Summary
The amount of resources allocated to Georgia's public sector has increased considerably in recent years and the efforts aimed at the eradication of bribery have been very successful. At the same time, independence of public sector employees is not protected adequately, while the robust legal provisions concerning transparency are not applied consistently in practice. The public sector does not presently engage in any significant efforts towards educating the general public on corruption and does not collaborate actively with either civil society or the private sector in this area. The existing system of public procurement contains important anti-corruption safeguards but these are not always implemented effectively in practice.
The table below presents indicator scores summarizing the assessment of the Public Sector in terms of its capacity, its internal governance and its role within the Georgian integrity system. The remainder of this section presents a qualitative assessment for each indicator.
Structure and Organisation
Georgian law defines "public service" as the work in central and local government agencies that are financed by the state. The law lists a number of bodies that comprise the public service,and separate pieces of legislation on other bodies also identify them as a part of the public service. This chapter also examines, the Legal Entities of Public Law (semi-independent bodies performing various public functions under the general supervision of the state), most of which are not covered by the Law on Public Service but nevertheless play important roles on behalf of the state. Furthermore, as some of the Legal Entities of Public Law perform a number of important public service roles delegated to them by government ministries and departments, they are required to follow the provisions of the Law on State Procurement and are monitored by Georgia's supreme audit institution, the Chamber of Control (see the relevant chapter for further information). The difficulty in defining Georgia's public service is a result of disjointed legislation caused by years of amendments, resulting in a body of law with many parts that are not in harmony with others.
The Civil Service Bureau is a body responsible for facilitating the development of a uniform state policy on public service and coordinating the relevant activities. The Bureau is also responsible for coordinating the management of human resources in public agencies, collecting asset declarations of public officials, analyzing the state of affairs in public service and presenting relevant recommendations to the legislature.
The assessment of the public administration in this chapter does not include the public institutions that are covered in other chapters as separate pillars (such as the Legislature, the Executive Branch, the Law Enforcement Agencies and the Electoral Administration).
Assessment
Score: 50
To what extent does the public sector have adequate resources to effectively carry out its duties?
The amount of resources available to Georgia's public sector has increased significantly in recent years. At the same time, effective delivery of public services is hampered by the fact many agencies still receive inadequate financing.
The availability of resources for the public sector improved considerably following the substantial increase in state revenues after the new government came to power in 2004. The problem of salary arrears, a major issue in the public sector under the previous government, has been resolved. In a 2009 survey of public servants, 99 percent of respondents said that their salaries had been paid ontime during the preceding year. A senior government official told TI Georgia that, along with the increase in state funding, the financial situation in the public sector has been improved through the transformation of many public agencies into Legal Entities of Public Law: semi-autonomous bodies delivering a range of services to citizens. Examples include the Civil Registry and the Public Registry, both under the Ministry of Justice. These entities are allowed to retain the revenues they generate and are thus more financially self-sufficient than most other state bodies that rely solely on government transfers.
Despite these improvements, it appears that funding is still inadequate and uneven across the public sector. Nearly half of the respondents in the survey cited above said that their salaries are inadequate in meeting their living costs.It is likely that inadequate pay levels often deter qualified individuals from entering public service. TI Georgia was told by a senior government official that public agencies often find it difficult to fill vacancies because of the lack of applicants possessing the necessary qualifications.According to one expert, while some government agencies receive an adequate amount of resources, the financing of many central agencies and all local government bodies is inadequate. The flexible hiring and firing system and the absence of a common remuneration scale for different public institutions make it possible for some "priority" agencies to retain qualified employees through generous bonuses and to offer attractive remuneration to contractors and consultants.The downside to hiring qualified external consultants at a higher salary is that institutional memory is not built or retained.
The low level of independence of civil servants and especially the insecurity in job tenure are also a drain on institutional knowledge and prevent some public bodies from building expertise (see the independence law/practice sections below for more detail).
Score: 50
To what extent is the independence of civil servantssafeguarded by law?
