e -Procurement in Georgia Everyone sees everything Tato Urjumelashvili, CSPA

1. e-Procurement in Georgia Everyone sees everything Tato Urjumelashvili, CSPA Tbilisi, September, 2012

2. Where we started SPA office. January 2010

3. Collection of documents from state bodies (paper tenders) • Waste of administrative resources Service agency of mia Notary courts • Waste of paper Tax Department Tender proposal • Waste of money Qualification docs • Waste of time Bidder NATIONAL AGENCY OF PUBLIC REGISTRY Commercial banks Other state agencies Procuring Entity

4. Paper tenders and “geographical inequality” • Limited access to information • Bidders had to make at least 4 physical visits to procuring entity, • and the winner – an additional 5th visit to sign a contract • High compliance costs • High transaction costs 20 mln paper copies – in last 5 years Procuring entity

5. Side effects of paper tenders High risk of corruption Non-reliable data Failing procurement system Restricted competition Geographical inequality High compliance costs Lack of transparency

6. What we wanted • Transparency • Non- discrimination • Fair evaluation • Streamlined and easy to follow procedures ..and get rid of papers!!!

7. Two options Off-the-shelf solutions In-house development • Cost • Cost • Approx. • $ 10 mln • Less than • $ 1 mln

8. Second option: Georgian alternative • S/W $ 150 000 • H/W $ 500 000 • BI $ 70 000 • Website $ 10 000 • Communication campaign $ 30 000 Sleepless nights  not counted

9. Pace of the reforms • January 2010. Started with legal amendments and design of the e-procurement system • August 2010. E-procurement system launched in test mode • October 2010. First e-tender announced • December 2010. Paper tenders abolished. Only e-tenders allowed • September 2011. 10 000 registered users • October 2011. $ 100 mln savings generated • December 2011. Bilingual system was introduced • May 2012. 13 339 registered users • September 2012. $ 198 mln savings generated • More is coming !!!

10. What we got Everyone sees everything • Bidders do not make physical visits to procuring entity. Only • the winner once visit procuring entity to sign a contract No physical visits Minimum transaction costs Geographical “inequality eliminated” Increased competition Maximum efficiency Procuring entity Fair evaluation Electronic dispute resolution Minimum paperwork

11. Georgian Electronic Government Procurement - Ge-GP

12. Some features of Ge-GP

13. Ge-Gp business process in brief

14. Bilingual system. Georgian - English System prevents mechanical and procedural mistakes System provides subscription andinternal messaging options Yes Yes Yes No Yes No All activities are logged Integrated appeal mechanism Electronic payments module/ linkage with State Treasury

15. Everyone sees everything

16. DRB Business Process

17. Data on DRB activities

20. CPV Codes

22. How we built it Transparent & Efficient System of State Procurement (in 1 year !!!) Mainstream Alternative: • Elaboration of a strategy (1 year) • Dialogue with the interested parties • Elaboration of an action plan/introduction (1 year) • Implementation (3 years) Consolidated team – unified views and values Unilateral liberalization of procurement market for foreign bidders Clear and well articulated political will Maximum transparency – “everyone sees everything” Visionary approach – no special rigid strategy Too long and too expensive for us (what about you ?) Non-discrimination & fair evaluation Correction during the implementation – return to the reforms several time Streamlined, easy-to-follow procedures

23. What we learned • Reform boldly, broadly and communicate • Start small and leverage on demonstrable results • Businesses love change they understand • More transparency – less corruption • Streamline then automate • Simplicity is power • Keep on identifying the next biggest binding constraint, reform in series • Reform unilaterally, don’t wait for reciprocity • Communicate reforms… Results inspire

24. Assessment by Others • UN- United Nations Public Service Award, 2nd place, in the category of “Preventing and Combating Corruption in the Public Service”,2012 • EBRD - “In the Eastern European countries, including Georgia and Russia, the basic policy features of public procurement are in place. However, only Georgia scored a high compliance rate, as most integrity safeguards and procurement efficiency instruments recommended by international best practice were adopted in Georgia in 2010”… • Transparency International Georgia - "In the past year, we have seen the successful introduction of an electronic, transparent procurement system, which has been a very positive development” . • European Parliament, Committee on International Trade - “Welcomes Georgia’s new procurement system, enabling e-auctions for all types of contracts, irrespective of their size or nature; points out that Georgia should also serve as an example for the EU Member States in this area”.

25. Thank you for your attention! 28 Pekini Ave., Tbilisi 0160, Georgia e-mail: info@procurement.gov.ge