WORLD TRADE
ORGANIZATIONGPA/68
14 May 2002
(02-2664)
Committee on Government Procurement Original:  English
NOTIFICATION OF NATIONAL IMPLEMENTING LEGISLATION
Communication from Georgia
The following communication has been received from the Permanent Mission of Georgia
with the request that it be circulated to the Committee on Government Procurement.
_______________
With reference to the process of the accession of Georgia to the Agreement on Government
Procurement, the following Georgian legislation* in the field of government procurement is being
circulated to the Parties to the Agreement:
- Law on State Procurement, 9 December 1998 (pages 2 – 14)- Law on Amendments to the Public Procurement Law, 30 March 2001 (pages 15 - 23)- Regulations on Implementation of State Procurements (pages 24 – 54)
                                                     
* In English only (translated from Georgian).GPA/68
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GEORGIAN LAW ON STATE PROCUREMENT
CHAPTER I.  GENERAL PROVISIONS
Article 1. Scope of Application of Law
1. This Law states the general legislative and economic principles governing State procurement.
2. The regulations determined by the present Law apply to any State procurements except the
State procurement related to State secrets as defined by the Georgian Law “on State Secrets”.
3. Regulations for implementation of State procurement connected to State secrets defined in the
Georgia Law “on State Secrets” is developed by th e National Security Council and approved by the
President of Georgia.
Article 2. Purpose of the Law
The purpose of the Law is to:
a) provide rational and economical expenditure of financial resources allocated for State
procurement;
b) develop sound competition between suppliers producing goods, works and services meeting
State needs;
c) provide just and non-discriminative approach towards participants of procurement
proceedings;
d) achieve transparency and publicity in the State procurement;
e) create a single, integrate procurement system and promote public confidence in the mentioned
system.
Article 3. Definition of Concepts and Terms Used in the Law
a) “State procurement”  - acquisition of any goods, works or services in order to meet State
needs and by utilizing funds from:
a.a) Georgian State budget and means consolidated in the State budget;
a.b) Budgets of the Abkhazian Autonomous Re public and the Adjarian Autonomous Republic;
a.c) Budgets of other Georgian territorial units determined by Georgian legislation.GPA/68
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b) “Procuring organization” – management bodi es; management and self-governing bodies;
institutions and organizations funded from the corresponding budgets; and other institutions
and enterprises for which State and local budgets are allocated for acquisitions of goods,
works or services; of Georgia, Abkhazian and Adjarian Autonomous Republic.
c) “Object of Procurement” – particular types of goods, works, and services purchased by the
procuring organization.
d) “Bidder” - any physical or legal body in Georgia or in foreign countries that passed through
the qualification procedure.
e) “Supplier” - any physical or legal body in Georgia or a foreign country that concluded
contract with a procuring organization on implementing State procurement.
f) For the purpose of the present Law, the term “construction works” means works that are
carried out for construction of an entity or its parts, as well as repair, reconstruction, andrehabilitation of the entity (except design related activity).
g) For the purpose of the present Law, the term “preference” means the acceptable difference
between the values of the bid submitted by the national bidder and that of the foreign bidder
in which case upon the evaluation by price factor the preference will be given to the national
bidder.
Article 4. Coordination of State Procurement Related Activity
1. State procurement related activity determined by this law is coordinated by the Georgian
Ministry of Economy.
2. The Ministry of Economy within the limits of its competence :
a) elaborates and approves the by-laws ensuring the full enactment of the present Law.
b) analysis the efficiency of the State procurement system and takes measures for its
improvement; periodically informs the President of Georgia on State procurement related
issues; in case of necessity prepares proposals and submits them to the Georgian President totake a decision;
c) carries out advisory activity concerning State procurement related issues; assists procuring
organizations to comply with the norms determined by this Law and the by-laws; arranges
seminars and meetings to improve the qualification of the participants of State procurement
proceedings and ensures the publicity of the legislation regulating State procurement;
3. The functions, rights and obligations provided by this Law will be exercised by the State
Procurement Department established with the Mi nistry of Economy of Georgia. The Head of
Department is appointed and dismissed by the President of Georgia at the proposal of the Ministry of
Economy.
Article 5. Rights and Obligati ons of procuring organizations
1. A procuring organization has the right:
a) to select a supplier according to this Law and bylaws and conclude a contract with the
supplier;
b) to disqualify a person according this Law;GPA/68
Page 4
c) to terminate procurement proceedings at any time before a contract is signed if such a
decision stems from an objective necessity that is beyond the control of the procuring
organization and can not be foreseen, also based on state or public interests;
d) to supervise and exercise control over the fulfillment of the contract;
e) according to the effective legislation suspend or terminate the realization of the contract if the
supplier submits false qualification documents, also in other cases determined by the
legislation.
2. A procuring organization is obliged:
a) to carry out State procurement in a rational manner within the limits of the  allocated assigned
budget allocations and stemming from the country’s interests and according to the rules stated
by this Law and the by-laws;
b) To keep confidential the information provided by bidders to the procuring organization before
the contract on state procurement is signed.
c) Submit to the Georgian Ministry of Economy reports on the realized State procurements
according the format and within the terms set forth by the Article 24 of the present Law.
d) Immediately submit to the Georgian State Department of Statistics statistical reports on the
realized State procurements according the format developed and approved by the GeorgianState Department of Statistics.
e) Pay the supplier the cost of works and/or services immediately upon goods, works, and
services are delivered, unless otherwise stated in the contract.
f) In case if state procurement is canceled according to the Article 5 (2) (c) implement this
procurement only by resuming the terminated procedures.
g) In the cases provided by the Article 5 (2) (c)  notify the Georgian Ministry of Economy and
parties participating in the procurement process about its decision and the grounds  for such a
decision within the 3 (three) days upon the decision is made. Meanwhile, procuring
organization is not obliged to provide the participants of the procurement process with the
evidence or give the detailed information, that made basis for the above mentioned decision,as well as reimburse the bidders’ costs related to the participation in the proceedings, except
tender fees.
CHAPTER II. METHODS OF STATE PROCUREMENT
Article 6.Methods of State Procurement
1. Methods of State procurement are as follows:
a) open tendering
b) closed tendering
c) single-source procurement
2.  In cases justified by the present Law, open and close tenders can be carried put in two stages.
3. Principles for the use of procurement methods are determined by the present Law and by-laws
adopted by the Georgian Ministry of Economy;GPA/68
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CHAPTER III.  TENDER
Article 7. Basic Principles Governing the Choice of Type of Tender
1.  Open tender is held in cases when the estimated value of the subject to procurement exceeds
the amount of 70.000 LARI, while in the case of  procurements of construction works – 230.000
LARI.
2. Closed tender is held in the cases when the estimated value of the subject to procurement is
less then the amount of 70.000 LARI (while in the case of procurements of construction works –
230.000 LARI), but exceeds the amount of 25.000 LARI (while in the case of procurements of
construction works –120.000 LARI)
Article 8. Grounds for Establishing and Functioning of Tender Committee
1. Both, open and closed tenders are held by Tender Committee which is established by the
Head of the procuring organization and consists of at least 5 members;
2. Head of procuring organizations and/or deputies,  as well as heads of structural sub-divisions
of procuring organizations are appointed as members of Tender Committee;
3. It is prohibited for a close relative of the head of bidder (physical or legal body); a  founder or
member of bidding organization that has a status of legal body and exists as a Fund or a Union; or has
a share in the bidder enterprise equity; to be  a member of the Tender Committee;
4. Pursuant to the decision of the Tender Committee, specialists from corresponding fields and
representatives of other treasury organizations can be invited to the Tender Committee as experts and
consultants, with voting right;
5. The Tender Committee will be chaired by the head of the procuring organization or the
person appointed by him (her);
6. Pursuant to the  order of the  Head of the procuring organization with the purpose of proving
organizational-technical activities of the  Tender Committee, there will be established apparatus,
manned by the staff members of the procuring organization and headed by the Chairman of the
Tender Committee;
7. The Tender Committee takes decisions by the simple majority of the Committee members.
The member of the Committee, that disagrees with the decision of the Committee has right to submit
his own view-point, that should be attached to th e decision of the Tender Committee. In the case of
equal votes, the Chairman has the casting vote;
8. The minutes of  meetings of the Tender Committee shall be signed by the members of the
Committee.
Article 9. Tender announcement
1. In an open tender the Tender Committee on the behalf of a procuring organization:
a) shall make an announcement about the tender via the Mass Media, defined in the by-laws;
b) when the estimated value of the State procurement exceeds the amount of 600.000 LARI,
while in the case of the construction work procurement – 8.000.000 LARI notification shallGPA/68
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be also placed in an wide-spread international periodical or specialized printing organ, on one
of the languages most accepted in the international trade practices. The notification shall also
be sent to the foreign diplomatic and consular institutions based in Georgia;
2. If necessary shall define additional means, other than the ones defined in the sub-unit (a) and
sub-unit (b) of the Unit, for tender announcement
3. In the case of closed tender the procuring organization sends to the bidders selected in
advance subject to this Law (no less than five bidders) an official notification of holding the tender.
4. In the tender announcement there should be indicated:
a) contact details of the procuring organization;
b) the type, quality and quantity, the point and form of supply of the procured  goods; the
essence and the place of implementation of the work or service to be implemented; all other
details, that the procuring organisation considers necessary  as connected with the descriptionof the objects to be procured;
c) the desire to supply of the goods, to implement the work, to render the service to be procured,
and the obligatory terms;
d) criteria and rule for estimation of qualification data;
e) the terms, place and language for submission of the qualification data;f) request for the documentation proving the qualification data;
g) the rules, terms, place and language for submission of tender documents, also payment rate
for acceptance of tender documents.
5. The Tender Committee approves the tender announcement.
6. The Tender Committee publishes and, correspondingly distributes tender announcements no
later, than 15 calendar days before the collection of the qualification data starts. In the case of closed
tender the Tender Committee should select the mean of distribution of tender announcement, that will
enable the selected persons to receive the announcement in the shortest possible term.
7. The Tender Committee might amend the information mentioned in the announcement, notice
of which shall be made through mass media, the same way the announcement had been published, andin the case of closed tender the notice should be distributed to all the persons, whom the Committee
addressed initially.
8. Amendment of the announcement and the publication (distribution) of these amendments
should occur no later, than 5 calendar days before end of the submission term.
Article 10. Qualification data
1. The qualification data of the legal entities bidding for State procurements  should meet the
following requirements:
a) their property should not be arrested; no bankruptcy or sanation proceedings should be
commenced against them, they should not be under re-organisation or liquidation process;
b) within the last 5 years period their heads should not  had been sentenced or no criminal
proceedings, connected with their duties at job, should be instituted against them by the
moment the State procurements start.
2. The qualification data of the  physical person bidding for State procurements  should meet the
following requirements:GPA/68
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a) they should be capable of functioning;
b) no bankruptcy proceedings should be commenced against them;
c) within the last 5 years period their heads should not  had been sentenced for economic
activities or activities connected with their duties at job,  or no criminal proceedings should be
instituted against them by the moment the State procurements start;
3. In case if supply of goods, implementation of works or rendering of service subject to the
legislation requires license, certificate or other types of permission, the bidder for the State
procurements should have such license, certificate or permission.
4. In case if the documentation submitted by person as proof for the qualification data is not
valid or it does not meet the qualification requirements, the procuring organization can disqualify the
person  at any stage of procurement procedure, before entering the agreement on State procurement.
5. The disqualified person can sue the decision on disqualification;6. In case if the documentation reflecting the qualification data is not correct or complete, or if it
contains any technical mistake the procuring organization gives the bidder opportunity to correct the
mistake or inconsistency, or to fill in the documentation with the necessary information.  The process
of correction or filling of the qualification documentation should be fulfilled before the end of the
qualification selection.
7. The detailed rule for estimation of qualification data is defined by by-law.
Article 11. Qualification selection
1. The purpose of the qualification selection is to define the list of bidders, by comparing the
submitted data with the qualification data.
2. The qualification selection should be ended no later, than in 10 days after the procedure for
the submission of qualification data stops.
3. The results of the qualification selection shall be registered under the decision of the Tender
Committee and it will reflect the reasons and basis for disqualification of corresponding person(s) andapproves the list of bidders.
4. All the persons, that had submitted their qualification data on due time shall be informed
about the decision of the Tender Committee on the qualification selection. In the case of
disqualification they will also be informed about the basis for disqualification. The Tender Committee
should choose the most efficient and quick way of delivery of the information.
Article 12. Tender documentation
1. The Tender Committee approves the tender documentation before publication (distribution)
of the tender announcement.
2. After payment of the fees defined in this Article 19 of the Law, if there is such, the Tender
Committee is obliged to issue tender documentation upon the request from the bidder.
3. The tender documentation should include:
a) instructions for development of the bidders tender proposals;
b) prioritized the procedures and criteria for estimation of the bidders’ proposals;GPA/68
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c) the quantity of the goods to be procured, obligatory or desirable terms and place for supply of
goods, implementation of work and rendering of service, and other details, that the
procurement organization will consider important in connection with the object to be
procured;
d) full description of the technical and qualitative data of the object to be procured, including
relevant technical specifications, plans, schemes and sketches, also the reasonable alternative
technical and qualitative specifications to the object of procurement, if permitted by the
procuring organization;
e) the necessary conditions for the agreement on State procurements, that are known to the
procuring organizations in advance,  including th e instructions for the  form of the agreement;
f) the methodology for calculation of the price of tender proposal, also the information weather
the price should include other elements, besides the  goods, work or service (e.g.transportation, insurance, taxes, etc);
g) instructions for the currency, that the amount for the tender proposal should be stated in;
h) the term, place and language for submission of the tender proposal;
I) description of the means and procedures for requirement of additional information or
explanation, connected with the tender documentation by the bidder. While in case of two-stage tender – also the opportunity to hold direct negotiations with the bidders;
j) time, place and rule of tender proposals disclosure;
k) the names and contact details of the officers of the Tender Committee apparatus, that are
entitled to have direct contact with the bidders and provide them with the information and
explanations on the procurement procedures;
4. The textual materials, specifications, plans, schemes, sketches and other materials used for the
technical and qualitative parameters of the object to be procured should correspond to the current
standards of international and Georgian standa rds, technical specifications, terminology and
conventional definitions. It is forbidden to include the trademark, patent, model, source and producer
in the description of goods to be procured.
