Nuclear infrastructure development for the elements of Procurement: Rosatom method and track record
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1 Rosatom State Atomic Energy Corporation Nuclear infrastructure development for the elements of Procurement: Rosatom method and track record Dr. Yulia Chernyakhovskaya
2 Overview 1. Staged Approach to Local Industry Involvement 2. IAEA Nuclear Infrastructure Concept and Rosatom practice 3. Rosatom Procurement System 2
3 Staged Approach to Local Industry Involvement ROSATOM IS READY FOR PARTNERSHIP WITH LOCAL COMPANIES TO ENSURE EFFICIENT NPP PROJECT IMPLEMENTATION Local manufacturing & engineering of heavy and specialized equipment Engineering services and other balance of plant equipment Non-critical parts and ancillary equipment LEVEL OF LOCALIZATION DEPENDS ON THE LOCAL INDUSTRY TECHNICAL QUALIFICATION, PROJECT FINANCING MODEL, PERFORMANCE OF LOCAL SUPPLIERS, AND APPLICABLE CERTIFICATIONS. ROSATOM SCOPE OF SUPPLY Full or partial responsibility for the civil works and erection Local labor, construction materials, consumables, tools and materials at site, site infrastructure EXPANSION OF LOCAL INDUSTRY INVOLVEMENT 3
4 National Industry Participation Principles FINANCING SOURCE FOR LOCAL SCOPE The higher level of local financing results in the higher level of local participation Supplier credits provided by local companies significantly increase benefits from localization ECONOMIC COMPETITIVENESS Local suppliers prices need to be competitive to ensure economic benefit of both the Owner and the Vendor The economy of scale effect achieved via serial NPP construction naturally increases level of localization TECHNICAL CAPABILITY Local suppliers should be technically qualified to ensure safety, quality, sufficient human resources, manufacturing capacity and on-time delivery Readiness to comply with the Vendor country norms and standards PROTECTION OF INTELLECTUAL PROPERTY RIGHTS Confidentiality of data transfer and fulfilment of the export control regulations Royalty / technical collaboration fees payable when applicable 4
5 Overview 1. Staged Approach to Local Industry Involvement 2. IAEA Nuclear Infrastructure Concept and Rosatom practice 3. Rosatom Procurement System 5
6 NI development for NPP/RR+ Project*: a system engineering approach by Rosatom NB SE Interdisciplinary approach governing the total technical and managerial effort required to transform a set of customer needs, expectations, and constraints into a solution; to support that solution throughout its life. 1. Conceptual design of the NI 2. Requirements engineering for NI 3. System simulation of the NI 5. Organization of global collaboration of distributed teams in real time Concept of NPP/RR+ and NI on the basis of 1.Analysis of a functional value for the customer and stakeholders; 2.NI model, risk matrix Requirements definition and analysis, management and implementation Modeling to overcome collisions and hindrances 4. Feasibility study Testing the concept and action plan National NI team establishment and fostering for the NPP/RR project life cycle NI DEVELOPMENT SERVICES NI NPP/RR PROJECT * Research reactor + laboratory complex 6
7 Rosatom provides services for 21 NI elements for a NPP/RR project LEVEL 1. Nuclear infrastructure practice LEVEL 2. The IAEA concept (phased, comprehensive, integrated) Graded service approach for nuclear infrastructure development Russian references since 1950ies (including transfer of technology and knowledge): NPP: Bulgaria, Hungary, Germany, Slovakia, Ukraine, Finland, Czech Republic Research reactor: Hungary, Vietnam, Kazakhstan, Libya, Poland*, Uzbekistan, Ukraine, Czech Republic Since 1990-ies: India, Iran, China Potential: Countries in Africa, Latin America, Asia, the Middle East LEVEL 3. Rosatom for NPP / RR + NI: Competences development Policy advise Regulatory Framework National Position Nuclear Safety Management Funding and Financing Radioactive waste Nuclear fuel cycle Information & knowledge management Stakeholder involvement Site and supporting facilities Environmental protection Emergency planning Security and physical protection Energy planning Industrial involvement Integrated in a Roadmap of NI development Legislative Framework Safeguards Radiation protection Electric grid Human resources development Metrology Procurement 7
