Tenders with advance payment: when is it possible and how to establish

How the Civil Code regulates the issue of advance payment

Full or partial advance payment is allowed under 44-FZ in 2021 (Articles 487, 711, 781 of the Civil Code). Customers transfer funds in full before the supplier fulfills the obligations stipulated by the government contract.

IMPORTANT!

Full advance is 100% prepayment according to 44-FZ before the start of execution of the agreement. And partial provides that part of the money is transferred before the fulfillment of obligations, and the rest - upon fulfillment of obligations.

When prepayment is not possible

There are groups of goods for which advance payment cannot be applied. Their list is given in Order of the Government of the Russian Federation No. 21-r dated January 16, 2021. It includes goods according to 22 OKPD2 items, for example, some types of transport, clothing, computers, etc.

In addition, Government Order No. 21-r contains a list of services for which advance payment is prohibited. It includes repair services for certain types of machinery and equipment, as well as furniture and household items.

How 44-FZ regulates advances

The law on the contract system does not provide special rules for advances; preliminary advances under contracts in 2021 are a right, not an obligation, of the government customer. He himself determines whether to establish an advance payment or not. The feasibility of the procurement object and budget restrictions are taken into account.

The size of the contract performance security (CEC) depends on the amount of the advance. It must be increased to the amount of the prepayment when the amount of security determined by 44-FZ turned out to be less than the prepayment established by the customer. This rule is spelled out in Part 6 of Art. 96 of the Law on the Contract System.

Let us pay attention to the connection between anti-dumping measures and the amount of the advance payment. If the amount of security for the execution of a government contract, increased by one and a half times, is less than the advance payment, then it is necessary to set the amount of security equal to the amount of the advance payment. This is stated in Part 1 of Art. 37 44-FZ.

The Federal Contract System does not indicate specific types of work under 44-FZ that are allowed for advance payment: if federal laws and local regulations do not prohibit advance payment for certain works or services, customers have the right to include a condition for advance payment in the government contract.

ConsultantPlus experts have developed a guide to all the conditions of a government contract. Use these instructions for free to avoid breaking the law and getting fined.

General provisions of the contract, types of prepayment (100%, 50%, etc.)

A supply agreement is a type of purchase and sale agreement, although it has significant differences from it, which we will discuss later.
The transaction is regulated by § 3 ch. 30 of the Civil Code of the Russian Federation (hereinafter referred to as the Civil Code of the Russian Federation), although general rules on purchase and sale also apply to it. The parties to the contract are the supplier and the buyer, who can be both individuals and legal entities. In this case, the supplier is always a person engaged in entrepreneurial activity (Article 506 of the Civil Code of the Russian Federation), in contrast to a purchase and sale agreement, where the seller can be any entity.

In addition, the goods transferred under the transaction in question are purchased only for business, that is, not for personal purposes (Article 506 of the Civil Code of the Russian Federation), in contrast to ordinary purchase and sale, when an item is purchased for any legal needs.

The prepayment condition means that the buyer transfers money before the goods are transferred. This position is most beneficial to the supplier, because:

• preliminary calculation reduces its risks;
• he can use the advance payment to purchase the supplied products.

In the case of prepayment, the buyer becomes a less protected party, since the supplier may violate the terms of the contract, which threatens the loss of both time and money. Prepayment makes sense for the acquiring party only if we are talking about a product whose price is unstable and can rise quickly.

If the condition for advance payment is not established, the buyer has the right to pay for the products only after receiving them.

Advance payment happens:

• full (100%), when the entire amount under the contract is paid before delivery of the products;

ConsultantPlus experts explained in detail what the supplier must check in a supply agreement with 100% prepayment. Get free demo access to K+ and go to the Ready Solution. It's free.

• partial or mixed (usually with an advance payment of 50%), when the second part of the payment is transferred after receipt of the goods.

Another option for such a transaction is an agreement with provisions for the sale of goods on credit (Article 823 of the Civil Code of the Russian Federation). Moreover, credit relations concern only that part of the amount that is paid after the transfer of the thing.

What restrictions are there for an advance?

