In 2022-2023, the level of competition in state tenders decreased. In 2024, there was only 1 participant in every second large tender (more than 5 million GEL), "Transparency International - Georgia" reports.
As explained in "Transparency International", savings from tenders also decrease with the level of competition.
The organization claims that along with the doubling of the number of suppliers, the decrease in competition indicates that tenders are held under non-competitive conditions, raising doubts about the so-called on the widespread distribution of "custom tenders".
"State purchases are mainly carried out through tenders. The purpose of the tender is to promote healthy competition between companies providing goods and services. On the other hand, competition between companies helps government agencies to save money on procurement.
The State Procurement Agency has been publishing information on competition in tenders in its annual reports since 2015. In 2015, an average of 2.02 bidders came to one tender. In 2016-2017, this figure increased to 2.14, but decreased to 2.05 in 2018-2019. In 2020-2021, it increased again, which is probably related to the pandemic. As the private sector operated under restrictions during the pandemic, public procurement became more attractive to companies. At the same time, the number of announced tenders also decreased. In 2022-2023, the competition in tenders decreased again, and according to the latest data, it amounted to 1.95 in 2023. There was less competition in 2023 than in 2015.
According to procurement objects, the lowest competition, 1.68 bidders in one tender, is in the procurement of services. The highest competition, 2.25 bidders in one tender, is in the procurement of construction works. However, compared to 2015, competition in construction has decreased from 2.7 to 2.25.
There is a logical connection between the level of competition and the economy of funds in the tenders conducted in 2015-2023. In 2015-2019, the competition in one tender was on average 2.09, and the economy was 10.3%. In 2020-2021, when competition increased to an average of 2.21, savings increased to 12.7%. In 2022-2023, the competition averaged 1.93, and the economy decreased to 7.6%. For example, in 2023, the economy amounted to 451 million GEL. However, if the level of economy of 2015-2019 (10.3%) was there in 2023, the economy would be 278 million GEL more.
It is also interesting to note that the number of suppliers registered in the state procurement system has increased significantly against the backdrop of a decrease in the average rate of participation in tenders. In 2015, 25,045 suppliers were registered, and in 2023, 2.2 times more, 56,232. An increase in the number of suppliers should lead to an increase in the average rate of participation in tenders, but the result is the opposite. The number of conducted tenders did not increase, which could be one of the arguments for the reduction of competition. For example, in 2017, 33,095 tenders were held and an average of 2.14 companies participated in one tender, and in 2023, 32,076 tenders were held and an average of 1.95 companies participated in one tender.
There is a high proportion of such tenders where there is only one bidder and he wins without competition. For example, from the tenders announced from January 1 to July 31, 2024, where the purchase amount was over 5 million GEL, as of August 23, 76 tenders were completed (agreement was signed), out of which in half, 38 tenders, there was only one bidder. The total amount of contracts signed in the mentioned 38 tenders is 610 million GEL. There were 2 bidders in 15 tenders, and 3 bidders in 10 tenders. There were 4 or more bidders in only 13 tenders.