document of the world bank for official use...

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: 76109-BD

PROJECT PAPER

ON A

PROPOSED ADDITIONAL CREDIT

IN THE AMOUNT OF SDR 22.8 MILLION

(US$34.5 MILLION EQUIVALENT)

TO THE

PEOPLE’S REPUBLIC OF BANGLADESH

FOR A

PUBLIC PROCUREMENT REFORM PROJECT II

APRIL 8, 2013

Procurement Unit

South Asia Region

This document has a restricted distribution and may be used by recipients only in the performance of their

official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

(Exchange Rate Effective March 10, 2013)

Currency Unit = Taka (Tk)

Tk 80.10…… = US$1

US$1.51483 = SDR1

FISCAL YEAR

July 1 – June 30

ABBREVIATIONS AND ACRONYMS

ADB Asian Development Bank

ADP Annual Development Program

BAPD National Academy for Planning and Development

BCC Behavioral Change Communication

BCSAA Bangladesh Civil Service Administration Academy

BIM Bangladesh Institute of Management

BPATC Bangladesh Public Administration Training Center

BWDB Bangladesh Water Development Board

C&AG Comptroller and Auditor General

CAO Chief Accounts Officer

CAS Country Assistance Strategy

CFAA Country Financial Accountability Assessment

CGA Controller General of Accounts

CIPS Chartered Institute of Purchasing & Supply, UK

CPAR Country Procurement Assessment Report

CPTU Central Procurement Technical Unit

DC Direct Contracting

DFID Department for International Development (UK)

DG Director General

DRC Disaster Recovery Center

ECNEC Executive Committee for National Economic Council

e-GP Electronic Government Procurement

ESCB Engineering Staff College Bangladesh

FAPAD Foreign Aided Project Audit Directorate

FBS Fixed Budget selection

FM Financial Management

FMC/ FMS Financial Management Consultant/ Specialist

GAAP Governance and Accountability Action Plan

GOB/ GoB Government of Bangladesh

IC Individual Consultant

ICB International Competitive Bidding

IDA International Development Association

IFB Invitation for Bids

IFR Interim Un-audited Financial Report

ITC-ILO International Training Center of International Labor Organization- Turin

IMED Implementation Monitoring & Evaluation Division

3

LGED Local Government Engineering Department

MIS Management Information System

MOP Ministry of Planning

MTR Mid-Term Review

NCB National Competitive Bidding

NGO Non-governmental Organization

NS National Shopping

OECD Organization for Economic Cooperation and Development PDB Power Development Board PDO Project Development Objective PE Procuring Entity PFM Public Financial Management PIP Project Implementation Plan PMC Procurement Monitoring Coordinator PPA Public Procurement Act PPR Public Procurement Rules 2008 PPRP Public Procurement Reform Project PPRPII Public Procurement Reform Project II PROMIS Procurement Mgmt Information System PPSC Public-Private Stakeholders Committee PSC Project Steering Committee QBS Quality-Based Selection QCBS Quality- and Cost-Based Selection REB Rural Electrification Board RHD Roads and Highways Department RFP Request for Proposal SA Special Account SAc Social Accountability SBD Standard Bidding Documents SOE Statement of Expenditures SSS Single-Source Selection SWAps Sector-wide Approaches TA Technical Assistance Target agencies RHD, LGED, REB, and BWDB TOR Terms of Reference TPP Technical Assistance Project Proposal TWG Technical Working Group UNCITRAL UN Commission for International Trade Law UNDP United Nations Development Program

Vice President: Isabel M. Guerrero

Acting Country Director: Salman Zaheer

Sector Director Idah Z. Pswarayi-Riddihough

Sector Manager: Felipe Goya

Task Team Leader: Zafrul Islam

4

BANGLADESH

ADDITIONAL FINANCING OF PUBLIC PROCUREMENT REFORM PROJECT II

CONTENTS

Project Paper Data Sheet

Project Paper

I. Introduction

II. Background and Rationale for Additional Financing

III. Proposed Changes

IV. Appraisal Summary

Mandatory Annexes

1. Revised Results Framework and Monitoring Indicators

2. Operational Risk Assessment Framework

Other Annexes

3. Detailed Description of Modified or New Project Activities

4. Revised Estimate of Project Costs

5. Revised Implementation Arrangements and Support

A: Implementation

B: Financial Management

C: Procurement

D: Governance and Accountability Action Plan

MAP: IBRD 35508

5

BANGLADESH

ADDITIONAL FINANCING OF PUBLIC PROCUREMENT REFORM PROJECT II

ADDITIONAL FINANCING DATA SHEET

Basic Information - Additional Financing (AF)

Acting Country Director: Salman Zaheer

Sector Manager/Director: Felipe Goya/ Idah

Z. Pswarayi-Riddihough

Team Leader: Zafrul Islam

Project ID: P132743

Expected Effectiveness Date: June 15, 2013

Lending Instrument: Technical Assistance

Credit

Additional Financing Type:

Sectors: General Public Administration

Themes: Public expenditure,

procurement, financial management

Environmental category: (C)

Expected Closing Date:

Joint IFC:

Joint Level:

Basic Information - Original Project

Project ID: P098146 Environmental category: (C)

Project Name: Public Procurement

Reform Project II

Expected Closing Date: December 31,

2016

Lending Instrument: Technical

Assistance Credit

Joint IFC:

Joint Level:

AF Project Financing Data

[ ] Loan [X] Credit [ ] Grant [ ] Guarantee [ ] Other:

Proposed terms: 40 years

AF Financing Plan (US$m)

Source Total Amount (US $m)

Total Project Cost:

Cofinancing:

Borrower:

Total Bank Financing:

IBRD

IDA

New

Recommitted

36.00

1.50

34.50

34.50

Client Information

Recipient: People’s Republic of Bangladesh

Responsible Agency: Implementation Monitoring and Evaluation Division

Contact Person: Mr. Amulya K. Debnath

Director General, Central Procurement Technical Unit (CPTU )

Telephone No.: + 880 2 9144252

Fax No.: + 880 2 9144250

Email: [email protected]

mailto:[email protected]

6

AF Estimated Disbursements (Bank FY/US$m)

FY 14 15 16 17

Annual 3 10 12 11

Cumulative 3 13 25 36

Project Development Objective and Description

Original project development objective: Improve performance of the public

procurement system progressively in Bangladesh, focusing largely on the key sectoral

ministries and targeting their implementing agencies.

Revised project development objective: Improve performance of the public

procurement system progressively in Bangladesh, focusing largely on the four target

agencies. .

Project description:

Component 1: Furthering policy reform and institutionalizing capacity

development would support the expansion of capacity development program to

additional agencies beyond the original four target agencies (RHD, LGED, BWDB, and

REB).

Component 2: Strengthening procurement management at the sectoral level would

strengthen monitoring of procurement performance at the target agencies.

Component 3: Introducing e-Government procurement (e-GP) would support the

implementation of full electronic bidding in the four agencies.

Component 4: Communication, Behavioral Change and Social Accountability would support awareness about e-GP and enforcement of procurement laws against fraud

and corruption.

Safeguard and Exception to Policies

Safeguard policies triggered:

Environmental Assessment (OP/BP 4.01)

Natural Habitats (OP/BP 4.04)

Forests (OP/BP 4.36)

Pest Management (OP 4.09)

Physical Cultural Resources (OP/BP 4.11)

Indigenous Peoples (OP/BP 4.10)

Involuntary Resettlement (OP/BP 4.12)

Safety of Dams (OP/BP 4.37)

Projects on International Waterways (OP/BP 7.50)

Projects in Disputed Areas (OP/BP 7.60)

[ ]Yes [X] No

[ ]Yes [X] No

[ ]Yes [X] No

[ ]Yes [X] No

[ ]Yes [X] No

[ ]Yes [X] No

[ ]Yes [X] No

[ ]Yes [X] No

[ ]Yes [X] No

[ ]Yes [X] No

Does the project require any waivers of Bank policies?

Have these been endorsed or approved by Bank management?

[ ]Yes [X] No

[ ]Yes [ ] No

Conditions and Legal Covenants:

Financing Agreement

Reference

Description of Condition/Covenant Date Due

7

Section I.A, Schedule 2 The Recipient shall maintain throughout the

implementation of the Project the CPTU, the E-GP

units in the 4 Target Agencies, the Project Steering

Committee, and the Public Private Stakeholders

Committee, with functions, staff and resources

satisfactory to IDA.

Recurrent

Section I.B, Schedule 2 The Recipient shall carry out the Governance and

Accountability Action Plan approved by IDA in

accordance with its terms.

Recurrent

Section II.A, Schedule

2

The Recipient shall prepare and furnish to IDA semi-

annual Project Reports, based on the key performance

indicators specified in the Financing Agreement.

Recurrent

Section II.B, Schedule

2

The Recipient shall prepare and furnish to IDA

quarterly interim unaudited financial reports, and

annual financial audit reports.

Recurrent

Section IV.B, Schedule

2

Provision allowing retroactive financing of eligible

expenditures under the additional financing, incurred

on or after July 1, 2012 up to $2 million equivalent

Terms and conditions of disbursement against DLI-

based expenditures upon satisfactory evidence for

compliance with the respective DLIs for each

respective DLI period and each Target Agency

Recurrent

Section V, Schedule 2 The Recipient shall put in place, and thereafter

maintain arrangements satisfactory to IDA to ensure

that the E-GP system developed under the Project is

sustainably financed through a retention of the E-GP

system generated revenues within IMED and/or

through the provision to IMED of other adequate funds

on an annual basis for the management, operation and

maintenance of the e-GP system, with a distinct budget

code and financial authority for IMED/ CPTU to spend

such funds.

Not later

than

September

30, 2013

Schedule 3 Matrix containing all applicable DLI targets and

periods for each Target Agency, and amounts allocated

for each target/period for each Target Agency

8

I. Introduction

1. This Project Paper seeks the approval of the Executive Directors to provide an additional

credit in an amount of US$34.50 million equivalent to the Bangladesh: Public Procurement

Reform Project II (PPRP-II; P098146).

2. The proposed additional financing would help finance the costs associated with the

funding gap and the scaling up of activities to enhance the impact of a well-performing project

implemented by the Central Procurement Technical Unit (CPTU) of the Implementation

Monitoring and Evaluation Division (IMED) of the Ministry of Planning (MoP). The proposed

financing will support expansion of the capacity development program and rolling out of

electronic government procurement (e-GP) combined with procurement performance

monitoring.

3. The project made an extensive effort in enhancing procurement management capacity of

the key sectoral organizations by developing a pool of 20 additional national trainers to the

earlier pool of 25, providing three-week training to over 2900 public procurement officials of

which 75% are from the four target agencies (Roads and Highways Department- RHD, Local

Government Engineering Department- LGED, Bangladesh Water Development Board- BWDB,

and Rural Electrification Board- REB), and developing about 40 professionals with international

procurement accreditation. The government established a comprehensive national web portal for

electronic government procurement- e-GP (www.eprocure.gov.bd) which is now at its rolling out

phase at the four target agencies, after completing the pilot. Also, an on-line procurement

performance monitoring system is in its initial stage of implementation at the four agencies. All

of these actions are contributing to building and institutionalizing the country system with

improved procurement outcomes/ results on the ground as demonstrated by reduced procurement

delays, increased competitiveness, and enhanced transparency.

4. In light of the need for better procurement outcomes using electronic means and huge

demand for increased procurement management capacity, the additional financing is proposed to

expand the scope: first, by enhancing the capacity development program beyond the four target

agencies to cover about 20 additional agencies in health, education, power, public works

department; second, by increasing the use of electronic government procurement (e-GP) at the

four target agencies to cover them fully under e-GP by 2016; and third, by improving the use of

on-line procurement performance monitoring (PROMIS) at the four agencies, followed by the

other additional agencies. E-GP is automation of the public procurement process while PROMIS

monitors on-line the performance of the public procurement system based on indicators. A

sustainable business model for the e-GP system has been worked out which will be implemented

in a way that by the end of the project, the system would be mostly self-financed; this will be

achieved by substantially expanding the transaction level of e-GP tenders by the four target

agencies, using a performance based approach (Disbursement-linked Indicators- DLIs).

5. The project objective is proposed to be adjusted to “improve performance of the public

procurement system progressively in Bangladesh, focusing largely on the four target agencies”

as the focus is on target agencies. To ensure continuity of the activities, CPTU/IMED will

http://www.eprocure.gov.bd/

9

continue to be responsible for overall implementation of the project, while the four target

agencies will be responsible for the actual implementation of e-GP and PROMIS.

II. Background and Rationale for Additional Financing of $34.5 million

Country and Sector Background

6. Country Context: Situated in a low-lying river delta, Bangladesh combines the world’s

highest population density with the greatest vulnerability to earthquakes, natural disasters and the

impacts of climate change. Despite this vulnerability, the Bangladeshi population has proven

remarkably resilient, and the country has developed beyond expectations. Economic growth has

accelerated in each decade since independence in 1971 – averaging 6 percent in the last 10 years

- and the poverty headcount has fallen from nearly 60 percent in the late 1980s to around 30

percent today. This progress has occurred against a backdrop of weak governance and partisan

political rivalry. Despite considerable economic and social progress across multiple

governments, Bangladesh remains a low-income country (per capita GDP of US$770) with

around 47 million people still living in extreme poverty.

7. Bangladesh’s record on improving public sector performance and reducing corruption has

been mixed. While the present government has built on the positive changes introduced earlier in

some areas, it has had limited success in meaningfully combating corruption. Bangladesh’s

mixed performance on economic management and governance is reflected in the Bank’s Country

Policy and Institutional Assessment rating, which rose modestly in 2007 before falling back in

2011 to below pre-2007 levels.

8. This mixed governance performance notwithstanding; there is growing recognition

within the country that enhancing accountability and improving governance is a prerequisite to

expediting poverty reduction, improving the investment climate, and accelerating private sector-

led growth that are priority objectives of the Government’s Sixth Five Year Plan (SFYP FY11-

FY15)—Accelerating Growth and Reducing Poverty. Aligned with the Government’s priorities,

the World Bank’s Country Assistance Strategy 2011-1014 (CAS) has enhanced accountability

and promoting inclusion as one of its four core pillars, under which increasing effectiveness and

efficiency in the utilization of public resources is seen as important for improving the investment

climate and accelerating the pace of poverty reduction.

9. Sector policy and strategy: Bangladesh’s annual development outlay alone is over US$6

billion along with a considerable amount of non-development expenditure in the revenue budget.

It is estimated that annual expenditure on procurement of goods, works and services in the public

sector of Bangladesh (the focus of the proposed additional financing) accounts for 20-24% of the

annual national budget and 60-80% of the annual development budget. Thus, annual

procurement volume is over US$3 billion. According to some estimates, the economic loss due

to inefficient procurement and misappropriation of funds costs the country over 1.5% GDP

growth per annum.

10

10. Public procurement is a core area within the framework of governance and

accountability. Accordingly, a Country Procurement Assessment Report (CPAR) was published

in 2002 that identified series of deficiencies in the system that, among others, include absence of

legal framework and institutional mechanism, protracted bureaucratic procedures allowing multi-

point rent seeking; lack of critical mass of professionals to manage public procurement;

inordinate delays; and ineffective contract administration. Following the recommendations of

the CPAR, the Government made a strategic road map to tackle the problem systematically in a

phased manner with a sequential approach. Key features of the road map includes: preparation

of laws/ rules/ procedures, establishment of a nodal procurement policy unit, developing a

critical mass of procurement professionals including provisions for capacity development

program initially focusing on the key spenders of the Government, and introduction of e-GP with

performance monitoring.

11. The Government has been steadily improving the procurement since 2002, including

through two consecutive IDA-financed projects. A Public Procurement law has been enacted

(2006), a policy unit established, procedures simplified and made more transparent, electronic

procurement (e-GP) introduced, procurement performance monitoring system piloted, and

capacity strengthened in central and sector procurement units. While much has been achieved –

and a promising foundation for further improvement has been put in place - yet there are

challenges ahead in particular reference to procurement performance monitoring by the agencies

combined with incidence of inappropriate practices including fraud and corruption (F&C),

collusion, coercion, etc. at local levels. Also, allegations of interference by vested quarters

and/or political groups exist. So, more needs to be done, especially to keep pace with changing

government structures (for example decentralization and local government), the increasing

volume and complexity of public procurement, the rising demand for public services, and the

increasing risks of fraud and corruption.

12. The on-going PPRPII has focused on improving capacity in the CPTU and in four target

agencies which account for about 50-60% of the total annual public procurement of the country.

While it has been successful in achieving its objectives, a continued effort is needed to keep up

with increasing demands on the public procurement system, improve the system’s transparency

and efficiency, and enhance public perception and accountability. Recognizing these needs, the

Additional Financing of PPRPII (PPRPII AF) proposes to focus more on the rapid expansion of

e-GP and on-line procurement monitoring (PROMIS) at these agencies, combined with the

capacity development efforts which is mainly focused to about 20 additional agencies in health,

education, power, public works, etc.

