This Bank Procedures statement was revised in August 2004 to reflect the term "development policy lending" (formerly adjustment lending), in accordance with OP/BP 8.60, issued in August 2004. Revised to reflect title change to "finance officer" (formerly disbursement officer) that took effect on July 1, 2002.
Note: OP 11.00, together with BP 11.00 and the Procurement and Consultants Manuals, replaces ODs 11.00, Procurement; 11.01, Country Procurement Assessment Reports; 11.02, Procurement Arrangements for Investment Operations; 11.03, Procurement Arrangements for Adjustment Operations; 11.04, Review of Procurement Documentation and Decisions for Lending Operations; and 11.10 Use of Consultants; BP 11.00, Annex C1, Sample Wording for Inclusion in Bidding Documents; BP 11.10, Annex D, Preparation of Consultant Lists and Annex D1,Sample Communication of Consultant List to Borrower; and the following Operational Memoranda: Procurement and Consultant Guidelines: Undertakings against Fraud and Corruption, 2/10/98; Procurement Guidelines: Fraud and Corruption Amendments, 9/06/96; Mandatory Publication of Specific Procurement Notices for Large Contracts, 2/15/96; Communications from Bidders or Consultants and from Executive Directors on Behalf of Bidders or Consultants, 3/06/95; Engagement of Lawyers/Legal Consultants, 08/17/93; Monthly Operational Summary--Improvements in Presentation, 12/31/92; Competence in Local Language in Consultant Selection Process, 12/22/92; and Use of Imported Goods for Productive Purposes, 12/12/90. Questions on procurement may be addressed to the Director, Procurement Policy and Services Group.
Project Preparation, Appraisal, and Implementation
1. For each project to be proposed for Bank1 financing, a procurement specialist (PS) or procurement-accredited staff (PAS) is included in the task team (TT) from its inception.
Procurement Capacity Assessment and Planning
2. After the TT identifies the agencies that will implement the operation, the PS or PAS assesses the agencies' capacity to carry out project procurement and the risks associated with procurement under the operation.2 To carry out the assessment, the PS or PAS draws on the most current applicable Country Procurement Assessment Report (CPAR).3 If the capacity and risk review reveals deficiencies, the TT works with the borrower to formulate an action plan to strengthen capacity (including training or technical assistance, as appropriate) and mitigate the identified risks.
3. Procurement planning begins when the nature and main components of the proposed project are identified. The PS or PAS assists the borrower in preparing the optimum contracting strategy for the project, taking into account any technical, financial, or management constraints the borrower may be facing. For specific investment projects, the procurement plan covers:
(a) the list of appropriate contract packages;
(b) the overall project procurement program, including timing of the contracts;
(c) the optimal methods for procuring the necessary goods, works, and services;
(d) the required Bank standard bidding documents; and
(e) the institutional arrangements necessary to carry out the procurement.
4. In the case of projects for which a time-bound schedule and specific contracts cannot be precisely defined,4 the procurement plan consists of a detailed description of all administrative aspects of procurement and consultant selection, including:
(a) criteria for efficient contract packaging and appropriate procurement methods;
(b) timing of all procurement activities and the system to monitor procurement progress; and
(c) actions to keep the business community informed of opportunities and outcomes of the procurement under the project.
The project Procurement Plan sets forth the contracts required to carry out the project for an initial period of at least 18 months. The plan shall be updated annually or as needed during project implementation.5
Project Appraisal and Negotiations
5. During appraisal, the following activities are carried out:
(a) The PS or PAS drafts the Bank procurement supervision plan, identifying the levels of prior and post review, and the frequency of any required procurement audit.6 The levels of review and the intensity of supervision of procurement are directly linked to the levels of risk and institutional weaknesses identified through the institutional assessment.7
(b) The Bank and the borrower agree on standard bidding documents to be used for the project, or the final complete bidding documents created for specific contracts to be let in the first procurement cycle, or both; the borrower issues a General Procurement Notice (GPN), as required in accordance with para. 2.7 of the Procurement Guidelines, which is cleared by the PS or PAS. If there is advance procurement under the proposed project, the GPN or Special Procurement Notice (SPN), or both, are issued at earlier stages of project preparation.