For organizations that receive federal budget funds, restrictions are provided within the established sizes. The conditions were put into effect by Government Decree No. 1496 dated December 9, 2017 (the so-called Budget Execution Regulations). It spells out the grounds for advances in budgetary institutions:

• not more than 30% of the NMCC - for the supply of goods, performance of work and provision of services, including construction work (reconstruction, major repairs) of capital construction projects of state property of the Russian Federation (paragraph 2, paragraph “a”, paragraph 18 of the Regulations on budget execution);
• from 30 to 80% of the NMCC - for research and development work aimed at import substitution of technological products. In this case, the contract (except for contracts whose execution is subject to bank support) must include a provision on treasury support for advance payments. And the Ministry of Industry and Trade confirms in its conclusion that the contract meets the goals of import substitution;
• from 30 to 90% of the NMCC (with the exception of government contracts, which are specified in the previous paragraph) when including in them and in the contracts (agreements) that are concluded as part of their execution, conditions for treasury support of advance payments;
• up to 100% of the NMCC - in contracts for the provision of communication services, the purchase of air tickets, compulsory insurance of civil liability of vehicle owners;
• from 30 to 70% of NMCC over 600 million rubles - for construction, reconstruction, and major repairs. The contract stipulates that subsequent advance payments are made after confirmation of delivery of goods in the amount of the first advance payment. Such confirmation is carried out in order to authorize the payment of monetary obligations within the framework of Order of the Ministry of Finance No. 213n dated November 17, 2016.

IMPORTANT!

In 2021, new rules for working with advances under 44-FZ are in effect: the maximum amount of advance payment for government contracts has been increased to 50% (RF RF No. 39 of 01/23/2021). This is a temporary measure that was adopted in 2020 and extended until 2021.

According to the new resolution, 100% advance payment in budgetary institutions in 2021 is not allowed, but an advance payment of 50% (inclusive) of the agreement price is possible. If the customer enters into a government contract in order to meet federal needs and requirements, he has the right to set an advance payment of up to 50% of the cost of goods, works and services.

50% advance payment is also allowed for contracts for construction, reconstruction and major repairs of state or municipal property, if the purchase is financed from targeted federal interbudgetary transfers. And with treasury support, the amount of prepayment, if necessary, is increased to 90% of the contract price. Until December 31, 2021, the 30 percent advance payment under 44-FZ does not apply.

When agreeing on advance payment, the customer stipulates that the amount of subsequent payment under the contract does not exceed:

• the difference between the cost of goods actually delivered and the total amount of the advance paid earlier (for a government contract that does not contain execution stages, or in which the stages are carried out sequentially);
• the difference between the cost of goods actually delivered and the amount calculated in the manner specified in paragraph. 1 pp. “a” clause 18 of the Regulations on Budget Execution (for a government contract containing execution stages, the deadlines for which completely or partially coincide).

Advantages and disadvantages

Prepayment is an undeniable advantage for performers. For some of them, the availability of an advance payment may become a determining factor when searching for procurement, since the advance payment often becomes the starting capital that is used by the supplier to fulfill the contract. In addition, the advance allows the contractor to prepare for the work without spending personal funds, find a subcontractor, organize the supply of necessary materials, and the like. Astral.Supplier will help you find a subcontract. The service will also allow you to find profitable offers (including by criteria such as advance payment), collect and analyze information about the customer.

However, there is a high risk of non-fulfillment of the contract. Thus, having received an advance payment in full, an unscrupulous contractor may not fulfill contractual obligations. Since the work or goods have been paid in full, the contractor may violate the terms of the contract, thus avoiding responsibility. The legislation provides for various measures for violators: penalties, fines, inclusion in the register of unscrupulous suppliers, etc.

When an advance cannot be established

For organizations that receive federal budget funds, advances are not provided for the supply of certain goods and services according to the list established by the government (Government Order No. 21-r dated January 16, 2018). The list includes:

• blankets, carpets;
• skirts, dressing gowns, blouses;
• detergents and laundry detergents;
• cars;
• some services;
• other.

IMPORTANT!

If the subject of the contract is goods, works or services (GWS) from Order No. 21-r and GWS not included in this list, then an advance cannot be established (clause 20 of the Budget Execution Regulations).

Recipients of federal budget funds, when concluding agreements or government contracts, which are specified in clauses “a” and “b” of clause 18, which provide for separate stages and payment, do not include in such contracts a condition for the payment of an advance payment at the last stage of execution of the agreement or government contract, unless otherwise established in the Regulations or another act of the Government (clause 19 of the Regulations on budget execution).

Common transaction payment options

One of the key terms of the contract is the procedure for settlements under the contract, for which the parties are required to agree on how and in what manner payments and settlements are made for the shipment of products, performance of work or services.

Partners agree on the form, currency, timing and frequency of payment under the contract. For example, the most common form is non-cash payments using payment orders. The payment deadline is set on an individual basis. Most of the payments are made in Russian rubles.

