Etenders.ge 07.08.2017
The amendments were made to the principles of the public procurement legislation, as well as to the certain definitions, thresholds, minimal timelines of competitive procedures, the rules applying during submission of the claims and some other regulations.
Due to the fact that the specific circle of the companies operating within our system as a supplier, besides procurement of the private sector, is also interested in the public procurement procedures, we will try to describe briefly the essence of the legal changes and the ideas and logic tightly connected thereto. Furthermore, we suppose that this information will be interesting also for those companies, which operate on Etenders.ge as a private procuring entities.
Means of Electronic State Procurement
Based on the legal amendments the definition of means of electronic public procurement was created within the regulatory legislation of public procurement. To explain simply, this definition covers different types of electronic procurement procedures that are suited to the different kinds of procuring objects. In compliance with the terminology utilized within the Legislation, electronic state procurement implicates electronic tender, design contest and consolidated tender.
The main differences between these three electronic means are as following:
In case of electronic tender, procuring entity may use only quantitative and objective evaluation criteria (it could be the price or price and other countable criteria). Correspondingly, in compliance with the Rules, procuring entity is entitled to procure any kind of object by using different types of electronic tenders.
Different to this, design contest might be used by the procuring entities in case if they want to procure objects, which cannot be exactly described. As usual, these are consultancy services (design contest services), for instance, architectural services. The idea of different regulation is that, in case of procurement of design contest services, procuring entity, as a rule, needs to consider subjective criteria. For example, procuring entity often evaluates the visual side of the submitted sketch that in compliance with acting rules makes decisions depending on the subjective considerations of commission members. Because of this, in case of design contest, the so-called “principle of two envelopes” is used (open tender based on two envelopes principle according to the terminology of Etenders.ge) and procuring entity evaluates technical proposals in the first stage without knowing the financial proposals of the companies participating in the procedure. It is obvious that in order to reveal the best proposal the prices are envisaged as well, though it happens in the second stage of the evaluation process just after the evaluation of technical documentation and after determination of “quality total rating”.
Consolidate tender implicates conducting procurement centrally. The decision to conduct consolidated tender is made by the Government of Georgia and the State Procurement Agency is responsible for preparatory and administrative issues. For example, the last consolidated tender was announced for the procurement of airtime.
Electronic tender implies the different methods of conduct of electronic tender:
• Reverse auction (abbreviation SPA) – this method (as well as reverse auction of Etenders.ge) implies submission of the new prices, revised downwards. In compliance with the Legislation of State Procurement, awarding contract is obligatory with the bidder which meets all the requirements of procuring entity and participates in tender with the lowest price;
• Electronic Tender without Reverse Auction (abbreviation NAT) is an open procedure without bidding rounds. Technically this procedure resembles open procedure of Etenders.ge, which is conducted by the principle of one envelope. According to the regulations, as in case of SPA tender, contract have to be awarded to the bidder who meets all the requirements envisaged by the tender documentation and submits the lowest price. It must be mentioned that within aforementioned procedure, the system automatically generates the ranks of the bidders and makes visible the identity and the proposal of the bidder which is the best among all participants. The identity of the next bidder becomes visible just in case of disqualification of the previous bidder.
• The so-called two-stage tender (abbreviation MEP) which concept is similar to the NAT tender, though the difference is that the ranks (order) of bidders depends not only on submitted prices, but also on the other quantitative criteria defined by the procuring entity and their relative weights. It should be mentioned that in this case the automatic ranking system is used as well – the system automatically defines bidders ranks based on the self-declared values indicated in the electronic system during submission of the bids (please see our short article about evaluation method).
