PROJECT SUPERVISION

A training programme for those involved in project supervision

Starting-up the Project: Project Planning and Budgeting

Procurement at Start-Up

AN OVERVIEW OF REVISED IFAD PROCUREMENT GUIDELINES

Starting-up the Project: Project Planning and Budgeting

Procurement at Start-Up

National Procurement Assessment

Overarching assessment carried out during the design
(Ref. III.C - IFAD Procurement Guidelines)

Need to understand Rationale for these changes

Starting-up the Project: Project Planning and Budgeting

Procurement at Start-Up

Background
 In the context of an evolving business model at IFAD

(Paris Declaration (2005), Direct Supervision (2007) Accra Agenda for Action (2008), Busan (2011), etc.)  Procurement is the Borrower/ Recipient responsibility  IFAD has a fiduciary responsibility

Starting-up the Project: Project Planning and Budgeting

Procurement at Start-Up

Fundamental Changes
Revised General Conditions New Financing Agreement & Role of LTB Revised Procurement Guidelines & Handbook

 New Supervision Modalities change of roles!  Concept of Entry into Force linked to approved first AWPB & PP (+ any additional specific withdrawal conditions)  Simplification Procurement Schedule deleted from FA and standard texts are shifted to GC (remedies, etc)  Update of Terminologies with elements of flexibility
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Starting-up the Project: Project Planning and Budgeting

Procurement at Start-Up

Fundamental Changes
Procurement Guidelines Greater emphasis on  Procurement Principles  Eligibility  Importance of Procurement Plan & Contracts Register  Use of National Procurement Systems  Default position for ICB

Starting-up the Project: Project Planning and Budgeting

Procurement at Start-Up

Use of National Procurement Systems



 

Definitions 4 pillars Assessment types and tools

Starting-up the Project: Project Planning and Budgeting

Procurement at Start-Up

What is meant by: Use of National Procurement Systems? (1)

By show of hands, how many have worked with or assessed national procurement systems? - How did you do it? - Were you satisfied with the results? Why?
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Starting-up the Project: Project Planning and Budgeting

Procurement at Start-Up

What is meant by: Use of National Procurement Systems? (2)

Donors satisfied with a countries own set of procurement rules and procedures that could be used to administer donorfinanced procurement and reduce transaction costs.
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Starting-up the Project: Project Planning and Budgeting

Procurement at Start-Up

Definitions
Paris & Accra: national arrangements and procedures for procurement
WB: a countrys legal and institutional framework,

consisting of its national, sub-national, or sectoral implementing institutions and applicable laws, regulations, rules and procedures AfDB: country systems as public management and accountability systems for managing the public resources of a country DFID: Putting aid on budget
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Starting-up the Project: Project Planning and Budgeting

Procurement at Start-Up

Some quoted gaps

Harmonization & Alignment: When it comes to using country systemsDFID considers country systems as default position, EC on the other hand budgetary support, MCC use country system where possible, US Government consider use of country system as an exception rather than a routine practice..
GMF paper 2008
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Starting-up the Project: Project Planning and Budgeting

Procurement at Start-Up

4 pillars

Procurement Operations and Markets

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Starting-up the Project: Project Planning and Budgeting

Procurement at Start-Up

Procurement Plan
No standard format

Most important elements: Simple but comprehensive!

 Description of procurement items by component and

type i.e. Civil Works, Goods, Services..  Quantity/ Unit Cost & Estimated Cost  Procurement Method  Prior Review Requirement  Schedule by bidding process Notice to Award of contract  Responsible Entity 5

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Starting-up the Project: Project Planning and Budgeting

Procurement at Start-Up Procurement Plan (an integral part of the AWPB)

Desired Features 1. Ideal Structure 2. Coherence with project objectives and annual work plan 3. Financial estimates in line with annual budget and overall funds allocation 4. Procurement methods in line with regulatory framework 5. Realistic timing and scheduling of procurement activities w 5

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Starting-up the Project: Procurement

Review of Procurement Plan (1)

Ideal Structure

(refer to checklist)

 The plan covers 18 months (12 mths for successive plans) and shows for each procurement action: the loan category, financing rate, procurement method, estimated cost, quantities, IFAD review requirement, and anticipated timeline for the entire process.  Procurement actions are presented by project component and properly identified and referenced.  Procurement actions are grouped according to categories (goods/works/services) for each component.  Within each category, procurement actions are grouped into coded lots or packages for increased competition, efficiency and better prices.