5. The Tender Committee, pursuant to the written request of bidder, or at its own discretion,
shall explain or verify the information connected with the tender documentation, which shall be
attached to the tender documentation in the form of appendices and shall be distributed to all the
bidders 15 calendar days before the  end of  submission of tender proposals. The appendices or
verification should not change the essence of the tender documentation.
Article 13. Preferences
In the case of participation of both local and foreign bidders 15 % preference is granted in
respect of the tender proposal price, which should be submitted by the local bidder.
Article 14. Agreement on Intention
1. The procuring organization, prior to review of tender proposals enters agreement on
intention with each bidder. Under the agreement:
a) in case of winning the tender the bidder undertakes the obligation to enter agreement with the
procuring organization on goods supply or, correspondingly implementation of work, or
rendering services;GPA/68
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b) except for the case envisaged in Article 5.2.(c) of the Law or the event of disqualification, the
procuring organization undertakes obligation to enter agreement with the bidder on goods
supply or, correspondingly implementation of work , or rendering services in case of winning
the tender by the latter, on the terms defined in the tender proposal;
2. Agreement on intention shall include term of the agreement on State procurement, the term of
validity of the bidders tender proposals, also the responsibilities of parties in the event of default on
the liabilities assumed under the agreement on intention.
3. The rules for definition of the forms of responsibility for breaching the form and conditions of
the agreement on intention are defined by by-laws.
Article 15. The procedure for submission and review of tender proposals
1. Tender proposals are submitted to the Tender Committee in sealed envelopes and  the
envelopes are opened at a Tender Committee meeting upon the expiration of their submission period
and in the presence of the bidders. After opening the envelopes the committee determines the deadline
for the reviewing of received proposals and taking a final decision.
2. Before the disclosure of the tender proposals bidders have right to withdraw or change the
tender proposal any time;
3. The Tender Committee only reviews the proposals of the bidders, which entered the
agreement, envisaged by the Article 14 of the Law with the procuring organization.
4. Tender proposals are assessed in accordance with the criteria and priorities defined in the
tender documentation. In case if the tender proposal submitted by bidder is not consistent with the
requirements of tender documentation, the Tender Committee, at its own discretion, takes decision on
disqualification.
5. The Tender Committee does not disqualify tender proposal, in case it includes
inconsistencies, that do not materially change or co ntradict the essence of the requirements stated in
the tender documentation or correction of which does not affect the essence of the tender
documentation.
6. In the case defined in unit 5 of this Article the Tender Committee addresses the corresponding
bidder with the request to verify the tender proposal.
7. Tender winner is determined on the basis of written conclusions submitted by Tender
Committee members, in accordance with the estimation criteria and prioritization stated in the tender
documentation.
8. The conclusion of Tender Committee member there should indicate the name of the preferred
bidder, and also the basis and arguments for such preference.
9. The absolute majority of conclusions of Tender Committee members decide winner. In the
case of equal votes the chairman of Tender Committee has the casting vote.
10. The decision of Tender Committee, stated in unit 7 of the Article is registered in minutes,
with the conclusions of Committee members attached to it. Minutes should include information on the
persons participating in the review of tender proposals, on bidders and also summary of t he submitted
proposals.
11. Bidder can sue for any issues connected with the tender procedures.
Article 16. Signing a Letter of Agreement with the winnerGPA/68
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1. Subject to the current law and on the basis of the agreement defined in the Article 14 of the
law, as well as tender proposal conditions of the winner, agreement on State procurement is made
between procuring organization and the winner.
2. The conditions of agreement are defined by by-laws.3. In the case of procurement of construction works no less, than 70 % of the engineering-
technical personnel and workers involved in implementation of the work should be citizens of
Georgia.
4. In the case of disqualification of the winner, or in case, if the winner refuses to enter the
agreement the Tender Commission addresses other bidders for participation in the renewed review
process of tender proposals, and if necessary, on prolongation of the term of the agreement on
intention. In case, if non-of the bidders express desire to participate in the renewed review processnew tender is held.
Article 17. Re-announcement of tender
1. In case if no winner was declare pursuant to tender process and renewed review-assessment
of tender proposals, or despite tender announcement no tender proposals had been submitted or non of
the submitted proposals was consistent with the conditions of Tender documentation, than Tender
Committee elaborates new tender documentation and announces new tender.
2. Subject to the unit 1 of the Article the procuring organization can change the tender
Committee, or appoint new members.
Article 18. Prohibition of  negotiations with the bidders during the tender process
Tender Committee is not entitled to negotiate with the persons desiring to take part in tender
and bidders, except of the event of two-stage tender.
Article 19. Tender fee
1. The following rates are set for tender fee in the case of State procurement from the State
budget resources of Georgia:
a) in the case of open tender – 500 LARI.
b) in the case of closed tender – 150 LARI.2. In the case of State procurement from Abkhazian, Adjarian or local budget resources subject
to the Law there can be set local tender fee, which should not exceed the amount defined in the unit 1
of the Article.
Article  20. Candidate selection during closed tender
1. In the case defined in the Article 7.2 of the Law tender announcement will be sent to the
selected persons;GPA/68
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2. In the case of closed tender the number of the tender proposals to be reviewed should not be
lass, than three.
3. Besides the rules defined in the unit 1 and the unit 2 of the Article other rules determined for
open tender are also used for closed tender.
Article 21. Two-stage tender
1. Two-stage tender is held if:
a) given the peculiarity of the object to be procured, it is impossible to determine all the
technical and economic conditions of the object in advance and the procuring organization
considers it necessary  to hold negotiation with bidders at the first tender stage, in order to
determine technical, economic and other aspects;
b) the object of State procurement is consultancy, scientific research, experimental, investigative
or consultation-projecting works, and it is impossible to determine their results and price in
advance;
2. At the first stage of two-stage tender the bidders shall submit their free Initial tender
proposals, (“initial tender proposal’);
3. At the first stage Tender Committee can hold direct negotiations with bidders, with the
purpose to verify any issues of the initial tender proposal, as well as define the final parameters for
tender documentation;
4. Pursuant to review of the initial tender pro posal the Tender Committee determines the final
version of tender documentation, that shall be distributed among all the bidders in case of payment oftender fee.
5. Besides the rules defined in the units 2,3 and 4 of the Article, the rules for one-state tender are
also applicable to the two-stage tender.
CHAPTER IV. THE METHOD OF HOLDING NEGOTIATION WITH ONE BIDDER
Article 22. The method of direct negotiation with a single person
1. The procuring organization may chose to use the method of holding direct negotiations on
State procurement with a single person, in case:
a) the assumed price of the State procurement object does not exceed 25.000 LARI (while in the
case of construction works – 120.000 LARI)
b)  supply or implementation of the State procurement object is the exclusive right of a single
person;
c) as a result of Force Majeure the State procurement can not be postponed;
d) it is necessary to implement State procurement from the same supplier with the purpose of
further application and prevention of deterioration of  qualitative feature of goods, technologyor equipment received from the supplier, exce pt for the case when the initial supply cost
exceeds the assumed amount of the State procurement to be implemented;GPA/68
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2. In the case of application of the method of holding direct negotiations on State procurements
the head of the procuring organization or the authorized person appointed by him (her) subject to
legislation.
CHAPTER V. REVIEW OF THE CONDITIONS OF AGREEMENT ON
IMPLEMENTATION OF STATE PROCUREMENT
Article 23. Review of the conditions of agreement on Implementation of State procurement
1. It is not permitted to change the conditions of the agreement entered with the supplier if it
causes increase in the price of the agreement and adversely affects the conditions of the agreementreferring to the procuring organization, except for the case envisaged by the Article 398 of the Civil
Code;
2. The procedures and rules for review of the conditions of agreement on implementation of
State procurements are defined by the Georgian Legislation.
CHAPTER VI. CONTROL OF STATE PROCUREMENTS
Article 24. State procurement account
1. The State procurement process is reflected in the State procurement account and the rule for
its elaboration and keeping is defined by the by-law, adopted by the Ministry of Economy.
2. After tender is held minutes of Tender Committee meeting, decisions taken, conclusions of
the experts and consultants participating in the tender, also other documents defined in the by-law
referred to in the unit 1 of the Article should be attached to the account.
3. The State procurement accounts shall be submitted to the Ministry of Economy of Georgia
within the following terms:
a) in the case of tender no later, than 10 days after agreement is executed;
b) in the case of holding negotiations with a single person, if the amount of State procurements
exceed 25.000 LARI -no later, than 10 days  after agreement is executed;
c) in the case the amount of State procurements is less than 25.000 LARI - on quarterly basis, no
later, than the 10th day of the fi rst month of the following quarter;
4. All the interested persons shall have access to the State procurement accounts if requested,
and their summary should be made public on regular basis through the State procurement bulletins,
founded by the Ministry of Economy of Georgia.GPA/68
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CHAPTER VII. TRANSITIONAL PPOVISIONS
Article 25          Procurement rule for goods until January 1, 2000,
                          subject to the Presidential Ordinance #317,
                          dated June 20 1997.
The Law is not applicable to the goods envisaged by the Ordinance of the President of
Georgia “ on Certain Urgent Measures for the Op timal Use of Budgetary Appropriations for the
Country’s Law Enforcement Bodies and Some Urge nt Measures Fostering the Operation of Local
Enterprises at a Maximum Capacity” dated June 20, 1997.
Chapter VIII. FINAL PPOVISION
Article 26. Establishment of State Procurem ent Department and adoption of by-laws.
1. The president of Georgia shall appoint the Chairman of the State Procurement Department
prior to June 1 1999.
2. The Ministry of Economy of Georgia shall establish the State Procurement Department prior
to June 1, 1999.
3. The Ministry of Economy of Georgia shall adopt the by-laws, necessary for enactment of the
Law prior to June 1, 1999.
4. The State Department of Statistics of Georgia,  in coordination with the Ministry of Economy
of Georgia shall approve the form of the account, defined in the Article 5.1.(d) of the Law prior to
June 1, 1999.
5. The expenses of the State Procurement Depart ment of the Ministry of Economy of Georgia
shall be included into the State budget of Georgia.
Article 27. Annulled by-laws
1. The Presidential Ordinance #612, dated October 28, 1998 shall be considered invalid upon
adoption of the Law.
2. Starting from June 1, 1999 the following shall be considered invalid:
a) the decree of the Cabinet of Ministers of Georgia #264 “On Supplying Production and Goods
for the State Needs of the Georgian Republic”, dated March 30, 1993;
b) the Presidential decree # 244 “On Some Measures Ensuring Maximum Efficiency of the
Country’s Industrial Potential in Material and Technical Support of Georgia’s Military
Forces”, dated March 31, 1996;
c) the Law of Georgia “on State Orders in the Construction Sector” (06.02.98)
On January 1, 2000 the Ordinance of the President of Georgia “ on Certain Urgent Measures for the
Optimal Use of Budgetary Appropriations for th e Country’s Law Enforcement Bodies and Some
Urgent Measures Fostering the Operation of Local Enterprises at a Maximum Capacity” dated June
20, 1997 will become invalid;GPA/68
Page 14
Article 28. Enactment of the Law.
Article VII and VIII of this Law shall enter into force immediately upon publication, while
other articles only after July 1, 1999.
THE PRESIDENT OF GEORGIA:                                    E. SHEVARDNADZE
Tbilisi, december 9, 1998
1721-IGPA/68
Page 15
(Is published in the official newspaper
of Georgia – SAKARTVELOS
SAKANONMDEBLO MATZNE
#10, 19.04.2001)
LAW ON AMENDMENTS TO THE PUBLIC PROCUREMENT LAW
The Parliament of Georgia resolves:
I.  The following amendments and additions shall be made to the Public Procurement Law
(Georgian Legislative Herald , #7, 1998).
1. In the Article 3:
A) in the subparagraph a.c) of paragraph (a) the words “territorial units” shall be substituted with
“local,”and new a.d), a.e), a.f) and a.g) subparagraphs shall be added to paragraph (a) which shall read
as follows:
a.d) by special funds of all those organizations and institutions which are funded out of the
resources of the State  Budget of Georgia,  budgets of  Autonomous Republics of Abkhazia
and Adjara and local budgetary resources   specified by law;
a.e) by funds extended by other countries and international organizations either as an
international assistance or lending on the basis of international agreements (except the caseswhen the given Law is in conflict with the respective international agreement or if respective
credit or grant agreements provide for internationally accepted procurement rules different
from the rules established by this Law);
a.f) by loans extended under the government’s guarantee;a.g) by funds of public or private legal entities, (except of National Bank of Georgia) established
on the basis of the State property, irrespective of sources of such funds.
B) Paragraph b) of Article 3 shall read as follows:b) Procuring agency – any executive governmental body of Georgia, or Autonomous Republics
of Abkhazia and Adjara,  budgetary agency or organization, local self-governance and
governance bodies as well as any other institution or company that is procuring goods, works
and services by the funds specified in paragraph a) of this Article.
