State Contracts and the Legal Framework of Procurement
State contracts in Georgia are governed by the law on public procurement, which establishes the general legal, organizational and economic principles of conducting public procurement. The rules established by this law apply to every kind of public procurement, except procurements connected with state secrets and separate exceptions provided for by law. For a supplier this means that work on a state contract begins not with the signing of the agreement but with understanding the rules of the procurement procedure: which procurement method is used, how the winner is selected and where a decision may be challenged. A public procurement contract is concluded in written form, taking into account the conditions determined by the law and by sub-legislative acts, while exceptions are established, for example, for simplified procurements carried out abroad by Georgian diplomatic missions and consular posts.
Electronic Procurement Methods
Electronic public procurement is carried out by means of a contest, an electronic tender and a consolidated tender, and, by decision of the contracting organization, a simplified procurement may also be conducted electronically under the procedures established for the electronic tender. Simplified procurement is possible where the supply of goods, performance of work or provision of services is the exclusive right of one person and no reasonable alternative exists for replacing the object of procurement. At the same time, exclusive right is not considered to exist where the estimated value of the goods or services exceeds 2 000 000 lari, and of works — 4 000 000 lari, and abroad, within reasonable territorial limits, there exists another person able to supply the same goods, perform the same work or provide the same services. These thresholds are important landmarks for a supplier: on high-value objects the argument of exclusivity is limited by law, and a competitive procedure is unavoidable.
Challenging Decisions Before the Council
The right to challenge a decision or action of the contracting organization or tender commission belongs both to a person wishing to participate in procurement and to a candidate, where the complaint concerns a decision connected with the tender or contest announcement and documentation, any decision adopted before the opening of submission of proposals, or a revision of such decisions by the Council. A candidate may also challenge decisions adopted after the opening of submissions. In preparing a complaint, two things are decisive: the deadline and the substantiation — the right of appeal extends only to the subjects provided for by law, and a complaint that does not rest on an actual violation of the procedure loses time without producing a result.
The Right of Appeal to Court
A person wishing to participate in procurement, a candidate, a supplier, a person wishing to participate in the selection process or a participant of the selection process is entitled to challenge a decision or action of the contracting organization, the tender commission, the authorized body or the selection commission directly in court. An interested person is also entitled to challenge in court a decision taken by the Council on its complaint; such an appeal, however, does not suspend the operation of the decision. This two-tier protection — the Council and the court — allows the supplier to resist an unlawful decision at different stages of the procedure. Determining the correct subject of the complaint matters here as much as the deadline: the law precisely prescribes which subject may challenge which decisions, and ignorance of that distinction renders a complaint inadmissible. Preparing a complaint therefore begins with reconstructing the chronology of the procedure — which decision was taken, when, and who was a participant at that moment.
Frequently Asked Questions
Which procurements are outside the law?
Procurements connected with state secrets and separate exceptions provided for by law; their list and procedure are determined separately.
When is supply not considered an exclusive right?
When the value of goods or services exceeds 2 000 000 lari, and of works — 4 000 000 lari, and another possible supplier exists abroad.
Who may challenge a decision?
A person wishing to participate, a candidate, a supplier and a participant of the selection process — before the Council or directly in court.
Does a court appeal suspend the decision?
Challenging a Council decision does not suspend its operation — this is provided for by law.
Can a simplified procurement be conducted electronically?
Yes. By decision of the contracting organization it may be conducted electronically under the procedures established for the electronic tender.
How We Help on Legal.ge
On Legal.ge we assist at every stage of public procurement: we assess the announcement and documentation, prepare the tender proposal and design a challenge strategy where the procedure has been violated. In state contracts the management of time is decisive: complaint deadlines are short, and recording a violation is impossible without documentary precision. From the publication of the announcement we record every stage of the procedure, so that a complaint, if needed, is substantiated. Contact us as soon as the procedure begins.