13. The World Bank, as part of its enhanced focus on development outcomes/results, is

seeking to strengthen country systems, moving away from transaction based approaches to a

principle-based approach. The above-mentioned procurement reforms initiated by Bangladesh

align well with this framework under which the World Bank has already launched a major

initiative to align its procurement policies and guidelines with those of country systems. Thus,

the support for scaling up activities of PPRPII is fully aligned with the Bank’s procurement

effort for long-term sustainability of the system yielding benefits to the country.

11

Project Implementation Status

14. With a credit amount of $23.6 million equivalent, the PPRPII became effective in

September 2007 with the project development objective of improving performance of the public

procurement system progressively in Bangladesh, focusing largely on the key sectoral ministries

and targeting their implementing agencies. The project started with the major component of

capacity development by programing a three-week course for procurement practitioners of the

four target agencies and others through an international-local twinning arrangement. By

December 2012, it exceeded the target by training over 2900 public procurement officials in a

way that about 85% of the procuring entities of those four agencies have at least one person

trained. It developed an additional pool of about 20 national trainers, and the local training

institute developed a procurement faculty, headed by a Dean and four trainers. Concurrently, on

procurement core competence front, about 40 procurement officials, as top-performers in three-

weeks course, have successfully completed the international procurement accreditation program

of the Chartered Institute of Purchasing and Supply (CIPS), UK including a top-up Masters in

procurement and supply management from the BRAC University- Institute of Governance

(BRACU-IGS). In addition, several short courses for variety of target audiences have been

completed though behind schedule. The capacity development framework of Bangladesh is

considered as an emerging model. Nevertheless, more work is needed for better sustainability of

the program in future.

15. Under the second component for sectoral strengthening, the Government of Bangladesh

(GoB) established an on-line procurement management information system (PROMIS) for

tracking performance with a set of indicators to measure efficiency, transparency, and

competiveness of the system including fraud and corruption elements. The four target agencies

are at its early phase of implementation. The monitoring and evaluation framework functioned

reasonably well to capture and analyze data. Nevertheless, given the mandate in procurement

law, staffing of CPTU continues to be a challenge because of frequent rotations/ vacancy.

16. As regards electronic tendering, with high level commitment, the GoB developed a

comprehensive national e-GP web portal that is fully functional. After completing the pilot, all

four agencies are at the rolling out phase. As of December 2012, 179 tenders, valued about

US$21 million, have been invited, with registration of 622 suppliers/ contractors and 9 scheduled

commercial banks (with 325 branches of which two are on-line) in the e-GP portal. Overall the

initial implementation target up to December 31, 2012 has been achieved 100% by inviting at

least one tender in e-GP for about 50% of procuring entities of each target agency, that is, one e-

GP tender in each of the 104 procuring entities. Target agency wise coverage is as follows: RHD

in 80 entities against a target of 52 entities (150%), followed by REB in all three target entities

(100%), BWDB in 48 entities out of 58 (82%), and LGED in 27 entities out of 37 (73%). With

this trend, the overall target up to March 2013 is expected to be fully achieved to cover about

300 entities, each at least with one e-GP tender. To run the e-GP system effectively, a self-

sustainable model is required with substantial increase of transactional base covering wider

bidding community which is planned for future.

17. Behavioral change communication with social accountability elements under the project

contributed considerably in demystifying procurement at the grass root level of the community

12

and making them aware about good procurement outcomes by following three pronged

approach: media campaign; advocacy interventions; and capacity building. Notable

contributions include: (i) advocacy interventions: at both local and national level through Future

Search Conferences (FSC) in all 64 districts, and Government-Contractor Forum (known as Kroi

Sanglap Forum) in seven divisions; (ii) Mass Media Communication: to create awareness and to

popularize PPR including TV/ radio shows, cartoon series, etc.; (iii) Capacity Building:

interventions like curriculum development and implementation of training to a cross section of

stakeholder. In addition, there has an effective public-private stakeholders committee (PPSC)

with services of a leading think-tank. PPSC created the forum of procurement policy discussion

that has contributed to more stakeholder engagement.

18. The project is consistently rated Satisfactory over the last two years in achieving the

development objectives and overall implementation progress. The project impact has been

consistent with expectation set out in the Project Appraisal Document (PAD). The project is in

compliance with the legal covenants including the financial reporting requirements and audit,

and it does not have any unresolved fiduciary, environmental, social or safeguard issues.

Procurement rating continued to be Satisfactory; as regards financial management (FM), though

overall performance was good, its rating was downgraded to Moderately Satisfactory in 2011

mainly due to the position of Deputy Director (Finance) remaining unfilled and slippage in hiring

the internal auditor.

Disbursement Status

19. In PPRPII, the disbursement as of January 25, 2013 is US$ 22.1 million equivalent which

constitutes 92.6 % of the credit amount. An amount of about $600,000 was reallocated from the

operating cost to goods/works/ consultancy services category as the expense need for operation

was much less while for consultancy there was need for additional fund. The revised approved

allocation of about $0.77 million for operating costs is substantially utilized. After reallocation,

about $22 million is already spent out of the total amount of about $24 million and the remaining

amount will not only be fully utilized within the credit closing date (all committed), even there is

likelihood of a small financing gap which is being taken into account in the additional financing.

Table: Disbursement Status of Credit (4350-BD) as of January 25, 2013

Amount in US$

Category Category description Original

allocation

Revised

allocation

Disbursed Un- Disbursed

1 Goods, works &

consultants’ services,

training, salaries of

incremental Project staff,

and allowance for Project

staff

22,960,000.00 23,732,281.50 21,987,867.00 1,744,414.50

2 Operating costs 640,000.00 76,803.50 70,685.10 6,118.40

Total 23,600,000.00 23,809,085.00 22,058,552.10 1,750,532.90

Note- The USD Amount changes due to XDR exchange rate.

13

Rationale for Additional Financing

20. The key rationale for the additional financing is to continue support for the Project that is

directly contributing to bringing about systemic changes in the procurement environment of

Bangladesh and building an effective country system and its institutions to fulfill the

Government priorities that are fundamental to the Bank’s development mission. The Bank has

joined developing countries and other development partners in endorsing the Paris Declaration

on Aid Effectiveness, the Accra Agenda for Action (AAA), and the Busan declaration, which

express the international consensus in favor of strengthening and expanding the use of country

systems. In the case of Bangladesh, it is understood that about 70% contracts by number in the

Bank’s portfolio are subject to post reviews most of which are following national competitive

bidding (NCB) procedures. Thus, the project framework is fully aligned with the concept

emanating from the investment lending (IL) reform, that is, moving from transactions to systems

with due consideration of risks.

21. Despite the challenging environment, with the implementation of the capacity

development program, the introduction of procurement performance monitoring, and piloting of

e-GP in the four target agencies, most outcome/ results indicators have either been already

achieved or are being achieved as demonstrated by: the reduction of procurement delays

specifically for large number of small value contracts at decentralized level (in 2012, about 65%

contracts are awarded within initial bid validity period as opposed to only about 10% in 2007);

improvement of competitiveness in bidding (average number of bidders increased to six in 2012

from four in 2007); enhancement of transparency as demonstrated by the publication of contract

award notice (about 60% contract awards are published in website in 2012 from about 15% in

2007); and increased stakeholders engagement in following procurement issues.

22. The GoB at its highest level (Prime Minister) attaches high priority to overcome project

implementation difficulties in particular reference to overcoming procurement difficulties and

the use of electronic tendering (e-GP) as part of its “Digital Bangladesh” program. The GoB

has a target of covering all key sectoral agencies under electronic tendering by 2016 including

on-line performance monitoring. Following the guidelines of the Multilateral Development

Banks (MDBs) and the Bank, a recent assessment of the e-GP system of Bangladesh has been

carried out by an independent expert who viewed the system as the most comprehensive one

starting with procurement planning and up to the final payment, and recommended for its use by

the Bank with some minor adjustments. Subsequently, the standard bidding documents for

works in NCB (e-GP version) has been fully harmonized between the Bank and the GoB, that is,

the GoB will use a single harmonized document in e-GP regardless of the source of financing.

Also, the Bank has agreed to start using the e-GP initially for two of its projects: rural transport

and primary education under SWAps with other Development partners. This is a significant step

forward in using ICT for improving procurement outcomes.

23. Concurrently, the existing capacity development program with built-in incentive

mechanism has been recognized as an emerging model with international appreciation. To

augment and institutionalize the procurement management capacity, much effort is needed to

expand the existing program to other public sector agencies beyond the existing four target

agencies, for instance, in sectors like health, education, power, and public works.

14

24. In light of the need for expansion, the GoB requested IDA to consider follow-up

financing, and thus the key reasons for additional financing is to meet costs associated with

financing gap beyond the current credit closing date of March 31, 2013 and scaled-up activities

to enhance the impact of this well-performing project in specific reference to the following: e-GP

combined with procurement performance monitoring and capacity development, followed by

sectoral strengthening and social accountability actions associated with the e-GP. Additional

financing will help consolidating these two areas with greater sustainability along with

strengthening management capacity of CPTU and the four target agencies.

25. Alternatives were considered before proposing this additional financing. The option of

closing the project and preparing a new project was considered. This option was discarded in

consideration of the possible long drawn processing time for a new project combined with the

shortage of fund within the current credit to continue uninterruptedly certain critical services/

activities. For example, continuation of the functioning of e-GP system that has direct bearing

not only upon the procuring entities but also on the bidding community at a time when it has

taken momentum.

26. In consideration of recognizing the results on the fore front of Bank operations and taking

the experience of implementing PPRPII in the last few years, under the proposed additional

financing, an innovative approach has been taken to include two financing modalities: direct

input-based financing of US$28.5 million for CPTU, and performance-based financing of

US$7.5 million for the four target agencies where disbursements will be linked to attainment of

specified indicators- DLIs (Improving procurement performance by using e-GP in four target

agencies, and Improving procurement performance monitoring using PROMIS by four target

agencies). The DLIs for e-GP and PROMIS by agency are in Annex 5.

III. Proposed Changes

27. Project Development Objectives: The current project development objective is “to

improve performance of the public procurement system progressively in Bangladesh, focusing

largely on the target agencies”. As the proposed additional financing is largely focused on the

four target agencies, the project development objective is adjusted to “improve performance of

the public procurement system progressively in Bangladesh, focusing largely on the four target

agencies.” Significant part of the additional financing will support the expansion of e-GP with

performance tracking at the four target agencies while under capacity development about 20

additional agencies will be covered beyond the existing target agencies.

28. The project would be rated as “satisfactory” if the principal outcomes at the end of the

project period are as follows: about 80% percent of contracts in all four target agencies have

been awarded within the initial bid validity period; at least 80% procurement in NCB have been

conducted using e-GP in four target agencies; e-GP awareness has been made in all 64 districts.

15

Project outcome indicators

Indicator Original target Current

progress

Revised/ New

target

Comment

Reduced delays in making

contract awards by at least

three target agencies

a. within the initial bid

validity period

60% 65% 90% In revised

target, the

percentage

is for four

target

agencies

Improved transparency and

disclosure of information in

procurement

a. Published contract

awards in CPTU’s

website

b. Introduced e-GP in

target agencies

c. Published quarterly

procurement

monitoring reports

(PROMIS) on bids/

contracts invited by

four target agencies

a. 100%

b. 80% (two

agencies-

ICB at

HQ)

c. None

a. 70%

b. 30%

(four

agenci

es-

NCB)

c. None

a. 90%

b. 80% (four

agencies-

NCB)

c. 90% (new

indicator)

In the

revised

target, the

percentages

are for four

target

agencies.

For item b,

current

progress and

revised

target is for

NCB;

(iii) item c is

a new

indicator.

Percentage of procuring

entities of 20 additional

agencies with one trained/

certified procurement staff

None None 70% New

indicator

29. Project Components: CPTU/IMED has been successfully managing the project in

collaboration with the four target agencies, that is, RHD, LGED, BWDB, and REB. Under the

additional financing, the four target agencies will have direct role in the implementation of e-GP

and procurement performance monitoring in a way that within the next three years most of their

procurement will be through e-GP. There will be about 20 additional agencies (as mentioned in

Annex 3), beyond the four target agencies who will also participate in the capacity development

program and initiate e-GP with support from the project. In order to ensure continuity of the

activities, under the additional financing, CPTU/IMED will continue to be responsible for overall

implementation of the project, while the four target agencies will be responsible for the actual

implementation of e-GP and procurement performance tracking system (PROMIS). CPTU will

also coordinate with the additional agencies for the capacity development program, and

promoting e-GP as a new starter.

30. All four project components will continue with necessary adjustments under the proposed

additional financing as follows:

16

a. Component 1: Furthering Policy Reform and Institutionalizing Capacity

Development (US$ 9.50 million): The component will now expand the scope of the

capacity development program to about 20 additional agencies, beyond the four target

agencies, with greater institutionalization. The key activities include: procurement

compliance training, procurement core competence course along with Masters in

procurement, and further institutionalization of capacity in Bangladesh. The compliance

training, designed for the procurement professionals, will have 90 three-week courses

covering about 2700 participants, conducted at Engineering Staff College Bangladesh-

ESCB (60 courses) and Bangladesh Institute of Management- BIM (30 courses) with

support from FINEUROP/Italy, an international firm. In addition, there will be about 15

types of short courses including e-learning modules for various audiences. Similar to the

ongoing arrangement, an incentive mechanism has been built in a way that over 100 top-

performers from among the three-week participants will undertake a core competence

course, conducted by the Chartered Institute of Purchasing and Supply- CIPS/UK in

collaboration with BRAC University- Institute of Governance- BRACU-IGS.

b. Component 2: Strengthening Procurement Management at Sector Level &

CPTU/IMED (US$7.50 million): This component will further strengthen the

organizational capacity for procurement performance management. Key activities will

include: full implementation of on-line procurement performance monitoring (PROMIS)

using a set of indicators, monitoring and evaluation (M&E) framework, and

strengthening capacity of CPTU, and four target agencies. The four target agencies will

monitor their procurement performance in terms of efficiency, transparency, and

competiveness as built into PROMIS by entering on-line procurement data for all bids

invited within the next three years as follows: RHD- 4000; LGED- 4000; BWDB- 1200;

and REB- 150. The strong M&E framework based on the revised results monitoring

indicators will be implemented. CPTU/IMED and the four target agencies will

strengthen capacity by creating dedicated e-GP/PROMIS cell with adequate staff and

provision of IT/ equipment/ training.

c. Component 3: Introducing e-Government Procurement- e-GP (US$17.00 million): This component is to make the e-GP system self-sustainable by substantially increasing

transaction level of the four target agencies and initiating e-GP network to about 20

additional agencies. The four target agencies will have 100% e-GP within the next three

years up to the district level with annual coverage of bid invitations as follows: RHD-

4000; LGED- 4000; BWDB- 1200; and REB- 150. Though challenging, a progressive

self-sustainable model has been worked out in a way that towards the end of the project,

the system is fully operated using its own revenues, while during the transition, the

project will support on a declining basis. While CPTU owns the e-GP system, the

existing service provider will continue to manage and operate the e-GP system

applications and data center including support to the four target agencies through a

dedicated team in each agency, trainings to: about 1500 officials of the four target

agencies, 1600 bidders for the four target agencies, and 700 officials of additional

agencies.

17

d. Component 4: Behavioral Change Communication and Social Accountability- BCC

& Sac (US$2 million): This component will enable to sustain the gains from earlier

interventions of raising awareness and will further generate public demand for electronic

procurement. This component will strengthen efforts to raise awareness regarding the

reforms in public procurement and e-GP message across public sector organizations, the

bidding community, and other stakeholders through behavioral change communications

and social accountability mechanism. Key activities will include: awareness about the

use of e-GP at the local level in reference to the reform agenda, and possible third party

monitoring of procurement outcomes taking the demand side of governance into account

with specific focus on the enforcement of laws against fraud and inappropriate practices.

31. Extension of original credit: At the request of the Government, IDA recently extended

the existing credit for six months beyond the original closing date of March 31, 2013, that is up

to September 30, 2013, mainly to ensure continuity of the program and enable timely processing

of PPRPII AF including its effectiveness within the PPRPII time period. Now in order to have

the same closing date for both PPRPII and PPRPII AF, the closing date of the original credit will

need to be extended up to December 31, 2016.

32. Project costs: PPRPII AF will be for about four years (FY14 to FY17/Q1) and have two

financing modalities: direct input-based financing for CPTU, and performance-based financing

for the four target agencies where disbursements will be linked to attainment of specified

indicators (DLIs) relating to e-GP and procurement performance monitoring (PROMIS). The

DLIs for e-GP and PROMIS by agency are in Annex 5.

33. Total cost estimate of the project is US$60.90 million of which US$24.9 million is in

PPRPII and US$36 million is in PPRPII AF. Out of the US$60.9 million, IDA will finance a

total of US$58.10 million of which US$23.60 million under PPRPII, and US$34.50 million

under PPRPII AF. Component-wise costs are summarized below. Further cost details are

presented in Annex 4.