The legal framework contains a number of provisions designed to ensure the independence of public servants but some important safeguards are missing.
The law highlights impartiality as one of the main principles of public service in Georgiaand prohibits public servants from using their position for political party-related activities.Public sector employees can challenge dismissals and other work-related orders and decisions in court.The law lists the legitimate reasons for dismissal of public servants,which should limit the scope for arbitrary decisions. The grounds for dismissal listed in the law are generally reasonable, such as an employee's lack of required skills, his/her failure to pass an examination or conviction for a crime.
However, there are no provisions expressly prohibiting partisan interference in the appointment and promotion of public servants and there is no institution tasked with protecting public sector employees from arbitrary treatment and political interference. As pointed out by the OECD's Anti-Corruption Network for Eastern Europe and Central Asia (OECD ACN), the existing rules give "large discretion" to the senior management of public agencies and make it possible for them to exert "undue influence" on the professional decisions on public servants.
Independence (practice)
Score: 25
To what extent are civil servants free from external interference in their activities?
The lack of effective legal mechanisms for ensuring the independence of public servants has led to a situation where their tenure and job security are often directly tied to the tenure of political appointees. In practice, the situation varies by agency but, in general, civil servants enjoy few protections.
The independence of the public sector has been undermined by the wide discretion that the heads of individual agencies enjoy in the appointment and dismissal of public servants in practice. According to OECD ACN, while the heads of agencies should be able to manage human resources based on the needs of their institutions, the wide scope of discretion they have in Georgia can lead to the "politicization of public administration".This fear is borne out in practice and the neutrality of the public service has been called into question during recent elections. The OSCE/ODIHR, for example, noted in its report on the 2010 elections that the "distinction between the state and the ruling party was sometimes blurred".TI Georgia's report on the use of administrative resourcesduring the elections also highlighted the fact that the public service was effectively involved in the ruling party's campaign in a number of cases.
A senior parliamentary official confirmed that, in practice, public servants are easily forced out of their jobs by their superiors and enjoy very little protection.Consequently, as noted by another expert interviewee, there is high turnover in the staff of public agencies. Given the lack of established professional service standards, loyalty to immediate supervisors often becomes a central factor determining whether or not an employee retains a job. The Civil Service Bureau, the body charged with coordinating the management of human resources, does little to reinforce the independence of public servants as each agency determines its staff-related policies on its own.
On the other hand, a 2009 survey of public servants produced a somewhat different picture: 67 percent of the respondents said that they enjoy job security and 68 percent stated that decisions on human resources are not based on political affiliation. However, the authors of the survey noted that almost a quarter of the respondents did not answer the latter question.
The Civil Service Bureau has recognized the fact that the chiefs of public agencies presently enjoy excessive autonomy in terms of human resources policy. The Bureau is currently working on a common set of rules and standards to address the issue.
Score: 75
To what extent are there provisions in place to ensure transparency in financial, human resource and information management of the public service?
The legal provisions concerning transparency in the management of the public sector are mostly adequate. The legal framework is generally progressive but does not always require public agencies to publicize certain types of information proactively.
The rules for the management of public information are set out in the General Administrative Code, which states that everyone is entitled to access public information stored in administrative bodiesunless it contains a state, a commercial or a personal secret. Public agencies are required to submit the public information they have to a special internal registry and to appoint officials responsible for ensuring access to public information.Public agencies are required to report to the president and parliament annually on matters concerning public information management.
Individuals seeking access to public information must submit a written request and the relevant public agency is required to provide the information immediately or, if the information requires some additional work to gather, within 10 days - a period to be envied by citizens of most countries. Importantly, it is not necessary to justify the reason for a request.In addition to the provisions of the General Administrative Code, the Law on Public Service requires heads of public agencies to ensure proper operation of the public information access mechanism.
The rules governing appointments to positions in the public sector are generally adequate in terms of transparency. Hiring is to be conducted through an open competition and vacancies must be advertised publicly at least 10 days in advance. Successful candidates are selected by a special commission that is required to inform all applicants about its decision within five days from adopting it.
