons and grounds for unsuccessful tender selection or rejection of all tenders;

48.4.8.a Client's decision;

48.4.9.a procurement agreement;

48.4.10.photographs and video recordings documented in accordance with paragraph 13.4 of this Law;

48.4.11.other documents.

48.5.The personal file of the tender selection shall be kept as an archive unit.

48.6.The client may keep the designs and samples submitted to the tender by the successful participant during the duration of the contract and use them to monitor the performance of the contractual obligations.

48.7.If the Client concludes a contract in accordance with Articles 35 and 36 of this Law, it shall submit a copy of the contract together with grounds justifying the usage of such method to the Anti-Corruption Agency within 10 working days after conclusion of the contract.

48.8.In the event that the Client has reason to believe that the conditions specified in sub-paragraph 7.1.4 of this Law have occurred, or that the employee or official specified in Article 52 of this Law has been affected, the Client shall be made a decision by the relevant law enforcement authorities.

Article 49.Procurement professional organization

49.1.A state administrative body in charge of procurement issues shall exercise the functions of the professional procurement organization and it shall have procurement units in aimag, the Capital city, and district.

49.2.The Governor of respective level, in consultation with the Head of state administrative body in charge of procurement issues, shall appoint and dismiss Head of the procurement units at the aimag, the Capital city and District, whereas, district Governor, in consultation with the Capital city Governor, shall appoint and dismiss the Head of the procurement unit at the district. 

49.3.Heads of the state administrative body in charge of procurement issues and Procurement Units at the aimag, the Capital city, and the district shall have no criminal record, have at least 6 years work experience in civil service, out of which at least 3 years' experience in procurement sector, as well as shall not engaged in a political or political party leadership position in the last three years.

49.4.The state administrative body in charge of procurement issues shall implement following functions in regards with organizing the procurement in addition to the provisions specified in the paragraph 7.1 of the Law on Legal status of Government agencies:

49.4.1.to provide with professional and methodological guidance to the Client and participants on the matters in connection with electronic system activities and procurement;

49.4.2.to exercise rights and undertake obligations of the Client other than those specified in sub-paragraphs 48.2.6, 48.2.7, and 48.2.11 of this Law;

49.4.3.to exercise the rights and obligations of the Client other than those specified in sub-paragraph 48.2.11 of this Law in connection with the conclusion of the master agreement;

49.4.4.to provide with professional and methodical guidance to the operations of the procurement unit, and supervise its operations;

49.4.5.to organize training on the use of electronic systems and the procurement;

49.4.6.to be responsible for the normal operation of the electronic system and its components, ensure the security and confidentiality of the electronic system, and regularly increase the capacity of techniques, technology and software;

49.4.7.to spend up to 30 percent of the fees specified in paragraph 22.10 of this Law to ensure the reliable operation, modernization, and security of the electronic system;

49.4.8.to create, maintain, and refine the registration system specified in Article 54 of this Law;

49.4.9.to analyze the use of the electronic system and submit the relevant information and data to the state central administrative body in charge of finance and budget issues;

49.4.10.to conduct market research for the purpose of developing standard technical specifications for goods, works, and services, and determining goods and services for the conclusion of a master agreement;

49.4.11.to establish the upper limit of the unit price of goods and services to be procured by the method of a master agreement, and to organize tenders by the method of a master agreement;

49.4.12.to enter into a contract with a competent person authorized to issue the guarantee specified in this Law through the electronic system, and supervise the implementation of the contract;

49.4.13.to deliver the notice of entering into a procurement contract with the successful participant to the competent person authorized to enter into the contract;

49.4.14.to revoke the certificate of a qualified procurement employee according to the notification submitted by the Client or competent person;

49.4.15.others specified in this Law.

49.5.The state administrative body in charge of procurement issues may be performed the functions specified in sub-paragraphs 49.4.5, 49.4.8, and 49.4.10 of this Law by professional associations and civil society organizations based on the contracts.

49.6.The fact that the state administrative body in charge of procurement issues has transferred its functions to other persons in accordance with paragraph 49.5 of this Law shall not be a ground to exempt it from the liability.

