africa region procurement cluster aftpc - world bankdocuments.worldbank.org/curated/en/... ·...

Africa Region Procurement Cluster

AFTPC

Retrospective of FY02 and

Prospective for FY03

Operational Quality and Knowledge Services

Africa Region The World Bank November 2002

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(AFTPC) Retrospective of FY02

and Prospective for FY03

Operational Quality and Knowledge Services

Africa Region The World Bank

Abbreviations and Acronyms

AfDB AFR AFTFM AFTPC AFTQK CAS CD CO COMESA CPAR ESW FY IAD JCM IDF IPR NGO 'ITL PAS PIU PPR PRSC PS RPA SOE WAEMU WDC

African Development Bank Africa Region Africa Region Financial Management Africa Regon Procurement Cluster Africa Region Operational Qudty and Ikowledge Services Country Assistance Strategy Country Director Country Office Common Market for East and Southern Africa Country Procurement Assessment Report Economic and Sector Work Fiscal \'ear Internal Audit Department Initial Concept Memorandum Institutional Development Fund Independent Procurement Review Non-Governmental Organization Task Team Leader Procurement Accredted Staff Project Implementation Unit Procurement Post Review Poverty Reduction Support Credit Procurement Specidst Regional Procurement Adviser Statement of Expenditures West African Economic and Monetary Union Washington, DC Office

Foreword

T his report provides an overview of the Af W Following-up on procurement reforms

rica Region's Procurement Cluster (AFTPC) activities in fiscal year (FY) 2002. For the past ~ ~ ~ i ~ i ~ ~ of client country in pub-

five years, the Bank's procurement function has been lic procurement. shfting its focus from transaction-intensive fiduciary - work to balancing development needs with the Enhanced decentralization and organization of Bank's fiduciary requirements. This strategy was

the procurement function through the establishment detailed in a report entitled: The World Bank Proct/re-

of five Procurement Hubs, and increasing the num- meat Function - AaJush'ng to Emerging Needs (SecM97- ber of staff in country offices (COs). 854). In particular, the report emphasized the need for (a) more systematic post review of procurement transactions; (b) increasing support to reform of country procurement systems; and (c) decentraliz- ing operations to provide more timely support. In FY02, AFTPC made substantial progress in align- ing the region's procurement work with these objec- tives. In particular, AFTPC focused on:

Delivery of the full range of procurement services, from procurement planning to review and clearance, for investment lending to Task Team Lead- ers W L s ) in Sector Management Units or increas- ingly in Country Offices.

Monitoring fiduciary compliance through assistance to T n s on Procurement Post Reviews (F'PRs), as well as planning and implementing Independent Procurement Reviews (IPRs), also referred to as procurement audts. As thresholds for prior-review clear- ances are raised, the post review process is essential in order to ensure that procurement is conducted in accordance with the Bank's principles of economy and efficiency and transparency. Systematic conducting of post review helps to send a strong message to Borrowers and 'TTLs of the importance of adher- ing to sound fiduciary management.

Delivery of CPARS (ESW) and Procurement Re- forms as institutional foundations for successful implementation and efficient management of public procurement in client countries through:

Joint preparation and reviews of Coun- try Procurement Assessment Reports (CPARs) with clients.

Investing in Institution Building: in addtion to sub-regional procurement seminars, AFTPC organized several country-specific procurement seminars. Client training needs are identified through infor- mal surveys by CO procurement staff, who in turn follow-up on capacity buildmg action plans recommended for implementation.

Modernization of Monitoring and Communica- tion: Due to decentralization and increase in the number of procurement staff, in FY02 AFTPC has taken steps to improve monitoring and communication systems.

Improving access to Procurement Services: T h s attachment provides TTJ,s with the composition of the procurement team, Country Responsibility Distribution, and the norms to apply for various tasks. The use of country assignments and norms are essential to ensure a balanced deployment of resources, as well as fair dstribution of services to all TTLs and country teams.

