Operational Procurement and

Business Opportunities
in
Bank-Funded Operations
Gurcharan Singh
The World Bank Group, Washington DC
Kenya, April 29, 2014
HISTORY OF WORLD BANK GROUP

LENDING TRENDS AND PROJECT CYCLE

BANK PROCUREMENT OF GOOD,WORKS
AND CONSULTING SERVICES

COMMON PROCUREMENT ISSUES
INCLUDING FRAMEWORK AGGREMENT

HOW TO PREPARE A WINNING BID OR RFP.
The World Bank Group
IBRD

IFC

IDA

MIGA
1945
1956
1960
1988
Six Regional Vice Presidents

Africa

East Asia & Pacific

South Asia

Latin America & Caribbean

Middle East & North Africa

Europe & Central Asia
Office of the President
Executive Directors
Board of Governors
Lending, Trends
&
Project Development Cycle
6
Investment Lending
For goods, works and services
Predefined specific project
Long-term focus (5 to 10 years)
broad range of sectors
Procurement and implementation schedule defined
75 - 85 percent of all Bank lending

Development Policy Lending
Support countries policy and institutional
reforms in a sector or the economy as a whole
Short-term focus (1 to 3 years)
Provide quick-disbursing financing
15 - 25 percent of total Bank lending
7
IBRD/IDA FY2013 Lending by Lending
Instrument
Total Operations Lending
$46.4 billions

Investment lending
$28 billion
60% of the total

Development Policy
$18.4 billion
40% of the total
8
301 operations
IBRD 125 (42%)
IDA 176 (58%)

$46.4 billion
IBRD $32.8 billion (71%)
IDA $13.6 billion (29%)

9
10
FY13 Top Ten IBRD / IDA Borrowers
Country
IDA / IBRD
Commitment
Amount ($M)
Total Share of
IDA / IBRD
Commitment
Indonesia 4,225.0 9.1%
Brazil 3,604.2 7.8%
Mexico 3,422.8 7.4%
Poland 2,550.2 5.5%
China 2,360.0 5.1%
India 2,242.4 4.8%
Kazakhstan 2,125.0 4.6%
Turkey 2,075.1 4.5%
Argentina 1,840.0 4.0%
Pakistan 1,609.7 3.5%
Total 26,054.40 56.3%
Top sectors by loan amount in FY2013
Economic Policy 8,939.2
Social Protection 6,202.3
Transport 5,711.3
Energy and Mining 4,646.7
Environment 3,829.0
Agriculture and Rural Development 3,570.6
Financial and Private Sector Development 2,924.0
Public Sector Governance 2,357.3
Education 2,353.1
Urban Development 2,053.1
11
12
Trends FY13 Lending by Major Sector
Economic Policy
19%
Social Protection
13%
Transport
12%
Energy and Mining
10%
Environment
8%
Agriculture and Rural
Development
8%
Financial and
Private Sector
Development
6%
Public Sector
Governance
5%
Education
5%
Urban Development
4%
Health, Nutrition
and Population
3%
Water
3%
Social Development
1%
Global
Information/Communications
Technology
1%
Poverty Reduction
1%
Financial
Management
0%
13
IBRD/IDA FY13 Lending Project
by Operations Region
# Proj
%
Amount
%
AFR 99
33%
7,802.9
17%
EAP 40
13%
8,152.7
18%
SAR 36
12%
5,433.6
12%
ECA 48
16%
9,284.8
20%
MNA 14
5%
1,723.0
4%
LCR 64
21%
14,031.0
30%
301 46,428.02
* Contracts prior-reviewed by the World Bank. The rank is
by contract amount.
FY / Rank 2007 2008 2009 2010 2011
1 China India China China Indonesia
2 India China India Brazil Brazil
3 Argentina Brazil Romania India Mexico
4 Egypt Russia Egypt Argentina Poland
5 Congo Ethiopia Vietnam Vietnam China
6 Russia Congo Argentina Russia India
7 Pakistan Vietnam Russia Romania Kazakhstan
8 Bangladesh Kenya Uganda Indonesia Turkey
9 Mexico Iran Afghanistan Turkey Argentina
10 Vietnam Pakistan Ethiopia Bangladesh Pakistan
Percentage
of Portfolio
60% 54% 54% 64% 56%
14
* Countries where suppliers/contractors registered.
FY / Rank 2007 2008 2009 2010 2011
1 China China China China China
2 India India India India India
3 Argentina Brazil Germany Spain Argentina
4 Egypt Russia United Kingdom Brazil Vietnam
5 UN Agency France Italy Argentina Italy
6 France Germany Argentina Russia Brazil
7 Russia Denmark Russia Vietnam Turkey
8 Germany UN Agency Vietnam Italy Iran R
9 Brazil Pakistan Turkey France Nigeria
10 United Kingdom United States Indonesia Indonesia Indonesia
Percentage of
Portfolio
60% 54% 58% 65% 59%
15
Top major Sectors in FY11 by Contract Amount
Transportation: 42%
Energy and mining: 18%
Water and sanitation: 15%
0.00
1.00
2.00
3.00
4.00
5.00
6.00
2005 2006 2007 2008 2009
B
i
l
l
i
o
n
s

