1. Transparency International-National Accountability Bureau-World Bank
Capacity Building and Training on Procurement Training the Trainers Workshop
Transparency International-National Accountability Bureau-World Bank
September 19-21, 2005
Karachi
By Uzma Sadaf

2. Objectives Economy, efficiency, and quality of services.
Giving equal opportunity to all eligible bidders to compete in providing goods, works, and services financed by the Bank.
Encouraging domestic contracting and manufacturing industry, and consultancy services.
Transparency in the selection process.

3. Functions of World Bank
To provide funds for development projects
To provide policy advice and technical assistance
To promote investment in developing countries

4. while implementing a project . . .
a) Responsibility of implementation rests with the Borrower.
b) The Bank has to ensure that Loan/Credit are used for
the purposes intended
with
Economy
Efficiency
Transparency

5. Goods, Works, and Consultancy Services
…. while implementing projects…
c) Accordingly, Bank has developed Guidelines for procurement of
Goods,
Works, and
Consultancy Services
d) Bank Guidelines explain the various procedures acceptable for procurements as given in the Legal Agreement.

6. Ensuring satisfactory implementation;
…. while implementing projects…
e) Role of Procurement
Ensuring satisfactory implementation;
Ensuring speedy transfer of resources by way of disbursement;
Achieving economy and efficiency; and
Ensuring success of the Project.
Developing Capacity of Sound Public Procurement

7. g Bank’s Considerations for Procurement
…. while implementing projects…
g Bank’s Considerations for Procurement
Need for economy and efficiency in the execution of the project
giving all eligible bidders from developed and developing countries equal opportunity to compete
encouraging the development of domestic contracting and manufacturing industries
transparency in the procurement process.

8. Processing for Procurement
Legal Agreement
Provides guidelines to Adopt the Procurement Procedure (cost, complexity, frequency)
Provides Bank’s Prior and Post Review thresholds
Guidelines for Selection of Goods & Works and Consultants
Provides Steps Required for Implementing various procurement procedures.
World Bank Standard Documents
Pre-qualification, bidding, contracts, RFP etc.
ICB: 2.0 in guidelines
Type of contracts depends on nature of work. Large Turn key projects. Two stage bidding etc, But this project does not plan any procurement under this method.
NCB. 3.3
Is the competitive bidding procedure normally used for public procurement in the borrower’s country for good for which by their nature, are unlikely to attract foreign competition. These procedure shall be reviewed to assure economy, efficeincy. Used where contract value is small, works are scattered, are labor intensive and are available at prices below international market. Community Participation projects of the PPAFare covered by this type of bidding procedure. (see Proc plan)
No Gen Proc Notice (3.4)
Only national press or official gazette
Adequate response time
Provide adequate competition to ensure reasonable prices
National Shopping
Procurement method based on price quotations obtained from several suppliers, usually at least three.
Appropriate for off-the-shelf goods eg. Computers, office equipment
Direct Contracting
(single source) without competition
Existing goods or works contracts extended or goods or works of similar nature. Where no demonstrable advantage in obtaining further competitive prices. Where such instances are anticipated, provisions are to be made in contract.
OEM
Spares
Proprietary items

9. Legal agreement
This Agreement is between the Islamic Republic of Pakistan and IDA/IBRD – is a treaty subject to International Law. As a treaty the Legal Agreement takes precedence over local law.
The Agreement governs the legal relationship between the borrower and the Bank.
Guidelines are applicable to the extent provided in the Legal Agreements.

10. Procurement guidelines
Works and Goods: Procurement under IBRD Loans and IDA Credits May 2004
Consultancy: Selection and Employment of Consultants by World Bank Borrowers May 2004

11. World Bank Standard Documents
Works and Goods:
Prequalification documents, Bidding documents, Bid evaluation report, Contract
Consultancy:
Expression of interest (for short-listing), Request for proposals, Evaluation report, Contract 

12. Methods Defined under the World Bank Guidelines
Procurement of Goods
Methods Defined under the World Bank Guidelines

13. Methods of procurement
International Competitive Bidding (ICB)
National Competitive Bidding (NCB)
Shopping
ICB: 2.0 in guidelines
Type of contracts depends on nature of work. Large Turn key projects. Two stage bidding etc, But this project does not plan any procurement under this method.
NCB. 3.3
Is the competitive bidding procedure normally used for public procurement in the borrower’s country for good for which by their nature, are unlikely to attract foreign competition. These procedure shall be reviewed to assure economy, efficeincy. Used where contract value is small, works are scattered, are labor intensive and are available at prices below international market. Community Participation projects of the PPAFare covered by this type of bidding procedure. (see Proc plan)
No Gen Proc Notice (3.4)
Only national press or official gazette
Adequate response time
Provide adequate competition to ensure reasonable prices
National Shopping
Procurement method based on price quotations obtained from several suppliers, usually at least three.
Appropriate for off-the-shelf goods eg. Computers, office equipment
Direct Contracting
(single source) without competition
Existing goods or works contracts extended or goods or works of similar nature. Where no demonstrable advantage in obtaining further competitive prices. Where such instances are anticipated, provisions are to be made in contract.
OEM
Spares
Proprietary items

