Management of the World Bank thanks the Independent Evaluation Group (IEG) for the report Making Procurement Work Better: An Evaluation of the World Bank’s Procurement System. The evaluation assesses World Bank–supported project procurement and capacity strengthening since the 2016 procurement reform. This report is a timely input as the World Bank is working to improve operations efficiency and effectiveness, and it will inform a change program for operations procurement that management is developing. Management thanks IEG for the continued collaboration.

World Bank Management Response

Overall

Management welcomes the report’s findings that the World Bank’s 2016 procurement reform logic is strong, that the World Bank’s Procurement Framework is aligned with cutting-edge international good practice principles, and that reforms have contributed to greater speed, increased efficiency and better project outcomes. The report highlights that the reforms expanded hands-on support to clients, the reduction of 33 percent in the median turnaround time for all procurements, and better implementation ratings. The report notes that efficiency improvements of the reform also enabled the World Bank to disburse emergency financing during the COVID-19 pandemic quickly. It also highlights that the reform’s data improvements have enhanced data availability and transparency.

Management agrees that there remains inconsistent implementation and application of the framework and notes that country procurement-related policy dialogue, client capacity strengthening, and World Bank staff skills need more emphasis. The 2016 reform and framework was a change that affected every World Bank–financed procurement. During reform implementation, the World Bank’s organizational structure and line management of procurement evolved,1 which inevitably contributed to uneven application of the framework. Further, the COVID-19 pandemic diverted procurement managers’ and staff efforts to help clients respond to the unprecedented emergency and global supply chain disruption, and as a result progress with reform implementation and change was slower.

Management agrees with the report’s finding that more can be done to simplify and focus the World Bank’s comprehensive prior review. Management recognizes that common processing issues and delays in starting procurement can impede project implementation (even as some of these are beyond the immediate sphere of procurement). Management notes that the reform’s approach to emphasizing noncost factors in procurement was minimally used between fiscal year (FY)17 and FY23. Starting September 1, 2023, the World Bank mandated the use of noncost factors and rated criteria to evaluate bids in addition to cost factors for all international competitive bidding (with some limited exceptions). IEG’s findings acknowledge that this change should help improve quality, and Operations Policy and Country Services is currently analyzing the first year of implementation across 317 procurements ($6.3 billion) and planning the next stage.

Recommendations

Management welcomes IEG’s recommendations, which inform its change program. Issues raised by IEG are complex and cross-cutting and have World Bank–wide implications for operations. Building on the 2016 reform and procurement framework, management is developing a change program for operations procurement program of actions targeted at improving development impact, increasing efficiency, and expediting project implementation.

Management agrees with the first recommendation to improve change management support for the reform’s implementation. Management’s change program will include a review of procurement roles and responsibilities, as well as enhancement of the World Bank’s operations procurement training and outreach and talent management for procurement staff.

Management agrees with the second recommendation to strategically strengthen country-level procurement capacity to enhance portfolio performance and uptake of quality, sustainability, and innovative procurement approaches. This will also be addressed as part of the change program. As part of this, management will develop country-level capacity strengthening plans to address persistent procurement issues and will take steps to support expanded use of hands-on expanded implementation support for lower capacity or borrowers from countries affected by fragility, conflict, and violence and for larger procurements. Management will emphasize integrating capacity-building initiatives with hands-on expanded implementation support to ensure that it not only addresses immediate project needs but also contributes to long-term capacity development within the implementing agencies.

Management agrees with the third recommendation to manage the full spectrum of procurement risks to maximize project success and to improve procurement risk identification and data to help enhance project implementation and results. The change program will also address this. As part of this, risk data will be used more systematically to help World Bank procurement management and staff optimize oversight and support to projects. Management will review thresholds for prior review and thresholds for the use of country national procurement systems. Recognizing that technology has changed, management will replace its main procurement data platform, the Systematic Tracking of Exchanges in Procurement system, which will address the report’s information technology system concerns, including levering artificial intelligence and other new technologies to support client document preparation, simplify and increase automation of World Bank prior reviews processes, and provide data for better procurement-related decision-making. Management will identify and implement further actions to improve the application and impact of noncost factors and rated criteria in international procurements and to further incentivize good contractor performance, including expanding the existing contractor disqualification mechanism to include broader performance matters, which can be an important risk mitigator during project implementation.