8 Objectives of NI elements: IAEA Nuclear Infrastructure Concept Establishment of a regulatory legal system for the safe and effective implementation of a nuclear program. 5. Legal framework 7. Regulatory framework 10. Human resource development 18. Industrial involvement 19. Procurement Creating duties and responsibilities for various organization necessary for the successful development of nuclear energy program. It includes the legal base and regulatory framework. Creation of a personnel development system authorized to perform specialized functions in organizations involved in the implementation of the nuclear power development program. Involvement of customer s national industry in the process of construction, operation and maintenance of nuclear power plants through the production and supply of equipment, components, goods and services, as well as construction of civil engineering facilities. Development of a requirements system for goods and services supplied by national suppliers and their certification and attestation, as well as selection procedures for the implementation of the project for the construction of an object for the use of nuclear energy in the framework of the nuclear power program. 8
9 Overview 1. Staged Approach to Local Industry Involvement 2. IAEA Nuclear Infrastructure Concept and Rosatom practice 3. Rosatom Procurement System 9
10 Rosatom procurement system is based on the international legislation and regulated by the Russian Law UNCITRAL Model Law on Procurement of Goods, Construction and Services with Guide to Enactment WTO basic principles (General Agreement on Tariffs and Trade, GATT) Procurement Policies and Rules for projects financed by the European Bank for Reconstruction and Development Russian Federal Law No. 44-FZ «On the Contractual System in the Area of Purchasing Goods, Works and Services for State and Municipal Needs» Russian Federal Law No. 223-FZ «On the Procurement of Goods, Work and Services by Certain Types of Legal Entities» Russian Federal Law No. 135-FZ «On Protection of Competition». Antitrust law. Branch s Unified Procurement Standard of Rosatom (Global Procurement Procedure of the Russian State Atomic Energy Corporation Rosatom) Industry s Unified Procurement Standard was elaborated in cooperation with: Russian Ministry of Economic Development and Trade Russian Federal Antimonopoly Service Russian Audit Chamber Russian National Anti- Corruption Committee Anti-corruption research center Transparency International R 10
11 Statistics: Rosatom procurement system 99% of competitive biddings are published on e-trading platforms public notices every year. Among them, for abroad projects 400 organizations worldwide. One rule for all: Rosatom Procurement Standard 11
12 Fulfillment of Rosatom s Procurement Plan 2017 TOTAL Competitive biddings USD MIO Competitive biddings planned in 2017, USD MIO MIO To competitively procure till end 2017, USD (International projects) MIO International projects Domestic projects 12
13 Rosatom procurement system: Main objectives Strict quality & security requirements Increase efficiency Minimize expenses Transparent system of regulated procurement procedures Supply chain management and the establishment of fair competition These approaches are used by other Russian state corporations (Rostec*, Roskosmos**) * Russian state corporation established to promote development of hi-tech industrial products for civil and defense sectors ** Russian State Aerospace Corporation 13
14 Procurement process Annual Procurement Plan: Publication Suppliers can look up and find items in the product request range according to their interest. APP is available at zakupki.rosatom.ru and (also in English) Competitive Biddings Contract notices are published at the same addresses as above. A supplier can log in at an e-trade platform site ( and submit his application on-line. The application filed must fully comply with the requirements set forth in the procurement documentation in order to be accepted. Selection and Evaluation Stages. Appealing Possibility calendar days from public notice till quotation opening (basic procedure). Tendering Authority shall select and evaluate the applications to comply with the published criteria, and finally award the contract to the best tenderer on the principle price/quality. A participant of a competitive bidding has a right to file an appeal against a decision or negligence of tendering authority to the Rosatom Commercial Arbitration. Contract execution and performance Supplier performance is tracked by the Customers. An accepted performance (with due quality and time) may be used by the supplier as the proven previous experience in further competitive biddings of Rosatom. 14
15 Selection Criteria in a Competitive Bidding Legal capacity Proven supply / manufacturing experience Financial stability Availability of licenses for the design and manufacture of equipment for NPP Disclosure of beneficiaries Certification of quality systems External financing Supplier (OEM) Audit for Safety- Critical Machinery and Equipment 15
16 Works and serially produced equipment Criteria for assessment of participants in procurement procedures * Equipment of 1-3 safety classes Services, design and survey works R & D, legal, consulting, IT, auditing services 5% previous supply experience 5% previous supply experience 5% Manufacturing experience 25% aggregate: Proven experience; Quality of technical offer; Business reputation; Other criteria. 45% aggregate : Proven experience; Quality of technical offer; Business reputation; Other criteria 95% Price 90% Price 75% Price 55% Price * The main volume of procurement for NPP 16
