This evaluation assesses World Bank–supported project procurement and capacity strengthening since the 2016 procurement reform. Procurements acquire the works, goods, and services necessary to achieve the World Bank’s project development outcomes. The World Bank’s procurement processes need to ensure that clients get the best value for every development dollar. From fiscal year 2017 to fiscal year 2023, governments procured approximately $20 billion through 713 World Bank–supported investment project financing (IPF) operations.1 Within IPF operations, governments award about 10,000 World Bank–supported contracts annually in over 100 countries.

The reforms aimed to address bottlenecks in the procurement system and improve value for money. It was informed by the 2014 Independent Evaluation Group evaluation of procurement. The reform launched a new procurement framework for IPF, emphasized increasing public procurement capacity, introduced a project procurement strategy tool (the project procurement strategy for development [PPSD]), simplified the World Bank’s procurement review process, highlighted procurement risk assessments, strengthened complaint handling, introduced hands-on expanded implementation support to help low-capacity contexts, and stressed procurement approaches that improve projects’ quality and sustainability. Improvements in these areas are intended to help clients better adapt procurement to projects’ needs and advance project outcomes. The reform also introduced a new electronic procurement system—the Systematic Tracking of Exchanges in Procurement (STEP).

The reform emphasizes cutting-edge international good practice principles—efficiency, economy, integrity, fairness, transparency, and fit for purpose—to enhance procurement’s value for money in World Bank–supported projects. The evaluation finds that the reform was successful in projects that apply these principles to achieve higher value for money and advance project development objectives. The evaluation also finds that projects with higher value for money have improved project implementation and procurement performance and that fit-for-purpose assistance to customize procurement supports satisfactory implementation. These findings confirm the benefit of integrating the procurement principles into the World Bank’s procurement framework and validate the reform’s results logic.

Main Findings

Overall, the evaluation finds that the 2016 procurement reform’s logic is sound and that the reform shows promising results. When projects effectively applied the reform’s approaches to tailor procurement around client needs and emphasized improvements beyond cost—such as speed, quality, integrity, and sustainability—they sped up implementation, enhanced beneficiary satisfaction, and obtained better implementation ratings. Better implementation ratings, in turn, correlate with better project outcome ratings. As such, the reform has contributed to both increased efficiency and better project outcomes.

There is a lack of consistent implementation to scale up reform improvements across IPF operations and Regions. Few task teams and clients have the knowledge and experience to draw on and implement the reform’s menu of procurement approaches. The challenge of client procurement experience is critical in Africa, where IPF is the dominant form of lending, and in sectors that rely on IPF for over 90 percent of their portfolio, such as Health, Nutrition, and Population; Transport; Agriculture and Food; Social Sustainability and Inclusion; and Digital Development. The evaluation highlights the urgent need to scale up the reform’s implementation across the IPF portfolio to maximize its benefits.

The reform enhanced efficiency through quicker overall procurement times in World Bank–financed projects. Improving procurement times entailed three changes: first, reducing by more than tenfold the number of procurements that require a comprehensive, time-intensive World Bank prior review; second, using faster procurement approaches for low-risk procurements; and third, when available, supporting low-capacity clients with hands-on support to reduce procurement issues and delays (about 8 percent of projects received this support). The median overall average turnaround time for all procurements (post and prior review combined) is now about two months, down from over three months before the reform. The efficiency improvements of the reform helped the World Bank quickly disburse emergency financing during the COVID-19 pandemic.

Comprehensive reviews of procurement done by World Bank staff still take longer, but support client learning. The median turnaround time of procurements that conduct prior comprehensive reviews is about five months, similar to before the reform. However, clients often benefit from more comprehensive prior reviews to learn how to carry out procurement.2 These reviews could be simplified by focusing on specific stages of complex or innovative procurements, where the World Bank’s comprehensive review can enhance clients’ confidence.

