| Procurement Policy
Title of the PPR
Board of Directors
07 April 2008
The Board of Directors Decision No. BD2008-11-12, 07 April 2008
| Related Policies
Articles of Agreement
ECO Trade and Development Bank
TABLE OF CONTENTS
1.2. STRUCTURE OF THIS DOCUMENT
1.3. GENERAL PRINCIPLES
II. GENERAL POLICY
2.2. APPLICABILITY OF THE PROCUREMENT POLICY
2.6. FRAUD AND CORRUPTION
2.7. PROCUREMENT PLANNING
2.8. APPLICABILITY IN CO-FINANCED OPERATIONS
2.9. PROCUREMENT IN OPERATIONS THROUGH FINANCIAL INTERMEDIARIES
2.10. PROCUREMENT UNDER BOO/BOT/BOOT, CONCESSIONS AND SIMILAR PRIVATE SECTOR ARRANGEMENTS
2.11. PROCUREMENT UNDER LOANS GUARANTEED BY THE BANK
2.12. PROCUREMENT IN PRIVATE SECTOR OPERATIONS
2.13. CLIENT RESPONSIBILITIES
2.14. ADVANCE CONTRACTING
III. PROCUREMENT OF GOODS, NON-CONSULTING SERVICES, AND WORKS
3.2. TENDERING PROCESS
3.3. GENERAL PROCUREMENT NOTICE
3.4. PREQUALIFICATION NOTICE OR TENDER NOTICE
3.5. PREQUALIFICATION OF BIDDERS
3.6. SINGLE-STAGE TENDERING
3.7. TWO-STAGE TENDERING
3.8. LOCAL TENDERING
3.9. INSPECTION AGENTS
3.10. CONTENTS OF DOCUMENTS
3.14. TENDER PRICES
3.15. EVALUATION CRITERIA
3.16. STANDARDS AND SPECIFICATIONS
3.18. TIME LIMITS
3.19. CONDITIONS OF CONTRACT
3.20. ELIGIBILITY TO SUBMIT BIDS
3.21. OPENING OF BIDS
3.22. BID EVALUATION AND CONTRACT AWARD
3.23. CONTRACT ADMINISTRATION
3.24. PROCUREMENT MONITORING AND BANK REVIEW
IV. MODIFIED OR ALTERNATIVE METHODS
4.2. SELECTIVE TENDERING
4.3. DIRECT CONTRACTING
4.5. FORCE ACCOUNT
V. PROCUREMENT OF CONSULTANCY SERVICES
5.2. CONSULTANT SELECTION PROCEDURES
5.3. SHORT LISTS
5.4. REQUESTS FOR PROPOSALS
5.5. EVALUATION AND SELECTION
5.7. PROFESSIONAL STANDARDS
5.8. CONTRACT NEGOTIATIONS
5.9. CONTRACT ADMINISTRATION
5.10. BANK REVIEW
VI. PREFERENCIAL TREATMENT
6.2. ELIGIBILITY FOR PREFERENTIAL TREATMENT
6.3. APPLYING MARGINS OF PREFERENCE FOR PROCUREMENT OF GOODS
6.4. APPLYING MARGINS OF PREFERENCE FOR PROCUREMENT OF WORKS
6.5. PREFERENTIAL TREATMENT FOR CONSULTING SERVICES
6.6. JOINT VENTURES
ANNEX 1 - REVIEW BY THE BANK OF PROCUREMENT DECISIONS
SCHEDULING OF PROCUREMENT
This document sets forth Policy that govern the procurement of goods, works , and services required for projects financed in whole or in part by a loan from the Bank. The loan contract governs the legal relationships between the Client and the Bank, and the Policy are made applicable to procurement of goods, services, and works for the project, as provided in the loan contract. The rights and obligations of the Client and the providers of goods, services and works for the project are governed by the bidding documents, and by the contracts signed by the Client with the providers of goods, services and works, and not by these Policy or the loan contracts. No party other than the parties to the loan contract shall derive any rights therefrom or have any claim to loan proceeds.
While procurement for public sector projects are fully governed by the provisions of this Policy, procurement by private sector projects may be exempt from some of the requirements of this Policy with the agreement of the Bank.
1.2. Structure of this Document
Open competition is the basis for efficient procurement. Clients shall select the most appropriate method for the specific procurement. In most cases, Open Competitive Tendering, properly administered, and with the allowance for preferences for regionally or domestically manufactured goods under prescribed conditions is the most appropriate method. In most cases, therefore, the Bank requires its Clients to obtain goods, works, and services through Open Competitive Tendering open to eligible suppliers and contractors. Section IV describes the procedures for Open Competitive Tendering.
Where Open Competitive Tendering is not the most appropriate method of procurement, the procedure may be modified or other methods of procurement may be used. Section V describes the modified or alternative methods of procurement and the circumstances under which their application would be more appropriate. The particular methods that may be followed for procurement under a given project are provided for in the loan contract. The specific contracts to be financed under the project, and their method of procurement, consistent with the loan contract, are specified in the Procurement Plan as indicated in Clause 3.7 hereof.
Unlike the procurement of goods and works, procurement of consulting services typically involves the supply of an intangible object whose quality and exact content may be difficult to quantify. The precise quality of the consulting services provided may be largely dependent on the skill and expertise of the suppliers or contractors. Thus, unlike procurement of goods and works where price is the predominant criterion in the evaluation process, the price of consulting services is often not considered as an important criterion in the evaluation and selection process as the quality and competence of the suppliers or contractors. Section VI is intended to provide procedures that reflect these differences.
Under Article 6 of its Articles of Agreement, the Bank has a clear mandate of “promoting economic development of the ECO region by giving preference to procurement from ECO member countries.” The Bank supports the development of the Member Countries by giving preferential treatments to bidders from the Member Countries and to procurement of goods manufactured in Member Countries . Under certain circumstances the Bank may agree to preferential treatments in favor of Client’s country. Preferential treatments are conferred through setting forth eligibility requirements for bidders or through applying margins of preference. The conditions and procedures for preferential treatments have been described in Section VII of this document.
1.3. General Principles
The responsibility for the implementation of the project, and therefore for the award and administration of contracts under the project, rests with the Client. The Bank, for its part, is required by the first paragraph of the Article 6 of its Articles of Agreement to “pay due regard to safeguarding its interests in respect of its financing.” While in practice the specific procurement rules and procedures to be followed in the implementation of a project depend on the particular case, five general principles guide the Bank’s requirements as follows:
(i) ECONOMY AND EFFICIENCY: the need for economy and efficiency in the implementation of the project, including the procurement of the goods and works involved;
(ii) COMPETITION: maximizing competition as the fundamental principle of good procurement practice;
(iii) FAIR TREATMENT: according fair treatment to suppliers and contractors bidding to provide goods or services to projects;
(iv) TRANSPARENCY: the importance of transparency in the procurement process; and
(v) PREFERENTIAL TREATMENT: the Bank’s interest in encouraging the intra-regional trade between the Member Countries and the development of regional and domestic contracting and manufacturing industries in the Member Countries.
II. GENERAL POLICY
The underpinning for the Bank’s Procurement Policy is that contracts should normally be awarded on the basis of Open Competitive Tendering. Only in special cases should contracts be awarded on the basis of other procedures.
In some cases, the Client acts only as an intermediary, and the project is carried out by another agency or entity. References in this Policy to the Client include such agencies and entities, as well as sub-Clients under on-lending arrangements and in the case of technical co-operations to the beneficiary.
