world bank procurement framework -...

WORLD BANK PROCUREMENT FRAMEWORK

JAPAN

October 2017

Agenda 3 reasons why you may consider bidding for WB financed

contracts• Portfolio

• New procurement framework

• Operating model

Key innovations to help partners and country clients

Updated Standard Procurement Documents (SPDs)

Information on Projects and Procurement

What makes a bid successful

Key Procurement data

3 reasons for bidding in WB financed contracts

1. Huge and diverse portfolio

Bank funds over 1,700 investment projects in 136 countries

Active project portfolio worth about US$230 Billion in total

Annual IPF procurements circa $14 to $20 Billion

Finances government-led procurement in a variety of industries and sectors

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Top areas of Spend in FY16 (Worldwide)

$14 Billion

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Source AO: BI – Information as of September 19, 2017

Transport 42% Energy & Extractives 18%Water 18%

42.2%

18.3%

17.6%

6.7%

5.0%

4.7%3.0%

0.9%0.8% 0.4% 0.3% Transportation

Energy and Extractives

Water, Sanitation and Waste Management

Public Administration

Health and other social services

Agriculture, Fishing and Forestry

Education

Information and CommunicationsTechnologiesIndustry, Trade and Services

Health

Financial Sector

2.The new Framework

Demand-driven: extensive consultations in almost 100 countries and 5.000 stakeholders

Greater focus on VfM, more ways bidders can differentiate bids, and more opportunities for dialogue and discussion;

Focus on the end to end procurement cycle, including strategic planning, appropriate procurement approaches/selections, evaluation criteria and contract award (e.g. fit for purpose approach design, life-cycle costs, incentive mechanisms, safety requirements) and contract management (e.g. enforcement of standards, long-term performance and relationship management.

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3. Operating model

250 procurement staff based in 72 countries support projects;

Enhances Bank’s support to Borrowers (including hands-on expanded implementation support) throughout the procurement process;

Promotes strategic engagement with delivery partners

Increases transparency and promotes governance

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Key Innovations to help Partners and Country Clients

Objective of the new Framework

Deliver better development results

Modernize how the Bank engages in Procurement with Partners, in project activities

Introduce choice in the design of procurement processes to ensure that they are fit for purpose and proportionate

Provide modern and efficient procurement approaches and methods Allows innovation in the solutions that the Bank finances

Enhance transparency by increasing access to procurement information

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Key innovations

More upfront analysis and design

Value for Money as a core procurement principle in all procurements. A shift in focus from the lowest evaluated compliant bid

Provide more options for tailored procurement approaches, and hands-on expanded implementation support as an option for the highest risk operations;

Promote strategic engagements with providers (i.e. sectorial engagements, pre-meetings)

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Key innovations (2)

Enable the use of sustainable procurement criteria in procurement;

Improve the approach to resolving procurement-related complaints e.g. standstill period

More involvement in contract management of procurements to ensure the best possible outcomes and that problems are resolved quickly

Alternative Procurement Arrangements as appropriate

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Project Examples

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• Industry Engagement Program. Central Asia South Asia Electricity Transmission Project (CASA 1000) P160586

• Hands-on Expanded Implementation Support. Myanmar South East Asia Disaster Risk Management Project (P160931); Papua New Guinea Emergency TB Project (P160947)

• Alternative Procurement Arrangements (UN Agencies, International Humanitarian Organization). Yemen Emergency Health & Nutrition Project (P161809) – UNICEF, WHO. Smallholder Agriculture Production Project (P162659) – FAO; Somalia Emergency Disaster Recovery Project (P163830) - ICRC & FAO

• Alternative Procurement Arrangements (Borrower Agency) Nepal - Thimphu Thromde, Ministry of Works and Human Settlement; India - PowerGrid

Project Examples (contd.)

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• Advance Contracting consistent with Core Procurement Principles. Somalia Emergency Disaster Recovery Project (P163830)

• Use of RFP, Life Cycle Costing and Rated Criteria. Morocco NOOR Solar Power Project (P164288)

• Enhanced Environmental, Social, Health and Safety Requirements. Uganda North Eastern Road-corridor Asset Management Project –NERAMP– (P125590)

• Beneficial Ownership disclosure for significant contracts. From November 1, 2017

• Mandatory Direct Payment Pilots. For international procurements under IDA 18 in situations of urgent need of assistance or capacity constraints (FCV, Small States, Emergency Operations) from November 1, 2017

• Domestic Preference Study. On-going

Industry Engagement Program

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How do we fix big procurement

problems?