Bernard Abeille Regonal Procurement Adviser

Retrospective nnd Prospective I

Procurement Service Delivery FYO2 Retrospective

procurement capacity remained weak, dsbursement was subject to delays. I n addtion to inadequate procurement planning, other weaknesses that were revealed during post reviews and Independent Procurement Re- views, were abuse of national shopping procedures to avoid competition, mistakes in bid evaluation, inad-

AFTPc Procurement S~eciahsts (PS) at Washing- equate contract management, and payment delays. ton and Offices P~~~~~~ sup- Record keeping is generally weak. In conclusion, while Port to Regon in all phases of the pro1ecr attention to procurement planning in the project cycle particularly before credit effectiveness to ensure is increasing, project execution and r e m ~ q u a b at project each project, a PS is areas where keen attention is needed, both by Borrow-

provide topro/ctpr!?araiion. ers and Bank staft for better implementation results. ration support consists of conducting procwement capaczg asses~mentr of project implementation units The Way Forward in FY03 or agencies, to determine the prior- review thresholds for goods, works and consulting service con- A F T ~ C ~ ~ focus is on irnplementauon intends to tracts, and the degree c a ~ a c i ~ needed strengthen procurement training at the country level,

good Procurement im~lementatiOn. The but Bank project staff are expected to malic better . >

ity assessment is instrumental in determining the use of programs as A focus

expected ~ ~ r ~ l o a d of TaskTeam Leaders F L s ) in wiU be procurement planning. AU countries with a prlor revlew of contracts. sizeable project portfolio be assigned a PS be-

fore the end of calendar pear 2002 to assist with In addition, PS assist in the preparation or review of project preparauon and to participate in projec t su- the project'sproc~~rementarrnngementim PuyectApprairni pervision at least once per year, A F T ~ C wfi con-

Docments to ensure the formulation of a procure- tinue to provide assistance wi& the prior review of ment framework that is consistent with the Bank's contracts and to monitor the p p ~ process to acheve guidelmes, the procurement capacity assessment, and a t least the comp~ance rate of ~ 0 2 . the client country's procurement environment. Of- ten, the recommendations led to strengthening of the project implementation units before credt effectiveness through the use of a Project Preparation Enhancing Fiduciary Fachty or other funding. Compliance In szperztszon, AJTPC provided assistance in the prior FY02 Program

re~ienr of contracts and the implementation of post review\. A total of 1,277 contracts mrere prior reviewed: n 7 0 2 was the first major structured exercise man-

395 goods, 547 consultants, 335 for civil w-orlts. datory PPRs, IPRs and Statement of Expendture (SOE) Reviews. Up to 154 PPRs were conducted

Expectations and Outcome covering 1,800 contracts in 26 countries with a total value of about US9645 d o n . For F'1702, AFR TTLs,

Careful and thorough procurement planning prior with the help of AFTPC, reached a PPR compli-

to p r o j e c t launch is essential to keeping ance ratio of 50°/01, which is a significant increase

disbursements on schedule. By focusing on pro- compared to prelrious fiscal years, but s d below the

curement planning during the preparation phase, of other Regions (62"~). In addtion, five

pro jec t teams were able to avoid problems in the IPRs were carried out in five countries covering 26

start-up phase of projects and avoid delays in d i s projects and 780 contracts with a combined vdue

bursement. In other cases, where inadequate at- of about US$ 63 mdhon.

tention was paid to procurement planning and/or "Proicct\ post reviru~cd dvtdcd hy pniiects sublcct to post revlcw

2 Mica Region Procurement Cluster

Expectations and Outcome of Post Reviews

In FY02 we improved the response time for com- pleting prior reviews and began to undertake a more systematic approach to post reviews. In t h~s connec- tion, at the end of FY02 AFTPC conducted an analy- sis of two of the Bank's essential procurement supervision instruments used to fulfill its post review fiduciary mandate.

