Organization
World Bank
Report Year
2014
1st MAR Year
2015
Accepted
Yes
Status
Active
Recommendation

#4. Revise and implement changes in the current Guidelines, including particularly: new procurement modalities, the Consultant hiring guidelines, and areas of the Guidelines and SBD referring to ICT and PPP, taking account of IEG's findings and reflective of prevailing good practice.abc

Recommenation Adoption
IEG Level of Adoption by Year: mar-rating-popup SCNTNT Management Adoption by Year: mar-rating-mng-popup SCNTNT
CComplete
HHigh
SSubstantial
MModerate
NNegligible
NANot Accepted
NRNot Rated
Findings Conclusions

Findings show scope for fundamental review in aspects of the consultant hiring guidelines, where there was evidence of concern in areas including the choice of selection methods and preparation of consultant short lists Bank Guidelines are also limited in terms of their incorporation of new modalities for procurement such as framework agreements, and use of negotiation. As regards ICT procurement, the evaluation notes that the Bank's SBD are not user friendly and are not aligned with industry norms. The Bank offers limited scope for dialog between bidders and procuring agents. The Bank's two-stage bidding procedure provides the opportunity for a dialog to adjust technical requirements and commercial terms in the first stage, during evaluation of non-priced technical proposals, but not in the second stage, during evaluation of price proposals. Moreover, two-stage bidding is not frequently used for procurement of complex ICT systems. As regards PPP procurement, there is a need to further clarify: (i) the scope of the Bank's review of private investor procedures and of standards acceptable to the Bank; (ii) situations where the Bank enters late, and is not involved in the design (including the design of procurement processes) from the beginning; (iii) situations where the procurement arrangements have been put in place by other investors, sometimes with larger financial stakes, where the Bank might be a minority investor; (iv) on-lending arrangements, financing via investment funds, or other situations with numerous small investments under an umbrella arrangement; and (v) unsolicited proposals.

Original Management Response

WB: Agree #4. The Guidelines will be reviewed and updated to reflect new procurement modalities. As part of its proposed new framework for Procurement in World Bank Investment Project Finance, Management envisages that the World Bank Procurement Guidelines would become one of Several different procurement arrangements that could be utilized to support a Bank operation.

Management envisages that the current Guidelines, as they now stand, would be replaced by: (i) a statement of the need to fulfill the core principles, reflected in a new operational policy (OP); (ii) a description of procedures to be followed by staff, reflected in a new statement of Bank procedures (BP); and (iii) a tool box of methods, procedures, processes, standard bidding documents, templates and supporting documentation to serve as guidance to staff and borrowers. These guidance materials would constitute the reference point in terms of the best that the Bank has to offer and would be continuously updated.

This approach would empower the Procurement team, to exercise discretion to identify the most proportional, fit for purpose procurement arrangements, reflective of prevailing good practice and our procurement principles to support a Bank project. The final decision on the appropriateness of any alternate procurement arrangements to support individual operations will rest with the Bank (Procurement) as part of its obligation to provide fiduciary assurance.

SBD's will also be reviewed and changes will be identified to take account of IEG's findings.

Action Plans
Action 1
Action 1 Number:
0326-01
Action 1 Title:
Action 4: Review and update, in selective areas, the current Bank Guidelines and reflect them in any new Procurement Policy an
Action 1 Plan:

Action 4: Review and update, in selective areas, the current Bank Guidelines and reflect them in any new Procurement Policy and Instructions/ Guidance for Bank Staff and Borrowers that the Bank may prepare. The new Guidelines will be implemented as and when approved by the Board.

Indicator: New draft Policy and Instructions/Guidance.

Baseline: Current Guidelines
Target: Updated and modernized Guidelines developed and approved by the Board.

Timeline: FY15

Action 2
Action 3
Action 4
Action 5
Action 6
Action 7
Action 8
2018
IEG Update:
No Updates
Management Update:
No Updates
2017
IEG Update:
No Updates
Management Update:
No Updates
2016
IEG Update:

This recommendation required review and update in selective areas of current Bank guidelines and reflect them in new procurement policy and instructions / guidance for Bank staff and borrowers. Several changes have been introduced in the new Procurement Framework: (i) limited contract award criteria for works, goods and non-consulting services, (ii) published new RFP for information systems, (iii) revised 19 SBDs to reflect approaches and flexibility offered by procurement regulations, and (iv) Project Performance Strategy for Development (PPSD) guidance notes (for both long form and short form). The PPSD guidance notes have been uploaded in both Bank's intranet and external website of operational procurement. The intranet link to guidance notes is: http://intranet.worldbank.org/WBSITE/INTRANET/UNITS/INTOPCS/0,,contentM…. IEG is happy to note the progress and views action on this recommendation as complete.

