Anti-crisis operational summary on the Russian market of design and survey work. Main provisions submitted for defense

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The proposed report contains an analysis of the situation in the market under study during the crisis and to the present day (as of the time the report was published).
An analysis was made of both the market itself and the anti-crisis actions of its participants.

Part 1 Market overview
1.1.Analysis of the situation in the market under study: overview, trends, prospects
1.2.Recommendations for market participants
Part 2 Competitive Analysis
2.1.Anti-crisis actions market participants and assessment of their effectiveness

Diagrams:
Diagram 1.1.a. Dynamics of work performed and changes in dynamics in the industry “Activities in the field of architecture; engineering design; geological exploration and geophysical work; geodetic and cartographic activities; activities in the field of standardization and metrology; activities in the field of hydrometeorology and related areas; types of activities related to solving technical problems, not included in other groups”, Russia
Diagram 1.1.b. Dynamics of revenue and profit of enterprises in the analyzed industry, Russia, million rubles
Diagram 1.1.c. Dynamics of debts in the analyzed industry, Russia, million rubles

Tables:
Table 2.1. Anti-crisis actions of market participants and assessment of their effectiveness

Excerpts from the report:
In conditions of market relations, exploration and design organizations For the first time in the history of their existence in Russia, they are forced to work in conditions of limited demand for their products and fierce competition.
Many contractors today are ready to take on any job, regardless of qualifications, experience, technical equipment and financial resources.
On December 16-17, 2010, the VI All-Russian Conference “Prospects for the development of engineering surveys in Russian Federation».
On December 29, 2010, the Concept for the Development of Geodesy and Cartography until 2020 was approved in the Russian Federation.

It is possible to attach a retrospective report based on the results of 100 competitive tenders on the topic under study since the release of the analytical report.
The report is paid separately.

Study title	Price, rub.
Construction of a sugar factory in the Chelyabinsk region Region: Russia, Chelyabinsk region. Release date: 02/05/15	47 040
Database of potential clients in the field of construction/design Region: Russia Release date: 01/21/15	76 800
Marketing research of the civil engineering market Region: Russia, Volga Federal District, Moscow, St. Petersburg Release date: 11/11/14	81 600
To prepare marketing research on the market for remote provision of design services and architectural and construction work Region: Russia, Kazakhstan, Belarus Release date: 10.10.14	67 200

Russian market of design and survey work(article: 07646 25775)

If this report does not suit you, you can:

1. with clarification of the report structure
2. on your topic
3. on your topic

This project is individually finalized in accordance with the client's wishes.

Finalization time: 12 working days.

Part 1 Market overview
1.1.Analysis of the situation in the market under study: overview, trends, prospects
1.2.Recommendations for market participants
Part 2 Competitive analysis
2.1. Anti-crisis actions of market participants and assessment of their effectiveness

Tables:
Table 2.1. Anti-crisis actions of market participants and assessment of their effectiveness

Excerpts from the report:
In market conditions, survey and design organizations, for the first time in the history of their existence in Russia, are forced to work in conditions of limited demand for their products and fierce competition.
Many contractors today are ready to take on any job, regardless of qualifications, experience, technical equipment and financial resources.
On December 16-17, 2010, the VI All-Russian Conference “Prospects for the Development of Engineering Surveys in the Russian Federation” was held in Moscow.
On December 29, 2010, the Concept for the Development of Geodesy and Cartography until 2020 was approved in the Russian Federation.

It is possible to attach a retrospective report based on the results of 100 competitive tenders on the topic under study since the release of the analytical report.
The report is paid separately.

Study title	Price, rub.
Construction of a sugar factory in the Chelyabinsk region Region: Russia, Chelyabinsk region. Release date: 02/05/15	47 040
Database of potential clients in the field of construction/design Region: Russia Release date: 01/21/15	76 800
Marketing research of the civil engineering market Region: Russia, Volga Federal District, Moscow, St. Petersburg Release date: 11/11/14	81 600
To prepare marketing research on the market for remote provision of design services and architectural and construction work Region: Russia, Kazakhstan, Belarus Release date: 10.10.14	67 200
Market research for precise geopositioning services (PPP, RTK) in the Russian Federation and the CIS, 2012-2014. Region: Russia and CIS Release date: 01/13/14	220 320

Nikolay Alekseenko: About 85 percent of the market for design and survey work is formed through government orders

Member of the Council of the Association "National Union of Prospectors" Nikolay Alekseenko published an article dedicated to topical issues support for small and medium-sized businesses in the field of design and survey work. We believe that our readers will also be interested in familiarizing themselves with the thoughts of Nikolai Nikolaevich. The text is voluminous and published with some abbreviations.

