Request for IDF Financing Procurement Capacity Development Support

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Request for IDF Financing Procurement Capacity Development Support Basic Information Title of Proposed Project Project ID Last Update Region Country Countries included (if applicable) Managing Unit Task Team Leader Focus Area / Theme Procurement Capacity Development Support P Mar-2013 AFRICA South Sudan AFTPE Grant Amount Requested (USD) 750,000 Grant Amount Approved (USD) 750,000 Implementing Agency Simon B. Chenjerani Chirwa Public expenditure, financial management and procurement Organization Department Location Ministry of Finance and Economic Planning IDF Recipient Contacts Wani Buyu South Sudan Name Location Telephone Christopher Lobojo South Sudan Program Scope and Results/Outcomes Development Objective (Provide clear and concise description of what is expected to be achieved - avoid generalization. Please limit to no more than 5 sentences.) The objective of the Project is to assist the Government of South Sudan in building capacity in public procurement institutions. The specific objectives of the Project will include: (i) Assist the Government in implementation of the procurement law, when it is enacted, by

2 establishment /strengthening of regulatory and institutional framework for public procurement. (ii) Assist the Government in capacity development by means of establishing in-country modalities for training in procurement, providing training to selected government officials in procurement management, and also providing training to the local private sector for effective participation in the public procurement opportunities. Development Objective Discussion (Optional section - Provide more background and detail on the DO, if helpful for the reader to better understand the Recipient's need for the grant.) Introduction Following the signature of the historic Comprehensive Peace Agreement (CPA) in 2005 between the Government of Sudan and the Sudan Peoples' Liberation Movement (SPLM), a Joint Assessment Mission (JAM) was conducted jointly by the United Nations and the World Bank (WB). The JAM noted that there was no public procurement system in Southern Sudan. During the civil war period there was little or no room for developmental spending, which would generate procurement of goods, works and services. There were no procurement procedures, institutional framework and capacity to support procurement under the SPLM-led administration. The JAM recommended that as an interim measure, the procurement function would be centrally managed and contracted out by the Ministry of Finance and Economic Planning (MOFEP) till capacity is built. The Government of South Sudan, established in July 2011, comprises 10 autonomous states following a Referendum in January In the absence of any public procurement legislation, the Minister of Finance and Economic Planning issued the Interim Public Procurement and Disposal Regulations (IPPDR) in June The IPPDR applies to all levels of government in Southern Sudan and lays out the public procurement policy as well as the procedures and processes that should be followed by Procuring Entities to ensure that public procurement is transparent, efficient, and fair. Further, the IPPDR provides for the creation of a Procurement Policy Unit (PPU) and a decentralized procurement function. It also requires MOFEP to delegate the authority to procure to Ministries, Departments and Agencies (MDAs) that it has assessed and found to possess the capacity to comply with the IPPDR. Such MDAs would be designated as Procuring Entities, and would be accountable for the procurement process and contract management in spending their budgets. The critical role played by the public procurement system in efficient budget execution is generally not well recognized or accepted at all levels of management in South Sudan. Through its own internal reviews, GRSS has found that unsatisfactory procurement practices are widespread. Thus a Presidential Order dated August 29, 2007 was issued on adherence to the IPDR and directing the authentication and monitoring of GRSS contracts by Ministry of Legal Affairs and Constitutional Development (MOLACD) and MOFEP respectively. Following that, MOFEP has also issued circulars in 2011, directing all MDAs to adhere to provisions in the IPPDR. The government has prepared a Public Procurement Bill which as in March 2013 is with the cabinet and is expected to be enacted into a law during the first half of In line with the decentralized system of government established by the constitution of the South Sudan, the government has prepared a PFM Manual consistent with the draft law to govern procurement and financial management at local government level, which is under refinement and is expected to be adopted soon. The World Bank carried out a Country Integrated Fiduciary Assessment (CIFA) in 2011 and the report was delivered to Government in In addition the Bank carried out a Procurement Value Chain Analysis (PVCA) in The objective of the PVCA was to analyze bottlenecks to