2.2. Applicability of the Procurement Policy
The Policy outlined in this Document apply to all procurement contracts financed in whole or in part from Bank loans including those cases where the Client employs a procurement agent. For the procurement of those contracts for goods, works or services not financed from a Bank loan, the Client may adopt other procedures. In such cases the Bank shall be satisfied that the procedures to be used will fulfill the Client’s obligations to cause the project to be carried out diligently and efficiently, and that the goods, works and services to be procured:
(a) are of satisfactory quality and are compatible with the balance of the project;
(b) will be delivered or completed in timely fashion; and
(c) are priced so as not to affect adversely the economic and financial viability of the project.
The Procurement Plan and Legal Documents applicable to each project may contain provisions or provide for procedures which involve deviations from the requirements of this Policy. In such cases, the provisions of the Loan Documents should be applicable provided that such deviations should be clearly stipulated in the Procurement Plan and should be in line with the general principles set forth in Article 1.3 hereof.
Conditions for eligibility of firms and individuals to participate in contracts to be financed in whole or in part from Bank loans are to be set forth according to the requirements of Section VII regarding Preferential Treatment. Any other conditions for participation shall be limited to those that are essential to ensure the firm’s capability to fulfill the contract in question.
In connection with any contract to be financed in whole or in part from a Bank loan, the Bank does not permit a Client to deny pre-qualification or post-qualification to a firm for reasons unrelated to its capability and resources to successfully perform the contract; nor does it permit a Client to disqualify any bidder for such reasons. Consequently, Clients should carry out due diligence on the technical and financial qualification of bidders to be assured of their capabilities in relation to the specific contract.
As exceptions to the foregoing:
(a) Firms of a country or goods manufactured in a country may be excluded if (i) as a matter of law or official regulation, the Client’s country prohibits commercial relations with that country, provided that the Bank is satisfied that such exclusion does not preclude effective competition for the supply of goods or works required, or (ii) by an act of compliance with a decision of the United Nations Security Council taken under Chapter VII of the Charter of the United Nations, the Client’s country prohibits any import of goods from, or payments to, a particular country, person, or entity. Where the Client’s country prohibits payments to a particular firm or for particular goods by such an act of compliance, that firm may be excluded.
(b) A firm which has been engaged by the Client to provide consulting services for the preparation or implementation of a project, and any of its affiliates, shall be disqualified from subsequently providing goods and works or services resulting from or directly related to the firm’s consulting services for such preparation or implementation. This provision does not apply to the various firms (consultants, contractors, or suppliers) which together are performing the contractor’s obligations under a turnkey or design and build contract.
(c) Government-owned enterprises in the Client’s country may participate in tenders only if they can establish that they (i) are legally and financially autonomous, (ii) operate under commercial law, and (iii) are not dependent agencies of the Client.
(d) A firm declared ineligible by the Bank because of involvement in Fraud and Corruption shall be ineligible to be awarded a Bank-financed contract during the period of time determined by the Bank.
The Bank does not finance expenditures for goods, services and works which have not been procured in accordance with the agreed provisions in the loan contract and as further elaborated in the Procurement Plan. In such cases, the Bank will declare misprocurement, and it is the Policy of the Bank to cancel that portion of the loan allocated to the goods, works and services that have been misprocured. The Bank may, in addition, exercise other remedies provided for under the loan contract. Even once the contract is awarded after obtaining a “no objection” from the Bank, the Bank may still declare misprocurement if it concludes that the “no objection” was issued on the basis of incomplete, inaccurate, or misleading information furnished by the Client or the terms and conditions of the contract had been modified without the Bank’s approval.
2.6. Fraud and Corruption
The Bank requires that all Clients as well as all firms, entities and individuals bidding for or participating in a Bank-financed project including, inter alia, bidders, suppliers, contractors, consultants, and concessionaires (including their respective officers, employees and agents), adhere to the highest ethical standards, and report to the Bank all suspected acts of fraud or corruption of which they have knowledge or become aware both during the bidding process and throughout negotiation or execution of a contract. The Bank shall in all cases proceed with the procedures for dealing with allegations of Fraud and Corruption established and updated from time to time by the Bank. Fraud and Corruption include the following:
• Coercive Practice (impairing or harming, or threatening to impair or harm, directly or indirectly, any party or property of the party to influence the actions of a party),
• Collusive Practice (an arrangement between two or more parties designed to achieve an improper purpose, including to influence improperly the actions of another party),
• Corrupt Practice (the offering, giving, receiving, or soliciting, directly or indirectly, of anything of value to influence the actions of another party),
• Fraudulent Practice (any act or omission, including a misrepresentation, which misleads, or attempts to mislead, a party in order to obtain a financial or other benefit or to avoid an obligation).
The definitions set forth above involve the most common types of fraud and corruption, but are not exhaustive. For this reason, the Bank shall also take action in the event of any similar deed or complaint involving alleged acts of fraud and corruption, even when these are not specified in the above list.
If, in accordance with the administrative procedures of the Bank, it is demonstrated that any firm, entity or individual bidding for or participating in a Bank-financed project including, inter alia,
Clients, bidders, suppliers, contractors, sub-contractors, consultants and concessionaires, executing agencies or contracting agencies (including their respective officers, employees, and agents) has engaged in an act of Fraud and Corruption, the Bank may:
(a) decide not to finance any proposal to award a contract or a contract awarded for works, goods, and related services financed by the Bank;
(b) suspend disbursement of the operation if it is determined at any stage that evidence is sufficient to support a finding that an employee, agent, or representative of the Client has engaged in an act of fraud or corruption;
(c) cancel, and/or accelerate repayment of, the portion of a loan earmarked for a contract, when there is evidence that the representative of the Client has not taken the adequate remedial measures within a time period which the Bank considers reasonable, and in accordance with the due process guarantees of the borrowing country’s legislation;
(d) issue a reprimand in the form of a formal letter of censure of the firm, entity, or individual’s behavior;
(e) issue a declaration that an individual, entity or firm is ineligible, either permanently or for a stated period of time, to be awarded or participate in contracts under Bank-financed projects except under such conditions as the Bank deems to be appropriate;
(f) refer the matter to appropriate law enforcement authorities; and/or
(g) impose other sanctions that it deems to be appropriate under the circumstances, including the imposition of fines representing reimbursement to the Bank for costs associated with investigations and proceedings. Such other sanctions may be imposed in addition to or in lieu of other sanctions.
The Bank will have the right to require that, in contracts financed with a Bank loan, a provision be included requiring bidders, suppliers, contractors, sub-contractors, and concessionaires to permit the Bank to inspect their accounts and records and any other documents relating to the submission of bids and contract performance and to have them audited by auditors appointed by the Bank. Under this Policy, the Bank will have the right to require that, in contracts financed with a Bank loan, a provision be included requiring bidders, suppliers, contractors, sub-contractors and concessionaires to:
(i) maintain all documents and records related to the Bank-financed project for 5 years after completion of the work contemplated in the relevant contract, and
(ii) require the delivery of any document necessary for the investigation of allegations of Fraud and Corruption and the availability of employees or agents of the bidders, suppliers, contractors,
sub-contractors or concessionaires with knowledge of the Bank-financed project to respond to questions from Bank personnel or any properly designated investigator, agent, auditor or consultant relating to the review or audit of the documents. If the bidder, supplier, contractor, sub-contractor or concessionaire fails to comply with the Bank’s request, or otherwise obstructs the Bank’s review of the matter, the Bank, in its sole discretion, may take appropriate action against the bidder, supplier, contractor, sub-contractor or concessionaire.
With the specific agreement of the Bank, a Client may introduce, into bid forms for Major Contracts (For the purpose of this Policy, any contract for the purchase of goods or services with estimated value of equal or more than USD 350,000 or any contract for works with the estimated value of equal or more than USD 2,000,000 is considered a Major Contract.) financed by the Bank, an undertaking of the bidder to observe, in competing for and executing a contract, the country's laws against Fraud and Corruption (including bribery), as listed in the bidding documents. The Bank will accept the introduction of such undertaking at the request of the Client, provided the arrangements governing such undertaking are satisfactory to the Bank.
