Annual Report 2017
Efficiency improvement
and sustainable development
Annual Report 2017
Procurement Management
TVEL Fuel Company supports, respects and protects basic human rights and builds its external business relationship on the principles of honesty, integrity and openness

More than 95% of competitive procurement procedures are carried out through on-line sales platforms. This promotes openness and transparency of the Company, and saves labor and financial resources.

Procurement procedures are implemented using the following electronic platforms: United Electronic Market Place JSC, Fabrikant LLC and Economics Development Center JSC.

Total amount saved by the subsidiaries of the Company in 2017 through the procurement procedures on an open competitive basis made RUB 2.7 billion.

Key documents that regulate procurement and set TVEL Fuel Company supplier and contractors selection criteria:

  • Federal Law No. 223-FZ "On Procurement of Goods and Services by Particular Types of Legal Entities";
  • ROSATOM Uniform Industrial Procurement Standard;
  • "TVEL JSC Corporate Standard "Procurement Process"

Table 13

Key indicators of procurement activities of TVEL Fuel Company

Indicator

2015

2016

2017 (plan)

2017 (actual)

2018 (plan)

Share of procurement through public competitive procedures under the UIPS, %

97

97

95

97

95

Total amount of procurement of TVEL FC, RUB mln

130,632

100,988

60,370

95,261

103,206

Total amount saved by subsidiaries of TVEL FC from procurement through public competitive procedures on an open competitive basis, RUB mln

2,852

2,850

minimum 2,000

2,719

minimum 2,000

All planned indicators for 2017 were achieved. Dynamics in the above figures indicates the enhanced efficiency of procurement management and transparency of procedures.

The largest procurement groups are the products and services purchased from the companies of nuclear industry, power supply. These are the largest categories in procurement from sole supplier.

Some of the key suppliers and contractors of the Company enjoy monopolist position on the market. Under the provisions of UIPS (Uniform Industrial Procurement Standard of ROSATOM State Corporation) no tender is provided for such contractors (natural monopoly entities), only according to the "Procurement from Sole Supplier" procedure.

Basic groups of competitive procedures:

  • materials and equipment;
  • construction and installation works;
  • manufacture of components;
  • repair and maintenance of equipment

Pursuant to provisions of the Uniform Industrial Procurement Standard of ROSATOM the Company may not provide any preferences to the suppliers on a territorial basis. The exception is only envisaged for outsourcing companies founded during the restructuring of TVEL Fuel Company. UIPS guarantees to such companies certain volumes of orders over a period of five years from the date of incorporation in the following way: for the first year - 90%, second year - 75%, third year - 60%, fourth year - 40%, fifth year - 25% of total annual demand of the customer.

Local suppliers participate in competitive procedures on a common basis, and no specific approaches to local suppliers are applied. The Company maintains no special records for such suppliers.

In planning and implementation of procurement activity the enterprises of TVEL Fuel Company afforded priority rights to small and midsized businesses in accordance with the Federal Law No.223-FZ "On Procurement of Goods and Services by Particular Types of Legal Entities", and in accordance with the Resolution of the Government of the Russian Federation d/d December 11, 2014 No.1352 "Concerning special aspects of participation of small and midsized business in procurement of products, works, services by particular legal entities". The share of procurement from small and midsized business related to certain enterprises of TVEL Fuel Company makes from 19.34% to 78.44%, when the regulatory level is 18%.

In the reporting year, the Company initiated works within the three-year program "Transformation of the MTO process in the Fuel Company", which made it possible to achieve the following indicators in 2017:

Diagram 3

Procurement structure according to cost criterion, %

  • reduced warehouse stocks by 26% relative to the fact of 2016;
  • conducted 86 audits of manufacturers of critical products;
  • 90% of goods and 60% of works and services are procured under the category management;
  • The economic effect of procurement under the category management in 2017 amounted to RUB 1.5 billion.
Since September 2012 the Arbitration Committee operates in TVEL JSC; the Arbitration Committee is vested with authority to consider complaints against actions (or omission thereof) of any customer, competent authority, procurement manager and/or procurement commission during the implementation of procurement procedures on behalf of organizations of TVEL FC management system

In 2017, the Arbitration Committee of TVEL JSC received 129 complaints related to procurement activities of the Fuel Division. 14 complaints were admitted as reasonable (partially reasonable).

In 2017, the total volume of warehouse material assets at the enterprises of TVEL Fuel Company was reduced by 26% relative to the fact of 2016.

Suppliers and contractors are evaluated using the criteria of labor practices, impact on society and environment subject to availability of all permits and licenses set by the law. Such criteria also include availability of management system certificates as evaluative ones i.e. forming the final evaluation for a member of procurement procedure. The Company does not perform any evaluation study of actual and potential impacts in the supply chain; all concluded contracts are checked for compliance with the Russian legislation.

Diagram 4

Complaints received by the Arbitration Committee of TVEL JSC in 2017, ea