The review looked at the findmgs of PPRs for more than 154 projects in 26 countries and at five IPRs in five countries. The ltey hdmgs of the post reviews conducted show a growing awareness of procurement rules but project implementation is s d impaired by the following: (i) the importance of procurement planning and the impact on project implementation is often overlooked, leading to the absence of regular monitoring and updating of procurement plans to accom- modate changes in projects; (ii) the lack of transparency in national shopping procedures is characterized by the absence of sufficient documentary evidence of compliance with the guidelines; (iii) the abuse of direct contracting which results from poor planning as well as the practice of direct contracting witl~out seekmg the Bank's prior clearance; and (iv) widespread poor h g systems among project agencies despite the Imowl- edge that the Bank requires documentation during the post review exercise.

The Way Forward in FY03 for Post Reviews

We learned important lessons from analyzing the ex- perience in carrying out the first year of mandatory PPRs and IPRs, and are able to make recornrnenda- tions to the Region's T l l s to take concrete actions in projects supervision. In FY03, M T P C plans to conduct at least one post review per project as part of its overall effort to enhance its procurement supervision responsibilrty. On a more general note, the review recommended that the provisions of Credit Agreements regarding procurement planning should be enforced more systematically and that procurement training modules for clients and staff put more emphasis on the strategic dmension of procurement planning.

Procurement Plans should be monitored at least twice a year and reviewed regularly during supervision. Improved planning helps fachtate implementation and reduces drect contracting which is often justified by emergencies caused by lack of proper planning. Similarly, the lack of transparency in national shopping and weak price competition could be addressed more vigorously in CPARs so that it is given sufficient coverage in new procurement laws and codes. Thls would not only improve procurement under Bank-financed projects but also public sector procurement at the national and local levels. Finally, one key recommendation of the IPR-PPR process is to standardze our reporting formats in order to make them more useful review tools.

In addition, for FY03, in cases, where PPRs show strong procurement performance by clients, the "prior review" threshold levels can be increased, re- sulting in a decrease in the number of contracts to be prior reviewed by TT'Ls. Since only 20% of the contracts subject to post review must be reviewed, h s would result in a considerable reduction in the procurement workload for TTLs. Conversely, in cases where PPRs show unsatisfactory results, a greater effort by both Borrowers and T l Z s is needed to improve fiduciary performance. It is, therefore, in the interests of TTLs with AFTPC assistance to ensure that Borrowers fulfill their obligations in procurement.

For FY2003, AFTPC intends to continue monitoring the satisfactory completion of the PPR process and has budgeted US$ 312,000 for IPRs in six selected countries (see below for FY02 results). The budget for IPRs includes costs for joint AE."TPC and AF1'1,'M exercises of SOE reviews and PPRs. In addition, AFTPC has budgeted US$234,000 for procurement seminars in the countries of the five Hubs, and US$ 100,000 to respond on a case-by-case basis to unprehctable "nasty cases".

TabLes 7 and 2 on the nextpage show how AFR compares to other regions fiJ~FI6ng zts mandate to zinplement P P f i and IPRr in FY02.

Retrospective and Prospective 3

Table 1

Date ~ncludes PPR, IPR and IAD Reviews I / wrkpaf@i%m i n w w H m ar c J & d o f & ~ ~ ~ 2/ P* twf hdW QyPmGVmClt# achach&s *po5f nl&w me d & b 1 1 1 p w jrr r b s p + y o h . 3/ ~ m i a ~ p ~ ~ b o n t j p n o r r e a w w i n h ~ p n r p n r w i .