The legal framework contains a number of provisions regarding the transparency of public procurement. The State Procurement Agency has a legal responsibility to create a single database of public procurement records and to issue normative acts designed to ensure transparency of procurement. The law directly requires the Agency to monitor procurements in order to ensure that the principles of transparency and accountability are followed. Procuring bodies must submit procurement reports to the State Procurement Agency within a legal deadline. These reports must be made available to any interested individual, while the procuring bodies are also required to publish brief summaries of the reports in the media. Under the latest legislative amendments, all bidding is to be conducted electronically and documents must be publicly accessible via a unified online system.This represents an important step forward in the transparency and accountability of public procurement.
The Law on Public Service requires lower-level public service employees (public servants) and their family members to submit annual income and property declarations to the Ministry of Finance.These are used primarily for tax purposes. Higher-level members of the public service (public officials) are required to submit more extensive asset declarations to the Civil Service Bureau. However, the latter requirement does not apply to a number of important members of local government (for example, the members of the Tbilisi City Council).
The law does not contain any mechanisms to verify the declarations. The Civil Service Bureau has stated that the need for such mechanisms is debatable since the declarations are publicly available and all interested individuals and organizations can review their content.
Also on the negative side, the fact that Georgian legislation does not contain a list of information that public agencies must publish proactively is a notable shortcoming. OECD ACN has recommended that such a list should include, among other things, information regarding the structure and authority of public agencies, their budgets and financial reports, as well as adopted or draft decisions.
Transparency (practice)
Score: 50
To what extent are the provisions on transparency in financial, human resource and information management in the public sector effectively implemented?
Legal provisions regarding the access to public information are implemented unevenly across the public sector. Government agencies do not always provide public information within the legal deadlines and withhold certain types of public information, such as the bonuses of public officials. At the same time, notable progress was made in recent months in terms of transparency of public procurement and public sector vacancies.
According to OECD ACN, Georgia's extensive provisions on freedom of information are not always implemented thoroughly. Public agencies often fail to provide information within the legal deadline and sometimes fail to provide a response at all.As a possible reason for these shortcomings, OECD ACN highlighted the fact that Georgia has no central body responsible for monitoring the application of freedom of information regulations and providing training to the relevant public officials.In TI Georgia's own experience with FOI requests, public agencies often wait for the maximum 10 days even if the information requested is readily available; they frequently provide incomplete answers when the requests are detailed and specific; and they ask for further clarification before providing the information, or ask requestors for a justification, which is a direct violation of the law.These conclusions were also borne out by the field tests conducted for this study: 52 questions sent to public agencies by the representatives of other civil society organizations, media, ethnic minorities and non-affiliated citizens. The field tests revealed considerable differences in how different public agencies treat FOI requests, with some of them being much less responsive than others (see the chapter on the field test results for further details).
The declaration of assets takes place in practice as required by the law and these are posted on a special website.At the same time, there is no agency responsible for reviewing the declarations or verifying the information.While it would not be possible to verify the information in every declaration, TI Georgia has suggested that a random spot-check of some asset declarations would be an effective enforcement mechanism.
Information regarding the salaries of public officials is publicly available, but the system of bonuses (which are believed to make up a substantial portion of some public officials' income) is not transparent. There is no defined system of bonus rates or criteria for awarding them. Public agencies have turned down TI Georgia's requests for information regarding the bonuses received by individual public officials.
Transparency in hiring is achieved only inconsistently within the public sector. The legal provision requiring that government jobs be publicly advertised is applied unevenly, as some agencies regularly advertise all positions, while others never do.At the same time, as an important step forward, the Civil Service Bureau started posting public service vacancies centrally on its website (www.csb.gov.ge) in late 2010.
Transparency of public procurement has been problematic in recent years but progress has been made lately. While bidding announcements used to be published in a newspaper and posted on the State Procurement Agency's website, it was difficult to obtain information about conducted tenders. The Georgian Young Lawyers Association, for example, has often found it difficult to obtain procurement-related information, especially from local government bodies, and the information it received is often incomplete.The problem was addressed through the introduction of electronic procurement since the relevant information is now posted on a dedicated website (tenders.procurement.gov.ge).
