Professor Kamal ELTAYEB PROCUREMENT PROCESS

1. Professor Kamal ELTAYEBPROCUREMENT PROCESS

2. THE PROJECT CYCLE IDENTIFICATION PREPARATION EVALUATION APPRAISAL IMPLEMENTATION NEGOTIATIONS BOARD PRESENTATION

3. ROLES AND RESPONSIBILITIES

4. ROLES IN PROCUREMENT PROCESS LOAN/CREDIT AGREEMENT BANK BORROWER COMPLAINTS (GL APP. 4) SUPPLIER CONTRACTOR CONSULTANT PREQUALIFICATION DOCUMENTS BIDDING DOCUMENTS REQUEST FOR PROPOSALS BIDS FOR GOODS AND WORKS PRPOSALS FOR CONSULTING SERVICES CONTRACT(S)

5. SELECTION OFCONSULTANTS

6. GOODS AND WORKS. PRODUCT BASED OPEN COMPETITION PRICE IS THE MAJOR CRITERION PUBLIC OPENING OF BIDS CONSULTING SERVICES KNOWLEDGE BASED SHORTLISTS PRICE PLAYS MINOR ROLE NON-PUBLIC OPENING OF TECHNICAL PROPOSAL PUBLIC OPENING OF FINANCIAL PROPOSALS TWO TYPES OF PROCUREMENT

7. GOODS AND WORKS DETAILED SPECIFICATIONS SINGLE STAGE PROCEDURE NORMALLY NEGOTIATIONS ONLY EXCEPTIONALLY CONSULTING SERVICES TERMS OF REFERENCE (GENERAL WORK PROGRAM) TWO-STAGE PROCEDURE NEGOTIATIONS NORMALLY TWO TYPES OF PROCUREMENT (CONT.)

8. OBJECTIVES OF SELECTION • OBTAIN HIGH QUALITY SERVICE • ENSURE ECONOMY AND EFFICIENCY • PROVIDE EQUAL OPPORTUNITY FOR QUALIFIED CONSULTANTS • ENCOURAGE DEVELOPMENT OF LOCAL CONSULTING CAPABILITIES • TRANSPARENCY IN THE SELECTION PROCESS

9. TYPES OF CONSULTING SERVICES • PRE-INVESTMENT • PROJECT PREPARATION • IMPLEMENTATION • TECHNICAL ASSISTANCE

10. PRE-INVESTMENT • COUNTRY AND SECTOR STUDIES • FEASIBILITY STUDIES

11. PROJECT PREPARATION • DETAILED STUDIES • DESIGN AND SPECIFICATIONS • PREPARATION OF BIDDING DOCUMENTS

12. IMPLEMENTATION • PROCUREMENT • PROJECT MANAGEMENT • CONSTRUCTION AND INSPECTION • INFORMATION SYSTEMS • ACCOUNTING AND AUDITING

13. TECHNICAL ASSISTANCE • ADVISORY SERVICES • INSTITUTION & MANAGEMENT ANALYSIS • CAPACITY BUILDING • STUDIES • TRAINING

14. TYPES OF CONSULTANTS • PRIVATE SECTOR • INDIVIDUAL • PARTNERSHIP • LIMITED LIABILITY (CORPORATION) • JOINT VENTURE • PUBLIC SECTOR • GOVERNMENT-OWNED • GOVERNMENT-SUBSIDIZED • OTHER

15. OTHER TYPES OF CONSULTANTS • UNIVERSITIES • RESEARCH INSTITUTES • UNITED NATIONS AGENCIES • NON-GOVERNMENT ORGANIZATIONS (NGO) • DIVISIONS/AFFILIATES OF MANUFACTURERS/CONTRACTORS/ UTILITIES

16. OTHER TYPES OF CONSULTANTS CONT. • PROCUREMENT AGENTS • INSPECTION AGENTS • BANKS • AUDITORS • SERVICE DELIVERY CONTRACTORS

17. TYPES OF CONTRACTS • LUMP-SUM • SIMPLE PLANNING AND FEASIBILITY STUDIES, ENVIRONMENTAL STUDIES, ETC. CONTENTS, DURATION, AND OUTPUT CLEARLY DEFINED. PAYMENTS LINKED TO OUTPUTS ONLY. • TIME-BASED • PLANNING, FEASIBILITY STUDIES, DETAILED ENGINEERING, SUPERVISION, TECHNICAL ASSISTANCE. PAYMENTS LINKED TO INPUTS, AGREED STAFF RATES AND REIMBURSABLE ITEMS. • WORLD BANK HAS ISSUED STANDARD FORMS OF CONTRACT FOR THESE TWO TYPES OF CONTRACTS.

