analysis of the state procurement policy of georgia

8/12/2019 Analysis of the State Procurement Policy of Georgia

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Project objectives

Brief history of public procurement system of Georgia

Analysis of public procurement system

Conclusion and recommendations

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Improvement of public procurement system and policy ofGeorgia

Analysis of public procurement system

Analysis of best foreign practices

Preparing recommendations in order Georgian

procurement system to be in correspondence tointernational standards and best practice

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Table 1. General government expenditure on goods and services

2007 2008 2009 2010 2011 2012 2013 2014

Goods and services

(million GEL) 1591 1606 1105 1139 1211 1298 985 1079

As percent of budget

Expenditures 36.3 29.7 20.5 20.8 21.7 21.4 15.4 15.0

As percent of GDP 9.4 8.4 6.1 5.5 5.0 5.0 3.6 3.7

Source: Ministry of Finance of Georgia

In 2007-2013 total expenditure of the budget on public procurement was almost 9billion GEL.

Including non budgetary public organizations, in 2012 the indicator of totalprocurement is 2.8 billion GEL

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Expanses on public procurement tax payers money/publicproperty

Main principles of spending:

Transparency Econom

Efficiency

Quality of the procured goods and services - one of the key

factor of public institutions efficiency

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Procurement system reform began in January 2010

Before the reform:

- Unsuccessful system

- Lack of transparency

- Limited competition

- Bureaucratic procedures

- High risk of corruption

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The reform had five main goals:

Transparency Non discrimination Fair selection

Easy procedures

Electronic system of state procurement start functioningSince October 2010

Paper based tenders were completely substituted by theelectronic tender within two months

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By the end of 2012, electronic system had 14 801 registered users,among them 3 927 were procuring entities and 10 847 suppliers

In 2011, number of suppliers were 7 400

In 2011-2012 , 300 million GEL was saved

White and black lists of suppliers

Dispute resolution board, which consists of 3 representatives of state

procurement agency and 3 representatives of civil society

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Number of contracts in 2012

Goods

9984

Services

4614

Cost (mln GEL)

Goods 437

Constructions 702

Services 253

Source: Competition and State Procurement Agency

Constructions

3890

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The method of state procurement:

Electronic tender for 200 000 GEL or more value goods andservices in a year

Simplified electronic tender for under 200 000 GEL value goodsand services in a earSimplified procurement

Design contest

Electronic tender

Simplified electronic tender Simplified procurement for under 5 000 GEL value goods andservices or for specific cases

Design contest alternative procurement method for design(project) services

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Public procurement by means of procurement, 2012

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55

Simplified procurements

45 percent of public money is spent in less competitive environmentSource: Competition and State Procurement Agency

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Contract value Number of contracts Cost (GEL)

Under 5 000 GEL 443670 1.1 billion

5 000 - 50 000 GEL 24947 0.4 billion

50 000 - 500 000 GEL 4712 0.7 billion

Statistics of simplified procurements, sum of 2011-2013 indicators

1 - 10 mln GEL 315 0.9 billion

10 - 50 mln GEL 20 0.3 billion

Above 50 mln GEL 7 1.5 billion

Total 473671 5 billion

Source: Competition and State Procurement Agency

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Advantages of a systemAdvantages of electronic system of state procurement:

-Transparency

- Competition

- Easy procedures

- Low risk of corruption

- Savings

- Technically well designed

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Problems of a systemProblems:

- Quality of procured goods and services, especially in constructionservices

- Quality of preparing technical requirements

- ua y o prepar ng ec n ca sen ences

- Planning of procurements

- High share of simplified procurements

- Consolidated tenders and small business

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RecommendationsTo improve the quality of procured goods and services:

Standardization of the most frequently procuredgoods and services

Ca acit buildin in re arin technical re uirements

Capacity building in preparing technical sentences

To reduce the list of those procurements, which arenot covered by the state procurement low

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To minimize the simplified procurements

To improving planning of procurements by procuringagencies

Desired:

Recommendations

To prepare catalogues for available goods and services

To improve the qualification of the members oftender commission of procuring entities

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Further goals of researchTo study the best international practices of state

procurements

To study the environment and ways how toimplement international best practices in Georgia

To prepare final recommendations for increasing thequality of procured goods and services significantly

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Thank you for your attention!

[email protected]

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analysis of the state procurement policy of georgia

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