Implementation Support Workshop February 06-10, 2012 Ankara The World Bank
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1 REVISION OF PROCUREMENT AND CONSULTANT GUIDELINES January 2011 Implementation Support Workshop February 06-10, 2012 Ankara The World Bank
2 Background The Guidelines have evolved over the years to reflect trends in the Bank s overall policies, global knowledge, experience in public procurement, best international procurement practices, dialogue with the borrowers and partnerships with stakeholders and other donors.
3 QUIZ (1) When was the last major revision to procurement guidelines? A) 2006 B) 2010 C) 2004 D) Don t know
4 Background the last time the major revisions to the Guidelines were made Eliminated country eligibility restrictions Introduce use of e-procurement Emphasized greater transparency and simplification 2006 and 2010 revisions were limited to Fraud and Corruption provisions
5 Background 2011 revisions do not, in a major or material way, change the existing overall Bank procurement policy framework, including methods and procedures
6 Rationale for Revisions in 2011 To reflect: broad evolution of policies and Board decisions affecting procurement harmonization effort with MDBs/IFIs practical experience in application of the Guidelines, and trends in industry practices
7 Process Long process of consultations (more than a year) Internal External - Including Harmonization with MDBs
8 Process Extensive internal reviews and discussions, including feedback from staff, Policy Committee of Procurement Sector Board, Audit Committee, pre-board briefings to the EDs, and Board discussion Extensive external consultations with borrowers implementing agencies, private sector/industry, MDBs/IFIs. Posting of GLs on the web for public consultations &feedback, including from civil society
9 Harmonization Consultations with MDBs as part of a broader harmonization process Resulted in reaching consensus on all changes and new provisions Achieved higher level of harmonization
10 Knowledge Check on Rationale (a) evolution of policies and Board decisions harmonization effort with MDBs/IFIs practical experience in application of the Guidelines, and trends in industry practices (b) Harmonization with Bank policies evolution of industry guidelines changing procurement needs
11 Categories of Revisions (1) Evolution of Policies (2) Harmonization Effort (3) Reflection on Practical Experience & Industry Trends (4) Cross-alignment between the two guidelines and editorial
12 (1)Evolution of Policies Revised provisions in both Guidelines: Eligibility: to ensure consistency with sanctions reforms and between both Guidelines Conflict of Interest (COI): used to be only in Consultant Guidelines, now in both. The text is also expanded to allow for a full treatment of COI
13 (1) Evolution of Policies (cont d) Fraud and Corruption (F&C): to align with sanctions reforms (temporary and early temporary suspension, cross-debarment, and corporate cross-debarment (GSD)) to define applicable sanctions procedures in contracts with UN agencies to clarify due diligence requirements before awarding contracts to include INT contact information for reporting F&C allegations
14 (1) Evolution of Policies (cont d) Use of country systems (UCS): UCS is introduced as a new method under the Piloting Program (Section III) to allow its use through the standard reference to the Guidelines in the loan or credit agreements
15 (2) Harmonization Efforts Sanctions provisions, in particular, cross-debarment & definitions of fraud, corruption, collusion and coercive practices with other 4 MDBs Provisions of harmonized master bidding documents and consultants RFP are reflected in clarified Guidelines clauses and terminology related to bidding process and contract terms
16 (3) Reflection on Practical Experience Without change in substance, existing provisions have been revised and/or expanded to clarify the requirements: Government-owned enterprises: requirements on documentation to establish eligibility of such enterprises are added Involvement of civil servants in Bank-financed projects is clarified
17 (3) Reflection on Practical Experience Misprocurement - added: application of this sanction when the lowest bids are no longer valid as a result of prolonged and unjustified delays by the borrower the Bank s right to declare misprocurement and cancel the funds when the borrower or beneficiaries are engaged in F&C
18 (3) Reflection on Practical Experience Publication of award of contracts: a new provision in Annex 1 consolidates all requirements previously found in different Sections Advertising: requirements change posting in dgmarket is no longer required, only in UNDB and Bank s external website advertisement in borrower s electronic portal of free access is now an alternative to national gazette, not in addition
19 (3) Reflection on Practical Experience Post review: Possibility of relying on independent reviews, depending on assessed risks and scope of project, is added