Why are most complaints in big medical

procurements?

Strategically engage with

Industry to fix the problems together

!

Large Medical Diagnostic Equip:

- Consolidated market - Targeted manufacturers - Collaborate with Health GGP - Held face to face workshops - Identified Problems - Discussed solutions:

- Early notice - Project design support - Model docs/specs - Global standards - Access to experts - VfM – Cost/quality - Complaints support

HVDC:

- Only 3 suppliers (Siemens, ABB, GE) globally

- 2 emergent Chinese Co. - Over demand & under supply - Collaborate with Energy GP - CASA 1000 strategic project

for Bank - Provided hands-on help to

task team - Applied new Framework

Tools - Early contractor engagement - Dialogue/partnering - Reverse marketing

Why did we get no compliant

bids for the CASA

HVDC Project?

OBJECTIVES:

- Set best practice - Motivate right

companies to bid - Speed up

procurements - Reduce complaints - Improve readiness

for project implementation

- Reduce costs for bidding

- Value for Money

EARLY STAGES:

Industry Positive Feedback

Use Romanian massive health project to test key solutions

Finalizing the action plan

Actions from September 2017

Feedback Survey

Website

USING CASA 1000 AS A PROXY:

Shared early draft bidding documents

Amended docs Risk Workshops Reallocated

Risks Project Re-

design Now have 5 full

bids in evaluation now

STAFF SCARED TO TALK TO INDUSTRY

INDUSTRY FRUSTRATED

OUR STANDARD RULES CAN ONLY FIX SO MUCH

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Procurement Regulationsfor IPF Borrowers Guidance on PPSD

Updated Standard Procurement Documents

Copyright World Bank 2017

Standard Bidding Documents (SBDs) vs Standard Procurement Documents (SPDs)

SBDs vs SPDsThere are now 2 sets of documents = SBDs + SPDs SBDs continue to be used for any project governed by the Guidelines SPDs to be used for projects where the new Procurement Framework

applies

Scope of application of SPDs mandatory for international competitive procurements where the

Project Concept Note is approved after 1 July 2016 may be used (as amended) for national competitive procurements, with

the Bank’s agreement


The new Standard Procurement Documents

Standard Procurement Documents (SPDs) 27 SPDs launched since 1 July 2016 In development: RFP Streamlined RFP Competitive Dialogue SPD Framework Agreement

Translations done (French and Spanish)

NOTE: Of the 27 launched 10 (relating to Works) have been updated to include Environment, Social, Health + Safety (ESHS) enhancements and published in January 2017.


List of Standard Procurement Documents

Slide 19

GoodsRFB Goods (1 envelope)

RFB Goods (2 envelope)

PQD Health Sector (PVC)

RFB Health Sector (PVC)

RFB Education (Textbooks)

WorksRFB Small Works (1 envelope)

RFB Small Works (2 envelope)

RFB Large Works (without PQ)

RFB Large Works (after PQ)

PQD Large WorksISD Works 2 stage (Design + Build)RFP Works 2 stage (Design + Build)

RFB Roads (Output + Performance based)

Works French Civil Code

PlantRFB Plant (without PQ)

RFB Plant (with PQ)

ISD PlantRFP Plant (2 stage)

AcronymsRFB = Request for Bids PQD = Prequalification DocumentRFP = Request for Proposals ISD = Initial Selection Document


List of Standard Procurement Documents (cont.)

Slide 20

Consulting ServicesRFP Consultancy ServicesOtherPQD Management ServicesRFB Management ServicesRFB Non-Consultant ServicesRFB Information SystemsISD Information SystemsRFP Information SystemsRFP Water and Wastewater Treatment Plant

(Design + Build + Operate)

ISD Water and Wastewater Treatment Plant (Design + Build + Operate)

SPDs in development

ISD Streamlined universalRFP Streamlined universal

ISD CD universalRFP CD universal

SPQD Framework AgreementRFB Framework Agreement

Key differences: RFB vis RFP

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RFB RFP1. conformance based specifications/

detailed technical requirements of the design, method of production, construction and/or delivery

2. Prequalification is optional

3. evaluated using qualifying criteria only

4. the Most Advantageous Bid (MAB) is:

the Bid of the Bidder that meets the qualification criteria and whose Bid has been determined to be:

a. substantially responsive to the RFB, and

b. the lowest evaluated cost.