Score: 75
To what extent are there provisions in place to ensure that public sector employees have to report and be answerable for their actions?
The legal framework is generally adequate in terms of accountability procedures as there are various mechanisms for challenging the decisions made by public agencies or officials.
The legal framework on whistle blowing, introduced in 2009, is strong. Whistle-blowing is defined in the law as informing the relevant internal unit (audit or internal control) of a public agency about a violation that was committed by a public agency or a public servant and which caused damage to public interests or to a public agency's reputation. The law prohibits intimidation, pressure or discrimination against whistle-blowers, who are also entitled to seek protection in a court if they or their family members are threatened. If civil, administrative or criminal proceedings are launched against a whistle-blower, the relevant agency is required to prove that the charges are not linked to the fact of whistle blowing. A whistle-blowing complaint cannot be adjudicated by an official against whom it is directed or an official who has a direct or indirect interest in the outcome and whose impartiality is therefore questionable. The complaint must be investigated and adjudicated by the relevant internal body within the shortest reasonable timeframe. If the internal inquiry finds grounds for criminal or administrative sanction, then the body must notify the relevant law enforcement authorities.
There is also a mechanism in place for citizens to file complaints regarding the decisions of administrative bodies (public agencies). They may petition a higher-level official or unit inside the same body or a higher-level body, or appeal to a court.Administrative bodies are required to allow all interested parties to present their opinion during the adjudication of a complaint.
The Chamber of Control (Georgia's supreme audit institution) has the authority to audit public agencies.The auditors are authorized to access all relevant materials and must inform law enforcement bodies of any suspected crimes.In addition, under a new law adopted in March 2010, public agencies are required to set up internal audit units responsible for examining the effectiveness of financial management in these institutions. Internal audit units report to a special body inside the Ministry of Finance. Moreover, the new law requires public agencies to set up financial management and control systems and to the Ministry of Finance on their operation. On the negative side, the Ministry of Internal Affairs, the Ministry of Defence and the Ministry of Justice, as well as local government bodies and the Legal Entities of Public Law funded by the state, are not required to set up internal audit units until 2013.
The Georgian Criminal Code contains a dedicated chapter on crimes committed by public officials and civil servants in their official capacity. Punishable offences include bribery, abuse of authority, excess of power, and forgery.
Georgian law includes provisions designed to ensure accountability of Legal Entities of Public Law. This type of an agency is required to submit annual reports to a special supervisory body designated by the president. The supervisory body is authorized to request information from the entity and commission an independent audit of the entity's finance reports.Georgia's supreme audit institution, the Chamber of Control, also has the authority to examine the activities of these entities.On the negative side, as noted by the Chamber of Control, the legal framework lacks any clear criteria for determining which Legal Entities of Public Law are accountable to the Ministry of Finance in the same manner as other bodies that receive state funding.
Parliament can require public sector agencies to present information/reports regarding their activities at any time.
Accountability (practice)
Score: 75
To what extent do public sector employees have to report and be answerable for their actions in practice?
Accountability of the public service agencies and employees is generally ensured effectively through the activities of the Prosecutor's Office, the judiciary and the supreme audit institution. At the same time, internal audit mechanisms were only introduced a short while ago and do not cover the entire public sector yet.
Official statistics suggest that offences committed by public servants are being investigated actively. The Prosecutor's Office recorded 791 crimes of this type in 2009, including 94 cases of abuse of power and 79 cases of bribery.The judiciary appears to provide a meaningful mechanism for private parties to seek redress. For example, in 2009, private parties won half of their appeals against public agencies in court (2,673 out of 5,342).