20 (3) Reflection on Practical Experience: PROCUREMENT GUIDELINES Revisions of ICB provisions (Section II) provided clear definition of single responsibility under turnkey contracts, and use of two-stage bidding procedures reintroduced 1995 provision on domestic preference (deleted in 2004) for single responsibility contracts specified conditions for use of national language clarified difference between performance security and retention money
21 (3) PROCUREMENT GUIDELINES (cont d) Revisions of ICB provisions Use of international arbitration and use of a neutral venue no more recommended but required simplified electronic bid opening procedure clarified procedure for rejection of all bids (to prevent the outright rejection) clarified process of evaluation of prices for three groups of goods and the price adjustment procedure
22 (3) PROCUREMENT GUIDELINES (cont d) Revisions to non-icb methods (Section III) used in a growing number of projects: NCB Shopping, Direct Contracting, and Force Account UN agencies Procurement in loans to fin.intermediary institutions Procurement under PPP, concessions Community participation in procurement
23 (3) PROCUREMENT GUIDELINES (cont d) NCB (para ): Aligns, clarifies, simplifies requirements for Advertising Comparison of all bids and award on the basis of the total cost at destination (including all taxes and duties) Borrowers having an independent protest mechanism in place Participation of foreign firms (on the same terms that apply to national bidders) Borrower s debarments can be recognized
24 (3) PROCUREMENT GUIDELINES (cont d) Shopping (3.5): threshold for Goods remains $100,000 threshold for Works is now $200,000 If Borrower obtains less than 3 quotations, No Objection is required to proceed
25 (3) PROCUREMENT GUIDELINES (cont d) Direct Contracting ( ) Revised text reflects already existing practice Clarified the requirements for acceptable circumstances Natural disasters and emergency situations declared by the Borrower shall be recognized by the Bank as such to use it as a justification for DC Procurement from UN agencies in case of natural disasters and emergencies
26 (3) PROCUREMENT GUIDELINES (cont d) Force Account (3.9): expanded and clarified text on applicability requirements Borrower must set up max aggregate amounts for FA, No Objection is required Borrower shall apply same rigorous quality checks as for contracts to 3d parties Specialized non-consulting services (aerial surveys and mapping) are added Urgent repairs to prevent further damages are added for conflict-affected areas
27 (3) PROCUREMENT GUIDELINES (cont d) UN Agencies provisions clarified and expanded (3.10) Clarifications on how to apply Specifics of application of Fraud and Corruption clause Mandatory use of standard agreement forms
28 (3) PROCUREMENT GUIDELINES (cont d) Procurement in loans to financial intermediary institutions (3.13) ICB is replaced with open or limited international or national competitive bidding On-lent funds to public sector beneficiaries, large and complex contracts use competitive methods of the GLs (new) Requirements to Project Implementation Manual to describe principles and procedures
29 (3) PROCUREMENT GUIDELINES (cont d) Community participation in procurement (3.19) Borrower makes Project Implementation Manual publicly available after it is approved by Bank Flexibility in requiring Procurement Plan at negotiations, simplified PP with an indicative list of eligible activities can be used
30 (3) PROCUREMENT GUIDELINES (cont d) New provisions: Framework Agreements (3.6) is introduced as an alternative method to NCB and Shopping Due diligence with regard to F&C and compliance with the Bank s sanctions policies and procedures specifies borrower s responsibility (para 8, Appendix 1)
31 (3) PROCUREMENT GUIDELINES (cont d) New thresholds in Section III: Small-value contracts are defined as below US$100,000 for Goods and US$200,000 for Works
32 (3) Reflection on Practical Experience: CONSULTANT GUIDELINES Revisions to clarify and streamline the process, and eliminate inconsistencies made in: Advertising Short-listing Technical evaluation & public opening Financial proposals evaluation and treatment of local indirect taxes Negotiations and award of contract Rejection of proposals and re-invitation New SRFP is being prepared
33 (3) CONSULTANT GUIDELINES (cont d) New maximum ceilings for contracts: Small-value contracts : should not exceed US$300,000 for firms and US$50,000 for individual consultants Very small-value contracts : should not exceed US$100,000 for firms
34 (4) Procurement and Consultant Guidelines: Cross-harmonization Title change: both guidelines now include the phrase under IBRD Loans and IDA Credits & Grants by World Bank Borrowers Applicability of the Guidelines is clarified to: exclude Bank-executed trust funds (BETFs) include non-consulting services (under Procurement Guidelines)
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