There are several options for settlements between counterparties. Let us remind you what forms of payment there are under the contract in 2021:

1. Advance payment. The terms of the contract provide for the payment of an advance. The amount of the advance payment is determined by the parties to the transaction. A common option is to transfer an advance in the amount of 30% of the contract amount.
2. Prepaid system. The system is similar to advance payment, but provides for up to 100% payment of the contract value in advance. That is, the customer first pays for the transaction, and only then the contractor fulfills the conditions.
3. Postpay. The payment method is completely opposite to the prepaid system. In this case, the transaction is paid by the customer after 100% fulfillment of the terms of the contract. For example, only after the goods have been shipped to the customer’s warehouse.
4. Installment and deferment. The actual payment for goods under the supply agreement is distributed over time. The payment schedule is agreed upon by the parties separately. Installment or deferred payment under a contract can be free (interest-free) or provide for the accrual of additional interest.

It is important for the parties to take into account the specifics and rules of how to specify payment terms in the contract; incorrect wording or controversial interpretation will lead to additional risks of debt formation.

Responsibility

If the customer decides that he is paying for the contract in advance, then he will have to specify this payment procedure in the draft contract. This is enshrined in Part 13 of Art. 34 44-FZ. It is indicated that it is necessary to determine the specific amount of the advance payment and the period for its payment. A current example of how to write down an advance in a contract under 44-FZ in 2021:

Payment under this contract is made by transferring funds to the supplier’s bank account in the following order:

• an amount of ____% of the total cost of the goods, which is ________ (___________) rubles ____ kopecks, - within ____ days from the date of conclusion of this contract;
• an amount of ___% of the total cost of the goods, which is ________ (___________) rubles ____ kopecks, - within ____ days from the date of delivery of the goods.

In Art. 34 44-FZ indicates how to calculate an advance for 1 month under 44-FZ - proportionally, as a percentage of the price of the government contract for each month (stage) of work (Part 13 of Article 34 44-FZ). The advance is paid in stages, in accordance with the amount specified in the agreement (Letter of the Ministry of Finance of Russia No. 24-03-07/3717 dated January 23, 2020).

If there are no advance conditions, this is recognized as an administrative offense under Part 4.2 of Art. 7. 30 Code of Administrative Offences. For approval of documentation that violates the requirements of contract legislation, a fine of 3,000 rubles is provided.

More serious punishment awaits those who prescribed an advance in the contract and did not pay it. Such actions are qualified under Art. 7.32.5 Code of Administrative Offences. For the first violation, you will be fined from 30,000 to 50,000 rubles. In case of repeated violation, you will be disqualified for a period of one to two years.

How to register an actual calculation

In practice, payment for work performed and payment for goods under a supply contract are not often included in the contract; this option carries great risks for the contractor.

It is recommended to include the following points in the agreement.

Specific payment period. The date is not necessary; it is possible to link the period to an inevitable event (acceptance of work, services, conclusion of an agreement).

Example:

Penalties and penalties for late payments. Usually a percentage is set for each day, the amount must correspond to practice, otherwise it may be reduced in court. It is not profitable for the customer to include this item.

Explanations on the topic

About the author of this article

Dmitry Sidaev Higher and specialized education in procurement: KhSUEP, diploma with honors in the specialty “Jurisprudence” and GAPM named after. N.P. Pastukhova, diploma with honors in the program “Procurement Management”. Author and ideological inspirer of the projects “GoodWin Project: Tenders made simple” and “Antidote 44-FZ: a cure for headaches in procurement.” Trains in procurement under 44-FZ, advises suppliers and customers, works as a guest manager of the tender department. Invited expert in many projects on public procurement.

Other publications by the author

• 2021.12.27223-FZ Non-competitive procurement from SMEs under 223-FZ will be carried out in the form of an electronic store
• 2021.12.27EISNew registration procedure in the EIS for customers
• 2021.12.23223-FZMemo to government purchasers: what needs to be done in December under 44-FZ and 223-FZ
• 2021.12.20 State Defense Order Changed the provision on the approximate terms of contracts for state defense orders

Maximum advance amount under 223-FZ

Since there are no clear rules for procurement under 223-FZ, the customer determines the conditions and procedure for the tender, including the conditions for advance payment of the contract.

In the procurement documentation, the customer can record a condition according to which payment for the supply of goods or performance of work will be made at a time in full at the moment when the supplier fulfills part of the contractual obligations.

According to Federal Law No. 223-FZ, the customer independently sets the amount of advance payment and prescribes it in the procurement regulations. Thus, the maximum limit for the advance amount in most cases is not limited in any way - if the customer has indicated that an advance in the amount of 100% of the payment is allowed, he has the right to set this amount for the purchase. However, there are exceptions.