From January 1, 2026, a new rule has come into effect in Georgian public procurement: every contracting authority is required to conduct market research in accordance with defined procedural norms prior to announcing an electronic tender or concluding a simplified procurement contract. The rule, approved by Order No. 78 of the Head of the State Procurement Agency (December 30, 2025), defines who is obligated, when, by what methods, and what may be considered adequate research.

In this article, we explain the key requirements of the new regulation in plain language.

Market research is a process by which a contracting authority — a government agency, municipality, or other public body — examines market conditions prior to carrying out a procurement. The goal is to determine, for example: who can supply the required goods or services, at what price, with what specifications, under what conditions, and within what timeframes.

The new rule is grounded in the fundamental principles of public procurement — rational use of public funds, healthy competition, and transparency. Without market research, the estimated value of a procurement may be set incorrectly, or tender conditions may be formulated in a way that effectively prevents competition. Without research, the specifications of the procurement object may also be inadequately defined, resulting in a quality that fails to meet actual needs.

All contracting authorities are required to conduct market research:

— prior to announcing an electronic tender or competition;
— prior to concluding a simplified procurement contract.

In addition, preliminary market research is required before the preparation of an annual procurement plan — though in this case, organizations have greater flexibility in choosing their methods.

Under the new rule, the mandatory primary method of market research is the use of the MRS Module — a dedicated module within Georgia's unified electronic public procurement system, where contracting authorities are required to publish a market research notice. The concept is straightforward: the contracting authority publishes the subject of its research, and the supply market responds. The market research documentation essentially compiles the contracting authority's questions, to which responses from market participants are expected.

— The contracting authority creates a market research notice in the MRS Module — specifying the procurement object, CPV code, delivery timelines, and other details, as well as the subject of the research — information on what the contracting authority is seeking to determine.
— The notice is published publicly — any potential supplier may review it and, if necessary, request clarification from the contracting authority.
— Potential suppliers submit their proposals — price and/or other information related to the procurement object, in accordance with the contracting authority's requirements.
— Once the submission deadline has passed, the contracting authority receives the results and declares the market research complete.

Important: The MRS Module ensures anonymity — during the research process, suppliers cannot see each other's proposals. The identities of potential suppliers and their submissions are disclosed only to the contracting authority after the research is concluded.

The MRS Module alone is not sufficient — the rule requires contracting authorities to simultaneously use at least one additional method, for example:

— communication with at least two potential suppliers — in person, by phone, or by email; requesting written offers or invoices;
— analysis of pricing information published on the websites of at least two potential suppliers;
— analysis of information available in other modules of the public procurement system;
— analysis of past tenders — at least two analogous tenders within the past 12 months, with a minimum of 2 bidders;
— contacting the manufacturer — for goods, where appropriate;
— open day — a meeting with potential suppliers held in a transparent environment, announced publicly.

When communicating by email, the regulation requires contracting authorities to use a dedicated official email address created for this purpose.

It is important to note that the MRS Module includes a dedicated field where the results obtained through the additional method must be uploaded — before the contracting authority declares the market research complete. Only after the research is declared complete does the contracting authority gain access to the proposals submitted through the MRS Module.

The new order provides for cases where a contracting authority may conduct market research without using the MRS Module. Below are the most common situations in which a contracting authority may use any method of its choosing:

— the value of the procurement object is less than GEL 10,000;
— certain types of simplified procurement — e.g., on grounds of exclusive rights, warranty services, or other specific legal bases;
— an identical recent tender — where the same organization conducted an analogous tender within the past month (±20% in volume) with at least 2 bidders;
— construction works — where the procurement is carried out on the basis of approved project and cost documentation;
— engagement of a hired expert/consultant — the expert is authorized to conduct market research using methods of their own choosing.

In such cases, the contracting authority may use any of the methods that would otherwise be mandatory alongside the MRS Module notice.

One of the primary practical objectives of market research is determining the estimated procurement value. The rule sets clear requirements:

— For electronic tenders — the estimated value must not exceed the arithmetic mean of the prices identified through market research. At the contracting authority's discretion, the estimated value may also be set below the minimum identified price.
— For simplified procurement — the contract must be concluded at the lowest of the prices identified through market research.

