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PROCUREMENT UNDER WORLD BANK-FINANCED
FY07 ANNUAL REPORT PROJECTS:
November 2008 Operations Policy and Country Services
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Contents
Abbreviations and Acronyms ........................................................................................... v
Executive Summary .......................................................................................................... i x
I . I1 . I11 . I V . V . V I . VI1 . VI11 .
Introduction ........................................................................................................... 1 Fiduciary Oversight and Compliance .................................................................. 1
Country W o r k ...................................................................................................... 13
Harmonization ..................................................................................................... 20
Procurement Policy, Tools, and Institutional Initiatives ................................. 24
Staffing and Capacity Development .................................................................. 28
New Initiatives/Future Challenges ..................................................................... 31
Regional Summaries. ........................................................................................... 34 u
. ......................................................................................................................... A AFR -35 B . EAP .......................................................................................................................... 36 C ECA 37 D LCR 39 E . MNA ........................................................................................................................ 41
. ..........................................................................................................................
. ..........................................................................................................................
F . SAR .......................................................................................................................... 42
Annex A . Additional Data on Procurement .................................................................. 45 Annex B . Current CPAR and Other ESW Reports ..................................................... 51
Boxes. Figures. & Tables
Box 1 . Tools for Better GAC Implementation in Projects .......................................... 12 Box 2 . ECA - Albania: Procurement and PFM Country Diagnostics ...................... 16
Box 3 . EAP . Philippines: Procurement Reform Initiatives ....................................... 17
Box 4 . Institutional Development Fund (IDF) Grants for Procurement ................... 18 Box 5 . GAC Initiatives at the Country Level ............................................................... 20 Box 6 . SAR - Bangladesh: Harmonization and Donor Collaboration ...................... 23
Figure 1 . FY07 Prior Review Contract Value and Disbursement Amount ................ 5
Figure 2 . Trend of Procurement Pr ior Review Contracts by Number and Value o f
Figure 3 . Trend o f OPRC Review by Number o f Contracts. FY03-07 ....................... 7
Figure 4 . Ma jo r Nature o f Complaints in FY07 .......................................................... 10
Contracts ............................................................................................................................ 5
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Figure A1 . FY07 Lending Commitment Amount by Region ....................................... 45
Figure A2 . Trends o f Procurement Post Review Coverage (FYO3-07) ....................... 47
Figure A3 . M a j o r Resoulution o f Complaints in FY07 ................................................ 50
Table 1 . Procurement Decentralization Trends. FY04-07 ........................................... 4 Table 2 . Top 10 Supplier Countries by Ma jo r Bank-Financed Contract Amount .... 6 Table 3 . Procurement Post Reviews Conducted in FY07 by Regions .......................... 8
Table 4 . Misprocurement Declared in FY07 ................................................................... 9
Table 5 . Comparison o f Numbers o f Complaints, FY03-07 ....................................... 10
Table 6 . Procurement Business Response Time Indicators (FY07) ........................... 11
Table 7 . Procurement ESW Reports Delivered to Clients in FY07 ............................ 14
Table 9 . FY07 Procurement Staffing by Grade and RegionNnit .............................. 29 Table 10 . FY07 Procurement Staffing by Grade and Station .................................... 30 Table A1 . Ten Largest IBRD/IDA Borrowers in FY2007 ........................................... 45
Table 8 . Management Response to IEG Report .......................................................... 15
Table A2 . Table A2 . FY07 Prior Review Contracts by Region and Procurement Category ........................................................................................................................... 46
Table A3 . Top Ten Supplier Countries o f M a j o r Bank-Financed Contracts -
Table A4 . Top Ten Supplier Countriesof Ma jo r Bank-Financed Contracts - Civil Works ...................................................................................................................... 47
Table A5 . Top Ten Supplier Countries o f M a j o r Bank-Financed Contracts . Consultant Services ......................................................................................................... 47
Goods and Equipment ..................................................................................................... 46
Table A6 . Summary o f Independent Procurement Reviews in FY07 ......................... 48 Table A7 . Trend o f Misprocurement in FY05-07 ......................................................... 48
Table A8 . Nature o f Complaints in FY07 ...................................................................... 49
Table B1 . Current CPAR and Other ESW Reports .................................................... 51 Table A9 . FY07 Complaints by Resolution ................................................................... 49
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ABBREVIATIONS AND ACRONYMS Asian Development Bank African Development Bank Africa Region Anti-money launderingkombating the financing of terrorism Administrative Manual Statement Australian Agency for International Development Business Environment and Enterprise Performance Survey Biennial Meeting o f International Lending Agencies and Consulting Industry Country Director Country Financial Accountability Assessment Confederation of International Consulting Associations Canadian International Development Agency Country Procurement Assessment Report Country Procurement Issue Paper Country Partnership Strategy Controllers Strategy Resource Management Vice Presidency Corruption Vulnerability Scan Department for International Development (U.K.) Development Gateway Development policy lendingjloan East Asia and Pacific Region East Asia and Pacific Region European Commission Europe and Central Asia Region Europe and Central Asia' Operations Policy & Services Unit Electronic government procurement Environmentally and socially responsible procurement Economic and sector work European Union Food and Agriculture Organization International Federation o f Consulting Engineers Financial management Fiscal year Governance and anticorruption Global Information & Communication Technology Department Generic Procurement Manual General Services Department Heads o f Procurement Human Resources Inter-Agency Procurement Service Organization International Bank for Reconstruction and Development
ADB AfDB AFR AMWCFT AMS AusAID BEEPS B IMIL AC I
CD CFAA CICA CIDA CPAR CPIP CPS CSRVP cvs DFID dgMarket DPL EAP EAP EC ECA ECSPS e-GP ESRP ES W EU FA0 FIDIC FM FY GAC GICT GPM GSD HOP HR IAPSO IBRD
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ICB IDA IDB IDF IDF IEG IFA IFC ILO IMED INT IP IPR ISG IT/IS JBIC JV K&L LCR LEGIA LOA MDB M N A MOHFW MOU NCB NCB NGO OBA OBD OECD-DAC
OPBP OPCPR OPCS OPR OPRC OPS PAD PEFA PEIR PER PFP PPP
International competitive bidding International Development Association Inter-American Development Bank Institutional Development Fund Institutional Development Fund Independent Evaluation Group Integrative Fiduciary Assessment International Finance Agency International Labor Organization Implementation Monitoring and Evaluation Division (Bangladesh) Department o f Institutional Integrity Issue Paper Independent Procurement Review Information Solutions Group Information Technology/Information Systems Japan Bank for International Cooperation Joint Venture Knowledge and leaning Latin America and Caribbean Region Legal Institutional Administration Loan Department Multilateral development bank Middle East and North Africa Region Ministry o f Health and Family Welfare Memorandum o f Understanding National competitive bidding National Competitive Bidding Non-governmental Organization Output-Based Aid Output-Based Disbursement Organisation for Economic Co-operation and Development-Development Assistance Committee Operational PolicyBank Procedure Procurement Policy and Services Group Operations Policy and Country Services (Network) Operational Procurement Review Operations Procurement Review Committee Other Procurement Study Project Appraisal Document Public Expenditure and Financial Accountability (initiative) Public Expenditure and Institutional Review Public Expenditure Review Policy Framework Paper Private-Public Partnership
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PPR PPU PR PREM PSIB PSLO
QAG QEA QSA RAPMAN- PRIMA RFP RPM RRC RTA RVP SAP SAR SBD SEPA SONATRACH
SWAP TOR TTL UN UNCITRAL UNDB UNDP UNICEF USAID USC WE3 WHO
Procurement Post Review Project Preparation Unit Procurement Poverty Reduction and Economic Management (Network) Programmatic Support for Institution Building Private Sector Liaison Officers Quality Assurance Group Quality-at-Entry Assessment Quality of Supervision Assessment The integrated Risk and Portfolio Management system - Portfolio and Risk Management system Request for Proposals Regional Procurement Manager Rapid Response Committee Reimbursable Technical Assistance Regional Vice President Systems, Applications & Products system South Asia Region Standard bidding document Procurement Plan Execution System (Spanish) Societe Nationale pour la Recherche, la Production, l e Transport, la Transformation, et la Commercialisation des Hydrocarbures s.p.a. Sectonvide approach Terms of Reference Task Team Leader United Nations United Nations Commission on International Trade Law United Nations Development Business United Nations Development Programme United Nations Children’s Fund United States Agency for International Development U s e o f Country Systems World Bank World Health Organization
PROCUREMENT UNDER WORLD BANK-FINANCED PROJECTS: FY07 ANNUAL REPORT
Executive Summary
1. This Annual Report centers on the work undertaken by procurement staff in FY07 to build better performing country procurement systems that contribute to the efficient use o f public funds and improved aid effectiveness, and to ensure appropriate fiduciary oversight and compliance monitoring. I t also provides information on new initiatives that will form the strategy and deliverables in the coming years. Compared to previous reporting, the FY07 report provides a greater focus on capacity development activities undertaken at the country level, as highlighted in information boxes on specific Regional procurement contributions to institutional goals and objectives. More emphasis has been placed on country work as wel l as on work undertaken to improve donor harmonization, with each o f these broad topics covered under separate sections. As was the case in the FY06 Annual Report, Figures and Tables providing statistical information are accompanied by enhanced analysis as to how this information contributes to the management and quality o f work. A final section providing summary information highlighting activities in the Regions has been added. Additional data in tabular format i s provided in the Annex.
2. Fiduciary Oversight and Compliance. Procurement staff make a major contribution to the design o f projects and to the fiduciary oversight o f their implementation. Most o f this work is focused on compliance, but the contribution o f procurement staff in the project environment i s increasingly on building country procurement capacity and related implementation o f procurement reform. In FY07, 301 new operations (1 12 IBRD and 189 IDA) in 96 borrower countries were approved, with a total commitment o f $24.7 billion. This was a 5 percent increase in new operations over FY06. The supervision portfolio supported by procurement staff increased to 1,599 operations, an 18.9 percent increase in just one fiscal year.
3. Prior Review of Contracts. In FY07, 6,251 contracts, with a value o f $7.65 billion, were subject to prior review by procurement staff. The number o f contracts reviewed declined slightly f rom FY06, but the value increased. The number o f contracts reviewed by the Operations Procurement Review Committee (OPRC) increased by 55.5 percent compared to FY06. These figures demonstrate that demands on staff time with regard to fiduciary responsibilities have increased with a resulting impact on work/life balance. Despite the challenge, in FY07 procurement staff maintained a high level o f responsiveness to clients, as indicated by the Regional monitoring o f response rates. The Bankwide average turnaround time for procurement staff input was two days, and staff met or exceeded the service standards 94 percent o f the time.
4. Supervision and Post Review of Contracts. Post review i s a key supervision activity undertaken primarily by procurement staff that complements the prior review
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process. Post review involves selecting a sample o f contracts from those not subject to prior review, and conducting a complete review o f the f i l e and procedures used to award the contracts. In FY07, 78 per cent o f projects were subject to post review. No t al l projects undergo post review in a given fiscal year as some projects are not in a stage o f implementation where post review would be cost effective (i.e. just starting implementation or in the final stages) and other projects are predominantly handled through prior review. Post review during supervision identifies areas where capacity development o f implementing agency staff may be required, issues that need to be addressed, and potential fraud, corruption, or misprocurement.
5. Risk Assessment and Monitoring Tools. Development o f better assessment tools to identify and mitigate risk associated with implementation o f Bank-supported operations was initiated in FY06. In FY07, based on the successful piloting o f a “dynamic risk model” in the South Asia Region, the Procurement Sector committed to move forward with completing the design and roll-out o f this tool as a web-based application. The risk tool will interface with a new reporting template, including a guidance note and database under construction to capture post-review data, which will enable monitoring o f risk and risk-mitigation measures during the l i fe o f a project. Both the post-review reporting database and the dynamic risk tool will enhance the quality o f supervision and post review. These new systems will incorporate work underway within the Sector and in cooperation with our colleagues from INT to better identify “red flags” that will help staff focus their attention on issues that should receive greater scrutiny during post review.
6. Procurement Decentralization. Decentralization o f procurement staff provides better service and increased client access, and contributes to building both country capacity and Bank knowledge o f the country’s procurement and implementation practices, Decentralization o f staff and delegation o f authority to staff are closely monitored by Regional management and the Procurement Sector Board Human Resources Committee, following a risk-based approach to balance staff capacity with the portfolio under implementation in the country. Decentralization levels have stabilized at around 75 percent since FY05.
7. Independent Procurement Review. Independent procurement reviews (IPRs) have been used by the Bank to complement prior/post reviews and supervision activities, and have proved increasingly useful when applied on a risk-based approach. During FY07, IPRs were conducted in 10 countries, covered 42 projects, and entailed the review o f 906 contracts. The Procurement Sector Board recognizes the value o f IPRs and has noted that consistent financing for them should be made available as part o f the Bank’s overall focus on providing greater attention to higher-risk projects. IPR financing i s additional to the regular supervision budget; typically, the cost o f IPRs ranges between $60,000-$100,000.
8. Complaints. The Bank has long defined a complaints process to be followed under projects supported by the Bank, and it remains committed to seeing that complaints are handled in a timely and fair manner by the borrower. During FY07, additional
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improvements were made to the complaints handling and monitoring and to enhance functionality o f the complaints database to enable better capture o f key data, such as the basis for complaints. One feature added to the complaints database was the ability to track payment issues. A wide range o f data on complaints i s included in this report at the request o f the Audit Committee. (Information on the handling o f complaints related to payment issues i s included in Annex A.) Although complaints are monitored primarily to ensure timely handling, the database i s also a rich source o f information on issues with process and procedure in implementing agencies. This information i s used to help Bank staff focus remedial and capacity development activities.
9. Governance and Anticorruption. The Governance and Anticorruption (GAC) Strategy' moved into implementation in FY07. As part o f this strategy, sanctions reform was completed in FY07 and required the inclusion o f new fraud and corruption language in all projects scheduled for negotiation after October 2006. The Procurement and Consultants Guidelines were updated to incorporate the new language and all standard bidding documents were updated in FY07. New emphasis was placed on upfront work in the design o f projects to address the risk o f corruption. Procurement staff were involved in this work as part o f project design teams, with many projects incorporating new risk- mitigation measures, especially in the handling o f procurement, Governance and anticorruption activities were also stepped up at the country level. This report includes information on GAC work in both the fiduciary oversight and the country work sections, providing specific implementation examples from the Regions.
10. The trend in country analytic work and reform initiatives i s toward greater coordination o f Bank work, both internally and with donor partners at the country level. In most Regions, economic and sector work (ESW) i s undertaken with donor partners on a regular basis and new ESW i s also coordinated internally. In FY07, two Country Procurement Assessment Reports (CPARs) were completed and 10 integrated assessments were completed. Integrated assessments included a range o f products, from Public Expenditure and Financial Accountability (PEFA) assessments to integrated fiduciary assessments-which are a combined CPAR and Country Financial Accountability Assessment (CFAA), often with PEFA and Organisation for Economic Co-operation and Development-Development Assistance Committee (OECD/DAC) indicators included. This trend in handling o f country analytic work demonstrates that the recommendations o f the Independent Evaluation Group (IEG) Report Country Financial Accountability Assessment and Country Procurement Assessment Reports: How Effective are the World Bank Fiduciary Diagnostics are being implemented.*
Country Work.
11. Harmonization Work under the Heads of Procurement. The Heads o f Procurement (HOP) o f the multilateral development banks (MDBs) meet every nine months as a group to further the harmonization agenda. In addition, various working groups under the HOP meet regularly to prepare harmonized bidding documents and
Strengthening World Bank Group Engagement on Governance and Anticorruption (R2007-0036), March 20,2007. Country Financial Accountability Assessment and Country Procurement Assessment Reports: How Effective are the World Bank Fiduciary Diagnostic (CODE2007-00 10) February 26,2007.
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agree on harmonization o f policy and guidance. During FY07, the final version o f the Procurement o f Small Works was agreed; use of the document will begin in FY08. Work i s ongoing to complete the harmonization o f bidding documents for use in information technology/infonnation systems (IT/IS) procurement, and work i s starting on developing guidance materials on Public-Private Partnership options. In the area o f electronic government procurement (e-GP), the working group updated several documents and began work on developing an interactive web-based standard bidding document for IT.
12. Joint Venture for Procurement. The Joint Venture for Procurement i s one o f the subgroups under the OECD Working Party on Aid Effectiveness. I t i s cochaired by the World Bank, along with a bilateral donor Canadian International Development Agency (CIDA) and a client country (South Africa). The Joint Venture (JV) oversaw a number o f initiatives in FY07, including the issuance o f an internationally agreed set o f benchmarks for assessment o f public procurement systems. The JV and i ts members are supporting pilot testing o f the benchmarking tool in 22 countries that volunteered to participate in the piloting program. In addition, donors working with the 22 countries have agreed to cooperate in providing needed capacity development to support procurement reform activities in the countries. Several workshops have been sponsored by the World Bank, other MDBs, and the JV for Procurement to help countries share experiences and learn how to apply the benchmarking tool and how to move forward in addressing systemic weaknesses through capacity development. The JV for Procurement also has sponsored special meetings with the Business Industry Advisory Council, an advisory group to the OECD, to discuss procurement issues.
13. Procurement Policies, Tools, and Institutional Initiatives. A key aspect o f the Procurement Sector’s work program carried out by the Procurement Anchor i s the development o f new policy and the maintenance and updating o f existing policy and documents. In addition, the Anchor i s responsible for the development, maintenance, and upgrading o f systems and tools that help integrate business processes and support staff and other clients. Highlights from FY07 include the following:
OP/BP 8.0 on Rapid Response were issued to improve the Bank’s ability to respond to crises and emergencies. A guidance note and handbook are under development for issuance in FY08.