1. performance based employer’s required outcomes. Specifications do not prescribe a specific design or method of delivery.

2. design is the responsibility of the contractor

3. Initial Selection

4. Evaluated on a mix of qualifying criteria and rated criteria which are scored against technical, quality, price and other pertinent factors

5. MAP meets the qualification criteria and whose Proposal has been determined to be:

a. substantially responsive to the RFP, and

b. the highest ranked Proposal.

RFB prequalification vs RFP initial selection

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Existing Prequalification process (RFBs)Existing Prequalification process

(RFBs)New Initial Selection process

(RFPs)

All suppliers that are substantially responsive to the qualifying criteria are invited to bid.

Additional step = rated criteria. Only the highest ranked suppliers

invited to submit full proposals Fairer to market – only suppliers

that have a the best chance of succeeding are put to the full cost of proposing.

RFP Evaluation of Technical Proposals

2. Evaluation of Technical Proposals (Rated criteria)a. Method statementb. Key personnel c. Access to key equipmentd. Site organizatione. Safetyf. Quality assuranceg. Mobilization schedule h. Implementation Schedule and i. Any other activities as specified by the Employer and based on the proposers

experience e.g. any sustainable procurement requirement if specified

a. Verification e.g. (Documents signed, JV Agreement included, correct authorization)b. Completeness of documentsc. Proposal Security included (consistent with SPD, correct amount / currency)d. Qualification criteria from Initial Selection are still met

1. Preliminary examination of process requirements (Pass / fail)

RFP Evaluation of Financial Proposals

Each SPD will state the relevant factors, in addition to price, that are to be considered in Proposal cost evaluation

Examples of where monetarily quantifiable methodology can apply, include: time schedule adjustment; life cycle costing; functional guarantees min/max adjustment; and discounts for multiple lots.

Combined Technical and Financial scores

After completion of the technical and financial evaluation, scores are combined. The Proposal with the best evaluated Proposal Score (B) among responsive Proposals shall be the Most Advantageous Proposal provided the Proposer is qualified to perform the Contract

After completion of the combined technical and financial evaluation of proposals, and if specified in the SPD, the Employer may invite those Proposers to submit their BAFOs.

where

C = Evaluated Proposal Price

C low = the lowest of all Evaluated Proposal Prices among responsive Proposals

T = the total Technical Score awarded to the Proposal

Thigh = the Technical Score achieved by the Proposal that was scored best among all responsive Proposals

X = weight for the Price as specified in the PDS

( )XTTX

CCB

high

low−+≡ 1

SPDs – key features: Abnormally Low Bids and Proposals

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Where the price, in combination with other elements of the Bid/Proposal, appears so unreasonably low, that it raises material concerns as to the capability to perform the contract for that sum.

Five stages in the treatment of an Abnormally low Bid/Proposal:

Identify: the Borrower identifies a potential ALT Clarify: the Borrower seeks clarification from the Bidder/Proposer Justify: the Bidder/Proposer prepares a justification of their price Verify: the Borrower fully analyzes the justification to verify if it provides a

reasonable explanation

Decide: Borrower decides whether to accept or reject the Bid/Proposal.

SPDs – key features: BAFO

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An option in international competitive procurement (prior review).

Opportunity to improve Bids/Proposals e.g. technical, price reduction, methodology enhancement, clarification or modification of any aspect of the Bid/Proposal or the provision of additional information.

Borrower must inform prospective Bidders/Proposers in the RFB/RFP -minimum information includes:

BAFO may be used

Bidders/Proposers are not obliged to submit a BAFO

No negotiations allowed following BAFO

BAFO can only be used once in a procurement. It cannot be used in conjunction with Negotiations. Each are mutually exclusive.

BAFO does not apply to Consulting Services.

SPDs – key features: Negotiations

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An option in international competitive procurement (prior review).