2.7. Procurement Planning
The Client shall prepare and present a Procurement Plan that should indicate what goods, works and services are required to carry out the project, by when they must be delivered, what standards are needed, estimated cost of each contract, number of contracts, the need for co-financing and which procurement and contracting procedure is most suitable for each contract. Procurement Plan acceptable to the Bank should at least set forth:
(a) the particular contracts for the goods, works, and/or services required to carry out the project during the initial period of at least 18 months,
(b) the proposed methods for procurement of such contracts that are permitted under the loan contract, and
(c) the related Bank review procedures.
The particular procedures and the goods, works and services to which they apply are determined by agreement between the Bank and the Client and are specified in the Bank’s operation reports and incorporated in the Legal Documents.
The Client shall update the Procurement Plan annually or as needed throughout the duration of the project subject to the approval of the Bank.
The Client should complete the overall Procurement Plan and the Bank should clear it before any procurement begins. The Bank’s review and approval of the Procurement Plan is one of the essential steps for establishing the use of the proceeds of its financing to be completed before any procurement begins, save as outlined in Clause 3.14 (Advance Contracting) below.
The Bank will finance only those contracts that are an agreed part of a project and that have been awarded and executed in accordance with the Bank’s Procurement Policy as incorporated in the Legal Documents applicable to that project
2.8. Applicability in Co-financed Operations
When projects are co-financed on a joint basis, the Bank’s Procurement Policy would normally be applied for co-financed contracts. The Bank and the co-financing party may however agree that the Bank’s Procurement Policy may be waived, in which event all procurement shall be subject to the requirements of the co-financing party. When projects are co-financed on a parallel basis, the co-financiers’ procurement procedures would be applied for contracts financed by them, but the Bank will assure itself that quality goods and services are received at economic prices, that contracts are fair and provide adequate protection to the project and that contracts are completed in a timely manner.
When projects are co-financed on a parallel basis, the Client shall promptly write to the Bank reporting any and all matters arising from such financing that may impact on the Bank’s lending and/or the overall project. Such matters shall thereafter be reported monthly until such time as the issues are resolved or the Bank advises otherwise.
2.9. Procurement in Operations through Financial Intermediaries
Where Bank funds are used through financial intermediaries for the procurement of goods, works or services, this Procurement Policy shall apply to the beneficiary(ies) of the loans. However, where the tenor of the financing is not more than four years, the provisions of this Policy shall be relaxed to the extent that procurement shall be carried out according to sound commercial practices and on an arm’s length basis.
2.10. Procurement under BOO/BOT/BOOT , Concessions and Similar Private Sector Arrangements
Where the Bank is participating in financing the cost of a project procured under a BOO, BOT, BOOT, concessions or similar types of private sector arrangements, either of the following procurement procedures shall be used, as provided for in the Legal Documents and elaborated in the Procurement Plan approved by the Bank:
a. The concessionaire or entrepreneur under the BOO, BOT, BOOT or similar types of contracts
shall be selected under Open Competitive Tendering procedures acceptable to the Bank, which
may include several stages in order to arrive at the optimal combination of evaluation criteria, such as the cost and magnitude of the financing offered, the performance specifications of the facilities offered, the cost charged to the user or purchaser, other income generated for the Client or purchaser by the facility, and the period of the facility’s depreciation. The said entrepreneur selected in this manner shall then be free to procure the goods, works, and services required for the facility from eligible sources, using its own procedures. In this case, the Project Appraisal Document, and the Loan Agreement shall specify the type of expenditures incurred by the said entrepreneur towards which Bank financing will apply. Or,
b. If the said concessionaire or entrepreneur has not been selected in the manner set forth in subparagraph (a) above, the goods, works, or services required for the facility and to be financed by the Bank shall be procured in accordance with Open Competitive Tendering procedures defined in this document.
2.11. Procurement under Loans Guaranteed by the Bank
If the Bank guarantees the repayment of a loan made by another lender, the goods, services and works financed by the said loan shall be procured with due attention to general considerations and in accordance with procedures which meet the requirements of Clause 3.2 (Applicability of the Procurement Policy).
2.12. Procurement in Private Sector Operations
The Bank’s concerns for the appropriate use of funds and for economy and efficiency apply equally to its public sector operations and its private sector operations. Private sector enterprises often meet these concerns by following established commercial practices other than formal open tendering for their procurement. Therefore in the case of loans made by the Bank to the private sector without government guarantee, the Bank does not insist on the use of Open Competitive Tendering procedures unless for Major Contracts(as described in Section 3.1).
In cases where, with the approval of the Bank, methods other than Open Competitive Tendering are used, the Bank will request Clients to satisfy the Bank that they use appropriate procurement methods which ensure a sound selection of goods and services at fair market prices and that they are making their capital investments in a cost effective manner. Careful procurement planning that takes into account the particular needs of the enterprise is essential for the Bank’s evaluation and agreement. Contracts awarded by private sector Clients should be negotiated on an arm’s length basis and should be in the best financial interest of the Client. The Bank will not finance costs that exceed market levels.
2.13. Client Responsibilities
The rights and obligations of the Client vis-à-vis bidders for goods, works and services to be furnished for the project shall be governed by the tender documents issued by the Client and neither by this Policy, nor any applicable Legal Documents related to the financing.
The Bank may advise and assist Clients in the procurement process and institutional development for specific projects, and require provisions as a condition of financing, but it is not a party to the resulting contracts.
2.14. Advance Contracting
In special circumstances relating to the nature of the project, or the Client, or other factors peculiar to the context of the project and when such possibility is provided for in the loan agreement, it may be advantageous for the Client to sign a contract before the signing of the related Legal Documents. Clients undertake such advance contracting at their own risk and any approval by the Bank with the procedures, documents or the proposal for award does not commit the Bank to provide funds for the project. Procurement procedures shall be consistent with the Bank’s Procurement Policy, or otherwise acceptable to the Bank, to be eligible for Bank financing. The Bank may finance such contracts based on the provisions of the Legal Documents.
III. PROCUREMENT OF GOODS, NON-CONSULTING SERVICES, AND WORKS
These rules shall apply to goods, works and services contracts (except consultancy services, for which the procedures are described in Section VI) financed in whole or in part by the Bank including inter alia purchase, hire-purchase, rental, leasing.
Open Competitive Tendering procedures are those procedures under which all interested suppliers or contractors are given adequate notification of contract requirements and all eligible bidders are given an equal opportunity to submit a tender. It provides extensive opportunities for competition and satisfies the needs for economy and efficiency. The Client shall give sufficient advance public notification of Open Competitive Tendering opportunities for potential bidders to determine their interest and to prepare and submit their bids.
The use of Open Competitive Tendering for the procurement of Major Contracts shall be mandatory.
If the Bank determines that the thresholds defined in this document for Major Contracts may have the effect of limiting competition or are not likely to ensure the most economic and efficient outcome, more appropriate thresholds would be required for such specific circumstances and would be specified in the Bank’s operation report and in the Legal Documents.
Prior to signing of the loan agreement, all exceptions to Open Competitive Tendering shall be clearly justified and agreed by the Bank.
No procurement requirement shall be divided with the intent of reducing the value of the resulting contract(s) below these thresholds with the purpose of circumventing these rules.
Also for goods, works and services contracts other than Major Contracts, Clients are encouraged to follow Open Competitive Tendering but may use other procedures that are consistent with general principles of competition, transparency, fair treatment, economy and efficiency, preferential treatment and that are acceptable to the Bank.
3.2. Tendering Process
The normal method of procurement is Open Competitive Tendering which usually involves the following steps:
(i) preparation and submission of Procurement Plan;
(ii) notification of opportunities for tendering;
(iii) prequalification where appropriate;
(iv) invitation to tender and issuance of tender documents;
(v) receipt of bids, evaluation of bids and contract award; and
(vi) contract administration.
