The COVID-19 related State Procurements

News | Research | Good Governance | Pressing Issues | Analysis 9 December 2020

On February 26, 2020, the first case of the novel coronavirus was confirmed in Georgia, while on March 21, the state of emergency, that lasted until May 22, was declared. In this period, the coronavirus  related procurements were primarily conducted with simplified procedures. After the expiration of the state of emergency, the procurement of principal goods and services continued with simplified procedures. During this period, IDFI prepared two studies that investigated the procurement process and subsequently issued several recommendations. These studies covered the period before May 15 and were primarily focused on revealing the suppliers of large procurements and their connections. The following report instead looks at the period between March 21 and November 15, and presents the statistical data, the systemic problems, and suspicious procurements from this period.

 

The data was collected from the SPM (simplified procurement agreements with the agency) module and the electronic tender module of the State Procurement Agency. The data concerning the period before May 15 is based on the results of the previous two studies related to Covid-19 prepared by IDFI.

 

Main Findings

 

- Between March 21 and November 15, GEL 200 million was spent on the procurement of hotel and hospital services.

 

- Between March 21 and November 15, the Georgian National Tourism Administration spent over GEL 78 million on the procurement of the goods and services required for the implementation of mandatory quarantine.

 

- By the November 5, 2020 Decree of the Government of Georgia, additional funds of GEL 35 million were allocated to the Georgian National Tourism Administration. Together with the funds already spent, the total amounts to more than GEL 100 million. The additional funds are to be spent on the Covid hotels and facilitating the procurement of services related to this process.

 

- Between July and November, the Social Service Agency requested an agreement for receiving GEL 98.5 million from the State Procurement Agency for the purposes of preparing additional beds at the hospitals. 

 

- The contract agreed upon by the Social Service Agency allocated a sum of GEL 625,537 for the purposes of supporting medical personnel in quarantine/field conditions. Additionally, with the same purposes GEL 300,000 was allocated during the month of November alone.

 

- The procurements related to Covid-19 are not separately listed in the electronic procurement system and consequently, are not analyzed, despite examples of such analysis seen in neighboring countries.

 

- The electronic procurement system does not provide its users the possibility to obtain information in open, easily-processable formats.

 

- The CMR and SPM module documents pertaining to Covid-19 are often unsystematically scattered across the electronic procurement system. This, along with the absence of data in a easily-processable format, further complicates the monitoring of this category of procurements.

 

- The Ministry of Defense and the Ministry of Internal Affairs do not publish simplified procurement agreements to the electronic system, including the procurements related to Covid-19.

 

Conclusion

 

The analyzed data has shown that the largest share of the funds is spent on covid hotels and mobilization of hospitals. In addition, it should be noted that the procurement of some of the services related to Covid-19 have returned to the format of electronic tenders, which should be welcome, although the number of such cases is not high. We believe that the procurement of the services that have already been tested and the necessity of which is known in advance is possible to be done through electronic tenders in order to facilitate competition.

 

It is important to note that the monitoring of procurements faces a number of significant technical challenges. Among these, the most noteworthy is the lack of available data in an open, processable format. The lack of a separate module/basis for procurements related to Covid-19 additionally causes such procurements to be haphazardly scattered across the system, and the collection and identification of these procurements as related to Covid-19 is often difficult. The study also showed that some institutions do not upload simplified procurement agreements to the system at all.

 

Recommendations

 

- The State Procurement Agency should guarantee the publication of the information in the electronic system in an open, processable format.

 

- The State Procurement Agency should create a separate category for procurements related to Covid-19. Alternatively, it must facilitate the collection of the information pertaining to these procurements and publish them in a processable format.

 

- The State Procurement Agency should control the indication of the relevant SPM codes by the procurers when the urgently requested simplified procurements are placed in the respective CMR module.

 

- The Ministry of Defense and the Ministry of Internal Affairs should facilitate the publication of the simplified procurement agreements to the electronic system, as dictated by the law. The State Procurement Agency should conduct the relevant control and monitoring in order to eliminate such cases in a timely manner and ensure that they are not left without the appropriate attention. Moreover, convenience of concealing the agreements should be controlled.

 

- Procuring entities should minimize the use of simplified procurements in the procurement of services and products, the necessity of which is known in advance and the respective procurements can therefore be planned and conducted on a competitive basis.  

 

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