Table 2

Summary of Independent Procurement Review

Percentage [number of counrrles audited divided by number of countries in portfolio 12% n / a 10% 13% 10% 25% 11% (item #3/#11

1 IFYO3 Indeoendent Procurement Review fIPR\ Program I

1 Cbte d91voire I October 2002 I Kenya November 2002

Mall October 2002

I May 2003 1 Tanzania December 2002

I

( Zambia ) December 2002 I --

4 AMca Region -enr Glosfrr

CPAR (ESW) and Procurement Reforms FY02 program

During FY02, five CPARs (Country Procurement Assessment Reports), which serve as institutional foundations for successful implementation of public sector procurement, were completed. Country Directors for Guinea, Mauritania, Mauritius, Mozambique and South Africa signed letters and agreements with Governments on the recommended action plans. Two CPARs (Eritrea and Ethiopia) were prepared up to the final stage, and CPARs for Angola and Zambia were initiated.

Expectations and Outcome

T h s was the &st year that CPARs were officially desig- nated as Economic Sector Work (ESW). As such, the analyucal work was carried out in close cooperation with Bank Country Teams and National Steering Com- mittees, and the CPAR questionnaires were prepared by national participants comprising the Government, the private sector, and representatives from civ~l soci- ety (NGOs, national associations). Action plans were dscussed in national workshops for optimum owner- shp of needed improvements in procurement fiduciary systems and management. The ESW approach also requires the preparation of an Initial Concept Memorandum (ICM) which is based on the esisting country knowledge and the findungs of a preparatory mission, to clearly o u h e the issues and describe the intended focus of the CPAR.

Due to the late decision on budget allocations for CPARs in FY02, all CPARs except the South-Africa CPAR, had to be prepared on a tight schedule.

For Sod-A f i ca ) this led to a thorough internal dscussion of national procurement practices which were deemed incompatible with generally accepted international stan- dards, and a government commitment to move toward a rationalization of the public procurement system.

For Guznea, where the CPAR was a joint operation of World Bank and the African Development Bank, a comprehensive program of medtum- to long-term reforms was agreed, including measures to fight corrup- tion, improve transparency and competitive- ness, and pursue greater efficiency and quality of the public procurement process.

In the case of Mauritania) the CPAR found that heavy procedures and lack of procurement capacity continue to burden public procurement, thus limiting efficiency and transparency, and the Government con- curred that modernization of the procurement fiduciary system was a priority.

For Mazl~ititis, the CPAR confirmed that public procurement has reached an accept- able level and that the improvements recommended by the CPAR with respect to greater economy, efficiency, and transparency are in line with the programs initiated by the Gov- ernment and could form the basis for a national procurement reform program.

The CPAR for Mo~anlbzque identified se- rious institutional, legislative, and capacity weaknesses adversely affecting the efficient and transparent use of public funds, requiring a substantial program of reforms over the next few pears.

The CPAR for Eritrea drew attention to the need for the Government to prepare a modern procurement code, establish a procurement policy and regulatory body, and prepare and implement a broad capacity- building program at the central and provincial levels.

The action plan recommended in the CPAR for Ethiopia focused on similar priori- ties, the challenges of capacity building at the provincial and community levels, as we.U as the establishment of a hgldy motivated

Rerrospecuve and Prospective 5

Task Force to promote and sustain the recommended reforms.

The impact of the FY 2002 CPAR program so far has been a greater understandmg among participat- ing governments and donors of the need for procurement reforms to facilitate more efficient, economic, and transparent fiduciary management, not only at the central but also at the decentralized level. In this respect, expectations were generally met. However, this greater awareness must now be trans- lated into a sustained action by all participants and adequate resources to ensure that this outcome will gain further momentum.

The CPARs are also the backbone for the procurement reforms pursued at sub-regional levels [West- ern African Economic and Monetary Union - WAEMU - and the Common Market for East and Southern Africa (COMESA)]. This sub-regional action culminated in a joined African Development Bank (AfDB) and World Bank (TVB) procurement reform program with the WAEMU Commission funded by an IDF and AfDB bilateral financing. For COMESA procurement reforms, AfDB is provid- ing financing and coordnating with WB.