According to estimates, among companies licensed to carry out engineering surveys, 92% are micro and small businesses and 4% each are medium and large businesses. The pool of organizations providing training has a similar structure. project documentation, among which micro and small businesses account for 95%, and medium and large businesses - 2.5% each.

And yet, despite the state policy of supporting small and medium-sized businesses (SMEs), the engineering survey industry is in very difficult situation when it is almost impossible to get work directly from the customer. Many are left with only low-paying subcontracts. This is due to a number of system barriers and errors, which are discussed in this article.

The development of small and medium-sized businesses is considered by the highest officials Russia as one of the most important directions of state policy. Over the past two years, the leadership of our country has taken a number of measures aimed at supporting small and medium-sized businesses, ranging from the creation of specialized development institutions to financial incentive programs. As noted Vladimir Putin at a meeting of the Presidential Council for strategic development and priority projects on September 21, 2016, “by 2018, the number of workers employed in small and individual businesses should grow to 20 million people. In the future, in terms of employment in small business and its share in GDP, we should reach comparable figures with countries where entrepreneurship, especially small and medium-sized businesses, are the backbone of the economy.”

Market Statistics

This publication provides an assessment of the market for design and survey work (D&R) within the framework of 44-FZ and 223-FZ and makes an attempt to determine what place small and medium-sized enterprises occupy in it, as well as how to state support affect the increase in the share of purchases from SMEs.

General annual volume The market for design and survey work is estimated by us at the level of 650 - 700 billion rubles. About 85% of this market is formed through government orders and purchases from large companies with state participation.

As of the end of May 2016, 10,811 companies have permission to carry out engineering and survey work on the territory of the Russian Federation; to carry out work on the preparation of project documentation - 49,350 companies. It is important to note that of these companies, 22,845 have design and construction permits, 6,766 have design and survey permits, and 3,553 companies have all three types of activities. Most companies present on the design and survey work market are small and micro businesses. To understand the structure of participants in the design and survey work market, as well as determine the level of competition between them for a market volume of 650 billion rubles, an analysis of open data was carried out on all companies that have the right (SRO approvals) to provide services for conducting engineering surveys and preparing project documentation .

To determine the number of organizations classified as different business categories, the gradation of companies depending on the size of annual revenue, approved by Decree of the Government of the Russian Federation of July 13, 2015 No. 702, was taken as a basis. The distribution of companies by business size was taken into account the following values of their annual revenue:

Micro - up to 120 million rubles;

Small - from 120 to 800 million rubles;

Average - from 800 million to 2 billion rubles;

Large - over 2 billion rubles.

Let us recall that from January 1, 2013 until the release of the above resolution, for classification as SMEs, annual revenue limits were set at 60 million, 400 million and 1 billion rubles, respectively. According to the Government of the Russian Federation, doubling the revenue limits should have opened preferential access to the government order market for a large number of new medium-sized companies.

To determine the effectiveness of this measure, we also compared data on the execution of contracts for design and survey work in the context of 223-FZ and 44-FZ in accordance with the new and old systems gradations of companies by revenue size.

Among companies licensed to carry out engineering surveys, 92% are micro and small businesses, and 4% each are medium and large businesses. The pool of organizations that prepare project documentation has a similar structure, of which micro and small businesses account for 95 percent, and medium and large businesses account for 2.5 percent each.

It should be noted right away that among representatives of the middle and big business In the design and survey industry, the vast majority of companies have approvals for both design and survey or construction, or all three types of activities.

As a result of the analysis, 54,694 unique organizations operating in the design and survey work market were identified, 49,350 of which have permission to prepare design documentation.

This imbalance in favor of design organizations is due to the peculiarities of the Town Planning Code of the Russian Federation and the established practice of the customer combining engineering survey and design work into one lot. More than 97 percent of these organizations are SMEs and only 3 percent represent large businesses.

About government contracts and their execution

As mentioned above, 85 percent of the annual volume of the design and survey work market is created through government orders (including purchases by large corporations with state participation) and the contract and subcontract work created by it. Having analyzed open data on government orders for 2015, one can understand what the real share of work performed by SMEs is.

The volume of contracts concluded for design and survey work in 2015 amounted to 418 billion rubles under 44-FZ and 161 billion rubles under 223-FZ. In just one year, about 50 thousand contracts were concluded for a total amount of 579 billion rubles.