Common processing issues and delays in starting procurement continue to impede project implementation of key procurements in projects, affecting what the World Bank can achieve. About half of projects still encounter procurement processing issues observed before the reform. The issues are exacerbated in high-risk, competitive, and technically complex procurements and by weak client capacity, especially in Western and Central Africa. Common issues that repeat across projects and countries include inadequately prepared bidding and technical documents and lengthy bid evaluations. These issues can double the time it takes to complete procurements, and urgent problem-solving occupies large amounts of staff time in some projects and countries. Some steps in the procurement process, such as evaluating consultants’ proposals and bids for goods and works, are the main reasons for delays in projects with slower procurement. Projects also continue to start procurements late, with about half of projects from 2016 to 2023 signing their first contract toward the end of the first year of implementation. These late start times delay implementation and often affect what can be achieved in development outcomes within the project’s given time frame. Many delays could be avoided by consistently using capacity strengthening to address procurement issues experienced by projects across the portfolio, and enhancing collaboration between procurement staff, clients, and task teams to support the early start of procurement in projects. A key reoccurring issue affecting early procurement relates to the difficulty of finding trained procurement human resources in countries. There has been limited capacity strengthening to develop a pool of trained procurement experts in countries and regions where there is lower capacity.

The reform’s approach to emphasize noncost factors in procurement has been minimally used, with most projects not yet paying significant attention. Procurement that balances cost and noncost considerations helps improve the quality and sustainability of projects. It does this in several ways: making procurement contracts more competitive to attract experienced suppliers, using quality criteria to evaluate bids, linking contract payments to quality outcomes, targeting small local businesses, and prioritizing contracts that help conserve water and energy. However, most procurement is still awarded based on the lowest cost, and the use of quality and sustainability approaches is in its infancy. Rated criteria were mandated for international contracts in September 2023, which should help address quality in these contracts. Findings suggest that attention to quality and sustainability approaches is key not only in international procurement, as currently emphasized, but also in national procurement. Quality and sustainability could be supported by helping World Bank staff and clients learn to implement such approaches and engaging in dialogue with governments to enhance procurement approaches in the country context.

Clients and staff often remain unfamiliar with quality and sustainability approaches. This unfamiliarity heightens the risk of delays and limits uptake unless clients are supported through applied learning, yet few staff have experience providing this support. Clients and staff show strong interest in expanding the use of quality and sustainability approaches, but incentives, collaboration between procurement and technical teams, and workloads often limit the time allocated for support. In addition, projects do not emphasize quality throughout the procurement cycle. A range of approaches to support quality could be emphasized for different types and stages of procurement.

Support for clients to strategize procurement and start implementation early helps achieve results but receives inconsistent attention from the World Bank’s procurement support. Strategizing procurement helps projects plan approaches that balance speed, integrity, and cost and noncost factors to meet contextual needs, thereby facilitating beneficiary satisfaction and improving project implementation. The PPSD, which was introduced with the 2016 reform to help clients strategize procurement and tailor it to local demands, is prepared in all projects. However, while projects prepare the PPSD, it is typically a generic document with similar content across many projects. Few clients and task teams report systematically using it in procurement planning and implementation, and most of them consider it a World Bank requirement to comply with. Clients and World Bank staff often lack the knowledge and skills needed to design and plan procurement approaches and conduct market engagement, which are required for a strong PPSD. Successful strategizing of procurement requires the collaborative engagement of procurement staff and technical teams to support clients during project design and throughout early project implementation, but it is rare. It also requires that procurement strategies are updated and that clients are consistently supported to use them for procurement planning. An early start of procurement in projects also helps increase project disbursement by maximizing what can be achieved. Projects with satisfactory implementation ratings had an average of 40 percent of contracts signed by the end of the first year.

The reform’s risk focus is not consistently implemented to adequately consider the full spectrum of procurement risks and inform management decisions. Current incentives for staff direct their support toward high-value procurements. However, procurement risks do not relate only to value. Risk management needs to consistently consider the different risks in the project and the country context and prioritize among them. The risks are related to processing issues, achievement of project development outcomes, use of country systems, oversight needs to ensure clients’ confidence in the procurement, quality of processes carried out by clients, markets, complexity, innovation, and client capacity and experience. The procurement reform emphasizes a range of risks for analysis and mitigation. Still, in practice, these risks are often not thoroughly evaluated, inadequately mitigated, and do not factor into decision-making, such as to help support clients take the risk of implementing quality, sustainability, or innovative procurements. Procurement risk analyses also miss opportunities to engage collaboratively with task teams and clients to assess risks and identify and track mitigation actions. Learning about which mitigation actions help address risks is limited.