Market research is considered successful if at least 2 potential suppliers respond to the contracting authority's requirements. If this threshold is not met, the research may still be deemed successful provided the contracting authority supplies adequate justification.

The results of market research remain legally valid for 3 months from the date of completion. If the procurement has not been carried out within this period, the research must be repeated.

If the market research fails to achieve its objectives — no responding suppliers were identified, or the price could not be determined — the contracting authority is required to conduct further analysis of its requirements and, if necessary, repeat the research. Important: an unsuccessful market research does not constitute a legal basis for simplified procurement.

Under the new order, for electronic tenders, the contracting authority is required to reflect the market research findings in the tender conditions approval protocol, which is uploaded to the electronic system at the time the tender is announced. It is important to note that contracting authorities are not permitted to disclose the identities of potential suppliers — anonymity must be maintained when describing the results.

The market research regulation does not explicitly specify where reporting should take place in the case of simplified procurement. However, it should be noted that the Contracting Authority Reporting Rule requires contracting authorities to reflect contract-related documentation in the CMR Module of the electronic system, which also encompasses information on market research. The CMR Module includes a dedicated field for market research documentation.

— Pay no less attention to substance than to formal compliance. The information published during market research must be sufficiently clear and detailed. The subject of the research should be clearly defined so that the market can provide a comprehensive response.
— Use a variety of information-gathering methods. The goal should not be merely to obtain "two proposals" to satisfy the formal requirement — it should be to gather the quality information needed to conduct the procurement rationally.
— Cross-check the information. Do not rely on data from a single source — verifying information reduces the risk of misjudging the market.
— For complex specifications — engage market expertise at the planning stage. The open day format exists precisely for this purpose: to allow the expertise of potential suppliers to be meaningfully incorporated in the case of complex procurements.

— The research stage is the right moment to engage in shaping technical details. At this stage, the contracting authority is still open to adjusting specifications. A competent, well-reasoned proposal can be valuable and may ultimately be reflected in the quality of the tender documentation.
— Anonymity is protected. During the market research process, your identity and submission are confidential — other suppliers cannot see them. This reduces the risk of disclosing commercially sensitive information.
— Participating in research does not create obligations. Submitting a proposal during market research does not create any legal obligations — it is an informational process only.
— Participation gives you early information. As a rule, potential suppliers who participate in market research are among the first to learn when a tender is announced.

Market research is not the exclusive domain of the public sector. Private companies — regardless of whether they are legally required to — also conduct market research. The goal is improving procurement outcomes.

Typical objectives of market research in the private sector include:

— Determining an accurate budget: Market research enables the establishment of a precise budget grounded in real market data. Without an accurate budget, it is impossible to assess whether a received offer is expensive or competitive — and equally, the price-to-quality ratio cannot be properly evaluated.

— Gathering information needed to develop specifications: Market research reveals what technologies, standards, and alternatives exist in the market. This information is essential to ensure that specifications fully meet the buyer's needs while remaining technologically neutral and conducive to competition.

— Forming realistic expectations: Market research reveals what is realistically available — in terms of price, quality, delivery timelines, and other conditions. Requirements that are misaligned with market realities typically result in failed competition. Information on standard delivery timelines, payment schedules, warranty durations, and other parameters enables contract terms to be balanced and aligned with market conditions.

— Identifying qualified suppliers: Understanding how many potential suppliers exist in the market, who they are, and what experience they have with similar projects allows for an assessment of whether sufficient competition exists — and consequently, how realistic it is to expect competitive pricing.

— Identifying potential risks and challenges: Market research also reveals potential issues that may affect the procurement process or contract performance — limited supply, long lead times, seasonal factors, currency fluctuations. Early identification of these risks allows them to be addressed in documentation and contract terms.

In the private sector, an electronic procurement platform can serve as a practical market research tool — from identifying potential suppliers to receiving competitive proposals. Etenders.ge is a commercial procurement platform where buying organizations and suppliers find each other. If you would like to learn more about the platform's capabilities — contact us!

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Author: Aleksander Chkhikvishvili