0 Sample bidding documents and a technical note on Procurement o f Management Services were completed.
0 As noted, sanctions reform introduced changes that required updating o f the Guidelines and the full library o f standard bidding documents. In addition to work on the complaints database and on creating a database to capture post-review data, the Operations Policy and Country Services Vice Presidency/Procurement Policy and Services Group (OPCPR) systems team introduced a system to cross-reference and check suppliers against the UN Security Council Resolution 1267 and other available antimoney-laundering l i s ts before “no objections” are provided for contract awards.
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14. Staffing and Capacity Development. Staffing levels increased in FY07 by 12 additional staff, but the Sector Board remains concerned about capacity development to improve knowledge and sk i l ls o f new staff and ensure that experienced staff are available to replace senior procurement staff leaving the Bank. The increased focus on governance, anticorruption and procurement reform initiatives at the country level has stepped up the demand on staff to develop better sk i l ls to analyze country systems and develop and support the implementation o f capacity-building initiatives for improving public procurement systems. A new knowledge and learning strategy i s being developed and will be closely coordinated within the fiduciary family to build better cross- knowledge between the procurement and financial management functions and increase the quality o f fiduciary work. A longstanding and successful procurement training program for task team members was updated in FY07; the new strategy will identify ways to expand available training for procurement specialists, both in core skill areas and in emerging areas o f work.
15. New Initiatives and Future Challenges. Following a successful year o f implementing initiatives identified in the FY06 Annual Report, the Procurement Sector i s looking forward to a very challenging future. As a result of the reorganization within Operations Policy and Country Services (OPCS), both the Procurement (PR) and the Financial Management (FM) Anchors were placed under the directorship o f an Operations Services Director. Defining a joint strategy will increase the contributions that both sectors make to the realization o f the Bank’s objectives. Accordingly, a joint strategy wi l l be introduced in FY08 that identifies ways in which the two sectors can work together and work more closely with other internal and external partners to build on the synergies that already exist. The Procurement Sector i s also looking specifically at i t s own key initiatives to be pursued during the coming years. The following are some of the new initiatives.
Use of country procurement systems. Following the approval by the Board o f the Bank’s proposal to expand the use o f country procurement, financial management, and safeguards systems in late FY07, work began in FY08 on the requested proposed methodology for piloting an increased use o f country procurement systems. The focus and challenge in FY08 and beyond will be to move to implementing the methodology at the country and project levels. The methodology will bring many new challenges for the Procurement Sector; from introducing the use o f new tools, to carefully monitoring pilots to gather lessons and feed them back into the process.
0 Impact of trade regimes. Many countries are aligned under broad trade treaties that have an impact on competition and defining the procurement marketplace. The Procurement Sector intends to conduct a broad study in FY08/09 of this relationship so as to identify good practices that may have an impact on the Bank’s procurement policies and provide information useful to our work in supporting client countries.
0 Study on consulting services. Studies conducted during FY07 on the Bank’s guidelines for selection o f consultants indicated that our policies are complex and are not reflective o f the procedures used in most countries. The Procurement
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Sector intends to look at practices worldwide to see what changes might improve the efficiency and effectiveness o f the Bank’s policies. Trust fund and UN agency agreements. The Procurement Sector will work on three key initiatives intended to provide better solutions to handling procurement under such agreements: a Fiduciary Principles Accord, which will provide an umbrella agreement; a Memorandum o f Understanding (MOU) initially with United Nations Children’s Fund (UNICEF) to be expanded to other UN agencies that act as suppliers; and a Consultant Service Agreement when the UN i s retained by the government. Use offramework agreements. Framework agreements are being used in most countries and by most organizations worldwide. The use o f such agreements will become part o f the revised United Nations Commission on International Trade L a w (UNCITRAL) Model L a w on Procurement. The Procurement Sector will look at how such agreements might facilitate our operational work, especially with regard to e-GP.
0 Operational PolicyBank Procedure (OPBP) 11.00, These key procurement policy documents for staff have been revised on a piecemeal basis over the past several years. I t was recognized that a major revision was needed to clean up inconsistencies that developed over time and to incorporate some major changes that affect the way we do business in the Bank. A key piece o f this work is a clear decision matrix that defines roles and responsibilities.
0 Private-Public Partnerships (PPP). The Procurement Sector i s developing new guidance and documents as part o f the customization o f products and business relationships emerging in the Bank to address differences between client countries. This effort will include a focus o n PPP, with the work undertaken in a harmonized manner under one o f HOP working groups that i s led by the Bank.
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PROCUREMENT UNDER WORLD BANK-FINANCED PROJECTS: FY07 ANNUAL REPORT
I. INTRODUCTION
1. The FY07 environment for procurement work was set by several key factors. The Bank’s investment portfolio reached record levels in FY07, resulting in a high demand for fiduciary oversight and compliance monitoring by Regional procurement staff. The Governance and Anti-Corruption (GAC) strategy approved in FY06l and i t s focus on implementation in FY07 required procurement staff to contribute at all phases o f project design and implementation, and it has increased responsibilities and the demand for country work to build client capacity and better performing procurement systems. At the end o f FY07, the Board o f Executive Directors expressed their support for the proposals contained in the Use of Country Systems in Bank-Supported Operations: Status Report. The common thread that l i n k s these activities i s that o f building better performing country procurement systems that contribute to the efficient use o f public funds and improved aid effectiveness.
2. Organization of the FY07 Annual Report. Following this introduction, Section I1 discusses FY07 fiduciary oversight and compliance across the Regions, including analysis o f data and implications for future work. Section I11 covers country work and provides additional insight on procurement reform activities as was requested following the review o f the FY06 Annual Report. Section IV has been added this year to provide more focus on the growing work o f harmonization and partnership activities. Section V discusses procurement policies, tools, and institutional initiatives to monitor and capture key data resulting from design and implementation o f procurement work. Section VI covers staffing and capacity development, including data, trends, and initiatives related to addressing staffing issues. Section VI1 outlines initiatives for the coming years, including a forward look at the emerging Procurement and Financial Management Joint Strategy. Section VI11 provides Regional summaries and i s being reinstated at the request o f the Audit Committee following i t s review o f the FY06 Annual Report.
11. FIDUCIARY OVERSIGHT AND COMPLIANCE
3. The core work o f Regional procurement teams remains that o f contributing to the design o f projects and to fiduciary oversight o f their implementation. For the most part, this work i s focused on compliance, but the contribution o f this work to building country capacity in the area o f procurement i s becoming increasingly apparent as the traditional boundaries between compliance work and country capacity development no longer exist. Section I1 provides statistical information on this work, which entails the review o f
’ Strengthening Bank Group Engagement in Governance and Anticorruption, (R2007-0036) March 2 1, 2007. Use o f Country Systems in Bank-Supported Operations: Status Report, (R2007-0079/4) October 15, 2007.
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documents, including specialized reviews and high-risk project review; post review; the provision o f technical advice to the operations teams on project design and implementation; supervision and advice to client countries on their project procurement activities; and the handling o f complaints and the application o f remedies.
4. Lending Portfolio. In FY07, 301 new operations (1 12 IBRD and 189 IDA) in 96 borrower countries were approved, with a total commitment o f $24.7 billion. This represented an increase o f 5 percent in new operations and $1 billion over the record levels set in FY06. The supervision portfolio supported by procurement staff increased to 1,599 operations, an 18.9 percent increase in just one fiscal year. This increase was also reflected in the number o f high value or complex procurement cleared by the Operations Procurement Review Committee (OPRC),3 which rose 55 percent over the FY06 figure. (The distribution o f FY07 lending by Region, and o f the lending portfolio by leading borrowers, are depicted in Figure A1 and Table Al , respectively, in Annex A,)
5. The increase in new projects and projects under supervision continues to drive the high demand for procurement staff services. Quality demands on staff have also increased with the growing emphasis on mitigation o f r isks in the design o f projects and the focus on increasing the quality o f supervision (both are key elements o f implementation o f the GAC strategy at the project level). The growing involvement o f Institutional Integrity (INT) not only in investigation o f fraud and corruption, but in the proactive identification o f risk factors across a range o f projects in a country or sector, i s also having an impact on the work o f procurement staff.
Work Program Impact.
6. Project Preparation. Regional procurement staff participated as members o f operational teams for the 301 new lending operations in FY07, providing advice on project design; conducting required procurement capacity assessments; preparing the required procurement information, annexes, and schedules in the Project Appraisal Documents (PAD) and Loadcredit agreements; and participating in final Loadcredit negotiations. The high-risk review procedures introduced in FY06 and the GAC strategy approved in FY07 have intensified the focus on procurement risk-mitigation measures in the design o f projects and for increased monitoring o f their effectiveness to reduce the potential for fraud and corruption. High-risk projects are subject to special reviews within the Regions and within Operations Policy and Country Services (OPCS), including the review o f the quality and adequacy o f the risk-mitigation measures included in the PAD.
7. Supervision. Each investment project supported by the Bank involves project oversight and supervision once the project becomes active and implementation begins. The risk level assigned to the project wi l l also form the basis for the proposed supervision level defined for the project. Higher-risk projects generally require supervision o f procurement twice a year. As the budget for supervision i s limited and has to be allocated across a range o f supervision activities, the participation o f procurement staff in
The OPRC i s chaired by the Chief Procurement Policy Officer, with membership fiom Legal Institutional and Corporate Administration (LEGIA) and the Regional Procurement Manager for the presenting Region.
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supervision missions does not always meet the desired level. During supervision, procurement staff participate in resolution o f procurement issues, support the update o f the procurement plan, conduct post reviews, and fol low up on actions that may have been mandated from a previous supervision mission. Training o f project implementation staff i s also provided during supervision missions, frequently to address capacity issues noted during earlier missions. Supervision also occurs throughout the implementation o f procurement under the project through prior review.
8. Risk Assessment and Monitoring Tools. Development o f better risk assessment tools to identify and mitigate risks associated with the design and implementation o f Bank-supported projects was initiated in FY06. In Europe and Central Asia (ECA), procurement staff worked with the financial management staff using the Risk and Portfolio Management-Portfolio and Risk Management (RAPMAN-PRIMA) management information system to define the risk associated with new project^.^ In South Asia Region (SAR), a “dynamic risk model” was introduced and tested in several projects. The dynamic risk model i s designed to be used during the procurement capacity assessment o f the implementing agency that i s mandatory for al l new projects. In FY07, based on the successful piloting o f this tool, the Procurement Sector committed to move forward with completing the design and roll-out o f the dynamic risk model as a web- based application that will interface with other procurement databases. The application will enable monitoring o f risk and risk-mitigation measures during the l i f e o f a project.
9. Procurement Decentralization. The focus o f procurement decentralization remains on providing better service, increasing client access, building capacity, and maintaining country-based knowledge, including o f the country’s procurement system and implementation practices. Overall, the level o f decentralization o f procurement authority remained stable in FY07 (see Table l ) , with increases noted in East Asia and Pacific (EAP), ECA, and Middle East and North Afr ica (MNA) and modest reductions in Afr ica (AFR) and Lat in America and Caribbean (LCR). Levels in SAR remained unchanged. Decentralization delegations are closely monitored by Regional Management Teams and the Procurement Sector Board and are based on staff capacity, experience levels, and changes in the make-up o f the country’s portfolio (which affects the number, type, and complexity o f procurement in Bank-supported operations). A key concern i s continuing to balance the level o f decentralization o f authority with risk, both at the country level and that associated with the portfolio o f projects being implemented in the country. The current levels o f decentralization, which have stabilized at around 75 percent overall since FY05, will likely not increase significantly in the future. Staffing issues associated with decentralization relating to mobility, career development, and costs are emerging and will be considered in reviewing the decentralization strategy in FY08. These issues are addressed in greater detail in Section V o f this report.
RAPMAN-PRIMA i s a management information system first introduced in ECA in FY06. The Financial Management Sector (FM) i s linking this tool with other data resources and expanding it to include monitoring with regard to the F M Practices Manual. This tool wi l l remain a source o f information for procurement staff as well.
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Table 1. Procurement Decentralization Trends, FY04-07 ,
om 350/388projects. I 10. The high level o f active investment projects, 1503 in FY07, continues to drive the work program o f most Regional procurement staff. A key function performed by procurement staff i s that o f prior review’ o f contract activities financed by Bank-supported investment operations. While prior review i s a key fiduciary compliance function, i t also serves as a means to build client capacity. Decentralization o f staff to country offices allows work previously seen as purely compliance to contribute more broadly in helping borrower staff understand procurement documents and procedures. Approximately 6,251 contracts, with a total value o f $7.7 billion, were subject to procurement prior review in FY07. The number o f contracts subject to prior review declined by 7 percent from FY06, continuing a trend toward less prior review. The value o f contracts reviewed as a percentage o f the Bank’s disbursement remained consistent with that o f FY06, at approximately 40 percent. Figure 1 shows FY07 Regional data on prior review o f contracts in relation to disbursements. Variations among Regions relates both to the capacity o f countries in the Region and to the types o f projects under implementation in the Regions.
Prior Reviews.
’ Per the Loadcredit Agreement, certain procurement actions taken by the borrower-for example, issuing bidding documents, evaluating bids, and recommending contract awards-must be reviewed by the Bank and a written “no-objection’’ provided before the borrower may proceed to the next stage o f the procurement process. This “prior review” usually applies to procurement actions for contracts involving international competitive bidding, those above defined monetary thresholds, and the first one-to-three procurement procedures using national competitive bidding. It i s also required for all consulting service selections using single source and those above specified monetary thresholds. Prior review thresholds are set on the basis o f assigned risk for a given country and for projects within the country, based on the assessment o f the capacity o f the executing agency.
5
+ Nurrber
Figure 1. FY07 Prior Review Contract Value and Disbursement Amount
8,025 8,233 8,301 8,145 6,757 6,251
US$ mllion
rn Dsb in FY07
value % reviewed contract value I disbursemnt
1 1. Prior Review Contract Award Data. The Bank collects data on al l contracts that have been subject to prior review using the Form-384 database and it provides this data online for interested stakeholders, both internal and external to the Bank. This information enables a review o f awarded contracts by country, Region, and sector as well as by contract type (goods, works, and consulting services). As noted, this database only captures prior reviewed contracts and i t therefore provides a l imited v iew o f the number, type, and value o f contracts financed under Bank-supported investment operations. Figure 2 presents trends on value and number o f contracts subject to prior review between FY02-07. The number o f contracts subject to prior review has continued to decline, but the value has remained more stable. This i s consistent with the sector's objective o f reducing the number o f contracts subject to prior review by focusing prior review on higher-value transactions.
Figure 2. Trend of Procurement Prior Review Contracts by Number and Value of Contracts
9,500
9,000
8,500
8,000
7,500
7,000
6,500 cal Yea ,A 2002 I 2003 1 2004 1 2005 I 2006 I 2007 I
I-*. - Anaunt (US$ MI 1 7,548 1 7,578 1 8,481 I 6.964 1 7,478 I 7,655 1
9 000 8,000 cI
7,000 6,000 5 5,000 2 4,000 2 3,000 2 2,000 5 1,000 = 0
12. Leading Suppliers. Table 2 depicts the top 10 supplier countries for FY05-07 and provides the percentage o f the Bank's portfolio represented by contracts awarded to these
6
countries. China has led this l i s t for several years, followed closely by India. China and India also led the l i s t o f top 10 Bank borrowers during this period. The data indicate the growing success o f f i r m s from borrowing countries in competing effectively for Bank- financed contracts and demonstrate that there i s an opportunity under large infrastructure- type projects for qualified f i r m s in borrowing country to win such contracts. Additional data drawn from the Form-384 database i s provided in Annex A.
Table 2. Top 10 Supplier Countries by Major Bank-Financed Contract Amount
Note: “UN Agency” i s a grouping of al l UN agencies that receive supply contracts, which primarily cover vaccines and other drugs and orders from the Inter-Agency Procurement Service Organization (IAPSO) catalogue.
1 3, Operations Procuremefit Review Committee. The Operations Procurement Review Committee (OPRC) provides a key oversight role with regard to procurement by reviewing and clearing the highest value and most complex contracts financed under Bank-supported operatiom6 During FY07, the OPRC reviewed 138 cases (a 55.5 percent increase from FY06), valued at $8.8 billion. The trend o f increasing numbers o f high-value contracts began in FY05 with the Bank’s renewed financing o f large infrastructure projects. The rising trend (see Figure 3) also reflects an increase in complex procurement, below the mandatory thresholds, brought to the OPRC at the request o f the Regional Procurement Managers (RPMs). This trend wi l l be analyzed to determine if the current rules for the OPRC and monetary thresholds for review need to be updated. The current rules and thresholds have been in place for more than 10 years.
This includes (a) contracts for procurement of goods, works, and nonconsulting services costing $25 million or more; (b) consulting services contracts costing $10 million or more; and (c) single-source consulting service contracts costing $5 million or more. Other cases may be considered at the request o f the RPMs.