The Way Forward in FY03

%Me the CPAR exercise was satisfactory, particularly considering the time constraints, the action plans agreed to with governments are only the beginning. AFTPC intends to undertake the following actions for follow-up:

To ensure implementation, action plans wdl be supported by IDF grants or other suit- able financing, such as learning and innova- tion loans, accompanied by regular supervision - requiring corresponding resources.

Procurement specialists will discuss progress with the client governments quar- terly and record their findings in the AFR Status Forms on the Progress with Procure- ment Reforms, whch are the foundation of the AFR Procurement Observatory.

The Status Forms are summarized twice per year (November and May) in the Rank- ing Index of the AFR Country Procurement Reforms, to determine where country procurement reforms stand in terms of progress on a scale of 1 (procurement fiduciary system is functioning well) to 5 ( no progress).

The updated Ranktng Index is discussed twice annually by the Procurement Group chaired by the RPA. Ranlungs are agreed on a comparative basis, and the Index is then dstributed to CDs as part of the input for the CAS. Most of the countries show a rank- ing between 3-4, indicating a weak to aver- age progress for most of AFR.

Action programs may then become part of the framework for adjustment lending or - in countries that demonstrate a high degree of success and commitment to improving procurement fiduciary management - part of the framework for a PRSC.

For FY03, CPARs are planned for Malawi, Tanzania, Ghana, C6te d'Ivoire, Togo, Senegal, and Madagascar. AfDB will participate in selected CPAR m.issions. AfDB and World Bank w d also join forces in the continued support of procurement reform at the sub-regional level.

Decentralization and AFR Procurement Hub Operations

Organization of the The Hubs began operation in the first quarter of

Procurement Function calendar year 2002. Thus far, we have received generally positive feedback from clients and the decen-

In November 2002, we announced the establishment tralized sector units. However, some Waslungton-

of Procurement Hubs (Hubs) in four countries: based TTLs were not happy with the relocation of Uganda, Madagascar, Ghana, and C8te dlIvoire. services. While we feel a measure of comfort by some

The proposal to establish these Hubs was initiated of the positive feedback, we also need to address after consultations with the Country Directors, Sec- the negative reactions from our clients. We do real- tor Managers, and AFR management. These Hubs ize the need to put in additional measures in place to

will provide the full satisfy both internal range of procurement and external clients services in accordance in the AFR family. with the decentraliza- 8 ~ r o w e r tion policy approved by When the Hubs the Board of Executive were established, Directors in 1998.

o we anticipated ini-

lTLS tial s tar t -up and Some of the major ob- o ther 'teething' jectives for thls initiative 1 o problems in their were:

1 To provide timely response to our clients on all project-specific procurement matters bj7 delegating fiduciary responsibilities to C O procurement staff who are accredited and at-

Procurement Staff

tached to a Hub;

Four Hubs: C6te dlIvoire

Ghana Madagascar

Uganda

operations, as the success of the enhanced decentralization initiative de- pended on various factors, such as: (i) corresponding decentralization of other sector units (i.e. TTLs placed in country offices), (ii) recruitment of ad-

Hubs can clew contracts atmve to

threshold and below RPA thrcrhold:

s IS m~~ - WQ- $7 .5 rnfl - go& $0.2 m l ~ - sole source cons.

$ 2.0 ITII - cons

0 Q

ditional country of- ' 0

fice procurement

1 To assist in RPA% Office In staff - 14 cur-

building capacity rently newly among the CO pro- recruited or under curement staff and Borrower personnel; and recruitment, (iii) training, mentoring, and gradual

accreditation of CO procurement staff, etc.

1 To assist the Borrower in accelerating the procurement reform programs by maintain- ing a more drect dialogue and monitoring progress with the governments.

