Rosatom State Atomic Energy Corporation

Nuclear infrastructure development

for the elements of Procurement:

Rosatom method and track record

07.11.2017

Dr. Yulia Chernyakhovskaya

Overview

1.Staged Approach to Local Industry Involvement

2. IAEA Nuclear Infrastructure Concept and Rosatom practice

3.Rosatom Procurement System

2

Staged Approach to Local Industry Involvement

3

Local manufacturing & engineering of

heavy and specialized equipment

Engineering services and other balance

of plant equipment

Non-critical parts and ancillary

equipment

Full or partial responsibility for

the civil works and erection

Local labor, construction

materials, consumables,

tools and materials at site,

site infrastructure

ROSATOM SCOPE

OF SUPPLY

EXPANSION OF LOCAL INDUSTRY INVOLVEMENT

LEVEL OF LOCALIZATION

DEPENDS ON

THE LOCAL INDUSTRY

TECHNICAL QUALIFICATION,

PROJECT FINANCING

MODEL, PERFORMANCE OF

LOCAL SUPPLIERS, AND

APPLICABLE

CERTIFICATIONS.

ROSATOM IS READY FOR PARTNERSHIP

WITH LOCAL COMPANIES TO ENSURE EFFICIENT

NPP PROJECT IMPLEMENTATION

National Industry Participation Principles

4

• 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

• 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

• 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

• Confidentiality of data transfer and fulfilment of the export control

regulations

• Royalty / technical collaboration fees payable when applicable

FINANCING

SOURCE

FOR LOCAL

SCOPE

ECONOMIC

COMPETITIVENESS

TECHNICAL

CAPABILITY

PROTECTION

OF INTELLECTUAL

PROPERTY

RIGHTS

Overview

1.Staged Approach to Local Industry Involvement

2. IAEA Nuclear Infrastructure Concept and Rosatom practice

3.Rosatom Procurement System

5

NI development for NPP/RR+ Project*: a system

engineering approach by Rosatom

6

NI

NPP/RR PROJECT

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

NI

DEVELOPMENT

SERVICES

• 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

• National NI team

establishment and fostering

for the NPP/RR project life

cycle

* Research reactor + laboratory complex

NB

4. Feasibility study • Testing the concept and

action plan

7

Rosatom provides services for 21 NI elements for a NPP/RR project

LEVEL 3. Rosatom for NPP /

RR + NI:

• Competences development

• Policy advise

• Information & knowledge

management

Integrated in a Roadmap of NI

development

NPP: Bulgaria, Hungary, Germany, Slovakia, Ukraine, Finland,

Czech Republic

Research reactor: Hungary, Vietnam, Kazakhstan, Libya,

Poland*, Uzbekistan, Ukraine, Czech Republic

India, Iran, China

Countries in Africa, Latin America, Asia, the Middle East

Russian references since 1950ies (including

transfer of technology and knowledge):

Since 1990-ies:

Potential:

LEVEL 1. Nuclear

infrastructure practice

LEVEL 2. The IAEA

concept (phased, comprehensive,

integrated)

National

Position

Nuclear

Safety

Management Regulatory

Framework

Funding and

Financing

Stakeholder

involvement Site and

supporting

facilities

Environmental

protection

Industrial

involvement

Radioactive

waste

Emergency

planning

Security and

physical

protection

Nuclear

fuel

cycle

Procurement Metrology

Energy

planning

Electric grid Legislative

Framework

Safeguards Radiation

protection

Human resources

development

Graded service approach for nuclear

infrastructure development

8

№ 18. Industrial

involvement

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.

Objectives of NI elements:

IAEA Nuclear Infrastructure Concept

№ 19. Procurement

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.

Creation of a personnel development system authorized to perform specialized

functions in organizations involved in the implementation of the nuclear power

development program. № 10. Human resource

development

Establishment of a regulatory legal system for the safe and effective

implementation of a nuclear program.

№ 5. Legal framework

№ 7. Regulatory

framework

Creating duties and responsibilities for various organization necessary for the

successful development of nuclear energy program. It includes the legal base

and regulatory framework.

Overview

1.Staged Approach to Local Industry Involvement

2. IAEA Nuclear Infrastructure Concept and Rosatom practice

3.Rosatom Procurement System

9

10

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»

Branch’s Unified Procurement

Standard of Rosatom

(Global Procurement Procedure

of the Russian State Atomic

Energy Corporation Rosatom)

Russian Federal Law No. 135-FZ

«On Protection of Competition».

