The Vendor Journey: Georgian Company Selling to the Georgian Government

Overview

This document maps the full journey a Georgian business must navigate to compete for and win a government contract through the Georgian Electronic Government Procurement (Ge-GP) system. Georgia’s procurement transformation is one of the most dramatic anti-corruption success stories in modern governance: a system built in 10 months for less than USD 1 million that dropped public perception of procurement corruption from 97% to 3%.

The Ge-GP system, operated by the Competition and State Procurement Agency (CSPA, formerly SPA), is fully electronic with zero paper. Bidding documents are free (previously USD 100-150), participation costs a nominal GEL 50 fee, and any interested party worldwide can observe tenders in real time. The system won a UN Public Service Award in 2012, and Transparency International ranked Georgia best among 19 Eastern European and Central Asian countries for procurement transparency. In 2014, the World Bank approved Ge-GP for Bank-financed projects – a rare endorsement of a national e-procurement system.

Georgia’s procurement is governed by the Law on Public Procurement, with a major new law adopted 9 February 2023 aligning with EU directives under the EU-Georgia Association Agreement. Key provisions took effect 1 January 2025, with additional provisions phasing in through 2029.

Georgia’s GDP was approximately USD 33.8 billion in 2024. Government consumption is roughly 12.7% of GDP. Annual public procurement through the e-system totals approximately GEL 2.7 billion (roughly USD 1 billion), though Transparency International estimates an additional GEL 1.2 billion bypasses the competitive system through simplified procurement and exemptions.

Exchange rate used throughout: 1 GEL = approximately 0.37 USD (February 2026).

Phase 1: The Qualification Gauntlet

Everything a Georgian business must do before it can submit its first bid on Ge-GP.

Estimated Qualification Cost: GEL 1,650 - 16,000 (USD 610 - 5,920)

Timeline: 2-5 days for basic registration; 1-3 months for full readiness including banking and guarantees

Key Observations

• Steps 1-5 can be completed in as little as 2 days – Georgia was ranked 7th globally in World Bank’s Ease of Doing Business (2020) and led the world (tied with New Zealand) for fewest procedures to start a business
• NAPR registration through Public Service Hall is famously efficient: one-stop service with multiple government registrations handled simultaneously
• The Ge-GP portal registration is free and immediate, with no equivalent to the multi-week US SAM.gov process
• There is no requirement for specialized government accounting systems (no DCAA equivalent)
• The major cost barrier is bank guarantee capability (Step 9), which requires sufficient banking history and collateral
• The 15% corporate income tax (deferred until distribution) is among the lowest in Europe
• Georgia’s VAT threshold of GEL 100,000 means many small contractors operate VAT-free

Phase 2: The Bidding Process

What it takes to respond to a single tender through the Ge-GP system.

Procurement Methods and Thresholds

Bidding Steps

Estimated Cost Per Bid: GEL 1,050 - 75,000 (USD 390 - 27,750)

Typical small/medium bid cost: GEL 2,000-10,000 (USD 740-3,700)

Win rate: ~25-35% for experienced bidders (estimated; higher than Western systems due to smaller competitive pool)

Evaluation Methods

The 2023 Law on Public Procurement (effective January 2025) introduced several evaluation mechanisms:

1. Lowest Price – Traditional price-only evaluation; dominant method historically; the reverse auction mechanism drives prices down automatically
2. Economic Effectiveness – Considers factors beyond price, including quality and lifecycle costs
3. Price/Quality Best Proportion – Weighted evaluation balancing technical merit against price; aligned with EU “Most Economically Advantageous Tender” (MEAT) concept
4. Electronic Reverse Auction – Automated system applying whichever criterion the procuring entity specified (price, economic effectiveness, or price/quality)