18. TYPES OF CONTRACTS CONT. • SUCCESS FEE CONTRACTS • CONSULTANTS (BANKS OR FINANCIAL FIRMS) FOR PRIVATIZATION OPERATIONS; PREPARES COMPANIES FOR SALE OR MERGERS OF FIRMS; RETAINER AND SUCCESS FEE (AS A PERCENTAGE OF SALE PRICE OF THE ASSETS) • PERCENTAGE CONTRACTS • ARCHITECTURAL SERVICES, AND PROCUREMENT AND INSPECTION AGENTS. SIMILAR TO LUMP-SUM CONTRACTS, NO MATCHING OF INPUTS TO PAYMENTS, OPEN-ENDED, NOT RECOMMENDED EXCEPT IF BASED ON PERCENTAGE OF FIXED TARGET COST

19. TYPES OF CONTRACTS CONT. • INDEFINITE DELIVERY CONTRACTS • SPECIALIZED SERVICES “ON CALL,” TO RETAIN ADVISERS FOR IMPLEMENTATION OF COMPLEX PROJECTS (DAM PANEL, ADJUDICATORS, PROCUREMENT ADVICE, TECHNICAL TROUBLESHOOTING); AGREED UNIT RATES FOR EXPERTS WITH PAYMENTS BASED ON TIME ACTUALLY USED

20. FINANCING OF CONSULTANTS • WORLD BANK • INSTITUTIONAL DEVELOPMENT FUND • ONGOING LOANS/CREDITS (PIGGY-BACK) • RETROACTIVE FINANCING • PROJECT PREPARATION FACILITY • TECHNICAL ASSISTANCE LOAN • ADMINISTRATIVE BUDGET

21. FINANCING CONT. • OTHER SOURCES • UNDP (WORLD BANK EXECUTED) • BILATERAL/MULTILATERAL SOURCES • JAPAN’S POLICY AND HUMAN RESOURCES DEVELOPMENT FUND • TRUST FUNDS (WORLD BANK EXECUTED) • GLOBAL ENVIRONMENT FACILITY

22. SELECTION METHODS • QUALITY- AND COST-BASED SELECTION (QCBS) • PREFERRED METHOD, SIMILAR TO ICB FOR GOODS AND WORKS. • TECHNICAL AND FINANCIAL PROPOSALS IN SEPARATE ENVELOPES. • FINANCIAL PROPOSALS SHALL REMAIN SEALED WITH INDEPENDENT AUTHORITY • TECHNICAL EVALUATION (QUALITY) FIRST (BANK NO OBJECTION MANDATORY) • PUBLIC OPENING OF FINANCIAL PROPOSALS • COMBINED EVALUATION BASED ON WEIGTHED FORMULA

23. SELECTION METHODS cont. • QUALITY BASED SELECTION (QBS) • TECHNICAL PROPOSAL ONLY OR BOTH IN SEPARATE ENVELOPES • TECHNICAL EVALUATION (QUALITY) • FINANCIAL EVALUATION ONLY OF FIRM WITH HIGHEST TECHNICAL SCORE

24. SELECTION METHODS cont. • SELECTION UNDER FIXED BUDGET (SFB) • FINANCIAL PROPOSALS TO BE WITHIN SPECIFIED FIXED BUDGET • TECHNICAL AND FINANCIAL PROPOSALS IN TWO SEPARATE ENVELOPES • TECHNICAL EVALUATION (QUALITY) FIRST (BANK NO OBJECTION MANDATORY) • PUBLIC OPENING OF FINANCIAL PROPOSALS • REJECTION OF PROPOSALS EXCEEDING FIXED BUDGET • HIGHEST RATED TECHNICAL PROPOSAL (WITHIN FIXED BUDGET) SELECTED

25. SELECTION METHODS cont. • LEAST COST SELECTION (LCS) • SMALL ASSIGNMENTS ONLY (<$200,000) • TECHNICAL AND FINANCIAL PROPOSALS IN TWO SEPARATE ENVELOPES • TECHNICAL PROPOSALS MUST ACHIEVE SPECIFIC MINIMUM SCORE OR THEY ARE REJECTED • FINANCIAL PROPOSALS OF SUCCESSFUL FIRMS OPENED IN PUBLIC • LOWEST PRICE PROPOSAL SELECTED