Negotiation may take place after the full evaluation of Bids/Proposals (i.e. both technical and financial parts) and before the Notice of Intention to Award the contract.

Borrower must inform prospective Bidders/Proposers in the RFB/RFP and outline how the Negotiations will be conducted.

Must be held in the presence of an independent third party agreed by the Bank.

Negotiations must not reduce the minimum technical requirements of the Bid/Proposal.

SPDs – key features: Most Advantageous Bid/proposal

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The new test to determine the award of contract varies between RFP and RFB:

1. RFP: rated criteria are used:This is the Proposal that meets the qualification criteria, has been determined to be:

a. substantially responsive to the RFP, andb. the best evaluated Proposal (i.e. the highest score).

In this scenario the Most Advantageous Proposal may not be the lowest price.

2. RFB: rated criteria are not used:This is the Bid of the Bidder that meets the qualification criteria and whose Bid has been determined to be:

a. substantially responsive to the RFB, andb. the lowest evaluated cost.

Information on Projects and Procurement

World Bank Procurement App

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Historic Procurement data on major contract awards

The App enables the public to look at: Who won what, where, and how much Ratios Trends Supplier Rankings

Easy to slice data by type, place, year, and company

Enables the public to easily explore large amounts of data

Includes an email feature that exports charts, figures, and tables

Free for iPad and iPhone from the Apple Store and will be developed for Android

World Bank Procurement App (link)

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World Bank Group Finances AppAccess the Bank portfolio of projects, finances, and upcoming/key procurement opportunities:

Nine different languages (Arabic, Bahasa Indonesia, Chinese, English, French, Hindi, Portuguese, Russian, and Spanish)

Locate any project including the awarded contracts Receive Procurement/Tender Notices and follow business

opportunities in more than 100 countries Get updates on pending projects in the pipeline, as well as

latest approved projects Check the disbursements data, updated monthly, and the

contributions to Trust Funds Engage with the Bank by sharing, following its projects and

investments, or reporting back

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World Bank Group Finances App

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What makes a bid successful

General Considerations

Procurement is led by the Borrower, NOT the Bank

Four broad procurement systems: International Competition

National Competition

Procurement arrangements of another MDB/bilateral

Borrowers arrangements, in full if assessed and acceptable

Tailored procurement approaches to suit the project

Contract is with the Borrower, not the Bank, under their legal framework (international arbitration if International)

Fraud and Corruption (public debarment)

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Good Advice

Be informed about the country and project pipeline

Determine areas of focus, countries/procurement type etc.

Consider how you will respond to project needs

Identify local partners and others for any joint ventures

Previous technical and country experience is usually critical

Understand local customs, laws, markets

Use the Implementing Agency, Trade missions/Executive

Director team for concerns and questions

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Make a pre-proposal visit (if indicated in the RFP)

Fully address the requirements

Emphasize methodology for delivery – innovate if you can

Propose a strong Project Manager and qualified experts

Cite relevant technical and regional experience similar to the

assignment – more significant and similar the better

Involve national partners, consider joint ventures

Don’t deviate from standard RFP forms/conditions

Preparing the Proposals

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Conditions or qualifications will lead to rejection

Get official clarification: If any provisions of the bidding/proposal

document are unclear or unacceptable, submit an official inquiry in

writing to the Borrower cc the Bank before the bid closing date or such

date as may be specified

Submit a professional proposal signed by an authorized individual

ensuring all supporting documents are included

Carefully review qualification and evaluation criteria Failure to satisfy

qualification criteria results in high bid rejection rate

Preparing the Proposals

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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/proposal document

Marking of envelopes as appropriate

Final checks before submission

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No Bid Security

Insufficient Amount of Bid Security

Lack of Supporting Documents

Incomplete Bids

Expiration and Extension of Bid Validity

Partial Quantities

Absence of test reports if required

Bids not signed

JV partner as bidder in another bid

Conflict of interest

Common issues with bids

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Be on time: Submit bid/proposal within the stipulated deadline. Late bids/proposals will not be accepted

During bid opening, ensure that: All relevant prices are read out All discounts are read out Presence and amount of bid security is read out No envelope remains unopened All the above is recorded correctly The record is signed by all bidders present and by the purchaser

