Risks attributed to subcontracting in public procurement system
Transparency International Georgia assessed Risks attributed to subcontracting in public procurement system. Despite the Georgian public procurement system meets high transparency standards, subcontracting remains an exception. The information on subcontracting is almost absent. Due to a lack of information, it is hard to have a full picture on problematic issues existing in subcontracting practices. It is also hard to detect the conflict of interest and political corruption cases.
In fact, subcontracting remains a hidden side of public procurement process, which should be focused on avoiding malpractices in this regard. The EU directive, which is mandatory for Georgia, obliges it to make subcontracting information more transparent and accessible.
OECD reports show that subcontractors can be used for getting an unfair advantage over other competitors when primary contractor and subcontractors make an illegal deal.
- Although the EU requires from Georgia to introduce certain rules for subcontractors by the end of 2019, our country should fulfill this obligation as soon as possible since it causes many problems. Regulating subcontracting can further increase transparency, effectiveness and trust in public procurement system;
- It should be mandatory to publish full information on subcontractors on electronic procurement platform. At least the names of subcontractors, the content and value of contract should be publicly available. This information should be provided in machine readable format in a specific section designed for subcontracting;
- In the meantime, the procurers should regulate the issue of subcontracting by elaborating proper procurement procedures (For instance, eligibility requirements not only for primary contractors, but also for subcontractors, ceilings for the use of subcontractor work, etc.);
- If a primary contractor fulfills its contractual obligations mostly through subcontracting such work should not be counted as work experience.