#1. Review the need for support to procurement capacity within the context of all CASs. Where identified as a priority, adopt country-level strategic plans to build procurement capacity in client countries that make specific resource commitments for this objective, integrated within the context of civil service reform, planning and budgeting, and economic management.abc
Good public procurement practices are a major determinant of the effectiveness of public expenditure. On behalf of their citizens, governments typically spend as much as between 5 and 20 percent of their gross domestic product on procurement of goods and services, and effective procurement policies enable better use of government budgets. Good national procurement practices are therefore an essential element of the poverty reduction focus of the Bank. Equally, sound public procurement in client countries is a prerequisite for the success of the Bank's newly introduced Program for Results lending instrument, which uses national procurement policies, and may allow procurement practices in Bank lending to be unified across investment and policy based lending, and harmonized with other donors.
IEG findings show that there has been an absence of strategic planning for procurement capacity building, and these efforts have been fragmented. There has been a loose translation of priorities from procurement discussions in country strategies to specific actions, in the country work program for procurement reform. Attention in early years focused on diagnostic work and there was limited effort in finding vehicles that would provide hands-on support with implementation of diagnostic findings and building them into the work program. Support for capacity building has been fragmented, with an excessive reliance on DPLs. As client countries' procurement systems mature and basic legal and institutional structures are put in place, there is less scope for achieving change through policy based loans, with more need for hands-on support through technical assistance. Given the relatively small size of IDF grants, technical assistance loans that are better grounded in predictable budgetary funding may provide more comprehensive, reliable and longer term support.
Reviews of procurement, viewed through the public finance lens of the PEFA instrument, do not suggest a close integration of procurement within the public expenditure management framework. Moreover there was little attention to public sector management issues such as cash planning or commitment reporting.
Limited success achieved in procurement capacity building is due to endemic country issues as much as to Bank-related issues. Although the Bank attempted some procurement capacity building in most countries, it was mostly with a focus on immediate needs for implementing Bank lending. On the government side, resources are invariably stretched, civil service salaries are low, and staff turnover is typical. The lack of recognition of procurement as a professional stream is an impediment that some governments have tried to address. However, building procurement capacity is also an integral part of a wider civil service capacity building exercise, and it cannot be developed in isolation of the overall civil service cadre.
WB: Agree # 1. Management agrees that decisions on how to support procurement in each country should be taken in the first instance in the context of the Bank's country engagement strategy in the country concerned. This issue has been identified in the proposed new framework for Procurement in World Bank Investment Project Finance. It is envisaged that when the Country Partnership Framework (including the lending program) is determined the procurement profile, including opportunities and risks, can be assessed. The procurement profile for a country would be informed by a diagnostic of the sectors in which engagement is planned, the broad market conditions (competitiveness, price trends, innovations, etc.) in those sectors, the institutions likely to be involved in implementation, and their procurement arrangements. This diagnostic exercise would incorporate an understanding of the sectors in which engagement is planned, the broad market conditions (competitiveness, price trends, innovations, etc.) in those sectors, the institutions likely to be involved in implementation, and their procurement arrangements. This assessment would identify the appropriate procurement approach in each instrument, including opportunities to utilize client procurement arrangements and institutions, with recommendations for procurement capacity building as appropriate within the context of Public Service reforms.
Final decisions on resource commitments will need to be taken in the context of competing development objectives and priorities of the country.
Action 1(a): Systemic country procurement profile to be developed and maintained
Indicator: Template for a systemic country procurement profile developed.
Baseline: No systemic country procurement profile exists.
Target: Systemic country procurement profile developed for all countries.
Timeline: FY16
Action 1(b): Where client demand exists and where indicated as priority management will prepare country level strategic plans to build procurement capacity within the context of the Country Partnership Framework, integrated with civil service reform, planning and budgeting, and economic management.
Indicator: Country Level strategic plans on building procurement capacity developed.
Baseline: Procurement reform/capacity building activities only referenced in some CASs without specific resource commitments.