The procurement process does not consistently target support to clients based on their risk profiles and country system capacities. Such efforts could ease the burden on World Bank procurement staff in some countries and redistribute the support to countries and projects with the greatest risks. In other words, clients with lower risks and greater capacities could carry out procurement more autonomously, and clients with frequent issues or lower capacities carrying out national or international procurement may require routine or more intensive World Bank oversight and support. Data on procurement activities, post review audits of procurement done by clients, past processing issues, complaints, mitigation actions, client feedback, and procurement outcomes, among other sources, could be used to modernize risk analytics and create a risk profile for a project that is dynamic, reducing the burden of repeat risk analysis by procurement staff (which often has limited value). Risk data could be used at the project, country, sector, and portfolio level for decisions to prioritize project support. Analyses indicate that clients’ own country systems are never used as alternative procurement arrangements because of the perceived risk in relying on them even if their use in high-capacity, low-risk countries might speed up procurement, save the client and World Bank resources, and improve clients’ perception of the World Bank’s procurement framework. To address this, the World Bank could explore the partial use of alternative procurement arrangements for clients with more capacity or activities with limited risks.

The reform’s data improvements are a tremendous major step in the right direction, enhancing data availability and transparency. The reform kick-started efforts to advance procurement digitalization and data analytics by introducing STEP—the World Bank’s procurement transaction tracking system. This system ensured that, for the first time, the World Bank had electronic data on procurements in projects for all regions. For example, STEP made World Bank reviews more agile and transparently published data on procurement transactions.

The data systems now need modernization, and data could be better used to inform procurement decisions. The system is labor-intensive, information is fragmented, and STEP is now outdated and difficult for clients to use. Moreover, the data from STEP are not systematically integrated with data from other sources, such as audits of simplified procurement done by clients, limiting its usefulness for decision-making. Dashboards also lack benchmarks to monitor performance, mitigation actions, the full spectrum of risks, client feedback, and capacity strengthening. Moreover, there could be a better use of automated generation of information, flags to highlight issues, and simple processes for information sharing to ease client data entry and ensure data quality and useability. Data could be used to predict which and when projects need more or less support and allocate limited staff resources across countries and regions to maximize benefits. Data could also identify common issues, which, if alleviated through capacity strengthening at the country or portfolio level, could yield efficiency gains.

Responsibilities for change management and oversight to ensure the uptake of the reform and oversee its consistent implementation could be more emphasized. Any major organizational behavior shift, such as the 2016 procurement reform, requires extensive change management to help staff and clients understand, embrace, and acquire the necessary skills to implement change. This entails strong central coordination and accountability to plan and monitor implementation and apply corrective actions across regions. While the procurement framework is forward-looking and cutting-edge and policy guidance exists, in practice there is no central oversight of the reform’s implementation across regions. Moreover, procurement capacity strengthening is not consistently implemented to support reform implementation. The World Bank’s procurement capacity strengthening support is not sufficiently strategic, sustainable, and focused on the most pressing needs in the project portfolio to adequately support the reform’s successful implementation. Few Country Partnership Frameworks address strategic capacity strengthening needs related to procurement that hinder portfolio performance. Hands-on expanded implementation support also is not consistently directed to help strengthen capacity, despite its proven success for projects. Moreover, more policy dialogue is needed with country-level clients to implement the reform and take advantage of synergies across the country portfolio. The World Bank provided training to staff and clients but has not yet developed the mix of skills required to make the reform fully successful or engage client ownership to adopt the procurement approaches.

Recommendations

Recommendation 1. Improve change management support for the reform’s implementation.

Proposed actions are as follows:

• Ensure strong central oversight and governance arrangements to manage the reform’s implementation across regions. This support may involve proactive senior management leadership and incentives that encourage staff to help clients implement elements of the reform. It may involve making resources available for applied learning and building a pool of staff with expertise in specific areas, such as coaching, market engagement, use of data for decision-making, and quality and sustainability approaches. In addition, it might be beneficial to recognize procurement staff, task teams, and clients who collaboratively tailor procurement to client needs, apply quality and sustainability approaches, and demonstrate procurement outcomes in the areas of the World Bank’s framework. Fostering collaboration between technical teams and procurement staff to strategize procurement approaches in projects to benefit clients and implement reform elements at scale could also improve support.
• Enhance procurement data systems to benchmark outcomes, identify bottlenecks, and inform decisions to improve reform implementation and project procurement. Adding benchmarks to monitoring dashboards could help track procurement outcomes for the reform principles (that is, efficiency, economy, integrity, fairness, transparency, fit for purpose, and value for money). Monitoring procurement processing issues could help solve these issues more efficiently. Simplifying data entry for clients could facilitate timely and complete information on procurement activities. At the reform level, the data acquired could also be used to correct shortcomings while implementing reform elements. At the portfolio level, the data acquired could be used to prioritize and allocate procurement staff and resources to support procurement achievements in projects with the greatest needs—those with frequent procurement issues, limited experience with planned approaches, low capacity to carry out procurement, and several procurement risks. At the project level, the emphasis could be on providing intensive procurement staff support starting from project preparation through the first year of implementation. For instance, the support could help strategize procurement approaches and ensure early contracting to maximize the success toward the project’s development objectives.