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Starting-up the Project: Procurement

Review of Procurement Plan (2)

Coherence with project objectives and annual work plan
 Procurement actions are relevant to project objectives.  Nature and quantity of goods/works/services are consistent with design (detailed cost tables).  Nature and quantity of goods/works/services are consistent with activities in the annual work plan.

Financial estimates in line with annual budget and overall funds allocation
 Estimated costs for each procurement action are reasonable and current.  Cost estimates are properly reflected in the annual budget.  Cost estimates are within overall project funds allocation (by expense category).
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Starting-up the Project: Procurement

Review of Procurement Plan (3)

Procurement methods in line with regulatory framework

 Use of National Regulations to the extent they are consistent with IFAD Procurement Guidelines
Realistic timing and scheduling of procurement activities

 Anticipated timeline for each procurement action (from preparation of bidding documents to signature of contract) is realistic  Anticipated delivery dates of goods/works/services are consistent with physical targets as per the AWPB

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D. SUPERVISING PROJECT IMPLEMENTATION

i. ii. iii. iv. v. vi. Project Planning and Budgeting Procurement Financing Administration Financial Management The Supervision Mission Mid-Term Review; Extension of MidCompletion Date

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Agenda A. Introducing Project Supervision B. The Financing Agreement & General Conditions C. Starting-up the Project D. Supervising Project Implementation i. Project Planning and Budgeting (AWPB)

ii. Procurement iii. Financing Administration iv. Financial Management v. The Supervision Mission vi. Mid-Term Review; Extension of Completion Date E. Closing the Financing (Loan/Grant)

Negotiation Draft Financing Agreement

Start-up

Implementation

Mid-Term Review & extension

Project Closure

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Supervising Project Implementation

Introduction
After start-up and setting up all project systems to ensure efficient implementation and development impact, project follows its AWPB and begins to 1. Purchase goods and services (procurement) 2. Use funds and other resources from the IFAD financing, government, co-financiers (if applicable) and project beneficiaries (funds administration) 3. . . .and for which financial management systems are set up. 4. All this is supervised by IFAD at HQ and in the field, beginning considerably before the mission leaves for the field.

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Supervising Project Implementation

General Principles (1)

Problems and success are a shared concern of all stakeholders (beneficiaries, Govt, cofinanciers, IFAD) >> Set up relationship with stakeholders to work as a team. This collaborative approach will ensure high SPN and implementation quality. Primary role of IFAD assist and facilitate implementation, while ensuring fiduciary responsibilities. Within results-based COSOP, maximize synergies, partnerships, knowledge management and innovation.

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Supervising Project Implementation

General Principles (2) Monitor progress of the projects against targets, development objectives and indicators. Monitor procurement and disbursement of funds. Review effectiveness of financial management system. Review compliance with FA covenants/overall GC.

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Supervising Project Implementation

General Principles (3) Assess risks and problems to successful

implementation and sustainability, and offer practical solutions.

Review the continued relevance of the project to

the recipient country, the beneficiary, and IFAD development priorities; modify if appropriate.

Assess implementation quality, safeguard

adherence and IMPACT! Do not loose sight of IMPACT on rural poor.

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D. SUPERVISING PROJECT IMPLEMENTATION

i. Project Planning and Budgeting
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Supervising Project Implementation: Project Planning and Budgeting

Learning Objectives  How are the subsequent years AWPBs different from the first year?  What elements complete a AWPB?  What is the AWPBs typical format?

