The document describes Georgia's new electronic procurement system. The system aims to make the procurement process more efficient, transparent, and manageable by moving it online. It reduces costs and barriers for bidders and provides more accessibility to tender information. The system has various users like contracting authorities and bidders. It consists of components like tenders, registrations, bids, and warranties. Each component has its own characteristics and processes defined in the system solution.

1. ELECTRONIC PROCUREMENT SYSTEM
OF
STATE PROCUREMENT AGENCY OF GEORGIA
TBILISI, NOVEMBER, 2010

2. Georgian ICT Development and Cyber Security Event
GITI 2010
Organizers:
ICT Business Council of Georgia
LEPL Data Exchange Agency of Ministry of Justice of Georgia
With the support of:
NATO-Georgia Professional Development Program, Trustcorp (Estonia),
US Embassy in Tbilisi
Chapter: Table of Contents
2

3. TABLE OF CONTENTS
Table of Contents ............................................................................................................................ 3
Introduction ..................................................................................................................................... 4
Goals of the System ........................................................................................................................ 6
Vocabulary ...................................................................................................................................... 7
System Solution .............................................................................................................................. 8
Users and Their Roles ................................................................................................................. 8
Components and Processes ......................................................................................................... 9
Tender ..................................................................................................................................... 9
Registration ........................................................................................................................... 12
Contracting Authority (CA) ...................................................Error! Bookmark not defined.
Bidder .....................................................................................Error! Bookmark not defined.
‘‘Tender Proposal’ (Warranty) ............................................................................................. 20
Price of a ‘Tender Proposal’ (Placing a bid) ........................................................................ 20
Conclusion .................................................................................................................................... 22
Appendix ....................................................................................................................................... 23
Chapter: Table of Contents
3

4. INTRODUCTION
Developing and making operational modern Information Technologies (IT systems) made
necessary the transformation of an old style state procurement system to a more efficient,
more transparent and better managed centralized electronic environment in Georgia.
The traditional procurement system had many disadvantages, including but not limited
to the following:
 It could not provide potential bidders with complete information regarding the
requirements of the state sector
 It could not provide a purchaser with needed information about the potential
bidder
 It could not allow the public to monitor the process of the state procurement
 It was no longer effective in comparison with best practices
All of these resulted:
 In restricted communications with state sectors
 In lending itself to the status quo, creation and maintenance of privileged bidders
It became obvious that the traditional system needed to be changed. Georgia was ready
for such change.
The best way to manage procurement procedures, purchaser-bidder communications, and
state tenders was via an online, web based system. This would require new policies and
regulations The State Procurement Agency (SPA) SPA as the responsible agency for the
procurement policies was the initiator of the new electronic system.
To build the system, which would cover all requirements of the SPA, teams from the SPA
Chapter: Introduction
and from NAPR‟s IT department worked together. It was decided to design the system
step by step, since it consisted of different parts. The first step would have been -
Electronic Tenders.
4

5. The purpose of this document is to describe the first step – Electronic Tenders – in more
details. This step is completed now and the system is ready for exploitation.
Chapter: Introduction
5

6. GOALS OF THE SYSTEM
The traditional tender process was time and money consuming. It had other
disadvantages, some of which were:
1. A bidder physically had to go to the CA‟s office
2. A bidder had to present „Tender Proposal‟, information regarding its qualification and
a document showing that the service charges were paid
3. To obtain the needed tender documents, a bidder was obliged to debit GEL 150 to the
state budget
4. A procurement process was not anonymous and bidders knew who was participating
in a tender
The goal of the Electronic Tenders (first step for Electronic Procurement System) was to:
 conduct tenders electronically
 reduce and simplify procurement procedures and processes
 increase transparency
 reduce remote problems for the CA and bidder and save time
 make tender information easily accessible to any domestic and foreign interested
person
 cut unnecessary costs for obtaining the needed tender documents
Chapter: Goals of the System
6

7. VOCABULARY
N Expression Definition
1 CA Contracting Authority (buyer/purchaser)
2 Bidder Company/person submitting a bid
3 User In the document it is used to describe a bidder who
participates in a bidding process; also a CA during the
registration process
4 Tender Proposal Tender proposal from a bidder
5 Tender Notice Announcement of the tender by the CA
Chapter: Vocabulary
7

