Inter-American Development Bank

1. Inter-American Development Bank Procurement of Goods, Works and Consulting Services in projects financed by IDB Washington, DC – April 2004

2. Procurement Policies and Procedures • What is Procurement? • Qualifications of Bidder • Technical proposal • Price proposal Procurement Policy and Coordination OfficeApril 2004

3. Procurement Principles • Procurement for Bank-financed (Inter-American Development Bank) projects • Principles Procurement Policy and Coordination OfficeApril 2004

4. Procurement Principles • Procurement Principles: • Economy • Efficiency • Public Competitive Bidding Principles • Competition • Equality • Transparency • Due Process • Publicity Procurement Policy and Coordination OfficeApril 2004

5. Events in a Procurement Process Last day of performance warranty Invitation to Prequalified Applicants to Bid Acceptance of Consulting Service Signing of Contract Identification of needs Publicity Performance Security Preparation Prequalification Bidding Execution Procurement Policy and Coordination OfficeApril 2004

6. Public Bidding Process Last day of last performance warranty Public Access to Database Bid results & notification Payment for documents Bidding documents Public bid opening Procurement Plan Contract Signing Bid Submission Clarifications Bid evaluation Publicity Procurement Policy and Coordination OfficeApril 2004

7. Business Opportunities at IDB • There are two markets: • Procurement contracts with IDBfor feasibility and design studies as part of project preparation ~5% • Procurement contracts with ExecutingAgencies in projects financed by IDB ~95% Procurement Policy and Coordination OfficeApril 2004

8. IDB Procurement Policies Practices • Bank’s procurement practices reflect best practices used worldwide. For IDB-financed projects the following rules apply: • National legislation applies. National legislations stipulate that for procurement financed by Multilateral Development Banks their procurement policies and procedures apply • Eligibility – nationality of private entities/individuals must be from IDB member countries • Origin of goods and related services – must originate from IDB member countries Procurement Policy and Coordination OfficeApril 2004

9. Division of Responsibilities in Procurement Financed by IDB • Bank • Oversees the application of IDB procurement policies and procedures • Gives its “no-objection” at different stages in the procurement process • Contracting Agency • Owns the bidding process • Publishes procurement notices • Issues bidding documents • Evaluates bids • Awards the procurement contracts • Manages contracts Procurement Policy and Coordination OfficeApril 2004

10. Procurement Methods • Competitive bidding • International Competitive Bidding (ICB) • National Competitive Bidding (NCB) • Both methods are open to all eligible participants from IDB member countries • Use of one or the other determined by the Project Procurement Plan and the specific threshold amounts set forth in the Loan Contract Procurement Policy and Coordination OfficeApril 2004

11. Threshold Amounts for Procurement • Agreed in specific Loan Contract (by project and country) • Range for maximum threshold amounts: • Works = US$ 1 million to US$ 5 million • Goods = US$ 150,000 to US$ 350,000 • Consulting services = US$ 200,000 • All procurement at the threshold level or above requires the use of ICB • For procurement under the threshold amounts NCB can be used Procurement Policy and Coordination OfficeApril 2004

12. Exceptions to Competitive Bidding • Competitive bidding restricted to a pre-established list of qualified Suppliers/contractors, whenever there is: • A need to standardize specialized equipment • Emergency projects (natural disasters) Procurement Policy and Coordination OfficeApril 2004

13. Publicity - Competitive Bidding • General Procurement Notice (GPN) • Published once within 30 days of approval of Loan by the Board of Directors • In: -“Development Business”(electronic issue) - IDB’s web page immediately thereafter (within 24 hours). Procurement Policy and Coordination OfficeApril 2004

14. Competitive Bidding Publicity • Specific Procurement Notice (SPN) • Published for every NCB, in: • One local newspaper of wide circulation • In case of ICB, in addition to national publicity, the SPN is published in: - United Nations “Development Business”(electronic issue). - IDB’s Web Page immediately thereafter (within 24 hours). Procurement Policy and Coordination OfficeApril 2004