The extent of the process and specific procedures to be followed for each step will depend on the method of tendering that is used.
3.3. General Procurement Notice
Once the Procurement Plan has been prepared and as early in the project cycle as possible, the Client shall issue a General Procurement Notice that advises the business community about the nature of the project. This notice shall include the amount and purpose of the Bank’s financing and the overview of procurement plan, including:
(a) the goods, works and services to be procured under competitive procedures;
(b) the expected timing; and
(c) a name and address to contact to express interest and obtain additional information.
Prior to issuing the General Procurement Notice, the Client shall submit the texts to the Bank for its approval.
The notice may be published in newspapers with wide circulation in each of the Member Countries, the official gazette of the Client’s country (if possible), international business publications and on the Client’s web site as appropriate. The Bank will arrange for publication of the notice on the Bank’s web site.
The General Procurement Notice shall be updated annually so long as any goods, works or services remain to be procured by Open Competitive Tendering.
The Client shall maintain a log of all those businesses that responded to the General Procurement Notice with an expression of interest.
3.4. Prequalification Notice or Tender Notice
Prior to issuing a Prequalification Notice or a Tender Notice, its text shall be submitted to the Bank for its approval.
Prequalification and Tender notices, for individual contracts using Open Competitive Tendering procedures shall be published in quality newspapers with wide circulation in each of the Member Countries and in the official gazette of the Client’s country (if possible) and in international business publications as appropriate and on the Client’s web site. They shall also be transmitted, by email, to potential bidders that have responded with an expression of interest to the General Procurement Notice as well as to businesses that are potential suppliers of the goods and works required. The Bank will arrange for publication of the notice on the Bank’s Web site.
In order to encourage and facilitate the participation of sub-contractors and sub-suppliers in contracts, the Client should make available to interested parties the list of potential bidders that have purchased tender documents and, where prequalification is being followed, the list of prequalified bidders.
3.5. Prequalification of Bidders
Client may require potential bidders to apply to prequalify for large and complex contracts before inviting bids. Prequalification is not a form of selective tendering but a first stage in a competitive tendering process.
The notification for prequalification and the evaluation procedure shall be consistent with those for Open Competitive Tendering in this document.
The prequalification criteria, which shall be specified in the prequalification documents, shall be based entirely upon the capability and resources of prospective bidders to perform the particular contract satisfactorily, taking into account relevant factors such as their
(a) experience and past performance on similar contracts,
(b) capabilities with respect to personnel, equipment, and construction or manufacturing facilities,
(c) financial position, and
(d) having proper licenses if necessary.
Only those applicants that have demonstrated that they have met the prequalification criteria shall be invited to submit tenders.
3.6. Single-Stage Tendering
There are two types of procedures in conducting single stage tendering depending on the nature and type of tender:
(a) One Envelope: Bidders submit the price proposal and the technical proposal in one envelope which is opened in public on the predetermined date and time.
(b) Two Envelopes: Bidders submit two sealed envelopes simultaneously, one containing technical and the other price proposal.
Initially only the technical proposal is opened and evaluated. Following the Bank’s approval of technical evaluation, the price proposal of technically responsive bidders are opened in public. Contract is then awarded to the lowest evaluated responsive bidder.
3.7. Two-Stage Tendering
Detailed design and engineering of the goods and works to be provided, including the preparation of technical specifications and other tendering documents, normally precede the invitation to tender for Major Contracts. However, in the case of turnkey contracts or contracts for large complex plants or works of a special nature, it may be undesirable or impractical to prepare complete technical specifications in advance. In such a case, a two-stage tendering procedure may be used as follows;
(a) In the first stage, unpriced technical proposals are invited on the basis of a conceptual design or performance specifications. Such proposals are subject to technical as well as commercial clarifications and adjustments, following which amended tender documents are issued.
(b) The second stage is the submission of final technical proposals and priced tenders.
These procedures are also appropriate in the procurement of equipment that is subject to rapid technological advances, such as major computer and communication systems.
3.8. Local Tendering
Local Tendering is a form of Open Competitive Tendering open only to the bidders from the country of the Client or for the procurement of the goods manufactured only in the country of the Client. Local Tendering procedures may be the most economic and efficient method of procuring goods, works or services when:
(a) contract values are small;
(b) proposed works’ sites are scattered geographically or works are to be constructed at different times;
(c) by their nature or scope contracts are unlikely to attract foreign competition; or
(d) the regulations of the country of the Client requires the procurement of goods or services from local sources unless such requirement can be waived.
Subject to the provisions of the Chapter 6 of this Policy regarding preferential treatments, foreign contractors shall be allowed to take part in a local tender. The procedures under which local tendering is carried out shall be similar to Open Competitive Tendering procedures mutatis mutandis. However, with the agreement of the Bank, such procedures may be relaxed or modified to suit the requirements of the project, provided that the general principles set forth in Article
1.3 hereof shall be taken into account and that the following requirements should be complied with:
(a) there shall be adequate notification (advertising in at least two local business orientated or other widely circulated newspapers);
(b) the specifications shall be clearly stated and non-restrictive to attract reasonable prices;
(c) evaluation criteria shall be made known to all bidders and applied fairly, and
(d) the conditions of contract shall be fair and appropriate to achieving a successful project.
3.9. Inspection Agents
When goods are to be imported, the Bank may require pre-shipment inspection and certification of imports by an independent inspection company. The requirement for the use of inspection agents and relevant details will be included in the Legal Documents.
Open Tendering Documentation
3.10. Contents of Documents
The bidding documents shall furnish all information necessary for a prospective bidder to prepare a bid for the goods and works to be provided. While the detail and complexity of these documents may vary with the size and nature of the proposed bid package and contract, they generally include:
• invitation to bid;
• instructions to bidders;
• form of bid;
• form of contract;
• conditions of contract, both general and special;
• specifications and drawings;
• relevant technical data (including of geological and environmental nature);
• list of goods or bill of quantities;
• delivery time or schedule of completion; and
• necessary appendices, such as formats for various securities.
The basis for bid evaluation and selection of the lowest evaluated bid shall be clearly outlined in the instructions to bidders and/or the specifications.
If a fee is charged for the bidding documents, it shall be reasonable and reflect only the cost of their printing and delivery to prospective bidders, and shall not be so high as to discourage qualified bidders.
The Client may use an electronic system to distribute bidding documents, provided that the Bank is satisfied with the adequacy of such system. If bidding documents are distributed electronically, the electronic system shall be secure to avoid modifications to the bidding documents and shall not restrict the access of bidders to the bidding documents.
Clients should use the Bank’s standard tender documents appropriate for each type of procurement or, where no suitable documents exists, other documents containing provisions acceptable to the Bank.
Nothing in the tender documents shall be designed to restrict competition or to offer an unfair advantage to a bidder other than preferences as agreed in the Legal Documents. Clients shall not provide to any potential supplier or contractor information regarding a specific procurement that would have the effect of reducing or precluding competition.
All clarifications and amendments to tender documents shall be sent at the same time and by comparable means to be received quickly by each recipient of the original tender documents.
Tender documentation, including all published procurement notices, shall be prepared by the Client in English language.
In order to assist local businesses in tendering, the Client may choose to prepare the tender documentation in English and the local language, jointly or separately. While tenders from local businesses shall be in English, a version on the local language may also be submitted but the English language version shall prevail.
A bidder may express the tender price in any currency. Clients may require bidder to state the local cost portion of a tender in the local currency. For the purpose of tender evaluation and comparison, tender prices shall be converted to a single currency, selected by the Client, using the selling (exchange) rates for the currencies of the tender price quoted by an official source (such as the central bank) for similar transactions on a date selected in advance and specified in the tender documents, provided that such date should not be earlier than 30 days prior to the date specified for the opening of tenders and not later than the original date prescribed in the tender documents for the expiry of the period of tender validity. The Bank may agree that the Client seeks bids only in specific currency(ies).