8. SYSTEM SOLUTION
The current chapter describes the Electronic Tenders system in general - users,
components, processes of the system The chapter also provides some screenshots showing
how the system works and simplifies procurement processes in a real time environment.
The official web portal can be found at www.procurement.gov.ge
USERS AND THEIR ROLES
The users of the system are:
 CA
- CA could be a State Organization such as a ministry, Self-government, or a
private company (if the state government owns more than 50% of shares),
and/or private sector NGOs, organizations from Autonomous Republics etc.,-
i.e., any entity that spends public finances
 Bidders
A bidder could be:
- Any resident or non-resident legal or physical person, as well as partnerships, .
 Guest
- Any person interested in the procurement process can be a guest and access
the system
- Guests can easily search and read specific information (documents) regarding a
tender
- Guests can observe the procurement process
 State Procurement Agency
The Agency has different access rights:
- Has profile, where it can add, activate or deactivate its own users.
- It can also see other users from other organizations, which information is
Chapter: System Solution
hidden from bidders, CAs and guests.
- It can activate/deactivate Purchasers after checking information regarding
them.
- It can enter any dishonest bidders on a „Black List‟ (where such bidders stay
for one year)
8

9. COMPONENTS AND PROCESSES
The system consists of several components: Tender, CA, Bidder, Bid and Warranty. Each
component has its own characteristics (see table in Appendix). There are also some
processes connected to each of them. This section will describe these components and the
processes.
Tender
There are two types of tender:
Simplified Electronic Tender
- The state procurement for this kind of a tender lasts at least for 3 days
- Bidding may continue for at least 3 days
- This type of tender is limited to 200,000 Lari maximum
- A price reduction step is from 0.5% to 2%
Electronic Tender
- The state procurement for this kind of tender lasts at least for 20 days
- Biding continues 5 days
- The price for this tender can be more than 200,000 Lari
- A price reduction step is from 0.5% to 2%
Editing of a Tender:
- It is possible to make changes to a tender while the status in the system is –
„Tender is Announced‟
- It is not allowed to edit a tender after the status changes to – „Receiving Proposals
Started‟ (in the case of a Simplified E-Tender, this is after the first day; for E-
Tenders, this is after 15 days)
- After registration, a CA can cancel a previous tender in the system and upload a
new one. In this case the tender status will go back to - „Tender is Announced‟
Tender Time:
Chapter: System Solution
Tender has two times: „Main Time‟ and „Additional Time‟ („Round Time‟).
„Main Time‟
- A tender has to state an end of the „Main Time‟. This is the time when receiving of
the „Tender Proposals will be stopped. It can be any time of day from 9 a.m. to 6
p.m.
9

10. Picture below shows how a tender is handled in the system during the main time:
„Additional Time‟
- „Additional Time‟ is given to a tender for the „Rounds‟ after the „Main Time‟
expires
- There are three rounds
- There is 2 minute break between the „Main Time‟ and „Rounds‟ („Additional
Time‟)
- After the „Main Time‟s 2 minute break, the first round starts
- In each round bidders are listed in descending order, in other words, a bidder
with the highest bid is on the top of the list
- A bidder places a new bid according to an order. An order depends on bidder‟s
last offer
Chapter: System Solution
- In each round a bidder has 2 minutes for placing a new bid
- Duration of a round depends on the number of bidders, which is multiplied by 2
(minutes). If a bidder refuses a „Tender Proposal‟ and leaves the process after the
first or second round, than the duration of the next round will be equal to the
remaining bidders multiplied by 2
- A break between rounds is also 2 minutes
10

11. - Duration of an „Additional Time‟ (round + break) is recalculated each time after
the previous round ends.
Picture below shows how rounds are handled in the system:
Status:
Tender has different statuses. Each status is connected to a particular process. After a
Chapter: System Solution
process step is finished the status progresses to the next one.
Tender statuses can be viewed on the screenshot below:
11