14. Steps of a procurement process
Notification and advertising
Pre-qualification of bidders (for health sector goods)
Issuance of bidding documents to (pre-qualified) firms
Bid opening
Bid Evaluation
Selection of lowest evaluated responsive bidder
Signing of Contract

15. Notification and Advertising
Draft General Procurement Notice (all planned projects) is published in UNDB.
Specific Procurement Notice for bidding is published for a specific project in
Atleast one nationally circulated newspaper, or
Official gazette, or
Electronic portal with free access, and
UNDB online and in dgMarket.
Minimum response time is 6 weeks for ICB and 4 weeks for NCB.

16. Standard Bidding Documents
Fair (terms and conditions should be balanced)
Non-restrictive (local registrations, response time)
Clear and comprehensive (adequate information, requirements, evaluation criteria)

17. Standard Bidding Documents
(ICB)
Bidding Procedures
Instructions to bidders (ITB)
Bid data sheet (BDS)
Evaluation and qualification criteria
Bidding Forms
Eligible countries
Supply Requirements
Schedule of Requirements
Contract
General Conditions of Contract
Special Conditions of Contract
Contract Forms

18. Standard Bidding Documents
(NCB)
Part I (fixed)
Instructions to bidders (ITB)
General Conditions of Contract
Part II (Procurement Specific Provisions)
Invitation for Bids (IFB)
Bid data sheet (BDS)
Special Conditions of Contract
Schedule of Requirements
Technical Specifications
Bidding Forms
Eligibility

19. Standard Bidding Documents
Instructions to Bidders (fixed)
General (Scope of Bid, source of funds, eligibility)
Contents of Bidding Documents (list of documents, clarifications, amendments)
Preparation of Bids (cost, currency, documents, period of bid validity, format of signing)
Submission and Opening of Bids (sealing & marking, deadline, late bid, withdrawal, opening)
Evaluation & Comparison of Bids (responsiveness, evaluation criteria and procedure, )
Award of Contract (award criteria, notification, signing of contract, securities)

20. Standard Bidding Documents
Bids Data Sheet (BDS) (Procurement Specific)
General (name of purchaser, project etc.)
Contents of Bidding Documents (list of documents) Preparation of Bids (cost, currency, documents, period of bid validity, format of signing)
Submission and Opening of Bids (address of submission, last date )
Evaluation & Comparison of Bids (currency conversion, domestic preference, evaluation criteria and procedure )
Award of Contract (variation in quantities)

21. Evaluation and Qualification Criteria
Standard Bidding Documents
Evaluation and Qualification Criteria
Post-Qualification Criteria
Manufacturing or supply experience, financial, technical and production capabilities, authorization from a manufacturer).
Evaluation Criteria
domestic preference (ICB)
Quoted Cost (DDP, EXW, CIP, CIF, etc.) plus incidental costs, delivery schedule, deviation in payment schedule
spare parts, O&M cost, performance and productivity,
technical specifications

22. Standard Bidding Documents
Bidding Forms
Bid Forms
Price Schedule Form
Bid Security Form
Manufacturer’s Authorization Form

23. Schedule of Requirements
Standard Bidding Documents
Schedule of Requirements
List of goods and delivery schedule
List of related services and completion schedule
Technical specifications
Drawings
Inspection and tests

24. General Conditions of Contract (FIXED)
Standard Bidding Documents
General Conditions of Contract (FIXED)
Clauses
Operational Clauses
Definitions
Rights and obligations
Delivery and risk transfers
Terms and currencies of payment
Mode & form of dispute settlement
Governing language
Applicable law

25. General Conditions of Contract (FIXED)
Standard Bidding Documents
General Conditions of Contract (FIXED)
Protective Clauses
Performance Security
Retention of Payments
Insurance
Inspection and tests
Warranty
Protection against third party infringement suits
Force Majure

26. General Conditions of Contract (FIXED)
Standard Bidding Documents
General Conditions of Contract (FIXED)
Variations
Quantity changes
Adverse physical conditions
Price adjustments
Remedies
Forefeiture of Performance Security
Damages, penalties for delays
Suspension and termination
Non-payments/delays in approvals

27. Special Conditions of Contract (VARIABLE)
Standard Bidding Documents
Special Conditions of Contract (VARIABLE)
Performance Security
Inspection and tests
Delivery and documentation
Payment Schedule
Insurance
Liquidated Damages
Warranties
Applicable Law

28. Standard Bidding Documents
Contract Forms
Form of Contract
Performance Security
Advance Payment Security Form

29. BID OPENING Public Opening
Announce the requisites (bid security, modification, withdrawal etc.)
Announce the price
Record the requisites
Only bids announced in public opening shall be further considered for evaluation
Late Bids are not Considered

30. Bid Evaluation
Selection of the lowest evaluated responsive bidder
Evaluation is to be based upon the contents of the bid itself.
Evaluation is to be based only upon the criteria clearly stated in the Bidding Documents.
Ideally all factors of evaluation criteria should be quantifiable in monetary terms.

