Supplier relationship management

Purchase activities during the reported period were regulated by the Uniform Purchase Standard[97]. The Company adheres to the following principles in building-up its purchase activities:

Principle 1:
Reasonable use of special techniques to enhance the effects of market laws in each case of purchase.
Principle 2:
Application of compulsory procedures to each purchase case over a specified value (also applicable to smaller purchases, if deemed required), that imply:
  • market analysis and planning of demand;
  • purchase transparency; equality of rights, justice, zero discrimination or unwarranted competitiveness restrictions towards participants;
  • honest and reasonable selection of the most preferable offers after thorough analysis of benefits and expenses (primarily, price and quality of produce);
  • target and efficient expenditures to acquire goods and services and measures aimed at cost-cutting;
  • unrestricted access to procedures by setting immeasurable requirements for a bidder.
Principle 3:
Systemic approach, comprising regulatory environment, prescribed setup of purchase administration and oversight, trained employees, smooth-running purchase infrastructure (information support, e-commerce means, certification, professional advisors).
Principle 4:
Compliance with corporate unity of procurement rules.
Principle 5:
Oversight of authorities and liability of purchasing employees.

The Uniform Purchase Standard describes the following purchase types: tender, auction, request for proposals, vendor quotations, ordinary purchase, small-size purchase and single-vendor purchase, vendor tender participation purchase.

During 2017 the Company conducted 3,036 purchases worth RUB 20,837,529.78 thousand (net of VAT), namely:

Purchase type Purchases Purchase value
pcs % of total purchases RUB thousand, net of VAT % of total value
Open tender 231 7.608 9,090,566.247 43.626
Open auction 11 0.362 2,211,340.00 10.612
Open request for proposals 909 29.941 2,482,809.284 11.916
Open vendor request 348 11.462 296,171.05 1.421
Vendor quotations after open competitive procedures 1012 33.333 2,917,484.496 14.001
Single-vendor purchase 264 8.695 1,993,337.611 9.567
Purchases from sellers 7 0.23 31,128.698 0.149
Open tender for the right to conclude framework agreements 34 1.119 0 0

There were 2,765 e-commerce procurement procedures worth RUB 18,813,063.467 thousand net of VAT (100% of total purchases and 100% of total value, net of single-vendor purchases and purchases from sellers).

Annual economic effect from the purchases amounted to RUB 1,253,462.85 thousand net of VAT or 5.67% of the announced price targets. Open purchases (open tender, open request for proposals, competitive dialogue, close requests for prices after open competitive dialogue) contributed 90.43% to the total purchase value.

Purchases from small-and medium-size businesses totaled RUB 14,492,976.34 thousand net of VAT (2,737 purchases) or 83.022% of the total value and 95.23% of the total purchases (comprising purchases that are not taken into account when calculating the annual total value). SME purchases amounted to RUB 12,159,505.981 thousand net of VAT (2,383 purchases) or 69.65% of the total value and 82.9% of the total purchases (comprising purchases that are not taken into account when calculating the annual total value).

The total innovation-related expenses of the Company (technologies, solutions, goods, works and services, stipulated by the Innovative Development Program), comprising designing, installation, precommissioning services and implementation, reached RUB 446.5 million in 2016 and RUB 262.6 million in 2017, the latter corresponding with the cost target - 3.55% of actual investment program costs.

The following activities are enforced to enhance economic metrics, improve and promote purchase transparency:

  • Use of electronic trading platforms ( and to conduct max portion of purchases;
  • Revisions of specifications in terms of elimination of unnecessary requirements to procurement participants;
  • Negotiations with manufacturers to invite them to apply on the ETP without intermediaries;
  • Additional requests for documents, required from participants, via ETP;
  • Meetings of a special advisory body to enforce efficiency of SME purchases, conducted by OAO IDGC of Urals;
  • Workshops for prospective contractors to explain requirements of tender documentation and filing procedure;
  • Pre-contract negotiations;
  • Repeated rebiddings.
Customer support
Full report or any of its chapters can be downloaded as pdf files on this page.
1About company
1.1Mission and strategic goals
1.2Market share
1.3Management systems
1.4Key 2017 events
2Board of directors’ progress report
2.1Letter to stockholders
2.2Production capital formation
2.2.1Network exploitation
2.2.2Electricity transmission
2.2.3Technological connection
2.2.4Development of telecommunications and IT systems
2.2.7Efficacy enhancement
2.3Financial capital formation
2.3.1Description of tariff policy
2.3.2Analysis of revenues and expenses
2.3.3Analysis of receivables and payables
2.3.4Credit ratings and bonds
3Corporate governance
3.1Corporate governance practices
3.2Corporate governance system
3.2.1General meeting of stockholders
3.2.2Board of Directors
3.2.3Board of directors’ committees
3.2.4General director and executive board
3.2.5Remuneration and compensation policy
3.3Oversight system
3.3.1Board of internal auditors
3.3.2Independent auditor
3.3.3Internal control
3.3.4Security and anti-corruption
3.3.5Risk management
3.4Investor and stockholder relations
3.4.1Shareholder capital structure
3.4.2 Shareholder rights
3.4.3The company and stock market
3.4.4Communications with market participants
3.4.6Allocation of profit
3.4.7Contact information
4.1Human resources management
4.2Customer support
4.3Supplier relationship management
4.4Public and goverment relations
4.5Company’s transactions
4.6Subsidiaries and financial investments
4.7Environment protection
5.1Prepared under Russian accounting standards
5.2Prepared under international financial reporting standards
5.3Corporate governance code compliance report
5.5Abbreviations and acronyms