Procurement Management

RMC’s Expertise

RMC’s particular strength is in the comprehensive knowledge of, and familiarity with every aspect of the implementation and supervision stage of major reform and rehabilitation projects financed by the World Bank and other IFIs. This is the stage in which procurement activities of every type are carried out and then appropriate use is made of goods procured, construction and operation of facilities, and the hiring and execution of consultant services.

Project Cycle Stages

The conventional World Bank (or other IFI) project cycle starts with the project concept identification stage and enters the preparation stage where project design and development takes place and the Borrower and the Bank jointly lay the groundwork for a procurement plan, preparation of the cost estimates, and procurement training of the Borrowers staff. When the project has taken shape and the project content is near completion, the appraisal stage provides a comprehensive review of all aspects of procurement, historically and into the future, focusing on achievement of concrete results through carefully managed implementation of procurement plans. This is all documented in the Project Appraisal Document (PAD) which becomes one of the key documents in the stage involving negotiating and completing a Loan Agreement. The next stage is the actual implementation and supervision of all agreed procurement plans.

For projects funded by the World Bank (or other IFIs) good project implementation requires that procurement planning, execution and monitoring be done efficiently, in a timely manner, and in compliance with all policies, principles and practices of the World Bank and the Borrower. Despite the most carefully crafted plans, a myriad of procurement issues can arise, and so a continuing level of undiminished care and vigilance is necessary to achieve project success.

The nominal period for procurement execution is commonly the most difficult target to achieve, not only due to many complex issues of procurement management, but also due to the dynamics within a Borrowers political and social arenas. However, once facilities have been constructed, goods purchased and installed, and new programs, institutions and policies put in place, and Bank funds disbursed, the evaluation stage is the final step in the project cycle. At this point the effects of good procurement management can be readily seen, and qualitative and quantitative information is consolidated to provide a balanced view of lessons learned.

RMC’s Approach

The fundamental principle in Bank-financed procurement is that the Borrower has the responsibility for procurement management. The Bank’s role during the implementation stage is one of oversight to ensure that procurement is carried out in accordance with the Loan Agreement. The potential complexity of short term procurement start-up, combined with the inherent tension between the Bank’s dual advisory and supervisory (performance auditing) roles exposes the Borrower’s staff to considerable stress and lack of working knowledge based on experience. Procurement know-how varies widely between countries and even between sectors within countries.

To ensure that the Procurement activity follows closely the implementation of project plans as outlined in the PAD and the Loan Agreement, RMC works with all levels of the Borrower’s project and procurement organization to provide effective management of the procurement cycle from the preparation of TORs (as required), to the signing of contracts, through to acceptance of deliveries, or work completed (as in technical assistance or civil works).

The procurement cycle requires procedural knowledge and careful planning and record keeping, tempered by experience with international procurement and project management dealing with a wide variety of products, works and services. Subject matter specialists are frequently required to assist in specification of goods and services to be procured, and knowledge of procedural details of execution and management reporting is required to ensure compliance with IFI’s procurement guidelines.

RMC’s approach aims to ensure that the Borrower’s counterpart staff become self sufficient in the shortest period of time, assisting them in developing effective and transparent procedures and processes, and when needed, developing their ease with preparation of English language documents. The on-the-job knowledge transfer from experienced and carefully trained Procurement Consultants to counterpart staff is a very effective means of developing or increasing the competency levels of the counterpart staff in managing projects, managing and disseminating periodic information reports, and following all of the procurement guidelines of the World Bank and the IFIs.

Requirements of World Bank Supported Projects

In the case of projects supported by World Bank funding, the procedures to be followed for procurement are explicitly defined by the World Bank in the Loan Agreement. The procedures normally include extensive approval provisions for all procurements. RMC has complete familiarity and long term experience with all variants of these provisions.

Generally, the major tasks to be carried out for procurement cover the following:

• Development and maintenance of project procurement requirements
• Specification, development and implementation of the necessary systems and procedures for procurement
• Establishment and maintenance of close liaison with the project component coordinators
• Determination of qualified potential sources of supply
• Administration of the procurement processes
• Provision of procurement management feedback information.