49.7.The unit of the procurement professional organization at the aimag, the Capital city, or district shall organize the tender selection for the contractor of goods, works, and services specified in paragraph 45.6 of this Law.

49.8.The units of the procurement professional organization at the aimag, the Capital city, or district shall carry out the following functions:

49.8.1.to submit proposals for the implementation of legislation on procurement to the state administrative body in charge of procurement issues;

49.8.2.to exercise rights and undertake obligations of the Client other than those specified in sub-paragraphs 48.2.6, 48.2.7, and 48.2.11 of this Law;

49.8.3.to carry out research specified in sub-paragraph 49.4.10 of this Law in accordance with the direction given by the state administrative body in charge of procurement issues;

49.8.4.to support the procurement of goods and services from electronic stores, and organize training;

49.8.5.functions specified in sub-paragraph 49.4.13 of this Law.

49.9.Tender selection for projects and measures to be implemented under the funding by foreign countries and international organizations may be performed by a procurement professional organization based on the request of the respective organization.

Article 50.Evaluation Committee

50.1.Except for the procurement of goods, works and services as specified in paragraph 10.2 of this Law, the Client shall establish an evaluation committee with the following composition:

50.1.1.th evaluation committee of the tender selection with a budget of up to 100 million MNT shall consist of at least three members;

50.1.2.the evaluation committee for the first stage of the master agreement, or of the tender selection other than those specified in sub-paragraph 50.1.1 of this Law shall consist of at least five members.

50.2.The evaluation committee shall have non-permanent activities and perform the following functions:

50.2.1.to develop tender selection documents, announcements, and invitations, and to receive tenders;

50.2.2.to open, examine, and evaluate tenders;

50.2.3.to submit recommendations to the Client for making a decision specified in Article 28 of this Law.

50.3.The member of the evaluation committee shall be a qualified procurement employee.

50.4.At least one third of the members of the evaluation committee shall be members independent from the Client.

50.5.Representatives of civil society organizations and non-governmental organizations, citizens appointed by the Assembly of Representatives of Provinces and Sumy citizens in localities other than the Capital city and state-ranked cities, a citizen appointed by the Citizens' Representatives' Khurals of the aimag and soum as well as the employees of the Secretariat Offices of the Governors shall be selected as independent members of the evaluation committee.

50.6.A person who is qualified in the sector in connection with the respective goods, work, or services may be appointed and worked in the evaluation committee.

50.7.If a member of the evaluation committee is no longer able to continue working for valid reasons, or if he/she violates the duties stipulated in Article 51 of this Law, the Client shall dismiss him/her of his/her duties as a member of the evaluation committee and appoint a new member.

50.8.In order to ensure the impartiality and independence of the evaluation committee, the Client may establish the evaluation committee to terminate its functions upon fulfillment of the function specified in sub-paragraph 50.2.1 of this Law.

50.9.In the case specified in paragraph 50.8 of this Law, a new evaluation committee shall be established with the functions specified in sub-paragraphs 50.2.2 and 50.2.3 of this Law.

50.10.The chairman of the evaluation committee shall perform the functions to organize the activities of the evaluation committee in compliance with the legislation, schedule meetings, make prompt decisions within the specified time and deliver them to the Client, and represent the evaluation committee before the Client.

50.11.The evaluation committee shall be prohibited from communicating with anyone other than the Client on matters related to the tender selection.

50.12.The evaluation committee shall communicate on necessary issues through the Client.

50.13.The procedure in connection with the activities of the evaluation committee and the awarding of incentives to members of the evaluation committee shall be approved by the Cabinet member in charge of finance and budget issues.

Article 51.Evaluation committee meeting

51.1.The main form of activity of the evaluation committee shall be a meeting.

51.2.The evaluation committee shall start the tender examination and evaluation proceedings on the date of opening of the tender.

51.3.The meeting shall be considered valid when the evaluation committee holds a meeting with the attendance of at least three-fourths of all members.

