III. Other Methods of Procurement
|3.1 General |
3.2 Limited International Bidding
3.3 National Competitive Bidding
3.5 Shopping (International and National)
3.7 Direct Contracting
3.8 Force Account
3.9 Procurement from United Nations Agencies
3.10 Procurement Agents
3.11 Inspection Agents
3.12 Procurement in Loans to Financial Intermediaries
3.13 Procurement under BOT and Similar Private Sector Arrangements
3.14 Procurement under Loans Guaranteed by the Bank
3.15 Community Participation in Procurement
3.1 ... There are circumstances where ICB would not be the most economic and efficient method of procurement, and where other methods are deemed more appropriate. The particular procurement methods and the categories of goods and works to which they apply are determined by agreement between the Bank and the Borrower, and are specified in the Loan Agreement.38 The Bank's policies with respect to margins of preference for domestically manufactured goods and contractors do not apply to methods of procurement other than ICB. The more common procurement methods which are generally considered in situations where ICB may not be suitable are set forth in this section.
Limited International Bidding
3.2 ... Limited International Bidding (LIB) is essentially ICB by direct invitation without open advertisement. It may be an appropriate method of procurement where (i) the contract values are small, or (ii) there is only a limited number of suppliers, or (iii) other exceptional reasons may justify departure from full ICB procedures. Under LIB, Borrowers shall seek bids from a list of potential suppliers broad enough to assure competitive prices, such list to include all suppliers when there are only a limited number. Domestic preferences are not applicable in the evaluation of bids under LIB. In all respects other than advertisement and preferences, ICB procedures shall apply.
National Competitive Bidding
3.3 ... National Competitive Bidding (NCB) is the competitive bidding procedure normally used for public procurement in the country of the Borrower, and may be the most efficient and economical way of procuring goods or works which, by their nature or scope, are unlikely to attract foreign competition. To be acceptable for use in Bank-financed procurement, these procedures shall be reviewed and modified as necessary to assure economy, efficiency, transparency and broad consistency with the provisions included in Section I of these Guidelines. NCB may be the preferred method of procurement where foreign bidders are not expected to be interested because (i) the contract values are small, (ii) works are scattered geographically or spread over time, (iii) works are labor intensive, or (iv) the goods or works are available locally at prices below the international market. NCB procedures may also be used where the advantages of ICB are clearly outweighed by the administrative or financial burden involved.
3.4 ... Publication of a General Procurement Notice is not required for NCB, and advertising may be limited to the national press or official gazette. Bidding documents may be in an official language of the country, and local currency is generally used for the purposes of bidding and payment. Adequate response time for preparation and submission of bids shall be provided. The procedures shall provide for adequate competition in order to ensure reasonable prices, and methods used in the evaluation of bids and the award of contracts shall be made known to all bidders and not be applied arbitrarily. If foreign firms wish to participate under these circumstances, they shall be allowed to do so.
Shopping (International and National)
3.5 ... Shopping is a procurement method based on comparing price quotations obtained from several suppliers, usually at least three, to assure competitive prices, and is an appropriate method for procuring readily available off-the-shelf goods or standard specification commodities that are small in value. Requests for quotations shall indicate the description and quantity of the goods, as well as desired delivery time and place. Quotations may be submitted by telex or facsimile. The evaluation of quotations shall follow sound public or private sector practices of the purchaser. The terms of the accepted offer shall be incorporated in a purchase order.
3.6 ... International shopping shall solicit quotations from at least three suppliers in two different countries. National shopping may be used where the desired goods are ordinarily available from more than one source in the country of the Borrower at competitive prices.
3.7 ... Direct contracting without competition (single source) may be an appropriate method under the following circumstances:
(a) An existing contract for goods or works, awarded in accordance with procedures acceptable to the Bank, may be extended for additional goods or works of a similar nature. The Bank shall be satisfied in such cases that no advantage could be obtained by further competition and that the prices on the extended contract are reasonable. Provisions for such an extension, if considered likely in advance, shall be included in the original contract.
(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.
3.8 ... Force account, that is, construction by the use of the Borrower's own personnel and equipment 39, 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 Borrower than by a contractor; and
(e) there are emergencies needing prompt attention.