6
7
Figure 3. Trend of OPRC Review by Number o f Contracts, FY03-07
Trend o f OPRC Reviews (FY03-FY07)
Number of Contracts
150 138
100
50
0 I FY03 FY04 FY05 FY06 FY07
14. OPRC Contributions. While the OPRC operates as an internal Bank control, it also contributes to country capacity development through the rulings and advice it offers on the cases presented. Through the task team leader (TTL), borrowers are provided with information on process and procedural issues and they are given guidance on corrective actions that need to be taken. The information generated by the OPRC is also a r ich source o f training material for Bank procurement and procurement accredited staff. The outcome o f cases presented to the OPRC are documented and shared on a quarterly basis with al l WMs, which provides a unique opportunity to view how complex procurement issues are resolved. Case studies drawn from OPRC cases are now regularly being used as part o f procurement staff training programs.
15. Procurement Post Review. During FY07, procurement post reviews (PPRs) were conducted on 619 projects, representing 77 percent o f the projects subject to post review. This level i s the same as the 78 percent post reviewed in FY06. Table 3 shows the FY07 numbers for post-review monitoring by Region. Procurement post review i s carried out by procurement staff during supervision o f projects. The frequency and degree o f post review i s based on the procurement risk assigned to the project. For example, a project with a high procurement risk, assigned on the basis o f country risk and executing agency capacity, will normally require supervisiodpost review every six months and will require a high percentage o f contracts to be sampled and reviewed. It should be noted that the budget for procurement participation in supervision and post review is controlled by the TTL and financing i s not always available to meet the recommended levels o f post review. PPR i s an integral part o f Regional procurement staff work and has a significant impact on client capacity building through follow-up work with clients to address issues noted. Indications o f misprocurement under Bank-supported operations are usually found during PPRs. (Information on trends in post review over the past five fiscal years is provided in Annex A; see Figure A2.) I t should be noted that the percentage o f projects subject to post
Post-review guidance i s provided to al l staffe7
“Procurement Post Reviews and Independent Procurement Reviews: Processes and Procedures,” Armando Araujo, Director, Procurement Policy and Services Group, July 2001.
8
Item\Region
Number o f Projects Subject to Post Review' Number o f Projects Post Reviewedb Percentage o f Projects Post Reviewed
review has risen from 46 percent in FY03 to 78 percent in FY07. The rise in post review i s consistent with the decrease in prior review o f contracts. Both are monitored to maintain the overall balance needed to meet fiduciary oversight responsibilities.
AFR EAP ECA LCR M N A SAR Bankwide
99 774 158 122 165 152 78
139 85 114 152 42 87 619
88% 70% 69% 100% 54% 87% 78 %
l a. Al l investment projects (IBRDADA) in FY07 portfolio, excluding projects requiring 100% Bank I prior review and projects with insufficient contracts for post reviews.
b. Data include projects under independent procurement reviews. I 16. The seventh Quality o f Supervision review (QSA7), which looked at 127 investment projects, noted a lack o f consistency in post review and a failure o f staff to properly document post review. In response, the Procurement Sector created a working group to review post-review procedures, offer recommendations to improve the process, and suggest ways that the information generated by post review might be better captured and used by the Bank to improve supervision o f Bank-supported operations. A comprehensive discussion o f the post-review template i s contained in Section V o f this report.
Quality of Supervision.
17. Independent Procurement Review (IPR). An IPR i s a review financed by the Bank to supplement and complement the work done by staff during post review. Such reviews also inform Regional management on the quality o f fiduciary work undertaken. Financing is provided through the Regional budgeting procedures and varies from year to year. Projects are typically selected for IPRs on the basis o f risk, since such reviews can be costly and are additional to the normal financing provided for Bank supervision. During FY07, IPRs were conducted in 10 countries,' covered 42 projects, and entailed review o f 906 contracts. The number o f IPRs decreased substantially in FY07 because o f funding constraints, especially in EAP and MNA, where no projects were covered by such reviews. The Procurement Sector Board fully recognizes the value o f the IPR as one o f the fiduciary oversight tools that contribute to the quality o f Bank supervision (IPR findings help identify generic issues in the portfolio, provide advice to task teams on implementation arrangements and risk mitigation measures, and provide feedback to their respective counterparts in implementing agencies). During the IDA 14 control re vie^,^ management noted that IPRs add value to the Bank's control framework and
' These included Argentina, Brazil, Colombia, Croatia, Georgia, Guinea-Bissau, India, Lesotho, Paraguay, and South Africa. The IDA14 control review was initiated in FY06 and i s continuing in a phased approach. This review i s examining financial management and procurement controls, including adherence to controls, procedures, and guidance.
9
Number o f Countries Region
Bank wide 9
recommended that consistent financing be made available to conduct IPRs following a risk-based approach. (Annex A provides information o n IPRs conducted in FY07, including their cost; see Table A6.)
Contract Amount ($ ‘000)
130 36,818
Number of Contracts
18. Misprocurement. The Bank’s Procurement and Selection o f Consultants Guidelines state that the Bank does not finance expenditures that have not been procured in accordance with the agreed provisions in the Loan Agreement. In such cases, the Bank declares misprocurement, and cancels that portion o f the loan allocated to the goods, works, or consulting services that have been misprocured. The number o f contracts and value o f declared misprocurement vary widely from year to year and are a function o f many factors, including the performance and level o f experience o f implementing agencies under the many projects supported by the Bank. PPRs and IPRs are the main sources for the identification o f misprocurement, although some misprocurement is discovered during prior review and the contracts are not awarded. Some additional misprocurement i s identified on the basis o f complaints received from bidders and consultants, including complaints that are referred to INT for investigation o f allegations o f fraud and corruption. Based on information maintained by RPM offices, 74 cases involving projects o f 25 countries were sent to INT for investigation in FY07. Data on misprocurement declared in FY07 are shown in Table 4. (Some additional comparative data on misprocurement declared in FY05-FY07 i s included in Annex A.) Although data are maintained on misprocurement declared each fiscal year, no particular trends have been noted.
Table 4. Misprocurement Declared in FY07
19. Complaints. An effective and competitive procurement process depends in part on the willingness o f bidders, suppliers, and consultants to participate in the process. A complaints mechanism that enables participants to submit complaints and have them addressed in a timely and fair manner contributes to the willingness o f participants to engage in the procurement process and helps to ensure compliance with procurement procedures. The Bank has long defined a complaints process to be followed under projects supported by the Bank and it remains committed to seeing that complaints are handled in a timely and fair manner by the borrower. A Bankwide Complaints Database was rolled out in FY06. In FY07, several new enhancements were added to the Complaints Database to improve the capture o f data and the ability to analyze the basis for complaints and to track the timely resolution o f complaints. In addition, a facility was added to the database in FY07 to capture and track issues related to payments for contracts awarded under Bank-financed projects. As a result, the Procurement Sector was able to prepare the first report to the Audit Committee on payment issues in 2007IO and will continue to monitor and provide reporting on this important area. During FY07,
lo “Payment Issues with Bank-Financed Contracts: Status Report,” Procurement Policy and Services Group, September 2007.
10
FY AFR
346 complaints were registered, involving 213 projects in 63 borrower countries (60 projects received more than one complaint). Table 5 provides information on the number o f complaints received and handled in implementation o f Bank-financed projects in the past five years. The number o f complaints in a particular Region varies from year to year and the data are monitored to enable each Region to determine if the number o f complaints indicates a need for corrective action or training.
EAP ECA LCR MNA S A R Total
Table 5. Comparison of Numbers o f Complaints, FY03-07
03 04 05 06 07
43 119 49 15 16 222 464 56 53 66 9 20 256 460 38 22 32 7 36 148 283 76 87 69 31 30 95 388 52 71 89 19 22 93 346
20. Complaint Trends. One o f the major benefits o f tracking data on complaints i s the ability to determine the nature o f complaints submitted by participants. This information can help focus advice and assistance to borrowers on how to improve their implementation o f procurement and contributes to overall capacity development in client countries. Figure 4 provides information on the most frequent bases for complaints submitted in FY07. (Annex A provides a significant amount o f additional data drawn from the Complaints Database.)
Figure 4. Major Nature o f Complaints in FY07
Qualification of
Contract administration
13%
corruption 6%
21. Payment Issues. Over the past few years, interest has grown on the issue o f timely payment for contracts awarded under Bank-supported operations. A s noted above, a new facility added to the Complaints Database now enables the Bank to monitor and report on the handling o f complaints and disputes regarding payment under contracts. (Annex A provides detailed information on FY07 payment issues as captured by the Complaints Database.) The aforementioned August 2007 status report on payments made several recommendations that are in the process o f implementation. These include continued monitoring o f resolution to help ensure timely resolution o f payment issues and
11
Region
Bankwide Average
preparation o f guidance for staff to build greater consistency in handling o f such issues. This guidance will be incorporated into the guidance for conducting the capacity assessment o f the implementing agency for Bank-supported operations, which will be updated in FY08.
Average response time Percent o f Meeting Standard (Day) Service Time 2.3 94
22. Responsiveness to Clients. The FY06 Annual Report included information on the responsiveness o f procurement staff to clients, tracked against the Bank standard response time (seven days) on procurement-related documents. This information i s used by Regional Management Teams to oversee quality and ensure that procurement staff are providing timely service to our borrowers and to the task teams they serve within the Bank. Information was incomplete in FY06 as several Regions had yet to develop monitoring systems. In FY07, al l six Regions completed development o f monitoring systems and reported on their performance in this area. Table 6 shows a consistently quick response time across al l Regions, with the Bankwide average being two days.
Table 6. Procurement Business Response Time Indicators (FY07)
23. Quality Assessment. The Quality Assurance Group (QAG) conducts annual reviews o f Bank performance in a number o f areas. Two o f particular relevance to the Procurement Sector are the Quality at Entry (QAE) and the Quality o f Supervision Assessment (QSA). Each year a sampling o f contracts i s taken from the previous year’s active projects and evaluated against a number o f criteria, including the handling o f procurement. The findings o f the QAE7 and QSA7 reviews were reported in the FY06 Annual Report, with procurement achieving overall ratings o f satisfactory or better on more than 97 percent o f projects reviewed. The ratings for the QAE8 are not yet finalized (but preliminary results show the same high level o f satisfactory ratings) and the QSA8 review has not yet been initiated. QSA7 provided the basis for recommendations on improving procurement supervision, as follows:
0 improve documentation on supervision 0
0
update 2002 guidance on post review develop new tools to improve consistency o f post review and to capture data from supervision, especially on effectiveness o f risk-mitigation measures initiate a study on procurement plans to review quality and adherence to the published plans.
These recommendations formed the basis for the new post reviewhupervision template designed in FY07, which will be introduced for staff use in FY08.
0
24. Governance and Anticorruption in Projects. The G A C strategy was approved in the latter part o f FY06 and much o f FY07 was focused on developing i t s implementation methodology. Procurement staff participated as members o f a series o f specialized working groups formed to define the elements o f the G A C strategy and provide guidance on how the strategy could be implemented. O f particular importance to procurement
12
work i s the implementation o f the GAC strategy in projects, which i s intended to contribute to the better design o f projects, including strengthening o f risk-identification and risk-mitigation measures and monitoring o f such measures for effectiveness.
25, GAG‘ Implementation. As noted earlier, the Procurement Sector is introducing the use o f the new dynamic risk model to help improve identification and mitigation o f risk. Another area under development during FY07 was the strengthening o f guidance on supervision and provision o f tools to better capture data generated on project performance through supervision and post review. In addition to these measures, a key aspect o f implementation o f the G A C strategy in the project environment will be a focus on strengthening systems, building capacity, and working o n prevention rather than on policing and sanctions. Box 1 provides examples o f some o f the good work being done in countries to support better handling o f procurement in projects as a contribution to G A C implementation.
Box 1. Tools for Better GAC Implementation in Projects
With respect to fiduciary risk within Bank projects, LCR developed two important tools during FY07.
Procurement Plan Execution System. The Procurement Plan Execution System (SEPA in Spanish) i s an innovative, web-based system that reports on all Bank-financed contracts over a calendar year, including all contracts planned or under implementation. The system i s highly versatile and enables the public to search for individual contracts or groups o f contracts clustered by project, sector, or territory. Information can be aggregated and reorganized to provide a broad analytical view o f the portfolio’s performance. Groundwork was laid during FY07 for implementation o f SEPA in several client countries (Honduras, Mexico, Paraguay, and Uruguay). Corruption Warning Signs. LCR prepared a good practice note and operational toolkit on corruption red flags in procurement and FM. The document and toolkit provide identification o f the most common corruption warning s igns that may appear throughout the project cycle; it i s intended as a quick reference for task teams and fiduciary staff to help them identify issues that require further review and when to seek appropriate guidance on follow-up.
26. Sanctions Reform. Reform o f the Bank’s policy on sanctions was completed and approved early in FY07.” This policy required revision o f the Bank’s Procurement and Consultants Guidelines, including (a) expansion o f the sanctions regime beyond fraudulent, collusive, and coercive practices; and (b) adoption o f “obstructive practices” as a separate sanction offense, covering both noncompliance with the Bank’s third-party audit rights (rights o f access to information) and deliberate obstruction o f Bank investigations into fraud and corruption. Following the revision to the Guidelines, OPCPR oversaw the updating o f al l Bank standard bidding documents and the standard request for proposals. Projects taken to the Board for approval after October 2006 are required to comply with the new policies and to use the standard bidding documents containing the expanded provisions required by the sanctions reform. The sanctions reform initiative also expanded application o f the Bank’s remedies. In particular, the Bank now has the ability to issue a temporary suspension o f award to a firm or individual
Sanctions Reform: Expansion o f Sanctions beyond Procurement and Sanctioning o f Obstructive Practices (R2006-0 149/4) July 28,2006.
13
while the due diligence process for debarment i s being completed. The Bank i s also working more closely with INT to ensure that projects supported by the Bank benefit from the lessons learned by INT from their investigations o f fraud and corruption under projects.
111, COUNTRY WORK
27. This section has been restructured from previous years by separating it from coverage o f harmonization, most o f which focuses on products and coordination at the country level. During a discussion o f the Independent Evaluation Group (IEG) report on Country Financial Accountability Assessments (CFAAs) and Country Procurement Assessment Reports (CPARS)’~ with the Committee on Development Effectiveness in June 2007, OPCS management agreed to provide more focus on procurement reform and capacity-development initiatives in the FY07 Procurement Annual Report. This section focuses o n specific country-based activities and tools and includes country examples.
28. The July 2005 memorandum joint ly issued by the Vice Presidents o f OPCS and PREMI3 had a major impact on how the Bank engaged in the planning and implementation o f assessments o f public sector financial management systems in client countries. This note, coupled with the removal o f the mandated requirement to conduct fiduciary economic and sector work (ESW) on al l active borrowers, furthered the already significant moves toward conducting integrated ES W and toward a strengthened approach on how the Bank should engage at the country level to improve the overall effectiveness o f work o n public sector management systems. While the CPAR s t i l l provides the core o f information available o n country procurement systems, the number o f new CPARs conducted had already dropped dramatically in FY06 (only one CPAR was delivered in FY06 versus 14 in FY05). The tendency toward separate fiduciary ES W being superseded by integrated reviews-through use o f either the PEFA indicators and strengthened approach, or customized approaches to ES W, including a new review, the Integrative Fiduciary Assessment (1FA)-was further consolidated in FY07. Table 7 shows the ESW completed in FY07 and indicates the nature o f this work, which has now become highly integrated (with internal and external partners) and more demand driven. Many Regions increased their focus on follow-up activities to enhance the effectiveness o f implementation o f the recommendations from existing CPARs.
Assessment Tools.
’’ l3
“Country Financial Accountability Assessments and Country Procurement Assessment Reviews: How Effective Are World Bank Fiduciary Diagnostics?” (CODE2007-0010) February 26, 2007 “Strengthening the Bank’s Public Financial Management Work,” issued July 25, 2005 by James W. Adams, OPCS, and Danny Leipziger, PREM.
14
Region Country Report Name
29. In May 2007, the IEG report Country Financial Accountability Assessments and Country Procurement Assessment Reports: How Effective are the World Bank Fiduciary D iagno~t ic ’~ was discussed with the Committee on Development Effectiveness (CODE). During this discussion, OPCS presented the joint management response from the Procurement and Financial Management Sectors to the three sets o f recommendations put forward in the IEG review. Table 8 summarizes the recommendations and the response provided.
Country Procurement Assessment Reports.
l4 “Country Financial Accountability Assessments and Country Procurement Assessment Reviews: How Effective Are World Bank Fiduciary Diagnostics?” (CODE2007-00 I O ) February 26,2007
15
Table 8. Management Response to IEG Report Recommendation Gear CFAAs and CPARs more directly to the fiduciary goal
0 Common definition o f fiduciary risk in all diagnostics Standardized framework and methodology for aggregating country level PFM risk
assessment and how it influences project design
Guide staff on risk
Enhance the quality o f the diagnostics
0 Issue revised joint
0 Develop and implement
Improve outcome and impact o f fiduciary work
guidelines
training for staff
0 Support clients in preparing a single, integrated, prioritized, and costed set o f actions for PFM reform
Management Response Mostly agreed.
0 In the case o f procurement and the CPAR, risk must be defined with regard to the risk factors relevant to procurement. A common definition would not be useful or practical. Aggregating risk under a standardized framework i s not seen as usefbl, as risk factors play a different role in individual country environments New risk tools and guidance for staff are under development and wi l l contribute to better project design
Agreed
July 25,2005 memo jointly issued by OPCSPREM VPs provided staff guidance PFM training initiated in 2005 with PEFA Program and i s ongoing on a regular basis
Agreed
Key to the strengthened approach introduced in July 2005 i s the preparation o f an integrated, prioritized strategy for PFM reform
30. Result of IEG Report Discussion, The discussions with the Committee resulted in a commitment by Management to focus more attention on quality, joint and integrated products, and results at the country level. It was noted by some members o f the Committee that there i s an issue with the publication o f ESW products, many o f which are not available to external parties. As a result, both Procurement and Financial Management agreed to make al l disclosable products available on external websites and through the Bank’s ImageBank, and to fol low up with countries that have not yet agreed to disclosure. A second discussion concerning effectiveness o f ESW resulted in a commitment to provide more information on reform initiatives in upcoming Annual Reports.