Target: Procurement/reform capacity building activities referenced in CPFs where indicated as necessary and where client demand exists based on the SCD, with specific resource commitments.
Timeline: FY16
IEG's recommendation was to adopt country-level strategic plans to build procurement capacity in client countries where demand exists and make specific resource commitments to this objective. The latest progress on the two agreed actions is as follows: (i) Develop and maintain Systematic country procurement profiles: IEG notes that Management has expanded and upgraded the Methodology for Assessing Procurement Systems (MAPS) system, which is now a consolidated comprehensive diagnostic tool that provides a holistic view of the structure, function, and performance of public procurement, which was easily measurable and could be tracked over time, and is capable of better assessing public procurement systems and formulate best-fit procurement reform programs. The first draft of the Revised MAPS (core indicators) was available for consultation on the OECD governance website in June 2016 and a global event was organized in November 2016 in Dakar, Senegal, to ensure broader dissemination and promoting feedback and buy-in. Three test assessments have been conducted over December 2016 to May 2017.The final version of the Revised MAPS core methodology has been finalized and is about to be launched in January 2018, along with its supplementary modules. The management has been using MAPS methodology to develop systematic country procurement profiles where demand exists. (ii) Adopt country level strategic plans to build procurement capacity within the context of CPF: IEG notes that the MDTF for procurement capacity building is now operational. IEG had already noted in 2016 that a significant number of SCDs now incorporate procurement assessments and CPFs proposed operations to support procurement capacity building. Continuing in 2017, public procurement and its impact on development were assessed in 14 (of the 18) Systematic Country Diagnostics (SCDs) conducted in the year. In addition, all 17 Country Partnership Frameworks (CPFs) approved in FY17 proposed specific investments to support capacity building for public procurement through Reimbursable Advisory Services, technical assistance, and trust funds.
The Bank's Procurement Framework, effective since July 1, 2016, goes beyond the establishment of rules-based and compliance-oriented systems - recognizing procurement's role as a driver of broader public sector performance, service delivery, and citizen trust. Public procurement accounts for 15 percent of GDP or more in most developing economies, meaning even marginal improvements in performance can generate significant fiscal savings that can be deployed to other priority areas. On the Action 1 (b) of this MAR, specifically IEG's recommendation that "Where client demand exists and where indicated as priority management will prepare country level strategic plans to build procurement capacity within the context of the Country Partnership Framework", Management agrees with IEG's demand-driven nature of this proposal. Therefore, Management agreed with the proposed target that "Procurement/reform capacity building activities referenced in CPFs where indicated as necessary and where client demand exists based on the SCD, with specific resource commitments." Management is happy to report that in recent years Management has taken specific actions to support borrower's procurement reforms, including those agreed with IEG (MARs). Currently the Bank has an active portfolio, exceeding $250 million (with a pipeline of over $200 million), in procurement reforms and capacity development components in IPFs, PforRs, DPOs and RASs. Specifically, in FY17, Bank data show that public procurement and its impact on development were assessed in 14 (of the 18) Systematic Country Diagnostics (SCDs). In addition, all 17 Country Partnership Frameworks (CPFs) approved in FY17 proposed specific investments to support capacity building for public procurement through Reimbursable Advisory Services, technical assistance, and trust funds. In addition, Management established an MDTF to further support country capacity building. A Secretariat has been established within the Governance GP to administer the MDTF, and administrative agreements with donors were signed in January 2017. To date, US$10 million has been committed by various donors to the MDTF. A Steering Committee comprising donor agencies held its inaugural meeting in January 2017 and assembled most recently in June 2017. The Committee's role is to determine the criteria to access funds, and to make decisions on program allocation. Funding is available to any borrower country however, priority will be given to Fragile and Conflict-Affected Situations and countries with low institutional capacity. Moreover, as reported to IEG in the Management report FY16, the Bank and partners committed in 2005 to use