C) New sub-paragraphs h), i) j), and k) shall be added after the sub-paragraph g) to read as
follows:
h) price quotation – a simplified method of procurement of goods, services, and minor works the
estimated value of which is above 10000 GEL and below 25000GEL, and also of minor works
at estimated value above 50000 GEl and below 120000GELGPA/68
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i) procurement of intellectual services – a specia l type of procurement, of intellectual and other
consulting services, scientific research works and experiments, construction designs, and
government’s orders in the education sphere;
j) goods – any types of goods (including raw materials, manufactured goods, equipment,
buildings, etc.) being in solid, liquid or gas condition, also electrical power; this will also
include services associated with the goods if the cost  of these services is not higher than that
of the goods;
k) services – any subject of procurement except goods and civil works.”
2. Article 4 shall read as follows:
Chapter 4.  Public Procurement Agency
1. With the purpose of coordinating and monitoring all public procurement activities, under the
guidance of the Law on Public Legal Entities, a permanently-operating independent agencyto be referred to as the Public Procurement Agency (hereinafter the “Agency”) shall be
established, the chairman of which, shall be appointed and dismissed  by the President of
Georgia at the proposal of the Mini stry of Economy, Trade and Industry.
2. The Constitution of Georgia, international covenants and agreements, this Law and the
Agency’s charter to be adopted on the basis of the above-mentioned documents shall
constitute a legal base of the Agency operations.
3. With the purpose of ensuring transparency in th e public procurement system  and  publicity in
the activities of the Agency, a Board of Supervisors shall be established with the Agency,which shall consist of 7 members (including Chairman of the Board of Supervisors), to be
appointed by the President of Georgia.  Charter of the Board of Supervisors shall be
approved by the President of Georgia. The staff of the Board of the Supervisors: officials
from ruling and controlling bodies (representati ves of the Chamber of Control, Ministries of
Finance, Justice and Economy, Industry and Trade); Representatives of Mass media and
Public organizations. The Board of Supervisors work on the public basis.
4. The Charter  and the structure of the Agency shall be based on   this Law and shall be
approved by the President of Georgia. A state body carrying out control of the activities of
the Agency shall also be specified by the Charter of the Agency in compliance with the
legislation of Georgia.
5. The Agency shall be funded:
a) funds earmarked from the State Budges;b) out of the revenues received for the work carried out on the basis of the agreement;c) out of the revenues in consistent to the Georgian legislation.
6. The main functions of the Agency shall be as follows:
a) to develop and make public any normative acts required for the implementation of this
Law and standard bidding documents and to harmonize them  with international norms;
b) on the basis of reports received from procurement agencies,  to implement systematical
studies and analyses of situation existing in  the country’s procurement system and toGPA/68
Page 17
provide recommendations to the President of Georgia to enable him to make appropriate
decisions;
c) to develop model teaching programs and methodological materials and documentation,
to hold seminars and training sessions for central and local governmental bodies, law-enforcement agencies, mass media and other interested parties;
d) to develop and improve an integrated public procurement data base;
e) to provide expertise, recommendations and consulting services to procurement agencies;
f) to maintain the register of suppliers
g) to support the establishing of modern in formational and communications technologies in
the public procurement system;
h) to make public any normative acts and reports for ensuring publicity of public
procurement and to publish a special periodical newsletter;
i) on the basis of administrative procedures to adjudicate any disputes emerged in the
course of public procurement activities;
j) to oversee the lawfulness of state procurement procedures and define the state policy
regulating procurement process.
3. New 4
1, and 42  articles shall be added to the Law to read as follows:
Article 41. Duties and Responsibilities of the Agency Chairman
1. The Agency Chairman shall:
a) in agreement with the Board of Supervisors established at the Agency issue  normative
acts – orders - specified in this Law and mandatory for all the agencies involved in the
state procurement;
b) make orders and instructions on internal organizational matters;
c) regulate any issues which are within the Agency’s jurisdiction;
d) monitor the Agency’s structural units to ensure that they perform their functions in
proper manner; supervise the Agency staff according to the  established procedures.
e) within the limits of its competence appoint and dismiss the Agency staff;
f) manage  the Agency’s funds and control the spending;
g) make suggestions according to the established procedures on such decisions which
should be made on any matter over which the Agency has jurisdiction;
2. The Chairman of the Agency is responsible for the Agency’s activities in accordance with
law.
Article 42. Duties, Responsibilities and Operational procedures of the Board of SupervisorsGPA/68
Page 18
1. The Agency’s Board of Supervisors shall
a)  review at its meetings normative acts to be  issued by the Chairman of the Agency,  and the
by-laws of the Agency’s structural units and results  of their activities;
b)  In its operations the Agency’s Board of Supervisors shall be guided by the key directions of
the government’s public procurement policy and at  its meetings shall give the participants in
the public procurement activities possibility to freely defend their respective interests;
c  prepares annual reports about its activity and submits it to the President of Georgia. The
reports should be open to public
2. Agency’s Board of Supervisors  within the limits of its competence, shall have the right to
request procurement agencies to provide it with any information related to the public
procurement activities and to examine corre ctness of such data and  information
.
3. The meetings of the Agency’s Board of Supervisors shall be open to public and all its
decisions shall be published in accordance with the existing procedures.  Confidentiality of
any information considered by the Board of Supervisors shall be preserved in accordance of
applicable law.
4. In sub-paragraphs 2(c) and 2(g) of Article 5, also in paragraph 3 of Article 24 the words
“Georgian Ministry of Economy” should be substituted with the word “Agency”; also
paragraph 2(d) of Article 5 should read as follows:
d) without delay present to the Agency a statis tical report on the implemented  procurements in
a template developed by the Agency and approved by the State Statistics Department ofGeorgia.GPA/68
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5. After Article 5, new articles 51 and 52 shall be inserted which shall read as follows:
Article 51. Terms and Procedures for Avoiding Conflict of Interests
1. These procedures which are aimed at avoiding conflict of interests shall apply to the
following activities related to public procurement:
a) conducting any operations required for preparing public procurement, including those
aimed at identifying both characteristics and estimated costs of objects to be procured;
b) selecting members of tender committees and any other persons responsible for
implementing public procurement;
c) preparing tender application forms, tender documents and other required materials;
d) reviewing and evaluating qualifications materials and bids;
e) under the conditions envisaged in this law, holding technical discussions and
negotiations;
f) under the conditions of closed tender, selecting potential bidders;
g) overseeing and monitoring the implementati on of the public procurement contracts;
h) conducting any other activities aimed at implementing public procurement.
2. No person willing to take part in the public procurement activities and/or actually
participating in such activities shall have the right to apply any procuring agency (its
managers or employees) or any governmental agency with a request to assist him, or by using
all means and methods to put any direct or indirect pressure on such agencies in order to win
the right to enter into any public procurement contract, which may be beneficial to such a
person.
3. No procuring agency shall assign any pers on to the duty of organizing and managing the
public procurement activities or overseeing such activities and no procuring agency shall
invite any person as a consultant (or expert), if such a person:
a) is closely related to any managerial staff of a legal entity involved in the public
procurement activities or to a direct party to such activities if the latter is an individual;
b) for the last three years has worked for any agency involved in the public procurement
activities;
c) has a personal or business relationship or has conducted negotiations with the purpose of
establishing such relationship with any individual or legal entity that is involved in the
public procurement activities.
4. No individuals and legal entities that had been involved in the public procurement
preparatory operations shall have the right to take part in the public procurement activities.
5. All provisions prescribed in paragraphs 3 and 4 of this Article shall also apply
a) in cases of overseeing the implementation of public procurement contracts;GPA/68
Page 20
b)  to all parties to any state procurement conducted through  negotiations with one person.
6. In cases of open or closed tenders, immediately after the qualifications materials submission
deadline, all members of the tender committee, all invited consultants (experts), and all those
employees of the procuring agency that have anything to do with the public procurementactivities, shall be required to certify in written that his or her involvement in this particular
public procurement activity is not in conflict with any of the above requirements.
7. Whenever consulting services are to be procured, the following conditions shall be met:
a) no consultant or any affiliated person thereof (whether individual or entity) shall take
part in any public procurement activity, which given the nature of such activity may be inconflict with any other responsibilities of such consultant;
b) all consultants (both individuals and entities) shall be required to give the procuring
agency a professional, objective and unbiased advice based on the interests of the
procuring agency.
Article 5
2. Public Procurement Planning
1. Any procurement agency shall implement public procurements in accordance with an annual
procurement plan developed and approved in advance. In the case of  multiple year
procurement, planning is conducted by a pertinent procuring body in compliance with the
Georgian legislation. State procurement planning is regulated by the Decree of the Agency
Chairman.
2. Each annual procurement plan shall be developed in accordance with the procedures of
developing and reviewing the drafts of appropriate (State or local) budgets, as set out in the
laws on the Budgetary System and Budgetary Authorities and the Principles of the Georgia
Economic and Social Development Indicative Planning.
3. Procurement of homogenious goods, services and work conducted by a pertinent procurement
agency during a year is considered as one procurement if it is financed out of one source.
4. Not later than 20 days following the approving of the State Budget, or those of the
Autonomous Republics, or local budgets, the he ad of a pertinent procurement agency shall
approve and provide to the Agency the revised procurement plan.
6. Paragraph 4 shall be added to Article 6 of the Law:
4.The quotation and the intellectual services procurement methods shall be defined in a special
normative act.
7. In the paragraph 3 of Article 16 the following words shall read as follows:
3.“In case that the construction works are procured, if the construction  site is located in the
Georgian territory” should be added after the words “in case procurement of works. ”
8. In paragraph 1 of Article 19 the following words shall be added after “with funds form the
State Budget of Georgia:” “special funds of th e organizations and agencies funded from the State
Budget, with funds received as assistance or credits from foreign countries and international
organizations on the base of  international treaties, credits received with state guarantee, with funds of
legal public entities established with state property (except the National Bank of Georgia),”; also in
paragraph 2 after the words “and with the funds of local budgets” the following words shall be added:GPA/68
Page 21
“budgets of Autonomous Republics of Abkhazia a nd Ajara, special funds of organizations and
agencies funded from the local budgets as defined by the legislation of Georgia.”
9. Paragraph 2 of Article 20 shall read as follows:
2. In case the closed tender is conducted the number of bidders shall not be less than 3,
otherwise the procuring Entitie has the right either to continue the begun tender or terminate it and
announce an open tender (after the agreement with the agency).
10. Subparagraph “a” of  Paragraph 1 of Article 22 shall read as follows:a. The estimated cost of the unit under procurement shall not exceed 10 000 GEL and in the
case of procuring construction works – 50 000 GEL
11. In the heading of Chapter 6 after the words “state procurement” the words “monitoring and”
shall be inserted.
12. Paragraph 5,6,7 and 8 shall be added to Article 24 of the Law which shall be read as follows:
”5. If the volume of public procurements conducted through a tender exceeds 2 million Lari, the
chairman of the tender committee shall report on the procurement process to the President of Georgia
at the government meeting”.
6. The Ministry of Finance of Georgia, those of the Autonomous Republics of Abkhazia and
Adjara, and local finance departments shall be obligated to regularly (on a monthly basis) provide
the Agency with information about actual disbursements to the budgetary agencies.”
7. The Agency is authorised to request any doc uments and information on state procurement
from procuring organizations and bidders at any stage of state procurement implementation,
including the information on im plementation of agreements.”
8. In order to ensure transparency of the procurement process the agency’s obliged to carry out
monitoring of the protecting of such principles during the state procurement process as publicity,
fairness, proper fullfilment of the determined procedures, reporting open and efficient competition, anopportunity of rational and free choice.
13. After Chapter 6 a new Chapter 6
1 shall be added to read as follows:
Chapter 61 – Adjudicating Disputes and Bringing Claims in Relation to Public Procurement
Article 241. Bringing of Claims
1. All persons willing to participate or actually participating in the public procurement
activities, all bidders and suppliers, whether being individuals or entities, shall have the rightto contest any action of procuring agencies (or tender committees), if they believe that in the
course of the public procurement activities any rules or procedures, established by the Public
Procurement Law or any other applicable legal act, and/or their rights have been violated.
2. If any claim emerges before the conclusion of a public procurement contract, the person who
has such a claim may request directly the procuring agency to reconsider the decision of the
relevant officer of the tender committee or procuring agency or to review the dispute.
3. In cases envisaged in paragraph 2 of this Article, any person who has a claim may apply to
the procuring agency with this claim not later than 20 calendar days after the receipt ofGPA/68
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information about the conditions or the making of that decision which caused the emergence
of such a claim or dispute.  All such persons whose interests actually are or can be affected
by such claim shall have the power to take part in the review of that claim.
4. Before a public procurement contract is made, any individual or legal entity that is willing to
take part or is actually participating in the public procurement procedure, or is a bidder or
supplier, may appeal to the Agency with a claim to review any dispute which may arise in
relation to public procurement.
5. Any individual or legal entity that is willing to take part or is actually participating in the
public procurement activities, or is a bidder or supplier, may appeal to the Agency also in
case that such individual or entity is not satisfied with the decision of the procuring agency.
6. In cases envisaged in paragraphs 4 and 5 of this Article, the Agency, not later than 10 days
after the receipt of a claim, shall make in written a reasonably justified decision which shall
be communicated to those persons and the procuring agency that has submitted the claim.
7. If as a result of thorough scrutiny of the claim itself, as well as all related conditions, the
Agency finds that the claim is reasonably justified, then the Agency shall have the power to:
a) warn the procuring agency that it has committed an incorrect action and call on it to
implement the public procurement activities in accordance with the requirements of law;
b) require that the procuring agency review or cancel its decision(s);
c) in case that it finds that any participant in the public procurement activities has failed to
comply with the provisions of this Law, to require the appropriate agencies to hold such aparticipant responsible for such a breach.
