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Procurement at Start-Up
Procurement at Start-Up
Procurement at Start-Up
Background
In the context of an evolving business model at IFAD
(Paris Declaration (2005), Direct Supervision (2007) Accra Agenda for Action (2008), Busan (2011), etc.) Procurement is the Borrower/ Recipient responsibility IFAD has a fiduciary responsibility
Procurement at Start-Up
Fundamental Changes
Revised General Conditions New Financing Agreement & Role of LTB Revised Procurement Guidelines & Handbook
New Supervision Modalities change of roles! Concept of Entry into Force linked to approved first AWPB & PP (+ any additional specific withdrawal conditions) Simplification Procurement Schedule deleted from FA and standard texts are shifted to GC (remedies, etc) Update of Terminologies with elements of flexibility
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Procurement at Start-Up
Fundamental Changes
Procurement Guidelines Greater emphasis on Procurement Principles Eligibility Importance of Procurement Plan & Contracts Register Use of National Procurement Systems Default position for ICB
Procurement at Start-Up
Procurement at Start-Up
Procurement at Start-Up
Procurement at Start-Up
Definitions
Paris & Accra: national arrangements and procedures for procurement
WB: a countrys legal and institutional framework,
consisting of its national, sub-national, or sectoral implementing institutions and applicable laws, regulations, rules and procedures AfDB: country systems as public management and accountability systems for managing the public resources of a country DFID: Putting aid on budget
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Procurement at Start-Up
Procurement at Start-Up
4 pillars
Procurement at Start-Up
Procurement Plan
No standard format
type i.e. Civil Works, Goods, Services.. Quantity/ Unit Cost & Estimated Cost Procurement Method Prior Review Requirement Schedule by bidding process Notice to Award of contract Responsible Entity 5
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(refer to checklist)
The plan covers 18 months (12 mths for successive plans) and shows for each procurement action: the loan category, financing rate, procurement method, estimated cost, quantities, IFAD review requirement, and anticipated timeline for the entire process. Procurement actions are presented by project component and properly identified and referenced. Procurement actions are grouped according to categories (goods/works/services) for each component. Within each category, procurement actions are grouped into coded lots or packages for increased competition, efficiency and better prices.
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Financial estimates in line with annual budget and overall funds allocation
Estimated costs for each procurement action are reasonable and current. Cost estimates are properly reflected in the annual budget. Cost estimates are within overall project funds allocation (by expense category).
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Use of National Regulations to the extent they are consistent with IFAD Procurement Guidelines
Realistic timing and scheduling of procurement activities
Anticipated timeline for each procurement action (from preparation of bidding documents to signature of contract) is realistic Anticipated delivery dates of goods/works/services are consistent with physical targets as per the AWPB
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Agenda A. Introducing Project Supervision B. The Financing Agreement & General Conditions C. Starting-up the Project D. Supervising Project Implementation i. Project Planning and Budgeting (AWPB)
ii. Procurement iii. Financing Administration iv. Financial Management v. The Supervision Mission vi. Mid-Term Review; Extension of Completion Date E. Closing the Financing (Loan/Grant)
Start-up
Implementation
Project Closure
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Introduction
After start-up and setting up all project systems to ensure efficient implementation and development impact, project follows its AWPB and begins to 1. Purchase goods and services (procurement) 2. Use funds and other resources from the IFAD financing, government, co-financiers (if applicable) and project beneficiaries (funds administration) 3. . . .and for which financial management systems are set up. 4. All this is supervised by IFAD at HQ and in the field, beginning considerably before the mission leaves for the field.
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General Principles (2) Monitor progress of the projects against targets, development objectives and indicators. Monitor procurement and disbursement of funds. Review effectiveness of financial management system. Review compliance with FA covenants/overall GC.
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Learning Objectives How are the subsequent years AWPBs different from the first year? What elements complete a AWPB? What is the AWPBs typical format?
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applied in your review and supervision of the quality of the AWPB. 2. You have also contributed with your own experience in the AWPB review; collectively now you have identified some of the most common factors that affect quality.
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Word of conclusion (2) What are the implications for the supervision and review process?
Your style, intensity and focus of supervision will vary in time and context depending on how these factors play in the particular project you are supervising and how it evolves over time (development effectiveness.) Examples change in Project Manager, Institutional changes; etc Monitoring the evolution of those factors in your checklist may help you anticipate any problems or constraints and take timely preventive and corrective action - It is an Art!
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Agenda A. Introducing Project Supervision B. The Financing Agreement & General Conditions C. Starting-up the Project D. Supervising Project Implementation i. Project Planning and Budgeting (AWPB) ii. Procurement iii. Financing Administration iv. Financial Management v. The Supervision Mission vi. Mid-Term Review; Extensions of PCD E. Closing the Financing (Loan/ Grant) F. Special Issues
Negotiation Draft Financing Agreement Start-up
Implementation
Project Closure
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Learning Objectives
What are IFADs role and responsibility in procurement for projects? What are the tasks involved in procurement supervision? How is procurement supervision conducted?
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Introduction
Purchasing goods, services and works (procurement) is a critical element of project implementation. . . Inefficient or ineffective procurement may have serious consequences:
expected project results and impacts not achieved. delays in project implementation. higher cost of implementation.
Overriding Principle!
