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

Adopt a progressive approach towards greater use of country systems, based, first, on the materiality of differences between Bank and the country systems, and second, on country, agency and private sector capacity. The Bank could approve subcomponents of a system, such as specific contracts, categories, methods or specific administrative entities. Clarify, where used, the form and content of the use of country systems proposed, in terms of Bank oversight and recourse.

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

The Bank developed its own pilot approach towards the use of Country Systems (UCS); an effort characterized by rigor but also minutiae in terms of detailed specification of necessary areas of compliance or conformity to the Bank needed. While most country systems have some differences from the Bank, some differences have greater materiality than others, in terms of underlying Bank principles, touching upon core principles of promoting competition and market access; others impact less upon such principles and there may be scope for flexibility. IEG also found mixed views, between country clients and private suppliers, which reflect ambiguity in the concept of "use of country systems" which would benefit from clarification, especially with regard to the extent to which they would also include, for example, Bank engagement in the procurement process, in fiduciary oversight, or in terms of legal recourse.

The IDB and proposed African Development Bank UCS programs contrast with the Bank's pilot which strove for full compliance to a set of criteria for the full range of procurement circumstances, including ICB (except consultant recruitment). The Bank's general intention was to approve national systems for use on all projects in a country. IDB and African Development Bank are attempting to avoid the "all or nothing" approach, striving to gradually move to full use of country systems though a measured process involving partial use, conditional acceptance, agreed improvements, and considerations of intent and objectives.

Original Management Response

WB: Agree #5. Management agrees on the need to adopt a progressive approach to utilize client procurement arrangements and institutions in whole or in part, as appropriate. Critically, the decision on the most appropriate procurement arrangements to utilize in a Bank operation should be proportional and fit for purpose, with the final decision resting with the Bank (Procurement Team) as part of its obligation to provide fiduciary assurance.
Management has made proposals to update its approach to operational procurement, with an increased focus on strengthening client procurement arrangements and institutions as an integral part of its proposed new framework for Procurement in World Bank Investment Project Finance. If agreed, this approach envisages the World Bank Procurement Guidelines becoming one of several different procurement arrangements that could be utilized to support a Bank operation. See Management Response #4 above.

Action Plans
Action 1
Action 1 Number:
0327-01
Action 1 Title:
Action 5: Development of a fit for purpose strategy to identify the most appropriate solution based on agency, sector and count
Action 1 Plan:

Action 5: Development of a fit for purpose strategy to identify the most appropriate solution based on agency, sector and country capacity, including the use of other appropriate procurement systems/ procedures, i.e. EU or IFIs in the case of co-financing.

Indicator: Policy/Guidance regarding fit for purpose, which clarifies Bank engagement in the procurement process, in terms of fiduciary oversight or legal recourse.

Baseline: Limited possibility to apply fit for purpose under current Bank Procurement Guidelines.

Target: Policy developed and approved by 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:
No Updates
Management Update:
No Updates
2015
IEG Update:

IEG notes points (a) and (b) above, as substantial progress towards a fit-for-purpose approach towards the adoption of procurement procedures either of Borrower agencies or of other IFIs.

'specifically, Procurement Policy, Section III.F.1-2 states that: The Bank may agree to relay on the procurement arrangements (and supervision) of another multilateral or bilateral agency or organization; and rely on and apply the procurement arrangements of an agency or entity of the Borrower.

Procurement Policy, Section III.D.1 points out that under the fit-for purpose approach, the Bank team needs to justify why the APA would be the most appropriate procurement arrangement to support the Borrower in achieving the project's development objectives.

As regards agency capacity building, IEG has requested and received a copy of the Annext J document on the APA methodology (attached). In a subsequent review IEG hopes for information on the extent to which it may already have been put into practice.

IEG has already been informed that:

The APA methodology for assessing Borrower's agencies is under review, and it has been tested internally with corporate procurement. Further testing outside the Bank is part of a pilot plan.

Management Update:

Reflecting IEG recommendations, the proposed new Procurement Framework allows the Bank to:

(a) rely on and apply the procurement rules and procedures of another multilateral or bilateral agency or organization, and may agree to such a party taking a leading role in providing the implementation support and monitoring of project procurement activities; and

(b) rely on and apply the procurement rules and procedures of an agency or entity of the Borrower.

To inform agency capacity building and institutional strengthening, Management has drafted a Methodology to assess Alternative Procurement Arrangements in Borrower Implementing Agencies (Annex J of the CODE/AC package). This methodology will primarily be used to determine the acceptability of a Borrowers implementing agency APA for procurements in Bank IPF. The methodology also provides an enhanced procurement system diagnostic that could be used to inform procurement capacity-building programs.