Public agencies are audited by the Chamber of Control as required by the law. The activities of the Chamber of Control are limited to inspection of compliance with the relevant laws and budgets, while the audit of financial systems and of internal control and internal audit functions is not carried out.At the same time, there have been some encouraging developments in recent months as the Chamber of Control has identified and publicized serious violations in a number of public agencies.It is difficult to assess the effectiveness of the internal audit units of public agencies since they operated for less than a year in some agencies and are yet to be established in others.
According to Deputy Justice Minister Jaba Ebanoidze, the Legal Entities of Public Law that were established by government ministries are supervised by the same ministries.All Legal Entities of Public Law that receive state funding are audited by the Chamber of Control.
Although Georgia recently introduced some robust rules on whistleblower protection, doubts have been voiced as to whether the government is taking any steps to raise the awareness of these new provisions among civil servants.
Score: 75
To what extent are there provisions in place to ensure the integrity of public sector employees?
Georgia has robust integrity rules for the public sector. These are primarily set out in the Law on Public Service and the Law on Conflict of Interest and Corruption in Public Service. Many provisions of the latter only apply to higher-level public servants.
The Law on Public Service was amended in 2009 to incorporate a whole new chapter on "general rules of conduct for public servants". Under this amendment, public servants are required to perform their duties in an impartial and honest manner and must refrain from misusing official funds or using official authority for personal purposes. Public servants are prohibited from accepting gifts or services that could influence the exercise of their duties and must inform their supervisors of any such offers. Public servants are required to prevent any instances of conflict of interest and to declare such instances whenever they occur. They are also required to file a notice if they have relatives who work in the same institution.
For three years after leaving the service, former public sector employees are prohibited from joining organisations or enterprises that they supervised as part of their office duties and from receiving income from such entities.Public servants cannot, in their official capacity, enter commercial deals with their family members or close relatives, as well as the institutions where they work, commercial entities or political parties. When a public servant holds shares in a commercial enterprise, s/he is required to hand them over to another person for temporary management for the duration of public employment.
OECD ACN has praised Georgia's rules on gifts, describing them as "very detailed".The Law on Conflict of Interest and Corruption in Public Service establishes a ceiling value of gifts that a public servant is allowed to accept in a single year (15 percent of the annual salary). A similar restriction is in place for the family members of public servants.
Public officials are prohibited to perform any other paid work, while their family members are also barred from working or owning shares in commercial entities that the officials are supposed to supervise. A public official's close relative cannot be appointed to a position directly subordinated to this official, unless the appointment is made through an open contest.
Bribery of or by public servants is a criminal offence under the Georgian law.
On the negative side, the extensive integrity provisions discussed above are vague or ambiguous in terms of their application to the Legal Entities of Public Law. Also, there is no legal requirement for public procurement contracts to contain integrity/anti-corruption clauses (though there are provisions dealing with conflict of interest during the bidding and selection process; see the section on the public sector's role in reducing corruption in public procurement for more detail).
Integrity Mechanisms (practice)
Score: 50
To what extent is the integrity of civil servants ensured in practice?
The government has been very successful in reducing bribery in the public service. Beyond that, however, Georgia's extensive integrity rules for public servants are not always applied effectively in practice, mainly because of the lack of an effective institution responsible for enforcing the rules and providing public servants with appropriate training.
The Georgian government has achieved considerable progress in reducing petty corruption in the public sector since 2003. According to the 2009 Global Corruption Barometer, a mere two percent of those interviewed in Georgia had paid a bribe during the previous year. At the same time, respondents still did not seem to have high levels of trust in public officials, giving an average score of 3.2 out of five when asked to rate public officials from "not corrupt" (one) to "extremely corrupt" (five).
Beyond the prosecution of bribery, it appears that integrity rules are not enforced in a consistent manner. According to the OECD ACN, "it cannot be concluded that the [Public Service] Bureau upholds professional and legal standards in the civil service in general."The Bureau does not have authority to discipline breaches of integrity rules, it does not conduct regular trainings for public servants, especially at the local municipal level, and it lacks the capacity to enforce conflict of interest provisions and post-employment restrictions.