31. Bid Evaluation Clarification Permissible and warranted
Should be in writing
- Should not Change Substance of Bid or Price
Preliminary Examination
(Substantial Responsiveness)
Eligibility requirements
Bid is signed
Bid Security
Required authorization
Major Deviations from Bid Conditions
Computational Errors

32. Major Deviations - Scope, Quality and Performance Affected
- Employer’s rights or supplier’s obligations limited in substantial way
- Rectification would unfairly affect ranking of other substantially responsive bids

33. Examples of Major Deviations
Late Bid Submission
Ineligible Bidder
Unsigned Bid
Unacceptable Bid Security
Lesser bid validity period
Price Adjustment Vs Fixed Price
Non Conforming delivery schedule
Unacceptable Subcontracting
Deviations from critical provisions
- Applicable Law
- Taxes and Duties
- Defect Liability
- Functional Guarantees
- Patent and Indemnity
- Limitation of liability

34. Debatable Deviations Different Payment Terms
Information given on different format
Different Payment Terms
Non Compliance with Local Regulations
- Labour, Import, Duties, Taxes, etc.
Completion/Maintenance Periods
Omission of (Minor) Items
Different Codes/Standards
- Materials, Workmanship, Design, etc.

35. and if such deviations otherwise acceptable
Bids with Deviations
May be considered substantially responsive if deviations can be assigned monetary value to be added as penalty for evaluation purposes
and if such deviations otherwise acceptable

36. Detailed Bid Evaluation
(Only for Substantially Responsive Bids)
Arithmetic Errors (If discrepancy between words and figures, words would prevail)
Currency Conversion (date as given in the Bid Docs.)
Evaluation shall exclude
Sales & other taxes payable if contract signed (local goods)
Customs and import taxes payable if contract signed (goods imported or to be imported)

37. Detailed Bid Evaluation
(Only for Substantially Responsive Bids)
Correction of Price (As given in the Evaluation criteria)
- incidental cost added
- addition to cost for delayed delivery
- adjustment for alternate payment schedule
- addition of cost of spare parts
- operating & maintenance cost
- adjustment for performance and efficiency
- adjustment for any specific additional criteria as given in the bid documents.

38. Award of Contract Lowest evaluated responsive bidder
Notification of award (notify successful bidder , publish results of evaluation, NOA is binding until contract is signed)
Signing of Contract (within 28 days of notification of award)
Performance Security (28 days of notification of award)
Return Bid Security of all Bidders
If lowest evaluated responsive bidder fails to sign contract/submit performance Security, invite the 2nd lowest evaluated responsive bidder.

39. ISSUES Validity of Bids and Bid Securities Extended Delivery Period
Bid Forms not completely filled
Authorization letter not signed
Experience Certificate not included
Delayed Decision of award
Specifications & Experience Requirements

40. ISSUES Validity of Bids and Bid Securities
- Must be valid for the period given in the BDS
- Extension may be requested; bidder has a right to refuse.
Extended Delivery Period
- Acceptable if BDS gives the option to evaluate delayed delivery.
- If BDS mentions a fixed delivery period, it is a major deviation.

41. ISSUES Bid Forms not completely filled
- May be acceptable if ALL information is given in a signed letter
Authorization letter not signed
- A certificate may be acceptable
Experience Certificate not included
- Bidder maybe asked to submit later

42. ISSUES Delayed Decision of award
- Award should be made within the bid validity period
- Incase of delay, ALL bidders should be requested to extend their bid validity.
- Unreasonable extension is not a good practice.
- Delays may entail increase in cost.

43. ISSUES Specifications & Experience Requirements
Specifications should be clear and suiting the requirement.
- A market survey prior to drafting specifications is always helpful
- Qualification requirement of suppliers should be realistic

44. A Good Practice
Assess capacity of prospective bidders and disseminate information
Pre-bid Meetings
Addendum
Prompt evaluation and decision

45. Procurement of Goods
SHOPPING

46. Shopping Three Quotations are required for comparison
Advertisement not necessary. Written request may be made.
Good practice is to approach more than three suppliers
Conditions (delivery schedule, Specifications etc.) given
If three responses are not received an extension may be given.

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