Government, Business & Civil Society: Fight Corruption Together in Georgia
• Territory: 69,700 square kilometers • Population 3.7 million • GDP 31.7 Billion GEL • Budget of 2017 year 11.4 Billion GEL • Overall Public Procurement in 2016: 4 Billion GEL = 39% of State Budget funds & 12% of GDP
The Georgian Public Procurement System at a Glance The Georgian public procurement system has been transformed, from one that was labelled “ high-risk ” in 2006, to one that achieved the highest rating a few years later
Before The Reforms: • 100% Paper based tenders • Lack of transparency • Non-reliable data • High compliance cost • Restricted competition • Geographical inequality • High risk of corruption
Where We Started SPA office at Jan 2010
Collection of Documents from State Bodies (Paper based Tenders) Bidders had to make at least 4 physical visits to CA (procuring entity) and the winner – an additional 5 th visit to sign a contract Waste of: • Administrative Resources • Paper NOTARY COURTS • Money SERVICE AGENCY OF MIA • Time REVENUE SERVICE Tender proposal Bidder Qualification docs NATIONAL AGENCY OF PUBLIC REGISTRY COMMERCIAL OTHER PUBLIC AGENCIES Contracting BANKS Authority
Pace of the Georgian Reforms:
Nowadays: • 100% electronic tenders • Everyone sees everything • Equal access to tenders • Smart system preventing mistakes • Business Intelligence system 70 real-time reports • Internal messaging system/SMS notifications • Fast and transparent Dispute Resolution Board
Current Procurement Framework Public Sector (Demand) State Procurement Agency Private Sector (Supply)
Public Sector (Demand): • Number of decentralized acting contracting authorities: (May 2017) • Annual amount of public procurement contracts: , approximately of GDP, and of State Budget • Number of open tenders per year: • Estimated value of approximately 80% of announced tenders: • Saving: of the estimated value, since
Private Sector (Supply): economic operators (as of May-17) participate in public tenders; number of foreign companies exceeds 35,000 30,703 32,145 30,000 25,045 25,000 19,911 20,000 15,625 10,874 15,000 7,365 10,000 5,000 - 2010-2011 2012 2013 2014 2015 2016 Apr-17
Private Sector (Supply): Contract value by years 4,018,097,958 Year 2016 3,203,258,126 Year 2015 2,846,942,257 Year 2014 2,791,085,439 Year 2013 2,771,183,391 Year 2012 2,662,663,113 Year 2010-2011 - 500,000,000 1,000,000,000 1,500,000,000 2,000,000,000 2,500,000,000 3,000,000,000 3,500,000,000 4,000,000,000 4,500,000,000
Private Sector (Supply): Average number of bidders in tender: 2.14 Average Number of bidders 2011 1,73 2012 1,75 2013 2,01 2014 2,02 2015 2,05 2016 2, 14 In certain sectors more than 3.31 : Building completion work 3,31 Installation services of metal containers 3,00 Garments 2,87 Works for complete or part construction and civil engineering work 2,78 Motorcycles, bicycles and sidecars 2,67 Occupational clothing, special work wear and accessories 2,65 Cleaning and polishing products 2,63 Site preparation work 2,62 Metal ores and alloys 2,57 Building installation work 2,56
Matrix of Current Procurement Procedures Procedure Circumstances Electronic procurement required? Simplified procurement (direct purchasing, single-source procurement) (CMR) Procurement under GEL 5,000 No Open Electronic Tenders’ procedures: Simplified electronic tenders (SPA) Procurement of homogeneous objects between GEL 5,000 and Yes GEL 200,000 Electronic tenders (SPA) Procurement of homogenous objects of GEL 200,000 and higher Yes Procurement with donor funds ( World Bank , European Investment DEP Tenders (with Donor funds) Yes Bank) Consolidated tender for framework Procurement of certain goods: fuel, computer hardware, A4 Yes agreements (CON) format paper, communication (mobile) services, tires Special procurement procedure established by Government on GEO Tenders (special procurement Yes certain goods and services procedure)
