Scope of the Law and the Defense Exception
The Law on State Procurement establishes the general legal, organizational, and economic principles of carrying out state procurement, but with respect to the defense sphere the very first article contains a significant exception: the rules established by the law apply to all types of state procurement except procurements connected with state secrets as defined by the Law on State Secrets. The list of objects of procurements connected with state secrets and the procedure for carrying out such procurements are approved by the Government of Georgia. Defense procurement is thereby divided into two regimes: classified procurements follow the special procedure established by the Government, while the remainder fall under the general procurement law.
The list of exceptions is broader still: the law does not apply, for instance, to procurements connected with the monetary and currency policy of the National Bank of Georgia, nor to the cases provided for by the Product Safety and Free Circulation Code and the Law on Energy Labeling. Determining the correct classification of a procurement — whether it falls under the general regime — is therefore the first question of the legal analysis of any defense-sector purchase.
Electronic Procurement Means and Simplified Procurement
Electronic state procurement is carried out by means of a competition, an electronic tender, or a consolidated tender, and, by decision of the procuring organization, a simplified procurement may likewise be conducted electronically under the procedures established for the electronic tender. Simplified procurement is admissible where the supply of goods, performance of works, or provision of services is the exclusive right of a single person and no reasonable alternative exists. At the same time, exclusivity is denied where the estimated value of the goods or services exceeds two million lari, or of the works four million lari, and another person exists abroad, within a reasonable territory, capable of the same supply or performance; or where the value does not exceed those thresholds and another person exists within the country.