Capacity Building and Training on Procurement Training the Trainers Workshop

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Capacity Building and Training on Procurement
Training the Trainers Workshop

• Transparency International-National
  Accountability Bureau-World Bank
•  
• September 19-21, 2005
• Karachi
• By Uzma Sadaf

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Objectives

• Economy, efficiency, and quality of services.
• Giving equal opportunity to all eligible bidders
  to compete in providing goods, works, and
  services financed by the Bank.
• Encouraging domestic contracting and
  manufacturing industry, and consultancy
  services.
• Transparency in the selection process.

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Functions of World Bank

• To provide funds for development projects
• To provide policy advice and technical assistance
• To promote investment in developing countries

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while implementing a project . . .

• a) Responsibility of implementation rests with
  the Borrower.
• b) The Bank has to ensure that Loan/Credit are
  used for
• the purposes intended
• with
• Economy
• Efficiency
• Transparency

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. while implementing projects

• c) Accordingly, Bank has developed Guidelines
  for procurement of
• Goods,
• Works, and
• Consultancy Services
• d) Bank Guidelines explain the various procedures
  acceptable for procurements as given in the Legal
  Agreement.

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. while implementing projects

• e) Role of Procurement
• Ensuring satisfactory implementation
• Ensuring speedy transfer of resources by way of
  disbursement
• Achieving economy and efficiency and
• Ensuring success of the Project.
• Developing Capacity of Sound Public Procurement

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. while implementing projects

• g Banks Considerations for Procurement
• Need for economy and efficiency in the execution
  of the project
• giving all eligible bidders from developed and
  developing countries equal opportunity to compete
• encouraging the development of domestic
  contracting and manufacturing industries
• transparency in the procurement process.

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Processing for Procurement

• Legal Agreement
• Provides guidelines to Adopt the Procurement
  Procedure (cost, complexity, frequency)
• Provides Banks Prior and Post Review thresholds
• Guidelines for Selection of Goods Works and
  Consultants
• Provides Steps Required for Implementing various
  procurement procedures.
• World Bank Standard Documents
• Pre-qualification, bidding, contracts, RFP etc.

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Legal agreement

• This Agreement is between the Islamic Republic of
  Pakistan and IDA/IBRD is a treaty subject to
  International Law. As a treaty the Legal
  Agreement takes precedence over local law.
• The Agreement governs the legal relationship
  between the borrower and the Bank.
• Guidelines are applicable to the extent provided
  in the Legal Agreements.

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Procurement guidelines

• Works and Goods Procurement under IBRD Loans and
  IDA Credits May 2004
• Consultancy Selection and Employment of
  Consultants by World Bank Borrowers May 2004
•  

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World Bank Standard Documents

• Works and Goods
• Prequalification documents, Bidding documents,
  Bid evaluation report, Contract
• Consultancy
• Expression of interest (for short-listing),
  Request for proposals, Evaluation report,
  Contract 

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Procurement of Goods

• Methods Defined under the World Bank Guidelines

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Methods of procurement

• International Competitive Bidding (ICB)
• National Competitive Bidding (NCB)
• Shopping

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• Steps of a procurement process
• Notification and advertising
• Pre-qualification of bidders (for health sector
  goods)
• Issuance of bidding documents to (pre-qualified)
  firms
• Bid opening
• Bid Evaluation
• Selection of lowest evaluated responsive bidder
• Signing of Contract

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• Notification and Advertising
• Draft General Procurement Notice (all planned
  projects) is published in UNDB.
• Specific Procurement Notice for bidding is
  published for a specific project in
• Atleast one nationally circulated newspaper, or
• Official gazette, or
• Electronic portal with free access, and
• UNDB online and in dgMarket.
• Minimum response time is 6 weeks for ICB and 4
  weeks for NCB.