Management Update:

The NPF applies to IPF projects with concept notes approved after July 1, 2016. Exceptions to this are indicated in Section VI (Transitional Arrangements) of the Procurement Directive. Documents constituting the NPF are available at www.worldbank.org/procurement.

The Procurement Regulations provide a wider menu of procurement approaches and methods, following a fit-for-purpose approach (one of the seven core principles of the Procurement Policy). The Regulations also define the circumstances under which these approaches and methods may be used. Further information has been provided through guidance issued by OPCS.

Procurement approaches and methods are informed by a procurement strategy defined upstream in the Project Procurement Strategy for Development (PPSD). Under this approach, borrowers are empowered to exercise professional judgment to identify the most proportional, fit-for-purpose procurement arrangements, reflective of prevailing good practice and the Bank's procurement principles, to support a Bank-financed project (see Annex I of the Procurement Regulations). As part of the guidance notes issued by OPCS, a short-form PPSD for simpler projects and a long-form version for more complex projects and procurement are available. Staff have also received training on preparing PPSDs.

To guide staff internally, the Procurement Regulations are complemented by the mandatory operational rules and procedures for procurement set out in the Procurement Directive and the Procurement Procedure. For example, the Procurement Procedure sets out procedural instructions and an ADM framework for handling and deciding on requests for using APA.

Among the changes introduced under the NPF are the following:

1.Limited Contract Award Criteria for works, goods and non-consulting services. Contract award was formerly based on the lowest-cost evaluated bid or proposal. Under the NPF, contract award criteria are based on value for money and fit for purpose. Therefore, the Procurement Regulations include ways to best meet the client's requirements using such evaluation criteria as life-cycle costing, quality, and sustainability, where appropriate.

2.Management has published the Request for Proposals (RFP) for Information systems, among others. The RFP, along with such new approaches as competitive dialogue and negotiations, provides a lot more opportunity for dialogue with the market in defining a technical solution. A similar RFP for plants is also available, and RFPs for design-and-build work will be developed in FY17. In addition, Management has revised 19 standard procurement documents to reflect the approaches and flexibility offered by the Procurement Regulations, and the revised documents are now available for use.

3.The selection of public-private partnerships is based on criteria that best meet the project development objectives and achieve project outcomes that are acceptable to the Bank, in contrast to the previous process-oriented approach. Annex XIV of the Procurement Regulations specifies requirements and provides guidance on (i) the scope of the Bank's review of private investor procedures and of standards acceptable to the Bank; (ii) the project assessment and structuring requirements that the borrower should meet before selecting the private partner; (iii) the arrangements and requirements for selecting the private partner, clarifying that, among other things, these should be consistent with the Bank's Core Procurement Principles; (iv) treatment of unsolicited proposals; and (v) allowing the private partner to procure goods in according with its own procedures if those procedures are in accordance with Annex XIV of the Procurement Regulations.

4. Under the Procurement Guidelines, framework agreements included limitations for pe

2015
IEG Update:

IEG is pleased with the progress described in terms of the incorporation of procurement modalities on PPP, competitive dialogue (especially for IECT procurement), etc. IEG requested further information on the PPSD (Project Performance Strategy for Development) and evidence of the revised Standard Bidding documents, and has been informed as follows:

ユOPCS is finalizing several documents including specific guidance notes on PPSD. These document are not available yet for circulation.

ユIn addition, OPCS and the GGP-PIO are designing training events for procurement and non-procurement staff, including PPDS. These training will start next month.

ユSBDs are in the process to be updated. They are one of our priorities. Drafts are not available for external circulation, but as needed, we can show you how advance some of these drafts are.

IEG looks forward to receiving (i) guidance notes on the PPSD; (ii) revised standard bidding documents

Management Update:

In developing the proposed new Procurement Framework, Management has reflected the feedback from IEG and has ensured that new Procurement modalities are fully reflected in the framework. For example, PPP (See Page 33 of the main body of the Regulations and its Annex XIV), competitive dialogue (See page 33 Regulations), negotiations (See page 33 of the Regulations, best and final offers etc. (see page 33 Regulations).

Management has drafted appendices to the Framework that provide detail on new modalities to further assist staff and borrowers in implementation.

In particular, the Project Procurement Strategy for Development (PPSD) is a critical tool that will be used to select the optimum procurement method cognizant of risks, market dynamics and operational needs.

Standard bidding documents will be augmented (new SBD's written as needed) to reflect new modalities once the proposed framework has been approved by the Board.

See Annex I of the CODE/AC package for a summary of the main changes between current Procurement Guidelines and proposed Regulations for Borrowers)