8. After the deadline specified in paragraph 3 of this Article, as well as after the public
procurement contract has been entered into effect, all claims and appeals may be heard by
courts only.
9. No claim may be considered if it refers to:
a) the selection of a public procurement method, if the same has already been selected in
accordance with the procedures established by this law and other applicable legal acts;
b) the decision of the procuring agency on the cancellation of public procurement activities,
if such a decision has been made in accordance with the procedures established by this
law and other applicable legal acts.
10. Any claim or appeal shall be based on a reasonable ground and shall be supported by a
reasonable evidence that in case of withholding the claim or appeal the person in questionwill suffer serious losses.
11. In case that any claim is submitted to the procuring agency, or the Agency, or court before
the relevant public procurement contract has been effected, the procuring agency shall
suspend all public procurement activities for the period of 10 days.  By the decision of themanager of the procuring agency, or the Agency, or court the suspension period may be
extended, provided that under no circumstances shall the whole suspension period exceed 30
days.GPA/68
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12. With the agreement of the Agency, the procuring agency may decide not to suspend the public
procurement activities, if delay in public procurem ent is impossible or is not justified in view
of national or public interests.
13. Any individual or legal entity that is willing to take part or is actually participating in the
public procurement activities, or is a bidder or supplier, may take legal action against the
decision of the procuring agency or the Agency with respect to the claim of such an individual
or entity.
14. Any damages which as a result of reviews and hearings provided in this Article may be
payable to the person that has initiated claims, shall be limited to those costs which have been
incurred in relation to the participation of such a person in the public procurement activitiesand shall not include any indemnification for the expected revenues.
14. Article 26
1 shall be added  to the Law which shall read as follows:
Article 261. Creation of an Agency for Public Procurement and Normative Acts to be issued in
connection with the implementation of this Law
1 .In relation to the reorganization of the Public Procurement Department of the Ministry of
Economy, Industry and Trade into the Public Pr ocurement Agency, by May 1, 2001 the following
regulations shall be issued:
a) Decree of the President of Georgia on “Establishment of the State Procurement Agency and
Transfer of State Property Thereto;”
b) Decree of the President of Georgia on “Approv ing the Charter of the Supervisory Board to
the State Procurement Agency.”
2. The Agency shall start fulfillment of its functions and the Agency’s Supervisory Board in its
initial composition shall be constituted as of May1, 2001.
3. By  June 1, 2001, the Parliament of Georgi a, by making appropriate amendments to the Code
of Administrative Offenses and the Criminal Code of Georgia, shall define the forms of responsibility
for the violation of the legislation regulating public procurements
4. By June 1, 2001 the Chairman of the Ag ency shall a Decree approving implementing
regulations for state procurements.
5. By June 1, 2001 the President of Georgia shall approve the implementi9ng regulations for
confidential procurements as defined by Georgian  Law on State Secrets.
6. By June 1, 2001 the Board of the National Bank of Georgia shall approve the implementing
regulations for the National Bank.
II. This Law shall enter into effect immediately following its publication.President of Georgia Eduard ShevardnadzeTbilisiMarch 30, 2001GPA/68
Page 24
REGULATIONS
on Implementation of State Procurements
CHAPTER I. GENERAL PROVISIONS
ARTICLE I. SCOPE AND PURPOSES
1. The Regulations on Implementation of State Procurement (hereafter... “ The Regulations”)
are elaborated in accordance with the Georgian Law on State Procurements and is subordinated to it.
2. The Regulations apply to all State procurements (hereafter ”procurement”)
covered in the Law (article 1, and article 3 , sub- paragraphs : “a”, “b”, “c”).
1. 3. The purpose of the Regulations is to establish detailed rules and procedures for
implementation of state procurements.
ARTICLE 2.MAIN PRINCIPLES OF IMPLEMENTATION OF STATE PROCUREMENTS.
Main principles of implementation of state procurement activities are the following:
a). Rational usage of funds allocated for implementation of procurement – related activities.
b). Enhance spirit of competitiveness in the sphere of production of goods and rendering
services, ensure impartial approach towards all participants of procurement proceedings.
c) Ensure transparency and publicity of procurement implementation activities.
ARTICLE 3.COORDINATION AND REGULATION OF STATE PROCUREMENT- RELATED
ACTIVITIES.
1. The state procurement –related activities are coordinated by Ministry of Economy.
2. The Ministry of Economy is authorized to the following:
a) Issue and approve all normative acts governing state procurements, including standard
documents and forms, to be used for the conduct of procurement proceedings. This
documents and normative acts are mandatory for all procuring entities for implementation for
procurement contracts. 
b) The Ministry of Economy is authorized to devise and implement decisions and measures
aimed at improvement and facilitation of state procurement system and present them to the
president for his approval;
c) Devise and present to the President measures and tools for effective implementation and
coordination of procurement of common –use goods, services and works, as well as create
effective and reliable system of centralized procurement of common-use supplies, developGPA/68
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supply management system, including: inventory management, warehousing, appropriate
system of distribution and disposing of excess or surplus goods.
d) Request from procuring entities and participants of state procurements any information
related to procurement activities, including the information concerning implementation of acontract; convene meetings to discuss the issues of proceedings of state procurements;
e) In the event of violation or circumvention of the Law and procurement regulations, or
ineffective usage of the funds allocated from the central budget, the Ministry should inform
the procuring entities about such infringements or circumventions and demand from them
correction of their decisions and activities in accordance with the Law and these regulations.
In the event of gross and systematic violation and circumvention of the Law by procuringentity, the Ministry is authorized to bring up the issue of temporarily stopping of budget
allocations to the Ministry of Finances of Georgia, Ministry of finances of Adjara and
Abkhazia Autonomous Republics and local state financial authorities.
f) In compliance with current legislation the Ministry is authorized to participate in and be
present at court hearings or disputes related to state procurements;
g) Maintain a register for the purpose classifying suppliers and contractors, goods and services
and up-date it on the annual basis.
h) Issue a state procurement bulletin as a special periodic edition with the purpose of
disseminating information concerning state procurements.
3. Functions of the Ministry of Economy.
The Ministry of Economy is authorized to the following:
a) Devise and issue normative acts, standard documents and forms and other regulatory
documentation to be used for the conduct of procurement proceedings.
b) Investigate and analyze effectiveness and of state procurement system and implementation of
procurement activities.
c) Collect and analyze information and reports submitted by procuring entities, prepare annual
report and submit it to the President for his approval.
d) Organize publication of information related to and depicting current situation of state
procurement proceedings (including publication of surveys of procurement-related
information).
e) Establish a central data bank for recording procurement-related information.f) Examine use of information technology and other technical innovations in procurement with
the view to more cost effective and higher quality performance of public administration anddelivery of public services;
g) In the event of violation or circumvention of the Law, especially when it has financial
consequences for the state and is of systematic character, or in case of grave abuse of
authority by public officials, the Ministry shall inform Chamber of Control about this;
h) Elaborate methodology of implementation of state procurements, assist procuring entities
with advice and work out recommendations for better implementation of funds allocated from
the state budget with the purpose of ensuring cost effectiveness;GPA/68
Page 26
i) Assist in dissemination and inculcation of rules and provisions of normative acts and
legislation regulating state procurement activities, device methodology, publish special
literature and conduct educational programs and professional training;
4. With the purpose of ensuring implementation of activities and functions defined by the Law
within the Ministry of Economy was created a State Procurement Department. The activities
of the State Procurement Department are governed by legislation of Georgia,  “The Law on
State Procurement “ and corresponding normative acts issued by The Ministry of Economy
and the state Procurement Department.
5. According to the Law on State Procurement, article 4, paragraph 3 the head of the State
Procurement Department is appointed and disc harged by President of Georgia, offered by
Minister of Economy.
6. According to the Law on State Procurement and present Regulations all state Procurements in
Georgia are within the authority of State Procurement Department of The Ministry of
Economy.
ARTICLE 4.RIGHTS AND OBLIGATIONS OF PROCURING ENTITIES.
1. The rights and obligations of procuring entities are defined by the Law on State Procurement,
article 5 and present Regulations.
2.  According to the Law on State Procurement, present Regulations and other normative acts,
which regulate fulfilment of contractual obligations, effective and rationale usage of funds allocated
from the local and state budgets and with the purpose of facilitating implementation of procurement-
related activities, the heads of the procuring entities shall establish specialized units and delegate tothem authority to conduct organizational and practical activities of state procurement.
3. The Law on State procurement, present Regulations and other normative acts defining rules
and procedures of state procurement are mandatory for the procuring entities and the latter are
responsible for rationale and effective implementation of procurement activities.
ARTICLE 5. PROCUREMENT PREPARATION AND PLANNING OF PROCUREMENT
ACTIVITIES
1. In accordance with the rules and procedures of the Law on State Procurement of Georgia,
present Regulations and procurement-related other normative acts and documents, to ensure
successful conduct of state procurements and rational and effective usage of funds all the state
procurement-activities should be carried out in accordance with the previously elaborated and
approved annual plan.
2. The annual general plan describing the extent and purposes of projected procurement should
be coordinated with corresponding budgets (state or local), as defined by the “Law on the System of
Budget and Authority over it.”
3. The procuring entities shall provide a draft of the general plan to the Ministries of Finances of
Georgia, Abkhazia and Adjara together with budget statements of the   finance departments of other
autonomous regions, as well as to the State Procur ement Department of the Ministry of Economy. No
later than 20 days after the approval of the state budget or the budgets of autonomies and otherGPA/68
Page 27
territories the general plan of procurement is approved by the head of the procuring entity and is
submitted to the State procurement Department for it’s approval.
4. The procuring entities shall device procurem ent plans taking into account the following:
a) The need for the procurement;
b) Precedents for similar procurement;c) Method (form) of implementation of procurement; duration of procurement procedures (e. g.
duration of tender);
d) Estimation of the cost of proposed procurement;
e) Long-term or last year financial obligations of a given year;f) Expected time of State Procurement contract completion, that must be agreed;g) In the case of necessity other surcomstances connected with concrete procurements.5. The plan of State procurement shall include:
a) Description of goods, works or services to be purchased, as well as their amount and
estimated prices during the financial year;
b) Taking into consideration estimated costs of the proposed procurement determine it’s
implementation resources;
c) Determine duration of the implementation of the proposed procurement.d) Long-term or last year financial obligations of a given year;6. In the event of the delay in elaborating and approving at the state and local budgets the
procuring entity should conduct procurement according to the law on “Budget System and Authorityover it”, article 15, paragraph 6 and within the boundaries of finances, defined by it.
B. ARTICLE 6. PRE-CONTRACT STUDIES AND ACTIVITIES
1. Prior to the procedures of implementation of procurement activities, each procuring entity
conducts pre-contract studies designed to assist a particular procurement. The particular purpose of
such studies is to determine desirability, feasibility, methods and amount of available funds and
preparation of a draft of a given procurement.
2. In the event that the procuring entity does not have sufficient staff and resources to conduct
the necessary pre-contract studies, it shall procure external consultants with the purpose of rendering
these services. In this event the same procurement rules and procedures are applicable.
3. For the purposes of determining feasibility of the estimated costs of a given procurement the
following aspects should be taken into consideration: all the costs and expenditures connected withimplementation of a given contract; expected duration of the agreement of a contract (including
likelihood and expected value of recurring orders); current prices (of the internal or international
markets), experience of similar contracts. Information, concerning estimated prices of a contractGPA/68
Page 28
should be confidential and shouldn’t be available for other participants of a contract (unless there is
any need in divulging it).
4. In the event, when state procurement is conducted on the tender-basis, a procuring entity shall
appoint a tender committee and it’s working group. The rules and procedures of creation of a tendercommittee are defined by the law on State Procurements, article 8, and present regulations.
5. Upon defining the estimated value and scope, as well as other parameters of a, proposed
procurement, a tender committee shall design a tender invitation notice and elaborate tender
documentation defining pre-qualification requirements or any other documents used to solicit an offer
and indication of evaluation criteria.
6. A tender invitation notice and tender documentation are approved by a tender committee
(prior to it’s publication in a newspaper).
7. In the event, when the estimated value of a given procurement contract exceeds 25000 lari,
upon conclusion of procurement preparation activities (in the event of a tender- prior to publication ofthe invitation to a tender; and in the event of a single-source procurement-prior to the beginning of
negotiations) a procuring entity shall inform The State Procurement Department and corresponding
Ministries of Finances of Georgia, Abkhazia and Adjara or local Financial authorities about the
beginning of procurement proceedings.
The State Procurement Department must be informed about the proof of choiced procurementmethod.
ARTICLE 7. METHODS OF IMPLEMENTATION OF STATE PROCUREMENT
1.In accordance with article 6 of the “Law on State Procurement”, implementation of procurements
shall be carried out in one of the following ways:
a). Open tender;b). Restricted tender;
c). Single-source procurement.
2. In the circumstances defined by the Law and present Procurement Regulations, open and
restricted tenders can be conducted on the two-stage basis.
3. It is not permitted to artificially divide procurement with the intention of avoiding monetary
thresholds set in the Law on State Procurement or the present Regulations and other procurement-
related normative acts.
ARTICLE 8.RULES OF AVOIDANCE OF CONFLICT OF INTERESTS.