The Civil Service Bureau has prepared a legislative proposal whereby public agencies would be required to provide their employees with training on integrity rules and issues.
Score: 25
To what extent does the public sector inform and educate the public on its role in fighting corruption?
The public sector does not presently engage in any significant activities designed to inform the public about corruption-related matters.
The government does not presently carry out any awareness-raising or educational activities in the field of anti-corruption, limiting its efforts to press conferences held by prosecutors when corruption-related crimes are solved. Thus the public only receives information about the repressive aspects of anti-corruption policies but it does not hear about pre-emptive measures, such as the development and implementation of anti-corruption strategies and action plans.One plausible explanation is that the government defines corruption rather narrowly as bribery and focuses entirely on combating it through arrests and deregulation. TI Georgia's interview with a senior government official seemed to confirm that the public service does not prioritize education of the general public about anti-corruption efforts. The official noted that, given the progress achieved in terms of reducing corruption in recent years, citizens no longer consider corruption to be a major problem in the public sector.
On the positive side, a number of agencies involved in anti-corruption efforts (such as the Prosecutor's Office and the Chamber of Control) have publicly advertised hotlines that citizens can use to submit corruption-related complaints. The Civil Service Bureau is planning to start a wide information campaign in order to raise public awareness of the most recent changes in the public service (including anti-corruption measures). According to the Bureau, the campaign will focus on public sector accountability and transparency.
Score: 50
To what extent does the public sector work with public watchdog agencies, business and civil society on anti-corruption initiatives?
There has been limited cooperation between the public sector, civil society and business on anti-corruption issues.
TI Georgia is one of four CSO members of the Anti-Corruption Coordination Council set up in 2009 by the Ministry of Justice. However, when the Council elaborated the National Anti-Corruption Strategy and its implementation action plan in 2010, the participation of NGOs was limited due to the short-term notification typically provided to NGOs to comment on draft versions of these documents.
OECD ACN noted that civil society's involvement in assessing the implementation of the National Anti-Corruption Strategy has been complicated by the lack of assessment criteria, while the private sector has not been included in the anti-corruption activities at all. It also emphasized that there are no formalized mechanisms for anti-corruption cooperation between different agencies inside the public sector.
On the other hand, in some cases, the government recognizes the value of involving civil society in its reform efforts. For example, CSOs are represented in the Board and the Disputes Council of the State Procurement Agency and in the Chamber of Control's Council of Disputes. Also, several NGOs including TI Georgia were members of a working group with the Central Election Commission that developed a memorandum to prevent abuse of administrative resources in the pre-election period in the run-up to the May 2010 elections, and also in 2008 parliamentary and presidential elections. There are numerous examples of a core group of civil society organizations involved in policy processes, although the general rule of thumb is that very little time is provided to comment on draft legislation.
Score: 50
To what extent is there an effective framework in place to safeguard integrity in public procurement procedures, including meaningful sanctions for improper conduct by both suppliers and public officials, and review and complaint mechanisms?
Georgia's legal framework for public procurement is extensive and contains a number of detailed provisions designed to ensure objectivity of the process and reduce the risk of corruption. Recent amendments to the law in 2009 provide for the introduction of further safeguards, such as an electronic procurement system and an independent panel for the review of complaints. However, according to experts, the existing procedures are not always followed thoroughly in practice and the agency responsible for supervising the procurement system lacks the capacity to conduct effective oversight. Some of the safeguards were only introduced a short while ago and it is difficult to assess their effectiveness in practice yet.
The general rules for state procurement are set out in the Law on State Procurement,while the Charter on State Procurement Rulescontains a more detailed description of the relevant procedures. Procurement is handled by individual public agencies, with general supervision from the State Procurement Agency (SPA). The SPA is an independent institution responsible for the coordination and monitoring of procurement-related activities. The agency is accountable to the executive branch and its chairperson is appointed by the prime minister. The agency is required to continuously examine and analyze the situation in the field of state procurement on the basis of reports supplied by procuring organisations and present relevant recommendations to the government, while ensuring that the procurement procedures are carried out according to the law.The legal requirements discussed below extend to Legal Entities of Public Law.