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Procurement Cycle
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Procurement Process
Strategy/ Needs assessment No-Objection (if under prior review)
Low Value: RFQ Procurement Planning + Selection of method Bid Evaluation No Objection for Contract Award Negotiations and Contract Award Contract Management
Procurement Planning
Identification of Need
Needs or Wants? Categories: Projected Requirements Interim Requirements One-off/ emergency requirements
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Specifications
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Tendering Process
Formation of Bid Evaluation Committee; N-O by IFAD
Key
Prepare Specifications and tender documents (Advertisement/ ITBs/ RFPs/ RFQs as applicable)
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Procurement Methods
Different methods (ranging from International Competitive Bidding to Direct Contracting) are used for the different categories of procurement depending on nature, amount and other criteria - guiding principle being economy and efficiency.
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Advertise in widely circulated newspapers, local representatives, Embassies, UN Development Forum Pre-qualification Public bid opening Bid evaluation based on point scoring system (technical + financial)
Advertise in local newspapers (note: foreign suppliers may bid) Same Same Same
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short-list at least three reputable suppliers in at least two member countries of IFAD issue ITB to the shortlisted suppliers receive bids in original form (not faxed) bid evaluation based on lowest cost for compliant offers sign contract
prepare specifications and request for quotations short-list at least three reputable suppliers issue request for quotations to the shortlisted suppliers Same Same
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CONSULTING SERVICES
Knowledge based Selective competition Non-public bid opening of technical offers Public opening of financial proposals Quality is a major factor Terms of Reference (general work program) Two-stage procedure Negotiations usual
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Regulatory Framework
Must adhere to regulatory framework . . . Procurement rules and procedures applicable to a particular project come from different sources: IFAD General Conditions National procurement rules & regulations IFAD Procurement Guidelines IFAD Procurement Handbook Project design report Applicable rules, methods, prior review thresholds and procedures are specified in the Letter to the Borrower.
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Importance of Procurement Supervision by IFAD IFADs Fiduciary responsibility: Proper use of funds: IFAD must ensure its financing are used only for intended purpose: specifically CPM and ICO. Economy and efficiency requirements in project implementation in general and procurement in particular: IFAD must ensure contract awards result from a competitive process. IFAD must ensure equity, integrity, transparency and good governance in procurement process. Concept of no objection.
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- IFAD staff must maintain neutrality and impartiality. - Flexibility is a must but know rules and regulations.
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Ex-post review procedures: - As part of the review of WAs - During field supervision
As part of the review of statements of expenditure. Review of procurement progress and processes (technical and financial/administrative). Identification of issues and constraints. Coaching of national and/or PMU staff. Issuance of recommendations for improvement.
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(1)
(for large/complex works or expected significant time/cost savings => need advanced procurement skills). Prior to issuance of invitations to pre-qualify, IFAD reviews: draft advertisement and invitation to pre-qualify. draft pre-qualification documents, including pre-qualification questionnaire and evaluation criteria and methodology. After borrowers evaluation of bidders submissions, IFAD reviews: draft evaluation report. list of pre-qualified bidders and statement of their qualifications. reasons for excluding any applicant from pre-qualification.
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(2)
conformity of procurement with applicable rules/procedures, approved AWPB/procurement plan and funds availability. draft bidding documents, including invitation to bid, instructions to bidders, technical specifications, evaluation criteria, contractual conditions. proposed composition of the bid evaluation committee (for comments).
After borrowers evaluation of bidders submissions, IFAD reviews:
minutes of public bid opening. bid evaluation report, including evaluation and comparison of bids and award recommendation. evidence of individual evaluations by each committee member draft contract.
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(3)
conformity of procurement with applicable rules/procedures, approved AWPB/procurement plan and funds availability. draft RFP, including instructions to consultants, terms of reference, selection method and evaluation criteria, shortlist of consultants, cost estimate, contractual conditions.
After borrowers evaluation of technical proposals, IFAD reviews:
technical evaluation report, including description of the process, summary of scores and award recommendation. technical scores/ranking given to each consultant on each evaluation criterion. scores given by each evaluation committee member. copy of proposals, if requested by IFAD.
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(4)
III. Review of procurement of consulting services using the following methods: (Handbook Module H3)
Quality and cost-based selection (QCBS) Quality based selection (QBS) Selection under a fixed budget (FBS) Least-cost selection (LCS) Single-Source selection (SSS)
After borrowers evaluation of financial proposals, IFAD reviews: (Handbook Module L) minutes of public bid opening. account of adjustments made to prices of the proposals and determination of the evaluated price. final evaluation report and award recommendation.
(The above review step is not applicable for quality-based selection, selection based on consultants qualifications, single source selection or individual consultant selection).
In all cases, IFAD reviews and provides No-Objection to the negotiated draft contract.
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POINTS
5 - 10 20 - 50 30 - 60 0 - 10 0 - 10 100
Could be divided into sub-criteria, but should be kept to the essential For training - high points on key Personnel Points may be adjusted for specific circumstances
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(1)
At HQ or Field
Post-award review of procurement actions PMU makes available to IFAD all bidding documents, evaluation reports, award recommendations, signed contracts, updated contract record, payment files and individual contract monitoring forms. IFAD reviews conformity of procurement with applicable rules/procedures, project objectives, approved AWPB/procurement plan and funds availability.
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Monitoring of Procurement at HQ
Several source documents for monitoring procurement . AWPB and updated procurement plan Results of prior reviews and ex-post reviews at HQ Supervision mission reports Progress reports Based on monitoring results, follow-up on issues and problems identified.
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Monitoring of Procurement at HQ
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Ensure that only contracts executed by project completion date are paid Ensure that procurement files are complete and obtain missing documents from project Report on lessons learned and make recommendations for future projects
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Message
Good procurement means continuous reforms in all procurement systems, well established and new ones.
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