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Supervising Project Implementation: Project Planning and Budgeting

Annual Work Plan and Budget Additional Elements

From Project Year 2, the consolidated AWPB will contain the following additional key elements:
Introduction (as explained for start-up) but including the following: Physical progress made in the previous year, including quantitative data. Financial progress in the previous year, including cost overruns and savings, and analysis of flow of funds from financiers. Procurement performance. Constraints and problems from previous year, and recommendations to resolve them. Lessons learned and rationale for the activities proposed.

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Supervising Project Implementation: Project Planning and Budgeting

Annual Work Plan and Budget Typical Inputs from Year 2

Consolidation of e.g., validated Village/ Community Development Plans into project AWPB Plus: Inputs for PMU and implementing agencies (investment + recurrent) Contract costs of service providers/ TAs Project specific inputs

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Supervising Project Implementation: Project Planning and Budgeting

Project Planning and Budgeting

Conclusion - Question to Ask Ourselves: (for discussion) Apart from good supervision and review, what are the contextual factors that contribute to a good AWPB? Not necessarily linked to the poverty levels of the country or the general capacity of national institutions. What could it be then? (i) Degree of influence donors may have on specific institutional processes and procedures of implementing agencies? (i) Project Manager or Project institutional arrangements? (ii) Technical Assistance? (iii) Country Programme Manager, ICO, CPMT? (iv) Other factors?

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Supervising Project Implementation: Project Planning and Budgeting

Word of conclusion (1)

The importance of a good AWPB cannot be overemphasized it is not just about procedures or about timeliness! 1. You have the criteria and standards to be

applied in your review and supervision of the quality of the AWPB. 2. You have also contributed with your own experience in the AWPB review; collectively now you have identified some of the most common factors that affect quality.

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Supervising Project Implementation: Project Planning and Budgeting

Word of conclusion (2) What are the implications for the supervision and review process?
Your style, intensity and focus of supervision will vary in time and context depending on how these factors play in the particular project you are supervising and how it evolves over time (development effectiveness.) Examples change in Project Manager, Institutional changes; etc Monitoring the evolution of those factors in your checklist may help you anticipate any problems or constraints and take timely preventive and corrective action - It is an Art!

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D. SUPERVISING PROJECT IMPLEMENTATION

ii. Procurement
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Agenda A. Introducing Project Supervision B. The Financing Agreement & General Conditions C. Starting-up the Project D. Supervising Project Implementation i. Project Planning and Budgeting (AWPB) ii. Procurement iii. Financing Administration iv. Financial Management v. The Supervision Mission vi. Mid-Term Review; Extensions of PCD E. Closing the Financing (Loan/ Grant) F. Special Issues
Negotiation Draft Financing Agreement Start-up
Implementation

Mid-Term Review & extension

Project Closure

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Supervising Project Implementation: Procurement

Learning Objectives

  

What are IFADs role and responsibility in procurement for projects? What are the tasks involved in procurement supervision? How is procurement supervision conducted?

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Supervising Project Implementation: Procurement

Introduction
Purchasing goods, services and works (procurement) is a critical element of project implementation. . . Inefficient or ineffective procurement may have serious consequences:
   expected project results and impacts not achieved. delays in project implementation. higher cost of implementation.

Procurement is a sensitive activity: can be conducive to corruption and fraud.

  complexity of certain procurement actions. combined use of national & IFAD regulations / guidelines.
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Supervising Project Implementation: Procurement

Overriding Principle!

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Supervising Project Implementation: Procurement

Procurement Cycle

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Procurement Process
Strategy/ Needs assessment No-Objection (if under prior review)

Low Value: RFQ Procurement Planning + Selection of method Bid Evaluation No Objection for Contract Award Negotiations and Contract Award Contract Management

High Value: RFP/ITB

Advertisement/ Preparation of formal solicitation documents

Development of Specs/ TOR/ SOW

Formation of Committee/ Bid Opening

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Supervising Project Implementation: Procurement

Procurement Planning

Importance of Strategic Planning

Ensures: Financier policies are followed Procurement contributes to meeting project objectives Align with best practice in procurement Achieve best value for money Manage risks
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Supervising Project Implementation: Procurement

Identification of Need
Needs or Wants? Categories:  Projected Requirements  Interim Requirements  One-off/ emergency requirements

