Spa e procurement_system_giti_2010

ELECTRONIC PROCUREMENT SYSTEM

OF

STATE PROCUREMENT AGENCY OF GEORGIA

TBILISI, NOVEMBER, 2010

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Georgian ICT Development and Cyber Security Event

GITI 2010

Organizers:

ICT Business Council of Georgia

LEPL Data Exchange Agency of Ministry of Justice of Georgia

With the support of:

NATO-Georgia Professional Development Program, Trustcorp (Estonia),

US Embassy in Tbilisi

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TABLE OF CONTENTS

Table of Contents ............................................................................................................................ 3

Introduction ..................................................................................................................................... 4

Goals of the System ........................................................................................................................ 6

Vocabulary ...................................................................................................................................... 7

System Solution .............................................................................................................................. 8

Users and Their Roles ................................................................................................................. 8

Components and Processes ......................................................................................................... 9

Tender ..................................................................................................................................... 9

Registration ........................................................................................................................... 12

Contracting Authority (CA) ................................................... Error! Bookmark not defined.

Bidder ..................................................................................... Error! Bookmark not defined.

‘‘Tender Proposal’ (Warranty) ............................................................................................. 20

Price of a ‘Tender Proposal’ (Placing a bid) ........................................................................ 20

Conclusion .................................................................................................................................... 22

Appendix ....................................................................................................................................... 23

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INTRODUCTION

Developing and making operational modern Information Technologies (IT systems) made

necessary the transformation of an old style state procurement system to a more efficient,

more transparent and better managed centralized electronic environment in Georgia.

The traditional procurement system had many disadvantages, including but not limited

to the following:

It could not provide potential bidders with complete information regarding the

requirements of the state sector

It could not provide a purchaser with needed information about the potential

bidder

It could not allow the public to monitor the process of the state procurement

It was no longer effective in comparison with best practices

All of these resulted:

In restricted communications with state sectors

In lending itself to the status quo, creation and maintenance of privileged bidders

It became obvious that the traditional system needed to be changed. Georgia was ready

for such change.

The best way to manage procurement procedures, purchaser-bidder communications, and

state tenders was via an online, web based system. This would require new policies and

regulations The State Procurement Agency (SPA) SPA as the responsible agency for the

procurement policies was the initiator of the new electronic system.

To build the system, which would cover all requirements of the SPA, teams from the SPA

and from NAPR‟s IT department worked together. It was decided to design the system

step by step, since it consisted of different parts. The first step would have been -

Electronic Tenders.

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The purpose of this document is to describe the first step – Electronic Tenders – in more

details. This step is completed now and the system is ready for exploitation.

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s of

the

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6

GOALS OF THE SYSTEM

The traditional tender process was time and money consuming. It had other

disadvantages, some of which were:

1. A bidder physically had to go to the CA‟s office

2. A bidder had to present „Tender Proposal‟, information regarding its qualification and

a document showing that the service charges were paid

3. To obtain the needed tender documents, a bidder was obliged to debit GEL 150 to the

state budget

4. A procurement process was not anonymous and bidders knew who was participating

in a tender

The goal of the Electronic Tenders (first step for Electronic Procurement System) was to:

conduct tenders electronically

reduce and simplify procurement procedures and processes

increase transparency

reduce remote problems for the CA and bidder and save time

make tender information easily accessible to any domestic and foreign interested

person

cut unnecessary costs for obtaining the needed tender documents

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VOCABULARY

N Expression Definition

1 CA Contracting Authority (buyer/purchaser)

2 Bidder Company/person submitting a bid

3 User In the document it is used to describe a bidder who

participates in a bidding process; also a CA during the

registration process

4 Tender Proposal Tender proposal from a bidder

5 Tender Notice Announcement of the tender by the CA

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SYSTEM SOLUTION

The current chapter describes the Electronic Tenders system in general - users,

components, processes of the system The chapter also provides some screenshots showing

how the system works and simplifies procurement processes in a real time environment.

The official web portal can be found at www.procurement.gov.ge

USERS AND THEIR ROLES

The users of the system are:

CA

- CA could be a State Organization such as a ministry, Self-government, or a

private company (if the state government owns more than 50% of shares),

and/or private sector NGOs, organizations from Autonomous Republics etc.,-

i.e., any entity that spends public finances

Bidders

A bidder could be:

- Any resident or non-resident legal or physical person, as well as partnerships, .

Guest

- Any person interested in the procurement process can be a guest and access

the system

- Guests can easily search and read specific information (documents) regarding a

tender

- Guests can observe the procurement process

State Procurement Agency

The Agency has different access rights:

- Has profile, where it can add, activate or deactivate its own users.

- It can also see other users from other organizations, which information is

hidden from bidders, CAs and guests.

- It can activate/deactivate Purchasers after checking information regarding

them.

- It can enter any dishonest bidders on a „Black List‟ (where such bidders stay

for one year)

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COMPONENTS AND PROCESSES

The system consists of several components: Tender, CA, Bidder, Bid and Warranty. Each

component has its own characteristics (see table in Appendix). There are also some

processes connected to each of them. This section will describe these components and the

processes.