Matrix of Current Procurement Procedures Electronic procurement Procedure Circumstances required? Design contest (CNT) Yes. From 01 July, 2015 SPA has Procurement of design related projects and services such as launched a 100% electronic Design architecture and engineering projects, plan or design, based on Contest procedure. Previously contest was “paper-based”… decision of a contracting authority Procedure based on free competition. Aim is to identify the best Yes Grant Contest (GRA) grant contest application Tender type that is working as a “sealed-bid auction”. All the Yes. From 01 July, 2016 SPA has Electronic Tender without reverse auction procedures are the same as reverse auction, but instead of three launched a tender without reverse (NAT) additional rounds, price is submitted just once. Except the best auction. proposal, all bids are closed (unavailable for contracting authority) until the “winner identified” status Procurement of goods, services and construction works according Yes. From 01 August, 2016 SPA has MEAT - Electronic Tender (MEP) to different quantitative criteria and price as well. The best bidder launched a so called “Two Stages or is identified according to price-quality ratio that is calculated by the Most Economically Advantageous unique algorithm, which is built in the system Electronic Tender” Procedures in based on prequalification principle. Suppliers must Different Acquisition Procedures on Yes. From December 2016. submit tender proposal, qualification documents, budget and all construction works (DAP) document which are requested by procuring entity. Procuring entity evaluates all bidders and if they satisfy all requirements, bidder with the lowest bid will be invited to sign a contact
Institutional Framework State Procurement Agency (SPA) - strong and independent authority striving to contribute to a competitive market economy by developing a transparent and equal environment in the Georgian public procurement system. SPA is collaborating with Supreme Audit Institution and relevant law-enforcement agencies in order to prevent and fight corruption
State Procurement Agency An independent authority directly responsible for development of public procurement framework in Georgia Accountable to the Government of Georgia With staff of 89 employees (71 civil servants + 18 contractors) Defining regulatory policy of procurement processes Development of legal framework ensuring its compliance with internationally recognized standards and best practice Development and maintenance of the unified electronic government procurement system Monitoring Elaboration of the adequate strategies, methodologies and their implementation Training activities Consulting Stakeholder in Public Finance Management Reform Stakeholder in Anti-corruption reform / Anti-corruption Coordination Council
Dispute Resolution Board (DRB) Established on 6 December 2010 • • Consists of six members; representatives of the SPA and the CSOs Any entity or person interested in participating in a public • procurement procedure may appeal the actions of a CA (procuring entity) or a tender committee to the DRB via special e-form, free of charge • eDRB appeal form: Everyone can “freeze” a tender with just a single click of a button. Submission of appeal takes less than two minutes • An appealed tender will be “frozen” for a period of 10 business days. During this period the DRB will review the appeal and the results will be published in the eProcurement system
Number of Appeals Filled with the eDRB
Possibility of Appeal Any interested person may appeal any decision of CA (procuring entity) at any institution given below, without being restricted to go through all of them step by step Contracting Authority • Doesn’t require any defined procedures by the law • According to Article 23 of DRB the law and Decree N11 of the Chairman of the SPA • A person interested in participating procurement procedures may appeal in Court court the decisions made by contracting authority or the DRB/Agency
Technological Framework - eProcurement • Single and smart e-Procurement system: transparent, simple, multilingual (Geo-Eng-Rus) and user- friendly, minimizing administrative requirements and preventing mistakes • All procurement-related information is available online, to any interested person - It is possible to track each transaction, to conduct relevant search actions, look for behavioral patterns • Any communication with contracting authority is transparent. Any registered user can question any tender using Q&A module. Tender committee/commission is obliged to answer.
eProcurement – Everyone Sees Everything Annual Procurement Plans Tender Notices Tender Documentation Questions related to tender notice and documentation / Relevant replies of Contracting Authorities Tender Proposals / Bids Decisions of Tender Evaluation Commissions All relevant correspondence All data on disputes, including application and decision Contracts and amendments Payments made through e-banking & eTreasury
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