Trends by Major Sector
Transportation
Energy & mining
Water/sanit/fld prot
Health & social serv
Public admin, Law
Agriculture
Transportation
42%
Energy & mining
18%
Water/sanit/fld
prot
15%
Health & social
serv
10%
Public admin,
Law
5%
Agriculture
4%
Education
3%
Finance
2%
Industry and
trade
1%
Info &
communication
1%
Not assigned
0%
FY11
16
17
Country Assistance Strategy
Project Identification
Project Preparation
Project Appraisal
Loan Negotiations
Loan Approval and Signing
Project Supervision
Implementation
Evaluation
Investment Project Cycle
World Bank activity
Joint activity
Borrower activity
Identify project/program
Appraise project/program and assess risk
Share knowledge and information
Supervise project/program
Monitor Compliance with Agreements
19
Identify project/program
Design, prepare and plan the project/program
Apply for the loan/credit
Implement project/program
Monitor Compliance with Agreements
20
Assess country system, projects procurement capacity
and potential risks
Assist borrower in procurement planning
Provide procurement training/ knowledge sharing
Monitor compliance with loan/credit agreement and
procurement plan
Prior review, Post review, Independent review
Translations
21

Design procurement plans
Prepare and issue bidding documents
Invite bids
Receive and evaluate bids/proposals
Award contracts
Implement/ contract payment
Monitor compliance with loan/credit agreement
and procurement plan
- Audit
22
23

LOAN/CREDIT AGREEMENT
WORLD BANK


IMPLEMENTING AGENCY
(Borrowing Country Government)


SUPPLIER/
CONTRACTOR/
CONSULTANT
BIDDING DOCUMENTS/ CONTRACTS

Contractual
Relationships
Corrupt Practice
Offering, giving, receiving or soliciting, directly or
indirectly, of anything of value to influence improperly
the actions of another party
Fraudulent Practice
Any act or omission, including a misrepresentation,
that knowingly or recklessly misleads, or attempts to
mislead, a party to obtain a financial or other benefit
or to avoid an obligation

24
Collusive Practice
An arrangement between two or more parties designed
to achieve an improper purpose, including to
influence improperly the actions of another party

Coercive Practice
Impairing or harming, or threatening to impair or
harm, directly or indirectly, any party or the property
of the party to influence improperly the actions of a
party

25
Obstructive practice
(aa) deliberately destroying, falsifying, altering or
concealing of evidence material to the investigation or making
false statements to investigators in order to materially impede
a Bank investigation into allegations of a corrupt, fraudulent,
coercive or collusive practice; and/or threatening, harassing or
intimidating any party to prevent it from disclosing its
knowledge of matters relevant to the investigation or from
pursuing the investigation; or
(bb) acts intended to materially impede the exercise of
the Banks inspection and audit rights provided for under par.
1.14 (e) below.

26
Parties expected to observe highest ethical standards
Bank reserves the right to audit firms accounts and
records of the contract

Sanctions by Bank:
Will reject proposal for award
Cancel the portion of the loan
Declare firm ineligible for a limited period of time or indefinitely
List of debarred firms will be posted on the World Bank website:
http://www.worldbank.org/debarr

27
Department of Institutional Integrity (INT)
Toll-free: 1-800-831-0463 (24 hours/day)
Collect call: 704-556-7046
By mail: PMB 3767
13950 Ballantyne Corporate Place
Charlotte, NC 28277, USA
Phone: 202-458-7677 Fax: 202-522-7140
E-mail: investigations_hotline@worldbank.org
Website: www.worldbank.org/integrity
Click on "Online Complaint Form"
Anonymous calls are accepted.
Please be as specific as possible.