1. Rules of avoiding conflict of interests apply to the following procurement-related activities:
a). Procurement preparation activities, including review or approval of specifications or a
statement of work for a particular procurement and definition of expected value of a procurement;
b).  Selecting members of a tender committee and other persons responsible for conduct of state
procurements;GPA/68
Page 29
c) Preparation of procurement documents, including solicitation of participation;
d). Assessment of qualification data and evaluation of tender proposal
e). Conduct of technical discussions or negoti ations (if previously agreed to do so);
f). In the event of a restricted tender, selection or approval of selection of a bidder;
g). Supervision and control over implementation of contractual obligations;h). Other procurement-related activities.2. Individuals participating in implementation of state procurement in any manner or
participants of a tender and bidders are prohibited to address a procuring entity (it’s head or staff),
state officials or their representatives with the request of exerting their influence and rendering
assistance in obtaining of a contract, or, directly or indirectly influence them by giving or offering to
give inducement.
3. A procuring entity is prohibited to delegate authority over implementation of a procurement
proceedings or supervision over them to a person or hire a consultant if the latter is:
a) An immediate family member of a public official conducting state procurement or is
participant of a tender, if the later is the individual;
b) During the last three years was working in organization engaged in procurement-related
activities;
c) Through personal or business activities is related to representatives of a legal entity
participating in state procurement procedures or conducts negotiations with them;
4. Individuals or entities, which participated in procurement-preparation proceedings, are
restricted from participation in a tender.
5. The principles stated in paragraph 4 and 5 of the present Regulations also apply to supervision
and control over fulfillment of procurement-related contractual obligationsAnd/or participants of negotiations in the event of single-source procurement.
6. It is prohibited for a close relative of the head of bidder (physical or legal body); a  founder or
member of bidding organization that has a status of legal body and exists as a Fund or a Union; or has
a share in the bidder enterprise equity; to be  a member of the Tender Committee.
7. In the event of any tender proceedings and after termination of the receiving of tender
solicitation documents all members of a tender committee, hired consultants and staff of a procuring
entity, which was engaged in implementation of a give n procurement, shall confirm in writing that his
activities did not contradict to any of the abovementioned requirements.
8. In the event of procuring of consultants services the following should be taken into
consideration;
a) A consultant or his affiliates shall not be hired for participation in such proceedings of state
procurement, or be given such assignment, that would by it’s nature be in conflict with their prior or
other assignments.GPA/68
Page 30
b) A consultant shall provide professional, objective and impartial advice to a procuring entity
and at all times hold it’s interests paramount.
CHAPTER II.TENDER
ARTICLE 9. THE RULES AND PROCEDURES OF SELECTING A FORM OF A TENDER.
1. The Law on State Procurement, article7, defines the rules of selecting a tender.
2. An open tender is announced in the case of procurement, when the estimate value of the
object of procurement exceeds 70000 Lari, and, in case of procurement of construction services-230000 Lari.
3. A close tender is announced in the case of procurement, when the estimated value of the
object of procurement ranges from 25000 Lari to 70000,and, in case of procurement of construction
services- from 120000 to 230000 Lari.
4. A two-stage tender is held, when due to the complexity of the object of procurement it
becomes impossible to determine all economic and technical aspects of the procurement or, define the
nature and amount of works to be procured in advance (especially in case of procuring consultants
services with the purpose of assisting in scientific research, implementation of complex constructionprojects and etc).
ARTICLE 10. THE INVITATION TO TENDER
1. General rules and procedures of elaboration and publication of a tender invitation notice are
defined by the Law on State procurement, article 9, and present regulations;
2. In the event of an open tender a tender committee on the behalf of a procuring entity
publishes an announcement of a tender in such publications as:
a) Newspaper “Sakartvelos Respublika” and “Svobodnaia Grusia”;
b) International newspapers and specialized trade journals with wide circulation (e.g. UN
Information Department publication “DEV ELOPMENT BUSINESS”,UN plaza, New York,
10017 USA, the office of which is also within the World Bank headquarters, 1818 H Street,nw, Washington D.C, 20433, U.S.A.);also newspapers stated in paragraph “a” and
disseminated in diplomatic and consulate representations in the event when the estimated
value of the object of procurement exceeds 600000 Lari; or in case of procuring construction
services-8000000.
3. In the event of an open tender publication of tender invitation announcement is admissible in
any newspaper or other media. Usage of other information media is admissible only after publication
of the announcement in the publications stated in article 2, paragraphs “a” and “b”. An official date of
the beginning of a tender is considered the date of publication of the announcement in the official
newspapers (or whichever happens first), and in the event of a restricted tender-the date of sending ofthe invitations.GPA/68
Page 31
4. In the case of closed tender the procuring organization sends to the bidders selected in
advance (no less than five bidders) an official notification of holding the tender.
5. The tender invitation shall be published (and in case of restricted tenders-sent)
15 days prior to the beginning of receiving qualification documents, and the receiving of qualificationdocuments shall be completed within 10 days period after the receiving of qualification data.
6. Apart from the information stated in the Law on state procurement, article 9, the tender
invitation notice shall include the following information:
a) Recvizites of procuring entities;  .
b) the type, quality and quantity, the point and form of supply of the procured  goods; the
essence and the place of implementation of the work or service to be implemented; all other
details, that the procuring organisation considers necessary  as connected with the description
of the objects to be procured;
c) the desire to supply of the goods, to implement the work, to render the service to be procured,
and the obligatory terms;
d) The rule and criteries of estimate qualification date;
e) Place, language, date and time to perform of qualification date;
f) request for the documentation proving the qualification data;g) the rules, terms, place and language for submission of tender documents, also payment rate
for acceptance of tender documents.
h) Indication of names and addresses of those representatives of a procuring entity, who are
authorized to provide additional information concerning given procurement;
7. Any person who wishes to participate in the State Procurement procedures, upon his request
must be provided by additional information. Additional information must contain:
a) List of legislative regulative acts of State Procurement;b) Requests for:
Payment for participation in a tender; Signing Agreement on Intention; Making use of  the State
Procurement contract performance security and/or th e insurance for the performance of the contract,
in the case of necessity;
c) Indication of  rules of preferences;d) Indication of possibility to choose two or more winners;e) Information about rules of appealing.GPA/68
Page 32
ARTICLE 11. QUALIFICATION DATA
1. To be admissible for participation in procurement proceedings entities and
individuals should satisfy the requirements, defined by the Law on State Procurement,
Article 10.
2. A procuring entity (or a tender committee) is authorized to demand additional
information concerning financial standing, technical capacities and qualification of
participants of a tender. These requirements shall be objective and impartial towards
participants of a tender.
3. A procuring entity (or a tender committee) may require bidders to submit information
and supporting documentation, showing that they satisfy quality, technical capacity, financial
resources and labor force resources requirements of a procuring entity.
4. The qualification requirements of a procuring entity(or a tender committee) might
also apply to the sub-contractors, who are invo lved in state procurement proceedings at the
stage of implementation of a contract.
5. A tender committee is authorized to demand from the participants of a tender to
present the documents confirming their qualification anew at any stage of a tender.
ARTICLE 12. QUALIFICATION SELECTION
1. Qualification selection procedure is defined by paragraph 7, article 10 of the Law on state
procurement.
2. The entities and individuals shall provide to the tender committee all the required
qualification documentation indicated in invitation to a tender prior to the expiration of the deadline of
submitting the above mentioned information. The qualification selection should be ended no later,
than in 10 days after the procedure for the submission of qualification data stops.
3. The tender committee is responsible to register all the submitted documents. During the
registration shall be indicated date and time of submission of each package of documents.
4. Based on estimation of qualification data is held qualification selection.5. During the qualification proceedings a tender committee checks and verifies if the entities and
individuals, who have submitted their qualification data satisfy the requirements of a given tender.
6. Qualification selection shall be completed no later than 10 days after expiration of the
deadline of submitting of the qualification data.
7. As a result of qualification selection a tender committee works out a list of candidates for
participation in tender proceedings and no later than within 5 days informs about it all the bidders who
have submitted their qualification data.
8. The following entities and individuals shall not be admitted to participate in a tender in case
the qualification data submitted by them doe s not comply with the following requirements:
a). Is false or does not satisfy qualification requirements;GPA/68
Page 33
b). Is incomplete, or technical specifications have many errors and the entity or individual who
has submitted it refuses to correct the erroneous information.
ARTICLE 13. PAYMENT FOR PARTICIPATION IN A TENDER
1. In accordance with article 19, of the Law on State Procurement, for implementation of a State
Procurement financed from the budget is charged a certain payment. The amount of this payment
ranges:
a) In the event of an open tender-500 Lari;
b) In the event of restricted tender-150 Lari.
2. When the procurement is financed from the budgets of Abkhazia and Adjara Autonomous
Republics, or local budgets, the decision on charging a tender payment is made by corresponding
Supreme Councils of the above mentioned Republics or local bodies of self-government, and it must
not exceeds to tender payments charged by this article, paragraph 1.
3. A tender payment is charged from entities or individuals, who have passed qualification
selection proceedings and want to get tender documentation.
4. A tender payment is returned to the bidder upon decision of a tender committee or of a   court
and only in those occasions when a procuring entity decides on suspension of procurementproceedings or can not ensure timely provision of tender documentation.
5. Candidates, selected as a result of qualification proceedings are authorized to have access to
tender documentation prior to paying a tender payment only in procuring entity.
ARTICLE 14. TENDER DOCUMENTATION.
 
1. Rules and procedures of elaborating tender documentation, as well as its approval and
amendments to them are defined by the Law on State Procurement, article 12, and present regulations.
2. Tender documentation presents packet of documents that contains whole information about
the object of procurement, tender process and favourite terms for signing of a state procurement
contract.
3. A tender documentation shall include the following information:
a) in accordance with article 16 of the present regulations, a form of an agreement of intention;
b) rules and procedures of elaborating and submitting proposals;c) detailed description of alternative technical and quality specifications of the object of
procurement;
d) Indication of expected amount of goods, works,  or services to be procured; expected or
obligatory deadlines and location of procurement indication of any incidental services to be
performed in the case of need of a given procurement (including description of theseservices); any other requirements, that a procuring entity will consider as necessary;GPA/68
Page 34
e) a requirement of providing samples and the number and type of such samples;
f) provision of warranty of the quality of proposed goods, as well as description of tests and
methods to be employed to judge the conformity of goods or construction with technical
specifications;
g) rules of determining a tender price, including indication, whether apart from the cost of
goods, works and services, what elements should be included in the price (e.g. transportation,
insurance, commissioning  and etc);
h) the currency, that will be used for defining the price of a proposal; or, the exchange rate that
will caused for the conversion of tenders into the currency, which will be used for theconversion of tenders into the currency, which will be used for the purpose of evaluating
tender proposals;
i) indication of the language, in which proposals shall be submitted;
j) The place, date and time of submitting tenders, including indication of possibility forms of
alternative proposals (which would ensure confidentiality of proposals);
k) indication of possibility of the bidder to require additional information or explanation
concerning tender documentation; description of corresponding procedures and names andaddresses of the staff of the procuring entity, who are authorized to provide such information;
information concerning a meeting, which a procuring entity is going to held prior to the
beginning of submittance of proposals and/or a site visit, with indication of the place, date and
time.
l) requirement of a minimal validity period of a tender. During determination of validity period
should be taken into consideration the period of time, during which tender shall be in effect,
expected date of signing an agreement and possible obstacles.
m) requirement of a tender security and insurance of certain stages of contract implementation,
including indication of the forms and amount of security and insurance.
n). indication of additional obligations of a s upplier apart from signing an agreement (sharing
technologies, rights for intellectual property, training and etc.)
o) general terms of agreement.
p) place, date and time for the opening of tenders, including indication of procedures.
q) the criteria to be used for evaluation and indication relative weight of such criteriar) indication of several bidders can be awarded a contract with the purpose of implementation of
portions of the procurement.
s) indication of margins of preference and rules of their application;t) indication, if a bidder has a right to revoke his tender or make amendments into it, including
the right to return tender security and payment and right to appeal.
u) a statement to the effect that a procuring entity reserves the right to reject all tenders or
suspend procurement proceedings;GPA/68
Page 35
v) any other requirements, that a procuring entity may have towards tender proposal, that
complies with the Law on State Procurement or this Regulations.
5. Upon written request of a bidder, or upon its own will, a procuring entity can make changes
or amendments in the tender documentation 15 days prior to the deadline of submitting of proposals.These changes or amendments shall represent an annex to the tender documentation and shall be
disseminated to all candidates of a tender.
6. If any of the candidates address a tender committee with the request of clarification or
explanation of some of the issues, the committee shall provide such explanations or clarifications.
7. The validity period of submitting of proposals shall not exceed 30 days from the deadline of
receiving tender documentation.
ARTICLE 15.RULES FOR DESCRIPTION OF OBJECT OF PROCUREMENT.
1. The announcement of a tender, tender documentation and any procurement-related
documentation shall have clear and comprehensible description of goods, construction or services to
be procured.
2. Any specifications, plans, drawings, technical or quality characteristics of the goods,
construction or services to be procured shall comply with the requirements of national andinternational standards and use internationally accepted terminology and symbols.
1. A description of the object of procurement should not include the following:
a) a particular trade mar, name, patent, design, type, specific origin or producer unless there is
no other sufficiently precise or intelligible way of describing the goods, construction or services to be
procured and provided that such words as “similar” or ”equivalent” are included.
a) demand of specifications and usage of terminology,  that will create obstacles for ensuring wide
participation in tender.
4. In the event of procurement of construction, the description of the object of procurement shall
include:
a) general description of the scope and purpose of the construction;b) list of works to be implemented;
c) description of physical nature and conditions of construction site;
d) detailed design and drawings of work to  be performed and technical characteristics;
e) safety standards to be met and environmental impact.
