GEO

Simplified procurements with the aim of holding celebration events in Batumi is a malpractice

09 October, 2019

 

In 2017-2019, public procurements with a value of GEL 1,493,385 were made for holding celebration events, out of which GEL 827,735 (about 55% of the total amount) was spent through simplified procurements.

Spending of budgetary funds on pre-planned events envisaged by the events calendar (New Year concerts, the opening of the tourism season in Batumi, May 26 celebrations, Batumoba (Batumi Day) celebrations) in a simplified manner contradicts the very criteria of substantiation of simplified procurement.  

TI Georgia has studied the contracts concluded for organizing the celebration events in the years 2017-2019.

As a result of the study, we have established the following circumstances:  

  • In 2017-2019, the Culture Center of Batumi, the Tourism Product Development Agency, and the Ministry of Education, Culture and Sport of Adjara concluded 33 simplified procurement contracts with a total value of GEL 827,735 for holding celebration events. A total of GEL 1,493,385 was spent on the events envisaged by the events calendar through 39 tenders and direct procurements during the reporting period.   
  • The procuring organizations justified the simplified procurements by the necessity to hold the events of state importance within tight time frames.
  • The biggest amount – GEL 697,105 – was spent through simplified procurements by the Culture Center of Batumi.
  • In 2017-2019, all the events dedicated to Batumoba were held without a tender, and 18 direct procurement contracts with a total value of GEL 249,558 were concluded; 81% of the funds allocated for the events dedicated to May 26 was also spent without a tender. As for the opening of the tourism season and the New Year events, 46% and 31% of the funds allocated for these events, respectively, were spent through simplified procurements.
  • One of the companies contracted for simplified procurements, I(n)vent Productions, belongs to Ana Sikharulidze, the art director of the Culture Center of Batumi. In 2017, the Ministry of Culture of Adjara commissioned this company to organize the opening events of the tourism season for GEL 105,500. Our organization also expressed doubts about the existence of a conflict of interest in connection with this fact at that time.  
  • From the simplified procurements, we should also mention the contract concluded with the Geo Event company. In May 2018, one month after the company was founded, the Culture Center of Batumi concluded a contract with this company with a value of GEL 56,980 for the organization of the May 26 events.

Conclusion and recommendations

During the past three years, 39 procurements were made to hold celebration events; out of these, a competitive electronic tender was only announced in 6 cases, and in the other 33 cases the procurements were made in a simplified manner. 

GEL 247,688 from the GEL 827,735 which was spent without a tender went to contracted musical performers and managers of musical bands. Receiving services from the field of culture is not a standard process as in the case of other procurements (construction, planning of infrastructure projects, the supply of goods, etc.), because this process is related to creative works. This makes it understandable why the procuring organizations resort to the practice of simplified procurements. However, it is important to develop transparent and predictable criteria for the selection of musicians/people of arts in order to reduce the risks of corruption to the minimum.

The aforementioned events are planned by the procuring organizations at the very beginning of the year. Accordingly, it is unclear why procuring organizations have to conclude simplified procurement contracts with this or that company. In the event of correct planning, the procuring organizations should announce a competitive tender, which will decrease the price of the service and eliminate the risk of possible covert deals.

In addition, the companies with which the procuring organizations conclude simplified procurement contracts for organizing the said events mostly win public tenders announced for such services without any competition, which makes an impression of a lack of proper competition among companies providing arts-related services.

Therefore, we call upon the procuring organizations to eliminate the practice of simplified procurements for holding celebration events envisaged by the events calendar as much as possible and to plan and announce competitive electronic tenders in a timely manner. In addition, we call upon the Internal Audit Service of the Batumi City Hall to study the simplified procurement contracts concluded by the Culture Center of Batumi with Geo Event LLC and to find out how the Culture Center substantiated the conclusion of contracts with a newly founded and inexperienced company bypassing a tendering process.