BOS 1

Procurementof

Goods and Works

Asian Development BankBusiness Opportunities SeminarBusiness Opportunities SeminarBusiness Opportunities SeminarBusiness Opportunities Seminar

Cesar T. Cesar T. ValbuenaValbuenaPrincipal Procurement SpecialistPrincipal Procurement SpecialistCentral Operations Services OfficeCentral Operations Services Office

BOS 2

Asian Development BankProcurement System

�� Documents Governing Procurement ActionsDocuments Governing Procurement Actions

�� Loan Agreement (Schedule 4)Loan Agreement (Schedule 4)

�� Procurement GuidelinesProcurement Guidelines

�� Standard Bidding Documents (Standard Bidding Documents (SBDsSBDs))

�� Project Administration Instructions (PAI)Project Administration Instructions (PAI)

�� SBD User Guides and Handbooks SBD User Guides and Handbooks

BOS 3

Asian Development Bank Procurement System - Guidelines

Key Principles

� Eligibility

� Economy and Efficiency

� Fairness

� Transparency

BOS 4

Responsibilities

� The Borrower (Executing Agency) is responsible for all procurement activities

� ADB will review the procurement activities to ensure that the ADB’s Procurement Guidelines are followed

Asian Development Bank Procurement System - Responsibilities

BOS 5

Asian Development Bank Procurement System - Eligibility

� Goods• must be produced in a member country

� Bidders• must be nationals of eligible source countries

• must not have a conflict of interest

• must not be under declaration of ineligibility by ADB

• must not be ineligible per UN Security Council resolution

• must be, in case of a SOE, legally and financially autonomous, operate under commercial law and be independent of the Employer

BOS 6

International Competitive Bidding (ICB)

� For contracts valued at US$1.0 million or more• For some countries, threshold is raised, e.g. $10 million

for China & India

� Quote and/or get paid in up to 3 foreign currencies

� No currency exchange risk

� ADB's Standard Bidding Documents must be used

� Value for money

� Provides for adequate, fair and equal opportunities

Asian Development BankProcurement System – Procurement Method

BOS 7

� Reference to ADB� Bid Validity & Bid Security� Clarity � Standards� Pricing� Price Adjustment � Currency of Bid� Currency of Bid Comparison� Currency of Payment � Terms of Payments

� Alternative Bids

�� Conditions of ContractConditions of Contract

� Performance Security

� Liquidated Damages & Bonus

� Force Majeure

� Settlement of Dispute

Key Features of ICBKey Features of ICB

Asian Development BankProcurement System – Procurement Methods

BOS 8

� Time for Preparation of Bids

� Bid Opening Procedures

� Clarification or Alteration of Bids

� Confidentiality

� Examination of Bids

� Evaluation and Comparison of Bids

Key Features of ICBKey Features of ICB

� Domestic Preference

� Extension of Bid Validity

� Postqualification of Bidders

� Award of Contract

� Publication of the Award of Contract

� Rejection of all Bids

� Debriefing

Asian Development BankProcurement System – Procurement Methods

BOS 9

Two Stage

Two-Stage: Two-Envelope

Single-Stage: Two-Envelope

Single-Stage: One-Envelope

Asian Development BankProcurement System – Bidding Procedures

BOS 10

ADBApprovalDeadline

STOPSTOPSTOPSTOP

Preparation

TechnicalProposal

FinancialProposal

Evaluation

Technical

Financial

TechnicalProposal

FinancialProposal

Bidding ProceduresSingleSingleSingleSingle----Stage: OneStage: OneStage: OneStage: One----EnvelopeEnvelopeEnvelopeEnvelope

BOS 11

DeadlineADB

ApprovalADB

Approval

Preparation Evaluation 1 Evaluation 2

TechnicalProposal

FinancialProposal

FinancialFinancial

TechnicalProposal

FinancialProposal

Technical

STOPSTOPSTOPSTOP

Bidding ProceduresSingleSingleSingleSingle----Stage: TwoStage: TwoStage: TwoStage: Two----EnvelopeEnvelopeEnvelopeEnvelope

BOS 12

Asian Development BankBusiness Opportunities

Getting evaluated

Determining the lowest evaluated Determining the lowest evaluated substantially responsive bidsubstantially responsive bid

BOS 13

Time Frame

Bid evaluation and award of contract should be completed before the expiration of the bid validity

Clarification and Alteration of Bids

Only clarifications not changing the substance or the price of the bid may be requested or accepted by the Employer

Asian Development BankBid Evaluation – Basics

BOS 14

Qualifications evaluationto ensure that contracts are awarded only to firms that have the necessary