Costs by component (US$ million)

Component Original cost Changes with

AF

Revised cost

Policy Reform and Capacity

Development

8.9 9.50 18.40

Sector and Central Procurement

Management

8.4 7.50 15.90

E-GP 4.2 17.00 21.20

Behavioral Change Communication

and Social Accountability

3.4 2.00 5.40

Total 24.9 36.00 60.90

IDA Financing 23.6 34.50 58.10

18

34. Credit conditions:

Prior to Board presentation: None

Prior to effectiveness: None

35. Credit covenants:

Financing Agreement

Reference


Section I.A, Schedule

2

The Recipient shall maintain throughout the

implementation of the Project the CPTU, the E-

GP units in the 4 Target Agencies, the Project

Steering Committee, and the Public Private

Stakeholders Committee, with functions, staff

and resources satisfactory to IDA.

Recurrent

Section I.B, Schedule

2

The Recipient shall carry out the Governance

and Accountability Action Plan approved by

IDA in accordance with its terms.

Recurrent

Section II.A,

Schedule 2


semi-annual Project Reports, based on the key

performance indicators specified in the

Financing Agreement.

Recurrent

Section II.B,

Schedule 2


quarterly interim unaudited financial reports, and

annual financial audit reports.

Recurrent

Section IV.B,

Schedule 2

Provision allowing retroactive financing of

eligible expenditures under the additional

financing, incurred on or after July 1, 2012 up to

$2 million equivalent

Terms and conditions of disbursement against

DLI-based expenditures upon satisfactory

evidence for compliance with the respective

DLIs for each respective DLI period and each

Target Agency

Recurrent

19

Financing Agreement

Reference


Section V, Schedule 2 The Recipient shall put in place, and thereafter

maintain arrangements satisfactory to IDA to

ensure that the E-GP system developed under

the Project is sustainably financed through a

retention of the E-GP system generated revenues

within IMED and/or through the provision to

IMED of other adequate funds on an annual

basis for the management, operation and

maintenance of the e-GP system, with a distinct

budget code and financial authority for IMED/

CPTU to spend such funds.

Not later

than

September

30, 2013

Schedule 3 Matrix containing all applicable DLI targets and

periods for each Target Agency, and amounts

allocated for each target/period for each Target

Agency

IV: Appraisal Summary

Economic and Financial

36. The direct benefits envisaged under the project would include faster and better use of

public resources with increased transparency, the reduction of corruption, increased aid

utilization capacity and a better investment climate. In the longer term, all the above would

create a powerful force toward more transparent and accountable institutions, resulting in

accelerated economic growth and faster poverty reduction.

37. In view of the nature of the project, since benefits cannot be quantified in monetary

terms, no calculation of economic rate of return has been attempted. To gauge the impact of the

proposed interventions, a set of well-defined procurement performance indicators have been

developed to monitor the performance of target agencies. Nevertheless, a financing model has

been developed for the e-GP system in a way that the system will be fully operated using its own

revenues in the third year of the project. This is based only on the transaction level of the four

target agencies, without including additional agencies. The model shows revenues of US$1.25

million in the third year, against expenditures of US$1.43 million, meaning that the earnings and

expenditures will be close to each other within the third year of its operation with the system

becoming sustainable (details are at Annex 3, paragraph 23, Box 2). In the fourth year, the

system will have earnings more than expenditures. With the addition of agencies, over time, the

earnings of the system will improve further. Besides, ESCB and BIM have initiated short

courses on procurement for participants having financing from their own agencies, leading to

greater institutionalization and self-sustainability of the Government’s efforts in procurement

capacity building. The details are in Annex 3.

20

38. The Government will fund the CPTU staff salaries and part of operating expenses. The

project's direct fiscal impact is minimal in consideration of its small contribution of about

US$1.50 million as part of operating expenses, constituting about four percent of the project

cost. The project, however, would have significant fiscal impact on GoB's overall budget in

terms of reduction of corruption, more effective competition, decrease of contracting costs, and

timeliness of contract execution.

Technical

39. From technical view point, design of the project is sound. The project uses well

established advanced technology in developing the national e-GP web portal

(www.eprocure.gov.bd) and on-line performance monitoring. The e-GP system developed and

established under PPRII is assessed by an international independent expert (report of November

2012), following the guidelines of the multi-lateral development banks (MDBs), as one of the

most comprehensive one covering procurement plan, invitation for bids, bid evaluations, contract

awards, and contract management up to the final payment. The system also covers e-purchasing,

e-payment, etc. Special attention were given as regards how to (i) develop the in-country

capability to deliver quality procurement training programs in an efficient and demand-driven

manner; (ii) strengthening procurement monitoring at target agencies to help achieve quality

procurement transactions, and (iii) sensitize the target groups of both the public and private

sectors including the bidding community for acquiring and applying procurement knowledge in

their work.

40. To continue uninterrupted support, the capacity development program will be managed

by the currently employed international firm in collaboration with the two local institutes, ESCB

and BIM. Also, the core competence part will remain unchanged with CIPS/UK’s collaboration

with BRACU-IGS. Similarly, the existing service provider will manage and operate the e-GP

system applications and data center.

Institutional

41. CPTU/IMED will continue to be responsible for overall implementation of the project,

while the four target agencies will have greater role and be responsible for actual

implementation of e-GP and PROMIS using a performance-based approach (disbursement-

linked indicators- DLIs) as verified by an independent consultant. Given the high importance of

continuity of the reform activities and its institutionalization within the country, the key project

officials (Director General, three Directors, and other identified staff) will continue to serve in

CPTU at least for its initial years, with appropriate arrangements permissible within the

government rules. The Procurement Monitoring Coordinator (PMC) of each target agency will

act as the link between the CPTU and those agencies, with support from the technical working

group (TWG) members of each target agency. The GoB will assure that the e-GP system

developed under the project is sustainably financed through a retention of the e-GP system

generated revenues within IMED and/or through the provision to IMED of adequate funds on an

annual basis for the management, operation and maintenance of the e-GP system, with a distinct

budget code and financial authority for IMED and CPTU to spend such funds. The project will

provide support in developing an M&E system and strengthening capacity at CPTU for regular

measurement and evaluation of economic impact of procurement reform.


21

42. To oversee and review project activities, the Project Steering Committee (PSC) will be

reconstituted with more focused role. It is expected that a specific task force would oversee the

implementation of e-GP and PROMIS, with an agreed terms of reference. The existing system

of PMC and TWG will remain unaltered, with the PMCs responsible for implementation of e-GP

and PROMIS at the agency level and accordingly the TOR will be adjusted. In all deliberations/

meetings of the above committees’ of the Government, the Bank representative will be present as

observer. Selection of criteria for the entire capacity development program including any foreign

training will require specific clearance from the Bank. Also, various teams of consultants, while

producing reports or documentations as per contracts, will share a copy with the Bank

concurrently as it sends such reports to CPTU/IMED.

Financial Management

43. The CPTU, with assistance of a financial management (FM) consultant, implemented

Bank financed PPRP and has been implementing PPRPII with moderately satisfactory FM

performance, though it does not have its own FM organization. Under PPRPII, it could not put

in place a Deputy Director (Finance) as per the plan, and internal audit is yet to be conducted.

Thus, FM capacity with adequate fiduciary assurance through internal audit and segregation of

duties on FM functions needs improvement. The project will have provision of retroactive

financing of about US$2 million to cover expenditures related to capacity development actions,

management and operation of e-GP system, and sectoral strengthening including Period0 DLIs

for four target agencies that are expected to be incurred before effectiveness of the PPRPII AF.

The FM arrangement as agreed for PPRP II will be applicable for the additional financing as well

with add on arrangement for limited financial management function at four target agencies for

implementing e-GP and PROMIS. Awarding the contract for internal audit per agreed TOR will

be completed by April 15, 2013 and the appointment of a Deputy Director (Finance) will be

completed within the first month of the credit effectiveness. The target agencies- LGED, RHD,

BWDB and REB have the experience of implementing Bank financed projects. These agencies

will receive project funds through CPTU in their dedicated project bank accounts. Funds will be

disbursed to the agencies on achievement of targeted results in the form of Disbursement Linked

Indicators (DLIs), and should not exceed the DLI expenditures incurred during the DLI period.

The overall FM risk is assessed as substantial, considering dispersed financial transactions in

four agencies and previous records of slippages of CPTU on staffing and internal audit.

Procurement

44. The procurement risk rating is “moderate” since, CPTU, being the key implementing

agency, has been implementing two successive procurement reform projects (PPRP & PPRPII)

since 2002 without significant procurement problems/ issues. The four target agencies may be

responsible for very small value procurement relating to implementation of e-GP under the

performance based financing. Large procurement includes three major consultancies as all of

them are continuation of their previous services: capacity development; core competence

program; and management and operation of e-GP system. The selection of these three

consultancies is at the advance stage of completion. A draft procurement plan has been prepared.

22

Social

45. With the objective of capacity building, behavioral change, and public awareness, the

major social issue is the behavioral change communication combined with social accountability.

Extensive efforts under PPRPII have contributed positively to the change of the “mind-set” of

stakeholders, in particular public procurement officials and the bidding community. Under

PPRPII AF, the involvement of civil society/ beneficiary groups/ non-profit organizations will

further contribute in the monitoring of procurement with specific reference to e-GP awareness

and taking the reform agenda at the grass root level. The framework for stakeholder

participation envisages: (i) initiating a gradual approach to the concept of social accountability in

procurement; (ii) conducting public awareness campaigns in the beneficiary/ user communities;

and (iii) instituting a communications strategy to build support for the reform.

Environment

46. The PPRPII AF continues to be assigned Category “C” for Environment. The additional

financing has provision to support the vertical extension of the CPTU building (from 2 storied

building to 3 storied building) and no significant and irreversible environmental impacts are

expected to arise as a result of project implementation, subject to proper adoption of

environmental code of practice (ECoP) including occupational health and safety issues. The

bidding document will include the environmental clauses and keep provision of better

occupational health and safety for the workers. The Public Works Department (PWD) will

supervise and ensure proper implementation of the ECoP.

Monitoring and evaluation of outcomes/ results

47. Project outcomes/ results will be measured using the revised results framework with

indicators. The CPTU will continue to use the existing monitoring and evaluation (M&E)

framework used for PPRPII, with adjusted indicators as agreed (Annex 1). A M&E team

(consulting firm) will assist CPTU and prepare semi-annual reports on the overall project M&E

including progress on the results indicators for review by the Bank. Results monitoring in

PPRPII AF covers: (a) procurement performance by the target agencies; (b) capacity

development by the additional agencies; (c) procurement monitoring by the target agencies using

procurement management information system (PROMIS); and (d) conducting procurement using

electronic government procurement (e-GP).

Risks

48. The overall project risk rating is “Moderate”, however, there are two risks that may affect

the achievement of the project’s development objective: (a) “project stakeholders risks”

associated with GoB and target agencies policy makers primarily because of the perceived issues

in the management and monitoring of procurement, despite their expressed willingness to

become part of the program; and (b) “operating environment risk” associated with interference at

the decentralized level procurement. The project is more prone to that risk because of the

sensitive nature of reform that is being pursued. The PMC and TWG members of each target

agency have been playing and are expected to play critical mitigating roles in exposing detractors

23

and building the constituency of support for reform. The Project Steering Committee (PSC),

with target agency heads included in it to oversee the implementation of e-GP and PROMIS, is

also likely to contribute to reducing the risk. In addition, the existing Public-Private

Stakeholders Committee (PPSC), with members from civil society/ think-tank/ business apex

body/ and senior government officials, will create further traction and broader constituency of

reform leading to a possible third-party monitoring mechanism with due capacity development.

Governance:

49. Opposition to reforms may to a great extent be related to corruption, which is an endemic

issue in the region. Project activities to increase transparency, introduce checks and balances in

the public sector, and educate the society at large could increase respect for ethics and law and

increase the likelihood of detection. However, the broader issues of public sector inefficiency

and corruption will require sustained effort over time to resolve. The proposed project’s support

can educate the community and foster openness but cannot assure that the lessons will be

absorbed by all; therefore there remains a risk to achieving the desired objectives fully. The

project activity under the social accountability component involving civil society group deals

directly with the demand side of the reform process which to a large extent is beyond the control

of the procuring entities. With the implementation of Right to Information Act, the concept of

procurement monitoring by a civil society organization (CSO) other than the procuring entity or

CPTU would contribute considerably in bolstering the openness of the system though building

such a CSO is still a challenge due to capacity as well as funding constraints

Policy exceptions and readiness

50. There are no exceptions to World Bank policies.

51. The project meets the readiness filters of the Region. The financial management and

procurement arrangements will be in place at the start of the project. The project is expected to

be ready for implementation by the time it is presented to the Board, and the first year’s activities

could start immediately upon effectiveness. All three major consultancies will continue their

services and the project will have provision for retroactive financing.

24

Annex 1: Results Framework and Monitoring

BANGLADESH: Additional Financing of Public Procurement Reform Project II

Results Framework

Revisions to the Results Framework Comments/

Rationale for Change

PDO

Current (PAD) Proposed

Improve performance of

public procurement system

progressively in Bangladesh,

focusing largely on the target

agencies

Improve performance of the public

procurement system progressively in

Bangladesh, focusing largely on the four

target agencies.

Adjusted to focus on the target

agencies.

PDO indicators

Current (PAD) Proposed change*

About 60% contracts in at

least three target agencies

reduce delays by making

contract awards within the

initial bid validity period

About 80% contracts awarded within

initial bid validity period by the 4 target

agencies

Revised indicator to reflect scale-

up under additional financing

Four target agencies publish PROMIS

quarterly report for monitoring of

procurement performance covering 90% of

bids invited/ contracts awarded

New indicator reflecting

measurement of an important

outcome under additional

financing

Electronic government

procurement (e-GP)

introduced in at least two

target agencies at their HQ

level for international

procurement

Four target agencies expand electronic

government procurement (e-GP) to all 64

districts using national competitive bidding

procurement


up under additional financing and

covering all NCB contracts instead

of ICB

Increased stakeholder

engagement in following

procurement issues in at least

two target agencies

Dropped Target largely achieved during

original project

Procuring entities of 20 additional agencies

with one trained/ certified procurement

staff


measurement of new outcome

under additional financing

Intermediate Results indicators

Current (PAD) Proposed change*

Course curriculum and

training materials developed

for all courses

Dropped Target achieved during original

project

Local training institute

develops a two-member


project



procurement faculty

At least one local institute/

university introduces

procurement core competence

skill certification/ accreditation


project

About 60% procuring entities

of each target agency with one

trained/ certified procurement

staff

About 70% procuring entities of 20

additional agencies with one trained/

certified procurement staff

New indicator reflecting new

activities supported under

additional financing

55 weeks of procurement training

delivered by the local training institute

(ESCB) with its own resources


activities supported under

additional financing

Computer hardware and

software for all target

agencies delivered and

installed


project

All contract awards above

PPR specified thresholds

published in CPTU’s website

for at least three target

agencies

About 90% contract awards published by

four target agencies in CPTU’s website

for awards above PPR specified threshold


up activities under additional

financing

About 60% complaints in at

least three target agencies

handled satisfactorily

About 70% of complaints handled

satisfactorily by four target agencies

Revised indicator to reflect wider

coverage under additional

financing

Annual implementation plan

submitted by Target agencies


project

Four target agencies publish PROMIS

quarterly report for monitoring of

procurement performance covering 90% of

bids invited/ contracts awarded


measurement of an important

activity under additional financing

e-GP developed and installed

at CPTU and target agencies

at HQ agencies


project

Network and connectivity for

MIS established at the district

level of at least two target

agencies


project

e-GP piloted at HQ level for

all international procurement

in at least two target agencies

About 80% of bids invited through e-GP in

national competitive bidding in 64 districts

by the four target agencies.


up activities under additional

financing

A comprehensive government

communication strategy

developed and launched


project

Workshops for communication

campaign and advocacy

campaign held in all districts

for target agencies and

stakeholders


project

Training program on public

procurement and social

accountability for mass media


project



professionals and civil society

organizations held

Government-contractors forum

established for all target

agencies and semi-annual

meetings held

Expanding government-contractors forum

to all districts and holding semi-annual

meetings

Revised indicator to reflect wider

coverage under additional

financing

e-GP awareness workshops held at all

districts


activities under additional

financing

* Indicate if the indicator is Dropped, Continued, New, Revised, or if there is a change in the end of project target value

27

REVISED PROJECT RESULTS FRAMEWORK

Project Development Objective (PDO): Improved performance of public procurement system progressively in Bangladesh, focusing largely on target agencies

PDO Level Results Indicators1

Co

re UOM2

Baseline

Original

Project

Start

(2007)

Progress

To Date

(2012)3

Cumulative Target Values4

Frequency Data Source/

Methodology

Responsibility

for Data

Collection

Comments 2013 2014 2015 2016

1. Percentage of contracts awarded

within initial bid validity period by

the 4 target agencies

% 10 65 68 73 78 80 Quarterly

Target

agencies/

CPTU/ M&E

report

Target

agencies/

CPTU & M&E

Consultant

Revised PDO1 from

original.

