1. Get to know the procurement principles & Ins & Outs of Procurement Policies

2. Principles and Considerations Governance –Loan Contract governs Borrower/Bank legal relationship –Procurement policies applicable through incorporation in Loan Contract –Rights and obligations of Borrowers/Suppliers Governed by BD, not Policies or Loan Contract and Signed supply/construction contracts –Only parties to Loan Contract derive rights thereon / claims on loan proceeds

3. Legal Relationship and Responsibility BORROWER BANK SUPPLIER CONTRACTOR CONSULTANT LOAN CONTRACT POLICIES BIDDING DOCUMENT SUPPLY CONTRACT WORKS CONTRACT CONSULTING CONTRACT X

4. Principles and Considerations Procurement Responsibility –Borrower Project implementation Procurement Payment of project goods, works, and services –Bank Loan Proceeds can be used –Only for purposes the loan was granted –With due attention to Economy and Efficiency Disbursements only at Borrower’s request Bank is not a party to procurement contracts

5. Principles and Considerations Procurement Responsibility of Bidders Carefully analyze ALL requirements of the bidding documents or request for proposal documents Strictly comply with the instructions and specifications/terms of reference in the bidding/request for proposals documents Require clarifications to documents in writing Review bid/proposal for compliance with the requirement before submitting Submit bid/proposal before deadline

6. Procurement Policies Goods and Works and General Services Sections I: Introduction II: International Competitive Bidding III:Other Methods of Procurement Appendices I:Review by the Bank II:Domestic Preference III:Guidance to Bidders IV:Procurement in Loans to the Private Sector The Policies comprise 3 sections and 4 Appendices

7. Procurement Policies Consulting Services Sections I: Introduction II: Quality and Cost Based Selection III:Other Methods of Selection IV:Types of Contracts & Important Prov. V:Selec. Of Individual Consultants Appendices I:Review by the Bank II:Instructions to Consultants III:Guidance to Consultants IV:Procurement in Loans to the Private Sector The Policies comprise 5 sections and 4 Appendices

8. New Areas of Selected Policies Eligibility Fraud and Corruption Misprocurement Qualification of Bidders

9. Eligibility Nationality and Origin Only firms and individuals from member countries can –Receive payments from Bank funds –Participate in Bank financed contracts Only goods originating (mined, grown, produced, assembled) in member countries –Can be financed by the Bank (*) (*) Exception Goods labelled “made in the European Union”

10. Eligibility (cont) Nationality and Origin (cont) Exceptions: Firms or goods from a country may be excluded if –Borrower’s law or official regulation prohibits commercial relations with that country –Compliance with decision of UN Security Council prohibits imports from, or payments to, that country

11. Eligibility (cont) Conflict of Interest (Section 1.9) Consulting firm that prepares or implements project is disqualified from also –Supplying Goods –Constructing Works –Supplying Services (does not apply to turn-key contracts) –Ex: A firm hired to prepare environmental study for project, will not be engaged to actually implement the recommendations made in the study

12. Eligibility (cont) Declaration of Ineligibility by the Bank Firm cannot be awarded Bank-financed contract if –Following investigation by the Borrower and Office of Institutional Integrity, evidence exists that it has engaged in act of Fraud and Corruption in Bank-financed project

13. Fraud and Corruption Fraud and Corruption are prohibited May include: –Corrupt practice –Fraudulent practice –Coercive practice –Collusive practice These practices are defined as follows:

14. Fraud and Corruption Definitions: Corrupt practice: Offering, giving, receiving or soliciting, directly or indirectly, anything of value to influence actions of another party Fraudulent practice: Any act or omission, including misrepresentation, which misleads, or attempts to mislead, a party in order to obtain financial or other benefit or to avoid an obligation

15. Fraud and Corruption Definitions (cont) Coercive practice Impairing or harming or threatening to impair or harm, directly or indirectly, any party or property of a party to influence the actions of a party Collusive practice Arrangement between two or more parties designed to achieve an improper purpose, including to influence improperly actions of another party

16. Fraud and Corruption (cont) Sanctions In case of demonstrated Fraud and Corruption, the Bank may impose sanctions which can be public or private –Not to finance –Suspend disbursements –Cancel and/or accelerate payment of part of the loan

17. Fraud and Corruption (cont) Sanctions (cont) –Issue reprimand –Declare individual, entity or firm ineligible, permanently or for a period of time, to be awarded or participate in Bank financed contracts –Refer matter to appropriate law enforcement authorities –Impose other sanctions, i.e.: Fines to reimburse the Bank for investigation costs