15. Minimum Number of Days for Publicationof SPN prior to Documents Submission • For Prequalification Applications: • Goods 45 days • Works 45 days • Consulting Services 30 days • For Bids: • Small Works 45 days • Major Works 90 days • Goods 45 days • Consulting Services 30 days Procurement Policy and Coordination OfficeApril 2004

16. Contracting Agency’s Responsibilities in a Bidding Process • Provide enough time to Bidders for bid preparation – extend this period, if deemed necessary • Inform how to obtain clarifications to bidding documents • Evaluate bids in accordance with specified criteria • Preserve confidentiality of bidding process • Award the procurement contract • Notify all parties of the results of the process Procurement Policy and Coordination OfficeApril 2004

17. Bidder’s Responsibilities in aBidding Process • Carefully analyze technical specifications/Terms of Reference included in the bidding documents • Strictly comply with the instructions and specifications in the bidding documents • Require clarifications to documents in writing • Make sure that bid submitted complies with all requirements of bidding documents • Submit bid before deadline Procurement Policy and Coordination OfficeApril 2004

18. Factors/Criteria Evaluated in a Bid • Bidder’s Qualifications • Eligibility • Historical Contract Non-Performance • Financial Situation • Experience • Technical Proposal • Technical specifications • Methodology and work plan • Proposed personnel (CV) • Delivery schedule • Price proposal Procurement Policy and Coordination OfficeApril 2004

19. Selection Methods in Consulting Services • For Consulting Services - 4 Selection Methods: • Quality (QBS) • Quality & Cost (QCBS) • Least Cost (LCBS) • Fixed Budget (FBBS) Procurement Policy and Coordination OfficeApril 2004

20. Who is Awarded the Contract? • For Goods and Works: • The Bidder whose bid has been determined to be the lowest evaluated bid and is substantially responsive to the bidding documents. Procurement Policy and Coordination OfficeApril 2004

21. Who is Awarded the Contract? • For Consulting Services: • The Bidder with the best evaluated bid Procurement Policy and Coordination OfficeApril 2004

22. Special Characteristics in Procurement of Consulting Services • Represents a small portion of total cost in projects • But amounts to a large number of contracts • Significant impact on the success of the project Procurement Policy and Coordination OfficeApril 2004

23. Special Characteristics in Procurement of Consulting Services • Difference in procedures from procurement of Goods and Works: • Emphasis on technical competence/capacity and qualifications over price • When a pre-selection process takes place prior to the bidding process, invitations are sent to a Short List of pre-selected Applicants (3 to 6 Applicants) instead of all prequalified Applicants Procurement Policy and Coordination OfficeApril 2004

24. Right to Protest throughout the Procurement Process • Bidders/Applicants may submit a protest in writing at any stage of procurement process • First instance: Executing Agency and party submitting protest try to come to an agreement • Second instance: If protest confirmed, reviewed by the Bank who decides on its merit • Decision cannot be appealed Procurement Policy and Coordination OfficeApril 2004

25. Contracts of Consulting Firms and Individual Consultants Procurement Policy and Coordination OfficeApril 2004

26. Registration in DACON for Consulting Firms • DACON = Data on Consultants • Registration is not mandatory • Registration requires that firms have 5 or more full-time professionals • Online registration is automatic with both, IDB and World Bank (http://www.dgmarket.com/dacon/ Procurement Policy and Coordination OfficeApril 2004

27. IDB Internet Website Procurement Policy and Coordination OfficeApril 2004

28. IDB Internet Website Procurement Policy and Coordination OfficeApril 2004

29. Tips and other Data • Familiarize yourself with IDB Procurement Policies and Procedures and Standard Procurement Documents • Learn about projects in the pipeline / Follow up on projects http://condc05.iadb.org/idbppi/asp/mainpage.asp • Consider associating in a consortium or joint venture with a local firm • Learn local business practices Procurement Policy and Coordination OfficeApril 2004