Module F1 IFAD Procurement Handbook

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Supervising Project Implementation: Procurement

Specifications

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Supervising Project Implementation: Procurement

Drivers for Specs

  

Functional Performance Technical

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Supervising Project Implementation: Procurement

Tendering Process
Formation of Bid Evaluation Committee; N-O by IFAD

Key

ITB Invitation to Bid

Prepare Specifications and tender documents (Advertisement/ ITBs/ RFPs/ RFQs as applicable)

RFP Request for Proposal

Bid Evaluation and draft contract IFAD Prior Review and No-Objection (if required)

RFQ Request for Quotation

Contract Award to best evaluated bid

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Supervising Project Implementation: Procurement

Procurement Methods
Different methods (ranging from International Competitive Bidding to Direct Contracting) are used for the different categories of procurement depending on nature, amount and other criteria - guiding principle being economy and efficiency.

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Supervising Project Implementation: Procurement

Common Procurement Methods

International Competitive Bidding (ICB): for high value requirements. (1) National Competitive Bidding (NCB): for public procurement in Borrowers country (2)

 Advertise in widely circulated newspapers, local representatives, Embassies, UN Development Forum  Pre-qualification  Public bid opening  Bid evaluation based on point scoring system (technical + financial)

 Advertise in local newspapers (note: foreign suppliers may bid)  Same  Same  Same

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Supervising Project Implementation: Procurement

Common Procurement Methods

International Shopping (3): Local Shopping (4):

 short-list at least three reputable suppliers in at least two member countries of IFAD  issue ITB to the shortlisted suppliers  receive bids in original form (not faxed)  bid evaluation based on lowest cost for compliant offers  sign contract

 prepare specifications and request for quotations  short-list at least three reputable suppliers  issue request for quotations to the shortlisted suppliers  Same  Same

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Supervising Project Implementation: Procurement

Common Procurement Methods

Direct Contracting (5):
 Extension of/ addition to an existing contract  Standardisation of goods with existing project assets Note: Competitive process is not required.

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Supervising Project Implementation: Procurement

Goods & Works vs. Consulting Services

Difference Between Procuring Goods and Works and Selecting Consulting Services . . .
GOODS, WORKS AND TECHNICAL SERVICES
Product based Open competition Public bid opening Price is a major factor Detailed specification

CONSULTING SERVICES

Knowledge based Selective competition Non-public bid opening of technical offers Public opening of financial proposals Quality is a major factor Terms of Reference (general work program) Two-stage procedure Negotiations usual

Single-stage procedure Negotiations rarely

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Supervising Project Implementation: Procurement

Regulatory Framework
Must adhere to regulatory framework . . . Procurement rules and procedures applicable to a particular project come from different sources:  IFAD General Conditions  National procurement rules & regulations  IFAD Procurement Guidelines  IFAD Procurement Handbook  Project design report Applicable rules, methods, prior review thresholds and procedures are specified in the Letter to the Borrower.

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Supervising Project Implementation: Procurement

Role of Borrower/PMU in Procurement

PMU has overall responsibility for Procurement Procurement planning (in line with project objectives and AWPB). Preparation and issuance of bidding documents and invitation to bid. Opening and evaluation of offers. Negotiation, award and signature of contract. Monitoring of contract execution (technical and financial/administrative). Delivery of goods/works/services. Payment.

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Supervising Project Implementation: Procurement

Importance of Procurement Supervision by IFAD IFADs Fiduciary responsibility: Proper use of funds: IFAD must ensure its financing are used only for intended purpose: specifically CPM and ICO. Economy and efficiency requirements in project implementation in general and procurement in particular: IFAD must ensure contract awards result from a competitive process. IFAD must ensure equity, integrity, transparency and good governance in procurement process. Concept of no objection.
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Supervising Project Implementation: Procurement

Role of IFAD in Procurement Supervision

CPM must ensure:
coherence of procurement actions with project objectives, AWPB and procurement plan, and timing within project implementation period. funds availability: cost of procurement must not exceed funds allocated in financing agreement and annual budget. transparency and equity: procurement must be conducted in compliance with applicable rules and procedures. best value for money: procurement must be the result of a competitive process.

