Cooperation with suppliers

In 2023, the Company updated its Code of Conduct for Suppliers, which presents a set of expected attitudes and principles for suppliers. The new iteration of the Code focuses on strengthening areas related to health and safety, fire protection, human rights, community relations and environmental protection.

GAZ-SYSTEM’s relations with its suppliers are based on fundamental principles of social responsibility, including but not limited to honesty, transparency, mutual respect, and professionalism. A key element in this area is a dialogue enabling the identification of expectations of both parties. An initiative that builds lasting relationships is the annual event – GAZ-SYSTEM Supplier Day. In May 2023, the meeting was attended by the representatives of over 140 companies – both domestic and foreign, creating an excellent platform to discuss key issues.

A robust and reliable cooperation is a priority for GAZ-SYSTEM. Timeliness, high quality of ordered supplies, commissioned services and construction works, as well as effective cooperation and maintaining good relations with suppliers are key to the Company’s operations. In order to recognise reliable contractors, a List of Reliable Suppliers (LWD) was established. It is a tool reflecting the performance of supplies, services and construction works delivered according to the Company’s strategic purchasing categories. Entry on the list confirms the high quality and recognition attributed to suppliers ensuring proper contract performance.

In addition, to secure its purchasing needs, GAZ-SYSTEM regularly checks the suppliers’ compliance with EU and national sanctions, especially in the context of the ongoing war in Ukraine. No entities or individuals covered by those sanctions are allowed to enter into any purchase agreements with GAZ-SYSTEM.

In 2023, GAZ-SYSTEM conducted a total of 682 contract award proceedings, of which 535 were open tenders and 147 were limited tenders. The Company is obliged to spend the funds allocated for the performance of tasks in a reasonable manner. Achieving this objective is based on obtaining the most favourable tenders which is possible by increasing the interest of suppliers in participating in procurement procedures.

As part of the dialogue with the market and with a view to mobilising the suppliers, GAZ-SYSTEM organises Preliminary Market Consultations (PACs). In 2023, the Company held seven PACs with a total of 33 suppliers participating. Another form of researching and informing the market about planned procurement procedures is the Request for Information (RFI) which is a commonly used tool at GAZ-SYSTEM. It allows the Company to obtain the most up-to-date market data necessary for the organisation of procurement procedures.

The mobilisation of suppliers by GAZ-SYSTEM increases competitiveness. The following table presents the average number of offers per procurement procedure in 2023 by type of contracts awarded:

As a result of GAZ SYSTEM’s efforts to create favourable conditions for fair competition, transparent contract award procedures and the continuous improvement of buyers and members of tender committees, the Company obtained positive results of an ex-ante audit by the President of the Public Procurement Office (UZP) for Rybnik investment program in 2023.

GAZ SYSTEM systematically boosts the qualifications of the staff in charge of contract implementation and coordination. Regular in-house training courses address the issues of „Contract Award Regulations”, contract standardisation and procurement procedures at GAZ-SYSTEM, including the capability to use the procurement platform.

In 2023, the Company prepared final reports on the implementation of the strategic projects, i.e. the Poland-Slovakia interconnector, the Poland-Lithuania cross-border interconnector (GIPL) and the Baltic Pipe project which stated that the objectives of the projects were met, and the benefits of their implementation are consistent with project assumptions.

In 2023, GAZ-SYSTEM signed an agreement with CINEA for co-financing the design engineering and the development of technical specifications for the LNG FSRU project in the Gulf of Gdańsk under the ‘Connecting Europe Facility’ (CEF). The maximum amount of the awarded grant is approximately EUR 19.6 million. That decision underlined the project’s relevance for strengthening security of supply and independence from Russian gas and increasing the availability of LNG for Poland and the region.

In 2023, GAZ-SYSTEM continued to standardise contracts in order to increase the efficiency of the implementation of procurement processes. At the same time, the supply chain of key investor-provided materials was developed, for instance by means of continuing coordination of production schedules, cooperation with the Technical Inspection Authority on quality control and periodic visits to production facilities. Improvement measures were updated and implemented in relation to the list of basic materials, comprising several hundred items required for continuous availability for operational purposes, and activities were initiated to establish a stock of strategic materials for the Transit Gas Pipeline System. In addition, as part of the implementation of the inventory policy, a tool enabling the immediate identification of the characteristics of each material batch using QR codes was implemented at key local warehouses, and a periodic process of qualifying redundant material stocks prior to their liquidation by means of sales auctions was completed.