51.4.The meeting of the evaluation committee may be postponed if it is deemed necessary to obtain clarifications from the relevant parties on the grounds specified in this Law for the examination and evaluation of tenders.

51.5.If all or some of the members of the evaluation committee are unable to attend the meeting in person due to transfer to the level of readiness determined by the competent authority, or determined quarantine, restriction regime, or other similar circumstances, upon the grounds specified in the legislation, those members may participate in the meeting electronically.

51.6.The member who participated in the evaluation committee meeting electronically shall be included in the attendance, and confirmed in the minutes of the meeting through the electronic system.

51.7.The issue shall be resolved by the majority vote of the members who participated in the evaluation committee meeting.

51.8.Regardless of whether the members of the evaluation committee attended the meeting in person or not, they shall be responsible for getting acquainted with the recommendations and confirming their proposals whether to agree or not through the electronic system.

Article 52.Duties of employees and officials participating in the procurement

52.1.Employees and officials with functions of planning, preparing, implementing, examining, and evaluating the tender, monitoring, reporting, and settling complaints in the procurement proceedings shall be subject to declare that there is no conflict of interest, and to report the occurrence of a conflict of interest, as well as the interference with official duties as specified in this Law, the Law on regulation of public and private interests, and prevention of conflicts of interest in public services, the Anti-Corruption Law and other relevant legislation.

52.2.Employees and officials specified in paragraph 52.1 of this Law shall be obliged to make decisions and participate in making decisions in a timely manner according to this Law.

52.3.Unless otherwise provided by law, the Client and any person representing it shall communicate in writing with interested parties, participants, and their representatives on matters related to the procurement.

52.4.It shall be prohibited for the Client, its representative, official, and member of the evaluation committee to meet or establish contact with interested parties, participants, or any person representing them on grounds and procedures other than those specified in this Law.

52.5.Failure of an employee or official specified in paragraph 52.1 of this Law to carry out any of the following duties shall be grounds for exempting him/her from the duties in connection with the respective procurement and imposing a liability stipulated in the legislation by the competent person:

52.5.1.did not notify the Client the occurrence or conditions may occur of a conflict of interest, or made a false statement;

52.5.2.in the event of a situation that can be understood as a conflict of interest, the official did not provide a written explanation of the situation or made a false statement;

52.5.3.violated the prohibitions and restrictions established by the Law on Regulation of Public and Private Interests and Prevention of Conflicts of Interest in Public Services in the performance of functions related to procurement.

Article 53.Training of qualified procurement employee, and qualified employee

53.1.Employees and officials who organize procurement shall have participated in training in the field of procurement.

53.2.The state administrative body in charge of procurement issues shall take an examination from the citizen who has attended the training, and issue a certificate of a qualified procurement employee.

53.3.Requirements for procurement qualification training organizations, their teachers and employees, qualification training programs, and examination procedures shall be approved by the state central administrative body in charge of finance and budget issues.

Article 54.Registration System

54.1.The state administrative body in charge of procurement issues shall keep the following records through the electronic system:

54.1.1.a client;

54.1.2.a business operator to be participated in the procurement;

54.1.3.a qualified procurement employee;

54.1.4.a catalog of goods, works and services.

54.2.The state administrative body in charge of procurement issues shall openly place the records specified in paragraph 54.1 of this Law in the electronic system.

54.3.By registering in the electronic system, the Client shall organize the procurement.

54.4.The business operator shall have registered in the electronic system and agreed to transfer its information through the electronic system in connection with the tender selection in which it is participating from the database of the state competent bodies connected to the respective system.

54.5.A business operator registered in the electronic system shall create its personal record by entering information and documents about meeting the general requirements specified in Article 7 of this Law and the requirements of capabilities and experience specified in Articles 15, 16, and 17 of this Law.

54.6.Information in regards with the experience and performance of contractual obligations of the business operator shall be registered in the electronic system by the state administrative body in charge of procurement issues after confirmation by the relevant state authorities and the Client.

54.7.The business operator shall be responsible for updating its registration information in the electronic system whenever there is a change and shall be responsible for the accuracy of the information.

