Public Procurement is a substantial part of Georgia’s economy. According to the World Bank’s latest Public Procurement Performance assessment, from 2013-2015 procurement amounted to 9.9% of the country’s GDP and overall represented 31.1% of the public spending.
Public procurement system in Georgia is known to be one of the most transparent in the world. The State Procurement Agency (SPA) maintains one of the highest levels of openness of public procurement in the world through the use of e-procurement platform.
Since 2010, all tenders in Georgia are 100% electronic. The electronic platform spa.ge is an easy to use online platform where most of the information on procurements is publicly available, free of charge. Since its launch, the e-platform has increased the efficiency of public procurements. Overall, in the period of 2010-2015, the amount saved through online tendering amounted to more than one billion Georgian Lari (approximately, 400 mln USD).
The TPPR assessment confirms that Georgia’s procurement legislation ensures transparency, efficiency and competitive environment of the procurement system. According to the assessment, Georgia received 86% of the total points and is the leading country among target states in terms of efficiency of the pre-tendering phase and has one of the highest points in transparency, with relevant information on tender documentation (including its amendments), bids, tender commission decisions and contract performance related information publicly available in machine-readable format, free of charge.
Despite Georgia’s high performance in the assessment, several areas in need of improvement were identified. Specifically, time-frames for preparation and submission of the bids can be extended to better fit international standards. Currently, Georgia does not comply with the WTO GPA standard due to a procurement procedure called Simplified Electronic Tender, which gives suppliers only 3 days to prepare and submit their bids. However, the newly presented legislative amendments (currently, under review in the Parliament of Georgia) will address the issue of time-frames and improve the situation substantially.
The number of exceptions to direct procurement remains a problem as their abundance creates solid ground for inefficiency of the procurement system (on average 30% of total procurement value is channeled through direct procurement annually). Transparency of the system can be further improved by publishing Procurement contract information (as well as its amendments) in machine-readable format. Additionally, information on sub-contractors can also be made obligatory to publish by law, which is currently not mandatory according to the PPL.
Over the next 6 years Georgia will be reforming its procurement legislation substantially within the framework of the Georgia-EU Association Agreement, to achieve full harmonization with the EU procurement directives. The harmonization will change the procedures, time-frames, principles, sector related specific rules further enhancing and refining the procurement legislation.
Additionally, with the assistance of the World Bank (WB), the SPA plans to adapt the procurement system to the Open Contracting Data Standard (OCDS) in the next 2 years, which will ensure availability of aggregated data on procurement to any interested individual.
Public Procurement Legislation available at the following – link.
Public Procurement Portal of Georgia – link.