2. Four target agencies publish

PROMIS quarterly report for

monitoring of procurement

performance covering 90% of bids

invited/ contracts awarded

annually

% 0 5 20 50 70 90 Quarterly

Target

agencies/

PROMIS

report

Target

agencies/

Independent

consultant

Four target agencies

publish PROMIS report

with indicators

3. Four target agencies expand

electronic government

procurement (e-GP) to all 64

districts using national competitive

bidding procurement

% 0

3

10

35

60 80 Quarterly

Target

agencies/

Independent

consultant

report

Target

agencies/

Independent

consultant

The indicator data will

include NCB

procurements in all

entities of each target

agency

4. Percentage of procuring entities

of 20 additional agencies with

one trained/ certified procurement

staff

% 0 2 10 30 50 70 Quarterly

Additional

agencies/

Capacity

development

consultant’s

report

Additional

agencies/ Cap.

Dev. consultant

New PDO Indicator

1 Please indicate whether the indicator is a Core Sector Indicator (for additional guidance – please see http://coreindicators).

2 UOM = Unit of Measurement.

3 For new indicators introduced as part of the additional financing, the progress to date column is used to reflect the baseline value.

4 Target values should be entered for the years data will be available, not necessarily annually. Target values should normally be cumulative. If targets

refer to annual values, please indicate this in the indicator name and in the “Comments” column.

http://coreindicators/

Intermediate Results and Indicators

Intermediate Results Indicators

Co

re

Unit of

Measur

ement

Baseline

Original

Project

Start

(2007)

Progress

To Date

(2012)

Target Values


Methodology

Responsibility

for Data

Collection

Comments 2013 2014 2015 2016

Intermediate Result 1: Capacity development program institutionalized locally and target agencies develop skilled procurement professionals

1. Percentage of procuring entities

of 20 additional agencies with

one trained/ certified procurement

staff

% 0 10 30 50 70 Quarterly

Four target

agencies/

Reports

Four target

agencies &

Cap. Dev.

Consultant

2. Number of weeks of

procurement training delivered by

Local training institute (ESCB)

with its own fund/resources

outside of PPRPII AF

Number 0 2 5 25 45 55 Quarterly

ESCB/ Cap

Dev. Consult.

reports

ESCB & Cap

Dev.

Consultant

New indicator in PPRPII

AF

Intermediate Result 2: Target agencies manage and monitor their procurement at all levels to improve sectoral objectives

3. Percentage of contract awards

published by four target agencies

in CPTU’s website for awards

above PPR specified threshold

% 10 70 75 80 85 90 Quarterly

CPTU, Four

agencies/

Reports

CPTU, Four

agencies

Revised indicator in

PPRPII AF

4. Percentage of complaints

handled satisfactorily by four

target agencies

% 5 25 35 45 55 70 Quarterly

Four target

agencies/

Reports

Four target

agencies/ Impl.

consultant

5. Four target agencies publish

PROMIS quarterly report covering

90% of bids invited/ contracts

awarded

% 5 20 50 70 90 Quarterly

Four

agencies/

Reports

Four target

agencies &

independent

consultant


AF; total contract: 9350

Intermediate Result 3: Four target agencies fully introduce electronic government procurement (e-GP) in national competitive bidding

6. Percentage of contract/bid

invited through e-GP by four target

agencies using national

competitive bidding in 64 districts

% 0 3 10 35 60 80 Quarterly

Four target

agencies/

Reports

Four target

agencies &

Independent

consultant


AF; total contract: 9350

Intermediate Results and Indicators

Intermediate Results Indicators

Co

re

Unit of

Measur

ement

Baseline

Original

Project

Start

(2007)

Progress

To Date

(2012)

Target Values


Methodology

Responsibility

for Data

Collection

Comments 2013 2014 2015 2016

Intermediate Result 4: Stakeholder engagement in following procurement issues increased

7. Expanding Government-

contractors forum to all districts

and holding semi-annual meetings

Number 0 5 10 20 40 64 Semi-

annual

Social

accountability

consultant/

Reports

Social

accountability

consultant

8. Number of e-GP awareness

workshops held in all districts

scope

Number 0 10 20 45 64 Quarterly

Social

accountability

consultant/

Reports

Social

accountability

consultant


AF.

9. Number of Public-Private

Stakeholders Committee (PPSC)

workshops/ meetings held

Number 6 10 14 18 22 Quarterly BRACU-IGS

report BRACU-IGS New indicator

30

ANNEX 2- OPERATIONAL RISK ASSESSMENT FRAMEWORK (ORAF)

Bangladesh: Additional Financing of Public Procurement Reform Project II (PPRP II AF)

Stage: Board

Project Stakeholders Risks Stakeholder Risks Rating Substantial

Description: Perceived issues in the monitoring and

management of procurement by GoB and target agencies

policy makers may affect the project. Also, the bidding

community’s slow progress in becoming aware of the e-GP

combined with inadequate capacity may negatively impact the

pace of full e-GP implementation plan.

Risk Management: An extensive targeted program for bidders’ capacity development on e-GP is

included in the project to cover as many bidders as possible.

Resp: Client Stage: Preparation Due Date : 02/15/2013 Status: Done

Risk Management: The PMC and TWG members of each target agency has been playing and are expected to play critical mitigating roles in exposing detractors and building the constituency for fast e-GP implementation. The GP system management and operational service provider will

implement the training program of bidders. This will help mitigate the risk as opportunities to more

and more bidders become available.

Resp: Client Stage: Implementation Due Date : 03/31/2016 Status: Not yet Due

Implementing Agency Risks (including fiduciary) Capacity Rating: Moderate

Description: Rotation and/or transfer of key staff may

negatively impact the performance of the project at CPTU

level. In addition, non-filling out few vacant positions may

affect efficient implementation. Inadequate number of

dedicated staff at the four target agencies may also impact the

speedy implementation of e-GP and PROMIS.

Risk Management: Assurance is sought that the key project officials will continue to serve in CPTU at

least for its initial years (Director General, and three Directors).

Resp: Client Stage: Preparation Due Date : 07/01/2013 Status: Not yet Due

Risk Management: CPTU will fill out all vacant but approved positions (Deputy Director-2; Assistant

Programmer-1; computer operators-2). A Deputy Director (Finance) will be in place in CPTU.

Technical experts will be added: individual consultant to assist the Director (Training) in coordination;

e-GP/MIS (Senior System Analyst , M&E expert).The four target agencies will create e-GP/PROMIS

cell and provide at least 5 counterpart staff (PMC, TWG, others) , with provision of logistics/

equipment/ training from the project.


Governance Rating: Moderate

Description: No significant governance risks is anticipated for

CPTU. As regards target agencies, certain risks exist with

regard to the effective internal control mechanism for the

eligible expenditures under the project that will be expended

by those agencies. Selection of trainees may pose certain

risks.

Risk Management: Each agency will publish quarterly PROMIS report with detailed results of

indicators for bids invited/ contracts awarded. Each target agency will maintain a roster of complaints;

also, there is provision of CPTU’s semi-annual review to validate data at PROMIS. Trainee selection

criteria will be cleared with the Bank.


Risk Management: To further improve the internal control mechanism, there will be one FM expert;

also, internal audit provision is made to be conducted regularly.

Resp: Client Stage: Implementation Due Date: 09/30/2013 Status: Not yet due

Project Risks Design Rating: Moderate

Description: Challenging coordination mechanism:

Constrained capacity of CPTU in coordinating the capacity

development component in light of the additional agencies

involved (about 20), beyond the existing four target agencies.

Limited scope of performance-based financing: As only the

existing four target agencies will be eligible for performance-

based financing, leaving the additional agencies out of it, it

may create a sense of non-uniform treatment among the

agencies although it is a known that those four agencies have

played the most critical role over the past four years in the

capacity development program and introduction of e-GP.

Weak private sector (bidding community) capacity in moving

fast with the needed IT skills and infrastructure at local level

may delay the e-GP process.

Risk Management: A designated consultant will assist the Director (Training) and Deputy Director

(Training) to coordinate with the existing four target agencies and the additional agencies in health,

education, power, and public works.


Risk Management : Scope of performance-based financing will be clarified further to the four target

agencies while other additional agencies will provided with more guidance and specific training as how

to start the process with e-GP.

Resp: Client Stage: Implementation Due Date :01/06/2014 Status: Not yet Due

Risk Management:. Specific training and awareness sessions have been included in the project for all

associated agencies’ bidders with local levels.


Social & Environmental Rating: Not Applicable?

Description : It is a category C project involving reform

without having any major social and environmental impact.

The minimum civil construction relating to the CPTU building

vertical extension is within the existing planning ministries

campus, thereby no major impact.

Risk Management : The bidding document will include Environmental Code of Practice (ECoP)

including proper occupational health and safety guidelines for the workers. The Public Workers

Department (PWD) continues to supervise the construction including the enviornemntal and safety

provision.

Resp: Client Stage: Preparation Due Date : Status: N/A

Program & Donor Rating: Low

Description : No major risk of donor coordination exists. Most of the key development partners, both multilateral and bilateral, are supporting the procurement reform agenda and following its progress regularly.

Risk Management : All concerned key partners with interest in procurement reform are being

consulted as the project preparation moves (e.g., ADB, DFID, JICA)

Resp: Partners Stage: Prep Due Date : 03/31/2013 Status: Not yet Due

Delivery Monitoring & Sustainability Rating: Substantial

Description : Sustainability: Sustainability of capacity

development program and e-GP system beyond the project

period are two risks.

Data collection and analytical capacity: Currently, M&E is

being done with sample data of the four target agencies;

eventually, it needs to capture all data of those agencies with

the full functioning of the on-line performance measurement

system (PROMIS) that has just been piloted.

Risk Management: A self sustaining business model has been developed in a way that the revenue

generated through the e-GP system is either retained within IMED/CPTU or GoB allocate sufficient

fund against it to run the system. Specific assurance of GoB has been sought in this regard..

Resp: Client Stage: Preparation Due Date : 03/20/2013 Status: Not yet Due

Risk Management: Each target agency will need to meet specific target of tenders/ contracts through e-

GP every year against which they will receive DLI-based financing. For capacity development

sustainability, ESCB will arrange series of course (3-week, 2-week, 1-weeh, short, etc.) with its own

resources, outside the project fund, and such courses are identified as milestones/ deliverables (in their

TOR) against their payment under the project. .

Resp: Client Stage: Implementation Due Date : Progressive Status: Not yet Due

Overall Risk Implementation Risk Rating: Moderate

Comments:

Annex 3: Detailed Description of Modified Project Activities

Component 1: Furthering Policy Reform and Institutionalizing Capacity Development

1. The objective is to complete the remaining small part of the tasks on documents

associated with secondary legislations and expand the scope of existing capacity development

program beyond the four target agencies with greater institutionalization and sustainability.

2. Furthering policy reform: This involves remaining tasks concerning secondary

legislations that, among others, incudes: part of a few bidding documents, guidelines for

evaluation, procurement post review guidance note, and translated version of rules to reflect the

latest state of play. Whatever those updating/ adjustments might be in the existing documents,

they will imply consequential amendments to all concerned documents.

3. Capacity development program: The capacity development program includes

provision of a series of long and short term training and academic programs in public

procurement for procurement practitioners and other stakeholders. The key components include:

procurement compliance training (three-week and short courses), procurement core competence

combined with top-up Masters in procurement and supply management, and further

institutionalization of capacity in Bangladesh. Under PPRPII, the main training is on target

(2866 staff trained exceeding the target of 2700 staff) and its objective of having at least one

person trained in each procuring entity of the four target agencies will be mostly achieved. The

effectiveness of the capacity development program in the four target agencies has been

demonstrated by increased competitiveness, and enhanced transparency of the system, with value

added in terms of quality of procurement documentation of the agencies.

4. Procurement compliance training: The two key components are main procurement

training and short procurement training. For the main training, out of the target of 2700 staff

(2175 from four target agencies and 525 from others), as of now, GoB already trained over 2800

staff, of which over 2000 staff (72%) are from the four target agencies, and over 800 staff are

from other public sector organizations.

Main procurement training: The three-week main procurement training will continue but

with updating the contents to reflect the latest adjustments including course contents for

procurement of goods, works, and services along with a basic short module on e-GP. The

course content will further update the module to act as bridge between the main training

course and the follow on course on core competence for the best performers in a way that

all three-week participants have at least basic competence training. Under the additional

financing, the training program will cover the remaining staff of the four target agencies

plus all concerned staff of health, education, power, and public works. The training is

planned to be conducted in the same training institutes (Engineering Staff College

Bangladesh- ESCB, and Bangladesh Institute of management- BIM) with due focus for

sustainability. All four target agencies will remain in this program to ensure its viability

for other additional agencies. A total of about 2700 officials will be trained under the

project.

Short procurement training : The short courses for various target audiences will continue

with some adjustments; for instance, policy makers, government mid-level officers,

project directors, junior officers, refresher courses, judiciary and anti-corruption staff (if

applicable), auditors/ accountants (C&AG and other agencies), estimators, journalists,

etc. Assistance will be provided to various existing public training institutes and

universities to continue appropriate courses within their current syllabus. The following

short courses are envisaged with scope of further adjustments/ additions depending on

actual need (Attachment 2):

(i) Short training course for junior level officers (E): Junior level staff of procuring entities

who assist in estimates, accounting and/or associated with procurement activities will be trained on a short course after adjusting the module to a 4-5 days course.

(ii) Short-training course for policy makers (F): Most of the key policy makers and officials at various tiers of GOB will undergo this short course (1 day) specifically designed on the basis of procurement rules and associated approval process. The objective is to help facilitate an efficient procurement approval process with reduced time lag.

(iii) Short-training for civil service officers (G1, G2, G3, G4, G5, G7, G8): These short courses

(1-5 days) or awareness workshops were developed under PPRP-II and targeting entry, mid and senior level civil servants, administration and economic cadre, National Board of Revenue (NBR) and municipality chairpersons. Except G1, G2, G3 and G5 where designated training institute such as Bangladesh Public Administration Training Centre (BPATC- G1, G2 and G3) and Bangladesh Civil Service Administration Academy (BCSAA- G5), the consultant is free to select other rented space for course delivery.

(iv) Short training for auditors, finance and accounts officers (I): Given the importance of the role of auditors in public procurement, the public auditors will be provided with targeted course on procurement (2-3 days) that is appropriate for them. Since their role is different from the roles of public procurement officials, the course module will concentrate on the type of deficiencies in bids and actual contract implementation issues including delayed payments and imposition of liquidated damages for delayed implementation

(v) Short course for project managers (M): This 3-day course is demanded by Government

for smooth implementation of projects funded by either or both among Government and Development Partners. Project staff involved in management such as project directors, deputy project directors, managers and coordinators will receive this training.

(vi) Orientation for judiciary staff (N): This 1-day orientation is targeted for supreme court

and district judges as well as public prosecutors and attorneys to have good interpretation of local procurement law and good understanding of international treaties affecting procurement decisions.

(vii) Orientation for anti-corruption officials (Q): This 1-day orientation is targeted for

officials of the Anti-Corruption Commission (ACC) or similar officials deals with anti-

corruption matters with specific reference to procurement and contracting to have good understanding and interpretation of local procurement laws in the context of sanctions and associated matters.

(viii) Orientation for journalists (P): This 1-day orientation is to give journalists from newspapers, TV and radio channels a broad perspective of public procurement and how to prepare quality reports on procurement decisions and usage of public money. The journalists can also act as a third party audit of development activities and contribute in determining accountability.

(ix) Orientation for Members of Parliament (R): Recognizing the involvement of the

Member of Parliament in development related matters at the local level, this 1-day

orientation course will provide orientation as regards the procurement law and

associated rules with specific reference to the integrity of bidding process and

contract implementation.

(x) Business outreach program (S): This is a 1-day short orientation to the business

community including bidders/consultants as appropriate in reference to the

application of procurement laws/rules and key elements of bidding mostly in the

form of workshops/ seminars.

(xi) Refresher Course (T): This is a one day refresher course aimed at the participants

who underwent three-week course for procurement of goods, works, and services in

the past under the procurement reform project and has been practicing procurement

for at least four years since the participant's training. The course will cover PPA,

PPR with associated amendments and procurement processes/ tools such as PPP,

framework contracting, and e-GP.

E-learning modules/ open source materials: In addition to face to face course, it is

envisaged that a number of open source training materials and/or short e-learning

modules for procurement will be developed for distant learning or e-learning at officers

own convenience, preferably with provisions of on-line certificates. The consultant will

develop these modules and will host them appropriately with CPTU’s website.