31. OECDDAC Benchmarking Tool. In July 2006, the Joint Venture for Procurement, a working group o f the OECD/DAC’s Working Party on Aid Effectiveness that i s cochaired by the World Bank, introduced a new tool for assessing aspects o f a public procurement system against agreed international benchmarks.” Application o f this tool, “Methodology for Assessment o f National Procurement Systems,” has become a growing feature o f procurement country assessment work since early versions o f the tool surfaced in 2005. By the end o f FY07, more than 20 countries had applied the
l5 Membership o f the Joint Venture for Procurement includes all OECD-DAC member countries, all o f the MDBs, the United Nations Development Programme (UNDP), the European Commission, and more than 20 partner countries.
16
benchmarking tool as an element o f country work, using this tool as a complement to a CPAR or a customized update. The tool enables a more precise identification o f the strengths and weaknesses o f a country procurement system and in doing so, it creates a better basis for dialogue with country counterparts, including other donors active in the country, to create and implement a prioritized strategy for addressing weaknesses. The OECD benchmarking methodology identifies critical elements o f sound procurement for scoring under several o f the Public Expenditure and Financial Accountability (PEFA) indicators and facilitates the Bank’s commitment to approaching public sector financial management and governance work on a more coordinated and structured basis.
Box 2. ECA - Albania: Procurement and P F M Country Diagnostics
Task/Objective. The main objectives o f the combined fiduciary assessment (CFA) were to assess the strengths and weaknesses o f the public financial management (PFM) system in Albania, and support the borrower’s initiative to prioritize PFM actions and measure progress on PFM reforms, with an emphasis on procurement. The CFA applied the OECD/DAC-World Bank Indicators tool for assessing the public procurement system and the PEFA indicators for the overall public financial management system.
Impact and Status of Reform. The CFA identified policy recommendations to strengthen PFM reform in Albania, including enhancing the autonomy o f the Public Procurement Agency, creating an independent complaint review mechanism, and regulating the use o f direct contracting. A new Public Procurement Law, enacted in November 2006, addressed key problems noted in the CFA.
32. Use of Country Systems. In June 2007, OPCS submitted Use ofcountry Systems in Bank-Supported Operations: Status Report to the Board.16 This report covered initial lessons emerging from the piloting o f the use o f country systems in Safeguards, and on the basis o f emerging lessons proposed to scale up the pi lot program from project-based to full country-based pilots. It further defined a plan to address the use o f country procurement systems and to continue to build on the use o f country financial management systems, which was already a default position for the Bank. The Status Report stated that a full and detailed procurement methodology would be prepared, subject to the Board’s agreement to proceed, and that the detailed methodology would be the basis for full and complete consultations with stakeholders, including the private sector, partner organizations, c iv i l society, and, most importantly, client countries. The Board expressed i t s general support for the Bank’s intention to expand i t s reliance on country systems that have been determined to be effectively equivalent to the Bank’s system and asked staff to prepare the detailed procurement methodology and conduct a wide and substantial process o f external consultation on this proposed methodology. The Board’s direction, received at the end o f FY07, set the stage for the work carried out thus far in FY08. It should be noted that the proposed detailed methodology was drafted and posted o n a dedicated external website in September 2007. The formal consultation period opened September 17,2007.”
Use of Country Systems in Bank-Supported Operations: Status Report, (R2007-0079/4) October 15, 2007 Following the conclusion o f one of the most extensive and wide-ranging global consultations conducted by the Bank, which closed in January 2008, OPCS prepared a revised detailed methodology
16
”
17
33. The remainder o f this section draws on Regional information on specific reform initiatives in client countries that demonstrate the types o f activities that are being undertaken to strengthen country capacity and procurement systems performance. The Regional summaries in Section VI11 provide additional information.
Procurement Reform.
Box 3. EAP - Philippines: Procurement Reform Initiatives
Procurement Reform Initiatives. The Philippines 2007 CPAR established that the Government o f Philippines (GoP) had developed (a) Legal and Regulatory Framework, (b) Institutional and Management Capacity, (c) Procurement Operations and Market Practices, and had strengthened (d) the Integrity and Transparency o f the Public Procurement System. The GoP and its development partners agreed to pursue coordinated efforts in the following key areas relevant to implementation and enforcement o f procurement reform: (a) further development o f phases 2-5 of the PhilGEPS (e-GP system) and steps ensure that the quality o f e-GP systems makes their use acceptable for MDB-funded projects, (b) implementation o f a strategic communication plan, and (c) professionalization o f the procurement function.
Impact of Reform Initiatives 0 Increased foreign investment: Created opportunities for foreign bidders to participate when (a) items
are not locally available, (b) there are parity or reciprocity rights between countries, as a consequence of international or executive agreements, or (c) a local branch office i s registered in the Philippines. To date, a number o f Chinese, Korean, Japanese, U.S., and other foreign companies have been issued special licenses or permits to conduct business in the country and participate in both government- funded and foreign-assisted projects.
0 Economic and efficient contracting: With issuance of harmonized Philippine Bidding Documents and Generic Procurement Manuals and training being conducted to improve capacity of procurement practitioners nationwide, a number of savings were realized in the past year.
0 Transparency: The Procurement Reform Law mandated (a) the bidding process be observed by civil society and professional organizations, (b) development and use of PhilGEPS as the single portal for procurement information, and (c) use o f standard bidding documents and procurement manuals.
34. Institutional Development Fund (IDF). Each year the Bank makes approximately $25 mi l l ion in grant financing available through the IDF, which finances quick, action-oriented, upstream capacity-building activities that are closely linked to the country assistance strategy (CAS). Allocation o f IDF grants i s competitively awarded on a Regional basis and focuses on financing in several key areas: legal; monitoring and evaluation; public financial management; and procurement. In FY07, four new IDF grants were awarded for procurement activities, for a total amount o f $1.6 mil l ion. (IDF grants are limited in size to no more than $500,000.) In addition to new grants, there are several ongoing activities financed by IDF. Box 4 provides examples o f h o w the IDF grants are contributing to procurement reform initiatives.
for a piloting program. Use of Country Systems in Bank-Supported Operations: Proposed Piloting Program (R2008-0036l3) was sent to the Audit Committee on March 3,2008.
18
Box 4. Institutional Development Fund (IDF) Grants for Procurement Brazil: A new IDF i s being used in the Minas Gerais state in Brazil to continue improvements to the procurement systems and enhance governance and transparency.
China: A new IDF i s being used in China to support the preparation and dissemination o f implementation regulations issued under the China Tendering and Bidding Laws. The project will review and consolidate existing regulations, which currently are issued under the two laws. An existing IDF grant i s being used to promote implementation of e-GP in China and i s financing the formulation of a strategy, including standards, system requirements, and training.
Morocco: An existing IDF grant on modernization o f public procurement in Morocco i s financing an e- procurement portal that provides access to complete information on procurement, including regulations, training programs, documents, and opportunities for contracts. Bidding documents can be downloaded for free. Access and use o f the portal i s available to al l levels o f government. Bidders can receive bid requests by email according to their geographical, sectoral, or ministerial interests.
Vietnam: An existing IDF grant i s being used to support an assessment o f the public procurement framework using the OECD/DAC benchmarking tool. The findings were discussed in January 2007 at a stakeholders workshop. Five donors jointly worked with the government to discuss the specific improvements required in the legal framework to bring it in line with internationally agreed practices. The grant wi l l help finance some of the initial activities once the government has set i ts prioritized strategy.
3 5 . E-Procurement. Electronic government procurement (e-GP) continued to play an instrumental role in the Bank’s country work agenda. Given i ts high potential for increased transparency and compliance, e-GP has been promoted as part o f the Bank’s procurement reform and GAC agenda, to strengthen country procurement systems. Under the leadership o f the Procurement Anchor, a core team o f committed e-GP champions from the Regions and the Global Information and Communication Technologies department (GICT) has contributed to building e-GP capacity in client countries and within the Bank. Examples o f knowledge-sharing activities and learning events include the following:
0 the International Public Procurement Conference “Advancing Public Procurement: Practices, Innovation, and Knowledge Sharing,” held in Rome, Italy, September 2006
0 the United Nations Commission on International Trade Law (UNCITRAL) Congress “Modern Law for Global Commerce,” held in Vienna, Austria, July 2007
0 two public procurement courses at the International Labor Organization (ILO) International Training Centre, held in Turin, Italy, September 2006 and April 2007
the Seminar on “E-Government for Development: Strategies and Policies” held at the United States Telecommunications Training Institute in Washington, DC, June 2007.
0
36. E-GP Assistance. Procurement staff assisted numerous countries in developing systematic e-GP programs. IDF grants (e.g., Armenia, Azerbaijan, China) or other grants (e.g., Afghanistan, Bhutan, Maldives, Nepal) helped governments design strategic e-GP plans and start their implementation. The terms o f reference (TORS) followed the
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approach suggested by the MDB e-GP Working Group. Based on an initial e-GP readiness assessment, a strategic e-GP implementation plan i s suggested and discussed among all stakeholders before being approved and implemented. Other Bank projects that included e-GP components were undertaken in Bangladesh, India, and Vietnam.
37. Challenges. The biggest challenge and lesson learned in this context i s that the introduction o f e-GP must be seen as a program with critical foundations, among which technology i s the least problematic one. The most critical success factor i s government leadership and support. In Armenia, for example, the e-GP strategy was approved by the Parliament, providing the e-GP implementation program with high-level endorsement. The strategy i s being implemented through an e-GP component in the Public Sector Modernization Project, among other initiatives.
3 8. Assessment of E-GP. Under i t s fiduciary mandate, the Procurement Sector leads the review and assessment o f country e-GP systems for their use under Bank-funded operations. E-GP systems in Brazil, Chile, and Mexico were approved under a piloting program for use for specific procurement transactions (off-the-shelf goods under the national competitive bidding [NCB] threshold) under Bank operations and new assessments were started in EAP (Indonesia, Philippines) and SAR (India). As a result, specific action plans were established to modify the e-GP systems in line with the “E- Tendering Requirements for MDB-Financed Procurement.” Issues to be addressed in partner countries typically relate to security and procedures for e-tendering.
39. GAC at the Country Level. The GAC Implementation Plan states that “country strategies that effectively and systematically address GAC impediments to development and poverty reduction” are at the heart o f the implementation plan. Box 5 provides examples on how procurement i s supporting the GAC Implementation Plan at the country level.
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Box 5. GAC Initiatives at the Country Level ~~~~
Yemen GAC/ZNT Workshop. At the invitation o f the Yemeni Minister o f Planning and International Cooperation, the Yemen Country Office, in conjunction with INT, presented the Bank’s anticorruption strategy and introduced INT to the invited officials. This meeting led to a continued dialogue among the Government of Yemen, the Country Office, and INT on the importance of transparency and the need to ensure the proper use of funds. I t provided the Minister with the opportunity to present Yemen’s newly introduced multifaceted anticorruption agenda. The Bank i s continuing to support Yemen in advancing these important initiatives. Part o f this work, which has been coordinated with United States Agency for International Development (USAID), involves support to the development of a procurement management information system for tracking of, and providing access to information on, government tenders and contract awards through a publicly accessible web portal.
ZDF Grant in Maldives. An IDF grant provided to the Maldives has a component that focuses on public awareness o f corruption and the impact that strengthening the procurement function can have with regard to anticorruption efforts. The main elements o f the grant involve (i) conducting workshops to raise awareness on financial regulations (covering procurement), (ii) creating a website to provide online information on procurement, (iii) conducting an advertising campaign on the fight against corruption, and (iv) conducting a public perception survey on corruption.
Corruption Vulnerability Scan (CVS). The CVS i s an instrument developed in ECA that provides information on the Bank’s vulnerability when providing assistance to countries. The CVS builds on work already done, such as the CFAA, PEFA, CPAR, portfolio review, and Business Environment and Enterprise Performance Survey (BEEPS). The CVS process was used in Belarus and Ukraine and will be considered for use in a number o f other countries. The findings contribute to preparation o f the GAC sections o f the CAS and analysis o f the active projects in a portfolio to identify high-risk areas and propose mitigation measures.
Data Mining System in Brazil. The State o f Minas Gerais in Brazil implemented a data mining system, called “Tamandua.” Deployment to al l line secretariats and controllers wil l be financed by a multisector Sectorwide Approach (SWAP) operation. The application aims at consolidating all information on government procurement and contracts from various databases and preparing management reports and statistical analyses. The system can be used as an input to audits and to identify trends for potentially collusive practices.
IV. HARMONIZATION 40. There i s a strong relationship between country work and work done to further harmonization, which affects how things are done at the country level. The FY07 Annual Report separates coverage o f harmonization from country work to provide more clarity on the activities that contribute to harmonization. Most o f the following activities are led by OPCPR, but the involvement and contribution o f staff from across the Regions, including the participation o f RPMs, i s key to implementation.
41. Heads of Procurement. The Heads o f Procurement (HOP) from the MDBs meet as a group every nine months. There are various working groups under the HOP that also meet on a regular basis to prepare the documents that are agreed as part o f the HOP’S harmonization work program. The following i s a summary o f the activities o f the HOP during FY07.
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The Harmonization Working Group designated by the Heads o f Procurement o f the MDBs produced the final version o f the Master Procurement Document for Procurement o f Small Works. I t s implementation will begin in FY08, after the approval o f the document by the HOP. This document i s added to the l i s t o f harmonized procurement documents for Prequalification for Procurement o f Works, Procurement o f Goods, Procurement o f Plant Design, Supply & Installation, and an Request for Proposals (RFP) for Consultant Services. In l ine with the two areas declared as priorities by the HOP, a new working group was created to develop guidance material on procurement o f Public- Private Partnership (PPP) options, and it i s expected that the existing working group (WG) on information technology/information systems (IT/IS) procurement w i l l complete the harmonization o f bidding documents in 2008. In the area o f harmonization, the Bank’s Procurement Anchor chaired the MDB e-GP Working Group, which met in Rome, Italy, and Washington, DC in September 2006 and March 2007, respectively, to discuss the joint e-GP agenda and resulting deliverables, including an update o f the E-Tendering Requirements for MDB-Financed Procurement, an International e-GP Study and papers on “Corruption and Technology in Public Procurement” and “E- GP Specifications.”” (These documents have been posted on the OPCS/Procurement website.) In addition, the MDB e-GP Working Group started to develop a harmonized I T Standard Bidding Document to be made available to client countries as an interactive web-based application.
0
0
42. OECD-DAC Joint Venture. Following the Paris Declaration issued in March 2005, the OECD Working Party on Aid Effectiveness oversaw the creation o f several Joint Ventures that brought together donor and client country participants in technical areas covered under the Paris Declaration. The Joint Venture for Procurement was created specifically to support donor coordinated and harmonized work in the area o f procurement reform at the country level. Several key activities have taken place under the JV for Procurement.
43. In December 2006, the Africa Region’s Procurement Management team, the United Nations Development Program, and the JV for Procurement jointly sponsored a regional procurement workshop in Uganda that brought together participants from more than 40 countries to share experiences and foster capacity development. During this workshop, the JV for Procurement announced a new pilot program, involving 22 countries,lg to test the use o f the JV benchmarking tool and i t s impact on facilitating the development and implementation o f a well-formed strategy for addressing identified weaknesses in a procurement system. The results from the 22 pilot
Joint Venture Pilots.
~~
Bilateral Development Bank International Survey of e-Procurement Systems, MBD e-GP Working Group, May 2007; Corruption and Technology in Public Procurement, MBD e-GP Working Group, April 2007; and E-GP Functional Specifications, MBD e-GP Working Group, April 2007 The JV for Procurement pilot countries include Afghanistan, Bangladesh, Botswana, Burkina Faso, Cameroon, Cape Verde, Indonesia, Kenya, Lao PDR, Malawi, Mongolia, Niger, Paraguay, Philippines, Rwanda, Sierra Leone, Sri Lanka, Tanzania, Togo, Uganda, Vietnam, and Zambia.
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countries (as well as other countries that may choose to apply the benchmarking tool) will form the basis for reporting on the procurement targets included in the Paris Declaration.20 To become a JV pilot country, each country expressed i t s interest and identified a group o f donors at the country level willing to support the country as a pilot. The World Bank, through i t s country offices, i s supporting all of the pilots in conducting the benchmarking exercises, in validating the results o f the benchmarking exercise and in developing a procurement capacity development strategy. This pilot program i s intended to continue into 20 10.
44. Procurement Workshops. Following the announcement o f the JV for Procurement pilots, a series o f “kick-off’ workshops sponsored by the JV, the Bank, and other donors were held to provide each pilot country with training on applying the benchmarking tool, validating results, and developing a strategy to address weaknesses in the system. Workshops were held in Nairobi, Kenya and Yaounde, Cameroon for African pilot countries, and in Jakarta, Indonesia for South Asian and East Asian pilot countries. In addition, a workshop in Lima, Peru in May 2007 jointly sponsored by the JV, the World Bank, and the Inter-American Development Bank attracted participants from 15 countries from Latin America and the Caribbean. Although Paraguay i s the only JV pilot country in LCR, the workshop was used an opportunity for countries to share experiences and to expand the use o f the benchmarking tool. Participants in the workshop uniformly expressed their interest in applying the OECD/DAC benchmarking as part o f designing and implementing more effective programs to improve national procurement systems.
