How Georgia is handling procurement transparency

This post first appeared on the Sunlight Foundation Blog. 

Ten years ago, residents of Georgia’s capital Tbilisi only had a few hours of electricity a day. Today, the country has one of the most transparent online systems for government procurement in the world.

At first glimpse, public procurement may not appear to be a sexy issue. But in a country like Georgia, public contractingaccounts for 40 per cent of all government spending and about 10.6 per cent of the country’s GDP (Gross Domestic Product). And that makes it a big deal.

Mathias Huter — a Project Manager at Transparency International Georgia. Image courtesy of Transparency International Georgia.

Up until the end of 2010, Georgia had a highly inefficient, bureaucratic and completely opaque procurement system and the public was not able to access any government procurement documents. This was mainly because in many cases, documents were not even properly archived.

This prompted the creation of a fully electronic procurement platform by the Procurement Agency. The platform, which was developed in-house, cost just over a million US dollars and was launched within a year. The investment also saved Georgian taxpayers some money.

Giorgi Chanturia — an Analyst at Transparency International Georgia. Image courtesy of Transparency International Georgia.

Now, (and for the past three years) all tendered government purchases in Georgia are conducted through one centralized e-procurement bidding platform which is operated by the Competition and State Procurement Agency.

The platform has succeeded in increasing transparency in government procurement by eliminating a paper-based, bureaucratic system (often riddled with opaqueness and corruption) and turning it into a more efficient operation. This has made it one of the most transparent government systems in the world. At least that we know of.

Today, Georgians and others interested in government procurement can find information online including tender documentation, documents submitted by bidders, participating bidders, their bids and all signed and amended contracts. Also included on the platform is information on all whitelisted companies that have been reliable in the past and those that have been blacklisted and barred from bidding for public contracts for a year. The website also allows interested bidders to request for clarification on tender documents. These requests are usually answered by a procurement officer on the website before any bidding starts.

Additionally, users of the procurement website can also file online complaints if there has been a violation of the law.

Tender documents in the hallways of the Georgia State Procurement Agency in 2010.

Such complaints can put a tender on hold for up to ten days – until a dispute review board which includes a representative from Transparency International Georgia, has discussed the complaints and decided on how to proceed. Again, all complaints and decisions by this Boardare published online.

Furthermore, the central government’s bank account is linked to the system. This linkage allows the public to see transactions made by government entities (who have to upload a procurement plan with the purchases they have budgeted for) and the days these transactions were made.

Having individual tenders is great. But in order to get the full picture, one needs aggregate data. So we decided to start scraping the procurement website and in June 2013, Transparency International Georgia launchedTenderMonitor.ge — an open-source procurement monitoring and analytics portal  which is also partly available in English. Every night, we take the data from the government’s central e-procurement website and repackage it into more user-friendly formats then upload it to TenderMonitor.ge.

That way, we are able to generate profiles of procurement transactions of all government agenciesand of all the companies that bid for public contracts. We can now generate aggregate statistical data on what the government spends money on. This service was not available before.

Users can download bulk data and set up free email alerts – that way, a reporter can get an email every time the local municipality announces or awards a larger contract. By so doing, we manage to get a fair amount of online traffic to our portal. The fact that the procurement agency endorsed it and prominently links to TenderMonitor.ge also helps.

Even in a small country like Georgia with some 4 million people, government agencies issue close to 30,000 competitive tenders a year. The next challenge is to develop methodologies that help in identifying tenders that face increased risks for corruption, based on patterns in the data, so that reporters and anti-corruption activists or government investigators can develop analysis and tell stories that inform the public more about transparent government procurement.

Once more countries start introducing e-procurement – hopefully with APIs (Application Programming Interface) associated with the platforms – it will become easier to identify corruption and wasteful spending in government. This perhaps will be a good first step towards providing transparent procurement data that allows for things such as comparing how much different governments pay for say a car made by the same manufacturer.