30.Sep .2022 15:00

State Agencies Do Not Publish Their Simplified Procurement Contracts - TI Georgia

State Agencies Do Not Publish Their Simplified Procurement Contracts - TI Georgia
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Georgia’s 18 state agencies do not publish their simplified procurement contracts. Among them are such important agencies as the Ministry of Internal Affairs, Government Administration, Presidential Administration, State Security Service, and others. "Hidden contracts", except for procurements related to state secrets, should not exist, as this significantly increases the risk of corruption, reads the report published by Transparency International Georgia.

The organization calls on the State Procurement Agency and procurer organizations to pay more attention to the issue of publishing simplified procurement contracts.

“Transparency in public procurement is of great importance, as it is a necessary prerequisite for the prevention of corruption risks. Since 2011, when the electronic portal of public procurement was established in Georgia, the transparency of procurement has been largely ensured regardless of some problems remaining in this field. However, in recent years some state institutions have not been publishing information about signed simplified public procurement contracts and this became a significant problem. In contrast, in electronic tenders such trends have not been observed as without public announcement of a tender it cannot be held, therefore, transparency in electronic tenders is a part of the entire procurement procedure. In the past years, Transparency International Georgia has repeatedly noted that the contracts concluded by certain state agencies through simplified procurement had not been published in the electronic system of public procurement. The State Procurement Agency has been regularly referring to a technical error. Today, this problem remains unsolved, which makes us believe that the state is not consciously dealing with this issue.

We wrote about this issue in the study of 2015-2017 public procurement - How the State Spends Our Money - that was published in 2017. In the mentioned period, more than 50 procurers were identified who had not published a single contract of simplified procurement. On December 26, 2017, the State Procurement Agency responded to the mentioned study and stated that the lack of information on simplified procurement of some agencies is a technical flaw existing in the procurement system that was inherited from previous years. However, this "flaw" has not been corrected over the years.

In September 2019, we sent a letter to the State Procurement Agency and provided the list of procurer agencies that did not publish simplified procurement contracts. In October of the same year, part of the contracts was uploaded to the system, which was probably the result of our letter. For example, the contracts of the Ministry of Internal Affairs (MIA) and its subordinate agencies were uploaded. For information, the MIA had not published its simplified procurement contracts since June 3, 2015. However, the simplified procurement contracts of such large agencies as the Government Administration of Georgia, State Security Service, and Intelligence Service of Georgia remained unpublished.

In October 2019, the MIA and the agencies subordinate to it stopped publicizing the contracts again.

In the study published by Transparency International Georgia in July 2020, we again wrote about the problem of unpublished contracts and recommended that the State Procurement Agency should pay more attention to the issue as non-publication of contracts might lead to corrupt deals.

This time, our research showed that 18 government agencies do not publish simplified procurement contracts. Among them, there are still such important agencies as MIA, Government Administration, Presidential Administration, State Security Service, and others.

The mentioned agencies stopped publishing simplified procurement contracts at different times. However, some of them have only made public a few contracts in recent years. The probability that these organizations will not sign contracts through simplified procurement is very low. The fact that contracts exist, but are not published, was confirmed by the publication of more than 100 contracts at once by MIA in October 2019.

The proof that the mentioned agencies have simplified procurement contracts can be found in the SMP module of the electronic public procurement system, where approvals granted by the State Procurement Agency are published. In the mentioned module, in 2020-2022, the MIA has requested approval to conduct 269 procurements through a simplified procedure. Out of these procurements, 53 were valued at more than GEL 100,000.

In the same period, the Government Administration requested the right to carry out 19 simplified procurements, the State Security Service – 36 procurements, the MIA’s LEPL Service Agency – 57 procurements, etc.

Research shows that simplified procurement contracts are mostly not published by law enforcement and security agencies, and one might think that the reason for this is procurements related to state secrets. The obligation to publish information on procurements does not apply to those purchases that are classified by the law of Georgia on State Secrets. Therefore, not all purchases by MIA and other law enforcement and security agencies are classified, and all unclassified procurement contracts must be published similarly to all contracts signed through electronic tenders. The secrecy of procurement is a weaker argument in the case of government and presidential administration procurements. Not even a single contract signed by the Government Administration in 2010-2022 through simplified procurement has been published in the electronic procurement system.

According to Article 9 of the Order N13 of the Chairman of the State Procurement Agency, a procurer organization must upload simplified procurement contracts to the CMR module of the electronic system no later than 10 days after its conclusion. Along with the contract, the procurer organization is obliged to upload the documents related to the conclusion of the contract.

Transparency International Georgia calls on the State Procurement Agency and procurer organizations to pay more attention to the issue of publishing simplified procurement contracts. Moreover, it is desirable to introduce an amendment to the Code of Administrative Offenses that should consider an offense the violation of the standards of publicity in public procurement established by the relevant normative acts. Except for procurements related to state secrets, "hidden contracts" should not exist, as this significantly increases the risk of corrupt agreements. In addition, since there is a suspicion that public procurement contracts are not being published deliberately, there may be a criminal offense committed by specific entities, which should be of interest to the Prosecutor's Office of Georgia”, reads the report.