Antitrust 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)

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”

Rosatom procurement system is based on the international

legislation and regulated by the Russian Law

Procurement Policies and Rules for

projects financed by the European Bank for

Reconstruction and Development

11

Statistics: Rosatom procurement system

99% of

competitive

biddings are

published on

e-trading

platforms

400 organizations

worldwide. One

rule for all:

Rosatom

Procurement

Standard

33.000 public

notices every

year. Among them,

1.500 for abroad

projects

12

Fulfillment of Rosatom’s Procurement Plan 2017

6 122 MIO

7 301 MIO

Competitive biddings planned in 2017, USD

International

projects

32 000 USD 13 423 MIO

3 225 MIO

To competitively procure

till end 2017, USD

(International projects)

TOTAL Competitive

biddings

Domestic

projects

13

Increase

efficiency

Minimize

expenses

Rosatom procurement system:

Main objectives

Transparent system of regulated

procurement procedures

Strict quality & security requirements

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

14

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 www.zakupki.gov.ru (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 (www.b2b-center.ru, www.roseltorg.ru, www.fabrikant.ru) 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

• 10 – 20 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.

Procurement process

15

Selection Criteria in a Competitive Bidding

Legal capacity

Financial stability

Disclosure of beneficiaries

Proven supply / manufacturing experience

Availability of licenses for the design

and manufacture of equipment for

NPP

External financing

Certification of quality systems

Supplier (OEM) Audit for Safety-

Critical Machinery and Equipment

16

Criteria for assessment of participants

in procurement procedures

Works and

serially produced

equipment

95% Price

5% previous supply

experience

Equipment of

1-3 safety

classes

90% Price

5% Manufacturing

experience

5% previous supply

experience

Services,

design and

survey works

75% Price

25% aggregate:

Proven experience;

Quality of technical

offer;

Business reputation;

Other criteria.

R & D, legal,

consulting, IT,

auditing services

55% Price

45% aggregate : Proven experience;

Quality of technical

offer;

Business reputation;

Other criteria

*

* The main volume of procurement for NPP

17

Rosatom procurement system

One Rule for All.

Transparency

• Unified Industry Procurement Standard;

• Official sites for publication of contract notices

www.zakupki.rosatom.ru and www.zakupki.gov.ru

• Electronic trading platforms www.b2b-center.ru, www.roseltorg.ru,

www.fabrikant.ru

• Publication of procurement notices on foreign websites

Supplier

Development

• Available training system in Russia: www.rosatom-academy.org,

www.rosatomtech.com

• Industry seminars on major projects, suppliers forums;

• Distance training program “How to become a supplier for Russian

nuclear power industry?” www.rosatom.ru - section «For suppliers»

Supply Chain

Management

Category | Commodity management:

• Consolidation of orders;

• Long-term, framework agreements;

• Price freeze and reduction via centralization and standardization of order

Control and

Responsibility

• Rosatom Central Arbitration Committee;

• Antifraud and antitrust hotline

(8-800-100-07-07, e-mail: 707@rosatom.ru);

• Consistent corrective actions and preventive measures

Quality

Management

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

18

Tendering Authority. Contract Authority

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. http://nppequipment.com/

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.

http://atomkomplekt.org/

19

E-catalogue

Customer

- Cost - Delivery time

- Manufacturers

Equipment manufacturers

- Specifications - Certificates,

- Licenses

Nuclear Plant Operator

- Operations manual - Drawings, instructions

- Specs, so forth

Engineering Company

- Specifications - Drawings and 3D-

models -Certificates, Licenses -Financial documents

E-catalog

is part of the core of

innovative technologies

E-catalogue functional applications

The introductory video about Catalogue can be found at http://www.eoncom.niaep.ru/

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Nuclear infrastructure

Site

Electrical Grid

Management

RWM Funding

and Financing

Industrial

Involvement

Stakeholder

Involvement

Nuclear Safety

Legal

Framework

Radiation

protection

National

Nuclear

Program

Nuclear

Infrastructure

Safeguards

Regulatory

Framework

National

position

Nuclear security

Procurement

Environmental

protection

Emergency

planning

Nuclear fuel cycle

Public Acceptance

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

www.researchgate.net/profile/Yulia_Chernyakhovskaya2

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Training courses to support NI element

“Industrial involvement”

Examples of training modules

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

23

Training courses to support NI element

“Procurement”

Training courses for nuclear infrastructure personnel

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