The law establishes open bidding (tendering) as a general method of public procurement, with some exceptions. Georgia recently adopted legal amendments that changed the procurement setup considerably. Electronic procurement conducted through a centralised online system was introduced and presently there are three types of procedures that public institutions can use for procurement: 1) electronic tender (for purchases worth GEL 200,000 (USD 120,500) and above); 2) simplified electronic tender (for purchases under GEL 200,000); 3) simplified procurement (for purchases under GEL 5,000 (USD 3,000)).The main difference between the electronic tender and the simplified electronic tender is the number of days allocated for the entire procedure, while the method of simplified procurement allows for direct purchase of goods and services.
Introduction of the GEL 5,000 cap for exceptions to open bidding is an important step forward, particularly as the same cap previously ranged from GEL 50,000 to GEL 100,000 (USD 30,000-60,000). At the same time, the entire law and its requirements concerning open bidding do not apply to a whole range of purchases made by public agencies. While it is commendable that a comprehensive list of these exceptions is provided in the law, some items on the list are potentially problematic. For example, the law does not apply to procurement conducted under the special funds ("reserve funds") of the president, the government and the Tbilisi Mayor's Office.
The law contains a number of provisions designed to ensure objectivity of the contactor selection process by addressing potential cases of conflict of interest. These rules are highly detailed and "adequately elaborated".Bidding is conducted by a tendering commission comprised of officials from the procuring organisation. Once bidders are identified, the public officials and civil servants involved in the evaluation and selection of offers are required to confirm in writing that their participation in the process does not involve a conflict of interest. All individuals who do have a conflict of interest are required to withdraw from the process.The law leaves little room for subjective decisions since it requires the commission to select the lowest-price offer that meets the criteria announced by the commission in advance.
The law establishes standard content of the tender announcements posted in the electronic procurement system. Procuring agencies are further required to use the European Union's Common Procurement Vocabulary.Any changes to the tender documents must be posted in the same unified electronic system no later than five days before the end of bidding (two days, in case of a simplified electronic tender).
The law describes the process by which contract implementation should be supervised. The procuring organization must appoint a coordinator or form a special inspection group. The law contains a list of the supervisory activities to be conducted by the coordinator and/or the inspection group (such as drawing up a plan and a schedule of supervision, overseeing the compliance of the quality of provided goods or services with the procurement contract). The procuring organisation must regularly inform the State Procurement Agency about the findings of the inspection group (though the exact frequency of reporting is not defined).
The SPA is also responsible for creating and maintaining a unified database of contracts,as well as an electronic database of dishonest bidders.All procuring organisations have a duty to submit procurement reports to the agency.Procuring organisations are required to store all documents and materials concerning the bidding process for a period of three years from the signing of a contract.The agency is authorized to ask procuring organisations and bidders to present any relevant documents at any stage of the procurement process.The agency can also demand that procuring organisations correct their unlawful actions and can recommend suspension of their funding in the event of gross and systematic irregularities.The Chamber of Control (Georgia's supreme audit institution) also examines public contracting through the audit of procuring organisations.
Bidders can file complaints against the actions by the procuring organisation or the tendering commission either with the organisation itself, with the SPA or with the judiciary. If a complaint is filed with the agency and the agency finds that the claims are valid, it is authorised to order the procuring organisation to revise its decision. The agency can also raise the question of responsibility of the offenders with the relevant authorities. The procuring institution is required to suspend the procurement process during the adjudication of a complaint. The decisions adopted by procuring organisations and the agency regarding complaints can be challenged in court.Under the recent amendments to the law, the SPA is required to set up a special panel for the adjudication of complaints that will include an equal number of representatives from the agency itself and from civil society organizations.
In terms of civic control of public contracting, the law provides for the establishment of the State Procurement Agency's Supervisory Board in order to ensure "transparency of the state procurement system, publicity and democratic governance of the agency's work". The seven-member board is to be comprised of civil society and media representatives along with government officials. The board is authorised to retrieve and examine any procurement-related information from the procuring organisations. The law requires the board sessions to be public.There are two civil society representatives and one media representative on the SPA board at present.