Payment under the contract will be made in the currency or currencies in which the tender price is stated in the tender of the successful bidder. For civil works and other similar contracts that involve performance in the Client’s country, and provided the Client’s currency is fully convertible, the tender price may be converted into that currency and payment of equivalent amounts will be made in the Client’s currency without loss or risk to the contractor.
Where co-financing is required to complete the financing package for an operation and joint co-financing of specific contracts is appropriate, tender invitations may require that bidders include in their tender specific co-financing offers for the contract. This requirement shall only be used where, in the Bank’s judgment, significant competition will be maintained. The agreed level and general terms of the co-financing required shall be specified in the tender documents. Evaluation of tenders should be based on the evaluated tender price, which could include any finance costs above the specified terms.
3.14. Tender Prices
Tender prices for the supply of goods from foreign sources shall be requested on the basis of Incoterms 2000 CIP, CIF or similar border entry point term that is considered appropriate according to the circumstances. For locally supplied goods, tenders may be priced ex-factory with, as appropriate, additions for handling insurance and transportation etc.
In the case of turnkey contracts, the bidders shall be required to quote the price of the installed plant at site, including all costs for supply of equipment, marine and local transportation and insurance, installation, and commissioning, as well as associated works and all other services included in the scope of contract such as design, maintenance, operation, etc. Unless otherwise specified in the tender documents, the turnkey price shall include all duties, taxes, and other levies.
Evaluation of tenders for supply of goods shall be based on the final price of the imported goods and exclude import duties and taxes but shall include all costs associated with the supply, delivery, handling and insurance of the goods as required by the purchaser at the final place of destination.
If the Client wishes to reserve transportation and insurance for the import of goods to national companies or other designated sources, Tenderers shall be asked to quote FCA(named place of destination) or CPT(named place of destination) prices in addition to CIP or CIF prices specified above. In any case, the indemnity payable under transportation insurance shall be at least 110 percent of the contract amount in the currency of the contract or in a freely convertible currency to enable prompt replacement of lost or damaged goods.
Tender prices for works and services contracts to be substantially executed in the purchaser’s country may be requested inclusive of all duties, taxes and other levies. The evaluation and comparison of tenders shall be on this basis and the selected contractor made responsible for all duties, taxes and levies in the performance of the contract.
3.15. Evaluation Criteria
Tender documents shall specify the relevant factors in addition to price to be considered in tender evaluation and the manner in which they will be applied for the purpose of determining the lowest evaluated tender.
Factors other than the tender price that may be taken into consideration include, inter alia, post Incoterms ‘delivery’ costs such as the costs associated with handling and transport to the project site, the payment schedule, the time of completion of construction or delivery, the operating costs, the efficiency and compatibility of the equipment, the availability of service and spare parts, and minor deviations, if any.
The factors other than price to be used for determining the lowest evaluated tender should be expressed in monetary terms or, where that is not practicable, given a relative weight in the evaluation provisions of the tender documents.
3.16. Standards and Specifications
Clients shall use international standards and specifications wherever these are available and appropriate. If particular national or other standards are used, the tender documents shall state that other standards that ensure equivalent or higher quality or performance than the specified standard would also be accepted.
The use of brand names or other designations that would discriminate among suppliers should be avoided. If they are necessary to clarify the nature of the product requirements, the tender documents shall state that products of equal or higher quality would be acceptable.
Payment terms and procedures shall be in accordance with the international commercial practices applicable to the goods, works or services and the market in question. Contracts for supply of goods shall provide for full payment on delivery and inspection, if so required, of the contracted goods, except for contracts involving installation and commissioning, in which case a portion of the payment may be retained until the supplier or contractor has complied with all its obligations.
Any advance payment required upon signature of a contract for goods or works as well as any security required for advance payments, shall be specified in the tendering documents.
3.18. Time Limits
Prescribed time limits for preparation and submission of tenders shall be reasonably adequate for all bidders to prepare and submit tenders taking into account commonly observed public holidays. Generally not less than 45 days from the publication of the invitation to tender or the availability of tender documents, whichever is later, should be allowed for the preparation and submission of tenders. For large or complex works or items of equipment, this period should be extended to 90 days or more.
Tender validity periods and delivery dates shall be consistent with the Client’s reasonable requirements but shall not be used to discriminate against any potential bidder.
In exceptional cases it may be necessary to request bidders to extend the validity of their bids. In such cases bidders shall not be allowed or required to change their bids and shall be free not to give such extension.
Where the tender is for a fixed price contract, provision should be made in the tender documents for the tender price of the successful bidder to be adjusted for inflation up to the date of contract award, so as to mitigate the risk accruing to bidder offering such an extension.
3.19. Conditions of Contract
The form of contract to be used should be appropriate to the objectives and circumstances of the project. Wherever appropriate, standard forms of contract incorporating generally accepted international conditions shall be used. The contract shall:
(a) clearly define scope of goods, works or services to be supplied or performed, the rights and obligations of the Client and of suppliers and contractors and should include, inter alia, appropriate provisions for guarantees of performance and warranties, liability and insurance, acceptance, payment terms and procedures, price adjustment, liquidated damages and bonuses, handling of changes and claims, force majeure, termination, settlement of disputes and governing law.
(b) be drafted so as to allocate the risks associated with the contract fairly, with the primary aim of achieving the most economic price and efficient performance of the contract.
Collection and Evaluation of Bids and Award of the Contract
3.20. Eligibility to Submit Bids
Businesses that did not purchase the prequalification or tender documents according to a general, published, requirement of the Client shall be ineligible to bid.
Businesses may participate individually or in voluntary joint ventures. The Bank will not accept conditions of tendering that require mandatory joint ventures or other forms of mandatory association between domestic and foreign firms.
A business, including any affiliate or parent of the business or party to a joint venture, may submit or participate in any capacity whatsoever in only one bid for each contract. Submission or participation by a bidder in more than one bid for a contract shall result in the rejection of all bids for that contract in which the party is involved. However, a subcontractor may participate in the same tender more than once.
Unless with the approval of the Bank, no publicly owned business shall be eligible to tender or participate in a tender in any capacity whatsoever unless they can establish that they are legally and financially autonomous and are subject to bankruptcy or insolvency law.
No affiliate or hierarchically inter-dependent agency of the Client, nor of a procurement agent engaged by the Client, shall be eligible to bid or participate in a tender in any capacity whatsoever.
Where, in addition to consulting, a business has the capability to manufacture or supply goods or to construct works that business, including any affiliate or parent of the business, cannot be a supplier of goods or works on a project for which it provides consulting services unless it can be demonstrated that there is not a significant degree of common ownership, influence or control. The only exceptions would be turnkey, single responsibility, public works concessions or similar undertakings where design, supply and construction activities are an integral part of the contract or where certain proprietary and critical items of equipment and materials are an essential part of the process design.
3.21. Opening of Bids
Bids solicited under competitive procedures other than shopping shall be received and opened under procedures and conditions guaranteeing the regularity of the opening as well as the availability of information from the opening.
The time specified for tender opening shall be the same as for the latest delivery of tenders or promptly thereafter.
On the date and at the time and place described in the tender documents, the Client shall open all tenders that have been received before the latest time stipulated for the delivery of bids.
Bids shall be opened in the presence of bidders or their representatives who wish to attend.
The name of the Bidder, the total amount of each bid and the name of the signatory to the bid and the date shall be read aloud and recorded when opened. The Client shall maintain a complete record of the bid opening, which shall be copied to the Bank.
Bids received after the stipulated deadline for the submission of tenders shall be returned unopened to the bidder.