5. Procurement core competence program (MCIPS): This is an incentive program in

PPRPII, designed only for the top performers in three-week courses. As of now, about 40 top-

performers of initial 54 three-week courses have undergone international procurement

accreditation program (MCIPS) of the Chartered Institute of Purchasing and Supply- CIPS/UK in

collaboration with BRAC University- Institute of Governance Studies (BRACU-IGS), most of

which are already completed. Under the extended program, staff from the remaining three-week

courses of PPRPII as well as planned additional three-week courses under PPRPII AF will be

eligible for the continued accreditation program after appropriate scrutiny/ selection of qualified

candidates. CIPS meanwhile has also developed three study centres in Bangladesh, namely,

BRACU-IGS, NAPD, and ESCB, of which BRACU-IGS has been the twinning partner under

PPRPII. Under PPRPII, Level 4 and level 5 were being conducted at BRACU-IGS while level 6

was at the CIPS/UK. Now, with enhanced capacity of BRACU-IGS combined with increased

national pool of resources (trainers), it is expected that, in going future, BRACU-IGS will have

greater role in managing and conducting the MCIPS course for an estimated number of over 100

participants by conducting all three competence levels at BRACU-IGS (face-face-learning) with

overall quality assurance and consistency of deliverables by CIPS.

6. Top-up Masters- procurement and supply management: This is an incentive program as

well for the top-performers in three-week courses. As part of the program, the MCIPS

accredited staff (about 40) are undergoing a top-up Masters program in procurement and supply

management at BRACU-IGS (first 20 awaiting degree award). Under the extended program

covering other agencies’ staff, this will continue at BRACU-IGS.

7. Master in Public Procurement Management for Sustainable Development/ Law/

others: This is an additional incentive program for a limited group of public procurement

practitioners selected through a rigorous screening process from among the participants of three-

week courses. With the advent of globalization and the increased role of private sector in

governance, public procurement features as an important market-based incentive for promoting

Corporate Social Responsibility (CSR). Thus, in addition to traditional regulatory obligations,

procurement practitioners also have to demonstrate their governments’ adherence to international

agreements in human rights, labor and the environment, and mitigation of corruption., and

thereby improving the “quality of jobs” while facilitating sustainable development. This is a

one-year Master’s in Public Procurement Management for Sustainable Development in the Turin

School of Development (University of Turin - ITC- ILO, Turin/Italy). Similarly, for legal

training in public procurement by obtaining a thorough understanding of: the nature of law and

the legal process, University of Nottingham/UK offers a two-year (part time) Masters course.

Also, University of Rome Tor Vergata/ Italy offers Masters in public procurement with focus on

interdisciplinary content which is meant to attract public purchasers with relevant experience in

procurement as well as young students interested in preparing for a career in public procurement.

It is expected that about 25 participants may be able join the program with significant focus on

sustainable development.

8. Training on e-procurement: This is an incentive program for the e-GP practitioners at

the agency level in particular reference to the four target agencies. As e-GP is at its initial phase

of implementation and is planned to make the four target agencies under full e-GP within three

years, expansion of the basic knowledge base at the decentralized level is essential. In addition

to the in-country training, a limited number of potential practitioners at focal point level will be

given opportunity to have experience abroad. It is planned that over 100 procurement

practitioners of the target agencies will be given one week training at ITC-ILO, Turin using their

comprehensive module on e-GP (LGED: 50, RHD: 30, BWDB: 30, and REB: 10). Four target

agencies will directly arrange this training with ITC-ILO/ Turin.

9. Training to national pool of resources: Out of the total of 25 TOTs, actually about 15

are available in-country; in addition to that 14 have been added recently who went through a

rigorous selection process, thus raising the total TOTs to about 40. Also, some more TOTs

could be developed. CPTU and the agencies are expected to take advantage of the knowledge of

this pool of resources on a continuous basis through a networking arrangement which CPTU will

coordinate. This group of resources will be attached to CPTU and will be involved in the

process of technical and knowledge dissemination dialogue. To promote this purpose, these

resource persons will also have opportunity to take advantage of short training abroad (one week

or so) on the evolving areas of procurement, like e-GP, public-private participation (PPP),

sustainable procurement, etc. It is planned that CPTU will arrange training of about 50 such

resource persons at ITC-ILO/ Turin.

10. Sustainability of capacity development at ESCB: With support from PPRPII, ESCB,

the main three-week training provider, has developed a procurement faculty with a Dean and

four trainers, and completed the targeted 80 course, covering about 2200 staff. Similarly

Bangladesh Institute of Management- BIM, the other institute, completed 28 covering over 700

staff. BIM in parallel runs many courses while ESCB since late 2010, as part of its effort for

greater institutionalization and self-sustainability, has been arranging other short courses outside

the purview of PPRPII. In PPRPII AF, the main training will continue at these two institutions.

Nevertheless, ESCB still require strengthening its capacity to manage such program

independently in a sustainable manner and will require professional support for long-term

strategic marketing which is included in the project. The main consultant, in collaboration with

ESCB will complete around 60 three-week courses (Attachment 2).

11. As part of the sustainability effort, ESCB is expected to conduct courses on public

procurement separate from those funded under PPRPII AF. And towards this, an incentive

mechanism has been developed for the consultant/ ESCB. The incentive mechanism will be

based on an agreed minimum number of courses to be provided each year over a three year

period. These additional courses are expected to be funded by the organizations and agencies of

the participants themselves, and may be the identified target agencies, additional agencies, or any

other government organizations and agencies or private sector organizations that wish to

participate in the training. ESCB, with consultants overall guidance, is expected to conduct 12,

24 and 36 weeks of procurement training in FY14, FY15 and FY16 respectively using its own

resources, outside the training programs in PPRPII. This course on procurement could be of a

duration of three-week or two-week or one-week; however, ESCB will need to meet the total

number of weeks in each FY. Concurrently, ESCB will conduct short courses for the bidding

community and bidders on charge-basis (1-5 day duration); such short course for bidding

community will constitute at least 33% of the annual aggregate target set out above. Both these

two types of trainings, however, will form part of the milestones/ deliverables for payments to

the consultant/ ESCB. In case of failure, there will be provisions for disincentive/ penalty in the

consultant’s contract. An indicative schedule of deliverables of the consultant/ ESCB is at

Attachment 3.

Component 2: Strengthening Procurement Management at Sector Level & CPTU/IMED

12. This component will further strengthen the procurement management capacity of public

sector agencies through: (a) the provision of technical advisory services to identify specific sets

of arrangements for the four target agencies to address the deficiencies identified in bidding

practices, contract management, and procurement planning and budgeting; (b) the provision of

technical support and equipment to the target agencies for developing a strategy and plans for the

implementation of new procurement rules and practices; (c) the provision of physical,

infrastructural and logistical support to the target agencies to collect data for tracking and

monitoring of procurement, including the establishment and integration of the CPTU’s

monitoring system “PROMIS” into a fully functional system. The detailed features are described

below.

13. Strengthening procurement performance monitoring: The on-line procurement

performance monitoring (PROMIS) with indicators developed under PPRII to measure

efficiency, transparency and competitiveness of the system is being piloted at the four agencies;

this tool has already been found effective for measuring performance. In PPRPII AF, this effort

will be further strengthened with targets for each agency over a specified period of time so that

procurement activities are monitored in a more systemic and transparent manner with the

provision of publishing monitoring reports in website. To enhance the social control, training of

local media and relevant NGOs will be provided. The details of performance targets are

described in Component 3 (e-GP).

14. Monitoring and evaluation framework: PPRPII AF will have a strong M&E

framework based on a revised results monitoring indicators after appropriate adjustments taking

into account the expanded scope of the project, both in terms of the project development

objective, and the intermediate outcome indicators against each project component. Also, the

M&E framework in its design will recognize the need for appropriately catering the

performance-based financing and/or disbursement-linked indicators (DLIs).

15. Strengthening four target agencies’ procurement management capacity: In PPRPII

AF, while CPTU will be responsible for overall coordination and the management and operation

of the national e-GP portal, each of the four target agencies will actually implement the e-GP and

procurement monitoring task using a performance-based financing approach where the agencies

will have access to such finance through CPTU upon meeting specified performance targets.

Taking cognizance of the four target agencies (RHD, LGED, BWDB, and REB) more direct role

in the implementation of e-GP, more support will be provided at these agencies for their

institutional strengthening. Such support, among others, will include: provision of the

consultant’s extended e-GP team at each agency, beyond its core team at CPTU; creating a

dedicated e-GP/ PROMIS cell in each agency with adequate counterpart staff; provision of

incremental project staff and/or consultants; and provision of IT equipment/ connectivity/

training.

16. Strengthening of CPTU and IMED: The CPTU with its current staffing is is constraint

to cope with the given mandate of procurement monitoring across all public sector organizations.

Under PPRPII AF, CPTU will remain as the key implementing agency for the entire project and

will be responsible for contracting out at least three large value contracts associated with

capacity development, e-GP system management and operation, and core competence program

As part of strengthening its staffing, CPTU will need to fill out all vacant positions (5 positions)

and recruit the remaining 10 staff as per the approved Technical Assistance Project Proposal

(TPP) after obtaining necessary permission from the Ministry of Public Administration (MoPA).

CPTU’s additional strengthening measures, among others, will include: creating an e-

GP/PROMIS cell within CPTU with Sr. System Analyst as its focal person; strengthening its

analytical/ research capabilities using services of incremental project staff and/or consultant;

delegating appropriate authority to the Directors in CPTU (three); ensuring continuity of key

project staff (Director General, Directors, and other level appropriate staff) at least for the initial

years of PPRPII AF; provision of equipment and/or IT facilities.

17. The project is expected to support CPTU to carry out the day-to-day administration of the

project including the verification of DLIs by independent consultant and e-GP systems audit.

The project will also support to start developing an M&E system and capacity at CPTU for

regular measurement and evaluation of the economic impact of procurement reform. The project

will provide support in strengthening the other associated units of IMED concerning

implementation monitoring of project procurement at national level that, among others, will

include some equipment and logistical supports including technical assistance in the form of

consultancy services.

18. Strengthening bidding community: it is recognized that the bidding community can

contribute positively to the development of the procurement regime in the country through their

experience and hands-on issues. Toward this, various options will be explored including

development of a nation-wide contractors’ database and development of local construction

industry. CPTU will undertake this task with assistance of consultants.

19. CPTU Building: Depending on the future need, CPTU may opt for vertical extension of

the CPTU building with one more floor subject to fulfillment of all technical and procedural

requirements.

Component 3: Introducing e-Government Procurement (e-GP)

20. The objective of the revised component is to expand the e-GP networking and its scope in

a way that the key sectorial agencies are under full e-GP within three years, with specific

reference to the four target agencies, thus, demonstrating its fair play, value-for-money,

transparency, and open competition with enhanced accountability. Under PPRPII, this

component achieved the design and implementation of e-GP in the areas of publication of notices

and contract awards, e-bidding, e-purchasing, and e-contract management, development of a

single web-based system, and formation of an e-GP technical support unit. In PPRPII AF, this

will further include capacity development support and training for the target agencies’ staff to

implement the e-GP system; provision of technical services for the management, operation and

maintenance of the national e-GP system; and provision of technical support and equipment for

the development of a procurement information back-up mirror site and disaster recovery center.

Details of the proposed activities under this component are provided below.

21. Expanding scope of e-GP: The e-GP system, developed under PPRPII, is fully

functional with its national web portal. The four target agencies, after completing pilot, are now

at the rolling out phase with a target of inviting at least one tender through e-GP in each of its

identified procuring entities by March 31, 2013 (total about 300 entities) which is on target.

Nevertheless, it is slow and needs substantial augmentation to expand the scope of transactions.

Under the expanded program, while the four target agencies are planned to have full e-GP within

three years, there will be further rolling out of e-GP in about 10-15 other public sector

organizations covering health, education, power, public works, etc. in a way that the transaction

level is enhanced substantially. Rolling out will seek 100% conversion of certain procuring

entities (champion) in concurrence with gradual ramp-up across-the-board. Also the existing

functionality will be reviewed to consider the enhanced scope.

22. Management and operation of e-GP system: The current contract of CPTU with the

third party service provider will expire by March 31, 2013. Taking cognizance of this scenario

and the PPRPII AF, while the Government/CPTU will be the owner of the e-GP system with all

its legal right, its management and operation will be done by a third party service provider. To

run the e-GP system effectively, a self-sustainable model is required in a way that the system is

self-financed with all its associated expenses within the next three years. However, at present

there is not enough business opportunity to attract prospective M&O service providers for a self-

sustainable model. A transactional trend analyses has been done for the four target agencies by

obtaining information for the past three financial years (FY10-FY12). After marginalizing the

data on a relatively conservative estimate, a target for e-GP implementation for the four target

agencies is set out below in a way that all contracts up to the district level are covered in e-GP

within the next three fiscal years. Also, the 20 additional agencies at their choice will initiate e-

GP and its transactions within the PPRPII AF period may be in the tune of 5 percent of the total

of four target agencies.

Box 1: Estimated Transaction of four target agencies Agency

name

Average

number of bids

invited annually

FY14 e-GP

target (35%)

FY15 e-GP

target (60%)

FY16 e-GP

target (80%)

FY17 e-GP

target (100%)

RHD 4000 1400 2400 3200 4000

LGED 4000 1400 2400 3200 4000

BWDB 1200 420 720 960 1200

REB 150 55 90 120 150

Total 9350 3275 5610 7480 9350

23. Self-sustainability of the e-GP system: Considering the current constraint, a progressive

self-sustainable model has been worked in a way that towards the end of PPRPII AF, the system

is fully operated using its own revenues, while during the transition, support from the project will

be included. An initial outline of the e-GP financing model is provided below which may

require further adjustments.

Box 2: e-GP Self sustainable model:

Year Expenditure

(annual average)

Revenue Considerations

Year 1 $1.43 M $0.55 M Revenue:

Yearly renewal fee for bidders: BDT 2,000 (US$ 25)

Cost of bidding document to submit bid:

Slab1 (tenders < BDT 5M): BDT 1000 (US$12)

Slab2 (tenders < BDT: 20M): BDT 2000 (US$25)

Slab 3 (tenders > BDT: 20M): BDT 4000 (US$50)

Four target agencies will implement e-GP as per the set

Year 2 $1.43 M $0.95 M

Year 3 $1.43 M $1.25 M

Year Expenditure

(annual average)

Revenue Considerations

out targets (Box 1 above).

Each bidder participates in at least three tenders (invited)

annually

Average number of bids per bidding is four.

Expenditure:

The model is based on a five-year life cycle of hardware.

Costs have been annualized for modeling purpose; in

reality the hardware cost will be at one time (5th

year).

Cost for the M&O of the e-GP system is of the service

provider on contract basis.

24. The e-GP system will generate revenues through its operation and to ensure sustainability

of the system and its operation in a most efficient way. Thus, it is critical that IMED/CPTU has

the full authority to run the system as any other revenue earning organization. GoB will assure

that the e-GP system developed under the project is sustainably financed through a retention of

the e-GP system generated revenues within IMED and/or through the provision to IMED of

adequate funds on an annual basis for the management, operation and maintenance of the e-GP

system, with a distinct budget code and financial authority for IMED and CPTU to spend such

funds. Taking the above into account, IDA will finance part of the M&O contract of the service

provider on a declining basis.

25. TOR of M&O contract: The proposed service provider for the e-GP system will have

two major tasks: operation and maintenance of the system at CPTU, and support four target

agencies to implement the e-GP expansion program. Thus, it will cover the management and

operation of the e-GP system application, e-GP data center, supporting the four target agencies

for the entire PPRPII AF period through a dedicated team for each agency, trainings to all

concerned staff of the four target agencies, training to bidding communities, arranging

workshops and business outreach program to meet specified target of e-GP implementation,

rolling out the e-GP system across the four targets agencies and other specified procuring entities

of the Government of Bangladesh.

26. Third party e-GP system audit: In order to ensure appropriate functioning of the system

including authentication of the system security, IMED/ CPTU will hire an international firm to

do third party independent e-GP system audit on an annual basis, starting in early FY13.

27. Disaster recovery center: At present there is no disaster recovery center (DRC) for the

e-GP system. Bangladesh Computer Council (BCC) is responsible for national DRC and its

maintenance. At present BCC has selected the site for national DRC (Jessore or similar site at

distance) and will go for procurement process soon. If CPTU uses the national DRC for its e-GP

system then it will be cost effective and more suitable from operational view point. It is

envisaged that CPTU will have a back-up mirror site at BCC building premises at Dhaka, and

when BCC will have the DRC up and running, CPTU will also house its DRC there.

28. Implementation of on-line procurement performance monitoring (PROMIS): The

on-line procurement performance monitoring of the target agencies needs strengthening in terms

of its implementation as the system issues are now resolved. E-GP implementation will largely

help by default in achieving PROMIS information as it will capture large data by itself, leaving

room for manual entry of those tenders that are not covered in e-GP. Based on the tendering

information provided above, an implementation schedule/ targets have been worked out which is

summarized below by financial year.

