Joint WTO/WB Regional Workshop on Procurement Reforms

1. Joint WTO/WB Regional Workshop on Procurement Reforms Overview of Procurement Reforms in Africa Bernard Abeillé Regional Procurement Adviser at the World bank January 14-17, 2003

2. Fiduciary Responsibility • WB’s Legal Obligations : • The Bank has a fiduciary responsibility to ensure that “the proceeds of any loan/credit are used only for the purposes for which the loan was granted, with due attention to considerations of economy and efficiency, and without regard to political or other non-economic influences or considerations”.

3. Fiduciary Responsibility • To fulfil its fiduciary responsibility, the Bank has established detailed Guidelines • Basic principles governing the Bank’s Procurement Policies are : • Need for economy and efficiency • All eligible bidders have equal opportunity • Development of domestic contracting • Transparency in the procurement process

4. Current Trend includes • Moving from transaction-intensive fiduciary work to the development of sound national fiduciary systems • Sound public procurement policies and practices are among the essential elements of good governance • Being prepared to work on Multi-Donor Budget Supports (MDBS), SWAPs and PRSCs • “Appropriateness of Expenditures”

5. Sound National Procurement Systems • To ensure that sound national procurement systems are in place, the Bank carries out : • Capacity Assessments • Country Procurement Assessment Reports (CPARs) : • Jointly with Government and other MDBs • Share its analysis/findings -- including risks • CPAR Recommendations, in general, lead to : • An Action Plan, and •  A Procurement Reform

6. CPARs Follow-up • As part of Country Dialogue & Capacity Building, the Bank: • Discusses action plans • Provides grants to support procurement reforms • Establishes triggers related to procurement as part of policy packages • Organizes country and sub-regional Procurement Training Programs • Sub-Regional Organizations will play a major role (WAEMU, COMESA …) • Partnership with other donors is growing rapidly in this area

7. Frequent Structural Problems • Lack of public expenditures management systems/controls • Lack of Procurement E & M systems • Complexity of national procedures  Slow process and weak absorptive capacity • High unit prices -- resulting from various factors, in particular the evaluation by bidders of country specific commercial risks • Lack of efficient, transparent and independent appeal mechanisms (to establish confidence an partnership with the private sector)

8. Frequent Deficient Practices • Slicing and poor packaging of contracts • Limited advertisement and insufficient competition • Abuse of direct contracting as a response to critical situations • Inadequacy of bid evaluation criteria • Modification of bid evaluation criteria after bid opening • Negotiations of terms and conditions of contracts after contract award

9. Key Principles for a good procurement system • Effective Advertisement (broad + sufficient time) • Public Bid Opening (immediate opening of all financial bids) • Well-formulated Bidding Documents • Bid Evaluation Criteria(non-discriminatory, disclosed, and in monetary terms) • Qualification of bidders reviewed separately • Contract Award to the lowest evaluated bidder -- without negotiations

10. Procedures should exclude: • Use of two-envelope systems (except for Consultants) • Use of merit-point system to evaluate bids (except for Consultants) • Combination of bid evaluation with qualification • Use of non-quantified bid evaluation criteria • Restricting access to bidding process

11. Modern Procurement Regulations • Loosing bidders must have an effective way to submit protests : • Protests submitted to an independent entity • Protests before contract award may lead to suspend the contract award decision • Protests after contract award may lead to compensatory damages • Contracting Entities : • Conducting bid evaluations are distinct from those having a regulatory/control functions • Have access to a series of standard documents and computerized information systems

12. Strategy for Efficiency • Enhance accountability of contracting entities, but install independent audits + efficient controls + sanctions • Eliminate steps and controls with no value-added • Enforce the use of Procurement Plans • Reconcile budget programming and contract execution • Associate the private sector in the oversight of the procurement through their participation in: • Control and surveillance • Information systems • Regulatory Body • Appeal Mechanisms

13. Observatory of Country Procurement Reforms • The Bank is maintaining for the Africa Region a “Ranking Index” of Country Procurement Reforms to monitor progress on: • Legal Procurement Framework & Regulations • Procurement Practices & Standard Tools • Institutional Capacity & Proficiency of Staff • Independent Control Systems & Appeal Mechanisms • Anti-Corruption Measures

14. Ranking Index of 27 African Countries

15. Why Procurement Reforms become so important ? • In the past, donors procedures were used for the largest part of investments (>80%) • Now, with Multi-Donor Budget Support (MDBS), national systems are playing a growing role • The Bank is ready to increase Proc. Review Thresholds (PRTs) if national systems are found acceptable • Better national systems are performing, more donors are able to accept national procedures • Procurement Reforms are at the center of: • WB Country Assistance Strategy (CAS); and • PRSCs + MDBS

18. End remarks Having sound national Procurement systems in place poses a tremendous challenge which requires sustained commitment on the part of political leaders + pressure from society

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