There are a number of weaknesses in the law. Specifically, the law does not expressly require people involved in different stages of the procurement process to have any special qualifications. There is also no provision that would stipulate a clear separation of responsibilities during the tendering process, for example requiring that those responsible for offering evaluations must be different from those tasked with elaborating bidding documents and from those in charge of oversight activities. There are no administrative sanctions (such as prohibition from holding public office) for individuals who have committed procurement-related criminal offences. In addition, OECD ACN notes that the law should provide for debarment of companies convicted of corruption-related offences from public procurement, and it should allow appeals to be filed regarding the type of procurement chosen by a procuring agency (e.g. whether a procuring agency should have used open bidding instead of single-source procurement).
The current system, whereby winners in tenders are determined on price alone, while limiting the possibility of biased decisions on the part of procuring agencies, creates a dangerous incentive among bidders to be dishonest about actual costs and pays inadequate attention to the value of quality in goods and services. In order for this system to be effective, there must be substantial resources invested into drawing up bid documents and overseeing implementation and delivery of services and goods tendered. It is not clear whether such expertise exists within the SPA currently.
Assessment of the current practice of public procurement is complicated by the fact that Georgia introduced a new system of electronic procurement less than a year ago and there is still not enough evidence for drawing any definite conclusions regarding its effectiveness in practice.
Open bidding seems to be the predominant practice. According to the SPA only three percent of the money allocated to different procurement organisations in 2009 was spent through single-source procurement, while 75 percent was spent through open bidding.No comparable data is available yet for the period of time since the introduction of electronic procurement. However, the percentage of single-source procurement is likely to have become even smaller due to the sharp reduction in the maximum permissible sum of such purchases.
According to GYLA, the tender procedures are not always applied thoroughly. Selection criteria are sometimes altered after the applications have been received and, in some cases, no clear selection criteria are released at all. Tendering commissions frequently fail to provide justification of their decisions.According to an expert interviewee, the supervision of procurement contracts is not always adequate in practice. For example, weaknesses in the supervision of the construction of homes for people displaced after the 2008 Georgian-Russian war affected the quality of work carried out by the contractors.A monitoring report comparing the capacity of different public bodies to supervise construction showed that Mtskheta municipality was far less equipped to ensure construction quality and prevent corruption than the Municipal Development Fund (MDF), a legal entity of public law that was originally established by the World Bank to oversee large construction projects. Even the MDF's supervisory processes were problematic, as it is virtually impossible to ensure the independence of supervisory engineers with such a small pool of qualified experts in the country and the monitoring efforts of these supervisors were not consistent.It has been suggested that, in practice, the SPA is still institutionally weak and lacks the resources needed for an adequate discharge of its supervisory role.
The Chamber of Control's recent findings regarding procurement-related corruption in a number of public agencies seem to confirm the above observations concerning the weakness of selection procedures and supervision mechanisms in practice.Furthermore, the Chamber has highlighted multiple problems at the municipal level relating to the terms of procurement, prices, terms of contracts, and contract oversight mechanisms.
Previously, there was a certain lack of public trust in the ability of the SPA to handle procurement-related complaints. In 2009, for example, only nine complaints were filed with the SPA.However, the situation appears to have changed lately. The Council of Adjudication of Disputes comprising an equal number of representatives from the government and the civil society was established in 2010. The Council received 13 complaints in the first two months of 2011 alone (of which two we upheld, one was upheld partially and 10 were rejected).
Footnotes
The Georgian Law on Public Service, adopted on 31 October 1997. The law lists the following institutions as comprising the public service:Parliament, the President's Administration, government chancellery, ministries and sub-agencies, Council of Justice and courts, National Bank, Chamber of Control, Public Defenders Office, regional governor's offices, government bodies of the autonomous republics and administrative bodies of municipal government
