Businesses ask for fair electronic procurement
22 May, 2014
Businesses ask for fair electronic procurement
Georgian businesses ask for better competition and competence terms in electronic state procurement. They say the lack of competence and of equal competition rules leads to losses and poises corruption risks. Since 2010, Georgia made a big step forward regarding state procurements when it introduced mandatory electronic tenders. All state procurements that require products and services above GEL 5,000 are obliged to be made through electronic open tenders. Technically, Georgian electronic tenders are seen as one of the best in
Europe since all tender-related information is made available and transparent to all interested parties. To avoid corruption deals direct personal contact between the order-maker and the bidder is prohibited once the bidder is registered. Whether or not the bidder fits the tender bid may be concluded based on the required and detailed product description published on the official website of the State Procurement Agency. The web page also provides eligibility criteria and backgrounds of the potential bidder. However, businesses, particularly Small and Medium Enterprises, complain that the electronic tenders are not as flawless as officially acclaimed. In order to remove these existing barriers they ask for more communication and to reduce the red tape burden. A meeting of the SME sector with the State Procurement Agency held on 8 May discussed this problem. Businesses complain that tender terms lack detailed description of the required product which misleads bidders and ends up in a waste of money and time for both sides. Sometimes the state structures ask for much higher standards than is required in reality, while they often do not have the capacity to check whether or not the implemented services or provided products fit the required standard.
For example, Davit Abramishvili, General Director of the Sport New Building Group, says that the state sometimes asks for FIFA standards for the implementation of mini-stadiums in rural regions which is a money and time squander because it requires expensive works and certification costs while international practice shows that no international competitions are held at mini-stadiums.
“Why require FIFA standards for mini-stadiums if there is no need for that? Besides, who orders this so frequently? They do not have a person with the proper knowledge and skills to check the quality of the work we delivered,” Abramishvili told Georgian Journal.
Beso Kvelashvili, founder of Invest Georgia, also point to the lack of competence. He says that the tender terms should be clearly stating which quality they ask for and provide a more comprehensive and detailed description of the required product. Sometimes they simply make unreasonable orders which bespeaks of a lack of proper knowledge. This can be solved via direct contact, but this is not allowed by law.
“Often I cannot understand what they ask for and try to contact the person who is responsible for the order, but they shun direct communication. Even though as a sector expert I can give them proper advice and put them on the right track, but the law prohibits this. I think direct contact is essential for us at the moment,” he said.
Economic analysts do not rule out that latent nepotism may be behind this forbidden direct communication, which misleads bidders through an imperfect description of the required product while the full description is provided to the bidder who is related to the tender officials. Thus the open electronic tender, which seems transparent at first sight, violates the competition. But Abramishvili believes this is more about a lack of experience and competence that can be removed if state officials would speak with businesses and vice versa. Businesses should also receive trainings to improve their skills on how to participate in these state procurement tenders.
According to Levan Razmadze, Chairperson of the SPA, nobody restricts the communication between the parties before the tender is announced. He believes that researching the market on the required product before the tender is announced while consulting potential bidders could be one of the best solutions that would spare both sides of losses.


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