28




29
Scope of Business Opportunities
for Consultants in World Bank
Projects
Study, Design, Supervision of
Projects
Technical assistance and
Institutional strengthening
30
Economy and Efficiency
Fair Selection Process
Role of National Consultants
Transparency
31
Public notification for large assignments
Restricted competition
Standard Request for Proposals
Different selection methods are specified in the
loan agreement
32
Quality- and Cost-Based Selection (QCBS)
Quality-Based Selection (QBS)
Fixed Budget (FBS)
Least Cost Selection (LCS)
Consultants Qualifications (CQS)
Single Source Selection (SSS)
33
Short lists, invites and selects
Negotiates and contracts
Supervises, and makes payments
34
Six firms with a wide geographic spread
No more than two from any one country
Shortlist may comprise all national firms for smaller
contracts.
All short listed firms must be qualified
Participation of national consultants encouraged
35
Target assignments based on regional
experience and technical qualifications
Obtain background information on project:
Country Assistance Strategy (CAS)
Sector Strategies
Project Information Document (PID)
Project Appraisal Document (PAD)
Understand Roles of Borrower and Bank
Target marketing at appropriate time
36
Contact, visit client before short listing.
Identify national partner firm, consultants
Monitor advertisements systematically
Express interest promptly, selectively
Expression of Interest (EOI):
Brief information on firms qualifications
Relevant technical and regional experience
37
Pre-proposal visit
Address the Terms of Reference (TOR) clearly,
comprehensively
Emphasize innovative technical solutions
Qualified Consultants in Key Staff positions
Firm Provides Strong Technical Leadership


38
Cite directly relevant technical and regional
experience
Involve national partner consulting firm or
individual consultants
Do not vary from standard RFP forms
Make sure that your proposal is carefully
prepared and easy to evaluate: use charts,
diagrams, color
Submit a professional and polished proposal
39
Procurement Of
Goods, Works and Services




40
International advertising
UNDB online and Development Gateways dgMarket
Standard Bidding Documents
Website: www.worldbank.org
Public bid opening
Evaluation and comparison of bids
41
Contract awarded to lowest evaluated responsive
bid

Publication of the award of contract

Domestic Preferences under ICB
Appendix 2
42
Exchange rate fixed
Price adjustment
No financing requirement
Advance payments
Letters of Credit
Direct payment
43
44
LIB - Limited International Bidding
Direct invitation to suppliers
NCB - National Competitive Bidding
Countrys rules with some modifications if
necessary
Shopping
Price quotations from at least three suppliers
Direct Contracting
Reconstruction, spare parts, etc.
45
Force Account
use of the borrowers own personnel and
equipment
Performance-Based Procurement
Payments made for measured outputs
Community Participation in Procurement
For project sustainability or specific social
objectives
Responsive Bids
Procurement Guidelines and SBD require that bids
containing material deviation or reservations to the
terms and conditions and specifications of the bidding
document be not considered for evaluation and award

46

Need to study carefully:
Raise issue of ambiguity, contradiction , omission etc, prior to submission of
bids/proposal. In case o f consultancy assess if requirements of TOR and commercial
and contractual condition be met

Restrictive, or tailored technical specifications:
limit the competition resulting in significant differences in the qualities of the offered
goods and hence significant differences in bid

Unrealistic requirements regarding the performance of
the equipment and the respective warranties:
Bidders should carefully review the BD's and if there are such requirements to ask for
clarification within the period indicated in the ITB.


Joint Ventures - ICB Goods
A consortium is not the same as a Joint Venture. JV's should be jointly and severally
liable for the contract implementation. In this regard and given the nature of the
procurement of goods, the establishment of JV's is not too appropriate for supply of
goods. The suppliers should carefully review the qualification requirements before the
bids preparation and bidding and if they have some questions to ask the purchaser for
clarifications.

Qualification requirements and post-qualification

If the qualification requirements are not clear, this may result in misunderstandings and
problems in the process of post qualification and may affect the final contract award.
Therefore, any ambiguities should be clarified through clarifications within the period
indicated in the ITB.

48
49
Alternative solutions and their evaluation - if alternative
solutions are allowed, the bidders should carefully examine the methodology
for their evaluation before making a decision to propose (or not) an alternative.

