“Doing Business with the Georgian Government”

The Supplier Guide

INTRODUCTION

The guide provides potential suppliers with simple and

practical insights into the necessary supplier qualification criteria.

In addition, it provides information about the state procurement’s needs

and opportunities as well as how to use the

Competition and State Procurement Agency’s (CSPA) online procurement system.

The guide is available through a variety of internet resources

[list of main web pages where guide will be available]

In multiple languages.

It will serve as a useful tool for suppliers to receive a contract from the Georgian Government.

CONTENT

• PROCUREMENT SYSTEM• GEORGIA’S STATE PROCUREMENT PROCESS • COMPETITION AND STATE PROCUREMENT AGENCY

(CSPA) • GEORGIAN ELECTRONIC GOVERNMENT

PROCUREMENT (Ge-GP)• WHICH MEANS TO CHOOSE • EVALUATION SYSTEM: LOWEST PRICE + PASS/FAIL• WHAT, WHEN, HOW MUCH, FROM WHOM• TO-DOs• NOT-TO-Dos• DISPUTE RESOLUTION IN PROCUREMENT• DISPUTE RESOLUTION SYSTEM

PROCUREMENT SYSTEM

Over the past decade, the Georgian procurement system has continuously improved due to progressive legislation, resulting in efficient and transparent

procurement policies and practices. The Law on State Procurement has multiple objectives, including:

To ensure rational spending of public funds; To develop fair and open competition; To create a fair and non-discriminatory environment for participants in

procurement procedures; To establish a vendor’s responsibility; To ensure publicity of public procurements; To establish a uniform system of electronic system of public procurements; To build trust among civil society for the Georgian procurement process.

PROCUREMENT SYSTEM

• Georgia’s state procurement system and its policies work to fulfill the procuring entity’s mission and protect the interests of the state and its taxpayers while promoting fair contractual relationships with the business community.

• Competition in the procurement process serves both state agencies and potential suppliers by guaranteeing an optimal solution at a reasonable price. It also provides qualified vendors with an opportunity to obtain business from the Georgian Government.

GEORGIA’S STATE PROCUREMNT PROCESS IS DESIGNED TO:

Ensure fair and transparent competition as the process is open and does not require a company’s local presence;

Prevent against favoritism, carelessness, over-spending, fraud and corruption;

Ensure that the results of the procurement process meet the needs; Provide for checks and balances to regulate and oversee

procurement activities; Protect the interests of the state and its taxpayers; Make reasonable efforts to ensure that vendors are aware of

opportunities to compete for state business as tender notices are in Georgian and English;

Define the process by which the procurement is being conducted; Disclose the general process to potential suppliers; Document the procurement process, including any related

information and decisions.

COMPETITION AND STATE PROCUREMENT AGENCY (CSPA)

CSPA is a central independent body in public procurement system and as such it carries out

variety of functions - regulatory, monitoring, training, advisory, informational, operational-

development and review.

GEORGIAN ELECTRONIC GOVERNMENT PROCUREMENT (Ge-GP)

 E-Procurement is a collective term for a range of technologies that can be used to automate the internal and external processes associated with procurement.

The two main e-modules embedded in the Georgian E-Procurement system are E-Tendering and E-Auction

  E-Tendering includes activities such as advertising the requirement for

goods or services, registering suppliers, issuing and receiving tender documents via the internet, and automating the evaluation of responses to a tender.

E-Auction is the means by which a supplier bids in an open auction via the internet for a contract.

 

 

GEORGIAN ELECTRONIC GOVERNMENT PROCUREMENT (Ge-GP)

 

By using email and internet technology, E-Procurement removes traditional paper processes and provides organizations with the ability to trade electronically. It makes trading simpler and more cost effective for both buyers and suppliers. Since December 1st, 2010 the Georgian Government must trade electronically with suppliers and those companies who desire to trade with the Government must have E-Procurement capabilities.

 It is not necessary to invest in expensive or complex technology to take advantage of the opportunities offered by E-Procurement. At the most basic level, a business may engage in E-Procurement with just a computer and an internet connection.

 The means by which E-Procurement is conducted depends on the value of goods, services or works to be procured; respectively minimum time frames are defined for each occasion.

