The World Bank has a new Procurement Framework. After a 3-year review period, the Board of Directors approved a new Procurement Policy that supports clients to achieve value for money with integrity in delivering sustainable development. The Framework goes into effect in early 2016.
The main changes and principles of the new policy are:
1. Acceptability of alternative procurement arrangements subject to verification by the Bank;
2. The possibility for the Borrower to apply elements of Sustainable Procurement and to reject Abnormally Low Tenders;
3. The use of the “fit-for-purpose” principle allowing procurement to be context-specific and facilitating Value-for-Money decisions;
4. Enhanced and centralised complaints handling by the World Bank.
About the Review
On 21 July 2015, the World Bank’s Board of Executive Directors approved a new policy governing procurement in projects financed by the Bank. The new Procurement Framework will allow the World Bank to better respond to the needs of client countries, while preserving robust procurement standards throughout Bank-supported projects. The World Bank Management will now finalise and issue the Procurement Directive, Procedure and Regulations and replace the current Procurement Operational Policy (OP 11.00), Procurement Bank Policy (BP 11.00) and the Procurement Guidelines with the new Procurement Framework.
Once in place, the new World Bank guidelines will become a benchmark for all Multilateral Development Banks, thus granting clients more freedom, but also calling for more responsibility from them.
The new Procurement Framework will go into effect in 2016. Value for money, sustainable development and integrity are the vision of the new approach. It will help clients get better development results as it gives the World Bank the space and capacity to significantly increase its support to help countries develop their own procurement systems. For the first time, the World Bank will allow any contract award decisions to be based on criteria other than lowest price, including value for money (Most Advantageous Tender - MAT), quality and sustainability.
The World Bank started its first comprehensive overhaul of its procurement system in 2012. A few of the goals of the reform are to increase quality competition, to move from a one-size-fits-all policy to a fit-for-purpose policy, improved capacity building, and to allow bank staff to focus most resources on the highest risk projects.
Consultations
The World Bank consulted widely during the review to ensure that the views of shareholders and stakeholders are represented. A first phase of consultations was held from May 2012 through February 2013. The second phase ran between August and December 2014. In total, the World Bank received input from about 5,000 stakeholders in close to 100 countries, representing government, the private sector, academia, and civil society.
The Bank also consulted closely with an International Advisory Group, comprising a number of international organisations, including FIDIC.
Implications for the Consulting Engineering Industry
WB procurement typically represents only a small portion of total investment in infrastructure. However, the Bank is still able to influence the procurement policies and procedures of its many borrowing countries. It is important for the professional consulting engineering firms and others involved in global infrastructure projects to understand therefore where the Bank procedures are used, and where local procurement is applied. All FIDIC members are urged to become familiar with local procurement, and seek to influence that procurement, using international best practices.
Key issues promoted by FIDIC throughout the consultation period included:
Eligibility criteria for National Procurement (NCB)
Thresholds for International bidding (ICB)
Involvement of consultants in the development of appropriate procurement strategies
Expert advice from consultants on project sustainability options and priorities
Management of risk and integrity
Capacity building, especially on contract management
Benefits of international contract forms (ie FIDIC) in SBDs
Selection of consultants based on quality
Use of DABs
Many procurement agencies will be confused about the bank policies and procedures. The consulting industry can assist them, and bank personnel, through the transition, and collaborate on modifying procedures that will help achieve the investment objectives, as well as facilitate the engagement of suitable consultants. Collaboration on Capacity Building should also be encouraged.
All related documents are available on the World Bank website under "Details" for Phase 3 of the review.
Link: http://consultations.worldbank.org/consultation/procurement-policy-review-consultations