mutually agreed standards and processes to carry out diagnostics to define sustainable reforms and monitor implementation. To that end the Methodology for Assessing Procurement Systems (MAPS core methodology) has become the globally recognized common methodology for the assessment of national procurement systems. The Bank has co-led an international initiative to upgrade and expand MAPS. MAPs methodology has been revised (June 2016), consulted (November 2016), and supplementary modules on Agency Level Assessments, Professionalization, Public Private Partnership (PPP), Sector Market Analysis, and Sustainable Public Procurement have been produced. Additionally, three test assessments using the revised draft MAPS were conducted (December 2016 - May 2017) in Chile, Norway and Senegal. Findings and lessons learned from these tests were discussed in a technical meeting held in Washington DC, June 2017. The final version of the MAPS core methodology, shared with IEG, has been finalized and is about to be launched in January 2018. Supplementary modules are about to be completed by January 2018. The new MAPS is a stand-alone methodology that provides a comprehensive approach for assessing procurement systems. The modules, on the other hand, complement the core assessment methodology -MAPs-, and focus on specific areas of public procurement. These modules can be used by countries depending on their particular needs. However, to facilitate a coherent and holistic approach to public procurement assessments and reform, it is generally recommended that the application of a MAPS module should follow or be embedded in a comprehensive assessment using the MAPS core methodology. On Develop a "template for systematic country procurement profile development". As reported above, the World Bank has been used the MAPs methodology since its inception. In addition, the World Bank has committed to use this methodology as part of the Multi-Donor Trust Fund, MDTF, (See Management FY17report, MAR 323). One of the key objectives of this MDTF is to develop "comprehensive diagnostic and risk assessment tools on performance measurement and reform prioritization. &hellip This requires that next steps be taken to enhance the analytical tool to focus not only on legal and regulatory aspects but also on actual performance of the system as well as the consideration of the political and institutional environment for procurement reforms.
Latest progress update on agreed actions under this recommendation is as follows:
(i) Developing a template for systemic country procurement profile for all countries: IEG had noted in its update for 2015 that a new draft template for procurement assessments was prepared and presented for discussion to the Bank's Executive Directors, in November 2015. However, now after the new Procurement Framework (NPF) has become effective on July 1, 2016, the Bank has a dual role of fiduciary assurance and borrower capacity building, according to Section III.A of the Procurement Policy. It will now play a more predominant role in borrowers' procurement reforms. As regards the development of template systemic country profile is concerned, Management has instead expanded and upgraded the Methodology for Assessing Procurement Systems (MAPS) system, which is a comprehensive diagnostic tool to better assess public procurement systems and formulate best-fit procurement reform programs. The revised MAPS has been placed on the OECD's website to seek stakeholder feedback in the ongoing consultative process. The revised MAPS is expected to be placed before the Board for approval by the end of FY17.
(ii) Developing country level strategic plans on building procurement capacity where client demand exists: IEG is happy to note that in 2015, public procurement and its impact on development were assessed in 16 Systematic Country Diagnostics (SCDs). During the same year, 7 Country Partnership Framework (CPF) had proposed specific investments to support capacity building for public procurement through Reimbursable Advisory Services, technical assistance, and trust funds. Following the World Bank Group's guidance on the CPF, Bank's interventions to enhance countries' public procurement have been progressively integrated with public financial management (PFM) and governance reforms to enhance both the quality of overall government expenditures and the fiduciary credibility of public sector management. The Bank has also set up a multi-donor trust fund (MDTF) that is expected to become a crucial financing mechanism, complementing and leveraging other Bank interventions (lending, knowledge, and convening services) to catalyze and demonstrate the impact of innovative capacity building solutions in public procurement. IEG is happy to note that, till date, US$11 million has been received in commitments from the Swiss State Secretariat for Economic Affairs (SECO), France, Netherlands, and the European Union, and that this MDTF is expected to be operational in FY17.