3 the procurement process to determine processes that are prone to abnormal time lapses, their causes and constraints. This proposal presents the status of the South Sudan procurement system, and lays out a strategy and the actions and output targets to address the continued development of the nascent South Sudanese procurement capacity. MOFEP aims to use the lessons from the implementation of the IPPDR and recommendations of the CIFA to address the procurement capacity development needs and continue to improve the public procurement system of South Sudan. Status of the Procurement System The IPPDR implements the JAM recommendation on procurement through four key policies on public procurement: (a) Procurement would be decentralized to budget holders to procure in accordance with their requirements and allocated budget in compliance with the IPPDR. MOFEP would designate MDAs as a Procuring Entities with the authority to conduct procurement and continually monitor and revise the list of procuring entities. (b) MOFEP would be the Procuring Entity of GRSS until MDAs acquired adequate procurement capacity to qualify to be designated Procuring Entities. In order to comply with the IPPDR, a Procuring Entity must have a Procurement Committee to adjudicate award of contracts and a Procurement Unit with proficient procurement staff. (c) A PPU was established in MOFEP, to set standards for and monitor procurement processes in South Sudan. The PPU would also advise Government on appropriate actions to be taken to bidder complaints and forward cases of fraud and corruption to appropriate GRSS institutions for action. (d) The IPPDR is a forerunner to comprehensive procurement legislation consistent with international standards that would aim to attract foreign investors as well as the confidence of donors in the South Sudan procurement system. A new public procurement legislation would address among others, procurement oversight, decentralization, organization of the procurement function, capacity building and mechanisms for handling bidder complaints. Government has prepared a new Public Procurement Bill which was at Cabinet stage in January 2013 and was expected to be passed into law in the first half of GRSS has implemented the IPPDR since June 2006 when it was issued. Contracts procured under the IPPDR have mainly been generated from the use of GRSS own resources and the Multi-Donor Trust Funds for Southern Sudan (MDTF-SS) managed by the WB. It is estimated that approximately 60% of the GRSS budget is expended through procurement conducted by some of the 49 MDAs. The amount expended by the 10 States through procurement would be in the same proportion or higher than at the GRSS level. MOFEP created the PPU which has been supported by Technical Assistance financed by Bank. Link to CAS and/or ESW (core diagnostics, e.g., CPAR, CFAA, PER, CEM, etc.), and relationship to Bank operations The Bank is finalizing an Interim Strategy Note (ISN) for South Sudan for the period 2013 to The ISN recognizes that procurement in South Sudan takes place in a low governance and non-transparent environment, seriously hampering the ability to deliver efficient and effective outcomes. A weak legislative and institutional framework, coupled with a nascent private sector and underdeveloped markets, have been exacerbated by the inadequate oversight provided by the integrity and anti-corruption institutions. These institutional weaknesses range across all

