Georgia rapid development and low cost model

A case of Georgia

Developing and implementing e-Procurement solutions

Tato Urjumelashvili, SPA

Kiev, December 2011

1Where we started

SPA office. January 20103Collection of documents from state bodies (paper tenders)Service agency of mia

Tax Department

NATIONAL AGENCY OF PUBLIC REGISTRYOther state agencies

Commercial banks

Notary

courtsProcuring Entity

Tender proposal

Qualification docsWaste of time

BidderWaste of moneyWaste of administrative resourcesWaste of paper3

Paper tenders and geographical inequality

Procuring entity

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

20 mln paper copies in last 5 years

High transaction costsLimited access to informationHigh compliance costs

4Side effects of paper tendersLack of transparencyHigh risk of corruptionNon-reliable dataRestricted competitionGeographical inequalityHigh compliance costsFailing procurement system5What we wantedTransparency

Non- discrimination

Fair evaluation

Streamlined and easy to follow procedures

..and get rid of papers!!!In-house developmentOff-the-shelf solutionsCostCostLess than $ 1 mlnApprox.$ 10 mlnTwo options7First option (widely used off-the-shelf solution)

8Second option: Georgian alternativeHardware $ 500 000Software $ 150 000Business Intelligence $ 70 000Website $ 10 000Communication campaign $ 30 000

Sleepless nights not counted

Pace of the reformsJanuary 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 !!!

Geographical inequality eliminatedWhat we got

Procuring entity

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

Minimum paperworkMinimum transaction costsEveryone sees everythingNo physical visits

Increased competitionMaximum efficiencyFair evaluationElectronic dispute resolution11

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

Yes

YesYesYesNoNo

System prevents mechanical and procedural mistakesSystem provides subscription and internal messaging optionsElectronic payments module/ linkage with State TreasuryAll activities are loggedBilingual system.Georgian - English Integrated appeal mechanism

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

Clear and well articulated political will 17Visionary approach no special rigid strategyConsolidated team unified views and valuesCorrection during the implementation return to the reforms several time Unilateral liberalization of procurement market for foreign biddersStreamlined, easy-to-follow proceduresNon-discrimination & fair evaluationMaximum transparency everyone sees everythingHow we built itTransparent & 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)Too long and too expensive for us (what about you ?)17What we learned

Reform boldly, broadly and communicateStart small and leverage on demonstrable resultsBusinesses love change they understandMore transparency less corruptionStreamline then automateSimplicity is powerKeep on identifying the next biggest binding constraint, reform in seriesReform unilaterally, dont wait for reciprocity

Communicate reforms Results inspireThank you for your attention!

www.procurement.gov.ge

28 Pekini Ave., Tbilisi 0160, Georgia e-mail: info@procurement.gov.ge