(c) As the project arrangements are firmed up, the PS or PAS finalizes the Bank procurement supervision plan and assists the borrower to develop the project procurement plan and any agency-strengthening action plans into a coherent overall project strategy. The PS or PAS addresses all three plans in the procurement section of the Project Appraisal Document (PAD) and, prior to negotiations, the country lawyer reflects the procurement-related arrangements in the PAD in the Loan Agreement. The regional procurement adviser (RPA) clears the draft procurement sections in both the PAD and the Loan Agreement.
6. During negotiations, the Bank and the borrower agree on the procurement provisions in the Loan Agreement, and finalize the Bank procurement supervision plan. Changes made at this stage must be cleared by the RPA.
7. During project implementation, the PS or PAS and the task team leader (TTL) evaluates whether the borrower's procurement actions comply with the provisions of the Loan Agreement.8 They also monitor adherence to the procurement plan and progress in strengthening the capacity of the implementing agency (where necessary). If major deficiencies occur, the PS or PAS reports them and proposes corrective action to the TTL, the country director, and the RPA. At the borrower's request, the TT, in consultation with the country director and the RPA, may revise the Bank's procurement supervision plan.9
Role of Bank Staff
8. In working with borrowers on procurement matters, Bank staff maintain strict neutrality and impartiality. Staff do not (a) recommend to borrowers that they use particular consulting firms, suppliers, or contractors; (b) undertake activities that are the responsibility of borrowers; or (c) participate in evaluating bids or proposals. The Decision Authority Matrix (see Annex A) sets forth the roles and responsibilities of principal Bank staff involved in the procurement process.
Consultant Lists and Review of Procurement Actions
9. The Borrower is responsible for the preparation of shortlists. However, upon receiving a written request from the borrower, Bank staff may supply additional consultants that could be included in a shortlist.
10. Bank review of the borrower's procurement actions under a Bank loan is discussed in Appendix 1 of both the Procurement and the Consultant Guidelines. For some contracts, depending on their size and nature, the review is carried out by the RPA or the Operations Procurement Review Committee (OPRC).10
11. The Legal Vice Presidency (LEG) clears all terms of reference and proposed selections of consultants, for legal work in Bank-financed operations.
Resolution of Disagreements
12. The TTL and the PS or PAS assigned to each project are accountable for procurement decisions. Disagreements between the PS or PAS and the TTL (or the sector or country director or other operational managers) are resolved as follows:
13. On a matter below the OPRC review threshold:11
(a) A disagreement between the PS or PAS and the TTL is referred to the RPA for resolution.
(b) A disagreement between a sector or country director and the RPA is referred to the RVP for resolution. The RVP consults with the RPA, who may consult with Procurement Policy and Service Group (OPCPR) and the Chief Counsel, Procurement and Consultant Services (CCPr).
14. On a matter at or above the OPRC review threshold:
(a) A disagreement between the TTL, PS or PAS, sector or country director on the one hand and the members of the OPRC on the other hand is referred to the next level of management: Vice President, Operations Policy and Country Services (OPCVP); Deputy General Counsel; and the concerned RVP. If no decision can be made at that level, the issue is referred to the managing director (MD) concerned, who consults with the General Counsel in arriving at a decision. If a decision cannot be reached, the matter is referred to the Bank President for a final ruling.
(b) If OPRC members fail to reach a consensus, the dissenting member may either record his/her dissenting views, or refer the issue to the next level of management: OPCVP; Deputy General Counsel; and the concerned RVP. If no decision can be made at that level, the issue is referred to the MD concerned, who consults with the General Counsel in arriving at a decision. If a decision cannot be reached, the matter is referred to the Bank President for a final ruling.
Complaints or Questions on Procurement
15. Appendix 4 of both the Procurement and the Consultant Guidelines set out (for the benefit of borrowers and bidders) the Bank's role in handling procurement-related complaints.
16. On receiving a written complaint or question from a bidder or applicant, either directly or through the office of an Executive Director (ED) or a government agency, Bank staff promptly send a copy to the borrower.12 If the Bank has not yet received the borrower's evaluation report, the TTL requests that the borrower address the issues raised in the complaint when submitting the evaluation report. Bank staff also write to the complainant to acknowledge receipt of the communication.
