The tender of the Georgian Railway may have been tailored to the company of a former high-ranking police official
The company of a former high-ranking official of the Tbilisi Main Division of the Ministry of Internal Affairs, Ioseb (Soso) Alavidze, has allegedly obtained a contract worth GEL 7.8 million from the Georgian Railway by means of a tender tailored to the company.
On March 31, 2023, the Formula TV station aired a news item – “An 8-million tender for Soso Alavidze”, which deals with tailoring a tender to the company of the former high-ranking police official.
TI Georgia has studied possible violations by the Georgian Railway in this tender.
The Georgian Railway buys security services by means of public procurement. Procurements of the security services can be traced in the electronic system of the State Procurement Agency from the year 2014.
In the years 2014, 2015, 2016, 2017, the Georgian Railway bought security services from LEPL Security Police Department of the Ministry of Internal Affairs through electronic tenders, for GEL 9 million per year.
In 2018, the tender announced by the Georgian Railway for the procurement of security services was not held, because not a single supplier took place in the tender. The starting procurement amount was close to GEL 9 million. As the tender was not held, the Georgian Railway concluded a contract with a value of GEL 10.5 million with the Security Police Department through the simplified (direct) procurement method.
In the years 2019, 2020, and 2021, the Georgian Railway no longer announced tenders for the procurement of security services and concluded contracts with the Security Police Department through simplified procurement. The values of the contracts ranged from GEL 9.5 million to GEL 11.2 million.
From 4 August 2022 to 5 April 2023, the Georgian Railway awarded 5 simplified procurement contracts to the Security Police Department, the total value of which is GEL 10.5 million, and the latest of these contracts expires on June 30, 2023.
After 2018, the Georgian Railway announced the first tender for security services on February 8, 2023. The total estimated value of the procurement was GEL 7,797,855. It should be noted that announcing a tender instead of simplified procurement is good practice, but a tender should be announced on as competitive grounds as possible, so that no supplier company finds itself in a privileged position.
Only one company – Intersecurity-Georgia LLC – took part in the tender announced on February 8, which is fully owned by Ioseb (Soso) Alavidze. Ioseb Alavidze held the position of the chief of the Tbilisi Main Division of the Ministry of Internal Affairs in the years 1997-2001. Ioseb Alavidze founded Intersecurity-Georgia LLC together with four partners in 1997.
Intersecurity-Georgia submitted the bid of exactly GEL 7,797,855 – i.e., the maximum value of the tender – in the tender announced for the security services of the Georgian Railway. Due to the fact that the company had no competitors, it was awarded a contract for precisely this amount, and the contracting authority was unable to economize from the total estimated value of the tender.
It is interesting why only one company took part in the tender. The tendering documentation reveals that the Georgian Railway required not less than a 20-year continuous experience from the bidder (supplier company). In addition, the bidder had to have an experience of providing analogous services (security services using security personnel) during the years 2021-2022; the total value of these services during the required years was not to be less than GEL 3 million, and the value of the services rendered as part of a single contract was not to be less than GEL 1 million.
It is noteworthy that in the tenders announced in the years 2014-2017, the Georgian Railway did not require a 20-year experience or an experience of providing services worth GEL 3 million. The bidder only was to have an experience of providing an analogous service.
According to the Business Registry of the National Statistics Office, there are 8 large and 20 medium-sized companies in the security sector in Georgia. Of these, only 2 have not less than 20 years of experience – Ioseb Alavidze’s Intersecurity-Georgia and Veziri LLC. In addition, Veziri LLC is mainly engaged in the sales and installation of telecommunications and security systems. Accordingly, the requirement to have a 20-year experience for taking part in the tender, in fact, put Intersecurity-Georgia LLC in a privileged position.
Unlike the previous years, LEPL Security Police Department of the Ministry of Internal Affairs has not taken part in the tender, the reason for which is unknown. However, it is interesting that LEPL Security Police Department was created in 2004, and, if we do not count the experience of its predecessor agency, it, too, does not have a 20-year experience of operation.
Prior to the tender of the Georgian Railway, Intersecurity-Georgia LLC had participated in 5 electronic tenders and had failed to win any of them. And through simplified procurement, it had obtained 44 contracts with a total value of up to GEL 56,000 from various contracting authorities.
Generally, public agencies mainly buy security services from the Security Police Department through the simplified procurement method, because only LEPL Security Police Department has the authority to defend objects using firearms. This has been the first time that the Georgian Railway has awarded a contract to a private security company. In the news item aired by Formula TV, the Georgian Railway explained that changes had been made to the specifications of the security of objects, which was the reason why the tender had been announced with new terms; the company further stated that the Security Police Department would defend those strategic objects of the railway which require the presence of armed security personnel, while for the objects where arms are not necessary, the aforementioned tender had been announced. However, the explanation of the Georgian Railway does not clarify the main suspicious circumstance as to why the company was required to have a 20-year experience, the more so if it will not be tasked with defending strategic objects.
The examination of the tenders in the electronic system of procurement has shown that, up to now, no contracting authority has required a company to have a 20-year experience for the procurement of security services. The maximum period of experience required has been five years.
According to Article 13 of the Law of Georgia on Public Procurement, requirements related to the qualifications of bidders must be proportional and non-discriminatory and promote wholesome competition and equal treatment of bidders. The tender conducted by the Georgian Railway contradicts the said article.
The alleged tailoring of the tender to the concrete company raises doubts regarding a corrupt deal and personal interests of those involved in the procurement.
- The State Procurement Agency should study the said tender of the Georgian Railway and, in accordance with Article 1596 of the Administrative Offences Code of Georgia, demand the fining of members of the tendering commission if a violation of the rules of drawing up tendering documentation is revealed;
- The Anti-Corruption Agency of the State Security Service should take an interest in the said tender and investigate facts containing signs of corruption;
- Contracting authorities should draw up the terms of tenders in such a way that minimizes the risks of corruption. The requirement to meet unreasonably high qualification criteria restricts competition and considerably increases risks of corruption.
 A large enterprise is one in which the average annual number of employees exceeds 100, or whose average annual turnover exceeds GEL 1.5 million.
A medium-sized enterprise is one in which the average annual number of employees fluctuates between 20 and 100, or whose average annual turnover ranges between GEL 0.5 million and GEL 1.5 million.