ARTICLE 16. AGREEMENT ON INTENTION.
1. The rules and procedures of concluding an agreement on Intention are defined by article 14,of
the Law on State Procurement.GPA/68
Page 36
2. An agreement on intention is concluded between a procuring entity and each participant of a
tender.
3. Agreement of intention, signed by the head of a procuring entity or his authorized
representative is provided to each bidder together with tender documentation. The instructionsincluded in the documentation shall call upon bi dders to include with their tenders a signed
copy of that form (but it shall not be sealed in the same envelope as tender proposal).
4. Negotiation between procuring entity and a candidate of a tender concerning agreement on
intention is permissible only during the validity period of a given agreement.
5. In the event, when a candidate of a tender fails to present or presents an agreement on
intention without appropriate signature than the tender shall be considered unresponsive and
will not be considered.
6. Agreement on intention shall include:
a) obligation of a bidder in the event of winning of a tender to sign an agreement on state
procurement implementation on previously defined terms;
b) obligation of the procuring entity to sign an agreement with the winner of a tender on previously
defined terms. abovemention obligation does not expend in that case, when the procurementproceeding is cancelled or the pretendent is disqualificated;
c) obligation of the procuring entity to return a tender security (or tender security documents)
(excluding those occasions when a tender committ ee decides differently) if such was required by
a given procurement.
d) indication validity period of the tender;
e) indication of the validity period of the agreement on intention.
f) responsibility of the parties in the event they fail to fulfill obligations of the agreement.
ARTICLE 17. TENDER SECURITIES
1. With the purpose of ensuring implementation of a tender a procuring entity has a right to
require tender security. In this event the bidders sh all transfer to the special account of a procuring
entity previously defined amount of money, as well as provide a special bank guarantee on the amountof the tender security or other internationally accepted guarantees. The amount of tender security
despite its form shall remain unchanged.
2. Tender securities shall be required in the following occasions:
a) when the estimated value of the object of  procurement exceeds 600000 Lari; and in case of
construction procurement-8000000;
b) when procurement concerns provision of t echnologically complex equipment or works
notwithstanding  the estimated value of the object of procurement.
c) When the time is of essence.GPA/68
Page 37
3. When the procuring entity requires the bidder s to provide security the tender solicitation
documents shall specify the nature, form, amount and other conditions of tender security.
4. The security requirement shall apply to all bidders.
5. The minimal validity period of a tender security and validity period of a tender shall coincide.6. The document confirming tender security shall be submitted together with tender proposal. It
will be enclosed to the envelope, containing tender proposal but not sealed together with it.
7. The procuring entity shall define the amount of tender security depending on peculiarities of
the object of procurement and it’s estimated price. This amount must not be so big as to create
obstacles for participants of a tender and shall not exceed 5% of the estimated value of theprocurement.
8. A tender committee has a right not to accept guarantees provided by the bidder if it gives
grounds for some doubt in their authenticity or the solvency of the bank,
confirming this guarantee is under question.
9. The procuring entity shall return to the bidders the security provided by them as well as the
security-related documentation no later than 5 days after the signing of the agreement.
10. In case the procuring entity decides to suspend or cancel procurement proceedings, the tender
security, as well as the documentation supporting it shall be returned to the bidders upon their request.
11. In the event of the failure to sign a procurement contract and the tender committee proceeds
with re-evaluation of the remaining bidders, the procur ing entity is entitled to promptly return tender
securities and accompanying documentation to thos e bidders, who refuse to participate in re-
evaluation procedures, prolong validity period of the agreement on intention or fail to prolong the
validity period of provided bank guarantees.
12. In the event when the tender validity period expires prior to the completion of the assessment
of tender proposals and a candidate refuses to comply with the need of prolonging this period, tender
security and security-related documentation shall be returned upon his request.
13. The tender committee makes a decision about retaining of the provided securities in the
following occasions:
a) if the bidder withdrew tender after opening of tenders (prior to the expiration of tender validity
period);
b) if the winner refuses to sign procurement contract  with procuring entity;
c) if a bidder is disqualified from procurement proceedings for grave violation  of procurement
procedures.
14. In compliance with the current legislation of Georgia and present Regulations (article 33) the
bidder has a right to appeal in case he does not agree with the decision of a tender committee to retain
the provided security.GPA/68
Page 38
ARTICLE 18. SUBMISSION AND REVIEW OF PROPOSALS
1. Basic provisions of submitting a tender are defined by article 15 of the Law on State
Procurement.
2. Tender proposals shall be signed by authorized representative of a bidder and submitted in a
sealed envelope, or in other form pre-determined in tender documentation, which would ensure
confidentiality of tender documentation.
3. A tender committee receives and registers tender proposals (indicating date and time of
receipt) on the date and address defined by tender documentation.
4. The procuring entity shall ensure that all tend ers and samples that it receives are kept in a
secure manner that does not permit the tenders to be open or reviewed. Information concerning the
number of proposals and their content shall be accessible only for persons, authorized by procuring
entities.
5. The late bids shall not be considered by a tender committee and shall be returned to the
bidders unopened. The date and time of the receipt of a late bid shall be noted in the record of the
procurement proceeding.
6. A bidder prior to the opening of tenders has a right to address a tender committee in written
form with the request of withdrawal of his tender or making amendments into it.
7. After the expiration of the validity period of submission of tenders a tender committee
meeting shall be convened, during which and in presence of all bidders tender proposals are opened
publicly. The names of the bidders and total amount of each tender, and alternative tenders, if any,
shall be read aloud and recorded in tender committee meeting minutes. After opening of tenderproposals a tender committee defines the deadlines of preliminary screening.
8. After opening of tender proposals it is not prohibited to make some amendments in these
proposals.
9. The validity period of a tender proposal shall not be less than the period required by tender
documentation and shall be indicated in the proposal.
10. A tender committee has a right to demand from the bidders to prolong validity period of a
tender proposal.
11. The bidders have a right to refuse to prolong validity period of their tender proposal.12. In the event that a bidder agrees to prolong validity period of his tender, but fails to prolong
validity period of his security (or is unable to present a new tender security) he will be considered as a
bidder, who refused to comply w ith the requirement of prolonging his tender proposal validity period
and will be rejected from further participation in the tender.
ARTICLE 19. PRELIMINARY SCREENING
1. After opening of tenders a preliminary screening of tenders shall be carried out. The purpose
of the preliminary screening is to determine wh ether tenders comply with the procuring entities
requirements as to the tenders themselves and the accompanying documents.
2. The preliminary screening involves the following:GPA/68
Page 39
a) whether all the required documents, including standard forms supplied with tender
documentation, have been submitted fully completed.
b) whether all the submitted documents have been filled  according to the requirements of a
procuring entity (have a signature of an authorized person, and if required so, a seal andindication of all the necessary dates)
c) whether the tender substantially conforms with the contractual terms and technical
requirements set out in the invitation  to tender .
3. At the preliminary screening tenders shall be checked for arithmetical or clerical errors.
Bidders that have submitted tenders with such errors shall be given an opportunity to correct them.
4. A tender committee is authorized to correct purely mathematical and clerical errors taking
into consideration the following:
a). If there is discrepancy between the unit price and total price, that is obtained by multiplying
the unit price and quantity, then unit price shall prevail and total price shall be corrected
(unless a tender committee considers that there is an obviously gross misplacement of the
decimal point in the unit rate and the price is unrealistic).
b) In the event there are deviations of the character, when the given figures and their verbal
expressions do not coincide, then the verbal expression of the figure shall prevail.
5. At the stage of preliminary screening tenders shall be classified by a tender committee into
the following categories:
a). Those tenders that can be considered responsive and satisfactory;
b). Those tenders, that contain material deviations or reservations and are considered unresponsive.6. A tender proposal shall not be considered acceptable and shall be rejected from participation
in evaluation proceedings in the following occasions:
a) If the bidder that submitted the tender did not provide all the necessary accompanying
documents and/or information, and, if required so, failed to provide samples.
b) If the bidder that submitted tender and qualification data fails to confirm his qualification
upon tender committee’s request to do so.
c) If the bidder does not comply with the requirement, stated in paragraphs 3 and 4 of this article
concerning correction;
d) If the bidder submitted a tender which does not conform to the requirements of the tender
documentation.
e) If the proposed price for the object of procurement is extremely law and the tender committee
considers it unreasonable or artificially decreased.
f) If the bidder has grossly violated procurement proceedings or committed offence.GPA/68
Page 40
ARTICLE 20. EVALUATION AND COMPARISON OF TENDERS
1. After a tender committee selects tender proposals, that will be considered admissible, they
will be examined in details. The tender committee is authorized to engage experts and consultants
who will render assistance in evaluation and comp arison of tender proposals. Discussions concerning
tender proposals and experts’ and consultants’ recommendations shall take place at tender committee
meetings. The tender committee is authorized to invite a bidder or his representative to provide
explanations or clarify some issues related to his tender proposal if it considers necessary.
2. If in compliance with the tender documents prices indicated in tender proposals are expressed
in two or more currencies, while evaluation and comparison of tender proposal the prices shall be
converted to national currency and according to the rate, specified in the solicitation documents.
3. After detailed examination of tender proposals the tender committee evaluates the submitted
proposals according to the criteria, indicated in tender documents and taking into consideration
importance and priorities of these criteria.
4. The evaluation criteria shall apply to the bidder, as well as to the proposals, submitted by
them, though evaluation of a tender proposal shall prevail.
5. The purpose of evaluation of a tender proposal is to investigate and compare financial
standing, technical capacities, labor resources, reputation and experience of a bidder.
6. While evaluation of tenders the following criteria shall be applied:
a) The price of a tender proposal (taking into consideration preference margins);b) Deadlines of provision of goods, construction or services;c) Quality of goods, works and services rendered and their functional characteristics;d) Forms and terms of payment;e) Costs of maintenance of the object of procurement, including expenditures for capital repairs,
technical maintenance, exploitation and etc;
f) Responsiveness of a tender proposal to the interests of the Country, as well as to those, of the
region and a procuring entity [influence on the overall financial situation of the Country and
the State’s currency reserves; International treaties, to which Georgia has become a party,
factor of usage of national components (such as: local production capacities, labor resources,raw materials and etc.); prospects of economic development of the country; providing
stimulus for finding employment for local infr astructure; transfer of knowledge and know-
how; training of management, scientific and production personnel; Environmental, National
and security interests and other related factors].
7. Each criterion used for evaluation purposes shall have corresponding numerical expression.
Criteria shall be weighted and the total of the added score shall be a coefficient of evaluation,
indicating priority. The total of the priority coefficient shall amount to 1,0. In the event of
procurement of intellectual services, the coefficient of priority of the price criteria must not
exceed 0,3.GPA/68
Page 41
8. In the event of procurement of some goods (e.g. procurement of standard goods) can be
applied only the criteria of price.
9. Each member of the tender committee provides evaluation of each tender proposal in written
form. The evaluation shall be carried out according to each criteria separately. The maximum score ofeach criteria shall be 10. The evaluation score of each criteria shall be multiplied on priority
coefficient of this criteria. Then results of evaluation according to each criteria shall be summed up
and the total shall be the score of each tender proposal. The highest score awarded by a member of the
tender committee to one of the tender proposals shall be considered as a vote in favor of this proposal.
The members of a tender committee confirm their evaluation by signature.
10. In the event when one or more candidates (tender proposals) receive the same evaluation
score, the members of the tender committee compare the scores according to criterion and preference
is given to that tender proposal, which possesses the highest coefficient according to the criterion.
when the evaluation is absolutely identical, each member of tender committee must decide what
candidate is excelent and affirm this decision in written form.
11. The successful proposal shall be considered that proposal, which has collected the majority of
votes of the members of the tender committee. In the event, when votes shall be distributed evenly,
the vote of the head of the tender committee shall be considered as prevalent.
12. In the event, when the evaluation procedures fail to reveal a successful tender proposal, as
stated in paragraph 11 of this article, (and consequently none of the tender proposals receive the
majority of votes), the tender committee shall sum up the evaluation scores and the proposal with the
highest evaluation score shall be considered as the best. In the event, when one or more candidates are
awarded the same evaluation, the proposal with the lowest prices shall be preferred; in case the prices
of the proposals are equal, the decision shall be reached through open vote of the members of thetender committee.
13. The decision of the tender committee concerning the successful tender proposal shall be in
written form, with the conclusions of the tender committee members attached. The protocol shall
include information concerning the participants of the evaluation of tender proposals and candidates,
as well as the summery of submitted tender proposals.
14. The tender committee should ensure confidenti ality of the proceedings of selection and
evaluation of tender proposals.
15. The tender committee shall inform all the participants of the tender proceedings about its
decision no later than within 5 days period after it has been reached and invite the winner to concludethe state procurement contract.
ARTICLE 21. APPLICATIONS OF PREFERENCE
1. In accordance with article 13 of the Law on State Procurement, in the event, when in tender
participate international bidders, the procuring en tity shell grant margin of preference in the
evaluation of bids proposed by Georgian candidates. The margin of preference shell be within 15%.
2. Margin of preference shell apply only when price evaluation criterion is used and when the
prices of the tender proposals submitted by entrepreneur registered in Georgia exceed prices of
foreign tender proposal no more than 15%.GPA/68
Page 42
3. In the occasions, stated by article 20, paragraphs 10 and 12, local and foreign candidates
receive equal evaluation score, preference shell be granted to the local candidate (in case applications
of preference was grounded).
4. In the event, when after final evaluation foreign tender shell be considered as the best, in the
contract shell be indicated prices of the tender proposal submitted by him.