Bank guarantees: bid validity: performance securities, terms,
amounts, omissions of important provisions The format of the bid
security shall be in accordance with the standard bidding documents
50
1. Eligibility and COI issues; State-owned enterprises participating in
tenders, confirming they operate under commercial law, yet are
dependent of the Borrower or agencies of Borrowers participate in tenders
which is not in compliance with eligibility provisions. Bidders are related
to designer, bidder participates in a design.

Bidders should consider the eligibility requirements in the BDs and legal
and financial status, and also previous activities (including those of the
affiliates and other member of a JV).

2. Bank guarantees /discount issues: JV ( e.g. bidder X is not on the
name of JV or only on the name of one member); less validity period than
requested in the Bidding Documents. Treatment of discount given by one
partner only.


51
Eligibility and COI issues; Unfair Competitive advantage,
civil servants working for the implementing agency, conflict with
previous assignments, state-owned enterprises .

Poorly prepared Terms of Reference (TOR) (unclear scope of
services; terms for implementation, downstream works etc.) and
significant differences in the prices.


52

Negotiations in consulting services: Scope, deliverables,
methodology, time, etc. tax obligations, responsibilities of the parties.
No negotiation on rates, in general.

Failure of Negotiation: Instances where firm starts to question TOR
or raise new deviations to contract conditions

Delays in Payments: Delays in the acceptance of the deliverables.
Raise the issue with the Client and then with the Bank
53
Contract implementation: ( goods of lower quality
supplied than as required by the Bidding Documents,
enforcement of liquidated damages, low quality of
supervision)

Contract Implementation: Bidders quote low prices and
undertake contract unrelated to their capacity. Several
examples non-performance , project delays and disputes

54
Joint Ventures between foreign firms and local firms:
Local firms establish JVs with foreign firms just for the
purposes of short-listing or passing the qualification or
post-qualification requirements. After signing the
contracts, foreign firms delegate most of the tasks (civil
works or consultancy) to local contractors or consultants
although they are members in charge. This results in delays
and poor quality of the deliverables.
55
Contract Implementation:
Bank is not a party to the contract. Contract
implementation is the responsibility of the Employer. Bank
can use its best efforts to request the Employer to enforce
the provisions of the contract, but can not act as mediator
in case of dispute. Bidders and consultant to follow dispute
resolution mechanism as provided in the contract
56
Confidentiality: The process of bid evaluation is confidential until
publication of award

Complaints Review: Bidder to contact the purchaser/client. If bidders wishes
to ascertain the ground on which its bid was not selected for award, they may
seek explanation from the purchaser
Debriefing: If bidder is not satisfied with the explanation given by the
purchaser they seek meeting with the Bank. The purpose of such meeting is to
only to discuss the bidders bid and neither to reverse the Banks position that
has been conveyed to the Borrower nor to discuss the bids of competitors




57
Definition
Framework is a general term for agreements with suppliers/ consultant/
pool of firm/academic institutions/civil society/NGOs which set out
terms and conditions under which specific procurement can be made
throughout the term of assignment

Objectives
To establish a streamlined approach for accessing high-quality global
expertise in the area of ICT-enabled transformation and innovation for
the World Banks analytical and operational work
58
Definition and Objectives
59
Selection Process
60
Focus Areas
World Bank website www.worldbank.org
Country Assistance Strategy
Sector Support Strategy
Monthly Operational Summary
Project Information Document
Project Appraisal Document
61
www.worldbank.org/procure
Procurement & Consultants Guidelines
Standard Bidding and Proposal Documents
Guide to Business Opportunities and more!
62
Bidders role
Address all queries or complaints to the client - the
borrower
Send copies of communications to the Bank or write
to the Bank directly, when borrowers do not respond
promptly, or the communication is a complaint
against the borrower.
Address to World Bank Task Team Leader, copy to
Country Director and Regional Procurement Manager
Bidders may request a debriefing
63
Read everything you can
Make contacts in the country
Identify local partners
Respect local customs
Solve the clients problem. Dont impose your view.

64
Respond precisely to technical specifications.
Unclear? Ask up front, do NOT guess or assume.
Submit bid/proposals in time. Bids that are even
one minute late will be rejected.
Assess the competition. Compete where YOU
are competitive.

65
66