17 Rosatom procurement system One Rule for All. Transparency Supplier Development Supply Chain Management Quality Management Control and Responsibility Unified Industry Procurement Standard; Official sites for publication of contract notices and Electronic trading platforms Publication of procurement notices on foreign websites Available training system in Russia: Industry seminars on major projects, suppliers forums; Distance training program How to become a supplier for Russian nuclear power industry? - section «For suppliers» Category Commodity management: Consolidation of orders; Long-term, framework agreements; Price freeze and reduction via centralization and standardization of order Supplier (OEM) Audit, inclusive: Check up of valid certificates of conformity for the manufactured products Verification of implemented ISO systems (ISO 9001; 14001; 18001) Shopfloor and logistics check up Rosatom Central Arbitration Committee; Antifraud and antitrust hotline ( , 707@rosatom.ru); Consistent corrective actions and preventive measures 17
18 Tendering Authority. Contract Authority ATOMKOMPLEKT is the Tendering Authority designated to organize and execute all the Russia s atomic industry public competitive biddings above RUR 100M (or Euro 1.47M), to award contracts based on the tenders results, and the published requirements. In its role, this organization publishes contract notices, receives bids from the participants of competitive biddings, selects and evaluates the bids, publishes the final protocols of supplier award. DEZ is the Contract Authority designated to prepare and perform procurement of long-lead equipment for the nuclear power plants in Russia and abroad, to sign supply contracts and control supplier performance. In its role, this organization defines the commodity strategy, calculates the starting (ceiling) price in a competitive bidding, concludes the contract with the chosen winner, and provides expediting and controlling functions. 18
19 E-catalogue functional applications E-catalog is part of the core of innovative technologies Customer - Cost - Delivery time - Manufacturers Engineering Company - Specifications - Drawings and 3Dmodels -Certificates, Licenses -Financial documents E-catalogue Equipment manufacturers - Specifications - Certificates, - Licenses Nuclear Plant Operator - Operations manual - Drawings, instructions - Specs, so forth The introductory video about Catalogue can be found at 19
20 Nuclear infrastructure Stakeholder Involvement Public Acceptance Radiation protection Emergency planning Nuclear Safety Environmental protection Site Management Electrical Grid Industrial Involvement Procurement National Nuclear Program Nuclear Infrastructure Legal Framework Regulatory Framework National position Nuclear fuel cycle Nuclear security Funding and Financing RWM Safeguards 20
21 Thank you for your attention! Chernyakhovskaya Yulia V. Deputy Director General for competences development of the nuclear infrastructure PhD in Economics Associate-Professor of Industrial Economics and Management Department, Faculty of Business-Informatics and Integrated Systems Management, National Research Nuclear University MEPhI Latest news at 21
22 Examples of training modules Training courses to support NI element Industrial involvement 1. International requirements on industrial involvement and quality management 2. Quality management in the ROSATOM 3. Localization of the supply of goods, works, and services 4. Industrial involvement and procurement procedures 5. Methods and practices used by designing institute JSC Atomenergoproekt (integrated into the ASE Group of companies) for industrial involvement 6. Technical tour at JSC Atomenergoremont. Maintenance, repair and reconstruction of NPP. 7. Technical regulation in the nuclear industry and practical examples of application of normative documents 22
23 Training courses for nuclear infrastructure personnel Training courses to support NI element Procurement 1. International recommendations in the field of procurement for NPP construction. Russian legal and regulatory framework in the field of procurement. Regulatory control of procurement for NPP. 2. International experience in conducting of procurement for construction of the first NPP 3. Procurement activities 4. Supply quality management Rosatom Corporate Academy training courses 1. Typification of technical requirements 2. Management of category strategies 3. Contract system in the sphere of procurement for state and municipal needs 4. Procurement activity for customers and initiators 5. Procurement operation management 6. Calculation of the agreement price and determination of the cost of production 7. How to become a supplier in the atomic industry 23
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