The Bank may send its representative(s) to bid opening in order to observe compliance with Bank procedures and regulations.
3.22. Bid Evaluation and Contract Award
When competitive procedures are used, the Client shall evaluate all bids and compare them only on the basis of the evaluation criteria set out in the tender documents.
A bid that is not signed and dated by duly authorized representative(s) of the bidder shall be rejected.
The tender evaluation process up to the award of the contract should be confidential.
Contracts should be awarded within the period of tender validity to the eligible bidder:
a. whose bid has been determined as being substantially responsive,
b. whose bid has been determined as having the lowest evaluated price in terms of the specific evaluation criteria set forth in the tender documentation, and
c. who has been determined to be fully capable of undertaking the contract.
Bidders shall not be allowed or asked to change their tenders, nor required to accept new conditions during evaluation or as a condition of award.
The terms and conditions of the contract shall not, without the Bank’s approval, materially differ from those on which bids were invited.
The Client may reject all bids only if there is evidence of Collusion or if there has been unsatisfactory competition, including receiving tender prices that substantially exceed the cost estimates or funds available. Before rejecting all bids, the Client shall obtain the Bank’s views on, and ‘no objection’ to, the procedures to follow.
If bidders have not been prequalified, the Client shall determine whether the bidder whose bid has been determined to offer the lowest evaluated cost has the capability and resources to effectively carry out the contract as offered in the bid. The criteria to be met shall be set out in the tender documents, and if the bidder does not meet them, the bid shall be rejected. In such an event, the Client shall make a similar determination for the next-lowest evaluated bidder.
The Client shall submit to the Bank a report containing the results of the bid evaluation and its recommendation for the award of the contract. The Bank will review the findings and recommendations as the final step in establishing the eligibility of the contract for Bank financing. The Bank may verify quoted price of offers from sources at its disposal at the expense of the Client.
3.23. Contract Administration
The Client shall administer contracts with due diligence and shall monitor and report to the Bank on the performance of contracts.
The Client shall seek the Bank’s approval before agreeing to any material modification to the terms and conditions of a contract including, but not limited to:
(a) granting a material extension of the stipulated time for the performance of a contract; or
(b) issuing a change order or orders that, in aggregate, would increase the contract price by more than 15 percent of the tender price, net of any change order or orders that reduce the tender or contract price, or that would exceed the allocated funding.
(c) waiver of rights under the contract or a decision not to enforce any of the contractual obligations or similar decisions that may affect the implementation of the project.
As an integral part of their project implementation responsibilities, Clients are required to prepare and maintain documents and records pertaining to the procurement process and the administration of contracts following their award.
The language of the contract shall be English. However, the Bank may authorize use of another language provided that the conformed copies of the contract and all related documents submitted to the Bank shall also include full certified English translations.
3.24. Procurement Monitoring and Bank Review
The Bank’s review of the procurement and contract administration processes will focus on critical steps that are necessary to ensure eligibility of the contract for Bank financing, in particular the procurement plan, the tender documents, the tender evaluation and contract award recommendations, and material changes and claims during execution of the contract. These review procedures are described in Annex 1.
All contracts are subject to the Bank’s prior review but in case of small transactions the Bank may chose not to review the documents. The Legal Documents will specify that the contract is subject to review.
When a complaint regarding any aspect of a tender procedure is received by the Bank, the Bank will require that the complaint be fully reviewed to its satisfaction and that, pending the outcome of such review, no decisions are made or no-objections given which could prejudice the outcome of the review.
In the event that the Bank finds that the procurement or administration of a contract has not been carried out in accordance with the procedures agreed in the Legal Documents, the contract will no longer be eligible for financing by the Bank and the outstanding portion of that financing allocated to the contract will be cancelled.
IV. MODIFIED OR ALTERNATIVE METHODS
With the agreement of the Bank, the Client may deviate from the Open Competitive Tendering using any of the alternatives methods described in this section. Exceptions to Open Competitive Tendering shall be identified in the Legal Documents or by modification thereto.
The deviation from Open Competitive Tender procedure should be limited to the extent expressly authorized in this section under each alternative method, and all other requirements and formalities provided for under Open Competitive Tender rules shall remain applicable mutatis mutandis. Preferential treatments shall be applicable according to the circumstances of the project.
4.2. Selective Tendering
Selective Tendering is essentially Open Competitive Tendering by direct invitation of potential bidders without open advertisement. It may be an appropriate method of procurement where:
(a) there is only a limited number of suppliers;
(b) critical goods, works or services are urgently required;
(c) other exceptional reasons may justify departure from full Open Competitive Tendering procedures.
With the Bank’s approval in the above cases, a Client shall seek bids from a list of potential suppliers broad enough to assure competitive prices, and at least one business from the Bank Members where this is practicable. Such list should include all suppliers when there are only a limited number.
In no case shall the quality of the required goods, works or services or the project be compromised by the selection process.
4.3. Direct Contracting
Direct contracting is contracting without competition (single source) and may be an appropriate method under the following circumstances:
(a) the extension of an existing contract awarded in accordance with procedures acceptable to the Bank for additional goods, works or services of a similar nature would clearly be economic and efficient and no advantage would be obtained by further competition;
(b) Standardization of equipment or spare parts, to be compatible with existing equipment, may justify additional purchases from the original supplier. For such purchases to be justified, the original equipment shall be suitable, the number of new items shall generally be less than the existing number, the price shall be reasonable, and the advantages of another make or source of equipment shall have been considered and rejected on grounds acceptable to the Bank;
(c) The required equipment is proprietary and obtainable only from one source.
(d) The contractor responsible for a process design requires the purchase of critical items from a particular supplier as a condition of a performance guarantee.
(e) In exceptional cases, such as in response to natural disasters.
(f) There has been an unsatisfactory response to other competitive methods carried out for the procurement of the same goods or services.
With the Bank’s approval, in the above cases a Client may invite a single business to present its bid without prior public notification or invitation of other businesses. The award of the contract should be pursuant to proper negotiations on the price and terms of the contract.
Shopping is a procurement method based on comparing price quotations obtained from several suppliers (in the case of goods) or from several contractors (in the case of civil works), with a minimum of three, to assure competitive prices, and is an appropriate method for procuring readily available off-the-shelf goods or standard specification commodities of small value, or simple civil works of small value. Requests for quotations shall indicate the description and quantity of the goods or specifications of works, as well as desired delivery (or completion) time and place. Quotations may be submitted by letter, facsimile or by electronic means. The evaluation of quotations shall follow the same principles as of Open Competitive Tendering. The terms of the accepted offer shall be incorporated in a purchase order or a brief contract.
4.5. Force Account
Force account, that is, construction by the use of the Client’s own personnel and equipment, may be the only practical method for constructing some kinds of works. The use of force account may be justified where:
(a) quantities of work involved cannot be defined in advance;
(b) works are small and scattered or in remote locations for which qualified construction firms are unlikely to bid at reasonable prices;
(c) work is required to be carried out without disrupting ongoing operations;
(d) risks of unavoidable work interruption are better borne by the Client than by a contractor; and
(e) there are emergencies needing prompt attention.
Specific rules and principles applicable to force account shall be specified in the Legal Documents.
V. PROCUREMENT OF CONSULTANCY SERVICES
The Clients employ businesses, whether firms or individuals, to provide a wide range of expert advice and consulting services in connection with their operations and management responsibilities. The main concern when choosing consultants shall be the quality of the services that are provided.
The procedures for selecting consultants and contracting for their services shall be flexible and transparent to ensure that assignments can be efficiently executed with high standards of performance, while providing the necessary accountability.
The procedures described below shall be followed by Clients for hiring Consultants using the proceeds of Bank financing.