45. JVfor Procurement Meeting. The second meeting o f the JV for Procurement, held in Copenhagen, Denmark in September 2007, provided the opportunity for participants from 24 partner countries to share experiences and raise key issues for further consideration by the JV. The World Bank provided a briefing to the Joint Venture on i t s proposal for piloting the use o f country procurement systems and how the Bank saw this proposal as complementing the work o f the JV and supporting harmonization o f donors around using acceptable country procurement systems. Key participants o f the JV for Procurement also met with industry representatives that participate as part o f OECD’s Business Industry Advisory Council (BIAC) to hear their comments regarding the procurement benchmarking tool. It was agreed that the dialogue with BIAC would continue and that the JV for Procurement would work with B IAC to broaden representation o f private sector organizations to participants from partner countries.
2o The Paris Declaration was the result o f the High-Level Forum on Aid Effectiveness held in Paris in February 2005. The Declaration contains two target indicators that involve procurement: indicator 2b tracks the improvement o f procurement systems and indicator 5b commits donors to increase the flow o f aid funds relying on country procurement systems as those systems demonstrate the achievement o f agreed standards.
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Box 6. SAR - Bangladesh: Harmonization and Donor Collaboration
Bangladesh i s one of the pilot countries for the OECD-DAC procurement initiative, and it i s starting its process for piloting the updated benchmarking for key implementing agencies, including use o f the procurement performance measurement system. Other key efforts in Bangladesh included (i) preparation by the Bank and DFID of a joint strategic note on procurement for the CAS, (ii) preparation o f a detailed Public Expenditure and Institutional Review (PEIR) assessment, led by PREM, including procurement, in collaboration with the Department for International Development (DFID) and the Asian Development Bank (ADB), (iii) Bank coordination with DFID on capacity building and voice accountability issues for the follow-on procurement reform project that i s starting implementation, (iv) ADB provision o f some $1 million TA to the Government for strengthening the project management and monitoring capabilities of the Implementation Monitoring and Evaluation Division (IMED) of the Government of Bangladesh (with the Bank complementing this through provisions o f infrastructure and logistic support to IMED in the follow- on reform project).
46. Environmentally and Socially Responsible Procurement (ESRP). In the field o f Environmentally and Socially Responsible Procurement (ESRP), an Information Note o n Asbestos was drafted and the former Sample Bidding Document for Procurement o f Pest Management Goods and Services was updated to include recent best practice derived from the Food and Agriculture Organization (FAO) and the World Health Organization (WHO) guidelines. Both documents will be issued in FY08 fol lowing internal consultations.
47. Core Labor Standards. In addition to the two core labor standards prohibiting forced or compulsory labor and harmful child labor included in the harmonized general conditions o f contract that form part o f the Standard Bidding Documents for Works, two other core labor standards were included as part o f the particular conditions. The newly included standards address workers organizations and nondiscrimination and equal opportunity and are identical to those applied by International Finance Corporation (IFC).
48. The Bank is continuing to participate with other donors in the use o f multidonor trust funds to provide services, especially in countries with dif f icult working environments. Often the Bank i s asked to manage the implementation o f the trust fund on behalf o f the participating donors. In other cases, the Bank will use the implementation capacity o f specialized organizations, including United Nations organizations and non-government organizations (NGOs). These multidonor trust funds often require individual negotiation o f terms and conditions, including those used for procurement and financial management. In FY06, a financial management umbrella agreement was put into place, but this agreement did not include procurement. Work on developing a procurement umbrella agreement to simplify the process o f entering into such agreements began in FY06 and i s s t i l l continuing as a few key issues remain unresolved, including use o f the Bank’s fraud and corruption provisions and the right to audit. These issues are particularly important to ensure that the Bank properly fulfills i t s fiduciary responsibilities entrusted under the agreements and specified in the Bank’s own policies.
Trust Fund Partnerships.
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49. Private Sector Associations. The Bank has maintained close working relationships with many private sector associations that represent the business community providing goods, works, and services under Bank-supported projects. These associations meet regularly with the World Bank; increasingly, such meetings involve other MDBs. In the past, the Bank has sought comments from industry groups on proposed changes to i ts guidelines and has often relied on industry good practice in developing standard bidding documents (SBDs) for use under Bank-financed projects. The work with the associations has contributed to the harmonization agenda by expanding discussions to key stakeholders involved in procurement and issues surrounding procurement, such as ethics, quality control, and environmentally responsible procurement. In FY07, the Bank and other MDBs met with the International Federation o f Consulting Engineers (FIDIC) and Confederation o f International Consulting Associations (CICA) on topics including integrity; use o f country systems in procurement; consulting services studies; and updatedchanges proposed to SBDs. In May 2007, the Bank and the Inter-American Development Bank jointly hosted the Biennial Meeting o f International Lending Agencies and Consulting Industry (BIMILACI), a gathering o f consulting industry representatives. Agenda items included discussions on policy for selection o f consultants; professional integrity; and red flags in procurement. These associations provide important insight on issues affecting procurement and have become increasingly important sources o f development, often working closely with the emerging private sector in our partner countries.
v. PROCUREMENT POLICY, TOOLS, AND INSTITUTIONAL INITIATIVES
50. A key aspect o f the work program for the Procurement Anchor continues to be the development o f new policy and the maintenance and update o f existing policy. This includes the maintenance o f the library o f standard and sample bidding documents to ensure they are fully consistent and incorporate new and updated policies. Policy work i s coordinated through the Policy Subcommittee o f the Sector Board. In addition, the Procurement Anchor i s responsible for the development, maintenance, and upgrading o f system tools and other institutional initiatives to provide integrated business solutions and support services to staff and clients. Through a team-based approach that includes Information Solutions Group (ISG) and Regional staff, the Procurement Anchor delivered products and services, such as the post procurement module in Operations Portal and the contract awards website for the business community, during FY07 that further integrated policy with business processes while strengthening key fiduciary controls. The institutional capacity to capture, monitor, and report against procurement data has increased by leveraging process integration with available technologies.
5 1. Rapid Response. Operational Policy (OP) and Bank Procedure (BP) 8.00, issued in March 2007, was the culmination o f the work o f a broad team that studied the Bank’s ability to respond to crises and emergencies and set out to define a more flexible and responsive set o f policies based on what was learned. Having to balance fiduciary requirements with the risk o f not achieving the desired objectives o f the emergency operation, greater weight i s given to considerations o f speed o f processing and timeliness
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o f the delivery o f critically needed goods, works, and services. This expedited approach i s allowed by controls and risk-mitigation measures from ex anti to ex post. Additionally, to facilitate decisionmaking, procurement specialists in the field may be delegated higher review authority within their task teams.
52. Regional Support. Regional experiences played a critical role in the development o f OP/BP 8.00. For example, MNA staff have considerable experience in emergencies as many o f their operations in West Bank/Gaza and in Lebanon have been in response to emergencies and/or in a post-conflict environment. With this background, the Region has simplified documents and procedures and prepared documentation in Arabic, to use shopping procedures in the most efficient way and more effectively meet the needs o f target beneficiaries. MNAPR, in coordination with OPCPR, has developed a Regional Rapid Response Handbook for Procurement that reflects the lessons learned and provides samples o f simplified documents and other good practices. In FY08, OPCPR will work with other rapid response partners to prepare a handbook that builds on the lessons and experiences from al l the Regions.
53. Rapid Response Committee. For projects that are designed under OP 8.00, the Regional Vice President (RVP), with the Country Director (CD), establish a Rapid Response Committee (RRC), in which a procurement specialist i s a key member. This approach provides more speed from the emergency occurrence to Board presentation, by allowing one-stop review chaired by the RVP. Regional procurement staff have been designated to be focal points for emergency projects, and al l sectors and Networks have established a callable roster. On the corporate level, quarterly meetings on fragile and conflict-affected countries are chaired by the Managing Director. The main objectives o f these meetings are to keep track o f implementation progress and record the lessons learned in implementation in this challenging area o f Bank involvement.
54. PPP/OBMOBD/%fanagement Contracts. A final version o f Sample Prequalification Documents, Sample Bidding Documents, and a Technical Note for Procurement o f Management Services were produced; these documents were made available for use on a trial basis in FY08. OPCPR collaborated in the development o f an operational/technical guidance note to staff titled “Implementing Output-Based Disbursement Mechanisms for Investment Operations,” issued by OPCS on April 2, 2007. Additionally, OPCPR staff provided training to client countries o n performance- or output-based procurement and on procurement o f services under performance-based road contracts, and contributed to the dissemination o f information regarding procurement under PPP contracts among professional and trade organizations with a stake in Bank-financed operational procurement in borrower countries.
5 5 . Procurement Tools and Initiatives. During the fiscal year, several quality control initiatives were implemented to assess (a) data quality and corrective action plans, (b) improved compliance with business processing standards, and (c) alignment o f system solutions with underlying policies and procedures. In addition, the fol lowing products and services were developed or improved in l ine with ongoing simplification efforts.
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Procurement Complaints System. OPCPR continued to enhance the Procurement Complaints System during the fiscal year as it addressed new requirements for developing a more comprehensive fiduciary tool for reporting and analyzing complaint-related information. The system’s management and reporting functionality was enhanced by developing (a) an alert system to direct users to seek RPM clearance before closing complaint cases, and (b) reports for analyzing late payments and distribution o f complaints across prior-review and post-review categories. Report templates were improved by adding additional data attributes to optimize data analysis and improve overall case management. An HTML text editing function was also built to facilitate capture and logging o f complaint documents and improve document retention and extraction procedures. The system has been undergoing continual improvements; the Board has approved a series o f new features that will be developed during the next fiscal year, including (a) updating pick l i s ts with new attributes (e.g., “nature o f complaint” and “resolution o f complaint”), (b) an alert feature for pending complaint cases, and (c) automated case management reports for RPMs.
0 Dynamic risk model application. OPCPR continued development o f the dynamic risk model, a web-based system that measures risk levels in projects based on a combination o f factors. In cooperation with SAR and drawing o n methods that are being employed in several Regions, including E C A and SAR, the application i s nearing completion and should be launched by the last quarter o f FY08. A preliminary analysis for linking the application to other Bank systems has been completed. The risk model will be linked with the Project Portal, Procurement Complaints System, Department o f Institutional Integrity cases, Country Procurement Assessment Reports, and the web-based Post Review Module. These associations will allow for a more comprehensive integration o f key measures o f procurement risk assessments for new projects, incorporating better mitigation procedures in project design. The system has also been incorporated into the process for the procurement country systems piloting program to help assess fiduciary risks in pi lot projects. Post-review module. Business analysis and system requirements for the web- based Post Review Module were completed this fiscal year. OPCPR led a focus group composed o f lead procurement specialists and procurement staff across al l Regions to develop the business requirements. The application addresses the need for a central repository for post review reports by automating the capture and electronic prof i l ing (IRIS) o f PPR documents; it also improves the risk assessment and reporting function o f post reviews by adding a rating feature that assigns an overall risk score based on a set o f three risk indicators. Procurement staff can also enter recommendations for each indicator and produce recommendation reports that become part o f the overall PPR exercise. During Phase I o f implementation (FYOS), the PPR system will be piloted in al l Regions; Phase I1 will begin thereafter and link the system to other Bank applications, including the dynamic r isk model, the complaints system, and the Implementation Status Report in the Operations Portal. As
0
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with the dynamic risk model, the PPR system will further strengthen risk mitigation measures in project design, improve systems integration, and streamline procedures through the use o f technology. Contract Awards Publication Facility. During the last quarter o f this fiscal year, OPCPR deployed in Client Connection the Contract Awards Publication Facility. This module provides clients secure online tools for publishing contract awards automatically to United Nations Development Business (UNDB) and Development Gateway (dg-Market). Having completed a roll- out pilot phase during FY07, OPCPR plans to market the application to borrowers during FY08.
0 Private Sector Liaison Officers (PSLO) website. OPCPR continued to provide a variety o f country-specific procurement reports to the PSLO through a dedicated websitea2’ Launched in Europe in 1999, the PSLO i s a network o f business intermediary organizations (chambers o f commerce and industry, business and trade associations, investment promotion agencies) working to foster trade and investment among countries, with the support o f the Bank’s products and services.22 During FY07, the Procurement Anchor participated in the PSLO retreat in Washington, DC, where it presented the PSLO website and delivered a one-day procurement contract and trend analysis workshop. Simplification of Form-384, In an effort to streamline internal processes, OPCPR simplified Form-3 84 by removing 60 percent o f previously mandatory fields. This was a result o f a year-long study to determine which data fields were no longer required for processing contract award information in l ine with the changes in Loan Department’s (LOA) disbursement After lengthy consultations with the Regions, system “super-users,” and ISG developers, OPCPR launched the new Form-384 module. Preliminary analyses have shown a sharp decrease in Form-384 delays and the near elimination o f procedural errors that have plagued the Form-3 84 process since it was created in Systems, Applications & Products system (SAP). OPCPR i s also working on further simplification o f the form as well as an online version for the Operations Portal, planned for release during FY08.
0 Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) functionality in SAP. In reference to sanction control for operational procurement, in FY06 OPCS was asked by the Controllers, Strategy, and Resource Management Vice Presidency (CSRVP) to develop a screening system for task teams to cross-reference check the supplier l i s t in the SAP 384 module against UN Security Council Resolution 1267 and other available AML l is ts before issuing their no-objections to contract awards.
0
~
The site i s also available to the public in the Bank’s Extranet. The network facilitates local companies’ access to Bank business opportunities, services, and knowledge, and acts as the voice o f their national private sector in advising the Bank o n h o w to better engage companies on development issues. Because the Form-384 process and the first disbursement against pr ior review contracts are interlinked, careful consideration was given to the relaxation o f the mandatory fields in the Form-384. Some aspects o f the simplif ication effort were made possible because o f the decision by the Loan Department to discontinue contract accounting as o f FY08.
22
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After extensive discussions with all stakeholders and consultations with the Regions, the system was fully developed during FY07 as a back-door process in the Form-384 module in SAP. A due diligence standard and procedural framework for processing AML cases were also developed during this time to ensure proper alignment with AML case management requirements, transactional reporting needs, and quality control procedures. The system will be deployed Bankwide during the second quarter o f FY08. Other AML initiatives include developing an online version for use in the Operations Portal and the online Form-384 system. Integration of reporting and monitoring data in Business Warehouse. Business Warehouse (BW) i s an SAP data reporting facility that allows the Bank to extract data from i t s systems and collate a series o f reports at various levels (Region, country, sector, project, and contract) and across various functions (Financial Management, Procurement, Operations, Resource Management, Loans). During FY07, OPCPR completed a Bankwide review o f i t s current procurement systems and those in development to identify possibilities for integrating existing applications with the new generation o f BW report for procurement. During FY08, OPCPR will be working with the BW team in ISG to develop a series o f new data collection systems that will stream information from the entire suite o f procurement systems into one electronic repository. Staff wil l be able to compile procurement reports through a user-friendly query-builder interface that fully automates the data collection, monitoring, and reporting functions at various levels o f the organization; i t will also provide for real-time data reporting at any point in time rather than relying on the typical quarterly reporting practice.
VI. STAFFING AND CAPACITY DEVELOPMENT
56. Staffing and capacity development remain core issues in the Procurement Sector. In FY07, the overall level o f staffing increased but issues remain with regard to experience, rotation and capacity development.
57. Staffing Resources. Staffing resources for the Procurement Sector increased in FY07 by 12 additional staff to a total o f 207 staff. Table 9 displays the current distribution o f procurement staff by Region.
24 ISG will launch a Business Intelligence focus group to work with stakeholders on the new reporting interface that wi l l be developed during FY08. The B W study done by OPCPR was in preparation for this initiative.
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Table 9. FY07 Procurement Staffing by RegioniUnit AFR I EAP I ECA I LCR I M N A I SAR I OPC I Bankwide
51 I 40 I 35 I 30 I 15 I 26 I 10 I 207
58 Although the overall number o f staff has increased, the increases have not kept pace with the increased workload demands on staff in the sector. The Procurement Sector Board held a retreat late in FY07 to identify key issues and discuss some possible solutions. The following i s a summary o f key issues identified:
Staffing Concerns.
good pipeline o f junior staff but insufficiently prepared as yet to replace senior procurement staff leaving the Bank need for rotation o f staff to comply with Bankwide guidelines on length o f stay in units and country offices, considered to be o f particular importance for fiduciary staff difficulties in attracting staff from outside o f sector and from outside the Bank difficulties in finding qualified candidates, especially for “G” and “H’ level positions, in terms o f years o f experience, knowledge o f public procurement, and required education levels new demands requiring broader set o f sk i l ls for staff.
59 Rotational Assignments. As a result o f the retreat, current staff were assessed by their managers to determine capacity development needs, identify staff who had been in their positions for five to seven years or longer, and identify staff who would benefit from a rotational assignment. Rotational assignments provide staff with the opportunity to gain experience in more than one Region o f the Bank, which has been a requirement recently added for promotion to the “H” level. Staff at the same grade level were then offered the opportunity to volunteer to rotate or “swap” places with staff f rom other Regions. Initially, this program was only marginally successful, although further implementation i s s t i l l being actively pursued. One lessons learned from this initial staff rotation exercise was the need for staff to expand language capacity, as this can be very important to undertaking procurement responsibilities in certain Regions. The rotation exercise was complicated by the high level o f decentralization, which provides limited opportunities at headquarters and often means a major move (country to country) for any participating staff. The Bank’s current Human Resources (HR) policies differ for international and local hire and this also complicates movement at some grade levels. (Table 10 shows the percentage o f staff that are local versus international appointments.) The primary movement o f staff among Regions continues to be on the basis o f competitive selection generally involving promotion. Grade level standards for procurement staff are also being reexamined by the Sector Board to determine what might be changed to help resolve recruitment o f new staff into the sector and improve promotion opportunities for staff.