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• Standard Bidding Documents
• Fair (terms and conditions should be balanced)
• Non-restrictive (local registrations, response
  time)
• Clear and comprehensive (adequate information,
  requirements, evaluation criteria)

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• Standard Bidding Documents
• (ICB)
• Bidding Procedures
• Instructions to bidders (ITB)
• Bid data sheet (BDS)
• Evaluation and qualification criteria
• Bidding Forms
• Eligible countries
• Supply Requirements
• Schedule of Requirements
• Contract
• General Conditions of Contract
• Special Conditions of Contract
• Contract Forms

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• Standard Bidding Documents
• (NCB)
• Part I (fixed)
• Instructions to bidders (ITB)
• General Conditions of Contract
• Part II (Procurement Specific Provisions)
• Invitation for Bids (IFB)
• Bid data sheet (BDS)
• Special Conditions of Contract
• Schedule of Requirements
• Technical Specifications
• Bidding Forms
• Eligibility

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• Standard Bidding Documents
• Instructions to Bidders (fixed)
• General (Scope of Bid, source of funds,
  eligibility)
• Contents of Bidding Documents (list of documents,
  clarifications, amendments)
• Preparation of Bids (cost, currency, documents,
  period of bid validity, format of signing)
• Submission and Opening of Bids (sealing
  marking, deadline, late bid, withdrawal, opening)
  
• Evaluation Comparison of Bids (responsiveness,
  evaluation criteria and procedure, )
• Award of Contract (award criteria, notification,
  signing of contract, securities)

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• Standard Bidding Documents
• Bids Data Sheet (BDS) (Procurement Specific)
• General (name of purchaser, project etc.)
• Contents of Bidding Documents (list of documents)
  Preparation of Bids (cost, currency, documents,
  period of bid validity, format of signing)
• Submission and Opening of Bids (address of
  submission, last date )
• Evaluation Comparison of Bids (currency
  conversion, domestic preference, evaluation
  criteria and procedure )
• Award of Contract (variation in quantities)

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• Standard Bidding Documents
• Evaluation and Qualification Criteria
• Post-Qualification Criteria
• Manufacturing or supply experience, financial,
  technical and production capabilities,
  authorization from a manufacturer).
• Evaluation Criteria
• domestic preference (ICB)
• Quoted Cost (DDP, EXW, CIP, CIF, etc.) plus
  incidental costs, delivery schedule, deviation in
  payment schedule
• spare parts, OM cost, performance and
  productivity,
• technical specifications

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• Standard Bidding Documents
• Bidding Forms
• Bid Forms
• Price Schedule Form
• Bid Security Form
• Manufacturers Authorization Form

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• Standard Bidding Documents
• Schedule of Requirements
• List of goods and delivery schedule
• List of related services and completion schedule
• Technical specifications
• Drawings
• Inspection and tests

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• Standard Bidding Documents
• General Conditions of Contract (FIXED)
• Clauses
• Operational Clauses
• Definitions
• Rights and obligations
• Delivery and risk transfers
• Terms and currencies of payment
• Mode form of dispute settlement
• Governing language
• Applicable law

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• Standard Bidding Documents
• General Conditions of Contract (FIXED)
• Protective Clauses
• Performance Security
• Retention of Payments
• Insurance
• Inspection and tests
• Warranty
• Protection against third party infringement suits
• Force Majure

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• Standard Bidding Documents
• General Conditions of Contract (FIXED)
• Variations
• Quantity changes
• Adverse physical conditions
• Price adjustments
• Remedies
• Forefeiture of Performance Security
• Damages, penalties for delays
• Suspension and termination
• Non-payments/delays in approvals

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• Standard Bidding Documents
• Special Conditions of Contract (VARIABLE)
• Performance Security
• Inspection and tests
• Delivery and documentation
• Payment Schedule
• Insurance
• Liquidated Damages
• Warranties
• Applicable Law

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• Standard Bidding Documents
• Contract Forms
• Form of Contract
• Performance Security
• Advance Payment Security Form

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• BID OPENING
• Public Opening
• Announce the requisites (bid security,
  modification, withdrawal etc.)
• Announce the price
• Record the requisites
• Only bids announced in public opening shall be
  further considered for evaluation
• Late Bids are not Considered

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• Bid Evaluation
• Selection of the lowest evaluated responsive
  bidder
• Evaluation is to be based upon the contents of
  the bid itself.
• Evaluation is to be based only upon the
  criteria clearly stated in the Bidding
  Documents.
• Ideally all factors of evaluation criteria
  should be quantifiable in monetary terms.