4 stages of the procurement process from planning to contract management. This has affected Bank financed projects leading to high transaction costs and substantial delays in the delivery of urgently needed services. This ISN recognizes the efforts that have been made by both the GRSS and the Bank to address the procurement environment through various studies and AAAs. In order to build institutional capacity and respond to the immediate need for early delivery on the ground, the Bank team proposes to adopt a flexible approach to the existing procurement policy Cluster I of the ISN details areas of intervention to improve economic management and governance for effective service delivery. The areas of intervention include PFM reforms that include AAA activities and action plan to address the findings of the 2010 CIFA. In parallel, the Bank is currently designing a country-specific procurement strategy to guide the provision of procurement support to Bank operations over the period of the ISN. This strategy will address the delivery of developmental objectives along with maintaining good procurement practices. The strategy, while based on the existing Bank procurement policy, will address requirements for flexibility by taking into account the risks, the specific market conditions and institutional capacity constraints. This proposal is part of the action plan to address capacity constraints in the implementation of procurement activities. Relationship to country/recipient's development program, including donor activities Following the Country Integrated Fiduciary Assessment of 2010, the Government prepared an Action Plan for Capacity Development that covers six core areas that include (a) Ensure Public Procurement Bill of 2011 is enacted (b) Strengthen institutional capacity at all three levels of government (c) Establish effective mechnaism for monitoring implementation of the law (d) establish mechanism for sharing information with stakeholders on procurement (e) Ensure independenece of procurement process from political interfrence (f) facilitate participation of private sector in public procurement and (g) facilitate participation of civil society in procurement. Process to enact the law is at advanced stage and PFM Manual has been prepared to guide procurement at decentralized level consistent with the draft law. Various donors are supporting GRSS in PFM capacity building : (i) African Development Bank have assisted Government to prepare a curriculum for procurement training at University of Juba and a larger civil service training program (ii) Africa Capacity Building Foundation has provided grant financing in the areas of Macro Economics, Budgeting, Executive Leadership and Fiduciary Management (iii) USAID is providing technical assistance within its Core Institutions Project and planning support in procurement capacity building. USAID also assisted GRSS with preparation of first draft of new procurement law. There is an active PFM Donor coordination committee that coordinates donor efforts but requires stronger government leadership. Description of the IDF - Financed Components, Activities and Outcomes 1. COMPONENT: Strenthening of Regulatory Framework The IPPDR is not a principal law. The GRSS have prepared a Draft Procurement Bill for procurement and is its final stages of consultations before enactment. It is expected that the Bill will be in enacted into Law in 2013 Following the enactment of the public procurement law, this component will support the revision of the IPPDR to be in line with the new law. Consultant services will be required to assist Government revise the IDPR and align Regulations to the new Law. The component will also finance information and education campaigns (IEC) on the new Law and Regulations through radio, TV and workshops. It will also financed printing of the Act and Regulations for dissemination The component will also finance the develop and dissemination of Standard Bidding Documents:

5 Standard Bidding Documents (SBDs) adapted to the South Sudan market practices and conditions would be prepared and disseminated. These standard and technical documents can always be revised, and do not have the force of law but are very useful to the procurement practitioners. A consultant will be hired to assist Government prepare Manual and Standard bidding documents and in addition another consultant will be hired to strengthen the PPU to coordinate the implementation of the reforms. Outcome Legislative and Regulatory framework strengthened 1.1 ACTIVITY: Training Workshops to introduce new Act and Regulations OUTPUT: 11 workshops to disseminate act and regulations held The activity will include printing of Act and Regulations and organising workshops to disseminate them 1.2 ACTIVITY: Prepare SBDs and Update Regulations OUTPUT: Updated Regulations A consultant will be hired to assist Government update the Regulations and Local Government PFM Manaual to be consistent with new law OUTPUT: Prepare Standard Bidding Documents Consultant will be hired to assist Government prepare SBDs based on new law and updated Regulations 2. COMPONENT: Strengthening of Institutional Framework and Capacity Building Efforts The PPU established in accordance with IPPDR comprises three main functions: (i) Legal and Complaints Review; (ii) Inspection and Compliance Monitoring; and (iii) Training and Capacity Building. In addition to technical assistance, staff of PPU will be trained both on the job, through short courses and at advanced tertiary level. As per the draft procurement bill PPU will wean itself from the ambit of MoFEP and become an autonomous procurement regulatory authority. MOFEP will publish guidelines for the assessment of Procurement staff, formation of Procurement Committees, creation of Procurement Units and the designation of MDAs as