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Table 10. FY07 Procurement Staffing by Grade and Station Grade I COAppt I H Q A p p t I Total I CO YO
GD I 13 I 12 I 25 I 52
GG GH 19 GI I 0
Total I I08 I 100 I 208 I 52
60. Procurement Specialist Staff Development. Development o f procurement staff capacity remains an activity largely undertaken on the job and takes place through the oversight o f the Regional Procurement Management Teams. Training i s delivered when procurement staff are gathered for activities such as Regional retreats or when the RPM or hidher staff travel to the country offices. In addition, most o f the Regions are using a form o f “hub” management that places a number o f country offices under the responsibility o f an internationally hired senior or lead procurement staff. These hub coordinators are responsible for overseeing the quality and performance o f the staff in their hub and they use their frequent visits to country offices to provide guidance and procurement training to staff. In several Regions where the time difference allows, videoconferences are arranged on a regular basis to provide staff an opportunity to share experiences with their colleagues, to become informed on key messages from Management, and to discuss issues o f common interest. To enhance staff capacity development, most Regions augment their training programs by providing local hire country office staff with an opportunity to work at Bank headquarters for developmental assignments o f varying lengths. During such assignments, staff also have the opportunity to attend training courses that are generally not available in the country offices.
61. A New Knowledge and Learning (K&L) Strategy. In FY07, the Procurement Sector Board agreed that a more defined program o f learning opportunities should be designed specially for procurement specialist staff. Work on a K&L strategy was initiated to identify specific sk i l ls needed by staff at different levels to perform their various responsibilities. The strategy wi l l prioritize procurement staff development needs and identify where specialized training wi l l be developed. Work on this strategy i s being led by OPCPR and should be finalized in FY08. The K&L strategy wi l l be closely coordinated with the F M Sector as part o f the objective o f building on synergies between the work o f the two sectors. This new strategy wi l l look closely at the joint initiatives that are emerging from the joint procurement and financial management sectors strategy under development, and at areas where a common approach to staff capacity development will benefit both sectors.
62. Procurement Training for Nonspecialist StafJ OPCPR continues to manage the delivery o f a series o f procurement training courses designed primarily to provide nonspecialist Bank staff with the knowledge and sk i l ls they need to carry out their operational responsibilities. All o f the courses managed by OPCPR were reviewed and updated in FY07 to include changes driven by updates to policy. In FY07, more than 40 deliveries were provided, reaching more than 1,000 staff across the Bank. The courses
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are targeted for different needs o f staff, offering basic and advance procurement courses and a range o f specialized training on procurement o f goods, IT, works, and selection o f consultants. In addition, training on application of tools such as the complaints database and the entry o f 384 data are offered for staff involved in using these databases, Materials for all training sponsored by OPCPR are made available to other organizations, including MDBs that have used the Bank’s materials to support the development o f their own internal procurement training programs.
63, Collaboration on Capacity Development. OPCPR works closely with internal and external partners to provide procurement capacity development and content to other ongoing training programs.
Internally, procurement modules are delivered as part o f the Introduction to Bank Operations courses offered monthly for new Bank staff. Training on Project Management has been jointly designed with investment lending colleagues and i s delivered on a regular basis. Asia Learning (the joint EAP/SAR K&L team) developed a new procurement course in collaboration with EAP, SAR, and OPCPR procurement staff, which wi l l be available in the learning program in FY08 calendar. Training on the use o f PEFA indicators and application o f the strengthened approach to public financial management i s jointly delivered with the FM sector and the PEFA secretariat, and i s offered internally to Bank staff and externally to donor partners and for partner country participants. Externally, the Procurement Sector continued a long-standing collaboration with the ILO International Training Center in Turin, Italy and with many regionally based training centers in Africa, East Asia, and South Asia. These procurement training programs offer a variety o f courses focused on training partner country participants in handling procurement under IFI-financed projects. Bank staff support this training and work with the institutes, to maintain the quality o f materials. The Procurement Sector participates in business outreach programs, providing information to private sector organizations on ways to become involved as suppliers, contractors, and consultants under projects supported by the Bank. In FY07, a number o f one-day events were delivered jointly with the United States Commerce Department for U.S. private sector companies. Outreach seminars were regularly scheduled globally and staff from the Bank supported these seminars on an availability basis.
0
0
0
0
0
VII. NEW INITIATIVES/FUTURE CHALLENGES
64. Several new Procurement Sector initiatives were introduced in FY06 and discussed in the FY06 Annual Report; reporting on these has been integrated into the FY07 Annual Report. They include introduction o f the new policy on rapid response, the development o f new risk management and compliance monitoring tools, implementation
32
o f the G A C agenda in projects and in country work, the increasing f lexibi l i ty in economic and sector work, the focus on harmonization and partnerships, and integration and greater reliance on common tools such as the OECD/DAC benchmarking tool and the PEFA framework o f indicators and strengthened approach. All o f these initiatives are well under way and have moved toward being mainstreamed in Procurement Sector approaches as the sector undertakes it responsibilities.
65. OPCS Reorganization. Under the OPCS reorganization introduced in early FY07, a new Operations Services Director position was created and the Procurement and FM sectors (along with investment lending) were organizationally placed under this Director. The Procurement Sector remains under the leadership o f a Chief Procurement Policy Officer, who i s also the head o f the Procurement Sector Board. (A similar organization was established for FM.)
66. Joint Strategy. The new organizational structure reinforced the need for a jo int strategy to help guide the sectors’ responses to the changing environment in which the Bank works. In particular, the PFUFM strategy aims to identify new and better ways for the PR and FM sectors to work closely with internal partners such as P R E M and INT, external partners, and with each other. The joint strategy will also enable each sector to identify and address i t s own unique challenges. Thinking on key components that will influence the work o f the Procurement Sector in the future has been undertaken, and the following paragraphs provide a summary o f some o f the new initiatives and challenges that have been identified.
67. Use of Country Procurement Systems (UCS). FY07 closed with the direction received from the Board, in response to the UCS Status Report presented in June 2007, to prepare a detailed methodology for procurement and conduct extensive consultations with a wide range o f stakeholders on the methodology. The four key objectives o f the UCS initiative as presented to the Board are to (a) scale up development impact; (b) increase country ownership; (c) facilitate harmonization; and (iv) simplify procedures and reduce costs. Much o f FY08 has been spent on defining a well-formed methodology to pi lot an expanded use o f country procurement systems, conducting consultations, and then revising the methodology to address concerns o f the many stakeholders interested in procurement.
68. Impact of Trade Regimes. Across the globe, there many trade agreements that affect procurement; some function on an international basis, such as the Government Procurement Agreement (GPA) under the purview o f the World Trade Organization, but many more operate under regional arrangements, the largest o f which being the European Union (EU). These trade agreements address procurement to varying degrees, but they have an impact on pricing through tariffs and on competition through restrictions based on membership and on what is accepted as good practice within the definitions o f the trade agreements. The Procurement Sector intends to look more closely at the practices and procedures that are defined under these trade agreements and analyze their impact on how we now do business, with the objective o f identifying good practices that might be adopted in or adapted to the Bank’s own procurement policies. This will facilitate
33
procurement work within projects and wi l l help the Bank harmonize i t s work on building capacity at the country level with other donors. Some o f this work has already begun, especially in ECA, where many o f the countries s t i l l borrowing from the Bank are also participants in agreements with the EU that require alignment o f their procurement systems with the Procurement Directives o f the European Commission.
69. The Procurement Sector has long maintained an open dialogue with various representatives o f the private sector, including many associations that represent consultants who do business with the Bank. Two studies on consulting services completed in FY07 documented issues with the Bank’s current policies, which are seen as complex, slow to implement, and often leading to a lower quality than that required for the assignment. In addition, preparation o f the UCS methodology underlined the differences between Bank policies and those used in most other countries worldwide. The voice from our counterparts in the private sector coupled with the need to align our selection o f consultant policies with emerging good practice has led to a decision to undertake a major study o f procurement practices. This study was initiated in FY08 and involves interviews with government practitioners and private sector representatives from a wide range o f countries. Once the study has been completed, a process o f further consultations wi l l take place to determine the impact o f i t s findings on Bank policies.
Consulting Services.
70. UN Agencies and Trust Fund Agreements. The World Bank and the United Nations operate under fundamentally different business models for supporting development activities. The Bank’s Procurement and Selection o f Consultants Guidelines recognize that the UN operates differently, and that in special circumstances, services or goods might be best provided by relevant UN agencies. In the process o f contracting with UN agencies, it has been necessary to deal with policy and process differences by: (a) requesting waivers; (b) signing contracts that fail to incorporate key provisions; or (c) conducting time-consuming negotiations that can stall implementation. As none o f these are seen as desirable procedures, the Bank and relevant UN agencies have embarked on discussions around three key initiatives:
When the UN i s an implementing agency: a Fiduciary Principles Accord (FPA) will be concluded providing an umbrella agreement between the Bank and the UN applicable to trust funds initiated under OP8.00, Rapid Response to Crisis and Emergencies.
0 When the UN i s a Contractor/Supplier/Consultant: a Memorandum o f Understanding will be negotiated with United Nations Children’s Fund (UNICEF) (a primary supplier) and presented to the Board by the end o f FY08. This will be expanded to cover other UN agencies that act as suppliers. When the UN i s retained by the Government (using IDA/IBRD or trust fund grants): a Consultant Service Agreement wi l l be prepared and finalized in early FY09.
0
0
71. The Bank participates in a working group that i s looking at types o f framework agreements for inclusion under the UNCITRAL Model Law for Procurement, which i s being updated and revised. Framework agreements are being used in most countries worldwide, and even within the Bank by General Services
Framework Agreements.
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Department’s (GSD) institutional procurement unit. There has already been some limited use o f framework contracts with regard to the use o f e-GP systems in Chile. Such systems often employ online catalogues that facilitate mini-competitions and the placement o f quick orders. As part o f OPCPR’s review o f its own procurement and selection o f consultants policies, the use of framework contracts will be studied for possible use under Bank-supported operations.
72. Update of OPBP 11.00. OP/BP 11 .OO cover the operational policies and Bank procedures for the handling o f procurement by Bank staff. These policies were last updated in 2004, but the updates were undertaken on a piecemeal basis. A thorough review o f these important policy documents will be undertaken and they will be updated from beginning to end. In particular, BP 11 .OO has an important decision matrix that defines the authority and responsibilities o f staff and Management and provides the procedures to be followed when differences of opinion occur at different levels in the decision process. New language wil l be added to cover the piloting program o f use o f country procurement systems and some o f the emerging approaches and lending products that require customization o f procurement input. The new OP/BP should be completed by the end o f FY08.
73. Private-Public Partnerships. Although the Bank has been involved in financing o f PPPs in the past, there i s l i t t le guidance for, or commonality in, the way these projects are handled, resulting in staff learning by doing. OPCPR i s preparing a concept note joint ly with colleagues from the infrastructure sector that will look at the various options for handling PPP operations; thereafter work will begin with other MDBs to agree o n common guidance for handling such operations. This work will start in FY08.
74. Staff Guidance Notes. As an alternative to developing extensive policy and procedural documents, the Procurement Sector will continue to facilitate the introduction o f new policy through the use o f guidance notes that provide staff with a range o f adaptable implementation practices that can be tailored to country- and project-specific situations. Guidance notes currently under development include guidance for implementing OP 8.00 on rapid response to emergency; updated guidance on sectonvide approaches (SWAPS); and guidance to staff o n implementation o f G A C in projects, in particular with regard to preparation o f the procurement annex and G A C annex required for high-risk projects.
VIII. REGIONAL SUMMARIES
75. This section includes Regional summaries covering major thematic areas, including procurement reform, governance and anticorruption, harmonization and simplification, e-government procurement, independent procurement reviews and post- review activities, and capacity development. Some o f the Regional summaries cover a wide range o f countries while others focus on specific country programs. Some information has been removed from the Regional summaries and included in the main body o f the report to provide country- or Region-specific examples o f procurement
35
activities undertaken during the fiscal year as they relate to the specific topics covered by the Annual Report.
A. AFR 76. The objectives o f the partnership initiatives between the World Bank and the African Development Bank (AfDB) included (a) strengthening collaboration between the institutions, harmonizing actions, reducing transaction costs, and increasing the impact o f development initiatives, and (b) ensuring a common approach in the discharge o f fiduciary responsibilities, supporting the development o f the national procurement systems in our member countries (with added focus on regional organizations), and developing jo int procurement capacity.
Highlights and results. Highlights and results o f these initiatives include (i) the emergence o f focal points for better coordination, (ii) pilot ing o f jo int procurement capacity assessments o f implementing agencies in selected projects, (iii) decentralization o f procurement functions, (iv) establishment o f a common approach to building capacity in procurement, and (v) a jo int CPAR and other assessment tools. Lessons learned. Lessons learned included (i) the importance o f having a structured approach endorsed at the highest level, and (ii) the importance o f “keeping the flame alive” through continual interaction and coordination.
e
77. Nigeria: Survey of Private Sector’s Perception of Public Sector Procurement Reforms. One o f the major deficiencies identified in the Nigeria Country Procurement Assessment Report was the l o w level o f private sector participation in public procurement, resulting in l o w competition and higher prices. Private sector practitioners had little confidence in public procurement processes in Nigeria. To address key elements o f the current P F M reform agenda-such as making public procurement transparent, efficient, open, and competitive-a comprehensive survey was used to assess the perceptions o f the private sector. The survey covered 442 private firms involved in the supply o f c iv i l works, goods, and services in a range o f sectors: agriculture, communication, education, health, power and steel, water resources, and works. The main findings o f the survey were:
60 percent o f respondents had not submitted recent expressions o f interest because they did not t rust the process most survey participants indicated present policies and procedures favored medium and large f i r m s f i r m s pointed to delays in payments o f more than six months 75 percent were satisfied with policy reform initiatives, procedures/guidelines, and access to information f i r m s remain hopeful about using the Internet to increase transparency and process efficiency government leadership i s necessary to ensure ownership and long-term sustainability
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0 government involvement in the conduct o f the survey led to a fear o f retaliation.
B. EAP 78. The procurement function i s heavily decentralized in EAP; 94 percent o f Procurement Staff/Procurement Accredited Staff (PSIPAS) are based in six different procurement hubs: Beijing, Hanoi, Jakarta, Manila, Phnom Penh, and Sydney. Each hub i s overseen by the Procurement Hub Leader.
79. Procurement Reform Initiatives. A series o f procurement reform initiatives took place across al l regional hubs. In the Hanoi hub, applications o f performance measuring tools based on the OECD/DAC methodology were piloted in selected agencies. In the Sydney hub, a CPAR for Papa New Guinea has been completed; the Bank plans to assist the government in implementing recommendations through new investment lending programs that focus on governance issues. In the Jakarta hub, the Bank collaborated with the Australian Agency for International Development (AusAid) and ADB to help assess the government’s public procurement system, piloting the use o f the OECD/DAC Baseline Indicator (BLI) Benchmarking Methodology. In the Phnom Penh hub, procurement reform activities were focused on Cambodia, Lao-PDR, and Thailand and included work on harmonization o f SBDs, review o f country-level legislation, and the piloting o f performance measurement tools in selected government agencies. In the Beijing hub, an IDF grant i s being used to support a project for the preparation and dissemination o f implementation regulations under China’s Tendering and Bidding Laws.
80. Governance and Anticorruption Agenda. The Hanoi hub strengthened measures for reducing fiduciary risks to the Bank’s portfolio through increased attention to procurement-related governance issues; the measures were incorporated into project design and supervision. In the Jakarta hub, the Bank continued to include governance and anticorruption measures in project design. In the Phnom Penh hub, G A C initiatives included Good Governance Frameworks mandated for al l Bank-financed projects in Cambodia (which include the establishment by the Government o f an Anticorruption Working Group for al l Bank-financed projects). In Lao-PDR, measures are being developed for strengthening transparency and accountability across the project portfolio. In the Beijing hub, G A C initiatives were focused on reviewing the functionality o f Mongolia’s public procurement system.
81. In the Hanoi hub, the team provided leading support to the efforts for harmonizing donor-government procurement procedures and systems, with notable success. In the Sydney hub, the Bank i s actively involved with bilateral and multilateral donors in the preparation o f CPARs and operational procurement reviews (OPRs). The team in the Jakarta hub i s working closely with ADB, AusAID, and Japan Bank for International Cooperation (JBIC) in the preparation o f CPARs and a benchmarking assessment i s being developed together with ADB and AUSAID. In addition, together with AusAID, the team i s working with the government to design the procurement arrangements and anticorruption measures in the transport sector. In the Manila hub, the harmonized Generic Procurement Manual (GPM), which defines the
Harmonization.