Key Observations

• The GEL 50 participation fee is extraordinarily low by global standards – a deliberate policy choice to maximize competition
• Free bid documents eliminated a significant barrier that previously excluded smaller firms
• The reverse auction mechanism creates strong downward price pressure, particularly for commoditized goods
• The system’s real-time transparency means any citizen can observe the procurement process as it happens
• Transparency International identified that approximately 45% of public contracting (GEL 1.2 billion) still bypasses competitive procurement through simplified procurement and exemptions – a significant gap
• The 2023 law’s introduction of price/quality evaluation methods signals a shift from pure lowest-price toward best-value considerations
• The Dispute Resolution Board’s 10-day review timeline is remarkably fast compared to US GAO’s 100-day protest timeline

Phase 3: The Full Lifecycle

End-to-end pipeline from market entry through contract completion, assuming a mid-size electronic tender for goods or services (estimated contract value GEL 500,000 / USD 185,000).

Total Vendor Investment to Win and Complete First Contract: approximately GEL 19,350 (USD 7,160)

Excludes direct contract performance costs (labor, materials, etc.) and assumes a single successful bid. If the win rate is 30%, expect 3 bids before winning, raising total sunk cost to approximately GEL 35,000 (USD 12,950).

Full Lifecycle Key Observations

• Entry to first bid: 6-10 weeks – Among the fastest government contractor onboarding processes globally
• Total sunk cost: GEL 19,350 (USD 7,160) – Dramatically lower than the US (USD 50,000-350,000+), Australia (AUD 8,000-175,000+), or the UK
• The system deliberately minimizes barriers to entry – Free registration, free documents, GEL 50 participation fee, all-electronic process
• Bank guarantees are the largest single cost – This is a common pattern across procurement systems but the amounts are modest relative to contract value
• Reverse auction pressure on margins – While entry costs are low, the competitive auction mechanism can compress profit margins significantly, particularly for commodity goods
• Speed advantage – A Georgian company can go from no legal entity to contract award in approximately 12 weeks, compared to 6-18 months in most Western procurement systems

Connection to Dissertation Research

LPTA vs. Best-Value: Georgia as an Evolving Case Study

Georgia’s procurement system provides a fascinating case study of a system transitioning from strict lowest-price toward best-value evaluation:

Historical Default: Lowest Price Dominance

• The Ge-GP system was built around electronic reverse auction, which by design drives prices to the lowest possible level
• This mirrors LPTA (Lowest Price Technically Acceptable) logic: once technical qualification is met, price determines the winner
• The system was explicitly designed this way to combat corruption – removing human judgment from evaluation removes opportunities for bribery

The 2023 Reform: Moving Toward Best-Value

• The new Law on Public Procurement (adopted 9 February 2023, main provisions effective 1 January 2025) introduces:
  • Economic effectiveness criteria
  • Price/quality best proportion evaluation (aligned with EU MEAT concept)
  • Framework agreements for up to 4 years
  • Dynamic purchasing systems for commonly available goods
• These changes are driven by EU-Georgia Association Agreement obligations, representing the same convergence toward best-value that EU member states have undergone

What This Reveals for the Dissertation

1. Anti-corruption vs. value optimization trade-off: Georgia chose lowest-price as an anti-corruption strategy. The dramatic corruption reduction (97% to 3%) validates this approach for environments with endemic corruption. But as the system matures, the limitations of price-only evaluation become apparent – quality issues, race-to-the-bottom pricing, and inability to evaluate innovation or lifecycle costs
2. The transparency paradox: Georgia’s system is among the world’s most transparent, yet 45% of procurement still bypasses competitive processes through exemptions and simplified procurement. Transparency in the electronic system coexists with opacity in the exempted categories
3. Barrier reduction as competition driver: By making entry nearly free (GEL 50 fee, free documents, same-week registration), Georgia maximizes the bidder pool. This stands in stark contrast to the US, where high entry costs suppress competition
4. Small market dynamics: Georgia’s entire annual procurement volume (~GEL 2.7 billion) is smaller than many single US federal contracts. The small market size means the competitive pool is inherently limited, making the low-barrier approach even more critical
5. Digital-first as equalizer: Remote participation from anywhere removes geographic barriers within Georgia (and for international bidders). This is directly relevant to the dissertation’s examination of how procurement design choices affect competitive outcomes