Box 3: Implementation of PROMIS

Agency

name

Average number

of bids invited

annually

FY14

PROMIS

target (50%)

FY15

PROMIS

target (70%)

FY16

PROMIS

target (90%)

FY17

PROMIS

target (100%)

RHD 4000 2000 2800 3600 4000

LGED 4000 2000 2800 3600 4000

BWDB 1200 600 840 1080 1200

REB 150 75 112 135 150

Total 9350 4675 6552 8415 9350

Component 4: Behavioral Change Communication and Social Accountability (BCC & SAc)

29. The objective is to further strengthen efforts to raise awareness and public demand for the

reform and e-GP across public sector organizations, the bidding community, and other

stakeholders. Under PPRPII, efforts were made through: provision of technical advisory services

and equipment to facilitate the implementation of the rules and regulations governing public

procurement. It included: design and implementation of (i) a communication strategy; (ii) an

education program; and (iii) carrying out of behavioral change activities, and advocacy

campaigns; (iv) possible entry point for engagement of beneficiary groups (civil society groups,

business chambers, or media apex bodies, etc.) to improve public access to procurement related

information, establish a government-contractors forum, etc. Under PPRPII AF, the component

will mainly focus on e-GP awareness campaign for bidders, journalists, policy makers and other

stakeholders and local level beneficiaries. Also, this will include possible third party monitoring

of the reform activities. Key features are described below.

30. e-GP awareness and reform agenda: To sustain the gains for increased awareness on

e-GP and public procurement reforms, it is imperative to continue behavioral change

communications to the target audience through using strategic mix of different communication

channels. It is envisaged that future activities under PPRPII AF will take it to a different level

with specific reference to deepening the reform agenda and its value to target groups at local

levels, bidding community, journalists, and policy makers. Major activities are:

i. Awareness and advocacy campaign: This component will launch a campaign

targeting to the procuring entities, bidding community and other stakeholders to raise

awareness on e-GP. It will also promote issues as anti-corruption (“no bribe”) and

transparency targeted to procuring entities and bidding community; and best use of

public resource or tax payer’s money.

ii. Media training: The awareness campaign will focus on strengthening media capacity

for better and more reporting on public procurement and e-GP. Possible activities

may include training for journalists and competition on investigative journalism.

iii. Advocacy: The Government-contractors forum formed under the PPRPII will be

continued on a larger scale. It may consider replication of future search conference to

continue the dialogue. The activities of public-private stakeholders committee (PPSC)

may continue.

31. Assessment developmental effectiveness/ impact: It is recognized that given the nature

of the project, by default since procurement success is measured in terms of economy, efficiency,

and transparency of the system, assessment of developmental impacts could be challenging,

Nevertheless, within this constraint, the project will attempt using social accountability tool to

conduct study capturing the notion of developmental effectiveness and on the ground results with

specific reference to governance challenges.

32. Third Party Monitoring: The reform activities will also be grounded at the local

stakeholders level with possible involvement civil society organizations including their own

capacity development in the area of behavioral change and accountability through procurement

outcome monitoring with specific focus on the enforcement of laws against fraud and corruption.

Attachment 1: Summary of Training Needs of Implementing Agencies

Remaining needs of target agencies

Agency Original

Target

Number

Trained

Remaining and Additional Required

RHD 470 387 100

LGED 876 874 100

BWDB 361 342 120

REB 468 455 100

Total 420

Training needs of additional agencies

Organization* No. Agencies No. of

Procuring

Entities

Number of

potential

trainees

Ministry of

Education

1 Directorate of Technical Education (DTE) 122 320

2 Directorate of Second. & Higher Education (DSHE) 26 400

3 Education Engineering Department (EED) 100

4 National Curriculum and Textbook Board (NCTB) 1 12

Power Division 5 Electricity Generation Co. Bangladesh (EGCB) 4 15

6 Power Grid Company of Bangladesh (PGCB) 63 49

7 Bangladesh Power Development Board (BPDB) 125 300

8 Dhaka Power Distribution Company (DPDC) 34 45

Ministry of

Primary Mass

Education

9 Department of Primary Education (DPE) 4 19

Energy & Mineral

Resources

Division

10 Gas Transmission Company Limited (GTCL) 1 23

11 Bangladesh Petrolium Exploration Co. (BAPEX) 1 15

Ministry of Health

& Family Welfare

12 Central Medical Stores Depot (CMSD) 1 15

13 Directorate General for Family Planning (DGFP) 7 15

14 Health Engineering Department (HED) 21 25

Local

Government

Division

15 Department of Public Health Engineering (DPHE) 190

16 Dhaka City Corporation (North) 1 10

17 Dhaka City Corporation (South) 1 10

Ministry of

Housing and

Public Works

18 Public Works Department (PWD) 121 308

19 National Housing Authority (NHA) 9 32

20 Rajdhani Unnayan Kortripokkho (RAJUK) 1 38

Total 1941

Attachment 2: Details of Indicative Training Courses

Name of Course

Duration Indicative

No. of

courses

Class

Size

Indicative venues

Main Target Audience

Total

No. of

Trainees

B1 Procurement of Goods, Works and

Services 3 weeks 60 30 ESCB

Target Agencies + Additional Agencies 1,800

B2 Procurement of Goods, Works and

Services 3 weeks 30 30 BIM

Target Agencies + Additional Agencies 900

E Junior Level Short Training 5 days 16 30 ESCB/BIM Target Agencies + Additional Agencies 480

F Orientation for Policy-makers 0.5 day 12 15 Rented facilities All Key Ministries (Additional Secretaries and above) 180

G1 Training for entry-level civil servants 2 days 6 50x4 BPATC Civil servants 1200

G2 Training for mid-level civil servants 1 day 16 20 BPATC Civil servants 320

G3 Training for senior civil servants 1 day 8 40 BPATC Civil servants 320

G4 Training for Economic Cadre 5 days 10 25 Rented facilities Planning Commission, ERD, IMED, Planning Wings, Economic Cadre and Development Project Staff

250

G5 Training for Administration Cadre 2 days 12 25 BCSAA Entry-level Administration cadre civil servants 300

G7 Awareness Workshops for Municipalities 1 day 30 100 Rented facilities Elected Municipality Chairpersons and Members 3,000

G8 Training for NBR Staff 2 days 5 20 Rented facilities NBR Staff (Income Tax, Value-Added Tax and

Customs) 100

I Procurement Training to Auditors 3 days 10 30 Rented facilities Public Auditors and Accountants 300

M Training for Project Management 3 days 20 25

Rented facilities Project Directors (PDs), Deputy PDs and Project

Managers 500

N Orientation for Judiciary Staff 1 day 10 15 Rented facilities Supreme Court Bar, District Judges and Public

Attorneys 150

P Orientation for Journalists 1 day 20 25 Rented facilities Media (Newspaper, TV and Radio) Executives 500

Q Orientation for Anti-corruption officials 1 day 4 25 Rented facilities Officials of Anti-Corruption Commission or similar 100

R Orientation for Members of Parliament 1 day 6 60 Rented facilities Members of Parliament, Parliament Secretariat 360

S Business outreach program 1 day 8 30 Rented facilities Business community, bidders, consultants 240

T Refresher course 1 day 50 40 IEB or similar Past three week participants 2000

TOTAL 13,200

Note: The table excludes refresher courses

Three-week course participant : 2,700

Short course participant : 10,500

Attachment 3: Indicative List of Deliverables

Tasks FY13 FY14 FY15

Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8

1. 3-week Main Course (ESCB & BIM) B1(4) B1(3), B2(2) B1(5), B2 (3) B1(6), B2(3) B1(6), B2(3) B1(4), B2(2) B1(6), B2(3) B1(5), B2(3)

2. Junior Level Short Training (ESCB) E(1) E(2) E(1) E(2) E(1) E(2) E(1)

3. Short Training Programs (Policy

Makers, Civil Servants, Planning, Admin Cadre, Municipalities, NBR,

Auditors, Project Managers, Judiciary

staff , Journalists, Parliament Members,

Business Outreach, Anti-corruption,

Refresher)

G1(1), G2(1),

G3(1), G4(1), G5(1), G7(1),

P(1)

F(1), G2(1),

G4(1), G5(1), G7(2), G8(1),

I(1), M(2), N(1),

P(2), S(1), T(4)

F(1), G1(1),

G2(2), G3(1), G4(2), G5(1),

G7(3), I(1),

M(2), N(1), P(1),

Q(1), R(1), T(4)

F(1), G2(1),

G3(1), G4(1), G5(1), G7(2),

G8(1), M(2),

N(1), P(2), S(1),

T(4)

F(1), G1(1),

G2(1), G4(2), G5(1), G7(2),

I(1), M(1), P(1),

Q(1), R(1), T(4)

F(1), G2(1),

G3(1), G4(1), G5(1), G7(3),

G8(1), M(2),

N(1), P(2), S(1),

T(4)

F(1), G1(1),

G2(1), G4(2), G5(1), G7(2),

I(1), M(2), N(1),

P(1), Q(1), R(1),

T(4)

4. Sustainability at ESCB(any combination of courses allowed to meet

minimum weeks mentioned)

3 weeks: X3(1) or X2(2) or

X1(3) and BC


X1(3) and BC


X1(6) and BC


X1(6) and BC


X1(6) and BC


X1(6) and BC

Tasks FY15 FY16 FY17

Q9 Q10 Q11 Q12 Q13 Q14 Q15

1. 3-week Main Course (ESCB & BIM) B1(4), B2(2) B1(5), B2 (3) B1(6), B2(3) B1(6), B2(3)

2. Junior Level Short Training (ESCB) E(2) E(1) E(2) E(1)

3. Short Training Programs (Policy Makers, Civil Servants, Planning, Admin Cadre,

Municipalities, NBR, Auditors, Project

Managers, Judiciary staff , Journalists, Parliament Members, Business Outreach,

Anti-corruption, Refresher)

F(1), G2(2), G3(1), G4(1),

G5(1), G7(3),

G8(1), I(1), M(1), N(1), P(2), S(1),

T(4)

F(1), G1(1), G2(1), G3(1),

G4(2), G5(1),

G7(2), M(2), N(1), P(1), Q(1),

R(1), T(4)

F(1), G2(1), G4(1), G5(1), G7(2),

G8(1), I(1), M(2),

P(2), S(1), T(4)

F(1), G1(1), G2(1), G3(1), G4(2),

G5(1), G7(3),

M(2), N(1), P(1), R(1), S(1), T(4)

G2(1), G4(1), G5(1), G7(2), I(1),

M(1), N(1), P(2),

S(1), T(5)

G2(2), G3(1), G7(3), I(1), M(1),

N(1), P(1), R(1),

S(1), T(5)

P(1)

4. Sustainability at ESCB (any combination of courses allowed to meet minimum weeks

mentioned)

6 weeks: X3(2) or X2(3) or X1(6)

and BC


X1(9) and BC

9 weeks: X3(3) or X2(5) or X1(9)

and BC

9 weeks: X3(3) or X2(5) or X1(9)

and BC

9 weeks: X3(3) or X2(5) or X1(9)

and BC

9 weeks: X3(3) or X2(5) or X1(9)

and BC

9 weeks: X3(3) or X2(5) or X1(9)

and BC

Note:

1. Each quarterly target will be elaborated through quarterly capacity development report. There will be 14 quarterly reports (Q1-Q14) and a final report in Q15.. All quarterly reports will be

simultaneously submitted to CPTU and the Bank.

2. For sustainability at ESCB part of the deliverables, any target not achieved during the designated quarter will be allowed to be completed within the following or subsequent quarters of one

fiscal year.

3. Example- B1(2) means 2 course of type B1 in Annex 2.

4. BC will cover at least 33% of the target of each quarter and 33% of the aggregate target of each fiscal year.

Annex 4: Revised Estimate of Project Costs

1. PPRPII AF will be for over three years (FY14 to FY17/Q2), with two financing

modalities: direct input-based financing for CPTU, and performance-based financing for the four

target agencies where disbursements will be linked to attainment of specified indicators (DLIs)

relating to e-GP and procurement performance monitoring- PROMIS (Improving procurement

performance by using e-GP in four target agencies, and improving procurement performance

monitoring using PROMIS by four target agencies). Given the continuity of PPRPII, PPRPII AF

will have provision for retroactive financing of about US$2 million to cover expenditures related

to capacity development actions, management and operation of e-GP system, and sectoral

strengthening including Year0 DLIs for the four target agencies that are expected to be incurred

before effectiveness of the PPRPII AF.

2. Cost estimates are summarized below. CPTU prepared a Technical Assistance Project

Proposal (TPP) included in it the cost details.

Project cost by component1/ Local

US$ million Foreign

US$ million Total

US$ million

Furthering Policy Reform and Institutionalizing Capacity

Development

3.30 6.20 9.50

Strengthening Procurement Management at Sector Level &

CPTU/ IMED

6.50 1.00 7.50

Introducing Electronic Government Procurement (e-GP) 10.65 6.35 17.00

Communication, Behavioral Change and Social

Accountability

2.00 0 2.00

Total Project Cost 22.45 13.55 36.00

Total Financing Required 22.45 13.55 36.00

Financing

IDA GoB Total

34.50 1.50 36.00

Project cost by category1/ Local

US$ million

Foreign

US$ million

Total

US$ million

1. Goods, works, consultants services, training,

salaries of incremental Project staff, and

allowances for Project staff

11.95 8.55 20.50

2. Operating costs 1.50 - 1.50

3. Consultancy services for e-GP system management

and operation

1.50 5.00 6.50

4. DLI-based financing 7.50 - 7.50

Total financing required 22.45 13.55 36.00

Financing IDA GOB Total

34.50 1.50 36.00 1/ All costs are inclusive of physical contingencies (3%), price contingencies (2%), and local taxes. Consultancy

services include project incremental allowances for staff of CPTU.

Annex 5: Revised Implementation Arrangement and Support

A: Implementation

1. Overall Project Implementation: To ensure continuity of the activities under PPRPII,

CPTU/IMED will continue to be responsible for overall implementation of the project, while the

four target agencies will be responsible for actual implementation of e-GP and procurement

performance monitoring system (PROMIS) using a performance-based approach (disbursement-

linked indicators- DLIs) as verified by an independent consultant. The Procurement Monitoring

Coordinator (PMC) of each target agency will act as the link between the CPTU and those

agencies.

2. To oversee and review the project activities, the Project Steering Committee (PSC) needs

to be reconstituted with more focused role. There will be a specific task force with adjusted

TOR to oversee implementation of e-GP and PROMIS. The existing system of PMC and

technical working group (TWG) will remain unaltered; however, the PMC will be responsible

for implementation of e-GP and PROMIS at the agency level. In all deliberations/ meetings/

events concerning the project, the Bank representative will be present as observer and/or invited

guest. All ToRs and selection of criteria for the entire capacity development program including

any foreign training will require specific clearance from the Bank. Also, various teams

consultants, as produces reports/ documents, will share a copy with the Bank concurrently as it

sends such reports to CPTU/IMED.

3. Strengthening CPTU and IMED: The Director General of CPTU will continue to

function as the Project Director (PD) of PPRPII AF, with support from three Directors (Director-

Rules & Procedures, Director- Training, and Director- MIS/ e-GP). This is also consistent with

GoB’s announced policy for continuation of Project Directors/ key project officials. All

Directors will have more delegation to execute day to day functions in their respective fields

with adjusted TORs as shared with the Bank. Given the high importance of continuity of the

reform activities and its institutionalization within the country, the key project officials will

continue to serve in CPTU at least for its initial years, with appropriate arrangements permissible

within the government rules (Director General, three Directors, and other identified staff). Also,

GoB will assure sustainability of the e-GP system with provision of adequate funds to IMED/

CPTU as described in Annex 3.

4. As part of strengthening CPTU’s activities under the additional financing, supports will

be needed to strengthen its e-GP/ PROMIS function with more improved analytical/ research

functions contributing to system improvement. In terms of staffing, following additional staffing

are anticipated at this stage: Sr. System Analyst (1 Person) as the head of e-GP/ PROMIS cell

who will report directly to the DG/CPTU; part-time international e-GP consultant- 1P; Sr.

national e-GP consultant-1P and local e-GP support consultant- 2P for the entire duration of the

project, procurement reform implementation advisor, and other logistical supports including

equipment and transports. CPTU staffs are funded from the revenue budget. The existing

arrangements in PPRPII for project staff incremental allowances, as permissible within the

Government rules but not exceeding 30% of salary, will continue. For consistency purpose,

project staff will include staff of CPTU, PMCs and TWG members, and counterpart staff of e-

GP/PROMIS cells in each of the four target agencies. In addition, there is specific arrangement

for strengthening IMED’s other associated units relating to project procurement with provision

of consultants and equipment.

