1 CAPACITY BUILDING AND TRAINING ON PROCUREMENT Session 9 – The World Bank Procedures for IT Procurement September 21, 2005 by Arif Hassan

2 GENERAL  Information System Projects in general appear to have an alarming high failure rate even in developed countries. Disputes are common.  It is estimated that 80 percent of World Bank projects have some form of informatics component. Some of these components incorporate large information technology and systems contracts. These are difficult and challenging to procurement because:

3  Their technical content is diverse and difficult to define.  Highly affected by changing business objectives, organizational politics and institutional capacity of the end-user.  Subject to rapid technological change over the project life - cycle.  Entail combination of professional engineering services and supply of diverse hard and soft technologies.

4 BASIC ELEMENTS OF IT PROCUREMENT  Preparation of the procurement strategy  Preparation of the detailed requirements and schedules  Preparation of the bidding documents  Bid evaluation process  Award of contract  Contract management  Settlement of final contract accounts

5 PROCUREMENT PLANNING  Normally two approaches are used in procuring IT needs by Borrower.  Short term needs of a particular department:  Stand alone PCs loaded with packaged software and associated peripherals like printers etc.  This is fragmented procurement where economies of scale are lost  IT goods and services procured provide very little scope for expansion in the future

6  Integrated IT Strategy  User overall business development plan for the next 3 to 5 years  Where needs of multiple departments are examined and a solution recommended  Additional users can be added to network. Cost of licensed software for multiple users is much less.  Maintenance and supply of spare parts is much more cost effective.

7 PROCUREMENT PACKAGING  Procurement packaging should be minimized in number to economize time and cost except for hardware where care should be taken not to procure equipment too much in advance.  Borrower should package as many of the technologies and services as are practical into a single contract.  However, despite above project specific factors may suggest multiple contracts  Procurement Plan for each item should be carefully thought of.  This may require technical assistance

8 BUSINESS PLAN  What are the business areas which would benefit from automation  What are the expected benefits of the systems investments  What are the key organizational, management, business process and legal/regulatory changes required to maximize the rate of return on information systems investments

9 STRATEGIC SYSTEMS PLAN  Provide greater detail of business functions to be automated, timetables and resources required.  Need to develop and implement a human resource plan. Find a proper balance for dependence on in-house and contracted technical staff for sustainability of investments

10 IT PROCUREMENT CONTRACTS  IT procurement encompass both supply of products and provision of services. All are bid on International Competitive Bidding Procedures (ICB)  Product and service contracts vary from  Off-the-shelf IT Supply and Maintenance Contracts to  Systems Supply & Installation Contract to  Systems Engineering Contract to  Consulting Services Contract

11  Off-the-Shelf IT Products contracts  Ready-made equipment and material, pre-installed software packages and consumables.  Services & Work element is incidental to the purchase – installation (including wiring for LAN) and standard training/orientation.  Logistics are straightforward enough to complete implementation in say six months.  Technical Support required is vendor’s or manufacturer’s standard warranty provisions.

12  Systems Supply/Installation & Systems Engineering Contracts  Complex IT Supply  Complex Software Engineering  System Development  Systems Integration Services  Consulting Services Contracts  Information System/Project Management Support  Development of ICT strategies/plans  User requirements  Functional specifications  Design of application software

13 PROCUREEMNT METHODS - BIDDING DOCUMENTS  Off-the-shelf IT Products Use Bank Standard Bidding Documents (SBD) – Procurement of Goods, May 2004 revised May 2005  Supply and Installation of Information System where different technical solution are not required – Use Bank SBD – Single Stage Bidding, March 2003

14 where different technical solutions are required - Use Bank SBD – Two Stage Bidding, March 2003  Consultancy Services The Bank’s Standard Request for Proposal (RFP) Document – May 2004

15  Based on technical products or service specification such as wide-area network (WAN) etc.  Where detailed functional or performance specifications are developed by the Purchaser  Specifications are likely to be met only by established products in the market such as established software packages. SINGLE STAGE PROCESS

16  Based primarily on business or performance requirements rather than any technical specifications  Buyers require different technical solutions from Purchaser TWO STAGE PROCESS

17  Proprietary Products  Bank discourages use of brand names. If brand name is mentioned this has to be followed by “or substantially equivalent” SPECIAL REQUIREMENTS

18  Proprietary Products…continued…  Commercial brand names can be used only if arguments and justifications are provided for -required HW/SW platform for proposed application. -“de-facto” industry standard -enterprise technology standard. -prior material investment.

19  Conflict of Interest  Consultant should perform systems analysis as a separate and prior activity.  Consultant should be independent of firm or firms performing the development and implementation activities and supplying technologies.

20  Use Standard Bid Evaluation Form;  Supply & Installation of information systems – Single Stage Bidding, October 2004  Annex I provides an Evaluation Guide for users  Examples. BID EVALUATION

21  Based on CIP (Carriage and Insurance Paid to Place of Destination i.e Project Site) as per Incoterms 2000  Website: PRICING OF FOREIGN GOODS IN ICB

22 HOW TO DOWN-LOAD IT STANDARD BIDDING DOCUMENTS and OTHER INFORMATION. Go to: Click on the documents you want to download

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