Significant reforms have been implemented in the field of public procurement over the past five years. As a result of the changes, Georgian procurement system has become one of the most transparent in the world, which is positively assessed by International Organizations. New and transparent system of procurement has reduced the probability of corrupt practices, simplified the procurement procedures and substantially increased the competition.
Nevertheless, it is impossible to eradicate all fundamental imperfections and to eliminate the risk of corrupt practices in such a short period. State Audit Office of Georgia found the referred topic interesting and decided to study the transformed system of public procurement to thereby define ways for its further development and improvement.
The audit has identified that despite the positive changes, certain gaps still exist in the legislation, substantial deficiencies are found at all stages of procurement, particularly at planning process. Namely, inaccurate identification and formulation of needs in the tender (bidding) documentation; Georgian or/and internationally standards (set for specific products) are not used in the process of defining the specific features of the procurement object, which causes incompliance with actual needs and supply; Procurement procedures and documentation are not standardized that could simplify the activities of procuring entities and reduce costs; lack of market research activities by procuring entities causes waste of finance in some cases of procurement; some procurements are implemented through a decentralized manner, while in certain instances the centralized manner seems more suitable, and thus the opportunities of saving funds are lost; simplified procurements were implemented on the basis of unjustified urgent necessity cases; number of procurement contracts signed bypassing the tenders has increased – value of simplified procurements amounted to more than 2 billion GEL in 2011-2012 (40 % of all procurements in 2011-2012).
Several deficiencies were identified during bidding process – unjustified termination of tenders and disqualification of bidders have a negative impact on competition. Contract management system needs improvement in order to avoid unjustified amendments of procurement agreements that are detrimental to the procuring entities, especially in terms of increasing contract value and ignoring obligation of meeting the contract deadlines.
In addition, procuring entities do not record and assess the suppliers’ performance to further analyze and systemize the referred information for the efficient planning ultimately. Despite the resourcefulness of the electronic system and many other advantages, a more refine system of supplier assessment needs to be designed to let all the interested parties/stakeholders get comprehensive information on the active market players, their performance and quality of service. State Audit Office believes that along with the reforms and improvements planned in the above mentioned problem areas primarily it is essential to maintain and improve the currently practiced transparent system and to ensure the independence of the Agency. Additionally, it is crucial to follow up on the issued recommendations and work with the addressees of the recommendations in a coordinated way.