Comparison to US System

Sources and References

1. World Bank, “Georgia: An E-Procurement Success” (2015) – https://www.worldbank.org/en/news/feature/2015/02/18/georgia-an-e-procurement-success
2. State Procurement Agency of Georgia – https://procurement.gov.ge/en/
3. Law of Georgia on Public Procurement (Legislative Herald of Georgia, Matsne) – https://matsne.gov.ge/en/document/view/31252
4. KPMG Georgia, “Law of Georgia on Public Procurement” (2023) – https://kpmg.com/ge/en/home/insights/2023/05/public-procurement.html
5. Transparency International Georgia, “Georgia’s E-procurement platform is one of the most transparent in the world but because of loopholes, too many contracts bypass the system” – https://www.transparency.ge/en/post/report/georgia-s-e-procurement
6. U.S. International Trade Administration, “Georgia - Selling to the Public Sector” – https://www.trade.gov/country-commercial-guides/georgia-selling-public-sector
7. World Bank, “Georgia Ranks 7th in the World for Ease of Doing Business” (2019) – https://www.worldbank.org/en/news/press-release/2019/10/24/georgia-ranks-7th-in-the-world-for-ease-of-doing-business-says-latest-world-bank-study
8. PWC, “Georgia - Corporate - Taxes on corporate income” – https://taxsummaries.pwc.com/georgia/corporate/taxes-on-corporate-income
9. PWC, “Georgia - Corporate - Other taxes” (VAT) – https://taxsummaries.pwc.com/georgia/corporate/other-taxes
10. National Agency of Public Registry (NAPR) via Gegidze, “Timeline, Costs, and Requirements for Registering a Business in Georgia” – https://www.gegidze.com/post/timeline-costs-and-requirements-for-registering-a-business-in-georgia
11. Open Government Partnership, “Electronic System of Procurement (GE0030)” – https://www.opengovpartnership.org/members/georgia/commitments/GE0030/
12. BGI Legal, “New Law on Public Procurement” (February 2023) – https://bgi.ge/files/BGI%20Law%20Brief%20-%20February%202023.pdf
13. Global Public Procurement Database, Georgia Country Profile – https://www.globalpublicprocurementdata.org/gppd/country_profile/GE
14. EU4Environment, “New Public Procurement Law in Georgia” – https://www.eu4environment.org/news/new-public-procurement-law-in-georgia-with-eu4environment-support/

The Vendor Journey: US Company Entering Georgian Government Procurement

Overview

This document maps the full journey a US-based company must navigate to compete for and win a Georgian government contract through the Georgian Electronic Government Procurement (Ge-GP) system. Georgia presents a paradox for US vendors: it is one of the world’s most business-friendly countries (ranked 7th globally by World Bank’s Doing Business), with extremely low registration costs, a flat 15% corporate tax rate, and a fully electronic procurement system designed for remote participation from anywhere – yet the small market size, Georgian language barrier, and limited contract values make it a niche opportunity rather than a major revenue target.

The good news: Georgia’s Ge-GP system was explicitly designed for remote participation. A US company can theoretically register and bid without ever visiting Tbilisi. The bidding documents are free, the participation fee is GEL 50 (about USD 19), and the entire process is electronic. The US and Georgia have a Bilateral Investment Treaty (signed 1994), and Georgia is negotiating accession to the WTO Government Procurement Agreement (GPA), which would formalize reciprocal procurement access. Georgia has also signed a Deep and Comprehensive Free Trade Area (DCFTA) with the EU and maintains one of the most liberal foreign investment regimes in the world.