26. SELECTION METHODS cont. • SELECTION BASED ON CONSULTANTS’ QUALIFICATIONS (SBCQ) • VERY SMALL ASSIGNMENTS ONLY (<$100,000) • REQUEST FOR EXPRESSIONS OF INTEREST • EVALUATION OF EACH FIRM’S EXPERIENCE AND COMPETENCE • SELECTION OF THE MOST APPROPRIATE FIRM • SELECTED FIRM TO SUBMIT TECHNICAL AND FINANCIAL PROPOSAL

27. SELECTION METHODS cont. • SINGLE SOURCE SELECTION (SSS) • NATURAL CONTINUATION OF PREVIOUS WORK BY FIRM • RAPID SELECTION ESSENTIAL • VERY SMALL ASSIGNMENT (<$100,000) • FIRM HAS UNIQUE QUALIFICATIONS OR EXPERIENCE OF EXCEPTIONAL WORTH • BANK REVIEWS/APPROVES SOLE-SOURCE REQUEST • BORROWER SOLICITS TECHNICAL/FINANCIAL PROPOSAL

28. COMPETITIVE SELECTION • CONSIDERATIONS • COMPLEXITY • ASSIGNMENT IMPACT • COMPARABILITY • COMPETITION ON QUALITY (QBS) • TECHNICAL EVALUATION ONLY • NEGOTIATIONS ON PRICE • PRICE AS A FACTOR

29. COMPETITIVE SELECTION CONTINUED • PRICE AS A FACTOR (QCBS, FIXED BUDGET, LEAST COST) • TECHNICAL EVALUATION F IRST • PRICE AS A FACTOR SECOND • NEGOTIATIONS LIMITED TO INPUTS (FROM CONSULTANTS AND CLIENT)

30. SELECTION STEPS • 1. PREPARE TERMS OF REFERENCE • 2. ESTIMATE COST (BUDGET) • 3. ADVERTIZE FOR EXPRESSIONS OF INTEREST (>$200,000) • 4. PREPARE SHORTLIST • 5. DETERMINE/CONFIRM SELECTION PROCEDURE

31. SELECTION STEPS CONT. • 6. PREPARE AND ISSUE REQUEST FOR PROPOSALS, INCLUDING • LETTER OF INVITATION (LOI) • EVALUATION CRITERIA • PROPOSED CONTRACT • 7. EVALUATE TECHNICAL PROPOSALS • 8. OBTAIN BANK’S NO OBJECTION IF REQUIRED (PRIOR REVIEW) • 9. OPEN AND EVALUATE FINANCIAL PROPOSALS

32. SELECTION STEPS CONT. • 10. OBTAIN BANK’S NO OBJECTION TO COMBINED EVALUATION • 11. NEGOTIATE AND SIGN CONTRACT • 12. NOTIFY UNSUCCESSFUL FIRMS

33. SHORTLIST PREPARATION • SOURCES • EXPRESSIONS OF INTEREST • BORROWER’S KNOWLEDGE/EXPERIENCE • TRADE REPRESENTATIVES • PROFESSIONAL ASSOCIATIONS • BANK REFERENCES THROUGH DACON SYSTEM • EXCEPTIONALLY, BANK WILL PROVIDE SHORTLIST OR LONG LIST

34. SHORTLIST PREPARATION CONT. • MANDATORY REQUIREMENTS: • FROM THREE TO SIX FIRMS • NO MORE THAN TWO FIRMS FROM ONE COUNTRY • AT LEAST ONE FIRM FROM A DEVELOPING COUNTRY (IF AVAILABLE) • MAY COMPRISE ONLY NATIONAL CONSULTANTS (SMALL ASSIGNMENTS)

35. REQUEST FOR PROPOSAL • CONTENTS • LETTER OF INVITATION • INFORMATION TO CONSULTANTS (INCLUDING DATA SHEET) • STANDARD FORMS • TERMS OF REFERENCE (TOR) • PROPOSED CONTRACT

36. TECHNICAL EVALUATION • GENERAL AND SPECIFIC EXPERIENCE OF FIRM (5 - 10%) • METHODOLOGY AND APPROACH (20 - 50%) • QUALIFICATIONS OF KEY STAFF (30 - 60%) • TRANSFER OF KNOWLEDGE (0-10%) • PARTICIPATION BY NATIONALS (0-10%) • TOTAL OF POINTS MUST EQUAL 100

37. TECHNICAL EVALUATIONCONT. • GENERAL AND SPECIFIC EXPERIENCE OF FIRM (5 - 10%) • RELEVANT ASSIGNMENTS • SIMILAR SIZE • COMPLEXITY • TECHNOLOGY • ENVIRONMENT