In FY 2002, we recruited seven (7) additional CO staff in Benin, Burkina Faso, Chad, Cate d'Ivoire Mozambique, Nigeria, and Uganda. We have also begun recruitment (FY03) of seven more CO staff in Cameroon, DRC, Ethiopia, Eritrea, Rwanda, Senegal, and Tanzania. In addition, in FY03,

Retrospective and Prospective 7

AF.TPC/QI< will recruit an international procure- Training Schedule for Borrowers: ment speciahst (to fill a vacant position created by retirement). We are confident that in the next 12-18 Francophone Training months we wdl have a full compliment of trained and accredited staff in the country offices, thus con- tributing to the proper functioning of the Hubs. Where it does not make a business sense, we will sull have some country offices without a procurement staff assigned in those locations. In such cases, procurement support will be provided either by the Hub or by Washngton-based procurement staff.

Investing in Institution Building

In addition to sub-regional procurement seminars, and in view of the Hub roll out leading to height- ened knowledge of Borrower capacity constraints, Country-Specific Procurement Seminars are to be organized in FY 2003 on the basis of budgets made available to Hubs in order to strengthen fiduciary compliance.

Emphasis wdl be on ensuring capacity at the Borrower level. AFTPC is asking all procurement staff in COs to report all cases where the recommended action plans on procurement capacity have not been fully implemented.

Procurement staff in COs are required to report on projects where inadequate procurement capacity is not being appropriately addressed as per the Procurement Action Plan, and where the quality of the staff em- ployed by the agencies is not of an accept- able level.

In regard to the above, during FY 2003, AFTPC staff will Qscuss with its counter- parts the need to improve the capacity of PIUs in the implementation of procurement aspects of Bank-financed projects.

hthtim T b h g h a r i p s

October/ CESAG

Goods and Dakar, November

Equipment 2002

Senegal

Procurem- ISADE

September Dakar, ent of

2002 Senegal Works

Anglophone Training

Modernizing Monitoring and Communication

AFTPC has established an internal database known as the Afiica Procurement Reforms Observatory. Staff responsible for procurement reforms are expected to send copies of documents or correspondence of substance to this central filing system. An updated version of the contents is always available in the electronic Activity Room.

AFTPC manages a web-based data en- try system for monitoring PPRs and IPRs based on the existing Projects Database. A

system for monitoring complaints from bidders is now accessible on the AFTPC web site. While the data can be accessed reason- ably, we have had some useful feed back about being able to generate more user- friendly reports on PPRs. We intend to address the issue early in FY 2003.

To better manage correspondence on complaints from bidders, a user friendly complaints database was established in FY 2002.

In EY 2003, in terms of just-in-time delivery of Bank review comments to clients, we plan to focus on developing PS level << . ome responsiveness" reports for management.

A user-friendly website provides updated information on Africa procurement: http://www.worldbank..org/afr/procurement

(For external aadiences, the pa~szvord 2s 'XFRpro- cat-enzent" and ')rocwrement'~

Improving access to procurement services

AFTPC is talilng steps to ensure that TTLs have adequate access to procurement staff by recruiting new staff, instituting special training programs for new recruits, and assessing the level of service being provided in the COs. AFTPC has also devised country assignments and norms that are essential to ensuring a balanced deployment of AFTPC services to TTLs and country teams. Two charts cir- culated with thrs report will help TTLs determine who to contact for procurement support and the expected time required for various tasks.

procurement stafE Cameroon, Ethiopia, Eritrea, Rwanda, Senegal, and Tanzania.

Induction and learning Programs. AFTPC plans to conduct a workshop in Feb- ruary 2003 for all PSs on how to do business and how performance could be enhanced.

Reviewing Country Office (CO) Pro- curement Services. AFTPC has planned to conduct a detailed assessment of CO procurement work in selected countries.

Staffing in FY02: AFTPC Procure- ment Cluster

31 GE + staff at CO level

14 GG +staff and 1 GE staff at HQ and 5 consultants at HQ

Recruitment prospective in FY03. The following COs are expected to recruit


(AFTPC)

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