17. The PS or PAS assigned to the project handles the complaint, in consultation with the RPA. The PS or PAS keeps the TTL informed of the steps being taken and the status of the matter. The RPA reviews all evaluation reports for procurement under international competitive bidding, and those for selection of consultants under contracts with an estimated cost of $200,000 or more, for which a complaint has been received.13 For such cases, when the TTL sends the evaluation report to the RPA for review, the cover memorandum clearly states that a complaint has been received, gives relevant details (the nature of the complaint, the name of the complainant, date of complaint, etc.), and includes a proposed draft reply and all relevant supporting information (e.g., referenced sections from the bid document, communications from the borrower responding to specific issues raised in the complaint, or by the Bank, and copies of the entire bid or proposal, if necessary). The RPA clears the reply to the complainant. All complaints that pertain to procurement legal issues are handled by the CCPr in consultation with the RPA.
18. If an ED's office or a government agency representing a supplier/contractor requests a meeting to discuss the complaint, staff inform the RPA, who attends the meeting.
19. When handling the complaint, Bank staff do not:
(a) discuss the complaint with the bidder (except to acknowledge receipt of the complaint), communicate an opinion to the bidder, or provide details on the evaluation while the process is under way;
(b) disclose correspondence between the Bank and the borrower or documents related to the evaluation process;
(c) participate in the evaluation of bids or make recommendations or give opinions to the borrower about the award of a contract;
(d) become party to discussions between the borrower and the bidder;
(e) give a no-objection to a bid award recommendation until any outstanding complaints are addressed to the full satisfaction of the Bank;14 or
(f) reply to the complaint during the evaluation process (except to acknowledge receipt), until the borrower has notified the winning bidder of the award of the contract.
20. If the complaint was channeled through the office of an ED or a government agency, once the case is resolved, the TTL sends a written response (a memorandum to the ED, a letter to a government agency) presenting the pertinent facts and explaining the Bank's position and rationale. The memorandum or letter should be self-contained and should not include copies of internal working documents or correspondence between the borrower and the Bank on the matter, and should be cleared with the RPA.
Allegations of Fraud and Corruption
21. Complaints alleging fraudulent or corrupt practices by a bidder, supplier, contractor, or consultant in the procurement process of a Bank-financed contract are referred by Bank staff to the Department of Institutional Integrity.
22. When Bank staff determine that the borrower has followed procurement procedures that are not in accordance with those set out in the Loan Agreement, the PS or PAS drafts a written notice to the borrower. The notice brings the violation to the borrower's attention and advises that, if the situation is not rectified, the Bank may declare misprocurement. The country and sector directors and the RPA are informed at this stage of the action being proposed. The notice is cleared with the RPA, CCPr,15 and with the country lawyer; signed by the TTL; and sent to the borrower. If the borrower refuses to rectify the situation as requested by the Bank, the PS or PAS prepares a memorandum from the TTL to the country director, giving the details of the case and recommending a course of action. Copies of this memorandum are sent to the RPA, the country lawyer, the CCPr, the Loan Department (LOA), and the Manager, OPCPR. The RPA, the CCPr, and the country lawyer provide their advice to the country director within five working days.
23. When misprocurement is declared, the country director promptly informs the borrower. The TTL also informs the finance officer and the country lawyer. If misprocurement with cancellation is declared, the LOA cancels the amount allocated in the Loan Agreement for the misprocured contract, including an appropriate portion of the physical and price contingencies. If any amounts related to the misprocured contract have been disbursed, the LOA so advises the TTL and takes appropriate action with the borrower to recover for subsequent cancellation the amounts already disbursed.
24. In exceptional cases,16 for example, if there are legitimate differences in judgment between the Bank and the borrower, or if the borrower genuinely misunderstood the requirements of the Loan Agreement, the Bank may reallocate the proceeds of the loan allocated to the misprocured contract to other components of the project, rather than canceling them. In such cases, the TTL, the PS or PAS, after consultations with the RPA and the chief counsel of the country concerned make a recommendation to the country director, who sends the recommendation to the RVP for approval. The General Counsel is notified of the final decision.