 

MEANS OF PROCUREMENTMeans of

ProcurementValue (GEL) Published Time frames Remarks

Simplified purchase ≤ 5K - - -

Simplified Electronic Tender

5K-200K Ge-GP min. 3 days -

Electronic Tender 200K≥ Ge-GP e-Tendering min. 15 days+e-Auction 5 days

Tender notices are published also in English

Contest - CSPA web page, www.procurement.

gov.ge

- Used mainly for architectural and design services

Two Stage Simplified Electronic

Tender

5K-200K Ge-GP

e-Auction (2nd stage) to be conducted on the 3rd day from technical and

qualitative evaluation (1st stage)

Limited to procurement of specific services such as: banking and investment,

legal, accounting, auditing , financial, recruitment,

training servicesTwo Stage Electronic

Tender

200K≥

Consolidated Tender

- CSPA web page - Used for aggregated purchase of commonly used

commodities, e.g. fuel

*Ge-GP – Georgian Electronic Government Procurement*CSPA – Competition and State Procurement Agency

EVALUATION SYSTEM: LOWEST PRICE + PASS/FAIL

Bidder Final Price (GEL)

Criteria Pass/Fail Status

Bidder A 90

C1 pass Disqualified because of

technical non-compliance in

Criteria 3

C2 pass

C3 fail

Bidder C 100

C1 pass

WINNER !!!C2 pass

C3 pass

Bidder B 110

C1 passNot reviewed because the

winner (Bidder C) was identified

C2 pass

C3 pass

WHAT, WHEN, HOW MUCH, FROM WHOM ???

Top Procuring Entities

Number of e-Tenders

Top Suppliers

Savings

CSPA-2011Annual Report

TO-DOs There are several important aspects to be taken into account by the supplier before and

throughout the process of participation in public procurement. Make sure you want to do business with the government. Government may be the

country’s largest customer, but their business comes with a lot of strings. Educate yourself extremely well on the process Make sure you meet the basic requirements for doing business with the government. Determine the relevant Georgian Governmental entity who will purchases your

products or services Identify classification codes for goods or services you provide according to Common

Procurement Vocabulary Register with the CSPA Unified Electronic System of State Procurement and

subscribe for automated alert system. Detailed walk-through on electronic procurement process is available on the following link

While E-Procurement offers benefits to suppliers, it can also pose challenges such as

increased competition and keener prices. As a result of bids being advertised on the internet, more suppliers have the opportunity to bid. Therefore, it is essential for the winning bid to be well drafted. The following tips will help a business draft a sound proposal:

NOT-TO-DOs

The most common reasons for losing a tender are as follows: Failure to follow the instructions regarding organization of the proposal. Failure to take evaluation criteria and allocated points into consideration

when preparing a response. Failure to understand and demonstrate an understanding of the problem. Failure to follow the necessary deadlines. Failure to include all of the requested information. The price provided is unreasonable (too high or too low) or incomplete. The proposal is unprofessional in appearance and poorly written. For

example, information is not presented and organized in a logical manner while the proposal is difficult to follow and uses poor grammar. A substandard proposal reflects poorly upon a company.

The proposal does not contain relevant information about a company, its capabilities, and or its management and staff.

The proposal does not demonstrate that a company and its personnel have the necessary experience and capabilities to carry out the project.

ATTENTION

Act Responsibly in accordance with legislation!!! If you fail to meet deadlines after being selected

or fail to sign a contract or meet contractual obligations

YOU GET INTO BLACK LIST

&LOSE GUARANTEE AMOUNT

If you meet the criteria set by the procurement legislation and you are acknowledged as a qualified vendor

YOU GET INTO WHITE LIST

DISPUTE RESOLUTION IN PROCUREMENT

If you think that a procuring entity violated the core principles of transparency, free competition and impartiality during the procurement process, the you can

always revert to the a variety of legislative tools. Dispute resolution in procurement is a tri-tier system, which allows a plaintiff to address the procuring entity (T-I), CSPA (T-II) and judiciary (T-III) without needing to address each of them in sequence. Statistics show that the majority of cases are rejected at the

T-I stage, resolved in favor of plaintiff at the T-II phase, and rarely get to the T-III level.

The Dispute Resolution Board is a T-II mechanism and consists of equal representation from various

stakeholders including the CSPA, the public and private sector, and NGO representatives. All claims are submitted electronically and all decisions are published on the CSPA web page, which is the only legitimate place for such

publication.

If the necessity emerges, a business should use the available legal tools to ensure adherence to the core principles that the state procurement system is based upon.

NOTE: If a business believes the procuring entity acted violation of legislation, it should appeal the tender decision.

DISPUTE RESOLUTION SYSTEM

Review Body

Claim Submission Format

Claim Submission

Stage

ClaimProcessing Timing

Claim Submission

Fee

Number of

Claims

Outcome

T-I Procuring Entity

- Any time prior to signing of the contract

10 days Free N/A

T-II CSPA Electronic Any time prior to signing of the contract

10 days Free 117 58 Positive

T-III Court Electronic Any time 2 months 3% of claim amount, not less

than 100 GEL and not more

than 3000 GEL for individuals and 5000 GEL

for legal entities

N/a