54.8.The Client shall simultaneously send the invitation to be delivered in accordance with this Law to the business operators operating in the respective sectors and registered in the electronic system.

54.9.The sending of an invitation in accordance with paragraph 54.8 of this Law shall not be a ground to give preference to the person who received the invitation, or to prohibit other interested parties from submitting tenders unless otherwise specified in this Law.

54.10.The procedure for keeping records and verifying information pursuant to paragraph 54.1 of this Law shall be approved by the Cabinet member in charge of finance and budget issues.

Article 55.Powers of State Central Administrative Body in Charge of Finance and Budget Issues

55.1.The state central administrative body in charge of finance and budget matters shall exercise the following powers in the field of implementation and control of state policy on procurement:

55.1.1.to develop proposals for improving the legislation on procurement;

55.1.2.to provide with professional and methodological advice at the Client's request on issues related to procurement;

55.1.3.to approve procedures, methodologies, instructions, standard tender/bidding documents, and contract models related to procurement;

55.1.4.to approve the procedures for issuing tender, performance and advance payment guarantees, and making tender guarantees state revenue as specified in this Law;

55.1.5.to  approve procedures related to tender selection complaints settlement proceedings;

55.1.6.to monitor and analyze the implementation of legislation, procedures, instructions, and methodologies in connection with the procurement;

55.1.7.to consolidate procurement reports at the national level and issue information;

55.1.8.to organize capacity building training for employees and officials participating in procurement;

55.1.9.to cooperate with the state central administrative body in charge of education issues in the field of supervision of procurement training programs;

55.1.10.to cooperate with international organizations and other organizations of foreign countries on procurement issues;

55.1.11.to maintain, monitor, and report the list specified in sub-paragraph 56.6.1 of this Law;

55.1.12.at the request of law enforcement and supervisory bodies, to make recommendations on specific issues related to the implementation of this Law;

55.1.13.others prescribed by law.

55.2.It is possible to cooperate on the basis of a contract with the person who organizes the training specified in sub-paragraph 55.1.8 of this Law.

Article 56.State Inspector for Procurement

56.1.A general state inspector, senior inspector, and inspector of procurement /hereinafter referred to as "state inspector"/ shall be in the state central administrative body in charge of finance and budget issues.

56.2.The State Secretary of the state central administrative body in charge of finance and budget issues shall be the General State Inspector of Procurement. The power of the General Inspector shall be granted by the Government.

56.3.The general state inspector of procurement shall make a decision to grant, suspend or revoke the rights of the senior state inspector and state inspector.

56.4.The Government shall establish guarantees for exercising the powers by the state inspector, and approve the rules of the state inspector.

56.5.The state inspector shall issue a conclusion on the following conditions related to the participant:

56.5.1.if submitted a tender with false documents or changed the documents of other parties in regards with meeting the participant's general and capacity requirements and experience in participating in the procurement process;

56.5.2.if submitted a tender that made false statements about the conditions specified in sub-paragraphs 7.1.3, 7.1.6, 7.1.7, and 7.1.9 of this Law;

56.5.3.if the contract was terminated, the contract was rejected, or the Client demanded compensation for damages due to non-fulfillment of the obligations of the procurement contract with the state or local budget or the Client's funds;

56.5.4.the court or other competent authority has determined that a mistake has been made in professional activities in the performance of obligations under the procurement contract;

56.5.5.if the contractor who concluded a contract as specified in paragraph 10.9 of this Law or with margin of preference treatment failed to properly participate the employee with disabilities in the performance of the contractual obligations, or failed to fulfill the conditions for margin of preference treatment.

56.6.In addition to the general powers specified in paragraph 10.9 of the Law on State Monitoring and Inspection, the State Inspector shall exercise the following powers:

56.6.1.in the case specified in paragraph 56.5 of this Law, to make a proposal to register the participant in the list of entities whose right to participate in the tender selection is restricted;

56.6.2.to make a conclusion on the elimination of violations of this Law and the imposition of liability, and submit it to the competent authorities;

56.6.3.to deliver to the Client recommendations for correcting errors in the performance of contractual obligations.