The bad news: Georgia’s total annual public procurement is approximately GEL 2.7 billion (~USD 1 billion) – smaller than many single US federal contracts. The working language is Georgian (a unique script and language unrelated to any major language family). The evaluation system has historically been lowest-price dominant through reverse auction, compressing margins. And effective March 2026, Georgia is introducing new work permit requirements for foreign nationals, ending its historically open labor policy.

Exchange rate used throughout: 1 GEL = approximately 0.37 USD; 1 USD = approximately 2.70 GEL (February 2026).

Phase 1: The Qualification Gauntlet

Everything a US company must do before it can submit its first bid on the Ge-GP portal.

Business Registration and Legal Presence

Tax and Financial Compliance

Language, Legal, and Operational Barriers

Workforce and Immigration

Estimated Qualification Cost: GEL 40,000 - 200,000 (USD 14,800 - 74,000)

Timeline: 2-6 weeks for basic registration; 2-4 months for full operational readiness

Key Observations

• Registration is remarkably cheap and fast – Georgia’s NAPR registration (GEL 100-400) is the cheapest and fastest in this research series. Compare to ASIC in Australia ($1,500-$3,000 AUD) or Companies House in the UK (GBP 12-30 but weeks of compliance setup)
• The Georgian language barrier is the single biggest non-financial obstacle – Georgian is a Kartvelian language with a unique script, spoken by only ~4 million people. Machine translation is improving but unreliable for legal/technical documents. This barrier is more severe than Korean or even Estonian
• The Estonian tax model is highly attractive – Profits reinvested in Georgia are tax-free. Only distributions to the US parent are taxed at 15% (reduced further by treaty). This is among the most favorable corporate tax regimes globally
• No DCAA, no CMMC, no ITAR – Georgian procurement has none of the specialized compliance frameworks that add $50,000-$500,000+ to US federal contracting entry costs
• The work permit change (March 2026) is new and significant – Georgia’s historically open immigration policy was a major attraction. The new requirements add cost and bureaucracy, though the regime remains liberal by global standards
• US citizens enter visa-free for 1 year – Extraordinary by global standards. Even after the work permit changes, entry itself remains trivial

Phase 2: The Bidding Process

What it takes for a US company to respond to a single tender through Ge-GP.

WTO GPA and Treaty Access

Georgia is currently negotiating accession to the WTO Government Procurement Agreement (GPA). The US is a GPA signatory. Once Georgia completes accession, US vendors will have formal treaty-based rights to bid on Georgian government contracts above GPA thresholds. Currently, access is based on Georgia’s domestic procurement law, which does not discriminate against foreign bidders for tenders above the international notification threshold (GEL 2 million for goods/services, GEL 4 million for works).

The US-Georgia Bilateral Investment Treaty (1994) provides investment protection (national treatment, protection against expropriation, free transfer of funds) but does not specifically guarantee procurement market access.

Bidding Steps

Estimated Cost Per Bid: GEL 8,550 - 120,000 (USD 3,165 - 44,400)

Typical mid-range bid cost for US company: GEL 15,000-40,000 (USD 5,550-14,800)

Win rate for foreign bidders: ~10-20% (estimated; foreign participation is low due to small market size)

Additional Costs Unique to Foreign Entry

Key Observations

• Translation costs dominate the bid budget – For a US company, translation adds $740-$5,550 per tender that a Georgian company does not incur. Over multiple bids, this accumulates significantly
• Remote bidding is genuinely possible – Unlike many countries, Georgia’s fully electronic system means a US company can bid from Washington, DC without physical presence. This is a rare advantage
• The reverse auction favors lowest-cost producers – US companies typically have higher cost structures than Georgian or regional competitors. The price-driven auction mechanism disadvantages higher-cost foreign bidders
• World Bank-financed projects are the sweet spot – The World Bank approved Ge-GP for Bank-financed projects (civil works below $10M, goods below $1M). These projects often have English-language documentation and international competitive bidding procedures, reducing the language barrier
• The US Advocacy Center is an underused resource – The Commerce Department’s International Trade Administration provides free advocacy for US companies bidding on foreign government contracts
• Time zone management matters – Tbilisi (UTC+4) is 9 hours ahead of Eastern Time. Reverse auctions happening during Georgian business hours require early-morning US attention

Phase 3: The Full Lifecycle

End-to-end pipeline from market entry through contract completion, assuming a mid-size electronic tender (estimated contract value GEL 1,000,000 / USD 370,000 – above simplified threshold, below international notification threshold).