� Eligibility

� Experience – General & Specific

� Financial Capacity

� Pending Litigation Limit

to undertake the work for which bids are invited

Asian Development BankProcurement System – Technical Evaluation

BOS 15

To compare technical proposal against requirements of bidding documents

� Completeness – incl. Bid Security & Letter of Bid

� Compliance with specifications

� Construction methods & resources

� Personnel & equipment

� Functional guarantees

� Warranty

Asian Development BankProcurement System – Technical Evaluation

BOS 16

Basis for Price Comparison

Goods� for Goods from outside

�Includes cost of insurance and freight (CIF or CIP)�Excludes custom duties or other taxes levied on goods

� for Goods from inside�Includes ex-factory price (EXW)�Excludes any sales or similar taxes levied on goods

� Related Services including all taxes and duties

Works & Plant (Turnkey)� Includes all taxes & duties

Asian Development BankProcurement System – Price Evaluation

BOS 17

Purpose� To provide margin of preference to domestically

manufactured goods or domestic contractors for ADB-financed projects

� To allow domestic firms to compete with foreign firms on more equal footing

Conditions� Granting of preference subject to conditions

� Applies only to ICB� Needs to be applied for by Borrower

� To be specified in Loan Agreement if scheme is applied

Asian Development BankBid Evaluation – Domestic Preference

BOS 18

Asian Development Bank Award of Contract

� Only to qualified bidders

� Award to the lowest evaluated and substantially responsive bidder

� Subject to ADB approval

� Notice of award sent to bidder after ADB approval

� Bidder requested to sign contract within specified period

� Bidder requested to provide Performance Security within specified period

� If bidder does not comply, reject bid and select next lowest evaluated bid after ADB approval

BOS 19

Award of contracts for values of $10 million and above must be approved by

— ADB Procurement Committee —

Chairman : Principal Director, COSO

Members : Assistant General Counsel Director, Sector Division

Secretary : Senior Procurement Specialist (Non-Voting)

Asian Development BankAward of Contract

BOS 20

Asian Development BankAward of Contract

Publication of Results

What� Name of each bidder� Bid prices as read out� Evaluated bid prices� Name of bidders whose bid was rejected and reasons� Name of winning bidder and price offered� Duration and summary scope of contract awarded

Where� English language newspaper or freely accessible web site

When� Within 2 weeks after ADBs approval

BOS 21

Asian Development BankAward of Contract

Debriefing

� Bidders may request an explanation from the EA as to why its bid was not successful

� The EA must promptly provide an explanation, either in writing and/or in a debriefing meeting

� The requesting bidder shall bear all the costs of attending such a debriefing

BOS 22

Asian Development BankBusiness Opportunities

How to prepare responsive bidsHow to prepare responsive bidsHow to prepare responsive bidsHow to prepare responsive bids

Avoiding common pitfallsAvoiding common pitfallsAvoiding common pitfallsAvoiding common pitfalls

BOS 23

� Submission Requirements

� All partners must be eligible – incl. SOE & COI

� JV agreement must contain provision for joint and several liability

� One of the partners must be authorized to be in charge

� Separate qualification requirements for lead and other partners

Asian Development Bank Joint Ventures (JV)

BOS 24

� Be compliant

� No conditionalities

� Get official clarification

Asian Development Bank Preparing Responsive Bids

BOS 25

� Be aware of bid evaluation criteria

� Be clear with alternatives

Asian Development Bank Preparing Responsive Bids

BOS 26

� Ensure bid is complete

� Make final check of bid � Amount, validity and text of Bid Security� Signatures and power of attorney� Joint venture agreement enclosed� References enclosed� Discounts in covering letter or appropriate place as

specified in the bidding document� Marking of envelopes

Asian Development Bank Preparing Responsive Bids

BOS 27

� Be on time

� During opening ensure� All relevant prices are read out� All discounts are read out� Presence and amount of bid security is read out� No envelope remains unopened (unless 2-envelope)� All the above is recorded correctly� The record is signed by all bidders present and by the procuring

entity

� Be Aware of Possible Extension – validity & security

Asian Development Bank Preparing Responsive Bids

BOS 28

Asian Development BankBusiness OpportunitiesBusiness OpportunitiesBusiness OpportunitiesBusiness Opportunities

For a review of main points about ADB ICB, follow link in ADB website:

http://www.adb.org/Documents/Toolkits/Business-Opportunities-Seminars/

BOS 29

Asian Development BankBusiness OpportunitiesBusiness OpportunitiesBusiness OpportunitiesBusiness Opportunities

Email: cvalbuena@adb.org