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A case of G e orgia Developing and implementing e-Procurement solutions

A case of G e orgia Developing and implementing e-Procurement solutions Tato Urjumelashvili, SPA Kiev, December 2011. Where we started. SPA office. January 2010. Collection of documents from state bodies (paper tenders). Waste of administrative resources. Service agency of mia.

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A case of G e orgia Developing and implementing e-Procurement solutions

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  1. A case of Georgia Developing and implementing e-Procurement solutions Tato Urjumelashvili, SPA Kiev, December 2011

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

  8. First option (widely used off-the-shelf solution)

  9. Second option: Georgian alternative • Hardware $ 500 000 • Software $ 150 000 • Business Intelligence $ 70 000 • Website $ 10 000 • Communication campaign $ 30 000 Sleepless nights  not counted

  10. Pace of the reforms • January 2010. Started with legal amendments and design of the e-procurement system; • March 2010. Legal amendments enforced; • 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 • More is coming !!!

  11. What we got Everyone sees everything • Bidders do not make physical visits to procuring entity. Only • the winner once visits procuring entity to sign a contract • More than 30 000 e-tenders instead of 3 000 paper tenders No physical visits Minimum transaction costs Geographical “inequality eliminated” Increased competition Maximum efficiency Procuring entity Fair evaluation Electronic dispute resolution Minimum paperwork

  12. All procurement related information is open and available online Tender notices (estimated value of the contract is open) Tender documentation Bids and bidding documents All decisions of tender commission All relevant correspondence Contracts (including amendments) Bidding process is open as well and available online…. Identity of bidders is anonymous

  13. 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

  14. Make profit by placing banners on your website!!! Why companies will pay? 170 456 unique visitors!!! 5 128 227 page views!!!

  15. 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

  16. 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

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

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