Tender There are two types of tender:

Simplified Electronic Tender

- The state procurement for this kind of a tender lasts at least for 3 days

- Bidding may continue for at least 3 days

- This type of tender is limited to 200,000 Lari maximum

- A price reduction step is from 0.5% to 2%

Electronic Tender

- The state procurement for this kind of tender lasts at least for 20 days

- Biding continues 5 days

- The price for this tender can be more than 200,000 Lari

- A price reduction step is from 0.5% to 2%

Editing of a Tender:

- It is possible to make changes to a tender while the status in the system is –

„Tender is Announced‟

- It is not allowed to edit a tender after the status changes to – „Receiving Proposals

Started‟ (in the case of a Simplified E-Tender, this is after the first day; for E-

Tenders, this is after 15 days)

- After registration, a CA can cancel a previous tender in the system and upload a

new one. In this case the tender status will go back to - „Tender is Announced‟

Tender Time:

Tender has two times: „Main Time‟ and „Additional Time‟ („Round Time‟).

„Main Time‟

- A tender has to state an end of the „Main Time‟. This is the time when receiving of

the „Tender Proposals will be stopped. It can be any time of day from 9 a.m. to 6

p.m.

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Picture below shows how a tender is handled in the system during the main time:

„Additional Time‟

- „Additional Time‟ is given to a tender for the „Rounds‟ after the „Main Time‟

expires

- There are three rounds

- There is 2 minute break between the „Main Time‟ and „Rounds‟ („Additional

Time‟)

- After the „Main Time‟s 2 minute break, the first round starts

- In each round bidders are listed in descending order, in other words, a bidder

with the highest bid is on the top of the list

- A bidder places a new bid according to an order. An order depends on bidder‟s

last offer

- In each round a bidder has 2 minutes for placing a new bid

- Duration of a round depends on the number of bidders, which is multiplied by 2

(minutes). If a bidder refuses a „Tender Proposal‟ and leaves the process after the

first or second round, than the duration of the next round will be equal to the

remaining bidders multiplied by 2

- A break between rounds is also 2 minutes

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- Duration of an „Additional Time‟ (round + break) is recalculated each time after

the previous round ends.

Picture below shows how rounds are handled in the system:

Status:

Tender has different statuses. Each status is connected to a particular process. After a

process step is finished the status progresses to the next one.

Tender statuses can be viewed on the screenshot below:

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Registration

To participate in the procurement process, all intended users (CAs or bidders) are

required to be registered in the system

A guest does not register in the system

For registration, all users need to fill out a form after which

- Bidders are registered immediately

- CAs are given a status - „CA Applicant‟. This status does not give an

applicant any rights in the system yet. The State Procurement Agency

performs a clearance check to see if an applicant is on the „Black List‟ and

has no unfulfilled obligations, then the agency changes the status to

„Purchaser‟.

Picture below shows CA‟s status - „CA Applicant‟:

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CA

- CA formulates Project of Tender Notice

- CA is obliged to upload Tender Documentation before Tender Notice registration

- CA is obliged to declare category and sub-category of its interest by the „Tender

Notice‟

- CA can delete the Project of Tender Notice before its registration

This „Simple Electronic Tender‟ screenshot shows registered Tender Notice in real-time:

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CA‟s right and responsibilities:

- CA can stop a tender at any time until the contract become valid (stopping a

tender could be forced by unpredictable reasons, or state interests)

- After the tender is closed, the tender changes status to – „Receiving the Proposal

Ended‟

- CA uploads an appropriate document (statement of case)

- The status changes to –„ Selection/Evaluation‟. At this stage, a winner has to be

selected (Bidding is over and documents of all bidders are accessible)

Picture below shows how the names, bid prices and the documents of all bidders are

exposed after the tender is over.

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- If a winner is selected then the status changes to „Winner is Selected‟; if not, then

the status changes to „Finished with Negative Results‟

- When a winner is selected, the CA uploads a document (statement of case) on the

web-portal and changes the status to either „Contract in Progress‟, or „Finished

with Negative Results‟ (in case a bidder refuses or cancels contract preparation)

- When the status is - „Contract in Progress‟, a CA names the winner and uploads a

contract. A CA can check the contract once more and finalize it. The status will

then change to „Contract is Completed‟. The contract then can be printed out from

the following window:

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.

The graphical representation below shows the whole processes described above.

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Procurer starts

Registration

(status is ‘Procurer

Applicant’

Is an ID code in

‘Black List’?N

Registered

(status changed to

‘Procurer’)

Formulate

Application Project

Upload Tender

Documents

Needs editing? Edit Documents

Tender Main Time

Started (status is

‘Receiving

Propositions

Started’)

YNNeed to Cancel

Tender

Y

Delete Existing

Tender

NTender Main Time

is in progress

Is Main Time

Finished?

Is additional

Time Finished?

N

Additional Time

Started

Y

Tender is Closed

(status is

‘Receiving

Propositions

Ended’)

Y

Upload document

(status is

‘Selection/

Evaluation’)Is Winner

Selected?