12. Registration
 To participate in the procurement process, all intended users (CAs or bidders) are
required to be registered in the system
 A guest does not register in the system
 For registration, all users need to fill out a form after which
- Bidders are registered immediately
- CAs are given a status - „CA Applicant‟. This status does not give an
applicant any rights in the system yet. The State Procurement Agency
Chapter: System Solution
performs a clearance check to see if an applicant is on the „Black List‟ and
has no unfulfilled obligations, then the agency changes the status to
„Purchaser‟.
Picture below shows CA‟s status - „CA Applicant‟:
12

13. CA
- CA formulates Project of Tender Notice
- CA is obliged to upload Tender Documentation before Tender Notice registration
- CA is obliged to declare category and sub-category of its interest by the „Tender
Notice‟
- CA can delete the Project of Tender Notice before its registration
This „Simple Electronic Tender‟ screenshot shows registered Tender Notice in real-time:
Chapter: System Solution
13

14. CA‟s right and responsibilities:
- CA can stop a tender at any time until the contract become valid (stopping a
tender could be forced by unpredictable reasons, or state interests)
- After the tender is closed, the tender changes status to – „Receiving the Proposal
Ended‟
- CA uploads an appropriate document (statement of case)
- The status changes to –„ Selection/Evaluation‟. At this stage, a winner has to be
Chapter: System Solution
selected (Bidding is over and documents of all bidders are accessible)
Picture below shows how the names, bid prices and the documents of all bidders are
exposed after the tender is over.
14

15. - If a winner is selected then the status changes to „Winner is Selected‟; if not, then
the status changes to „Finished with Negative Results‟
- When a winner is selected, the CA uploads a document (statement of case) on the
web-portal and changes the status to either „Contract in Progress‟, or „Finished
with Negative Results‟ (in case a bidder refuses or cancels contract preparation)
- When the status is - „Contract in Progress‟, a CA names the winner and uploads a
Chapter: System Solution
contract. A CA can check the contract once more and finalize it. The status will
then change to „Contract is Completed‟. The contract then can be printed out from
the following window:
15

16. .
The graphical representation below shows the whole processes described above.
Chapter: System Solution
16

17. PROCURER
Procurer starts
Registered Need to
Registration Is an ID code in Formulate
N (status changed to Announce New Y
(status is ‘Procurer ‘Black List’? Application Project
‘Procurer’) Tender
Applicant’
Y N
Sending
Announcement Delete Existing Need to Delete
Y
Message to a Tender a Project
Procurer
N
Tender
Registration Upload Tender
(status ‘Tender is Documents
Announced’)
Tender Main Time
Started (status is
Tender Main Time Need to Cancel
N ‘Receiving N Needs editing? Y Edit Documents
is in progress Tender
Propositions
Started’)
N
Y
Is Main Time
Finished?
Are any bids
N
placed?
Y
Y
Tender is Closed
Upload document
(status is
Additional Time (status is
‘Receiving
Started ‘Selection/ Is Winner
Status Changes to
Propositions ‘Finished with
Evaluation’) N
Ended’) Selected?
negative results’
Y
Y
Additional Time in Is additional
progress Time Finished?
Status changes to
‘Winner is
Chapter: System Solution
Selected’
N
Upload Contract
Upload Document
on the Web (status Is contract
Y (status is ‘Contract
is ‘Contract is ready?
in Progress;’)
Completed’)
N
17

18. Bidder
- A bidder has to agree with affidavit before submitting a „Tender Proposal‟
- A bidder has to present a warranty * (see warranty)
- A bidder pays GEL 50 for submitting a „Tender Proposal‟
- A bidder presents technical documents. Only bidders have access to these
documents until the tender ends.
- A bidder can delete or add additional documents via the web-portal before placing
a bid
- After going through the steps above, bidders becomes contenders and are
enumerated, e.g. contender 1, contender 2, etc. The contenders‟ real names are
undisclosed.
- If a bidder refuses a „Tender Proposal‟, the warranty amount will be removed
from the bidder‟s account. If this occurs before the bidding ends, the bidder won‟t
be entered on the „Black List‟
- If this occurs after the bidding ends, the bidder will be added to the „Black List‟
The graphical representation below shows the whole process described above. Chapter: System Solution
18