In order to operate an effective procurement function, Procurement Staff must be well versed in the requisite procurement practices and procedures. They must be supported by the necessary facilities, equipment and supplies to carry out their responsibilities. In addition to the Procurement Staff, those with broader project management responsibilities within the PCU, as well as those with sub-project management responsibilities, must have a sound appreciation of the principles and practices of procurement in order to ensure effective overall project management.

In terms of specific procurement procedures, the competencies to be acquired by the PCU's cover the following stages normally associated with procurement on World Bank supported projects:

• Preparation and documentation of procurement requirements, including: Terms of Reference (TORs); Technical Specifications; Letters of Invitation (LOIs) to prospective suppliers; Standard Bidding Documents and Instructions; and pro forma Contract Documents for Works, Goods and Services, and Technical Assistance.
• Preparation of bid evaluation criteria
• Selection of potential suppliers through general market intelligence, international announcements of procurement requirements and short listing of prospective suppliers
• Formal procedures for receiving and opening of bids and quotations, including verification of bidding documentation received from suppliers
• Technical and Financial Evaluation of Bids leading to a ranking of acceptable bids received from suppliers, and obtaining "no objections" from the World Bank
• Negotiations with the highest ranked supplier and, if unsuccessful with subsequent qualified suppliers
• Formal approvals from authorized representatives of both the Ministry and the World Bank.
• Contract preparation and signing by authorized representatives of the Ministry and the supplier(s).
• Monitoring and verification of the delivery of goods and services with particular emphasis on the suppliers' performance in meeting specifications and adherence to other contractual obligations.
• Submission of necessary authorizations for payments to suppliers.
• Preparation and submission of periodic reports on the status of procurement for the project with appropriate analyses of deviations from commitments contained in the Project Appraisal Document (PAD), the Loan Agreement and subsequent modifications to such commitments as documented in World Bank's Aide Memoir emanating from supervisory missions.

RMC recently finalized the Technical Assistance Procurement Operating Manual for a major Health Sector Reform Programme. We provide here the Table of Contents for a glimpse into the typical requirements of Procurement Management.

TABLE OF CONTENTS

Formal Guidelines, as designed at a Workshop by Stakeholders

The Procurement Plan & Summarizing Status of All Required Terms of Reference

Section 1: Procurement Planning

• Terms of Reference
• Cost Estimate / Budget
• Evaluation Committee

Section 2: Procurement Execution

• International Competitive Bid (ICB) – “Open Pre-Qualification”
• ICB – Technical & Financial Proposals combined with Pre-qualification
• Local Competitive Bid (LCB) – Firms, Joint Ventures, Individuals
• Individual Consultants
• Sole Sourcing

Section 3: Proposal Evaluation & Contract Development

• ICB & LCB
• Individual Consultants

Section 4: Contract Monitoring & Administration

• Monitoring Technical Assistance Outputs / Deliverables
• Tracking Financial Performance
• Contract Variation

Section 5: Contract Closeout

• Final Report
• Final Payment
• Technical Assistance Performance Evaluation

Appendices:

• Sample Terms of Reference
• MoH Approval Request Form
• Sample Cost Estimate/Budget
• Sample Pre-qualification Document Package
• Sample Bid Package (International Competitive Bid)
• Sample Bid Package (Local Competitive Bid)
• Sample Bid Package (International Competitive Bid Combined)
• Sample Bid Package (Individual Consultants)
• IFC’s Norms for Selection without Competition
• Sample Payment Schedule
• Sample Technical Assistance Contract
• Sample Invoice Report
• Sample Valuation Report
• Sample Progress Against Deliverables Report
• Sample Invoice Correspondence
• Sample Payment Recommendation Form
• Sample Invoice Payment Tracking Sheet
• IFC’s Performance Evaluation Form (Firm)
• IFC’s Performance Evaluation Form (Individual)
• Technical Assistance Procurement
• Operating Manual Compact Disc