Government, Business & Civil Society: Fight Corruption Together - - PowerPoint PPT Presentation

Government, Business & Civil Society: Fight Corruption Together in Georgia

• Territory: 69,700 square kilometers
• Population 3.7 million
• GDP 31.7 Billion GEL
• Budget of 2017 year 11.4 Billion

GEL

• Overall Public Procurement in

2016: 4 Billion GEL = 39% of State Budget funds & 12% of GDP

The Georgian public procurement system has been transformed, from one that was labelled “high-risk” in 2006, to

• ne that achieved the highest

rating a few years later

The Georgian Public Procurement System at a Glance

• 100% Paper based tenders
• Lack of transparency
• Non-reliable data
• High compliance cost
• Restricted competition
• Geographical inequality
• High risk of corruption

Before The Reforms:

Where We Started

SPA office at Jan 2010

REVENUE SERVICE

COURTS

NOTARY

Bidder

Collection of Documents from State Bodies (Paper based Tenders)

SERVICE AGENCY OF MIA NATIONAL AGENCY OF PUBLIC REGISTRY OTHER PUBLIC AGENCIES COMMERCIAL BANKS

Tender proposal

Qualification docs

• Time

Contracting Authority

• Money
• Administrative Resources
• Paper

Bidders had to make at least 4 physical visits to CA (procuring entity) and the winner – an additional 5th visit to sign a contract

Waste of:

Pace of the Georgian Reforms:

Nowadays:

• 100% electronic tenders
• Everyone sees everything
• Equal access to tenders
• Smart system preventing mistakes
• Business Intelligence system

70 real-time reports

• Internal messaging system/SMS notifications
• Fast and transparent Dispute Resolution Board

Current Procurement Framework

State Procurement Agency Private Sector (Supply) Public Sector (Demand)

• Number of decentralized acting

contracting authorities: (May 2017)

Public Sector (Demand):

• Saving:
• f the estimated value,

since

• Estimated value of approximately 80% of

announced tenders:

• Number of open tenders per year:
• Annual amount of public procurement contracts:

, approximately

• f GDP, and
• f State

Budget

Private Sector (Supply):

economic operators (as of May-17) participate in public tenders; number of foreign companies exceeds

• 5,000

10,000 15,000 20,000 25,000 30,000 35,000

2010-2011 2012 2013 2014 2015 2016 Apr-17

7,365 10,874 15,625 19,911 25,045 30,703 32,145

Contract value by years

Private Sector (Supply):

• 500,000,000

1,000,000,000 1,500,000,000 2,000,000,000 2,500,000,000 3,000,000,000 3,500,000,000 4,000,000,000 4,500,000,000

Year 2010-2011 Year 2012 Year 2013 Year 2014 Year 2015 Year 2016

2,662,663,113 2,771,183,391 2,791,085,439 2,846,942,257 3,203,258,126 4,018,097,958

Average number of bidders in tender: 2.14

Average Number of bidders 2011 1,73 2012 1,75 2013 2,01 2014 2,02 2015 2,05 2016 2,14

In certain sectors more than 3.31:

Building completion work 3,31 Installation services of metal containers 3,00 Garments 2,87 Works for complete or part construction and civil engineering work 2,78 Motorcycles, bicycles and sidecars 2,67 Occupational clothing, special work wear and accessories 2,65 Cleaning and polishing products 2,63 Site preparation work 2,62 Metal ores and alloys 2,57 Building installation work 2,56

Private Sector (Supply):

Procedure Circumstances Electronic procurement required? Simplified procurement (direct purchasing, single-source procurement) (CMR) Procurement under GEL 5,000 No Open Electronic Tenders’ procedures: Simplified electronic tenders (SPA) Procurement of homogeneous objects between GEL 5,000 and GEL 200,000 Yes Electronic tenders (SPA) Procurement of homogenous objects of GEL 200,000 and higher Yes DEP Tenders (with Donor funds) Procurement with donor funds (World Bank, European Investment Bank) Yes Consolidated tender for framework agreements (CON) Procurement of certain goods: fuel, computer hardware, A4 format paper, communication (mobile) services, tires Yes GEO Tenders (special procurement procedure) Special procurement procedure established by Government on certain goods and services Yes

Matrix of Current Procurement Procedures

Matrix of Current Procurement Procedures

Procedure Circumstances Electronic procurement required? Design contest (CNT) Procurement of design related projects and services such as architecture and engineering projects, plan or design, based on decision of a contracting authority

• Yes. From 01 July, 2015 SPA has

launched a 100% electronic Design Contest procedure. Previously contest was “paper-based”… Grant Contest (GRA) Procedure based on free competition. Aim is to identify the best grant contest application Yes Electronic Tender without reverse auction (NAT) Tender type that is working as a “sealed-bid auction”. All the procedures are the same as reverse auction, but instead of three additional rounds, price is submitted just once. Except the best proposal, all bids are closed (unavailable for contracting authority) until the “winner identified” status