Minimal timelines (duration) while using of electronic means of procurement
The news is that within the different types of electronic tender as well as in case of design contest the unified minimal timelines apply – the minimal duration of any of the electronic means of procurement is depended on the procurement object itself and the total annual value of the homogeneous objects planned to be procured within the fiscal year. For example, if procuring entity plans the procurement of construction service within the following fiscal year and the estimated value of the contracts exceeds 300 000 Gel, the obligatory duration of the competitive procedures have to be defined by not less than 20 days. In the similar manner, the simplified electronic tender will be named as electronic tender from July 19, which might be announced by the different method of conduct of electronic tender. In case you are interested in details of the relevant terms, you can see the Law on State Procurement Article 10 (1) or user’s guide published by State Procurement Agency.
In addition, if a procuring entity makes any changes in a tender documentation, the duration of the tender will extend automatically, by the period elapsed since the announcement until the amendment. For example, in case if procuring entity makes amendments within the tender documentation on the 5th day of announcement of electronic tender, the course of duration of that tender will automatically increase by 5 days.
Functional specifications
The new publication of the Law has established internationally recognized practice in compliance to which procuring entity must give an advantage to the functional specifications while elaboration of tender documentation. In spite of technical specifications, during the description of procurement object by its functional specifications, the focus is made on result and not the way of its achievement. For example, in case if procuring entity announces that due to its technical specifications it wants to procure the service of 5-tone vehicle (which must transport cargo in a certain period of time in accordance with certain standards and norms) due to functional specifications just the desired result is defined (for example, transportation of cargo in a certain period of time in accordance with certain standards and norms) and is not defined the means of transportation supplier must utilize. Correspondingly, due to well-elaborated functional specifications more proposals and alternatives are considered that as a result saves procurement budget (you can see our short article re types of specifications, where we discuss advantages of using of functional specifications).
Amendments within tender/design contest procedure of appealing
The amendments were made within the complaint submission procedure to the Dispute Resolution Board operating within the State Procurement agency. This is an action by which the decision of the tender commission is appealed. Appealing procedure is conducted by electronically submitted complaint. As a result, tender is “frozen” until Dispute Resolution Board does not make decision in accordance to the terms defined by the Law.
By the way, in Georgia, Dispute Resolution Board makes decisions promptly compared to the other countries – the maximum term amounts ten days. Complaints as well as respective decisions of the Dispute Resolution Board are available on the web-page of the State procurement agency.
In accordance with the new publication of the Law, the rights of the persons willing to participate in a tender and the rights of the participants are defined differently. By the relevant Legislative interpretation, in the first case, it might be any physical or judicial person, and in the second case, just the one who has submitted tender/design contest proposal. According to the new legislation, tender/design contest notice and respective tender/design contest documentation can be appealed by any person. Appealing tender/design contest documentation is free of charge as used to be. However, the decision of the evaluation comity on the evaluation stage can be appealed by the person, which has submitted proposal. Appealing in such case is chargeable. The amount of the fee is 2% of the estimated value of the contract, but not less than 100 and not more than 500 GEL. In accordance with the laws acting until now, any person could appeal commission decision during selection/evaluation stage.
The principle of proportionality
The new purpose defined in the Law on public procurement is the protection of the principle of proportionality. This principle is connected to the requirements established for suppliers, that until now in compliance with the legislation, was called qualification and technical requirements. In compliance with new publication, these are the requirements towards supplier, which due to the newly added principles, have to be defined proportional (please, see the short article re qualification requirements).
The idea of the new purpose is that requirements must not restrict competition. As for the meaning of proportionality, it is defined by State procurement Agency or Dispute Resolution Board individually. For example, nowadays, it is clearly defined that the turnover of the company, which is an indicator for the assessment of the capability of supplier, have to be set proportionally taking into account the estimated value of the contract as well as the delivery period. Supposedly, in future the dispute review Body operating within the State Procurement Agency will have to interpret the proportionality of the requirements and as we have already mentioned above, the decisions of Dispute Resolution Board is available for any interested party.
Etenders.ge wishes you success in participation in public tenders. In case of questions, we offer relevant consultations. Please, see the info regarding our services via the following link.
