Updates on World Bank’s New Procurement Framework
It has been now since one year that the World Bank’s New Procurement Framework and Regulations for Projects are in force in order to deliver better development results. Further experiences can be shared in meantime related to the focus on the end to end procurement cycle considering:
- strategic planning
- fit for purpose and proportionate approach design
- appropriate procurement approaches/selections
- life-cycle costs
- evaluation criteria
- complain mechanism
- contract award and management
Objectives of the new Framework
- Deliver better development results
- Modernize how the World Bank engages in procurement with partners
- Introduce choice in the design of procurement processes to ensure that they are fit for purpose and proportionate
- Provide modern and efficient procurement approaches and methods, which allows innovation in the solutions that the World Bank finances
- Enhance transparency by increasing access to procurement information
Key Innovations
- More upfront analysis and design
- Value for Money (VfM) as a core procurement principle in all procurements
- Shift in focus from the lowest evaluated compliant bid
- Provides more options for tailored procurement approaches
- Enables hands-on expanded implementation support as an option for the highest risk operations
- Promotes strategic engagements with providers via industry sectorial engagements, market engagement and pre-meetings
- Enables the use of sustainable procurement criteria
- Improves the approach to resolving procurement-related complaints e.g. standstill period
- Greater focus on environment, social, health and safety requirements (ESHS)
- More involvement in contract management via best possible outcomes delivered and problems resolved quickly
Request for Bid Prequalification vs Request for Proposal Initial Selection
In the currently existing prequalification process on Request for Bid (RFB) are suppliers that are substantially responsive to the qualifying criteria are invited to bid. In contrary in the new initial selection process of the Request for Proposal (RFP) an additional step has been included, which is the rated criteria in which only the highest ranked suppliers invited to submit full proposals. Thus only suppliers that have the best chance of succeeding are put to the full cost of proposing. This should lead fairer to market.
Abnormally Low Bids and Proposals
Where the price, in combination with other elements of the Bid/Proposal, appears so unreasonably low, that it raises material concerns as to the capability to perform the contract for that sum.
Five stages are applied in the treatment of an abnormally low Bid/Proposal:
- Identify: the Borrower identifies a potential abnormal low bid/proposal
- Clarify: the Borrower seeks clarification from the Bidder/Proposer
- Justify: the Bidder/Proposer prepares a justification of their price
- Verify: the Borrower fully analyses the justification to verify if it provides a reasonable explanation
- Decide: Borrower decides whether to accept or reject the Bid/Proposal
Best And Final Offer
The Best And Final Offer (BAFO) is an option in international competitive procurement and gives the opportunity for Bidders/Proposers to improve Bids/Proposals in terms of
- technical
- price reduction
- methodology enhancement
- clarification or modification of any aspect of the Bid/Proposal
- provision of additional information
The Borrower must inform Bidders/Proposers in the RFB/RFP that
- BAFO may be used
- Bidders/Proposers are not obliged to submit a BAFO
- no negotiations allowed following BAFO
The BAFO can only be used once in a procurement and not in conjunction with negotiations.
BAFO does not apply to Consulting Services
Negotiations
Negotiations is another Option in international competitive procurement.
- Negotiation may take place after the full evaluation of Bids/Proposals (i.e. both technical and financial parts) and before the Notice of Intention to Award the contract
- Borrower must inform prospective Bidders/Proposers in the RFB/RFP and outline how the negotiations will be conducted
- Must be held in the presence of an independent third party agreed by the World Bank
- Negotiations must not reduce the minimum technical requirements of the Bid/Proposal
Most Advantageous Bid/Proposal
The new evaluation to determine the award of contract varies between RFP and RFB consist of
- RFP: rated criteria are used
This is the proposal that meets the qualification criteria and is substantially responsive to the RFP and the best evaluated Proposal (i.e. the highest score). In this scenario the most advantageous proposal may not be the lowest price
- RFB: rated criteria are not used
This is the Bid of the Bidder that meets the qualification criteria and is substantially responsive to the RFB and the lowest evaluated price.
Conclusion
The World Bank’s Procurement Framework
- Provides more choice and greater flexibility to deliver the desired outcome
- More focus on Value for Money aspects, as opposed to price only
- Encourages innovation and alternative solutions
- More and earlier engagement with business actors and experts
- More information and greater transparency on procurement process and rules
Alexander Herring
Vice President CBL-ACP
PSLO World Bank Group
Sources: www.worldbank.org