6 Procuring Entities. With the support of the World bank, using CIFA-procurement aspect fund, the Government has planned to carry out a capacity needs assessment for procurement and prepare a capacity development plan to guide procurement capacity building activities. Following the preparation of the plan, the project plan to finance capacity building activities which will include short and long term training, localization of the training provision through strengthening of local institutions through a twining arrangement with an established procurement training institution such as Eastern and Southern Africa Management Institute (ESAMI), Tanzania Chartered Institute of Purchasing and Supply (UK), ITC ILO or International Law Institute. The contracted institute will twin with School of Management Science of the University of Juba to establish a short course (initially one month) and eventually a degree course. University of Juba was assessed during preparation of the project and found to have adequate staff and experience with twining arrangements. MOFEP to recruit, train, and deploy Procurement Officers for GRSS: The stock-taking of procurement practitioners is expected to reveal procurement capacity gaps in MDAs. MOFEP will centrally recruit, train and deploy Procurement Officers to MDAs and later monitor their career progression. Develop and implement a procurement training plan: A consultant to be hired through twining arrangement described paragraph 13 above would design training course and materials and deliver training in collaboration with local training institution. MOFEP will also organize training sessions for the local private sector to make them capable to effectively participate in the public procurement opportunities. Outcome Strengthened institutional set up and management capacity for implementation of procurement law 2.1 ACTIVITY: Workshop to introduce capacity needs assessment report and capacity building plan The procurement capacity needs assessment and development of capacity building plan is being financed by CIFA follow up fund. Once the report is available, it will be printed and disseminated to all concerned stake holders by holding a workshop OUTPUT: Workshop to disseminate capacity needs assessment report and capacity building plan This activity will involve printing and its dissemination of capacity needs assessment report and capacity building plan 2.2 ACTIVITY: Training government staff and private sector in procurement management and bidding respectivley OUTPUT: 200 people trained

7 This activity will support the training of government staff and private sector. The proposed strategy is a twining arrangement between between School of Management at University of Juba and an estbalished procurement training centre or institution 3. COMPONENT: Strengthening of Procurement Operations Implement a Contracts Payment Monitoring and Commitment Control System: In order to monitor commitments and payments under GRSS contracts, a contract payment and monitoring system will be prepared and adopted. The assignment would include design and implementation of Procurement Management Information System and design and launch of a Southern Sudan Procurement Website for posting bidding and contract award notices. The development of website will be first priority over the tracking system which will depend on availability of data and this will likely be deficient in the early years. Outcome Effective mechanisms for monitoring of implementation of law at all levels established 3.1 ACTIVITY: Develop a central procurement information and tracking system OUTPUT: Procurement information system functional The activity will support the recruitment of consultants to support development of procurement information and tracking system. In addition to enhacing transparency and access to information by all stakeholders, the information system will track procurement processing for large value contracts and price monitoring for common used goods and pharmaceutical products 3.2 ACTIVITY: Setting up of Procurement website To hire consultant and procure computers to establish a [procurement website OUTPUT: Procurement Website set up and made functional A website dedicated to government procurement will be set up providing procurement information such as advertisement notices of procurement opportunities, information about awarded contracts, procurement law, regulations, standard boidding documents and other relevant manuals and documents. 4. COMPONENT: Strengthen integrity and transparency of the procurement system

8 PPU to conduct Complaints Review, Inspection and Compliance Monitoring. The PPU would hire consultant to prepare Manual(s) for Complaints Review, Inspection and Compliance Monitoring to guide its staff in discharging this function. PPU would report annually on all complaints and contracts reviewed; lay out plans for inspections and compliance monitoring; and forward all cases of allegations of fraud and corruption in procurement to the South Sudan Anti-Corruption Commission. The component will also support carrying out of a procurement compliance audit for key central ministries Outcome Complaints Review, Inspection and Compliance Monitoring Manual prepared and Procurement audit of key central ministries done. 4.1 ACTIVITY: Carry out procurement audit of central Ministries OUTPUT: Audit Report A procurement compliance audit will be carried out for all central ministries at towards the end of the project. The audit will be used as a basis to further strengthen procurement capacities within ministries and departments 4.2 ACTIVITY: Preparation of Complaints Review, Inspection and Compliance Monitoring Manual A consultant shall be hired to prepare Complaints Review, Inspection and Compliance Monitoring Manual OUTPUT: Complaints Review, Inspection and Compliance Monitoring Manual The hired consultant shall prepare Manual(s) for Complaints Review, Inspection and Compliance Monitoring to guide PPU staff in discharging related functions. 5. COMPONENT: Project Managenment This component will support the fiduciary aspects of managing the grant and the required project financial audit. Outcome Management of FM/Procurement issues and project financial audits.