Procurement from United Nations Agencies
3.9 ... There may be situations in which procurement from specialized agencies of the United Nations (UN), acting as suppliers, pursuant to their own procedures, may be the most economical and efficient way of procuring small quantities of off-the-shelf goods, primarily in the fields of education, health and rural water supply and sanitation.
3.10 ... Where Borrowers lack the necessary organization, resources, and experience, Borrowers may wish (or be required) by the Bank to employ, as their agent, a firm specializing in handling international procurement. The agent shall strictly follow all the procurement procedures outlined in the Loan Agreement on behalf of the Borrower, including use of Bank Standard Bidding Documents, review procedures and documentation. This also applies in cases where UN agencies act as procurement agents 40. Management contractors may be employed in a similar manner for a fee to contract for miscellaneous works involving reconstruction, repairs, rehabilitation, and new constructions in emergency situations, or where large numbers of small contracts are involved.
3.11 ... Preshipment inspection and certification of imports is one of the safeguards for the Borrower, particularly where the country has a large import program. The inspection and certification usually covers quality, quantity and reasonableness of price. Imports procured through ICB procedures shall not be subject to price verification, but only verification for quality and quantity. However, imports not procured through ICB may additionally be subjected to price verification. The inspection agents are ordinarily paid for on a fee basis levied on the value of the goods.39 Costs for certification of imports shall not be considered in the evaluation of bids under ICB.
Procurement in Loans to Financial Intermediaries
3.12 ... Where the loan provides funds to an intermediary institution such as an agricultural credit institution or a development finance company, to be re-lent to beneficiaries such as individuals, private sector enterprises, or autonomous commercial enterprises in the public sector for the partial financing of subprojects, the procurement is usually undertaken by the respective beneficiaries in accordance with established local private sector or commercial practices, which are acceptable to the Bank. However, even in these situations, ICB may be the more efficient and economic procurement method for the purchase of large single items or in cases where large quantities of like goods can be grouped together for bulk purchasing.
Procurement under BOT and Similar Private Sector Arrangements
3.13 ... Where the Bank is participating in financing the cost of a project procured under a BOO/BOT/BOOT 41 or similar type of private sector arrangement, either of the following procurement procedures shall be used, as set forth in detail in the Staff Appraisal Report, the President's Report and the Loan Agreement:
(a) The entrepreneur under the BOO/BOT/BOOT 42 or similar type of contract shall be selected under ICB or LIB 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 Borrower 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 Staff Appraisal Report, the President's Report and the Loan Agreement shall specify the type of expenditures incurred by the said entrepreneur towards which Bank financing will apply.
(b) If the said 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 ICB or LIB procedures.
Procurement under Loans Guaranteed by the Bank
3.14 ... If the Bank guarantees the repayment of a loan made by another lender, the goods and works financed by the said loan shall be procured with due attention to economy and efficiency and in accordance with procedures which meet the requirements of paragraph 1.5.
Community Participation in Procurement
3.15 ... Where, in the interest of project sustainability, or to achieve certain specific social objectives of the project, it is desirable in selected project components to (i) call for the participation of local communities and/or nongovernmental organizations (NGOs), or (ii) increase the utilization of local know-how and materials, or (iii) employ labor-intensive and other appropriate technologies, the procurement procedures, specifications, and contract packaging shall be suitably adapted to reflect these considerations, provided these are efficient. The procedures proposed shall be outlined in the Staff Appraisal Report, the President's Report and the Loan Agreement.
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(38). Contracts shall not be divided into smaller units in order to make them less attractive for ICB procedures; any proposal to divide a contract into smaller packages shall require the prior approval of the Bank.
(39). A government-owned construction unit that is not managerially and financially autonomous shall be considered a force account unit. "Force account" is otherwise known as "direct labor," "departmental forces," or "direct work."
(40). The Consultant Guidelines shall apply for the selection of procurement and inspection agents. The cost or fee of the procurement or inspection agent is eligible for financing from the Bank loan, if so provided in the Loan Agreement, and provided the terms and conditions of selection and employment are acceptable to the Bank.
(41). BOO: Build, Own, Operate; BOT: Build, Operate, Transfer; BOOT: Build, Own, Operate, Transfer.
(42). For projects such as toll roads, tunnels, harbors, bridges, power stations, waste disposal plants, and water distribution systems.