Government Procurement to Factor in Operational Costs
When purchasing electrical engineering products, government organizations will compare not only the purchase price but also the costs over the operational period.
During a meeting between the President of Uzbekistan, Shavkat Mirziyoyev, and industry representatives, plans were announced to consider not only the price but also operational expenses when procuring electrical equipment. This procedure is intended to be implemented in government procurement following discussions with entrepreneurs, investors, and industry participants.
Starting from January 1, the publication of three-year procurement plans will begin. Manufacturers will be able to assess prospective demand in advance, increase production, purchase equipment, and seek investors.
Government orders have already been consolidated on a single platform. Previously, entrepreneurs had to monitor procurements across four or five different platforms.
Additionally, authorities aim to abandon the practice where the lowest price serves as the decisive factor. As an illustration, the procurement of two transformers was considered: the imported one cost 400,000 Uzbekistani soms less than the domestic one but lost 10% more electricity, while repairs during operation were four times more expensive.
The new procedure is referred to by the term 'life-cycle cost'—the total cost of ownership. When determining a supplier, in addition to the product price, electricity consumption, repairs, servicing, and other expenses during the use of the product will be taken into account.
