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EU and Georgia establish reciprocal access in their public procurement systems

Photo credit: European Commission, 2022The decision adopted on July 8th by the EU-Georgia Association Council to establish reciprocal access in the field of public procurement was published in the Official Journal of the European Union. This change is a crucial step towards the full realization of the Deep and Comprehensive Free Trade Area (DCFTA) between the bloc and the country included in the Association Agreement signed in 2014.

This development was achieved as a result of the actions performed by Georgia in approximating its legislation in relevant sectors with that of the Union. Specifically, Georgia had to ensure that public purchases of goods, works and services are transparent and fair, guarantee sound competition, tackle corruption, and ensure that public authorities get the best value for their taxpayers’ money. This includes the principle of equal treatment for EU companies in national, regional and local levels for public contracts and concessions.

This decision allows EU companies registered in the European Union to have full access to public procurement tenders in Georgia. The central Georgian e-Procurement system is in fact open without restriction for them in the same way as the EU Tenders Electronic Daily platform is for Georgian companies.

A set of necessary criteria

The EU-Georgia association agreement has obligated the EU and Georgia to ensure that:

  • all the intended procurements are made public in order to open the market to competition and to give companies access to information regarding the intended procurement prior to the award of the contract;
  • there is a non-discriminatory description of the subject matter of the contract, showing appropriate time limits, accessible to all economic operators;
  • no discrimination is carried against an economic operator as such, which might disable it from qualifying for the tender;
  • there is transparency in the process of awarding the tender up to the announcement of the winning bid;
  • the final decision is communicated to all applicants and unsuccessful applicants can upon request receive an explanation to allow an analysis of the decision.

With regard to institutional reforms and the award of procurement contracts, Georgia was required to designate a central executive body responsible for economic policy tasked with guaranteeing a coherent policy in all areas related to public procurement. The establishment of an impartial and independent body charged with reviewing decisions taken by contracting authorities or entities during the award of contracts was made necessary for the adoption of the Association council decision.

Concerning the award of the contracts, the DFCTA defined regulatory basic standards derived directly from the EU’s public procurement legislation, and include the principles of non-discrimination, equal treatment, transparency and proportionality.
With reference to the accessibility to the market EU had to grant access to contract award procedures to Georgian companies – whether or not established in the EU – under EU public procurement rules under treatment no less favourable than that accorded to EU companies. This step was expected to be taken after a positive assessment of the quality of Georgia’s legislation in the public procurement field as well as its practical implementation.

The decision is beneficial for both sides but offers an enormous potential market for Georgian companies to access the EU public procurement market, which accounts for around 18% of the European Union GDP.