Total US Vendor Investment to Win and Complete First Contract: approximately USD 29,500

Excludes direct contract performance costs and assumes a single successful bid. At a 15% foreign-bidder win rate, expect approximately 7 bids before winning, raising total sunk cost to approximately USD 75,000-95,000.

Full Lifecycle Key Observations

• Entry cost of ~$29,500 is the lowest in this research series for a US company entering a foreign market – Compare to Australia (~AUD 90,000-530,000), UK (GBP 50,000-300,000), South Korea ($100,000-400,000)
• But the market is proportionally tiny – A $370,000 contract is mid-range for Georgia but would be a micro-purchase in US federal procurement. The return on investment must be evaluated relative to market size
• Language costs consume 20-30% of the bid investment – This is the defining cost penalty for English-speaking companies in Georgia
• The “when” matters: World Bank and international donor projects – The most accessible opportunities for US companies are international donor-financed projects (World Bank, EBRD, ADB, USAID) that use English and international procurement procedures through Ge-GP
• Georgia as a regional hub – US companies already operating in the Caucasus/Black Sea region (Azerbaijan, Armenia, Turkey) may find Georgia a natural extension rather than a standalone market entry

Connection to Dissertation Research

LPTA vs. Best-Value: The Georgian Experiment

Georgia’s procurement evolution offers unique insights for the dissertation on several dimensions:

1. Lowest-Price as Anti-Corruption Strategy

Georgia adopted the reverse auction/lowest-price model specifically to combat endemic corruption. When 97% of the population perceives procurement as corrupt, removing human judgment from evaluation is a rational policy choice. The system treats all technically qualified bidders identically and lets the algorithm select the lowest price – a pure LPTA approach. The result: corruption perception dropped to 3%. This is the strongest empirical validation of LPTA’s anti-corruption properties in the research literature.

2. The Maturity Transition: When to Move Beyond Price

The 2023 law’s introduction of “price/quality best proportion” evaluation (effective 2025) signals that Georgia has reached the maturity point where pure lowest-price creates more problems than it solves. The quality degradation, race-to-the-bottom pricing, and inability to evaluate innovation or lifecycle costs mirror exactly the critiques of LPTA in the US federal context. Georgia is effectively recapitulating the US evolution from sealed-bid low-price to best-value trade-off – but compressed into a decade rather than half a century.

3. Foreign Vendor Access: The Promise vs. Reality

Despite Georgia’s open system and zero discrimination against foreign bidders, actual foreign participation is extremely low. This reveals that formal access rules are insufficient – language barriers, small contract values, cultural familiarity, and geographic proximity matter more than legal frameworks. This finding has implications for the WTO GPA’s effectiveness: even when procurement markets are legally open, practical barriers limit foreign competition.

4. The Transparency-Competition Paradox

Georgia has arguably the world’s most transparent procurement system (real-time public observation, open data since 2018), yet Transparency International documents that 45% of procurement bypasses the competitive system entirely. This challenges the assumption that transparency alone drives competition and value. The 55% that goes through the system is extremely competitive; the 45% that bypasses it is essentially sole-source.