5.2. Consultant Selection Procedures
The selection process for consultants normally involves the following steps:
(i) defining the scope, objectives and estimated budget of the proposed assignment and determining the selection procedure to be followed;
(ii) identifying consultants that are qualified to perform the required services and preparing a short list accordingly;
(iii) inviting proposals from the short-listed consultants;
(iv) evaluating and comparing capabilities and proposals and selecting the preferred consultant;
(v) negotiating a contract with the selected consultant; and
(vi) contract administration.
5.3. Short Lists
Short lists of consultants should normally include no less than three and no more than six qualified and experienced consultants (individuals or firms, as the case may be). The list should, as far as possible, consist of a wide geographic spread of consultants.
Unless otherwise approved by the Bank, the following rules shall be considered when preparing the short lists:
(a) No affiliate of the Client shall be included on a short list unless it can be demonstrated that there is not a significant degree of common ownership, influence or control amongst the Client and the affiliate and that the affiliate would not be placed in a position where its judgment in the execution of the assignment may be biased.
(b) No consultant, nor any of its affiliates, shall be included in a short list for any assignment where there may be a conflict with another assignment carried out or to be carried out by the consultant.
(c) A short-list shall not include two or more parties that are associated or affiliated.
For Major Contracts, complex or specialized assignments, or operations involving a significant number of similar assignments, a formal notice shall be published in a quality newspaper with wide circulation in each of the Member Countries and, as appropriate, in the official gazette of the Client’s country, in international business publications and on the Client’s web site. They shall also be transmitted by email to potential participants that have responded with an expression of interest to the General Procurement Notice as well as to known local and foreign firms that are potential suppliers of the services required. The Bank will arrange for publication of the notice on the Bank’s web site. The short list shall be prepared on the basis of the responses to the solicitation.
In order to encourage and facilitate the participation of sub-consultants in contracts, the Client should make available to interested parties the list of shortlisted consultants.
5.4. Requests for Proposals
Consultants not on the short list shall be ineligible to submit a proposal.
Requests for proposals should include the scope of work.
Requests for proposals, including all notices, shall be prepared by the Client in English. If the Client so chooses, and at its expense, a certified translation of the same text may be published translated into any language or languages of the Member Countries.
The language of the contract shall be English. However contracts entered into with local consultants (excluding joint ventures between local and foreign consultants) may, at the Client's option, be in the national language of the Client, provided that the contract and all related documents submitted to the Bank include full certified English translations.
5.5. Evaluation and Selection
When formal proposals are requested from a short list of consultants, the invitation for proposals shall clearly state the criteria for evaluating them. The evaluation of consultants shall firstly be based on technical considerations including, but not limited to, experience in similar assignments, local experience and presence, qualifications of key personnel proposed for the assignment, and suitability and quality of the work plan.
When formal proposals have been requested, the consultants that submit technically responsive proposals shall be requested to give their financial proposals and/or be invited to take part in negotiations with the Client. The consultant who has provided a technically responsive bid and who has proposed the best price shall be invited to sign a contract with the Client.
Some of the above steps may be simplified or omitted, depending on the value of the contract for services to be performed as follows:
(a) For contracts with an estimated value of less than USD 100,000 qualified consultant may be selected directly, without the requirement to prepare a short list.
(b) If the contract is not a Major Contract, selection shall be based on an evaluation of the short-listed firms’ proven experience and current expertise related to the assignment, without a requirement that the firms submit specific proposals for carrying out the assignment. The rationale for the choice shall be documented and recorded.
(c) In some circumstances it may be necessary or advantageous to engage or continue with a specific consultant. In the following cases a Client may, with the Bank’s prior approval, invite the consultant in question to submit a proposal and negotiate a contract:
(i) the consultant has unique expertise or experience; or
(ii) the consultant has been or is involved in the early phases of the project such as feasibility or design and it has been determined that continuity is necessary and no advantage would be gained from following competitive procedures. Provision for such an extension, if considered in advance, shall be included in the original terms of reference and contract, which preferably should have been awarded after a competitive selection.
5.7. Professional Standards
Consultants shall be contractually required to observe the highest standard of ethics during the selection and execution of Bank financed contracts and provide professional, objective, and impartial advice and at all times hold the Client’s interests paramount, without any regard for their future work, and shall strictly avoid conflicts with other assignment or their own corporate interests.
No consultant, nor any of its affiliates, shall be hired for any assignment where such assignment may result into a potential conflict of interest of any nature.
5.8. Contract Negotiations
During contract negotiations the selected consultant’s proposal may be modified by mutual agreement between the Client and the consultant. The Client should indicate any changes that may be desirable in the scope of services and in the staffing proposed by the consultant, and appropriate adjustments in the price of services should then be agreed. Where price is taken into account in the appointment of the selected consultant, no negotiations on fee rates or other prices that were used for evaluation, shall be permitted. The draft final contract shall be presented to the Bank for review before signing where required by the Legal Documents.
5.9. Contract Administration
The Client is responsible for managing and administering the consultant’s work to ensure high performance standards, authorizing payments, making contract changes as may be needed, resolving claims and disputes, ensuring timely and satisfactory completion of the assignment and evaluating the performance of consultants.
5.10. Bank Review
Where consultants are being engaged by a Client, the qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. The Bank will review the proposed scope of services and terms of reference, the proposed short list of consultants, the recommendation for consultant selection and the final contract to ensure that the assignment is eligible for Bank financing.
The review procedures are described in Annex 1. Major Contracts will normally be subject to the Bank’s prior review. The Legal Documents will specify the contracts subject to review. The Bank will also require an evaluation by the Client of the consultant’s performance. The Bank may also choose to independently evaluate the performance of the consultant.
If the Bank finds that the procurement or administration of a contract has not been carried out in accordance with the procedures agreed in the legal or other applicable documentation, the contract would no longer be eligible for financing with the proceeds of the Bank’s financing and the outstanding portion of the financing allocated to the contract would be cancelled.
VI. PREFERENCIAL TREATMENT
When contracting for the procurement of works or services, firms or individuals from Member Countries should enjoy preferential treatment. Also goods manufactured in Member Countries should have priority in Bank-financed procurements. Furthermore, in certain cases, local contractors and locally manufactured goods may enjoy preferential treatment. The preferential treatment shall be applied in Bank-financed projects through:
(a) Setting forth eligibility rules that disqualify contractors from non Member Countries and/or exclude the procurement of goods manufactured in countries other than Member Countries;
(b) Using Local Tendering procedures for the procurement of goods, works or services where contractors from countries other than the country of Client or goods not manufactured in the country of Client are not eligible for procurement.
(c) Setting margins of preference for bidders from Member Countries or for goods manufactured in Member Countries as the case may be.
The exact method of application of the preferential treatments shall be described in the Procurement Plan in accordance with the requirements of this Section.
However when the nature of the project or the technical requirements of the project necessitate the involvement of contractors or procurement of goods from non Member Countries, the Bank may agree that the above rules may be relaxed to allow the participation of businesses from other countries and/or the procurement of goods manufactured in non Member Countries on equal basis.
6.2. Eligibility for Preferential Treatment
In case of procurement of goods, when a bidder applies for preferential treatment based on the origin of the goods, it should establish to the satisfaction of the Client and the Bank that:
(i) labor, raw material, and components from within the country of the Client or Member Countries (as the case may be) will account for 40 percent or more of the EXW price of the product offered, and
(ii) the production facility in which those goods will be manufactured or assembled has been engaged in manufacturing/assembling such goods at least since the time of bid submission.
In case of procurement of services and works, the Bank determines which contractors are genuine domestic contractors and therefore eligible for preferential treatment. The Bank ensures that specific criteria for eligibility are agreed upon and included in the Procurement Plan and/or bidding documents.