38. TECHNICAL EVALUATION CONT. • METHODOLOGY AND APPROACH (20 - 50%) • SCHEDULES • RESPONSIVENESS TO TOR • LOGISTICS • SKILLS TRANSFER • BACKSTOPPING • INNOVATIVENESS

39. TECHNICAL EVALUATION cont. • QUALIFICATIONS OF KEY STAFF (30 - 60 %) • TEAM COMPOSITION • PROFESSIONAL QUALIFICATIONS • SUITABILITY • LOCAL KNOWLEDGE • LANGUAGE • TRAINING EXPERIENCE • PERMANENT STAFF

40. TECHNICAL EVALUATION CONT. • TRANSFER OF KNOWLEDGE (0 - 10%) • IF TRANSFER OF KNOWLEDGE IS THE MAIN OBJECTIVE OF THE ASSIGNMENT, IT SHOULD BE GIVEN HIGHER WEIGHT • IF TRANSFER OF KNOWLEDGE (TRAINING) IS A FACTOR IN EVALUATION, TOR SHOULD CLEARLY SPECIFY THE REQUIREMENTS (TOPICS, NUMBER OF TRAINEES, TRAINING METHODS, BASIS FOR EVALUATION, ETC.)

41. TECHNICAL EVALUATION CONT. • PARTICIPATION OF NATIONALS (0 -10%) • ONLY KEY STAFF TO BE EVALUATED • BASED ON NUMBER OF NATIONALS AMONG KEY STAFF PRESENTED BY FOREIGN AND NATIONAL FIRMS • WEIGHT TO BE GIVEN PROPORTIONATELY TO RATIO OF LOCAL/FOREIGN KEY STAFF, OR OTHER SUBCRITERIA AS STIPULATED IN DATA SHEET

42. FINANCIAL EVALUATION • NOTIFY UNSUCCESSFUL FIRMS • PUBLIC OPENING OF FINANCIAL PROPOSALS OF SUCCESSFUL FIRMS • EXCLUDE LOCAL TAXES, IF APPLICABLE, BUT INCLUDE REIMBURSABLE EXPENSES • LOWEST PRICE SCORES 100%, OTHERS INVERSELY PROPORTIONAL TO THEIR PRICES • COMBINE TECH. AND FIN. EVALUATION 10 TO 20 % WEIGHT TO PRICE

43. INDIVIDUAL CONSULTANTS • USE WHEN • TEAMS ARE NOT REQUIRED • NO OUTSIDE SUPPORT NEEDED (BACKSTOPPING) • INDIVIDUAL EXPERIENCE AND QUALIFICATIONS PARAMOUNT

44. INDIVIDUAL CONSULTANTS CONT. • SELECTION • LESS FORMAL THAN HIRING FIRMS • NO SHORTLISTING NEEDED • ADVERTISEMENT • REFERENCES • DIRECT APPROACH

45. INDIVIDUAL CONSULTANTS CONT. • BANK REVIEW • TERMS OF REFERENCE • QUALIFICATIONS OF CONSULTANT • CONDITIONS OF EMPLOYMENT • REMUNERATION • SIMPLE CONTRACT • WORK ENVIRONMENT

46. DATA ON CONSULTANTSDACON • REGISTRATION NOT A PREREQUISITE FOR BANK-FINANCED ASSIGNMENTS • PURPOSE • LISTS QUALIFICATIONS OF CONSULTING FIRMS • PROVIDES BASIS FOR LONG/SHORTLIST AT REQUEST OF BORROWER

47. PURPOSE CONT. • PROVIDE INFORMATION TO GOVERNMENTS, BORROWERS, EXECUTIVE DIRECTORS AND MANAGEMENT • AVAILABLE TO • MEMBER GOVERNMENTS • BORROWERS • BANK STAFF • INTERNATIONAL FINANCING INSTITUTIONS • PERFORMANCE EVALUATION FILE

48. compiled by Dr kamal eltayeb Procurement of Goods and Works

49. Comparing Procurement of Works and Goods (Page 1 of 3) Works • Approximate definition of quantities and total cost • Disputes and claims are common • Qualifications of contractor are very important • PQ is common • Bid preparation very costly Goods • Precise definition of quantities and total cost • Disputes and claims are not common • Qualifications of supplier do matter but less than in works • PQ is rare • Bid preparation generally not too costly

50. Comparing Procurement of Works and Goods (Page 2 of 3) Works • Different bidders may prefer different construction methods which are acceptable • Performance Security is a must • Require supervision during implementation • JVs very common • Complex Price adjustment is common Goods • Generally not an issue. • Performance Security not always needed • Not necessarily • JV not common • Rare