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organizational set up, administrative processes, and roles and accountabilities within the procuring entity, was issued by the Government Public Procurement Board, with support from the Bank, ADB, and JBIC. In the Phnom Penh hub, a harmonized Standard Procurement Manual for externally financed projects in Cambodia i s being applied to N C B procurement under Bank-financed projects. In Lao-PDR, opportunity for common application o f agreed SBDs i s being pursued with other development partners. Through the Beijing hub, the Bank and ADB procurement teams discussed the common procurement and regulatory issues affecting local project implementation in China and Mongolia. The objective o f this initiative i s to establish a harmonized position between the two institutions on how best to address these issues.
82. Capacity-Building Efforts. In the Hanoi hub, the Bank provided training to borrower and Bank staff and conducted 20 workshops and clinics for 678 participants. In addition, the Bank supported the government in conducting dissemination workshops on the new Procurement Legislation and conducted training for the Inspectorates on dealing with fraud and corruption in procurement. Through the procurement accreditation scheme started in early 2007, thousands o f procurement personnel were trained on procurement regulations and ski l ls by public and private training institutions.
83. implemented:
Other New Initiatives. In the Manila hub, the following new initiatives were
a
a
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a
0
84.
Strengthening the internal audit units o f implementing agencies for procurement monitoring and enforcement. This initiative will be funded by an IDF grant and wil l produce a generic internal audit manual, including procurement audit. Institutionalizing the procurement professionalization program. The implementation will be funded by an IDF grant. Development o f PhilGEPS Phases 2 to 5, featuring virtual store, e-payment, charges and fees, and e-bidding. Strengthening monitoring and data collection through the adoption o f OECD’s compliance and performance indicators. Implementation o f the Strategic Communication Action Plan.
C. ECA In FY07, E C A delivered seven procurement-related P F M core country
diagnostics, for Albania, Bosnia and Herzegovina, Georgia, Kyrgyz Republic, Moldova, Russia, and Ukraine. These analytic works, several o f which were conducted jo int ly by Procurement and Financial Management units, were strategically linked with other Bank operations, including public sector modernization projects, IDFs, and public expenditure reviews (PERs). The studies measured and monitored the performance o f borrowers’ P F M systems, applying instruments developed by the Public Financial Management Performance Measurement Framework (PEFA) and the OECD-DAC/World Bank Joint Venture on Procurement. CPARdCFAAs promoted ownership o f reforms by client countries and other stakeholders, by conducting an in-depth look into areas o f the clients’ particular concern, such as the inefficiency o f public sector, blurred lines o f responsibility and accountability, and traditional transaction-based approach to controls; and by
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conducting consultations with a diverse group of stakeholders, such as the private sector, leading NGOs, and academia.
85. Governance and Anticorruption. The Region took early action in hiring and placement o f procurement staff to address and implement the GAC agenda. Europe and Central Asia’s Operations Policy and Services Unit (ECSPS) i s developing a procurement action plan by articulating concrete activities for the implementation o f the GAC agenda. Innovative products such as the Corruption Vulnerability Scan (CVS) were applied in Belarus and Ukraine. (CVS i s an instrument developed in ECA that provides better understanding o f Bank’s vulnerability in providing assistance to country borrowers; and identifies mitigating actions to reduce risks, while improving results on the ground.) The findings o f the CVS directly contributed to (a) preparation o f governance and anticorruption sections o f the Country Assistance Strategy, and (b) analysis o f the active project portfolio to identify high-risk areas and propose mitigation measures.
86. Harmonization. External harmonization efforts included (a) conducting the Third Central Asia Procurement Forum jointly with other donors, fostering improvements and cross-country dialogue for public procurement reform, (b) completing all planned Procurement Outreach Programs for borrowers and business communities (2 1 events reaching over 1,000 participants), and (c) continuing collaboration and harmonization efforts with the European Commission (EC).
87 E-Government Procurement. The Bank has been actively involved in providing technical assistant to ECA countries interested in development o f e-GP. E-GP development components were included in new projects, providing, for example, financial and technical support to the e-GP development in Armenia (Public Sector Modernization Project) and Azerbaijan development policy lending/loan (DPL).
0 Armenia. E-GP in Armenia i s in the preparation phase. During FY07, two key actions were completed: the design and approval o f a strategic e-GP plan, and the adoption o f e-commerce legislation that i s adequate for the current level o f e-GP. It has been agreed that in 2008, under the Public State Modernization Project, the borrower wi l l carry out other key activities relating to the development o f e-GP systems.
0 Azerbaijan. In Azerbaijan, the e -GP program i s also in an early stage and i s being applied in a limited way, to the identification o f needs and a preparation phase, with calls for bids and quotes for goods, works, and services being made available through a website. However, as in the case o f Armenia, the borrower and the Bank have agreed on a comprehensive action plan that will cover key activities for the implementation o f e-GP for 2008.
88. during FY07.
IPRs and PPRs. The Region conducted a number o f IPRs and Post Reviews
0 IPRs. Two IPRs o f Croatia and Georgia portfolios were completed. About 140 contracts under 17 projects were covered (five projects in Croatia and 12 in Georgia). IPRs were conducted by a consulting firm selected on a competitive
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basis. IPR findings were analyzed to identify portfolio generic issues, including corruption risks. This was then used for review o f pipeline projects and to advise task teams on implementation arrangements and risk-mitigation measures.
0 IPR Lessons. The TORS for IPRs planned for FY08 were revised on the basis o f lessons learned from the Croatia and Georgia reviews, to cover in greater detail contracts’ administration stage, provide more focus on review and assessment o f the quality o f procurement management, transparency and efficiency with which procurement transactions are handled, and ensure selection o f contracts based on a “red flag” principle, rather than a random choice. Post Reviews. Post reviews on al l active projects under supervision are scheduled and monitored at the RPM office level. The RPM office has a depository o f post- review reports. In FY07, post reviews were conducted by PAS, normally as part o f supervision missions. Post-review reports were discussed with the task leaders for respective operations and then shared with the implementing agencies. Results o f the post reviews were used for on-the-job training o f counterparts’ procurement staff.
0
D. LCR 89. In addition to the joint analytic work discussed below, the Regional team cooperated with the Inter-American Development Bank and other development partners on a number o f important activities, including:
0 jo int initiatives with the governments o f Colombia and Peru to develop country SBDs based on the Bank’s standard documents a Regional OECD workshop in Lima cosponsored with the Government o f Peru was attended by more than 60 procurement policymakers and experts from 24 countries in the Region and OECD
0 country workshops on the OECD indicators in Bolivia, Chile, Guyana, Mexico, and Paraguay.
0
90. Innovation: Efficiency of Expenditure. The Regional procurement team implemented innovative approaches to measure the effectiveness o f client public procurement systems. This work included a high-level assessment o f the purchasing and contracting strategy in government procurement and a cost/benefit analysis o f streamlining it to make it more efficient. This assessment identifies opportunities for achieving better efficiencies and economies o f scale, the current regulatory framework, and potential implementation vehicles/methodologies, such as e-procurement and/or framework contracts. In FY07, these studies were carried out in Brazil, Costa Rica, and Honduras.
9 1. Electronic Government Procurement. The Region continues to work actively with most countries on e-GP. All o f the Bank’s Latin American clients have implemented e-procurement, ranging from systems that simply publish procurement information to systems that are fully transactional. The Region will continue to work joint ly with the IDB in assisting the countries to adopt international standards (for
40
example, the introduction of an international catalogue for goods and services) and adapt the system to their specific needs.
92. GAC Agenda. The Region implements the GAC agenda with a holistic and integrated approach through a comprehensive portfolio risk management strategy, assistance to countries in strengthening national systems within broader public sector strategies, and capacity building for both client staff and Bank teams. Two tools for better GAC implementation in projects were developed and implemented (see Box 1 above).
93. procurement reform activities in most countries in the region. include:
Procurement Reform. LCR procurement team has been actively involved in Country highlights
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94.
Colombia. Major improvements were introduced in the procurement law, and work started with the Bank’s assistance to prepare sound implementing regulations. Bolivia. An in-depth institutional review o f the Productive and Social Investment Fund, an agency managing decentralized public investments, including most Bank projects, led to the adoption by the institution o f a comprehensive plan to strengthen i t s fiduciary capacity and controls. Honduras. The Regional procurement team actively participated in the GAC implementation strategy (which included, for example, the review o f a decentralized social investment fund). Panama. Key contributions were made to the Country Partnership Strategy (CPS) and a single-tranche DPL, largely drawing from the joint CPAWCFAA (delivered during the previous fiscal year). Additional financing was applied to the procurement reform component o f a technical assistance (TA) loan that i s supporting several aspects o f reform. In addition, a new procurement law was developed with the Bank’s assistance and adopted by Congress. Peru. The procurement team participated jointly with the IDB in a fast-response mission requested by the President o f Peru to advise the Government on short- te rm strategy to implement an emergency investment program as well as medium- term reforms based on the recent CPAR action plan.
Analytic Work. In addition to the analytic work mentioned above, in FY07, the Region carried out the (a) Paraguay Integrated Fiduciary Assessment (CFANCPAR, including FM and PR), and (b) Haiti Public Expenditure Management and Financial Accountability Review (with F M and PR fully integrated as part o f the PER). It also followed-up extensively on the Organization o f Eastern Caribbean States OECS Integrated Fiduciary Review delivered in FY06.
95. achieved i ts 100 percent post-review target, and carried out 19 IPRs.
Post Reviews and Independent Procurement Reviews. In FY07, the Region
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E. MNA 96. A number o f activities were undertaken in the region to improve quality of procurement in the client countries. These activities included conducting procurement training for public officials from a number o f countries, as well as undertaking the following country-based activities.
97. I ran Independent Procurement Post Reviews. In view o f the extensive transactions under some Bank-financed projects, M N A P R introduced an outsourcing initiative to complete the PPR o f Iran. O f the nine projects in the portfolio, eight had contracts that were subject to post review.
98. E-GP in Morocco. In Morocco, thanks to a strong willingness o f the Government and appropriate support from an IDF grant on modernization o f public procurement, an effective e-procurement portal was implemented in early 2008.
99. Morocco: Assessment of the Performance in the Education Sector. In April 2007, further to the assessment o f the performance o f the procurement system in the education sector in Morocco, a workshop was held in Rabat to share the data generated by the review o f some 300 contracts around the country. The assessment was carried out per the OECD/DAC performance assessment indicators.
100. Emergency Situations in West Bank/Gaza and Lebanon. Nearly every operation in the last few years has been in response to emergencies and post-conflict conditions. Consequently, an effort has been made to simplify procurement procedures and documents; requests for quotations and simple contracts, for example, were developed in Arabic, in order to use Shopping procedures in the most efficient way. Similarly, simplified bidding documents for works and goods and letters o f invitation and simplified contracts for consulting services in Arabic were drafted for use under emergency conditions. On-the-job training by Arabic-speaking Bank procurement specialists from the country offices reinforced the introduction o f these simplified procedures and documents. In coordination with OPCPR, M N A P R has also developed a “Rapid Response Handbook for Procurement,” which will soon be distributed and shared with others outside the Region who have expressed an interest.
10 1. Reimbursable Technical Assistance (RTA) Program. Under a previous RTA contract in Algeria (in 2003/2004), the Bank’s services were retained to assist SociCtC Nationale pour la Recherche, la Production, l e Transport, la Transformation, et la Commercialisation des Hydrocarbures s.p.a. (SONATRACH) in developing procurement guidelines and procedures, including SBDs for the procurement o f Goods, Works, and Supply & Installation o f Plants and Equipment, in addition to prequalification o f contractors. Under a second RTA contract (in 2006/2007), methodology in preparation o f technical sections o f bidding documents was prepared by the Bank and SONATRACH staff and used to develop a f i rst set o f 20 bidding documents covering different types o f acquisitions. Two validation workshops have been carried out in Algeria to review and finalize those documents and train the different entities in SONATRACH on the specifics and the use o f each technical document. Among a
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number o f RTA for Kuwait and Saudi Arabia, the Bank’s services were retained to carry out CPARs as part o f i t s technical assistance to ambitious reform programs, which include modernizing the procurement system.
102. Other Main Capacity-Building Activities. Another series o f capacity-building activities were conducted during FY07 in Iraq and Jordan.
As part o f the ongoing “training-of-trainers” program, a workshop on “Procurement and Project Management” was held in Baghdad at the National Center for Consultancy and Management Development to strengthen the capacity o f 40 Iraqi officials from 15 institutions, including ministries, the Supreme Audit Board, the Central Bank, and NGOs. In coordination with the Iraqi Ministry o f Planning and Development Cooperation, the Iraqi Engineering Syndicate, and the Iraqi Contractors’ Union, a workshop was designed to strengthen the capacity o f Iraqi contractors, vendors, and consultants in procurement management. More than 40 local private sector individuals attended the workshop in addition to three representatives from JBIC. In coordination with the Jordanian Ministry o f Planning, a procurement workshop was sponsored by the World Bank to strengthen the capacity o f key Jordanian implementing institutions, NGOs, and private sector f i rms . The workshop was attended by 35 participants from several ministries and the United Nations Development Programme (UNDP).
0
F. SAR 103. In Afghanistan, considerable progress was made in FY07 in the implementation of key reform agenda items, such as the establishment o f the Procurement Policy Unit in the Ministry o f Finance in August 2006. In Bhutan, the Bank i s assisting the Royal Government o f Bhutan in improving i t s national systems in five areas: (a) the procurement legal framework, (b) procurement capacity building, (c) establishing a central public procurement policy division to manage procurement policy and performance in country, (d) procurement grievance mechanisms, and (e) e-GP.
104. Procurement Reform Activities: Maldives. Two components o f the IDF grant in the Maldives for “Strengthening o f the Procurement Regulatory Framework” showed progress: (a) the Ministry o f Justice work on Contract Dispute Resolution, and (b) efforts by the Anti-Corruption Board to raise public awareness. In Bangladesh, a unique reform project has been prepared as a stand-alone intervention to address the implementation and monitoring challenges o f the government’s Procurement Act and Rules.
1 05. Capacity Development. In Afghanistan, the government carried out a capacity- building exercise focused on training o f staff o f ministries and other relevant agencies involved in public procurement, and on improving the legal and regulatory framework. The Bank provided training to (a) 35 contractors representing the Afghan Builders Association on SBD for civil works in DadEnglish languages, on the initiative o f Afghan Chamber o f Commerce and Peace Dividend Trust (PDT) o f Afghanistan; and
43
(b) 48 staff members o f the Ministry o f Public Works and Ministry o f Rural Development on the use o f Bank’s SBD for civil works.
106. Training. In India, training initiatives included capacity-building efforts to professionalize urban management (with the support o f the World Bank Institute), and training events for health officials on Bank procurement procedures for health sector goods, organized by the Administrative Staff College o f India and the Bank team in Delhi. In Bangladesh, the government’s systematic approach to capacity development resulted in the training o f some 400 public procurement officials and the certification o f 30 national procurement trainers. In addition, the Bank provided procurement training to 300 public sector officials.
107. In Afghanistan, the Bank has been providing rolling support to Government’s development strategy through a series o f Programmatic Support for Institution Building (PSIB) operations that focus on enhancement o f fiduciary standards. In Bangladesh, a DPL and a PEIR study were completed in FY07. Establishing effective mechanisms to undertake procurement also plays a large role in the Bank’s dialogue with the Government o f India on support for public-private partnerships. During FY07, the procurement team was involved in a number o f pieces o f analytic work on public financial management, such as PFM assessments for Rajasthan and Jharkhand and assessments covering the functioning o f public financial management systems with urban and local bodies. The procurement team in India i s leading the study on PFM in Bihar, and has also contributed to studies on Lagging States, as well as studies on governance in the transport sector and growth in the construction sector. In addition, the procurement team has been deeply involved in supporting improvements in procurement in the health sector and in monitoring the implementation o f the Health Sector Governance and Accountability Action Plan. The Bank has worked closely with DFID to enhance the capacity o f the already established Empowered Procurement Wing o f the Ministry o f Health and Family Welfare (MOHFW).
DPL, PEIR, PFM Initiatives.
108. Electronic Government Procurement. Financed through a Japanese trust fund, an external consultant conducted e-GP readiness assessments o f Afghanistan, Bhutan, Maldives, and Nepal. Workshops were conducted in each o f these countries to disseminate the e-GP readiness assessment report, and a comprehensive e-GP implementation strategy was agreed with each o f these governments. In India, after redrafting o f the procurement provisions in the Government Financial Rules (in 2005) and the issuance o f manuals to guide implementation, the use o f e-GP in all central ministries was mandated. Several states in India are in the process o f adopting some form o f eGP. In Bangladesh, an implementation plan for introducing eGP in four key sectoral government entities was finalized in FY07 and i s now under design.
109. Harmonization and Donor Collaboration. Following i t s endorsement o f the Paris Declaration o f Aid Effectiveness, Afghanistan i s one initiative’s pilot countries. The Project Preparation Unit (PPU) has already carried out an assessment o f the national procurement system using the OECD/DAC indicators. The legal framework was assessed using the BLI. In Bhutan, procurement reform work i s being undertaken in
44
close collaboration and partnership with the entire donor group. In India, DFID and the World Bank actively collaborate on work in the health and education sectors on improving procurement outcomes; and the Bank works closely with the AsDB on issues relating to e-GP. This collaboration reflects a country-specific extension o f the collaboration on this issue that has been forged among the MDBs.
1 10. Governance and Anticorruption. Governance and anticorruption are critical components o f the Regional agenda.
Afghanistan. The procurement team provided cross-support to the “PFM Vulnerability to Corruption Assessment” report led by PREM, by producing the vulnerability assessment o f the procurement process. The report i s now at the draft stage.