• Yes. From 01 July, 2016 SPA has

launched a tender without reverse auction. MEAT - Electronic Tender (MEP) Procurement of goods, services and construction works according to different quantitative criteria and price as well. The best bidder is identified according to price-quality ratio that is calculated by the unique algorithm, which is built in the system

• Yes. From 01 August, 2016 SPA has

launched a so called “Two Stages or Most Economically Advantageous Electronic Tender” Different Acquisition Procedures on construction works (DAP) Procedures in based on prequalification principle. Suppliers must submit tender proposal, qualification documents, budget and all document which are requested by procuring entity. Procuring entity evaluates all bidders and if they satisfy all requirements, bidder with the lowest bid will be invited to sign a contact

• Yes. From December 2016.

Institutional Framework

State Procurement Agency (SPA) - strong and independent authority striving to contribute to a competitive market economy by developing a transparent and equal environment in the Georgian public procurement

• system. SPA is collaborating with Supreme Audit Institution and relevant law-enforcement agencies in
• rder to prevent and fight corruption

State Procurement Agency

 Defining regulatory policy of procurement processes  Development of legal framework ensuring its compliance with internationally recognized standards and best practice  Development and maintenance of the unified electronic government procurement system  Monitoring  Elaboration of the adequate strategies, methodologies and their implementation  Training activities  Consulting  Stakeholder in Public Finance Management Reform  Stakeholder in Anti-corruption reform / Anti-corruption Coordination Council  An independent authority directly responsible for development of public procurement framework in Georgia  Accountable to the Government of Georgia  With staff of 89 employees (71 civil servants + 18 contractors)

Dispute Resolution Board (DRB)

• Established on 6 December 2010
• Consists of six members; representatives of the SPA and the

CSOs

• Any entity or person interested in participating in a public

procurement procedure may appeal the actions of a CA (procuring entity) or a tender committee to the DRB via special e-form, free of charge

• eDRB appeal form: Everyone can “freeze” a tender

with just a single click of a button. Submission of appeal takes less than two minutes

• An appealed tender will be “frozen” for a period of

10 business days. During this period the DRB will review the appeal and the results will be published in the eProcurement system

Number of Appeals Filled with the eDRB

Possibility of Appeal

Contracting Authority

• Doesn’t require any defined

procedures by the law

DRB

• According to Article 23 of

the law and Decree N11 of the Chairman of the SPA

Court

• A person interested in participating

procurement procedures may appeal in court the decisions made by contracting authority or the DRB/Agency

Any interested person may appeal any decision of CA (procuring entity) at any institution given below, without being restricted to go through all of them step by step

Technological Framework - eProcurement

• Single

and smart e-Procurement system: transparent, simple, multilingual (Geo-Eng-Rus) and user- friendly, minimizing administrative requirements and preventing mistakes

• All procurement-related information is

available

• nline,

to any interested person - It is possible to track each transaction, to conduct relevant search actions, look for behavioral patterns

• Any communication with contracting

authority is transparent. Any registered user can question any tender using Q&A

• module. Tender committee/commission

is obliged to answer.

eProcurement – Everyone Sees Everything

 Annual Procurement Plans  Tender Notices  Tender Documentation  Questions related to tender notice and documentation / Relevant replies of Contracting Authorities  Tender Proposals / Bids  Decisions of Tender Evaluation Commissions  All relevant correspondence  All data on disputes, including application and decision  Contracts and amendments  Payments made through e-banking & eTreasury

Establishing a special “Anti-corruption Task Force” at the Agency

In order to strengthen monitoring activities based on complex risk- factors, to prevent corruption in PP, to focus on “risk-tenders”, to elaborate new methods and tools, to draft special “investigation reports” based on desk analysis, to enhance cooperation with relevant law-enforcement agencies, at the SPA was established inter-departmental WG (5 officers) on Dec-2015

ANTI CORRUPTION TASK FORCE ANTI CORRUPTION TASK FORCE

MONITORING DEPARTMENT

Elaboration and Adoption of a New Monitoring Methodology (Dec-15)

20+21 risk factors, implemented in eProcurement system

Adoption and Implementation of a New Regulations on “Simplified” Procurement (Nov-2015)

In order to prevent any corruption cases, to decrease non-transparent and restricted purchasing cases, GoG has adopted and Parliament has voted a new amendment to the PPL on single-source / direct purchasing procurement procedures. SPA has developed/launched a new transparent e-module (SMP module) on November 2015.

Adoption and Implementation of a New Procurement Procedures (July-Dec 2016)

In order to fight bid-rigging, to prevent corruption cases in public and business sectors, SPA has developed/launched 3 new PP procedures during July-December 2016.

Development and Launching of a New Ranking Module

In order to prevent corruption cases in public sector during single-source, restricted procedure, SPA has developed/launched a new e-service on May 2017. Aim is to consult CA and recommend relevant Economic Operators in case of direct purchasing without prior publication (non e-tender procedure).