5. Implementation of Capacity Development: Because of the importance of continuity of

existing arrangements and consistency of approach, most of the current arrangements will

continue with appropriate adjustments combined with other additional arrangements:

Main capacity development consultant: Recognizing the need for continuation of the

program and its consistency, the current contractual arrangement between the

IMED/CPTU and the consultant (FINEUROP) will continue as per the agreed revised

terms of reference. The consultant will undertake the capacity development task in

collaboration with the Engineering Staff College Bangladesh (ESCB) and Bangladesh

Institute of Management (BIM) with the following approach: the main consultant will

update the course materials/ curriculum and provide quality assurance of the delivery of

courses while ESCB and BIM will actually deliver the courses and prepare proposal

accordingly using resource persons from the market, and the consultants will be paid

based on actual delivery of courses unlike the current arrangement where payments are

input based. As part of the sustainability effort, IDA will finance training costs upon the

consultant/ ESCB meeting certain performance triggers related to additional training by

ESCB using its own resources.

Core competence program: Under the adjusted arrangement, BRACU-IGS will be

jointly and severally liable for the course delivery: CIPS role will be more for ensuring

overall quality and consistency of deliverables while BRACU-IGS will actually deliver

the courses using mainly the national pool of resources with additional support from

CIPS. The top-up Masters of BRACU-IGS will remain unaltered.

Other Master’s Program/ Training on e-GP/ National Trainers: IMED/CPTU will have

arrangement with University of Turin - ITC-ILO/ Turin for (i) Master’s program in

procurement management for sustainable development, and (ii) short training on e-GP/

PPP/ sustainable procurement. For e-GP practitioners at the agency level in particular

reference to the four target agencies, the agencies will have direct arrangement with ITC-

ILO for short e-GP training under their performance based financing modality.

6. Implementation of Strengthening and Monitoring: Strengthening of CPTU will entail

recruitment of staff under revenue budget and a number of project funded staff. While CPTU as

a transition measure may hire project staff from the market based on the revised need under

PPRPII AF with specific reference to e-GP and PROMIS, the key focus should be to strengthen

CPTU with its own revenue budget. Also, a model of CPTU could be envisaged where CPTU

will be allowed to have its own autonomy for its recruitment/HR/staffing/ function; however, this

will require Government’s prior approval. Project staff be recruited in a way that all such key

staff is onboard by the time of the effectiveness of the proposed PPRPII AF.

7. Strengthening implementation capacity of four target agencies: In order to strengthen

the e-GP implementation capacity, each target agency will create an e-GP cell within its

organization to focus issues relating to e-GP and implementation of PROMIS with specified

performance targets. Such cell will have a support team of consultants (from the M&O firm) but

also will have agency’s counterpart staff (at least 5) so that there is adequate knowledge transfer;

the cell will have adequate office facility and equipment which could be financed under the DLI.

8. Implementation of M&E: IMED/CPTU is likely to continue the current arrangement

with adjusted TOR to report mainly on results framework with indicators where a firm (SRGB)

is conducting the M&E functions based on data from the agencies. CPTU with assistance from

the consultant will report the results monitoring framework with indicators quarterly.

9. Implementation of e-GP M&O: In light of the unique nature of the e-GP system that

has been specifically developed for Bangladesh and taking into account the need for initial

sustainability of such a high-tech system with possible enhanced features within the country

operating environment, IMED/CPTU will maintain the existing arrangement with the consultant

(GSS with Dohatech) for future management and operation of the system with revised TOR as

agreed, included in it performance targets.

B: Financial Management

10. Financial Management and Disbursement: PPRPII Additional Financing is envisaged

to have two financing modalities: direct input based financing for major part of the project to be

directly implemented by CPTU and performance based financing for meeting specified

performance targets on e-GP and PROMIS by the four target agencies. Ongoing financial

management and disbursement arrangement for PPRP II will be applicable with regard to $28.50

million input-based financing in PPRPII AF. The project will have provision for retroactive

financing.

11. $7.50 million performance based financing will be disbursed on attaining the targeted

results in the form of Disbursement Linked Indicators (DLIs), as agreed with the four target

agencies, CPTU and the Bank. On achieving one or more DLIs, the Bank will disburse value of

the DLI (s) to the CPTU that will in turn transfer the relevant amount to the respective target

agencies. As PPRPII AF is an investment lending instrument, the disbursement on meeting

targets will be on reimbursement basis and will be required to be identified with project

expenditures as evidenced by quarterly Interim Financial Reports (IFRs). The DLI based

disbursement amount should not exceed the amount of DLI expenditures incurred during the DLI

period. The total value of DLIs pertaining to each agency and their distribution against

implementation of e-GP and PROMIS is shown in Attachment to this Annex.

12. The eligible expenditure under DLIs will include goods, consultant’s services, training,

and operating costs related to e-GP and PROMIS covering the economic heads of account of the

government (budget code) as shown in the table. Disbursement for DLIs attained for any period

including such disbursements in the previous period will not exceed the total eligible

expenditures for each agency on a cumulative basis.

PPRP II AF: Financing table with disbursement categories

Project financing by category

Total

US$M GOB

US$M IDA

US$M % of Financing

1. Goods, works, consultants

services, training, incremental

project staff, and allowances for

project staff

20.50

-

20.50

100%

2. Operating costs 1.50 1.50

3. Consultants Services for e-GP

system management and operation

6.50 1.50 5.00 100% until June

30, 2014, 80%

until June 30,

2015, and 60%

thereafter

4. DLI based financing for four

target agencies

7.50 - 7.50 100%

Total Financing Required 36.00 1.50 34.50

Eligible expenditure heads for DLI based disbursement for four target agencies: RHD,

LGED, BWDB, REB

Economic code Heads of expenditure Economic codes Heads of expenditure

4800 Supplies and Services 4900 Repair and Maintenance

4827 S&S- printing and binding 4901 R&M- motor vehicles

4842 S&S- Seminar/ conference

exp.

4911 R&M- computer and office

equipment

4822 S&S- fuel and gas 4916 R&M- machineries &

equipment

4816 S&S- telephones 4921 R&M- office building

4814 S&S- Miscellaneous 6800 Capital Expenditure

4813 S&S- custom duty and VAT 6815 CE- computers &

accessories

4854 S&S- consumable store 6819 CE- office equipment

4874 S&S- consultancy 6821 CE- furniture & fixture

4840 S&S- Training allowances 6822 CE- laboratory

4883 S&S- honorarium/ fees/

remuneration

6823 CE- telecommunication

equipment

4884 S&S- examination fees and

expenses

6827 CE- electrical equipment

4886 S&S- copying charges 4700 Allowances

4888 S&S- computer consumable 4701 A- dearness allowance

Economic code Heads of expenditure Economic codes Heads of expenditure

4889 S&S- audit fee 4729 A- foreign allowance

4891 S&S- subsistence 4753 A- daily subsistence

allowance

4893 S&S- hiring charges 4769 A- overtime

4895 S&S- committee meeting 4777 A- training allowance

4898 S&S- special expenditure 4793 A- telephone allowance

4795 A- other allowance- project

allowance

13. Designated Account: The Designated Account (DA) currently being used for PPRPII

will also be used for AF. A new advance amount will be agreed between the Bank and the

CPTU. Funds will be transferred from the DA to the dedicated project bank account to be

maintained by all the target agencies.

14. FM arrangement with the Target Agencies: Except RHD, the remaining agencies

LGED, BWDB and REB are currently implementing Bank funded projects. For REB and LGED,

the FM support for the project transactions will be made by the FM unit of the bank funded

ongoing RERED II and RTIP 2 projects. For BWDB, FM support will be provided by Dhaka

Regional Accounting Center. For RHD, FM support will be made by the Directorate of Accounts

and Audit.

15. External Audit: External audit will be carried out by the Foreign Aided Project Audit

Directorate of the Comptroller and Auditor General. A Statement of Audit Needs (SAN)

(cleared by IDA) will be agreed between the CPTU and the FAPAD. Audited Financial

Statements will be submitted to the Bank no later than six months from the end of a fiscal year.

16. Internal Audit on the basis of a TORs agreed with the Bank will be conducted by a

reputed firm of Chartered Accountant for every two years of AF operations. Adequate resource

will be included as part of the project costs.

17. FM Staffing: A Deputy Director (Finance) will be made onboard within the first month

of effectiveness of PPRRPII AF credit. The existing FM consultant will continue to provide

support to CPTU with provision of training and transfer of knowledge to the Deputy Director

(Finance).

18. FM Risks: Overall FM risk is assessed as Substantial having regard to the FM staffing

and internal audit slippage in PPRP II and additional project financial activities in the target

agencies. Mitigation measures include suggested FM staffing in the CPTU and FM arrangement

in the target agencies, undertaking of external and internal audits.

C: Procurement

19. Overall procurement: Total value of PPRPII AF is US$36 million; IDA Credit will

finance US$34.50 million. Procurement under the project by CPTU will largely involve

consultancy services and training of US$25.85 million, followed by goods of US$2.85 million

and works of US$0.35 million; there is incremental operating costs of US$1.50 million for

CPTU. Large consultancy packages with their approximate estimated costs are as follows:

capacity development consultant- US$5.8 million; management and operation of e-GP system-

US$6.5 million; core competence contract- US$2 million. Besides, the project has performance

based financing of about US$7.5 million for the four target agencies (RHD, LGED, BWDB, and

REB) upon meeting disbursement-linked indictors (DLIs).

20. Re-assessed procurement capacity. The Bank’s recent capacity assessment of CPTU by

using Procurement Risk Assessment and Management System tool, as well as the fact that

PPRP-II was rated ‘Satisfactory’ in procurement performance, indicates that CPTU has adequate

capacity to carry out procurement activities envisaged under the project. Under PPRPII AF, all

major consultancy contracts will be either extension of the current contract or single source

selection of the same firm in view of continuation of assignments. One area that needs

improvement is time taken to make payments to contractors and consultants. Besides, the

procurement capacity of the four target agencies has also been assessed in light of their expected

expenditures under DLI based payments which includes very small value procurement. All of

these agencies are currently executing Bank-financed projects except RHD. RHD has previous

experience of implementing Bank projects; though there was incidence of misprocurement

involving few large value contracts in 2006. Given the nature of very low value transactions,

RHD’s capacity is also assessed to be adequate like the other three agencies with areas of

improvement: record keeping and complaints handling mechanism. All four agencies will have

procurement trained designated official to minimize procurement associated risks.

21. Procurement risks and mitigation measures. Given the nature of the project and based

on the procurement capacity assessment, the project risk is ‘Moderate’ from procurement

operation and contract administration viewpoint. Risk mitigation measures include: (i) handling

procurement by designated procurement officials; (ii) establishment of a credible complaint

handling mechanism at the four target agencies; and (iii) improvement of record keeping.

22. Use of the World Bank’s Guidelines. Procurement of goods and non-consulting

services valued US$ 2,000,000 or more per contract and procurement of works valued US$

6,000,000 or more per contract will be carried out in accordance with the World Bank's

"Guidelines: Procurement of Goods, Works, and Non-Consulting Services under IBRD Loans

and IDA Credits & Grants by World Bank Borrowers" dated January 2011 (Procurement

Guidelines). Procurement of all consulting services by firms and individuals will be carried out

in accordance with the "Guidelines: Selection and Employment of Consultants under IBRD

Loans and IDA Credits & Grants by World Bank Borrowers" dated January 2011 (Consultants

Guidelines) irrespective of value. However, shortlist of consultants for services estimated to cost

less than US$300,000 equivalent per contract may be advertised locally and composed entirely

of national consultants. World Bank’s standard documents will be used for procurements

following World Bank Guidelines.

23. Application of the Procurement Laws. Within the overall context of the Bank’s

Procurement Guidelines, local procurement of goods and non-consulting services valued less

than US$ 2,000,000 per contract, and local procurement of works valued less than US$

6,000,000 per contract will follow the Government's Public Procurement Act 2006 (with first

amendment of 2009) and Public Procurement Rules 2008 (PPA/PPR), with the number of

exceptions as mentioned in the PPRPII Financing Agreement. The local procurement following

National Competitive Bidding (NCB) will be done using the Standard Tender Document (STD)

agreed with or satisfactory to the Bank.

24. Procurement plan: An initial procurement plan for the project has been prepared. This

plan will be the basis for selecting methods for procurement as agreed by the World Bank,

updated semi-annually or as required to reflect the latest circumstances.

25. Review by the Bank. The procurement plan sets forth those contracts which shall be

subject to the Bank’s prior review. IDA will carry out sample post review of all other contracts.

Procurement post review of contracts below the threshold will constitute a sample of about 15%

(fifteen percent) of the post-review contracts in the project. Procurement post-reviews will be

done on annual basis depending on the number of post-review contracts.

26. Initial procurement plan agreed with the borrower for the first eighteen months identifies

the following as prior review contract packages: (i) each contract for goods, works and non-

consulting services procured on the basis of International Competitive Bidding (ICB); (ii) all

contracts for goods and non-consulting services estimated to cost equivalent of US$2,000,000 or

more, regardless of the procedure; (iii) all contracts for works estimated to cost equivalent of

US$6,000,000 or more, regardless of the procurement method applied; (iv) each contract for

consultants’ services provided by a firm, estimated to cost the equivalent of US$300,000 or

more; (v) each contract for services of individual consultants, estimated to cost the equivalent of

$100,000 or more; (vi) all contracts for goods/works procured through Direct Contracting; (vii)

contracts for consultants’ services procured through Single Source selection. For consultancy,

all TORs need to be cleared with the Bank. The mentioned thresholds will be updated annually

in the procurement plan based on the review of the capacity and performance of CPTU.

27. Single source selection of consultants’ services: Contracts that are envisaged as single

source selection are described below along with justifications, mainly due to the need for

continuity and consistency of deliverables. All of them were selected through competitive

selection under PPRPII, except CIPS contract:

Capacity development consultant: Recognizing the strong need and importance of

uninterrupted continuation of the program and its consistency of deliverables, the

current contractual arrangement between IMED/CPTU and the consultant

(FINEUROP Support) will continue as per the agreed revised terms of reference.

ESCB will remain as nominated-sub-consultant to FINEUROP. Also,

Bangladesh Institute of Management (BIM) will remain as the other sub-

consultant. The main consultant will update the course materials/ curriculum and

provide quality assurance for delivery of courses while ESCB and BIM will

actually deliver the courses.

Management and operation of e-GP system: In light of the unique nature of the

e-GP system that has been specifically developed for Bangladesh and taking into

account the need for initial sustainability of such a high-tech system with possible

enhanced features within the country operating environment, IMED/CPTU will

maintain the existing arrangement with the consultant GSS America Infotech Ltd.

(India) with Dohatech New Media Ltd. as its nominated sub-consultant for future

management and operation of the system with revised TOR as agreed.

Core competence program: The Chartered Institute of Purchasing and Supply

(CIPS), UK was hired on a single source basis under PPRPII as it is one of the

only two such institutions that has such procurement accreditation program to

develop skills in procurement planning, budgeting, supply-chain management,

strategic procurement. BRACU-IGS was their local partner. Under the adjusted

arrangement in PPRPII AF, given the need for continuity, BRACU-IGS will be

jointly and severally liable with CIPS for the course delivery: CIPS role will be

more for ensuring quality of deliverables while BRACU-IGS will actually deliver

the courses.

M&E program: Taking cognizance of the experience gained by the existing firm

(SRGB Bangladesh) in compiling and analyzing procurement data in reference to

indicators, lIMED/CPTU is likely to continue the current arrangement with

adjusted TOR to report mainly on the results framework with indicators where

SRGB is conducting the M&E functions based on data from the agencies.

Behavioral change and communications consultancy: Bangladesh Center for

Communication Programs (BCCP) has been providing the service under PPRPII,

and under the PPRPII AF, the same arrangement will continue to ensure

continuity of services and consistency of deliverables which is critical, and its

benefit outweigh a competitive selection at this stage of the project.

28. Operating cost: The operating costs will include operations and maintenance of

equipment and vehicles, costs of office and vehicle rental, costs of consumables, fuel, office

utilities and supplies, bank charges, and advertising expenses but excluding the salaries of civil

servants.

D: Governance and Anti-corruption Action Plan

29. Objective: The Governance and Accountability Action Plan (GAAP) for the proposed

Additional Financing of Public Procurement Reform Project II (PPRPII AF) is designed to

further improve the overall risk management, enhance efficiency and development impact and

ensure allocated resources are spent for the intended purpose. The GAAP will be updated as

issues emerge.

30. GAAP Methodology: The draft GAAP has been developed by CPTU/IMED in

consultation with the World Bank project team. The GAAP is based on an assessment of the

governance risks, including fraud and corruption, and overall country governance context. Given

that this is additional financing, the methodology is mainly based on the operational risk

assessment findings in light of the already implemented PPRPII. In the implementation of

PPRPII, no major governance issue has arisen in the last few years. Nevertheless, certain

approaches are intended to be strengthened to ensure risk management and transparency with

particular reference to complaints handling and disclosure of information.