9 5.1 ACTIVITY: Project management The activity will support hiring of a consultant to assist the fiduciary aspects of managing the grant and the required project financial audits OUTPUT: Management of FM/Procurement issues A consultant will be hired on part time basis to assist Government in management of FM/Procurement issues OUTPUT: Annual Financial Audits Independent auditors to prepare annual financial audits Key Monitoring Indicators 1. INDICATOR Procurement law and associated Regulations implemented Base Value: No law or Regulations in place Date: 01/01/2013 Target: Law and associated tools (Regulations and SBDs) in place and in use by central ministries and departments Date: 06/30/ INDICATOR Ministries staffed with qualified procurement officers Base Value: 2 (MoFEP and MRB) Date: 01/01/2013 Target: 5 Date: 12/31/ INDICATOR Transparency and accountability of procurement systems improved Base Value: Marginal and no mechanism to evaluate it Date: 01/01/2013 Target: Website and contract moniotirng system establsihed to publish tenders Date: 06/30/2015

10 and contracts Other Contributors Government/Recipient Contribution (check all that apply): Office Facilities Training Facilities Counterpart Staff Time Trainee Staff Time Local Transportation Administrative Support Audit Cash Contribution Other Other Donor Financing (parallel or co-financing): None. Dialogue is in progress with other bilateral donors to finance strengthening of the University of Juba School of Management to provide regular procurement training Institutional and Implementation Arrangements (governance structures, implementation responsibilities, etc.) A Grant Agreement will be signed between Bank and Government of South Sudan. Government of South Sudan has designated the Procurement Policy Unit (PPU) within Ministry of Finance and Economic Planning as the implementing agency for the project. The PPU is an established unit under the Interim Public Procurement Regulation headed by a Director General. The PPUhas three sections of (i) Legal and Complaints Review section (ii) Inspection and Compliance and (iii) Training and capacity building. The PPU will be responsible for management of the project, procurement of goods, works and services and coordination of the various training activities Proposed Use of Grant Funds Expense Overview

11 Expense Category IDF Grant Funds (USD) % of Financing Consultants/Travel/Per Diem 408, Equipment/Supplies/Materials 42, Other (e.g. audit) 15, Training/Workshops 285, Total 750, Proposed Fiduciary Arrangements A. Financial Management and Audit Arrangement A procurement assessment of the implementing agency will be carried out by the Bank prior to Grant Signature and mitigation measures agreed. An independent auditor will be recruited by the Recipient on terms and conditions acceptable to the Bank. The audits will be done annually and provision has been included in the financing estiamte. A Senior Financial Management Specialist based in the Juba office will be responsible for the financial oversight over the Project B. Procurement Arrangements Procurable items under the proposed Grant will include consultants, goods (computers ) and non consulting services mainly workshop costs. The PPU will be responsible for procurement of goods, works and services. Procurement will be carried out in accordance with Bank Procurement Policies and Procedures. A Procurement Specialist based in Juba office will be responsible for fiduciary oversight on the Project C. Risks and Mitigating Measures There are two main risks associated with the project: (i) Delays by the Government to enact the public procurement law which will affect downstream activities based on it and (ii) weak capacity of the recipient to implement and carry out procurement activities.. The Government has indicated through its Letter of Development Policy for the Local Government Service Delivery Project to enact the new procurement law within first half of Bearing in mind that the Bill has already passed through the Cabinet stage and the Government has made an undertaking to the Bank through a Project that it desires to start implementing in 2013, the likelihood of its enactment is high. Weak capacity will be mitigated through use of simplified procurement procedures utilizing OP/BP8.0, hand holding of staff of the PPU in procurement processing and technical assistance which has been provided to PPU through other donors.

12 D. Supervision Arrangements Bank will supervise the Project through field missions once a year involving TTL, Financial Management and Procurement. All Task Team members are field based and procurement and financial management staff are based in the country office in Juba. The Task Team will also get guidance from the Fragile and Conflict Hub in Nairobi at regular occassions Project Team Members (Please include team members with following expertise: Procurement, Financial Management, LOA, and LEG) Name Title Unit Jose C. Janeiro Senior Finance Officer CTRLA Adenike Sherifat Oyeyiola Sr Financial Management Specialist AFTME Siobhan McInerney-Lankford Senior Counsel LEGAM Grace Tabu Felix Team Assistant AFMJB Anjani Kumar Senior Procurement Specialist AFTPE