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• Bid Evaluation
• Clarification
• Permissible and warranted
• Should be in writing
• - Should not Change Substance of Bid or Price
• Preliminary Examination
• (Substantial Responsiveness)
• Eligibility requirements
• Bid is signed
• Bid Security
• Required authorization
• Major Deviations from Bid Conditions
• Computational Errors

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Major Deviations - Scope, Quality and
Performance Affected - Employers rights or
suppliers obligations limited in substantial
way - Rectification would unfairly affect
ranking of other substantially responsive bids
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• Examples of Major Deviations
• Late Bid Submission
• Ineligible Bidder
• Unsigned Bid
• Unacceptable Bid Security
• Lesser bid validity period
• Price Adjustment Vs Fixed Price
• Non Conforming delivery schedule
• Unacceptable Subcontracting
• Deviations from critical provisions
• - Applicable Law
• - Taxes and Duties
• - Defect Liability
• - Functional Guarantees
• - Patent and Indemnity
• - Limitation of liability

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• Debatable Deviations
• Information given on different format
• Different Payment Terms
• Non Compliance with Local Regulations
• - Labour, Import, Duties, Taxes, etc.
• Completion/Maintenance Periods
• Omission of (Minor) Items
• Different Codes/Standards
• - Materials, Workmanship, Design, etc.

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• Bids with Deviations
• May be considered substantially responsive if
  deviations can be assigned monetary value to be
  added as penalty for evaluation purposes
• and if such deviations otherwise acceptable

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• Detailed Bid Evaluation
• (Only for Substantially Responsive Bids)
• Arithmetic Errors (If discrepancy between words
  and figures, words would prevail)
• Currency Conversion (date as given in the Bid
  Docs.)
• Evaluation shall exclude
• Sales other taxes payable if contract signed
  (local goods)
• Customs and import taxes payable if contract
  signed (goods imported or to be imported)

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• Detailed Bid Evaluation
• (Only for Substantially Responsive Bids)
• Correction of Price (As given in the Evaluation
  criteria)
• - incidental cost added
• - addition to cost for delayed delivery
• - adjustment for alternate payment schedule
• - addition of cost of spare parts
• - operating maintenance cost
• - adjustment for performance and efficiency
• - adjustment for any specific additional
  criteria as given in the bid documents.

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• Award of Contract
• Lowest evaluated responsive bidder
• Notification of award (notify successful bidder
  , publish results of evaluation, NOA is binding
  until contract is signed)
• Signing of Contract (within 28 days of
  notification of award)
• Performance Security (28 days of notification
  of award)
• Return Bid Security of all Bidders
• If lowest evaluated responsive bidder fails to
  sign contract/submit performance Security, invite
  the 2nd lowest evaluated responsive bidder.

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• ISSUES
• Validity of Bids and Bid Securities
• Extended Delivery Period
• Bid Forms not completely filled
• Authorization letter not signed
• Experience Certificate not included
• Delayed Decision of award
• Specifications Experience Requirements

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• ISSUES
• Validity of Bids and Bid Securities
• - Must be valid for the period given in the BDS
  
• - Extension may be requested bidder has a
  right to refuse.
• Extended Delivery Period
• - Acceptable if BDS gives the option to
  evaluate delayed delivery.
• - If BDS mentions a fixed delivery period, it
  is a major deviation.

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• ISSUES
• Bid Forms not completely filled
• - May be acceptable if ALL information is
  given in a signed letter
• Authorization letter not signed
• - A certificate may be acceptable
• Experience Certificate not included
• - Bidder maybe asked to submit later

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• ISSUES
• Delayed Decision of award
• - Award should be made within the bid validity
  period
• - Incase of delay, ALL bidders should be
  requested to extend their bid validity.
• - Unreasonable extension is not a good
  practice.
• - Delays may entail increase in cost.

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• ISSUES
• Specifications Experience Requirements
• Specifications should be clear and suiting the
  requirement.
• - A market survey prior to drafting
  specifications is always helpful
• - Qualification requirement of suppliers should
  be realistic

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• A Good Practice
• Assess capacity of prospective bidders and
  disseminate information
• Pre-bid Meetings
• Addendum
• Prompt evaluation and decision

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• Procurement of Goods
• SHOPPING

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• Shopping
• Three Quotations are required for comparison
• Advertisement not necessary. Written request may
  be made.
• Good practice is to approach more than three
  suppliers
• Conditions (delivery schedule, Specifications
  etc.) given
• If three responses are not received an extension
  may be given.

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