19. VENDOR
Agrees with Is Warranty
Vendor Registers N Present Warranty
Affidavit Presented?
Y
Make Payment to
Is 50 Lary
Procurement N
paid?
Agency
Y
Present Technical
Vendor Becomes Documents.
Contender 1 (or 2, Announce ‘Tender
3…) Proposition’
Needs Editing/
Place a Bid N Y Edit Documents
Deleteing?
N
Want to Refuse
Warranty Amount
N ‘Tender Y
is cut off
Proposition’?
Bidding Time
ended?
Y
Vendor Refuses Vendor is added to
Y
after Tender ends ‘Black List’
Want to Refuse
‘Tender
Proposition’?
N
Is Vendor a
Y Sign a Contract
Winner
Chapter: System Solution
N
19

20. ‘‘Tender Proposal’ (Warranty)
Assurance methods of a „Tender Proposal‟ are two kinds:
1. When a warranty amount is placed on „hold‟, i.e., is “blocked” from the bidder‟s
bank account;
2. When an electronic warranty* (registered at the NAPR) is presented from a bank.
*Warranty:
Some features of an electronic warranty are included in the Electronic Tender
System. Although, they will be activated after some procedures are clarified.
Meanwhile, warranties are paper based.
This screenshot will allow a bidder to manage warranty electronically.
An amount of the warranty is 1% of the procurement price.
Price of a ‘Tender Proposal’ (Placing a bid)
There are some rules regarding placing a bid
- It is not allowed to make any changes in technical documentation after placing a
Chapter: System Solution
bid
- The placing of bids is not limited during the „Main Time‟
- The price of a bid has to be either unchanged or one step less** than the previous
bid
**One Step Less:
20

21. One step represents from 0% to 2%.
- In the „Additional Time‟ only those bidders who placed a bid in the „Main Time‟
can participate
- After a tender‟s „Main Time‟ is expired, all bidders and their technical
documentation are disclosed on the web-portal.
The screenshot below represents the bidding window.
Chapter: System Solution
21

22. CONCLUSION
The Electronic Procurement System has many advantages for the management of the
state procurement, as well as benefits for the economy. It indicates coordination,
accessibility, transparency and simplifies the procurement processes.
The first module of the Electronic Procurement System - The Electronic Tender provides:
 A simplified tender process for all – state, bidders, public
 Potential bidders with complete information regarding the requirements of the
state sector
 CAs with the ability to obtain needed information about potential bidders
 Unrestricted communication between the state sectors
 All bidders with the same chance to participate, to expect fair results and
eliminate privileged bidders
 The public with the ability to monitor the process of a tender
 Cost reduction for the tender process
It is planned to develop the Electronic Procurement System farther. The next step will be
to develop „Electronic Planning Management and Reporting Module‟. Here, CA will be
able to publicize already intended and approved plans. The system won‟t let a CA:
1. Announce a tender which is not planned, or
2. State a price for an object which exceeds the intended price
Another step towards the development of the Electronic Procurement System will be the
Management Information System. The goal of this module will be to obtain some statistical
information and graphical representation for further analysis regarding numbers of
announced tenders, their individual and total prices etc. Chapter: Conclusion
22

23. Appendix
Each component has its own characteristics, shown in the below table.
Table: Components
Component Characteristic Details Notes
Name
Code
General Information
Address
Status
Telephone
Contact Person Email
CA
www
Annual Procurement PDF files
Plan Total price
Quarterly Plan of PDF files
Execution XLS files
Total expenditure price
Bidder Personal Information Name
Status
Code
Address
Telephone
Email
Desirable Topic Classificatory topics
Tender Purchaser Information Generated automatically
Application Content Not structured; Old versions
are kept.
Classificatory topics Ex. Constriction
Procurement Form Simplified electronic
tender
Electronic tender
Procurement dates
Attachments PDF files
Intended amount
Currency
Chapter: Conclusion
Contact person
Bid Bidder
Bid amount
Bid count
23