Overpriced Tickets for Teach and Learn with Georgia

News | Economics and Social Policy | Good Governance | Publications | Analysis 30 May 2016

In February 2016 the Institute for Development of Freedom of Information (IDFI) received a letter from Michael Decker, a volunteer in the Teach and Learn with Georgia (TLG) program, requesting that we investigate an electronic tender on airline tickets announced by the National Center for Teacher Professional Development (TPDC).


TLG is run by the TPDC and has been recruiting foreign teachers since 2010 to promote foreign language skills in Georgian schools and to organize intercultural and educational activities (school clubs, summer camps, etc.).


IDFI decided to look into the specific tender brought to our attention and to extend our investigation to other tenders for purchasing tickets for TLG.


On July 9, 2015, the TPDC announced a tender (SPA150019160) for purchasing 11 one-way economy class airline tickets with a total cost of GEL 62,000. Bidding registration for suppliers was open between July 25-30, 2015. The tender ended with a single bidder - Discovery Ltd.


The first problem we discovered with the tender was its assigned procurement category. Instead of the more appropriate category of ‘travel agencies, tour operators and tourist assistance services’ (CPV 63500000), the TPDC had assigned its tender the category of ‘miscellaneous transport equipment and spare parts’ (CPV 34900000). This resulted in potential suppliers being unable to find and participate in the tender since airline ticket operator companies would not be looking for tenders in such a category.


It is possible that the TPDC had misassigned the tender to the subcategory CPV 34800000 - ‘transport tickets’ under the ‘miscellaneous transport equipment and spare parts’ (CPV 34900000) category without realizing that the subcategory was only intended for ticket printing services.


The TPDC announced a total of nine electronic tenders with the category CPV 34900000, eight of which only had the same two bidders – Discovery Ltd. and LOT Travel Ltd.

  

 

IDFI requested that the TPDC disclose electronic correspondence related to the July 9 tender. The correspondence revealed that on July 6, 2015, the Center had requested several ticket operator companies to provide price quotes within one day. Only two companies responded. Discovery Ltd. estimated the cost of 11 one-way economy class tickets at GEL 64,395, while LOT Travel Ltd. estimated a cost of GEL 62,000.

 

After this, IDFI decided to look into the reasons behind such high prices and managed to obtain copies of ten of the airline tickets purchased from Discovery Ltd., which cost an average of GEL 5,636.36 each (ranging from a minimum of GEL 3,034.9 to a maximum of GEL 6,281.9).


As it turned out, these tickets contained all the necessary information to calculate their actual cost using the Fare Calculator provided in the Ticket Handbook of the International Air Traffic Association.

 

 

 

 

 

 

 

For one of the tickets displayed above, the difference between the actual fare and the amount paid by the TPDC was GEL 3,363.84. The fact that the tickets were purchased at least two weeks prior to the flights did not result in a significant increase in their price. This is evidenced by the August 10, 2015 contract between the TPDC and Discovery Ltd. and the dates displayed on the e-tickets.


IDFI did the same calculation with the remaining nine tickets and found the total difference between the actual price of the ten tickets which volunteers provided us and the amount paid by the TPDC was GEL 33,639.76. When we inquired about the reasons behind this difference, Discovery Ltd. responded that their price calculation was a commercial secret.


It should be noted that the GEL 62,000 paid does not include the Value Added Tax (VAT), since airline tickets are not taxed with VAT.


IDFI also requested information on other similar tenders announced by the National Center for Teacher Professional Development. In addition to the July 9 tender, the TPDC had announced 4 more tenders in 2015 (SPA150001101, SPA150022697, SPA150021920, and SPA150013083).


IDFI was also able to obtain copies of tickets sold by LOT Travel Ltd. with the consent of TLG volunteers; however, these tickets did not contain the information necessary for fare calculation.

 

The second tender (SPA150001101) won by Discovery Ltd. also had a high price – GEL 46,530 for 10 one-way economy class tickets. One of these tickets (New York - Baku - Tbilisi) cost as much as GEL 3,645.10.

   

 

 During the investigation IDFI was unable to identify any clear violation of the law. The questions raised above may be due to procedural mistakes made by the procurer during procurement or dishonesty of the suppliers. It should be noted that the TPDC provided IDFI with timely and comprehensive responses to all of our public information requests.


It is also important to point out that after IDFI conducted an investigation of the matter, TPDC announced another electronic tender for 24 economy class one way tickets. In the procurement announcement of May 11, 2016 the indicative price of the tender was GEL 48, 500, which is GEL 2 000 for each ticket.


In conclusion, IDFI considers the prices of the above tenders to be suspicious. It is unclear why 11 one-way economy class airline tickets would cost GEL 62,000. Other purchases of the same nature made by the National Center for Teacher Professional Development have similarly high prices.

 

 

1.Ticketing Handbook, 39th Edition, International Air Traffic Association,

http://www.travelready.org/PDF%20Files/IATA%20-%20Ticketing%20Handbook.pdf, accessed on April 29, 2016

 

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