As part of the analysis of contracts for 2015 under 44-FZ, 10,938 unique suppliers and 11,906 unique customers were identified. In accordance with 223-FZ, contracts were concluded with 1,646 customers and 3,795 suppliers. The share of SMEs among unique suppliers averaged 97.5%, and the share of large business organizations was 2.5%. As you can see, the structure of companies participating in public procurement as suppliers of design and survey services is almost identical to the structure of the entire design and survey market.

It can be noted that the increase in the maximum values of the revenue of organizations for classification as SMEs in design and survey activities did not lead to any noticeable increase in the share of participation of small and medium-sized businesses in public procurement. According to our estimates, the number of unique suppliers increased by 1%, the share of contracts they carry out increased only by 3%, and the volume by 2%.

Despite the fact that the industry is mainly represented by SMEs, as well as an impressive share of the contracts they carry out, in terms of the volume of work performed in in monetary terms SMEs occupy much more modest positions.

The majority of contracts under 44-FZ, namely 90%, were carried out by SMEs, but in monetary terms the volume of contracts executed by medium, micro and small enterprises amounted to only 42%.

The majority of the volume of government contracts under 44-FZ (58 percent) is still taken by large businesses, which are represented in the design and survey work industry by 2.5% of companies. A similar situation arose during the execution of contracts within the framework of placement under 223-FZ. The share of the number of contracts where SMEs became winners is 87%, and the volume of work performed by them is only 52%. Almost half of the volume of contracts, or rather 46%, is carried out by the same 2.5% of large business companies. For a number of companies, whose share in public procurement was 7% in terms of the number of completed contracts and 2% in terms of the volume of work, it was not possible to find revenue data in open sources.

Lagging state support

Decree of the Government of the Russian Federation of December 11, 2014 No. 1352 in accordance with paragraph 2 of part 8 of Article 3 of Law No. 223-FZ approved the Regulations on the specifics of the participation of small and medium-sized businesses in the procurement of goods, works, services certain types legal entities, the annual volume of such purchases and the procedure for calculating the specified volume. The regulation stipulates that the annual volume of purchases of certain categories of customers from SMEs must be at least 18% of the total annual value of contracts concluded as a result of procurement. The SME Development Strategy until 2030, adopted in June by the Government, speaks of a gradual increase in the mandatory quota for purchases from small and medium-sized businesses from 18% in 2016 to 25% (from 2018). At the same time total cost contracts concluded as a result of procurement, the participants of which can only be SMEs, must be at least 10% of the total annual volume. In accordance with Decree of the Government of the Russian Federation No. 819 of August 19, 2016, from January 1, 2018, this share increases to 15%. According to the law “On contract system» No. 44-FZ, the mandatory share of participation of small and medium-sized businesses in government procurement is 15% of the customer’s total annual procurement volume.

As our research shows, in the design and survey work segment, even the long-term targets set by the state have already been exceeded by 2 times! Considering that procurement in the construction sector accounts for almost 50% of the total volume of government orders, it is possible that in some segments, including design and survey work, targets should be revised upward, and there is also a need to introduce separate regulation of procurement in construction.

But in the professional environment there is a well-established opinion about the lack of volumes of work and difficulties in entering the market for government orders for design and survey work. Below we present the main barriers that impede the access of bona fide design and survey organizations to the market with annual volume proposals of 580 billion rubles.

Barriers for bona fide participants

Among the companies from the Unified Register of SMEs there are enterprises that are part of groups of companies or are subsidiaries (with a participation share of more than 50%) of large companies with revenues of more than 2 billion rubles. For example, 14 out of 149 direct subsidiaries PJSC Gazprom is included in the SME register. SMSP is also a set of companies that PJSC Gazprom owns through its subsidiaries. PJSC NK ROSNEFT has 20 of its 85 direct subsidiaries on this register.

From these examples it is clear that often organizations included in the SME register are small businesses only formally, but in fact they are part of groups of companies and are direct or indirect subsidiaries of large businesses. It is unlikely that these are the SMEs whose support and development the President speaks about, and which really need support from the Government. For this reason, it is necessary to modernize the criteria for including companies in the SME register in order to exclude subsidiaries big business. Otherwise there is a risk that large companies will widely use the practice of creating many dependent SMEs and fragmenting purchases to formally fulfill the task set by the Government of the Russian Federation to increase the share of purchases from SMEs.

The widespread practice of the customer combining engineering survey and design work into one lot (the so-called design and survey works), provided for by the Urban Planning Code, actually cuts off all organizations that perform only engineering surveys from the scope of work, and forces them to be content with the role of subcontractors.