0 Bangladesh. The new caretaker Government i s acting to minimize the impact o f corruption (including in procurement) in the political process, and has reconstituted the Anti-Corruption Commission. The Bank i s actively supporting the ACC and Government’s initiative and i s in constant dialogue with policy inputs. O n the Bank-funded operational front, an Operational Risk Mitigation Action Plan Team (ORMAP) has been working in the last one year or so which i s mainly providing guidance to the task team on operational risk issues. For specific procurement risks, a procurement risk mitigation plan (PRMP) has been designed and i s being piloted with two Bank-financed project (Municipal Services Project and Rural Transport Improvement Project); initial results show considerable improvement through the use o f this tool. All new projects are now including a similar PRMP at the design stage, and the Bank i s in consultation with the Government to introduce the PRMP in al l existing projects to better monitor procurement risks with appropriate measures for improvement.
0 India. Governance actions in procurement have focused on improving transparency. Improving governance in the health sector has been the area o f greatest concentration, and has encompassed work on building the institutional capacity to monitor procurement, the creation o f software designed to detect possible corruption, and the development o f enhanced information systems for recording procurement data. Other work has included contributing to the development o f project action plans (emphasizing social auditing and greater publication o f information) designed to mitigate procurement risks.
0 Nepal. Measures such as blacklisting o f errant f i rms, mandatory disclosure o f procurement results, a code o f ethics for c iv i l servants handling procurement, and a complaint review mechanism are now built into the provisions o f the Public Procurement Law, which was drafted with a Bank-funded IDF grant.
ANNEX A
Africa Regional Projects Sub- Total
Total Len ding
ADDITIONAL DATA ON PROCUREMENT
1. commitments ($1 19.7 billion for 1,599 operations).
Figure A 1 depicts the Regional disaggregation o f FY07 IBRD/IDA lending
Figure A l .
4 707 2.9 73 13,714 55.5
3 01 24,696
FY07 Lending Commitment Amount by Region
R 18% 20%
r! 20%
2. Table A 1 shows the top 10 borrowers for new FY07 IBRDADA lending operations, There were 301 new operations in FY07, at a total commitment o f $24.7 billion.
Table A l .
I Ten Largest IBRDDDA Borrowers in FY2007 I
46
Total I 1,5351 1,2051 1,4501 970 I 3 78
3. o f contracts distributed, in procurement categories and Regions.
Table A2 details the major Bank-financed contracts in FY07 by number and value
7131 6,251 I 100
Table A2.
59 Percentage of the Total Portfolio 58 62 51 64
4. Tables A3, A4, and A5 show the top 10 countries o f registration awarded for goods, works, and services for FY03-FY07 for contracts subject to prior review. It should be noted that data entered on the basis o f country o f registration for f i r m s receiving contracts can result in some unexpected outcomes. For example, Afghanistan i s listed as second for receipt o f consulting contracts in FY07. This reflects large service providers (e.g., CARE) registered in the country.
Table A3.
47
Table A4.
Table AS.
8 1 Conao(DRC) 1 France I Russia 1 Brazil I Canada 9 I Germany I Canada I Australia I Netherlands I Germany
I Percentage o f the 56 58 51 5 1 49
5. In FY07, the Bank’s post reviews covered 619 projects and some 8,465 contracts, at a total contract amount o f $2 billion. The overall trend shows an increase in post review from 53 percent in FY03 to 78 percent in FY06 and FY07 (see Figure A2).
Figure A2.
Trenb of Procurement Post Review Coverage (FYO3-FYO7)
100%
80%
60%
40%
20%
0%
78%
I FY03 F Y O 4 l W 5 FY06 FY07 1
6. Table A 6 provides a summary o f independent procurement reviews (IPRs) conducted in FY07. EAP and MNA were unable to conduct such reviews in FY07 because o f budget constraints.
48
Item \ Region
Table A6.
I Summary o f Independent Procurement Review in FY07 I AFR ECA LCR SAR Bankwide
Guinea-Bissau Croatia Colombia India
Reviewed Borrower Country
Number o f reviewed projects
Number o f reviewed contracts Value o f reviewed contracts (US$ f000)
Total cost o f IPRs (US$)
10 Lesotho Georgia Brazil South Africa Argentina
Paraguay 5 15 19 3 42
82 177 552 95 906
4,683 127,134 141,111 38,326 311,254
61,770 85,700 159,386 149,000 455,856
7. Table A 7 shows data on misprocurement for FY05-07. It also provides information on the main activities that contribute to identification o f misprocurement. The dollar amount o f declared misprocurement varies widely from year to year and does not demonstrate any trends.
05
06
07
Table A7.
6 nia 22 1,199 PPR, complaint, prior review
Prior review, PPR, IPR, complaint,
government audit
PPR, IPR, complaint, supervision, 36’830 INT investigation
10 25 150 76,4 1 1 supervision, INT investigation,
9 9 130
8. Table A8 provides the basis for complaints received by the Bank in FY07.
49
Region Bank Upheld Borrower's Decision Bank Validated Comdaint - Borrower Ameed
Table A8.
1 Nature o f Complaints in FY07 1
Bankwide 160 24
Theme I # Qualification o f other firm I 41
Case forwarded to Dept. o f Institutional Integrity I 19 Complaint Dropped by Complainant 15 -.
ITechnical evaluation I 39 I
Re-bidding Case Inactivated Bid Cancelled
Application o f evaluation criteria I 37 Disqualification o f bid I 29
9 7 4
14 [r;f{dding document I i; 1 Bid securi Technical s ecifications B i d ro osal submission El i ibili Short l i s t 1 6 Irregularity in bidfinancial proposal evaluation 1 4
IPerformance securitv 1 3 1
9. Table A 9 and Figure A3 summarize how complaint cases received in FY07 were resolved. O f the 283 closed cases, 160 cases, or 57 percent o f the total, were clarified by the borrowers. The rest were resolved in other ways.
Table A9.
FY07 Complaints by Resolution 1
Bank Validated Complaint - Borrower Disagreed I 2 Contract Terminated 2 Other I 41
Total I 283
50
Figure A3.
Major Resolutions of Complaints in FY07
Borrower Agreed
ANNEX B
Table B1.
CURRENT CPAR AND OTHER ESW REPORTS* Report
Delivery Document
(In SAP)
Country Report Type FY Classification
Africa Region Official use
only Angola CPAR FY03
Official use only Benin CPAR FY99
Botswana CPAR FY07 Confidential Official use Burkina Faso CPAR FY06
only Burundi CPIP FY04
Cameroon FY05 Public Cape Verde CPIP FY04 Public Central African Republic IP FY06 Confidential
Official use only Chad CPAR FY04
Official use onlv Congo, Democratic Rep. of CPAR FY04
................................................................................................................................................................................................................................................................�� ................................................................................................................................................................................
................................................................................................................................................................................................................................................................ª�
................................................................................................................................................................................................................................................................ª�
................................................................................................................................................................................................................................................................(�
................................................................................................................................................................................................................................................................1�
............................................................................................................................................ ..CPAR .update. .........................................................................................................................................
................................................................................................................................................................................................................................................................^� ................................................................................................................................................................................................................................................................j�
................................................................................................................................................................................................................................................................G� .............................................
Congo, Republic of CPIP ................................................................... z ........ d .........................
Official use onlv FY06
................................................................................................................................................................................................................................................................{� < ........................... CBte d'Ivoire CPAR FY04 Public
Eritrea CPAR FY03 ............................................................................................................................... .................................................................................................................................................................................................................................
nnlv "l.. ................................................................................................................................................................................................................................................................Ž� 2.. ........................ Ethiopia CPAR FY03 Public Gabon PEMFAR FY07 Public
................................................................................................................................................................................................................................................................—� -
Gambia CPIP FY05 Ghana CPAR FY03 Public Guinea CPAR FY02 Confidential Guinea Bissau CPIPiIFA FY06 Public Kenya CPAR FY97 Confidential
Under Lesotho CPAR (draft) FY08 Government
Review Official use
only Madagascar CPAR FY03
Malawi CPAR FY04 Public Mal i CPAR Update FY06 Public
Mauritania CPAR Update FY02
Mauritius CPAR FY03
................................................................................................................................................................................................................................................................Š�
................................................................................................................................................................................................................................................................•� ................................................................................................................................................................................................................................................................•� ................................................................................................................................................................................................................................................................t�
Official use only
Official use only
Under
Review
................................................................................................................................................................................................................................................................X�
................................................................................................................................................................................................................................................................~�
Mozambique CPAR (draft) FY08 Government ................................................................................................................................................................................................................................................................o�
Official use only Niger CPAR FY05
................................................................................................................................................................................................................................................................š�
52
CURRENT CPAR AND OTHER ESW REPORTS"
Report Delivery Document
(In SAP) FY Classiflcation Country Report Type
Nigeria CPAR
Rwanda CPIP
Official use only
Official use onlv
FYOO
FY04 .....................................................................................................................
................................................................................................................................................................................................................................................................ � .................................................................................................... * ......................... ................................................................................................... Sao Tome and Principe CPAR (joint with AfDB) FY07 Confidential ..... Se?%a! CPAR ' FY03 Public
................................................................................................................................................................................................................................................................�� ................................................................................................................................................................................................................................................................„�
Sierra Leone IP Official use onlv FY04
............................................................................................... ............................................................................................................................................................... ................................................................................................... * ......................... South Africa CPAR FY02 Public Tanzania CPAR FY03 Public
Official use CPAR FY04 only
PEMFAR FY07 Official use only
Official use
................................................................................................................................................................................................................................................................Š�
................................................................................................................................................................................................................................................................L�
Togo
Uganda FYOl Public
Zambia PEMFAR
............................................................................................................................................................................................... C P A R .................................................................................................................................................................................... ................................................................................................................................................................................................................................................................•�
................................................................. ................................................. ................................................................................................................................................................................................................................................................Š�
Official use only China OPR FY03
East Timor CPAR FY04 Public Indonesia CPAR FYOl Public Kiribati
Lao PDR CPAR FY03 Public Malaysia CPAR FY95 Internal Use
................................................................................................................................................................................................................................................................„�
................................................................................................................................................................................................................................................................o� ................................................................................................................................................................................................................................................................—�
................................................................................................................................................................................................................................................................“� ........... ... Korea, Rep: .... Of ................................................................................................................................................................................................................................................................T�
Mongolia CPAR FY04 P
................................................................................................................................................................................................................................................................̄ �
................................................................................................................................................................................................................................................................T� ................................................................................................................................................................................................................................................................{� Myanmar Papua New Guinea CPAR FY06 Public
.. ,Phi!ippines CPAR FY08 Public Samoa OPR FY06 Public Solomon Islands OPR FY08 Public Thailand
OPR FY03 ublic Tonga
................................................................................................................................................................................................................................................................¢�
................................................................................................................................................................................................................................................................x� ................................................................................................................................................................................................................................................................P�
................................................................................................................................................................................................................................................................§� ...................................................................................................................................... ................................................................................................................................................................................................................................................................�� ................................................................................................................................................................................................................................................................u� ............................................................................................................................................................................................................................................... .................................................... ........................................ Vanuatu
Vietnam CPAR FY03 Official use only
Regional To - P - Albania Albania Armenia CPAR Azerbaijan
tal: 13
IFA FYO Europe and Central Asia Region ................................................................................................................................................................................................................................................................��
................................................................................................................................................................................................................................................................t� CPAR FYO 1 Public
FY03 Public CPAR FY02
................................................................................................................................................................................................................................................................{�
................................................................................................................................................................................................................................................................u� ................................................................................................................................................................................................................................................................B�
vet Azerbaijan CPAR Update FY08
53
CURRENT CPAR AND OTHER ESW REPORTS"
Bosnia-Herzegovina CPAR FY02 Public FYOO Official use Bulgaria
Bulgaria CPAR FY04 Confidential Bulgaria IFA FY07 Confidential
Official use only Croatia CPAR FYOO
Croatia FY04 Public Georgia CPAR FYOl Public Georgia IFA FY07 Confidential
FYOO Official use Kazakhstan CPAR
Kosovo OPS F Public
Kyrgyz Republic CPAR FY03
Kyrgyz Republic IFA FY07 Public
Kyrgyz Republic Education IFA
only
only
Official use only
FY08 No Decision VPt ........................................................................................... ........................................................................................................................................................................................................................... i..-.:.. ....
Official use onlv Latvia CPAR FYOl
FY02 Official use only CPAR Macedonia (former Yugoslav
repub 1 i c)
IFA FY07 Public Macedonia (former Yugoslav republic) M o 1 do v a CPAR FY03 Public
Poland CPAR FYOl
Romania CPAR FYOO
FY0.5 Romania
Russian Federation FYOl
Russian Federation FY07
Slovak Republic CPAR FYOl
Turkey CPAR FYOl
Turkey Health IFA FY08 Public
FY07 Public Tajikistan
FY08 No Decision Tajikistan Health IFA Official use
only Ukraine CPAR FY07 Public
Official use only Ukraine CPAR FYOl
Uzbekistan CPAR FY02 Public
............................................................................................................................................................ ........................................................................... ..................................................................................................................
................................................................................................................................................................................................................................................................«�
............................................................................................................... ................................................................................................................................................................................................................................................................�� Official use
only Official use
only Official use
only Official use
only Official
only Official use
only Official use
only
................................................................................................................................................................................................................................................................q�
................................................................................................................................................................................................................................................................•� CPAR
(Joint Report with EU) ................................................................................................................................................................................................................................................................f�
......................................................................................................................................................................... ................................. ................................... ..............................
................................................................................................................................................................................................................................................................‚�
................................................................................................................................................................................................................................................................•�
................................................................................................................................................................................................................................................................�� ......................................................................................................................................
................................................................................................................................................................................................................................................................›� OPS (Education Sector Fiduciary Capacity
Assessment Report) ................................................................................................................................................................................................................................................................ �
................................................................................................................................................................................................................................................................r� liet ........................... CPAR FY03
................................................................................................................................................................................................................................................................D� ................................................................................................................................................................................................................................................................b�
................................................................................................................................................................................................................................................................O� ................................................................................................................................................................................................................................................................U�
54
CURRENT CPAR AND OTHER ESW REPORTS*
Yugoslavia CPAR FY02 Public
Official use only Argentina CPAR FY02
Bahamas Barbados
................................................................................................................................................................................................................................................................�
................................................................................................................................................................................................................................................................�
................................................................................................................................................................................................................................................................�
55
CURRENT CPAR AND OTHER ESW REPORTS* Report
Delivery Document
(In SAP) FY Classiycation Country Report Tjpe
Official use n"lV Venezuela CPAR FY91
~~
Region a1 Total: 28 P - -
Middle East and North Africa Region Internal use
only Algeria CPAR FY03 .................................................................................................................................................................................................................................................... ................................................................................................................
Djibouti CPAR Internal use only FY04
......................................................................................................... Internal use
only Egypt CPAR FY04
Iran ................................................................................................................................................................................................................................................................š�
OPR Internal use onlv FY05
Internal use only
dan CPAR FY99 Public
Iraq OPR FY05 ................................................................................................................................................................................................................................................................¬�
................................................................................................................................................................................................................................................................q� Internal use
only Public
Lebanon OPR FY06 ................................................................................................................................................................................................................................................................R�
Morocco CPAR CPAR Update
FYOO Under FY08 government
review
Tunisia CPAR Internal use onlv FY04
WBG CPAR
Issue Paper
Internal use FY05 only FY08 Official use
only Internal only/
donors
................................................................................................................................................................................................................................................................�
CPAR FYO 1 shared with Yemen
Kuwait CPAR (Draft) FY08 Kingdom o f Saudi Arabia CPAR (Draft) FY08
................................................................................................................................................................................................................................................................•�
................................................................................................................................................................................................................................................................o�
Regional Total: 15 _=E
......... " ................... " South Asia Region ........................................................................................................................................................................................................................ " ........................................................ ...... " .................................................................. " ................................................
FY 02 Bangladesh CPAR (May Public
Bhutan 2002) ................................................................................................................................................................................................................................................................M�
................................................................................................. ............................................................................................................................................................................................................................................................
India CPAR F Y 04
(December Public 2003)
Internal Use/ India State - Jharkhand PFP F Y 08 Under
Finalization Internal Use/
Finalization
................................................................................................................................................................................................................................................................”�
India State - Maharashtra PFP F Y 08 Under ................................................................................................................................................................................................................................................................²�
56
CURRENT CPAR AND OTHER ESW REPORTS*
India State - Rajasthan IDF FY 08 Under Finalization Internal Use/
Finalization India State - Himachal Pradesh PFP FY 08 Under
Not yet FY Os Finalized OPR India State - Bihar
Maldives .............................................................................................................................................................................................................. ........................................................................................ ..................................................................................................................... .......................................................................................................................................................................................................................................
FY 02 Nepal CPAR (April Public
2002) FY 00
2000) FY 06
Pakistan CPAR (June Public
Pakistan CPAR on Consulting Services (March Public 2006) FY 03
2003)
................................................................................................................................................................................................................................................................•�
Sr i Lanka CPAR (June Public ................................................................................................................................................................................................................................................................¡�
Regional Total: 11 ................................................................................................................................................................................................................................................................}� Bank-wide Total: 143
* List o f acronyms i s provided at end
AfDB CPAR CPAWCFAA
CPIP IFA IP OPR OPS PEMFAR PFP
African Development Bank Country Procurement Assessment Report Country Procurement Assessment Report/Country Financial Accountability Assessment Country Procurement Issue Paper Integrative Fiduciary Assessment Issue Paper Operational Procurement Review Other Procurement Study Public Expenditure and Financial Accountability Policy Framework Paper