The new Procurement Framework (NPF) consisting of the Procurement Policy, Directive, Procedure, and Regulations for IPF Borrowers governing the procurement of good, works, and services financed by the Bank through investment project financing (IPF) operations, became effective on July 1, 2016. According to Section III.A of the Procurement Policy, the Bank has a dual role fiduciary assurance and borrower capacity building and will thus play a more predominant role in borrowers' procurement reforms. To provide country capacity-building support, in recent years Management has taken specific actions, including those agreed with IEG (MAR), as follows: 1. As a crucial element in the global governance agenda and a key area of focus for the development community, the Bank has increasingly taken public procurement into account in its assessments of countries' public expenditure. Furthermore, the Bank's interventions to enhance countries' public procurement have been progressively integrated with public financial management (PFM) and governance reforms to enhance both the quality of overall government expenditures and the fiduciary credibility of public sector management. (See World Bank Group Guidance: Country Partnership Framework Products). Bank data show that in 2015 public procurement and its impact on development were assessed in 16 Systematic Country Diagnostics (SCDs). During the same year, 7 Country Partnership Framework (CPF)proposed specific investments to support capacity building for public procurement through Reimbursable Advisory Services, technical assistance, and trust funds. 2. The Governance Global Practice (GGP) has been tasked to enhance country capacity building by leveraging its global, multidisciplinary resources, particularly its specialists in governance, procurement, and financial management. 3.The GGP has established a Global Procurement Partnership (GPP), a multi-stakeholder coalition aimed at spurring a long-lasting movement to strengthen country procurement systems and performance. 4.The Bank has set up a multi-donor trust fund (MDTF) that is expected to become a crucial financing mechanism, complementing and leveraging other Bank interventions (lending, knowledge, and convening services) to catalyze and demonstrate the impact of innovative capacity building solutions in public procurement. The governance arrangements for the MDTF have been defined in a draft program document, and administrative agreements with donors are being finalized. Funds mobilization has progressed well: to date, US$11 million has been received in commitments from the Swiss State Secretariat for Economic Affairs (SECO), France, Netherlands, and the European Union. The MDTF is expected to be operational in FY17. 5. At the global arena, in the Paris Declaration on Aid Effectiveness, the World Bank, partner countries and donors committed in 2005 to use mutually agreed standards and processes to carry out diagnostics to define sustainable reforms and monitor implementation and the Methodology for Assessing Procurement Systems (MAPS) became the globally recognized common methodology for the assessment of national procurement systems. Honoring international commitments, Management believes that expanding and upgrading the Methodology for Assessing Procurement Systems (MAPS) system is a way to develop a comprehensive diagnostic tool that is truly anchored in countries' needs country level analytical tools. To that end, the Bank has been actively involved with the OECD in an initiative to upgrade MAPS as a tool to better assess public procurement systems and formulate best-fit procurement reform programs under the GPP. (See action 2, below, for more information.) MAP will continue using MAP as the analytical tool (see Action 1(a)) for the formulation of best fit procurement reform programs, innovative country-led, community-driven solutions to procurement issues and capacity building and institution development
Under Action 1(a), a new draft template for procurement assessments has now been prepared and presented for discussion to the Bank's Executive Directors, in November 2015. Management has also begun to take steps towards the creation of a new multi-donor trust fund for financing capacity building for procurement. Under Action 1 (b), IEG has been informed that where client demand exists and where indicated as priority management will prepare country level strategic plans to build procurement capacity within the context of the Country Partnership Framework. IEG would like to see actions, in the future, towards the integration of such strategic plans within the context of Country Partnership frameworks.
1. The World Bank Board of Directors approved the new Procurement Policy for IPF operations on July 21st 2015. The new Procurement Framework improves the way the Bank supports Borrower's capacity building and institutional strengthening. Among other actions, Management has proposed to:
(i) identify countries based on government ownership, track record of existing programs, evident capacity gaps and need for additional resource
(ii) establish a multi-donor trust fund, through which together with other lending and non-lending instruments, capacity building activities at the country level could be financed.
2. Leveraging the benefits of the new global organizational structure (GGP), Management plans to consider PFM (public procurement) as an integral part of systematic country diagnostics (SCDs) which result could be reflected in the respective Country Partnership Frameworks (CPFs).