Public procurement during the state of emergency: Basic data analysis and corruption risks - საერთაშორისო გამჭვირვალობა - საქართველო
GEO

Public procurement during the state of emergency: Basic data analysis and corruption risks

22 July, 2020

Key findings and recommendations

1,495 public tenders worth a total of GEL 557 million were announced during the state of emergency. Only one bidder participated in more than half of the tenders. Compared to the same period in 2019, the number of tenders announced has almost halved, competition has also decreased.

11,316 contracts worth a total of GEL 127.2 million were signed through simplified procedures during the state of emergency. Of this amount, GEL 57 million was spent based on urgent needs and GEL 29.2 million was spent on smooth implementation of events of state and public importance for a limited period of time. The law allows the use of these grounds for simplified procurement, but frequent use of these grounds and suppliers’ affiliation with the ruling party remains a problem.

Companies linked with Georgian Dream’s and Salome Zurabishvili’s donors of different years received contracts worth at least GEL 45 million through direct procurement during the state of emergency, which is 35% of the total amount spent through simplified procedures during that period;

21 specific public procurement cases discussed in the study indicate a link between the ruling party’s donors and the contracts won. Among them, there were several cases when the contract was signed with the supplier within a few days after the donation.

The Government Administration, the State Security Service, the Ministry of Internal Affairs, and some agencies subordinated to this Ministry do not publish their simplified procurement contracts. Therefore, it is likely that more money will be spent through simplified procedures, but information about them is not transparent, which complicates the analysis and monitoring of corruption risks. This problem was relevant even before the state of emergency.

Most of the money – GEL 24.4 million - was spent on healthcare goods and services through simplified procurement. Then comes the purchase of hotel services for GEL 23.6 million.

Recommendations

  • The State Audit Office should pay even more attention to the issue of identifying high-risk donations of the ruling party from the owners of the winning companies in tenders and simplifiedprocurements;
  • The Public Procurement Agency should pay more attention to the issue of publicizing simplified procurement contracts. There should be no “hidden contracts” other than procurement related to the statesecret;
  • The approval process of simplified procurement from the Public Procurement Agency should betightened;
  • When using simplified procurement, a procurer shall be required to substantiate and disclose information on what basis it has selected thesupplier;
  • The Anti-Corruption Department of the State Security Service should study public procurement contracts containing suspiciouscircumstances.