ARTICLE 22. PROCEDURES FOR RESTRICTED TENDERING
1. Rules and procedures of open tender apply to restricted tender as well, with the difference,
that tender announcement notice is sent by tender committee to the previously selected entities and
individual.
2. The number of bidders selected by tender committee shell be no less than 5, excluding those
occasions, when implementation of procurement contract can be ensured by restricted number of
entities and individuals, whose number is less than 5.
3. With the purpose of selecting (defining) the entities, stated in paragraph 1 of this article, the
tender committee shell use any available source of information (specialized periodic publications and
information available for ministries, organizations and Department of State procurement).
4. The tender committee shell choose such form of dissemination of tender invitation, which
shell insure receiving of the invitation by the bidders in the shortest possible period of time.
5. The persons, who shell receive such invitation to the tender shell immediately and in written
form inform the procuring entity about its receiving , and, in case they agree to participate in the
tender, submit to the tender committee their qualification data within the period, specified in the
invitation notice.
6. If the number of qualification data and/or tender proposals is less than the minimal (3), as
defined by article20, paragraph 2 of the Law, then tender is considered as resulting negatively and
upon agreement with State Procurement Department, other means of implementation of State
Procurement shell be sought.
ARTICLE 23. RULES AND PROCEDURES OF TWO-STAGE TENDER
1. When holding a two-stage tender, the procurin g entity shall follow the same procedures and
principles, as apply to the one- stage tender and are defined by the Law on State Procurement and
present regulations.
2. Two-stage tender procedures are followed for the procurement of intellectual types of
services (such as: consultant’s services, scientific-research, construction and educational works and
etc), when the quality of services and qualification of the bidder is of primary importance as compared
to the costs of services; also, when long-term agreement is concluded, or for procurement oftechnologically complex equipment.
3. When a two-stage tender is held, the bidders, alongside with submitting of qualification data
shall present to a tender committee general plan and specifications, and, on the second stage a tender
committee shall invite only those candidates, who satisfy the requirements of the first stage of thetender.GPA/68
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4. During the two-stage tender apart from the information, defined by article 10 of this
Regulations the request for proposals shall include the following information:
a) Indication, that alongside with qualification data shall be submitted tender proposal. Financial
part of the proposal shall not be submitted at this stage;
b) Instructions and rules of compiling and submitting of tender proposals (including indication
of the date of submitting) and evaluation requirements;
c) any other information that a procuring entity considers necessary.
5. At the first stage of the two-stage tender the tender committee is authorized to enter in
negotiations with all participants of tender procedures (separately) with the purpose of clarification of
conditions of the initial tender and finalizing of tender documentation requirements.
6. During two-stage tender initial, as well as finalized tender proposal shall be submitted to the
tender committee in the sealed envelopes. The procedures of opening of the envelopes are defined by
article 18, paragraph 7 of the Regulations.
7. The tender committee shall determine the date of completion of the first stage of the tender
upon opening of initial tender proposals. The valid ity period of qualification selection procedures
does not apply to the two-stage tender.
8. During two-stage tender the submitted qualification data and initial tender proposal shall be
considered simultaneously.
9. During evaluation of initial tender proposals shall be considered their responsiveness to the
needs of the procuring entity and evaluation scores shall not be applied.
10. The results of the first stage of the tender shall be provided to all bidders no later than within
5 after the decision shall be reached.
11. Upon completion of the first stage of the tender the procuring entity has a right to modify its
requirements concerning technical and quality parameters of the object of procurement, as well as
tender evaluation criterion.
12. The second stage of a two-stage tender is carried out according to the same rules, which apply
to the one-stage tender (including tender fee, signing of the agreement on intention, providing of
tender documents, tender security, evaluation of proposals and other rules).
ARTICLE 24. SIGNING OF PROCUREMENT CONTRACT WITH THE WINNER
1. The contract shall be signed between the winne r of the tender and the procuring entity no later
than within 10 days period after the tender committee shall reach a decision.
2. It is not permitted to change the terms and conditions, as well as the deadlines defined in the
tender documentation, agreement on intention and tender proposals.
3. The information concerning signing of the contract shall be published by a procuring entity in
the newspaper “Sakartvelos Respublika”.
4. If the winner of a tender refuses to sign a procurement contract, or, if required to do so, fails to
provide any required security, or is disqualified, the procuring entity shall address the remainingGPA/68
Page 44
participants of the tender with the request to undergo identical evaluation procedures, and, if the
tender committee considers it necessary, extend the validity period of the agreement on intention,
tender proposal and tender securities.
5. If one or several candidates are willing to participate in re-evaluation procedures, then a
tender committee shall carry out re-evaluation of tender proposals.
6. In the event, when the bidders refuse to par ticipate in re-evaluation of tender proposals, a
procuring entity shall announce a new tender( in compliance with the Law on state procurement,
article 17).
ARTICLE 25. CANCELATION OF STATE PROCUREMENT PROCEEDINGS
1. A procuring entity is authorized to cancel state procurement proceedings in such cases as the
following:
a) Due to the need or contingency which arose from some objective reasons or is in public and
state interests;
b) When the tender solicitation documents, including technical, economic and other parameters
have to be modified to such extent, that it will lead to inevitable cancellation.
2. In the event of cancellation of state procurement proceedings the procuring entity shall inform
about its decision and the grounds for it to the State Procurement Department and all the participants
of the procurement no later than within three days period. The procuring entity is not obliged to give
detailed explanations concerning the grounds for the decision of canceling the procurementproceedings to the bidders, as well as reimburse their expenditures, related with their participation in
state procurement proceedings, except for the tender participation payment.
3. The decision of canceling state procurement proceedings prior to the opening of tenders is
made by the procuring entity .In that case it shall return all previously submitted qualification data and
tender proposals to the corresponding bidders unopened, and if previously agreed to do so, return the
tender payment as well.
4. In case the procuring entity upon cancelling of procurement proceedings decides to procure
the same object, it shall implement the procurement (if it is financed by the budget allocations for the
same fiscal year) through continuing the same proceedings. With that purpose it shall address all the
participants of the cancelled proceedings to submit their qualification data, tender proposals andenclosed document anew (depending on which stage were cancelled procurement proceedings). In
case the bidders refuse to participate in the abovementioned proceedings, the procuring entity shall
announce a new procurement proceedings.
5. Canceling of state procurement procedures after the opening of tenders is permitted only on
special occasions. The decision to that avail shall be made by a procuring entity in agreement with
Department of State procurement.
6. In the event of cancellation of procurement proceedings after opening of tenders, the
procuring entity is authorized to suspend the proc urement proceedings for no longer than 15 days and
inform about this decision the Department of State Procurement in written form. Upon studying the
presented materials and grounds of this decision, the Department of State procurement shall elaborate
conclusions and recommendations for the procuring entity and provide them within the period of
suspension of the procurement. If the Department of State procurement does not agree with theGPA/68
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decision of the procuring entity concerning canceling of procurement proceedings, the latter is obliged
to continue the procurement procedures.
7. In case the procuring entity decides to discontinue the procurement procedures after opening
of tender proposals (in compliance with the rules defined by article 5, paragraph 6 of the Regulations),it shall make a decision concerning returning of tender payments, proposals and other enclosed
documents.
8. If upon termination of procurement proceedings (after the opening of tenders) the procuring
entity decides to proceed with procurement of the same object with the budget allocations of the same
financial year, it shall inform the bidders about this decision. If the bidders refuse to participate in the
procurement, the procuring entity shall announce a new tender.
ARTICLE 26. TENDER, COMPLETE D NEGATIVELY
1. A tender shall be considered negatively completed in case, none of the qualification data or
tender proposals shall be submitted timely (in the event of restricted tender their number amounts to
less than three).
2. A tender is considered as resulting negatively in the following cases:
a) If none of the submitted qualification data satisfies the requirements of the procuring entity;
b) If none of the tender proposals correspond with the requirements of the tender documentation;c) The proposed prices shall exceed financial possibilities of the procuring entity.3. In compliance with the Law on State procurement, article 17, in the occasions, defined by
paragraphs 1 and 2 of this article and paragraph 6 of article 22 of this Regulations, a new tender shall
be held.
CHAPTER III. SINGLE-SOURCE PROCUREMENT
ARTICLE 27. SINGLE-SOURCE PROCUREMENT
1. In compliance with the low on state procurement, article 22, Single-source procurement is
justified in the following occasions:
a) When the estimated value of the object of the procurement does not exceed 25000 Lari, and in
case of procurement of construction works-120000 Lari;
b) Capacity or exclusive right to delivery of goods and implementation of works and services
belongs to one bidder. Single-source procurement ma y not be justified only on the grounds, that only
one bidder has the capacity or the exclusive right to manufacture goods or deliver services if the
functionally equivalent goods, works and services of the other bidders would meet the needs of the
procuring entity.
c) In the case of single-source procurement need on the grounds of urgency and force major. In
such cases the procurement entity shall limit the qua ntity of the procurement needed to deal with the
urgent circumstances.  The procuring entity shall avoid delaying procurement proceedings artificially,
as not to create urgency for the procurement.GPA/68
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d). To avoid deterioration of quality of supplier goods (technologies or equipment), implementation of
works and rendering of services, the procuring entity shall award a contract extension or a repeat
contract to the holder of the previous procurement, excluding those occasions, when the estimated
price of the procurement to be implemented sha ll exceed the value of the initial procurement.
2. In the occasions, described in sub- paragraph “a” of this article:
a) If the estimated value of the object of procurement does not exceed 10000 Lari, and in case of
procurement of construction services-50000 Lari, the procuring entity has a right to negotiate
procurement contract with any bidder of its choice;
b) If the estimated value of the object of procurement exceeds 10000 Lari but is less than 25000
Lari, and in case of procurement of construction services exceeds 5oooo Lari but is less than
120000 Lari, the selection of the bidder to be invited for negotiations shall be carried out
based on the price aspects.
3. In the occasions described in paragraph 2, sub-paragraph “b” of this article, the procuring
entity shall request quotations from as many suppliers as possible, but no less than three. Each bidder
from whom the quotation is requested shall be inform ed whether any elements other than the value of
the object of procurement shall be included in the price. The procuring entity chooses the most
favorable proposal, which satisfies its’ requirements the most and starts negotiations with this
supplier.
4. The negotiations on implementation of procurement contract shall be responsibility of the
head of the procuring entity or his authorized representative.
5. In the event when the value of the object of procurement exceeds 25000 Lari, the procuring
entity, prior to the signing procurement contract shall demand re-confirmation of the qualification
data of the other party to a future contract in conformity with the Law on State procurement and
articles 10 and 11 of this regulations (excluding the occasions defined by paragraph 1, sub-paragraph
“c” of this Regulations). The information concerning signing of the contract shall be published in
newspaper “Sakartvelos Respublika”.
CHAPTER IV. DISQUALIFICATION FROM TENDER PROCEEDINGS.
ARTICLE 28. DISQUALIFICATION FROM TENDER PROCEEDINGS
1. In compliance with the Law on State Procurement and present Regulations the procuring
entity is authorized to disqualify any participant of state procurement proceedings at any stage of the
abovementioned proceedings in the following occasions:
a) If the qualification data or tender proposal does not satisfy the requirements of the procuring
entity;
b) If the participant of procurement proceedings at stage any of the procurement fails to provide
confirmation of his qualification;
c) If the participant of state procurement proceedings refuses to correct errors or make
amendments to the submitted qualification data or tender proposal and/or refuses to provideadditional information or specifications;
d) If the submitted qualification data or a tender proposal, as well as supporting documentation
contains false information b;GPA/68
Page 47
e) If the participant of the state procurement refuses to sign the procurement contract, modifies
terms of his tender proposal, or fails to provide tender security;
f) If with the purpose of obtaining procuremen t contract the participant of the procurement
proceedings acts unscrupulously.
2. The decision of disqualification shall be well grounded and be provided to the disqualified
participant in written form and within the period of time, defined by the agreement with indication of
reasons of disqualification.
3. The disqualified participant has a right to addre ss the procuring entity in written form with the
intention of challenging the decision of the procuring entity and proving his positions, as defined byparagraph 2, article 33 of this Regulations, or address to the court of appeals.
4. In the event when decision to disqualify a participant of state procurement proceedings is
grounded on the reasons defined by paragraph 1, sub-paragraphs “d”, “e”, “f”, the procuring entity
shall promptly notify the Department of State Procurement
5.The Department of State Procurement maintains registration of the entities and individuals
disqualified for the reasons stated in paragraph 4 of this article, and gives the list containing
information about them to interested procuring entities.
Rehabilitation of the entities and individuals from the list mentioned in paragraph 5 of this article, ispossible in the event, if during one year a given entity or individual shall not be disqualified from the
procurement proceedings for the same reasons, or the decision of the procuring entity shall be revoked
by the decision of a court.
7. In the event, that the same entity or indivi dual shall be disqualified from the procurement
proceedings on several occasions during the same year and for the reasons, stated in paragraph 4 of
this article, this entity or individual shall be rehabilitated only three years later from the period of the
last disqualification.GPA/68
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CHAPTER V. STATE PROCUREMENT CONTRACT>
ARTICLE 29. TERMS OF A CONTRACT
1. The ground of this article is the Low on State Procurement, article 16, paragraph 2.
2. The procuring entity shall elaborate the draft of the terms of the state procurement contract at
the procurement preparation stage.
3. Basing on the draft of a state procurement contract, requirements of the procuring entity and,
consequently, conditions of the winner’s tender proposal, or, in the event of holding negotiations
concerning single-source procurement and taking into consideration the results of this negotiations,the final version of the procurement contract is elaborated. While conducting negotiations with the
winner of the tender, it is not permitted to make amendments into the contract, but only clarify some
of its issues.