6.3. Applying Margins of Preference for Procurement of Goods
The Procurement Plan may provide for a margin of preference in the evaluation of bids under Open Competitive Tendering procedures to bids offering certain goods manufactured in the Member Countries when compared to bids offering such goods manufactured elsewhere.
In such cases, bidding documents shall clearly indicate any preference to be granted to goods manufactured in the Member Countries and the information required to establish the eligibility of a bid for such preference. The nationality of the manufacturer or supplier is not a condition for such eligibility. The methods and stages set forth hereunder shall be followed in the evaluation and comparison of bids.
For the purpose of evaluation and comparison of bids, an amount equal to 15 percent of the bid amount shall be added to all bids received from bidders save those bids eligible for the preference. The lowest evaluated bid determined from the comparison shall be selected for the award of the contract.
In the case of single responsibility, supply and installation or turnkey contracts in which a number of discrete items of equipment is grouped into one contract package or in a bid package involving multiple items, the preference margin shall not be applied to the whole package, but only to the equipment within the package. Equipment offered from non Member Countries shall be quoted CIF or CIP; and all other components, such as design, works, installation, and supervision, shall be quoted separately. In the comparison of bids, only the price of the equipment not eligible for preferential treatment in each bid shall be increased by 15 percent. No preference shall be applied for any associated services or works included in the package.
6.4. Applying Margins of Preference for Procurement of Works
For contracts for works to be awarded on the basis of Open Competitive Tendering,
the Bank may request that the Client grant a margin of preference of 7.5 percent to contractors from Member Countries. The bidding documents shall clearly indicate the preference and the method that will be followed in the evaluation and comparison of bids to give effect to such preference.
Contractors applying for such preference shall be asked to provide, as part of the data for qualification, such information, including details of ownership, as shall be required to determine whether, according to the classification established by the Client and accepted by the Bank, a particular contractor or group of contractors qualifies for preferential treatment.
For the purpose of evaluation and comparison of bids, an amount equal to 7.5 percent of the bid amount shall be added to bids received from all bidders save those eligible for the preference.
Bidding documents and contracts shall specify limitations on subcontracting by eligible contractors to other contractors in order to safeguard the essential intent of the preferential treatment.
6.5. Preferential Treatment for Consulting Services
When selecting consultants, the priority should be given to consultants from the Member Countries. A consultant from a non Member Country may be selected and hired only if:
(a) No consultant from any of the Member Countries is eligible to be short listed or the number of short listed consultants is not sufficient provided that this fact should be established and well documented by the Client in a report to be provided to the Bank; or
(b) None of the short listed consultants provide a bid in due time following sending of requests for proposal.
6.6. Joint Ventures
In some circumstances businesses eligible for preferential treatment may prefer to bid in a joint venture with other businesses. When contracting for works or services, unincorporated joint ventures (or consortiums) may apply for preferential treatment on the condition that:
(a) the partners from Member Countries are individually eligible for the preference under the criteria and procedures set forth under the Procurement Plan and bidding documents;
(b) the partners from Member Countries would not qualify for the work on technical or financial grounds without the participation of other partners; and
(c) the partners from Member Countries, under the arrangements proposed, carry out at least 50 percent of the value of the work.
ANNEX 1 - REVIEW BY THE BANK OF PROCUREMENT DECISIONS
Scheduling of Procurement
1. The Bank shall review the procurement arrangements proposed by the Client in the Procurement Plan for its conformity with this Procurement Policy. The Procurement Plan shall cover an initial period of at least 18 months. The Client shall update the Procurement Plan on an annual basis or as needed, always covering the next 18-month period of project implementation. Any revisions proposed to the Procurement Plan shall be furnished to the Bank for its prior approval.
2. With respect to all contracts which are subject to the Bank’s ex-ante review:
(a) In cases where prequalification is used, the Client shall, before prequalification submissions are invited, furnish the Bank with the draft documents to be used, including the text of the invitation to prequalify, the prequalification questionnaire, and the evaluation methodology, together with a description of the advertising procedures to be followed, and shall introduce such modifications in said procedure and documents, as the Bank shall reasonably request. The report evaluating the applications received by the Client, the list of proposed prequalified bidders, together with a statement of their qualifications and of the reasons for the exclusion of any applicant for prequalification, shall be furnished by the Client to the Bank for its comments before the applicants are notified of the Client’s decision, and the Client shall make such additions to, deletions from, or modifications in the said list as the Bank shall reasonably request.
(b) Before tenders are invited, the Client shall furnish to the Bank for its comments, draft tendering documents, including the invitation to tender; instructions to bidders, including the basis of tender evaluation and contract award; and the conditions of contract and specifications for the civil works, supply of goods, or installation of equipment, etc., as the case may be, together with a description of the advertising procedures to be followed for the tendering (if prequalification has not been used), and shall make such modifications in the said documents as the Bank shall reasonably request. Any further modification shall require the Bank’s approval before it is issued to the prospective bidders.
(c) After tenders have been received and evaluated, the Client shall, before a final decision on the award is made, furnish to the Bank, in sufficient time for its review, a detailed report (prepared, if the Bank shall so request, by experts acceptable to the Bank), on the evaluation and comparison of the tenders received, together with the recommendations for award and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the intended award would be inconsistent with the loan contract and/or the Procurement Plan, promptly inform the Client and state the reasons for such determination. Otherwise, the Bank shall provide its “no objection” to the recommendation for contract award. The Client shall award the contract only after receiving the “no objection” from the Bank.
(d) If the Client requires an extension of bid validity to complete the process of evaluation, obtain necessary approvals and clearances, and to make the award, it should seek the Bank’s prior approval for the first request for extension, if it is longer than four weeks, and for all subsequent requests for extension, irrespective of the period.
(e) If after publication of the results of evaluation, the Client receives protests or complaints from bidders, a copy of the complaint and a copy of the Client’s response shall be sent to the Bank for information.
(f) If as result of analysis of a protest the Client changes its contract award recommendation, the reasons for such decision and a revised evaluation report shall be submitted to the Bank for its approval. The Client shall provide a re-publication of the contract award.
(g) The terms and conditions of a contract shall not, without the Bank’s prior approval, materially differ from those on which tenders were asked or prequalification of contractors, if any, was invited.
(h) One conformed copy of the contract shall be furnished to the Bank promptly after its execution and prior to delivery to the Bank of the first request for disbursement of funds from the loan contract.
(i) All evaluation reports shall be accompanied by a summary of the procurement on a form provided by the Bank. The description and amount of the contract, together with the name and address of the successful bidder, shall be subject to release by the Bank upon receipt of the signed copy of the contract.
3. In the case of contracts subject to ex-ante review, before granting a material extension of the stipulated time for performance of a contract, agreeing to any modification or waiver of the conditions of such contract, including issuing any change order or orders under such contract (except in cases of extreme urgency) which would in aggregate increase the original amount of the contract by more than 15 percent of the original price, the Client shall seek the Bank’s “no objection” to the proposed extension, modification, or change order. If the Bank determines that the proposal would be inconsistent with the provisions of the loan contract and/or Procurement Plan, it shall promptly inform the Client and state the reasons for its determination. A copy of all amendments to the contract shall be furnished to the Bank for its record.
4. The Client shall retain all documentation with respect to each contract not governed by paragraph two (2) during project implementation and up to five (5) years after the date of final disbursement of the loan. This documentation would include, but not be limited to, the signed original of the contract, the analysis of the respective proposals, and recommendations for award, for examination by the Bank or by its consultants. The Client shall also furnish such documentation to the Bank upon request. If the Bank determines that the goods, works, or services were not procured in accordance with the agreed procedures, as reflected in the loan contract and further detailed in the Procurement Plan approved by the Bank or that the contract itself is not consistent with such procedures, it may declare misprocurement as established in Article 2.5 of the Policy. The Bank shall promptly inform the Client of the reasons for such determination.