56.7.Within 15 working days after delivery of the conclusions and recommendations specified in sub-paragraphs 56.6.2 and 56.6.3 of this Law to the relevant authorities and organizations, the response in regards with implementation of the conclusions and recommendations shall be submitted to the state inspector.

56.8.Within 15 working days after receiving the proposal of the state inspector, the Cabinet member in charge of finance and budget issues shall issue a decision to register the business operators in the list of persons restricted from participating in tender selection for a period of three years.

56.9.The state central administrative body in charge of finance and budget issues shall maintain a list of persons whose right to participate in tenders has been restricted and inform the public.

56.10.If the concerned person considers the state inspector's decision to be unjustified, it may submit a complaint to the general state inspector of procurement within 10 working days.

56.11.The General State Inspector of Procurement shall review and resolve complaints specified in paragraph 56.10 of this Law within 20 working days.

56.12.The state inspector may start the monitoring and inspection within three years after the conditions specified in paragraph 56.5 of this Law have been created.

56.13.If the monitoring and inspection is delayed for the purpose of examination and determination of issues related to the monitoring and inspection started within the period specified in paragraph 56.12 of this Law, the period shall be considered interrupted.

CHAPTER SEVEN

FILING A COMPLAINT AND ITS SETTLEMENT

Article 57.Filing Complaints to Client and its Settlement

57.1.In the event interested party, participant believes the Client is in breach of its tender selection related duties specified in the Law, it can file a complaint in writing to the Client within five working days since becoming aware of such breach along with evidence documents enclosed.

57.2.Client shall upload the content of complaint in the electronic system without mentioning the name of the complainant within three working days after receipt of the complaint.

57.3.Within five working days from receipt of the complaint, the Client shall make a decision where it shall state the grounds and measures to be taken further.

57.4.The Client shall not make any decision specified in paragraph 28.1 of this Law during the complaint settlement period unless the Client decided it is necessary to continue tender selection without interruption in order to protect public interest.

57.5.If a decision has been made to proceed tender selection process pursuant to the paragraph 57.4 of this Law, the complainant shall be officially notified of its grounds.

57.6.If the Client makes changes to the tender documents due to the settlement process of complaints, the deadline for accepting tenders shall be extended in accordance with paragraph 20.6 of this Law.

57.7.Client shall not accept complaints after the decisions specified in paragraph 28.1 of this Law have been made.  

Article 58.Filing a complaint to state administrative body in charge of competition issues  

58.1.The state administrative body in charge of competition issues shall receive a complaint with justifiable grounds of the interested party in regards with the restriction of competition at the tender documents at least five working days before the opening of the tender in case of open selection tender, and in case of other methods of tender selection, at least three working days, respectively.

58.2.The state administrative body in charge of competition issues shall make a decision to assign the Client not to make any action and/or to suspend the Client's decision until the complaint is settled.

58.3.The state administrative body in charge of competition issues shall refuse to accept complaints in regards with matter that have already been submitted and responded.

58.4.The state administrative body in charge of competition issues shall review and resolve the complaint within ten working days after receiving the complaint within the framework of the grounds stated in the complaint.

58.5.Having reviewed the complaint, if it is considered that the Client is in breach of this Law, the state administrative body in charge of competition issues shall make the following decisions:

58.5.1.to annul or modify whole or part of the tender documents and decisions 58.5.2.to assign to continue the tender selection after remedying the breach.

58.6.The state administrative body in charge of competition issues shall publish information on the complaint settlement proceedings in the electronic system per a month.

Article 59.Filing a complaint to state central administrative body in charge of finance and budget issues and its settlement  

59.1.The state central administrative body in charge of finance and budget issues shall receive a complaint on disagreeing with the decision specified in paragraph 28.1 of this Law made by the Client within five working days after issuance of the decision, and a complaint on not settling the complaint within the period specified in the Law within five working days after expiration of the period specified in the paragraph 57.3 of this Law, respectively.

59.2.A right of the participant to file a complaint within five working days after being aware of the decision of the Client who signed the contract without observing the minimum period for concluding the contract based on the grounds specified in paragraph 30.2 of this Law shall not be restricted.