According to the Association “National Union of Prospectors”, this leads to a systemic violation of competition law and the contract system, infringement of the interests of survey organizations, directly affects the level of competition and, as a result, to less efficient spending of funds (increased prices of contracts).

Another reason why SMEs do not receive the volume of work is subjectivity in the selection of winners and the bias of procurement participants with the customer. According to statistics from the Rating Agency of the Construction Industry (RASK), 54% of companies participate in competitions only once. Perhaps this indicates the widespread practice of creating companies to participate in a specific procurement.

This is also supported by the large turnover of approvals for design and survey work (6,607 approvals in the first half of 2016 alone).

Often, selection methods use indicators such as business reputation, experience, staffing, equipment of the company, which are assessed either by external experts or by members of the competition committee, who may have “their own interests” when making decisions. According to the Federal Antimonopoly Service, in construction procurement up to 40% of evaluation criteria are subjective. This allows you to manipulate the results of competitions.

One of the possible systemic, comprehensive measures to solve the current problem, according to the Construction Industry Rating Agency, is the introduction of an industry rating institute and the inclusion in the competition procedure of ratings assigned to competition participants. The industry rating should become an element of prequalification in procurement. For example, a company created specifically “for a competition” will no longer be able to receive rating assessment sufficient for successful participation in the competition. The resulting assessment will serve as a certain marker both for the customer and for other participants in market relations; it will show the real level of qualifications of the company and the complexity of the work that it is able to perform.

However, this raises a natural question about trust in rating agencies’ assessments.. It is necessary to clearly define the mechanisms for public control over their activities and for them to receive accreditation from the authorities so that the assessments issued by the agencies are truly independent and objective, reflecting the real picture.

The bill “On the activities of rating agencies in construction industry" is precisely intended to establish legal basis activities of rating agencies, ensure the independence and transparency of their activities and the objectivity of assigned ratings.

Systemic measures required

Summarizing the above, it can be assumed that in order to increase the transparency of procurement in the design and survey work market and to facilitate access to government order For professional survey and design organizations belonging to small and medium-sized businesses, the following set of systemic measures will contribute.

1. Introduction of separate regulation of procurement in the construction sector through the adoption of a law on construction contracts, or at a minimum, harmonization of the Urban Planning Code with 44-FZ, 223-FZ and 135-FZ “On the Protection of Competition”.

2. Development of legislative measures aimed at dividing procurement into survey, design and construction, especially during the construction of large infrastructure, as well as particularly dangerous and technically complex facilities.

3. Introduction of a system of independent pre-qualification of participants public procurement, as one of the real market and internationally recognized instruments through the industry rating institute.

4. Legislative expansion of the concept of “conflict of interest” in public procurement from the supplier's beneficiaries who own directly or indirectly voting shares and interests, and to beneficial owners - those who can directly or indirectly influence the actions of the company. It is also necessary to introduce the practice of checking the affiliation of procurement participants with other suppliers, the customer company and its subsidiaries.

These measures, as well as setting the right targets, formulated with the involvement of the professional community, will help solve the tasks facing the state to increase the share of small and medium-sized businesses in GDP to comparable indicators with developed countries where small business is the backbone of the economy!

FROM THE EDITOR. This is the opinion of Nikolai Alekseenko, who, among other things, is also the head of RASK - one of the most famous rating agencies in construction industry. What do you think about the state of the design and survey work market, dear readers? We look forward to your comments on the forum!

Your ZaNoStroy.RF

Anti-crisis operational summary on Russian market design and survey work

This research report was prepared by Business Monitor Agency exclusively in informational purposes. The Agency does not guarantee the accuracy or completeness collected material for any purpose. The data presented in this report should not be construed, directly or indirectly, as information containing investment advice. All assessments, conclusions and conclusions present in this work reflect the opinions of the authors on the date of publication and are subject to change without notice. Business Monitor is not responsible for any loss or damage arising from the use by any third party of the information contained in this report, including published opinions and conclusions, or for consequences caused by incompleteness of the data. The information contained in this report is obtained from open sources or provided by companies mentioned in the report. This document or any part of it may not be distributed without the written permission of the Business Monitor Agency or reproduced by any means.

Part 1	Market overview
	Analysis of the market situation: overview, trends, prospects

Part 2	Competitive Analysis
	Anti-crisis actions of market participants and assessment of their effectiveness
Part 3	Overview of consumer industries
	Description of the consumption market

Market overview

1.1. Analysis of the market situation: overview, trends, prospects

The transition to market relations in the Russian Federation led to significant changes in the structure of design organizations that developed during the planned economy. A number of institutions were fragmented, and a large number new design and survey organizations. In the early 1980s, design and engineering surveys for construction were carried out by 1,800 design and survey organizations, and in 2000 - already XXX. At the same time total number employees of these organizations decreased from more than 1 million to XXX thousand people.