Status Changes to

‘Finished with

negative results’

N

Status changes to

‘Winner is

Selected’

Y

Upload Document

(status is ‘Contract

in Progress;’)

Is contract

ready?

N

Upload Contract

on the Web (status

is ‘Contract is

Completed’)

Y

Sending

Announcement

Message to a

Procurer

Y

Tender

Registration

(status ‘Tender is

Announced’)

Need to

Announce New

Tender

Y

Need to Delete

a ProjectY

N

N

Are any bids

placed?N

Y

Additional Time in

progress

N

PROCURER

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Bidder

- A bidder has to agree with affidavit before submitting a „Tender Proposal‟

- A bidder has to present a warranty * (see warranty)

- A bidder pays GEL 50 for submitting a „Tender Proposal‟

- A bidder presents technical documents. Only bidders have access to these

documents until the tender ends.

- A bidder can delete or add additional documents via the web-portal before placing

a bid

- After going through the steps above, bidders becomes contenders and are

enumerated, e.g. contender 1, contender 2, etc. The contenders‟ real names are

undisclosed.

- If a bidder refuses a „Tender Proposal‟, the warranty amount will be removed

from the bidder‟s account. If this occurs before the bidding ends, the bidder won‟t

be entered on the „Black List‟

- If this occurs after the bidding ends, the bidder will be added to the „Black List‟

The graphical representation below shows the whole process described above.

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Vendor Registers

VENDOR

Is Warranty

Presented?

Agrees with

AffidavitPresent WarrantyN

Make Payment to

Procurement

Agency

Y

Is 50 Lary

paid?N

Y

Present Technical

Documents.

Announce ‘Tender

Proposition’

Needs Editing/

Deleteing?Edit DocumentsY

Vendor Becomes

Contender 1 (or 2,

3…)

Place a Bid

Want to Refuse

‘Tender

Proposition’?

YWarranty Amount

is cut off

Vendor is added to

‘Black List’

Bidding Time

ended?

Vendor Refuses

after Tender ends

N

Sign a Contract

Y

Is Vendor a

WinnerY

N

N

N

Want to Refuse

‘Tender

Proposition’?

Y

N

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‘‘Tender Proposal’ (Warranty)

Assurance methods of a „Tender Proposal‟ are two kinds:

1. When a warranty amount is placed on „hold‟, i.e., is “blocked” from the bidder‟s

bank account;

2. When an electronic warranty* (registered at the NAPR) is presented from a bank.

*Warranty:

Some features of an electronic warranty are included in the Electronic Tender

System. Although, they will be activated after some procedures are clarified.

Meanwhile, warranties are paper based.

This screenshot will allow a bidder to manage warranty electronically.

An amount of the warranty is 1% of the procurement price.

Price of a ‘Tender Proposal’ (Placing a bid)

There are some rules regarding placing a bid

- It is not allowed to make any changes in technical documentation after placing a

bid

- The placing of bids is not limited during the „Main Time‟

- The price of a bid has to be either unchanged or one step less** than the previous

bid

**One Step Less:

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One step represents from 0% to 2%.

- In the „Additional Time‟ only those bidders who placed a bid in the „Main Time‟

can participate

- After a tender‟s „Main Time‟ is expired, all bidders and their technical

documentation are disclosed on the web-portal.

The screenshot below represents the bidding window.

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CONCLUSION

The Electronic Procurement System has many advantages for the management of the

state procurement, as well as benefits for the economy. It indicates coordination,

accessibility, transparency and simplifies the procurement processes.

The first module of the Electronic Procurement System - The Electronic Tender provides:

A simplified tender process for all – state, bidders, public

Potential bidders with complete information regarding the requirements of the

state sector

CAs with the ability to obtain needed information about potential bidders

Unrestricted communication between the state sectors

All bidders with the same chance to participate, to expect fair results and

eliminate privileged bidders

The public with the ability to monitor the process of a tender

Cost reduction for the tender process

It is planned to develop the Electronic Procurement System farther. The next step will be

to develop „Electronic Planning Management and Reporting Module‟. Here, CA will be

able to publicize already intended and approved plans. The system won‟t let a CA:

1. Announce a tender which is not planned, or

2. State a price for an object which exceeds the intended price

Another step towards the development of the Electronic Procurement System will be the

Management Information System. The goal of this module will be to obtain some statistical

information and graphical representation for further analysis regarding numbers of

announced tenders, their individual and total prices etc.

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Appendix

Each component has its own characteristics, shown in the below table. Table: Components

Component Characteristic Details Notes

CA

General Information

Name

Code

Address

Status

Contact Person

Telephone

Email

www

Annual Procurement

Plan

PDF files

Total price

Quarterly Plan of

Execution

PDF files

XLS files

Total expenditure price

Bidder Personal Information Name

Status

Code

Address

Telephone

Email

Desirable Topic Classificatory topics

Tender Purchaser Information Generated automatically

Application Content Not structured; Old versions

are kept.

Classificatory topics Ex. Constriction

Procurement Form Simplified electronic

tender

Electronic tender

Procurement dates

Attachments PDF files

Intended amount

Currency

Contact person

Bid Bidder

Bid amount

Bid count