4. The state procurement contract shall include the following information:a) The exact names of the parties to the contract and their requisites;b) The name of the object of procurement, including technical parameters, basic specifications,
identification number, the nature and quantity of goods, services or works to be procured, unitcosts and total costs;
c) Total value of the contract (including discounts, taxes, expenses of transportation, insurance
and etc);
d) Conformity of the goods, services and works to be procured with the existing standards;
e) The deadlines and place of delivery of goods, works or services (schedule of implementation
in stages);
f) The manner of delivery and receiving of goods, works and services;
g) Terms and forms of payments, deadlines and place of payments;
h) Security of performance (in case such is required by tender documents);i) The rights and responsibilities of the parties;j) The responsibilities of the parties in the event of the breach of the procurement contract;k) Force major conditions;
l) The conditions of amendment and modification of the contract;
m) The validity period of the contract;n) The rules and procedures of settling disputes;GPA/68
Page 49
ARTICLE 30. CONTROL OF IMPLEMENTATION OF STATE PROCUREMENT CONTRACT
1. Control over the implementation of state procurement contractual obligations shall be within
the authority of a special group, set up by the procuring entity (hereafter “the group”) and staffed by
its personnel.
2. Within the functions of the group responsible for the control of the implementation of
procurement contract is the following:
a) Upon agreement with the supplier elaborate a plan of control of implementation of the
contractual obligations;
b) Ensure conformity of the supplied goods, works or services to the requirements of the terms
of the contract and with this purpose supervise it s implementation and maintain acts of supplying and
receiving of goods, works and services;
c) Regulate and supervise payments to the supplier according to the terms of the contract;
d) Keep and maintain the records, reflecting implementation of the contract on the periodic
basis;
3. The goods, works and services shall be considered delivered only upon being reflected in the
corresponding reports (act of supplying and receiving).
4. The procuring entity is authorized to inspect quality of the goods, works and services at any
stage of implementation of the procurement contract, including inspection of raw materials and spare
parts, as well as implementation of works (or services) by sub-contractor.
5. The supplier shall at its own expense place at the procuring entity’s disposal any premises,
facilities and personnel needed for inspection. In the event, if the procuring entity shall employ
services of its own or hired personnel, the proc uring entity shall itself cover the costs and
expenditures.
6. Any deficiencies and omissions shall be remedied by and at the expense of the supplier.
7. Before the signing of the report of acceptance or rejection of goods the procuring entity shall
carry out the final inspection of the supplied goods, works and services with the purpose of
confirming that the quality of the goods, works and services satisfies the requirements of the
procuring entity, terms of the contract, the submitted samples and accepted standards. The place of the
final inspection shall be defined by the terms of the contract. During the final inspection the sides mayagree to employ services of an independent expert. The supplier shall carry the expenses of any
deficiencies or omissions detected (including the costs of recovering of the faulty goods).
8. The results of the final inspection shall be su bmitted to the supplier in the written form and
shall include detailed indication of the amount of faulty goods, works or services and the reasons forconsidering them faulty.
9. In the event of a dispute between the supplier and the examination and receipt group (or
committee), the matter shall be settled according to the procedures under the procurement contract, or,
in the event, that this procedures fail to deal with the dispute, through the court proceedings.
10. The procedures of reimbursement of the costs of damages, incurred by transportation of the
procured goods shall be defined by the contract.GPA/68
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11. It is not permitted to change the terms of the contract, if such changes cause the increase of
the total value of the procurement contract, or the terms of the contract become unacceptable for the
procuring entity, excluding the occasions, defined by The Civil Code of Georgia, article 398. Any
changes or amendments to the state procurement contract shall be made in compliance with the
current legislation of Georgia.
12. Any adjustment of prices (of the object of procurement), indicated in the state procurement
contract shall be admissible in case they are previously agreed upon and stated in the procurement
contract. The contract shall stipulate those conditions, which may cause adjustment of the prices of
the procurement contract. In case when the decision of price adjustment is made, the formulas and
indices shall take into consideration the influence of the factors, described in the procurement contract
over the price of the object of procurement, as well as the amount of budget allocations forprocurement purposes, the official rate of inflation, consumer price index, production activity index
and etc. Any adjustments in the prices of the procurement contract shall be reflected in documents and
promptly provided to the State Procurement Department.
13. Payments between the procuring entity and the s upplier shall be settled in accordance with the
state procurement contract.
14. In the case of procurement of goods the payments for the delivery of goods shall be made on
submission of invoices, together with other required documents.
15. In the case of procurement of works or services, the procurement contract shall indicate the
manner and time of payments. The procuring entity may require from the supplier additional report of
the proceedings of implementation of the contract at its middle stage.
16. Payments due to the supplier shall be made in accordance with the deadlines set forth in the
current legislation.
17. The procurement contract may provide for the advance payment s to the supplier. In case the
tool of advance payment is employed, in the procurement contract shall be indicated the percentage of
the advance payment from the total value of the ob ject of procurement. In the event of advance
payment the supplier shall furnish an advance paym ent guarantee covering the amount of the advance
payment in the form and manner that is defined by the procurement contract.
18. The supplier and his subcontractors shall utilize the advance payments only for the supply of
goods and completion of works, related to the procurement contract.
19. The procuring entity may suspend or cancel the validity period of the contract if the
qualification data or the supporting documents submitted by the supplier are false, or, the supplier
fails to fulfill or violates terms of the procurement contract, or for other reasons defined by legislation
of Georgia.
ARTICLE 31. SECURITY FOR PERFORMANCE OF THE CONTRACT
1. The terms of the procurement contract may require provision of the security and/or the
insurance for the performance of the contract.
2. Procuring entities shall solicit and accept as security for the performance of the procurement
contract a disbursement of the pre- determined amount of money to the special account of the
procuring entity and a bank guarantee for the same amount of money, or some other internationally
accepted form of security.GPA/68
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3. The validity period of the performance security and the conditions for the return of the
security shall be defined by the state procurement contract. In the case the contract validity period was
discontinued for a reason not attributable to any fault of the bidder, the procuring entity shall return
performance security to the bidder.
4. The object of insurance may be: damage, incurred to the goods due to their transportation,
production or storage, supplier’s or subcontractor’s personnel, supplier’s or subcontractor’s property,
equipment, means of production, as well as any document, elaborated during validity period of a
contract, risks of participants of a contract and etc.
5. The procuring entity reserves the tight to reje ct insurance coverage that is not in the public
interest.
CHAPTER VI. RECORD OF STATE PROCUREMENT.ARTICLE 32. RECORD OF STATE PROCUREMENT
1. In compliance with the article 24 of the Law on State Procurement, a procuring entity is
subordinated to the State Procurement Department.
2. The rules and procedures of maintaining and keeping of reports are defined by article 24 of
the Law on State Procurement and present Regulations.
3. With the purpose of facilitation of the creation of unified data bank of state procurements and
ensure transparency and better coordination of procurement-related activities, the procuring entities
elaborate operational and annual plans of implementation of state procurements.
4. When utilizing tender method for implementation of state procurement, all stages and
proceedings of a tender must be reflected in the records of a tender committee.
5. The procuring entity shall file all documents, related to tender proceedings into one package
and ensure its safe keeping for three years from the date of signature of the procurement contract, and
in case of long-term contract (two and more years)-one year after the date of expiration of its validity
period.
6. When utilizing tender form for implementation of  state procurement, a procuring entity shall
submit all reports concerning the proceedings of tender to the State Procurement Department no later
than within 10 days from the date of signing of the contract.
7. The following shall be included in the operational record of tender proceedings:
a) A brief description of goods, works, and services to be procured, as well as the need for the
procurement;
b) The source of financing of the procurement (state or local budget);
c) The list of the members of a tender committee and its working group, invited experts and
consultants and all participants of a procurement;
d) Reports of tender committee and its members’ conclusions on tender proposals;
e) Information relative to announcement of invitation to state procurement proceedings in
newspapers with indication of these dates;
f) The list of participants of the qualification proceedings;GPA/68
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g) The list of the candidate to a tender including summery of their tender proposals;
h) The indication of expenditures of a procuring entity related to holding of a tender;
i) Information concerning qualification data of the participants of a tender;j) Copies of the state procurement contract;8. In case of single-source procurement, when the value of the object of procurement exceeds
25000 Lari a procuring entity is entitled to elaborate operational report on the implemented
procurement and present it to the State Procurement Department within 10 days after the signing of a
contract.
9. This report shall contain the following information and documentation:a) Summery of the description of the goods, works and services and the need for them;
b) The source of the financing of state procurement (state or local budget);
c) Grounds for single-source procurement;d) The list of the persons responsible for the conduct of negotiations, signing of agreement and
supervising its implementation;
e) Information concerning qualification of the supplier;
f) Copy of the procurement contract;
10. The reports on state procurement, the value of which is less than 25000 Lari, made according
to the source of procurement shall be submitted to the State Procurement Department on the quarterly
basis every 10 of the first month;
11. This report shall contain the following information:a) The volume of the goods, types of works and services and their costs;b) The number of concluded contracts;c) the implementation of contracts and settlement of payments;
12. The procuring entity shall ensure safe keeping of the reports stated in paragraph 8 and 10 of
this article for three years.
13. Based on the principle of ensuring transparency of state procurements and in compliance with
the Law on State Procurement, article 24,paragraph 4, the reports on state procurement shall be madeavailable for all stakeholders and be presented to them upon their request. Summery of the reports of
state procurement shall periodically be published  (at least twice a year) in such newspapers, as
“Sakartvelos Respublika” and others. At the same time, the procuring entities and the State
Procurement Department have no right to publish or divulge such information, which may be
damaging to the interests of public and all participants of state procurement and restrict or hindercompetition in the sphere of state procurement without prior decision and agreement of authorized
bodies (excluding information concerning disqualification).GPA/68
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14. If a procuring entity shall make clerical or purely mechanical mistakes in the reports of the
proceedings of procurement contracts, such mistakes shall not be considered as the cause of filing an
appeal on the part of participants of the state procurement.
15. In the end of each fiscal year a procuring entity shall make an annual report on state
procurements implemented during the year and present it to the State Procurement Department nolater than February the 1 of the next year.
16. The annual report shall include the following information:a) Information relative to the number of state procurement contracts signed during the fiscal
year, with indication of the total value and amount of procurements classified into categories
(such as: goods, works and services).
b) The number and value of the completed contracts and indication of the goods, works and
services rendered;
c) The description of those contracts and their implementation proceedings the validity period of
which has not expired yet;
d) Information concerning the number of tenders, their forms and participants;e) The expected and real contributions to the corresponding state and local budgets (made on the
quarterly basis);
f) Information concerning the volume of the debts, accumulated due to the unsettled payments
for the supplied goods, works or services;
17. The annual reports, presented by procuring entities are the basis for the annual report of the
State Procurement Department.
18. The State Procurement Department shall ensure keeping of the reports for at least three years.19. In compliance with article 5, paragraph 2, subparagraph ”d” of the Law on State Procurement,
the procuring entity shall present to the State Depart ment of Statistics the statistical data and reports
related to state procurement in the form and deadline s, defined by the State Department of Statistics.
CHAPTER VII. THE RULES OF APPEALING
ARTICLE 33. THE RULES AND PROCEDURES OF APPEALING
1. The candidates to participate in state procurement proceedings, participants, suppliers, legal
entities and individuals have a right to seek review in case they consider, that are violations of therules and procedures stipulated by the Law on State Procurement and present Regulations on the part
of the procuring entity.
2. In the event that a complaint was given rise prior to the signing of a state procurement
contract, bidder (entity, individual and etc) may address the procuring entity directly with the requestof reviewing the decision of the member of the tender committee or other authorized person or
settling a dispute. Such request shall be made 20 days of when the bidder became aware or should
have become aware of the circumstances giving rise  to the complaint. In the settling of complaints
may participate the individuals, who were the reason of the rising of the complaint or may be affectedGPA/68
Page 54
by the decision. With the purpose of receiving advice and recommendations, the parties to a dispute
may address the State Procurement Department.
3. After the expiration of the deadline, stated in paragraph 2 of this article, or after the signing of
the procurement contract, any complaint or dispute shall be settled by court.
4. The complaints, which shall relate to following issues shall not be entertained by court:a) The choice of the method of implementation of state procurement, if it is in accordance with
the Law on State Procurement and Present Regulations;
b) The decision of a procuring entity on the canceling of the proceedings of the state
procurement, if it is in accordance with the Law on State Procurement and this Regulations;
c) The qualification requirements of the procurin g entity towards procurement of intellectual
services;
5. Taking into consideration that satisfaction of the complaint may be damaging to the interests
of the state, or those of a procuring entity and other participants of the procurement proceedings, the
complaint or appeal should be well-grounded and must contain declaration, that in case it is not
satisfied, the party which filed this appeal shall be gravely damaged.
6. In the event that the appeal shall be filed accordance with the deadlines, set forth by this
Regulations and prior to the signing of the procurem ent contract, the procuring entity shall suspend all
procurement-related proceedings for a period of seven days. The suspension period may be extended
by the decision of the head of the procuring entity or the court, provided, that the total period of the
suspension shall not exceed 30 days. The pr ocuring entity, upon agreement with the State
Procurement Department has a right not to suspend procurement proceedings, if the delay shall be
damaging to the interests of the state.
7. All the disputes, which may give rise between the procuring entity and the supplier shall be
settled by court.
8. Any damages that may be incurred to the party, which has filed an appeal due to the
settlement of a dispute in compliance with this article, shall be restricted only with the reimbursement
of the costs of participation in the state procurement proceedings and shall not include reimbursement
of the expected profit.
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