Subject The article considers the efficiency of budget spending in the Russian Federation by means of public electronic procurement auctions. Transition to the contract system of procurement for State and municipal needs that became effective from January 1, 2014, and the corresponding radical change in the rules for public procurement in Russia enhanced the significance of the analysis of budget funds spending. Objectives The aim of the paper is to identify the conditions of the public electronic procurement auctions that have a direct impact on the level of budget funds efficiency in the Russian Federation. Methods The paper employs statistical and comparison methods, and the systems analysis methods to analyze the revenue of the requests for quotation and electronic auctions. It is determined that the profitability of the auctioneer's requests for quotation is much higher as compared to the electronic auctions that represent the reverse English second-price auctions. Results The study reveals the conditions of electronic procurement auctions that have a direct impact on the efficiency of budget funds spending in the Russian Federation. The Russian system of public procurement has certain conditions, under which the first-price auctions yield much more revenue for the auctioneer than the second-price auctions do. Conclusions I conclude that the Federal Law of January 01, 2014 № 44-FZ, does not consider the internationally recognized provisions of the auction theory with regard to the influence of external environment on auction revenue, and this makes the Russian budget and financial system extremely inefficient.
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