31. Country Context: Bangladesh has been making modest progress in recent years in terms

of international governance indices. While cases of coercion and collusion in public

procurements still occur, the Government of Bangladesh is making efforts to bolster its legal

framework to counter corruption, including the empowerment of an Anti-Corruption

Commission, passage of an Anti-Money Laundering Act, joining the UN Convention against

corruption, and approval of a National Integrity Strategy. These efforts have not yet yielded

substantial gains, as institutions of accountability and country systems to deter corruption are not

yet robust.

32. The Bank’s strategy for improving governance in Bangladesh, laid out in its 2011-2014

Country Assistance Strategy, focuses on developing accountability mechanisms in public sector

operations, especially through increased transparency in the procurement process. The Bank

seeks to align with Government priorities in developing the means of accountability, especially

strengthening of public financial management, procurement, support for local government, and

use of information and communication technology (ICT) and the adoption of a Right to

Information (RTI) regime. In particular, the Bank is working with the Government to improve

budgeting practices among line agencies in conjunction with enhanced accountability

mechanisms. The Bank is also supporting the Government to strengthen the role of the

Parliamentary Accounts Committee to provide quality oversight of public finances; and improve

the capacity of the Comptroller and Auditor General’s Office to provide reliable and timely

audits. The Government’s public financial management program includes promoting greater

public understanding of public financial management, and reforming the public procurement

environment; which has been supported through two successive World Bank technical assistance

operations. The procurement operations have already assisted the government with: mandating

good public procurement laws and rules setting out the rules of the game; establishing a

procurement policy unit; increasing the use of IT in the procurement process and practices, and

developing procurement management capacity and mechanisms to measure performance of the

system. The proposed additional financing, among others, is specifically focused on full

coverage of e-GP within the next three years at the four target agencies (RHD, LGED, BWDB,

and REB) and is expected to contribute significantly in mitigating the risk of collusion and

coercive practices at decentralized local level for small value contracts.

33. Governance risks at IMED/ CPTU: The risks of fraud and corruption in the CPTU is

small since this is the very unit, with the legal mandate for implementing sound procurement

practices as enshrined in Public Procurement Laws and Rules. There is also no evidence of

previous fraud and corruption concerns with this agency. CPTU has its own website where all

public procurement policies and associated documents are disclosed (www.cptu.gov.bd). It also

maintains the e-GP central server which is recognized as a critical milestone to enhance

transparency of procurement process (www.eprocure.gov.bd). A few key attributes of CPTU

includes: national e-GP web portal; on-line procurement monitoring system (PROMIS) with

contract details including value of contracts; website with a list of nationally debarred firms;

procurement capacity development information agency by agency; social accountability

activities through Public-Private Stakeholders Committee (PPSC); formation of government-

contractors forum; publication of contract awards above a specified thresholds, etc.

34. Nevertheless, as there are provisions of large number of trainings under component 1 of

PPRPII AF including considerable foreign training at various levels, likelihood of inappropriate

selections cannot be ruled out and this may pose certain risks. Rotation/ transfer/ non-retention

of trainees at the institution are also a risk. In addition, use of PROMIS by the four target

agencies with appropriate validations of data may also have certain risks. Recognizing this,

following mitigation measures could be put in place:

Integrity of trainee selection process: The selection criteria for all levels of training to be

shared and cleared with the Bank. For any training/ study tour/ academic course abroad,

the participants list will require Bank’s no objection.

Retention of participants in long trainings abroad: All participants undergoing long term

training and/or academic course abroad shall require to sign appropriate surety bond with

their employer to serve the institution for a minimum period or provide a penalty as per

GoB rule.

Integrity of contract data in PROMIS: The CPTU will carry out semi-annual check of

actual data entry in PROMIS by the target agencies including actual number of contracts

with values, with assistance of independent consultant. CPTU will share such report with

the target agencies and the Bank.

35. Large part of the project fund relates to the four major consultancies, all of which are

continuation of services under PPRPII (capacity development, management and operation of e-

GP system; core competence program; and M&E). There is also a behavioral change

communication and social accountability consultant. Given this nature, procurement associated

governance risks are minimized.

36. Governance risks in four target agencies (RHD, LGED, BWDEB, and REB):

Besides CPTU, the four target agencies will implement e-GP and procurement performance

tracking system (PROMIS) at their respective agencies with a performance-based financing

approach based on disbursement linked indicators (DLIs) upon meeting certain performance

http://www.cptu.gov.bd/


target as regards the above two parameters. Among this four target agencies, LGED is the most

decentralized, followed by BWDB, and both deal with a large number of small value contracts

(about 80 percent of contracts are less than $300,000 each). With the exception of RHD, these

agencies are also implementing Bank financed projects. In 2006, there were incidences of few

cases of misprocurement in couple of these agencies. The project will maximize the positive

impact on governance through the introduction of e-GP by significantly improving the

transparency of the procurement process with reduced delays combined with reducing coercive

practices. A set of indicators to measure such improvement are included in the results

framework which will be monitored to ensure that there is transparency and adherence to due

process once the e-GP adopted.

37. The risk of fraud and corruption with this project is small in the four target agencies since

the sums of procurement in those agencies are very small. Nevertheless, there is some risk

relating to the overall governance at the decentralized level. For project expenditures, the use of

the training might be abused and the wrong officers identified to participate, especially in

overseas training. In addition, trainee selection may have some risks similar to described for

IMED/ CPTU above. Taking cognizance of this, a number of risk mitigation approaches have

been proposed that, among others, include the following (details in GAAP Matrix):

Internal integrity. Integrity mechanisms (e.g., public information disclosure, vigilance,

grievance redress mechanism), while in place, are still not fully used and need substantial

improvement to demonstrate their effectiveness.

Transparency in procurement process and contract management: Extensive disclosure of bid

invitations and contract award information combined with disclosure criteria for bid

evaluation will improve the transparency of the process. Concurrently, enforcement of the

rules of the game through e-GP will contribute to minimize collusive and coercive practices.

Citizen oversight: Either very few complaints or no grievances of complaints reported which

could be indication of inadequate functioning of grievance redress mechanism and/or issue of

poorly disclosed project information.

Internal accountability: Trainees selection criteria by CPTU and four target agencies need to

be disclosed. The M&E framework has been developed under PPRPII AF needs to become

fully operational to serve its purpose of improving effectiveness of performance.

Integrity of trainee selection process: Similar provisions as described for IMED/ CPTU.

Retention of participants in long trainings abroad: Similar provision as for IMED/ CPTU.

38. Implementation of GAAP: The overall responsibility for the GAAP implementation

will rest with CPTU and four target agencies. The Director General, CPTU will provide overall

guidance whereas the agencies will implement their own actions based on alerts. Quarterly

report will include status of governance matrix regularly.

Attachment: Disbursement Linked Indicators (DLIs) for Four Target Agencies

I: Improving procurement performance by using e-GP in four target agencies DLI

DLI- Target (No.

of bids)/

Value(US$M)

DLI- Target

(No. of bids)/

Value(US$M)

DLI- Target

(No. of bids)/

Value(US$M)

DLI- Target

(No. of bids)/

Value(US$M)

DLI- Target

(No. of bids)/

Value(US$M)

Protocol

DLI Period Period 0*

(July 1, 2012 –

June 30, 2013)

Period 1

(July 1, 2013 –

Dec. 31, 2013)

Period 2

(January 1, 2014

– June 30, 2014)

Period 3

(July 1, 2014 –

June 30, 2015)

Period 4

(July 1, 2015 –

June 30, 2016)

DLI# 1: Minimum

number of bids invited

in NCB using e-GP by

each of the four target

agencies

Definition: All bids

invited under national

competitive bidding

(NCB) across the target

agency regardless of

location of its procuring

entities (HQ, districts,

sub-districts) will be

eligible. Target agency

means RHD or LGED

or BWDB or REB as

appropriate.

Source/ Verification:

Target agency’s e-GP/

PROMIS cell

reconciled data/ reports

based on actual

invitations of bids by

various procuring

entities. Procurement

Monitoring Coordinator

of the target agency will

report DLIs to CPTU

for validation by IDA.

DLIs will be verified by

an independent

consultant contracted

DLI

DLI- Target (No.

of bids)/

Value(US$M)

DLI- Target

(No. of bids)/

Value(US$M)

DLI- Target

(No. of bids)/

Value(US$M)

DLI- Target

(No. of bids)/

Value(US$M)

DLI- Target

(No. of bids)/

Value(US$M)

Protocol

by the CPTU.

RHD 100/0.20 400/0.20 1000/0.20 2400/0.20 3200/0.20

LGED 100/0.30 400/0.30 1000/0.30 2400/0.30 3200/0.30

BWDB 60/0.19 120/0.19 300/0.19 720/0.19 960/0.19

REB 8/0.06 15/0.06 40/0.06 96/0.06 128/0.06

II: Improving procurement performance monitoring using PROMIS by four target agencies DLI

DLI- Target (No.

of bids)/

Value(US$M)

DLI- Target

(No. of bids)/

Value(US$M)

DLI- Target

(No. of bids)/

Value(US$M)

DLI- Target

(No. of bids)/

Value(US$M)

DLI- Target

(No. of bids)/

Value(US$M)

Protocol**

DLI Period Period 0*

(July 1, 2012 –

June 30, 2013)

Period 1

(July 1, 2013 –

Dec. 31, 2013)

Period 2

(January 1, 2014

– June 30, 2014)

Period 3

(July 1, 2014 –

June 30, 2015)

Period 4

(July 1, 2015 –

June 30, 2016)

DLI# 2: Minimum

number of tenders

entered into published

PROMIS report, with

procurement

performance indicators

covering various

stages from bid

invitations to award of

contracts

Definition: Monitoring

of procurement steps

forward for all bids

invited under national

competitive bidding

(NCB) during the

corresponding period of

the respective DLIs

across the target agency

regardless of location of

its procuring entities

(HQ, districts, sub-

districts) or . Target

agency means RHD or

LGED or BWDB or

REB as appropriate.

Source/ Verification:

Target agency’s e-GP/

DLI

DLI- Target (No.

of bids)/

Value(US$M)

DLI- Target

(No. of bids)/

Value(US$M)

DLI- Target

(No. of bids)/

Value(US$M)

DLI- Target

(No. of bids)/

Value(US$M)

DLI- Target

(No. of bids)/

Value(US$M)

Protocol**

PROMIS cell

reconciled data/ reports

based on actual

invitations of bids by

various procuring

entities. Procurement

Monitoring Coordinator

of the target agency will

report DLIs to CPTU

for validation by IDA.

DLIs will be verified by

an independent

consultant contracted

by CPTU.

RHD 200/0.20 800/0.20 1200/0.20 2800/0.20 3600/0.20

LGED 200/0.30 800/0.30 1200/0.30 2800/0.30 3600/0.30

BWDB 120/0.19 240/0.19 360/0.19 840/0.19 1080/0.19

REB 16/0.06 30/0.06 45/0.06 112/0.06 144/0.06

* Disbursement will be on reimbursement basis of eligible expenditures as reported in IFRs.

** Proportionate Disbursement will be admissible against partial achievement of DLI targets with the minimum achievement of 60% of the target value with the

exception of Period 0 target for which no minimum threshold is applicable. Unmet portion of any partially achieved DLI target will be eligible for disbursement

if met within the immediate next target date.

.

GAAP Matrix

Issues / Risk Mitigating Actions to be taken Agency

Responsible

Timeline Early Warning

Indicators

Fraud and Corruption

Issue of internal

integrity

Carry out annual review of vigilance, public

information disclosure, internal controls, suggestion

and complaint mechanism to suggest improvements

of internal integrity mechanisms.

CPTU and Four

Target Agencies

Annually Lack of disclosure of public information

Delays in procurement audit

Adopt transparent and effective suggestion and

complaint mechanism ensuring annual reporting on

complaints received and actions taken

CPTU and Four

Target Agencies

By start of the

project

Absence of reporting on grievances

redressal and complaints handling.

Absence of complaints even though

repeated rebidding occurs

Issue of

transparency in

procurement

process and

effectiveness of

contract

management

Set-up systems to prevent fraud and corruption

during bidding process and contract

implementation:

(a) Adequate disclosure of procurement plan and

invitation for tenders;

(b) Mainstream use of red flags to identify risk of

fraud and corruption in tender evaluation

(c) Implement e-Procurement

CPTU and Four

Target Agencies

Continuously

Prior to 1st bidding

As per agreed plan

Check-list of red flags not provided in

tender evaluation reports

Low number of bidders

Significant gaps between bids and

engineer’s estimates

Absence of systematic follow up on

bidders’ complaints

Unwarranted payment delays

High number of major observations in ex-

post procurement reviews.

Weak Accountability

Inadequate citizen

oversight

Enhance a Suggestions and Complaints Mechanism

to cover all aspects of project implementation and

involve project stakeholders at local level

Adopt disclosure policy and disclose project

information on website

Set up board signs with contract information as part

of social accountability actions

Four Target

Agencies

1st year of project

implementation

1st year of project

implementation

2nd

year of project

implementation

No suggestions and comments from

project stakeholders

Project information not updated

No board signs at project roads

Inadequate

integrity of trainee

selection process

Obtain Bank’s clearance on the selection criteria for

all trainings

CPTU/ Four Target

Agencies

Before

commencement of

training

No comments from project stakeholders

Retention of

participants in long

Adopt surety bond to serve the agency for a

minimum period and/or provide penalty as per GoB

CPTU/ Four Target

Agencies

Before

commencement of

Reluctance in signing the bond

Issues / Risk Mitigating Actions to be taken Agency

Responsible

Timeline Early Warning

Indicators

trainings abroad rule training or penalty

before leaving

agency

Integrity of

contract data in

PROMIS

Check validity of actual contract data entry both for

numbers and value of contract

CPTU/ independent

consultant

Semi-annual Signs of numerous wrong or manipulated

entry

Rangpur

Gaibandha

Dinajpur

Bogra

SerajganjNatore

Joypurhat

Naogaon

Nowabganj

JamalpurSerpur

Netrokona

Sunamganj

Pabna

Kushtia

RajbariMeherpur

Chuadanga

JhenaidahMagura

Narail

Satkhira

Bagerhat

Perojpur

Jhalukathi

Gopalganj

MadaripurSariatpur

Faridpur

Jessore

Noakhali

Khagrachhari

Patuakhali

Bhola

Borguna

Comilla

MoulviBazar

Mymensingh

Tangail

Manikanj

Rangamati

Bandarban

Cox's Bazar

Thakurgaon

Nilphamari Lalmonirhat

Kurigram

Panchagar

Feni

GazipurNarsingdi

Naraynganj

Munshiganj

Chandpur

Luxmipur

Brahmanbaria

Habiganj

Kishorganj

Khulna

Rajshahi

Chittagong

Barisal

Sylhet

DHAKA

PANCHAGAR

THAKURGAONNILPHAMARI

LALMONIRHAT

DINAJPUR

RANGPUR

KURIGRAM

GAIBANDHA

JOYPURHAT

NAOGAON

NOWABGANJ

RAJSHAHI

NATORE

BOGRAJAMALPUR

SERPUR

NETROKONA

MYMENSINGH

TANGAILSERAJGANJ

PABNA

KUSHTIA

MEHERPUR

CHUADANGA

JHENAIDAHMAGURA

RAJBARI

FARIDPUR

MANIKGANJDHAKA

GAZIPUR

KISHORGANJHABIGANJ

SUNAMGANJ SYLHET

MOULVI BAZAR

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NARSINGDI

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SARIATPUR CHANDPUR

COMILLA

MADARIPUR

GOPALGANJNARAILJESSORE

SATKHIRA

KHULNA

BAGERHAT

PEROJPUR

BARISAL

JHALUKATHI

PATUAKHALIBHOLA

BARGUNA

LUXMIPUR

NOAKHALI

FENI

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RANGAMATI

CHITTAGONG

BANDARBAN

COX’S

BAZAR

R A J S H A H I

D H A K A

S Y L H E T

K H U L N A

B A R I S A L

C H I T TA G O N G

INDIA

INDIA

MYANMAR

Bay

of

Bengal

Karnaphuli R.

Padma R.

Jamuna R.

Brah

map

utra

R.

Tista R.

Madhumati R.

Meg

hna

R.

Meghna R.

Ganges R.

26°

25°

24°

23°

90° 91° 92°

21°

23°

24°

25°

26°

92°91°90°89°

21°

22°

DhakaBANGLADESH

Bay of Bengal

INDIA

MYA

NM

AR

SRILANKA

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other informationshown on this map do not imply, on the part of The World BankGroup, any judgment on the legal status of any territory, or anyendorsement or acceptance of such boundaries.

0 25 50 75

KILOMETERS

100

BANGLADESHPUBLIC PROCUREMENT

REFORM PROJECT II

DISTRICT CAPITALS

DIVISION CAPITALS

NATIONAL CAPITAL

DISTRICT BOUNDARIES

DIVISION BOUNDARIES

INTERNATIONAL BOUNDARIES

IBRD 35508

MAY 2007