In market conditions, survey and design organizations, for the first time in the history of their existence in Russia, are forced to work in conditions of limited demand for their products and fierce competition. However, the question arises of how competent and responsible they are.

Many contractors today are ready to take on any job, regardless of qualifications, experience, technical equipment and financial resources. Wanting to win a particular tender, they deliberately take into account the incomplete amount of work required, thereby reducing the cost of the proposal. And here, at the stage of customer assessment of potential counterparties, special meaning acquire issues of estimated pricing for design and survey work.

Estimate is one of important documents, from which the design, construction or reconstruction of any object begins. When choosing a contractor, it is the analysis of the estimate that allows you to evaluate the professionalism of the potential contractor. The subject of such an assessment is primarily the total amount commercial offers and the prices per unit of work used in the estimates. Next, it is necessary to evaluate the composition of the work included in the estimates, as well as possible uncertainties and risks of increasing the labor intensity of the work. This is especially important at reconstruction sites, because they usually reconstruct old networks, buildings and structures, the condition of which must be carefully examined. Such a survey must be carried out not just before approving estimates, but at the stage of drawing up assignments for design and survey work, which should make it possible to avoid a sharp increase in cost during the work process that is unexpected for the parties.

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Today, under the influence of price dumping factors provoked by participants investment project, Russia has an extremely unsatisfactory market situation for design and survey work, a passive pricing method, in which it is customary to determine prices with a focus on competition (that is, at the level of existing dumping prices for similar objects). This devaluation of the labor of surveyors and designers leads to the release of low-quality design and survey products: incomplete and low-quality surveys, poor elaboration of design solutions, delays in the execution of design and survey work (D&R), and in times of crisis - a complete stoppage of work due to for lack of funding. The current situation is more dangerous the higher the category of responsibility of the buildings, structures and systems being designed. This is especially true for facilities included in current programs for the reconstruction of explosion- and fire-hazardous facilities of the fuel and energy complex (FEC).

It is no secret that the quality of construction and installation work on the construction of new or reconstruction of existing facilities directly depends on the completeness of the development and the quality of design solutions. And a special place in design is occupied by engineering surveys, the results of which determine the design solutions of buildings and structures being erected, their technical and economic indicators, reliability and stability. They are even more significant where construction moves to inconvenient lands and areas exposed to dangerous geological processes. The completeness and reliability of engineering survey materials significantly influence the efficiency of design solutions, the quality and cost of construction.

It is also no secret that the quality of survey work depends, in turn, on the reliability and complexity of the initial data necessary for drawing up a work program, and on the timeliness financial flows at each stage of the investment process.
Unfortunately, realizing this dead-end path in the quality of design, survey, construction and installation work, participants in the process, wanting, on the one hand, to save money, and on the other hand, simply to survive in conditions of price dumping, provoke a further decline in market conditions. And this not only does not help reduce the investor’s costs, but, on the contrary, leads to cost overruns due to “fire injections of funds into the contractor” to eliminate situations caused by gaps or simply errors in the design and estimate documentation (DED). Refusal to finance such “fire” work and costs entails “unfinished work”, problems in finding an alternative contractor, long-term construction (and time, as we know, is money).

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According to experts, in this regard, the creation of the National Association of Prospectors (NOIZ), designed to build and maintain at the proper level the philosophy of such behavior of its members, is of particular relevance today. The creation of such an association will help restore the design and survey market, which, in turn, will help optimize the profitability of the design and survey business, reduce unreasonable costs for investors and customers, improve the status of industry engineers, and unify industry requirements for products. Improving the standards of interaction between participants to increase the responsibility of contractors for the quality of work, and customers for the transmitted initial data will improve the ways of resolving conflicts associated with the emergence of additional work during their production process. All this will help to conduct an honest and open dialogue between the parties.

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The importance of updating approaches to pricing is undeniable. The development of various methods for determining prices for design and survey products is a timely and urgent task, representing one of the main directions for improving the pricing system, which will improve the quality of survey and design work and ultimately save investors money.

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Thanks to the activities of the Deposit Insurance Agency, the bankruptcy of 18 banks was prevented.

In addition, an operational support measure financial system serves as a reduction in the Central Bank's refinancing rate, which is currently set at XXX% after a consistent reduction since April 2009.

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