59.3.Complaints to be filed to the state central administrative body in charge of finance and budget issues shall be justifiable.

59.4.The tender guarantee shall be valid during the settlement proceeding of the complaint filed by the participant participating in the tender selection requires the tender guarantee.

59.5.The state central administrative body in charge of finance and budget issues shall refuse to accept and return complaints that do not meet the requirements specified in paragraphs 59.3 and 59.4 of this Law, or on the matter that have already been resolved and responded to.

59.6.The state central administrative body in charge of finance and budget issues shall make a decision to assign the Client not to make any actions and/or to suspend the Client's decision until the complaint is settled.

59.7.The period specified in paragraph 24.1 of this Law shall be suspended from the time when the Client is assigned not to make any actions and/or the execution of the decision is suspended until the complaint is settled.

59.8.The state central administrative body in charge of finance and budget issues shall review and settle the complaint within ten working days based on the documents and information uploaded in the electronic system related to the tender selection, as well as the personal case of the tender selection within the framework of the grounds stated in the complaint.

59.9.The Client shall be responsible for accurately and completely uploading the documents and information necessary for complaint settling in the electronic system.

59.10.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 finance and budget matters shall make the following decisions:

59.10.1.to annul or modify whole or part of the tender selection or Client's decision;

59.10.2.to assign to continue the tender selection after remedying the breach;

59.10.3.to indicate the legal provisions to be applied to the given matter.

59.11.If the state central administrative body in charge of finance and budget issues cannot settle the complaint for reasons similar to those specified in sub-paragraph 65.1.3 of the Law on Administrative Procedure, the complaint may be rejected and returned.

59.12.The state central administrative body in charge of finance and budget issues shall publish the information on complaint settling proceedings in the electronic system per a month.

Article 60.Filing a Complaint to Court and its settlement

60.1.If an interested party or participant does not agree with the decision of the complaint settling organization or the state inspector general of procurement, it may file a complaint to the court.

60.2.Complaints filed after the conclusion of the procurement agreement shall be submitted to the court, unless the state central administrative body in charge of finance and budget matters settles complaints in advance as specified in paragraph 59.2 of this Law.

60.3.The decision of the Client and the enforcement of the procurement agreement may be suspended in accordance with the Law on Administrative Procedure, unless the court deems it to be clearly harmful to the public interest.

60.4.Disputes related to the performance of contractual obligations, except for the cancellation of procurement agreements which belong to the administrative contracts based on the General Administrative Law, shall be resolved by the civil court.

CHAPTER EIGHT

MISCELLANEOUS

Article 61.Liabilities to be imposed on the violators of the Law

61.1.If the action by an official who breached the legislation on procurement of goods, works and services with state and local funds does not have any criminal characteristics, the disciplinary sanctions specified in the paragraph 48.1 of the Law on Civil services shall be imposed on the faulty official, as well as the disciplinary sanctions specified in the paragraph 123.2 of the Law on Labor shall be imposed on the employee with a lobar contract based on the characteristics of the violations, respectively. 

61.2.The imposition of disciplinary sanctions on the relevant person as specified in paragraph 61.1 of this Law shall not be a ground to exempt him/her from imposition of liability and/or compensation for damages according to this Law, the Law on Regulation of Public and Private Interests and Prevention of Conflict of Interest in Public Service, and other laws.

61.3.If the Client does not make a decision within the time period specified in paragraphs 24.1 and 24.2 of this Law, the actual expenses related to the participant's participation in the tender selection shall be paid by the faulty employee or official.

61.4.If the competent authority or the court determines that the employee or official specified in paragraph 52.1 of this Law has violated the duties specified in Article 52 of this Law, the certificate of a qualified procurement employee shall be revoked, regardless of whether he/she is held liable under the Criminal Code or the Law on Violations.

Article 62.Entry into force of this Law

62.1.This Law shall enter into force on December 01, 2023.  

THE CHAIRMAN OF THE STATE GREAT KHURAL OF MONGOLIA ZANDANSHATAR.G