Be aware of possible extension: There may be a request to extend the bid validity and bid security periods by several months, as in certain cases the evaluation of bids requires more time than originally expected

At bid/proposal opening

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WB Procurement Data Worldwide and Japan

Top areas of Spend in FY16 (Worldwide)

$14 Billion

44


Transport 42% Energy & Extractives 18%Water 18%

42.2%

18.3%

17.6%

6.7%

5.0%

4.7%3.0%

0.9%0.8% 0.4% 0.3% Transportation


Water, Sanitation and Waste Management

Public Administration



Education

Information and CommunicationsTechnologiesIndustry, Trade and Services

Health

Financial Sector

FY16 Top Ten Borrowers

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RANK COUNTRY AMOUNT (USD) % OF TOTAL

1 India 1,891,938,968 13.5%2 Ecuador 1,740,288,719 12.4%3 China 1,220,229,447 8.7%4 Egypt, Arab Republic of 589,952,491 4.2%5 Africa 575,064,416 4.1%6 Ethiopia 526,201,007 3.8%7 Bangladesh 512,737,791 3.7%8 Indonesia 471,353,456 3.4%9 Argentina 460,449,401 3.3%10 Colombia 458,973,885 3.3%


FY16 Top Ten Supplier Countries

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1 China 2,160,380,056 15.4%2 India 1,987,724,295 14.2%3 Spain 1,487,217,295 10.6%4 Brazil 1,348,258,737 9.6%5 France 364,972,807 2.6%6 Tunisia 361,274,743 2.6%7 Vietnam 343,508,496 2.4%8 Egypt, Arab Republic of 303,840,893 2.2%9 Germany 295,033,785 2.1%10 Indonesia 294,020,530 2.1%


FY16 Top Ten Non-Consulting Services Supplier Countries

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1 Japan 28,347,297 19.6%2 Indonesia 25,978,140 18.0%3 India 11,761,490 8.1%4 Brazil 9,697,349 6.7%5 Peru 8,116,488 5.6%6 Pakistan 7,227,396 5.0%7 New Zealand 5,525,899 3.8%8 United Arab Emirates 5,446,252 3.8%9 France 4,743,514 3.3%10 Papua New Guinea 4,445,128 3.1%


FY16 Top Ten Consultant Services Supplier Countries

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1 Peru 115,252,990 7.7%2 Afghanistan 88,818,961 5.9%3 India 86,922,675 5.8%4 France 80,452,958 5.4%5 Russian Federation 75,708,719 5.1%6 United Kingdom 54,013,827 3.6%7 Germany 52,408,268 3.5%8 United States 51,400,306 3.4%9 China 45,585,311 3.1%10 Canada 42,110,743 2.8%


FY16 Top Japan Suppliers

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RANK AMOUNT (USD) % OF TOTAL # OF CONTRACTS

NEC 28,347,297 79.7% 1M/S MITSUBISHI CORPORATION 2,397,537 6.7% 1KATAHIRA & ENGINEERS INTERNATIONAL 2,220,336 6.2% 1KOKUSAI LINKS CO. LIMITED 744,800 2.1% 1

NIPPON KOEI CO. LTD. 719,974 2.0% 1

MOENCO 639,003 1.8% 1TOYOTA TSUSHO CORPORATION 430,507 1.2% 1

YAMAMOTO MASAHIRO 73,625 0.2% 1


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JAPAN: FY16 Contract Awards by Procurement Category


$3M

$4M

29M

CONSULTANT SERVICES GOODS NON-CONSULTING SERVICES

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ITC 80% Energy & Extractives 7%

$36 Million

FY16 Top Sectors for JAPAN Suppliers


79.7%

6.7%

6.2%

2.2% 2.1% 1.8%1.2%

Information & CommunicationsTechnologies


Transportation

Water, Sanitation and WasteManagement



Education

CONCLUSION

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The World Bank’s New Procurement Framework

Provides more choice and greater flexibility to deliver the desired outcome

More focus on Value for Money aspects, as opposed to cost only

More, and earlier, engagement with Business

More information and greater transparency on procurement through

STEP

Contact for World Bank Procurement Framework:

Enzo De LaurentiisManager, [email protected]: 202 473-0538

World Bank Group1818 H Street NWMail Stop MC 10-1018 Washington DC 20433USAProcurement Website