18. Fraud and Corruption (cont) Bank has right to require that: –Bidders, Suppliers, Contractors, Consultants and Concessionaries Permit Bank inspection of accounts and records Permit Audit by Bank designated auditors –Consultants Keep documentation for 3 years after completion Deliver information for investigation of Fraud and Corruption

19. The Bidding Process for Bank-financed Projects

20. Publicity Bidding documents Clarifications Bid Submission small fees for documents Bid evaluation Public bid opening Bid results & notification Public Access to Award Contract Signing Public Bidding Process Procurement Plan

21. Standard Procurement Documents Typical structure of SBD Instructions to Bidders Bidding Data Sheet Evaluation and Qualification Criteria Bidding Forms Eligible Countries Schedule of Requirements General Conditions of Contract Special Conditions of Contract Contract Forms Invitation for Bids (not a part of BD)

22. Standard Procurement Documents Available SBD / SPD / SRFP/Instructions –Procurement of Goods –Procurement of Health-Sector Goods –Procurement of Books and Reading Materials –Prequalification for Procurement of Works –Procurement of Works –Procurement of Works – Smaller Contracts –Selection of Consultants

23. STARTING THE PROCUREMENT PROCESS Publicity General Procurement Notice (GPN) –Published once within 30 days of loan’s approval by the Board of Directors in: United Nations periodical “Development Business” (online) http://iadb.org/procurement http://iadb.org/procurement IDB’s web site - Procurement Portal immediately thereafter: http://iadb.org/procurement http://iadb.org/procurement

24. STARTING THE PROCUREMENT PROCESS Competitive Bidding - Publicity Specific Procurement Notice (SPN) –Required for International Competitive Bidding (ICB) - published in: United Nations periodical “Development Business” (online) IDB’s web site - Procurement Portal immediately thereafter –Required for National Competitive Bidding (NCB) published in: The Country’s official web site for advertising government business opportunities; or One local newspaper of wide circulation

25. Project Procurement Process Goods and Works Bid Preparation Time Days from publication of Specific Procurement Notice (SPN) to deadline for submission of bids Prequalification Applications 45 days Bids  Goods 6 weeks  Small Works 6 weeks  Major Works 12 weeks

26. Project Procurement Process Consulting Services Proposal Preparation Time Days from publication of SPN to deadline for submission of proposals Request for Expressions of Interest 14 days Request for Proposal (shortlist: 6 firms) 4 weeks

27. Procurement Methods Goods and Works –Preferably ICB –Other methods Used when ICB not economic and efficient When used, Domestic Preference does not apply Consulting Services –Default Method QCBS –Other methods

28. Other Methods Goods and Works General Use Limited International Bidding (LIB) National competitive Bidding (NCB) Shopping Direct Contracting

29. Procurement Methods Consulting Services Six main selection methods: Quality & Cost Based Selection (QCBS) Quality Based Selection (QBS) Least Cost Based Selection (LCBS) Fixed Budget Based Selection (FBBS) Selection Based on Qualifications (CQS) Single Source Selection (SSS) (non competitive)

30. Key Principles –Timely adequate notification and advertising –Equal opportunity to present bids Essential and fair conditions of contract Appropriate time for bid preparation and presentation –Equal treatment of bidders Sound explicit evaluation criteria Non discriminatory requirements and specifications Procurement Methods

31. Qualification of Bidders What if the Borrower just doesn’t like the bidder? –Bank does not permit Borrower to: Deny pre or post-qualification to Bidder or Disqualify Bidder …for reasons unrelated to capability and resources to successfully perform contract

32. Procurement Process Bidder’s Right to Protest Bidders/Consulting Firms may submit a complaint in writing at any stage of the procurement process Procurement process is not suspended when complaint is submitted Contracting Agency resolves the complaint If Bank determines that its procurement policies have not been adhered to, Bank can declare misprocurement

33. Misprocurement Bank declaration of misprocurement –The procurement conducted is not in accordance with Loan Contract and Procurement Plan –After no objection, if based on incomplete, inaccurate or misleading information Consequences –Bank does not finance contract, may exercise other remedies –Bank policy: offers option to cancel loan portion assigned to contract

34. Goods and Works Who is Awarded the Contract? The Bidder whose bid has been determined to be the lowest evaluated bid and is substantially responsive to the bidding documents. CONTRACT AWARD

35. Consulting Services Who is Awarded the Contract? The Consulting Firm with the best evaluated proposal depending on the selection method. CONTRACT AWARD

36. Thank You! Q & A