GEO

Over GEL 6 million spent on Independence Day Celebration Events without public tenders

01 August, 2019

 

Within the frame of public spending and procurement monitoring project, Transparency International Georgia (TI Georgia) has studied procurements related to the celebration events of May 26 – the Independence Day of Georgia. According to the information received from 18 state agencies and the research conducted by TI Georgia, over GEL 6.8 million was spent on the celebration of the Independence Day. 97% of all expenses were processed without tender, through a simplified procurement. Only Rustavi and Tbilisi City Halls used public tenders, the rest 16 public institutions purchased needed goods and services only through a simplified procurement.

A high share of simplified procurements has usually characterized public procurements made for the celebration of public holidays. Force Majeure or significant state interests are usually given as grounds for justification for simplified procurement.

Although the dates of public holidays always are known in advance, since they are celebrated on the same days from year to year, state agencies both on central and local government level cannot start preparations for celebrations on time. This does not allow procurers to avoid simplified procurement and highlights serious problems in procurement planning.  This problem has been remaining relevant for many years. TI Georgia has already written on similar problems identified in public procurement of the New Year celebrations.

This research covers public procurements made by public institutions of the central government and five self-governing cities for the celebration of the Independence Day of Georgia. 

Based on the Government order N1030 (3 May 2019), an action plan for organizing the Independence Day celebration events was adopted. According to the plan, Tbilisi City Hall and 20 more state agencies were assigned to organize various events.

In 15-17 May, the Government issued a couple of additional orders to allow public institutors to use simplified public procurement. To organize events of high state importance was named as a ground for allowing simplified procurement. Based on the order N1127, the Ministry of Environment Protection and Agriculture was allowed to spend GEL 200 000 through a simplified procedure. The order N1128 gave permission to LEPL Environmental Information and Education Center to spend GEL 150 000 through a simplified procurement. Based on similar decisions, the Ministry of Defense got GEL 754 000, the Ministry of Regional Development and Infrastructure got GEL 393 000. Creative Georgia, a LEPL of the Ministry of Education, Science, Culture and Sport got the largest funding – GEL 2.7 million.

On 7 June, TI Georgia requested public information from 17 institutions of the central government and five self-governing cities on public procurements made for the Independence Day celebration events. The Ministry of Economy and Sustainable Development, the Ministry of Foreign Affairs and the National Tourism Administration did not provide the answers even in 1.5 months. Therefore, these agencies violated the General Administration Code of Georgia.

TI Georgia still could collect information on purchases of the National Tourism Administration and the Ministry of Foreign Affairs with the help of electronic system of public procurement. As for the Ministry of Economy and Sustainable Development, we could not identify procurements relevant for our research. 

According to the information received by the above-mentioned public institutions, over GEL 6.8 million was spent on the celebration of the Independence Day. 97% of all expenses were made without tender, through a simplified procurement.

Rustavi City Hall, more specifically its N(N)LE Rustavi Art, Sports and Youth Development Center purchased 95% of its goods and services through public tenders. Tbilisi City Hall spent 36% of the allocated money through public tenders. Poti City Hall did not spend anything on the celebration of the Independence Day. As for the rest public institutions, none of them used public tenders and spent all money through a simplified procurement. 

GEL 277 268 was spent on remuneration of artists, out of which GEL 231 000 was spent by the Creative Georgia, GEL 36 500 – by Batumi City Hall and GEL 9 568 – by Kutaisi City Hall (see Graph 1).

17 companies got more than GEL 100 000 through one or more simplified procurement contracts. These 17 companies in total got GEL 4.8 million, which was 74% of all simplified procurements made for the celebration of the Independence Day.

Recommendations

  • Central and local government institutions should better elaborate their annual public procurement plans, which will include detailed information on procurements foreseen for the celebration of the Independence Day and other public holidays. This will increase competition and allow procurers to save money and get goods and services of higher quality;
  • The Government of Georgia and the Public Procurement Agency should be more strict toward providing approvals of simplified public procurement for the celebration of public holidays
economics