- IFAD staff must maintain neutrality and impartiality. - Flexibility is a must but know rules and regulations.
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Supervising Project Implementation: Procurement

Key Tools for Successful Procurement Supervision (1)

A complete financial and administrative procedures manual (Implementation/ Operations Manual) A well-prepared start-up workshop with a technical session The technical session should include discussions about the importance of quality submissions, frequent causes of delays, timing issues A procurement table summarizing procurement methods, applicable rules and prior review requirements as provided in the loan agreement
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Supervising Project Implementation: Procurement

Key Tools for Successful Procurement Supervision (2)

Assessment of procurement capacity at the national/project level. Training of relevant PMU and national partners in all aspects of procurement Procurement expertise at national/project level (complemented by on-going capacity building). Procurement expertise at IFAD level (procurement specialist to assist CPM in supervision).

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Supervising Project Implementation: Procurement

Different Levels of Procurement SPN

Under the responsibility of the CPM (assisted by a
procurement expert)
 Review  Review  Review  Review of of of of

Prior review procedures:

procurement plans. pre-qualification of bidders. bidding documents procurement progress reports.

Ex-post review procedures: - As part of the review of WAs - During field supervision
 As part of the review of statements of expenditure.  Review of procurement progress and processes (technical and financial/administrative).  Identification of issues and constraints.  Coaching of national and/or PMU staff.  Issuance of recommendations for improvement.

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Supervising Project Implementation: Procurement

Prior Review Procedures

(refer to workflow 1. & checklists)

(1)

I. Review of pre-qualification of bidders (where applicable)

(for large/complex works or expected significant time/cost savings => need advanced procurement skills). Prior to issuance of invitations to pre-qualify, IFAD reviews:  draft advertisement and invitation to pre-qualify.  draft pre-qualification documents, including pre-qualification questionnaire and evaluation criteria and methodology. After borrowers evaluation of bidders submissions, IFAD reviews:  draft evaluation report.  list of pre-qualified bidders and statement of their qualifications.  reasons for excluding any applicant from pre-qualification.
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Supervising Project Implementation: Procurement

Prior Review Procedures

(2)

II. Review of procurement of goods and works.

Prior to issuance of invitations to bid, IFAD reviews:

 conformity of procurement with applicable rules/procedures, approved AWPB/procurement plan and funds availability.  draft bidding documents, including invitation to bid, instructions to bidders, technical specifications, evaluation criteria, contractual conditions.  proposed composition of the bid evaluation committee (for comments).
After borrowers evaluation of bidders submissions, IFAD reviews:

 minutes of public bid opening.  bid evaluation report, including evaluation and comparison of bids and award recommendation.  evidence of individual evaluations by each committee member  draft contract.

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Supervising Project Implementation: Procurement

Prior Review Procedures

(3)

III. Review of procurement of consulting services.

Prior to issuance of request for proposal (RFP), IFAD reviews:

 conformity of procurement with applicable rules/procedures, approved AWPB/procurement plan and funds availability.  draft RFP, including instructions to consultants, terms of reference, selection method and evaluation criteria, shortlist of consultants, cost estimate, contractual conditions.
After borrowers evaluation of technical proposals, IFAD reviews:

 technical evaluation report, including description of the process, summary of scores and award recommendation.  technical scores/ranking given to each consultant on each evaluation criterion.  scores given by each evaluation committee member.  copy of proposals, if requested by IFAD.
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Supervising Project Implementation: Procurement

Prior Review Procedures

(4)

III. Review of procurement of consulting services using the following methods: (Handbook Module H3)
     Quality and cost-based selection (QCBS) Quality based selection (QBS) Selection under a fixed budget (FBS) Least-cost selection (LCS) Single-Source selection (SSS)

After borrowers evaluation of financial proposals, IFAD reviews: (Handbook Module L)  minutes of public bid opening.  account of adjustments made to prices of the proposals and determination of the evaluated price.  final evaluation report and award recommendation.
(The above review step is not applicable for quality-based selection, selection based on consultants qualifications, single source selection or individual consultant selection).

