World Bank’s New Procurement Framework and Regulations for Projects

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The World Bank has a new, modern and business-friendly Procurement Framework. This modernized approach means greater focus on value for money, more ways bidders to differentiate bids, and more opportunities for dialogue and discussion.

World Bank procurement staff are based in 72 countries to support borrowers throughout the procurement process. Staff work with governments to achieve the highest bidding and contract management standards to get the best development result.

Under the new procurement framework, there are four key innovations to help businesses and country clients:

  1. Needs and risks of a project are analysed through a Project Procurement Strategy for Development (PPSD). This analysis enables the borrower to have a strategy on how best to engage with bidder. The analysis will ensure that procurement processes are fit for purpose, allow choice, and are appropriate to the size, value, and risk of the project.
  2. Value for Money has been introduced as a core procurement principle in all procurements financed by the World Bank. This means a shift in focus from the lowest evaluated compliant bid to bids that provide the best overall value for money, taking into account quality, cost, and other factors as needed.
  3. The approach to resolving procurement-related complaints has been significantly improved with capacity to promptly respond to any concerns during the procurement process. A standstill period has been introduced – a pause between identifying who should win the contract and actually awarding them the contract so that other bidders can voice any concerns before a contract is actually legally formed and awarded.
  4. The World Bank will be more involved in contract management of procurements with high value and high risk to ensure the best possible outcomes and that problems are resolved quickly.

Core procurement principles

  1. Value for MoneyThe principle of value for money means the effective, efficient, and economic use of resources, which requires an evaluation of relevant costs and benefits, along with an assessment of risks, and non-price attributes and/or life cycle costs, as appropriate. Price alone may not necessarily represent value for money.
  2. EconomyThe principle of economy takes into consideration factors such as sustainability, quality, and non-price attributes and/or life cycle cost as appropriate, that support value for money.It permits integrating into the Procurement Process economic, environmental, and social considerations that the Bank has agreed with the Borrower. It also permits augmenting identified sustainability criteria with specific in support of the Borrower’s own sustainable procurement policy.
  3. IntegrityThe principles of integrity refer to the use of funds, resources, assets, and authority according to the intended purposes and in a manner that is well informed, aligned with the public interest, and aligned with boarder principles of good governance. It requires to observe the highest standard of ethics during the Procurement Process and refrain from fraud and corruption.
  4. Fit for purposeThe principle of fit for purpose applies both to the intended outcomes and the procurement arrangements in determining the most appropriate approach to meet the project development objectives and outcomes, taking into account the context and the risk, value, and complexity of the procurement.
  5. EfficiencyThe principle of efficiency requires that Procurement Processes be proportional to the value and risks of the underlying project activities by avoiding delays.
  6. TransparencyThe principle of transparency requires the Borrower and the Bank enable appropriate review of the procurement activities, supported by appropriated documentation and disclosure.
  7. FairnessThe principle of fairness refers to equal opportunity and treatment for bidders and consultants, equitable distribution of rights and obligations and credible mechanisms for addressing procurement-related complaints and providing recourse.

The new rules are applicable for projects with Project Identification Document (PID) dated 1st July 2016 and onwards.