5. Small Market, Big Lessons

Georgia’s annual procurement ($1 billion) is approximately 0.14% of US federal procurement ($700 billion). Yet the system has attracted more international study and awards than procurement systems of much larger economies. The lessons for the dissertation:

• Radical simplification works: GEL 50 fee, free documents, all-electronic, same-week registration
• Technology can replace institutional trust: the algorithm substitutes for the integrity that the old system lacked
• Lowest-price is a phase, not an endpoint: successful anti-corruption systems eventually need to evolve toward value optimization
• Transparency without comprehensiveness is incomplete: the open data portal is excellent for the 55% on-system, irrelevant for the 45% off-system

Comparison Matrix: Georgia vs. US for Foreign Vendor Access

Sources and References

1. World Bank, “Georgia: An E-Procurement Success” (2015) – https://www.worldbank.org/en/news/feature/2015/02/18/georgia-an-e-procurement-success
2. World Bank Blog, “The story behind Georgia’s E-Procurement success” – https://blogs.worldbank.org/governance/story-behind-georgias-e-procurement-success
3. State Procurement Agency of Georgia – https://procurement.gov.ge/en/
4. Law of Georgia on Public Procurement (Legislative Herald, Matsne) – https://matsne.gov.ge/en/document/view/31252
5. U.S. International Trade Administration, “Georgia - Selling to the Public Sector” – https://www.trade.gov/country-commercial-guides/georgia-selling-public-sector
6. U.S. International Trade Administration, “Georgia Country Commercial Guide” – https://www.trade.gov/georgia-country-commercial-guide
7. U.S. International Trade Administration, “Georgia - Trade Agreements” – https://www.trade.gov/country-commercial-guides/georgia-trade-agreements
8. U.S. Department of State, “Georgia - Investment Climate Statement” – https://www.state.gov/reports/2025-investment-climate-statements/georgia
9. U.S. Department of State, “United States Bilateral Investment Treaties” – https://www.state.gov/investment-affairs/bilateral-investment-treaties-and-related-agreements/united-states-bilateral-investment-treaties
10. KPMG Georgia, “Law of Georgia on Public Procurement” (2023) – https://kpmg.com/ge/en/home/insights/2023/05/public-procurement.html
11. BGI Legal, “New Law on Public Procurement” (February 2023) – https://bgi.ge/files/BGI%20Law%20Brief%20-%20February%202023.pdf
12. PWC, “Georgia - Corporate - Taxes on corporate income” – https://taxsummaries.pwc.com/georgia/corporate/taxes-on-corporate-income
13. PWC, “Georgia - Corporate - Other taxes” (VAT) – https://taxsummaries.pwc.com/georgia/corporate/other-taxes
14. Transparency International Georgia, “Georgia’s E-procurement platform” – https://www.transparency.ge/en/post/report/georgia-s-e-procurement
15. Transparency International Georgia, “Simplified procurement: Corruption risks” – https://transparency.ge/en/content/stub-346
16. Gegidze, “Timeline, Costs, and Requirements for Registering a Business in Georgia” – https://www.gegidze.com/post/timeline-costs-and-requirements-for-registering-a-business-in-georgia
17. Fragomen, “Georgia Immigration Reform 2025: New Work Permit Rules” – https://www.fragomen.com/insights/new-work-permit-rules-georgia-immigration.html
18. PB Services Georgia, “Work permits in Georgia: New Law” – https://pbservices.ge/blog/work-permits-to-become-mandatory-in-georgia-in-2026/
19. ExpatHub Georgia, “Business Bank Accounts in Georgia” – https://expathub.ge/business-bank-accounts-georgia-country/
20. WTO, “Agreement on Government Procurement (GPA)” – https://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm
21. UNCTAD, “Georgia International Investment Agreements” – https://investmentpolicy.unctad.org/international-investment-agreements/countries/77/georgia
22. EU4Environment, “New Public Procurement Law in Georgia” – https://www.eu4environment.org/news/new-public-procurement-law-in-georgia-with-eu4environment-support/
23. World Bank, “Georgia Ranks 7th for Ease of Doing Business” (2019) – https://www.worldbank.org/en/news/press-release/2019/10/24/georgia-ranks-7th-in-the-world-for-ease-of-doing-business-says-latest-world-bank-study