In all cases, IFAD reviews and provides No-Objection to the negotiated draft contract.
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Supervising Project Implementation: Procurement

Example of Weights for Consultant Evaluation Criterion EVALUATION CRITERION:

Consultants / firms specific experience Methodology Key personnel (general qualifications adequacy for the assignment) Transfer of knowledge Participation by nationals TOTAL

POINTS
5 - 10 20 - 50 30 - 60 0 - 10 0 - 10 100

Could be divided into sub-criteria, but should be kept to the essential For training - high points on key Personnel Points may be adjusted for specific circumstances

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Supervising Project Implementation: Procurement

Ex-Post Review Procedures

(refer to checklist)

(1)

At HQ or Field
Post-award review of procurement actions  PMU makes available to IFAD all bidding documents, evaluation reports, award recommendations, signed contracts, updated contract record, payment files and individual contract monitoring forms.  IFAD reviews conformity of procurement with applicable rules/procedures, project objectives, approved AWPB/procurement plan and funds availability.

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Supervising Project Implementation: Procurement

Ex-Post Review Procedures (2)

The supervision mission team also:  assesses the physical and financial progress of procurement actions and the quality of final products (through site visits for works, review of consultants reports, review of the contract monitoring forms, etc.).  identifies procurement issues and constraints.  briefs/coaches borrower and/or PMU staff on procurement issues.  issues recommendations for improvement (e.g. training of staff, fielding of implementation support missions, streamlining of workflows, ).
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Supervising Project Implementation: Procurement

Frequent causes for delay in procurement (1)

 Lack of procurement plan or inadequate/incomplete procurement plan  Poorly designed and/or unrealistic AWPB  Imprecise and ambiguous terms or documents for the bid evaluation method and selection criteria  Absence of confidentiality at various stages of the bid evaluation process and/or selection of winning bid  Failure to justify rejection of bids or non-selection of a competitive bid  Political interference in the procurement process  Corruption, fraud, conflicts of interest and miss-procurement

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Supervising Project Implementation: Procurement

Frequent causes for delay in procurement (2)

 Poor qualification of evaluation committee members  Lack of procurement capacity at borrower and/or project level  Poor understanding of IFAD procedures at borrower and/or project level  Confusion between national procedures and IFAD guidelines/loan agreement procedures  Cumbersome procedures and bureaucracy for approval of procurement documents at borrower level  Long delays in issuance of no-objections by IFAD  Long response time by IFAD to queries from PMU
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Supervising Project Implementation: Procurement

Monitoring of Procurement at HQ

Several source documents for monitoring procurement .  AWPB and updated procurement plan  Results of prior reviews and ex-post reviews at HQ  Supervision mission reports  Progress reports Based on monitoring results, follow-up on issues and problems identified.

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Supervising Project Implementation: Procurement

Monitoring of Procurement at HQ

Contracts Register Contract Monitoring Form

Requirements
A conformed copy of each and all awarded contract to be financed from the loan proceeds in part or in full must be submitted to IFAD on their signature or before disbursement. Form C-10 of LDH (Register of contracts)  Form C-11 of LDH Contract Monitoring Form CMF Guide.xlsx


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Supervising Project Implementation: Procurement

Procurement in Project Completion Process

To ensure that all goods are delivered/works completed/services rendered by the project completion date:
 Closely review and monitor the final procurement plan and progress reports during the last year of the project  Take measures to facilitate completion of physical execution of contracts  Cancel activities that cannot be executed within the completion date

Ensure that only contracts executed by project completion date are paid Ensure that procurement files are complete and obtain missing documents from project Report on lessons learned and make recommendations for future projects

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Supervising Project Implementation: Procurement

Message
Good procurement means continuous reforms in all procurement systems, well established and new ones.

Professor Khi Thai , Ph.D.,

Director, School of Public Administration & Interim Director, School of Criminology & Criminal Justice Florida Atlantic University 68

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