Country Procurement Work
25. To better understand the strengths and weaknesses of the procurement environment of a client country, the Bank may carry out either a CPAR17 at the request of, and jointly with, the government, or an Operations Procurement Report (OPR) if the government chooses not to participate. Country directors, in consultation with the RPAs, are responsible for planning and executing the reviews. CPARs or OPRs are normally carried out on a priority basis in countries with a record of unsatisfactory procurement practices, or countries with a substantive ongoing or proposed lending program, or where a government requests Bank assistance to improve capacity or reform its national procurement system. OPCPR, the CCPr, the country lawyer, and Poverty Reduction & Economic Management (PREM) provide support as needed. The RPA, country lawyer, and the CCPr clear the final CPAR or OPR report. The reports are updated whenever major legislative or institutional changes occur in the country.
26. If the Bank is involved in assisting with procurement reforms, the country director and the RPA are generally responsible for overseeing this work. The CCPr oversees the legal aspects of this work, in particular by drafting the terms of reference for the legal assignment, clearing a list of specialized legal consultants capable of undertaking it, explaining to government officials the merits of such reform, and commenting on the draft laws and regulations prepared by the legal consultant. Since the legal framework is key to the success of an effective procurement reform, the legal consultants should be hired directly by the government and not as a sub-consultant to any procurement consultants that might be hired to advise on other aspects of the procurement reform. In addition, the Bank may be requested by the country from time to time to provide advice on ongoing reforms.
- "Bank" includes IBRD and IDA; "loan" includes IDA credits and IDA grants, and PPF advances to which the Bank's Procurement Guidelines are made applicable pursuant to the provisions of the relevant Agreement with the Bank providing for such credit, grant or PPF advance, but excludes development policy lending, unless the Bank agrees with the borrower on specified purposes for which the loan proceeds may be used; "Loan Agreement" includes Development Credit Agreement, Letter Agreement for grants or PPF advances and any agreement, such as a Project Agreement, between the Bank and the project implementing entity, when the project implementing agency is different from the borrower; "procurement" refers to the purchase of goods, works, or services (e.g., the hiring of consultants); "borrower" includes the recipient of a grant or PPF advance, or the project implementing agency, when it is different from the borrower.
- See Assessment of Agency's Capacity to Implement Procurement, Setting of Prior Review Thresholds, and Procurement Supervision Plan.
- See Country Procurement Assessment Report.
- For example, sector investment operations, projects with community participation, and financial intermediary loans. For these kinds of projects, procurement is typically carried out on an ongoing basis and the precise list of all the goods, works, and services (e.g., medicines, vaccines, school supplies, etc.) to be procured under the project may not be available in its totality from the beginning.
- See guidance on project procurement planning.
- See Assessment of Agency's Capacity to Implementation Procurement, Setting of Prior Review Thresholds, and Procurement Supervision Plan.
- See guidance on the procurement supervision plan. Prior and post reviews are discussed in Appendix 1 of both the Procurement and the Consultant Guidelines.
- See the Bank's service standards related to procurement actions.
- If revision of the Bank's procurement supervision plan involves changes in the thresholds for prior and post review, such changes would normally require amendments to the Loan Agreement. For procedures governing amendments to the Loan Agreements see BP 13.05, Project Supervision.
- See thresholds for review by the RPA and the OPRC, and procedures on how to submit cases for review by the OPRC.
- See threshold for review by OPRC.
- The complainant may want to keep the communication with the Bank confidential for fear of reprisal or in cases where the complaint may be related to corruption. In these cases, the TTL consults with the RPA and CCPr on the most appropriate course of action.
- In cases subject to the review of the OPRC, the complaint is reviewed by the RPA, in consultation with the other members of the OPRC.
- If the complaint reaches the Bank shortly after the "no objection" has been issued and the complaint appears serious, the RPA may consider requesting the borrower to postpone award of the contract pending resolution of the complaint.
- Involvement of Chief Counsel, Procurement and Consultant Services is upon the RPA's request.
- See para. 15, OP 11.00.
- See Country Procurement Assessment Report.