Recommendation 2. Strategically strengthen country-level procurement capacity.

Proposed actions are as follows:

• Engage in country-level dialogue to enhance portfolio performance and the uptake of quality, sustainability, and other innovative procurement approaches. This dialogue would help clients and World Bank staff take advantage of procurement synergies across projects and promote capacity strengthening where relevant to enhance the portfolio’s performance. It could help reduce the burden on task teams, procurement staff, and clients to repeat certain types of procurement-related activities, such as aspects of market analyses in each project, and solve procurement bottlenecks for the project portfolio as a whole instead of on a project-by-project basis. For example, it could help solve bottlenecks related to delays at the start of projects due to client procurement specialists not being in place to strategize and process contracts early. Dialogue could also be used to agree with clients on suitable actions to enhance quality and sustainability in the portfolio and identify innovative ways to improve procurement in World Bank–supported projects in the country context.
• Develop country-level capacity strengthening plans to support countries with persistent procurement issues. These plans could have a long-term horizon (based on timely data on project procurement issues and outcomes, such as from projects, complaints, and client feedback). The plans could be tailored to address procurement-related barriers to project and portfolio performance. The plans could emphasize countries with severe or persistent procurement issues and lower procurement capacity. They could focus on actions to tackle persistent procurement issues in the World Bank’s portfolio, with a strong focus on procurement human resources and knowledge sharing, especially in countries where finding local procurement experts is a constant hindrance. Procurement human resource support could build on hands-on expanded implementation support and include training programs with other development partners, the development of university curricula on procurement, and collaboration with regional procurement networks. The plans could also involve strengthening national procurement and complaint systems and other actions to streamline and expand procurement approaches that enhance quality and sustainability.

Recommendation 3. Consistently manage the full spectrum of procurement risks to maximize project success.

Proposed actions are as follows:

• Improve procurement risk identification and data to help enhance project implementation and results. Risk identification could become a collaborative discussion with task teams and clients to identify and support practical actions to mitigate risks while encouraging procurement innovations to help enhance project development outcomes. The World Bank could provide tools and workshops for procurement staff to support clients in managing risks, such as strategizing procurement activities, balancing the use of comprehensive prior reviews with simplified post reviews, engaging potential suppliers, developing procurement approaches, and remotely monitoring procurement. Risk data analytics could be modernized to generate a dynamic risk profile on a wide spectrum of risks using procurement information from projects (for example, using data on procurement activities, complaints, historical performance, post review problems, and indicators or flags to track risks). This could ease the timely collation of fragmented data from multiple sources to inform decisions and the heavy burden on staff to enter risk information repeatedly and manually for many projects. Data could track risks related to value, the timing of procurement contracting to support the achievement of project development outcomes, the use of quality approaches for procurement, market engagement, post review oversight, client readiness and experience to carry out planned procurement approaches, and clients’ use of alternative procurement approaches.
• Use risk data to help World Bank procurement management and staff optimize oversight and support to projects. Based on the risk profile, procurement oversight approaches for clients could be customized and simplified. For example, clients with demonstrated procurement capacity and low risks might require less support, and part of their procurement could be done using country systems. In contrast, procurement activities might need frequent oversight for clients with low capacity and high risks. This includes early oversight of post review processes done by clients in projects and more targeted World Bank support for comprehensive prior reviews. Prior review timelines may be shortened by targeting the World Bank’s review to focus on challenging stages of procurement rather than the entire process. The use of third-party review mechanisms could also be expanded for higher-risk procurements, where clients want the assurance of oversight but prior reviews would be too slow. Managing risks better, with clear guidance to inform decisions, could help procurement staff customize client support and optimize the time they spend supporting clients. Risk profiles may also change over time and vary for different project components and activities.