The World Bank Procurement Regulations

for IPF Borrowers

July 2016, Revised November 2017

JAKARTA, JUNE 4 – 6, 2018

 Procurement Regulations July 2016, Revised November 2017
Training Agenda

1st day of training will cover:

 Introduction and overview to the Procurement Regulations
 Procurement Regulations - Key Changes
 Procurement Provisions
 Selection Methods for Goods, Works, and non-Consulting Services
 Selection Methods for Consulting Services
2nd day of training will cover:
 Project Procurement Strategy For Development (PPSD)
 Standard Procurement Documents (SPDs)
 Complaint Management and Stand Still Period
 Implementation of ESHS in Civil Works and Construction Supervision Contract
3nd day of training will cover:
 STEP Overview
 Sharing Session
Slide 1
Presenters

Yash Gupta : Senior Procurement Specialist

Budi Permana : Senior Procurement Specialist

Andy C. Firdana : Procurement Specialist

Achmad Zacky Wasaraka : Procurement Specialist

Angelia Budi Nurwihapsari : Procurement Analyst

Slide 2
 INTRODUCTION AND OVERVIEW
The World Bank Procurement Regulations for IPF Borrowers
July 2016, Revised November 2017
 Applicability of Procurement Regulations July 2016,
Revised November 2017

 PF in force from 1 July 2016

 Replaces the ‘red’ and ‘green’ guidelines.
 Applies to goods, works, non-consulting and consulting services financed by the
Bank (in whole or in part) through Investment Project Financing (IPF) operations
with project Concept Note (PCN) Approval date on/after July 1, 2016.
 Provides Borrower more choices and greater flexibility to adopt for purpose
procurement approaches and to achieve Value for Money.
 Introduce flexibility in the design of procurement processes to ensure that they
are fit for purpose and appropriate to the size, value and risk of the project, in lieu
of one size fits all.
 Exclusions - Procurement Regulations do not apply to the procurement of Goods,
Works, Non-consulting Services, and Consulting Services financed by the Bank:
 Under projects where the Bank Guarantees, provided by the Bank; and
 Through loans made by eligible financial intermediaries to private borrowers

Slide 4
Vision

“Procurement in Investment Project

Financing supports Borrowers to
achieve value for money with
integrity in delivering sustainable
development”

Slide 5
Core Procurement Principles

Slide 6
Core Procurement Principles

 Value for Money

The Principle of value for money means the effective, efficient, and economic use of
resources. This requires an evaluation of relevant costs and benefits along with an
assessment of risks. It may also include non-price attributes and/or life cycle costs.

Price alone may not necessarily represent value for money.

 Economy
The economy principle takes into consideration factors that support value for money, such as
sustainability, quality, and non price attributes and/or life cycle as appropriate.

It permits integrating economic, environmental, and social considerations into the

procurement process that the Bank agrees to with the Borrower.

It also permits augmenting identified sustainability criteria with specific criteria in support of
the Borrower’s own sustainable procurement Policy.

7 Presentation Title
Core Procurement Principles
 Fit for Purpose

The principle of Fit for Purpose applies both to the intended outcomes and the
procurement arrangements in determining the most appropriate approach to
procurement to meet the project development objectives and outcomes, taking into
account the context and the risk, value, and complexity of the procurement.

 Integrity

The integrity principle refers to the use of funds, resources, assets and authority,
according to the intended purposes in a well- informed manner that is aligned with the
public interest and broader principles of good governance.

The Bank requires that all parties involved in the procurement process (Borrowers
and Sub-Borrowers, bidders, Consultants, Contractors and Suppliers, any sub-
Contractors, sub-Consultants, service providers or suppliers, any agents, and any of
their personnel) observe the highest standard of ethics during the procurement
process of Bank-financed contracts. They must also refrain from fraud and
corruption, as defined in the Anti-corruption Guidelines (ACG).

8 Presentation Title
Core Procurement Principles

 Efficiency
The principle of efficiency requires that procurement processes be proportional to
the value and risks of the underlying project activities.
Procurement arrangements are generally time-sensitive and strive to avoid delays.

 Transparency
The principle of transparency requires that the Borrower and the Bank enable appropriate
review of the procurement activities, supported by appropriate documentation and disclosure.

Transparency requires:

 Relevant procurement information be made publicly available to all interested parties in a

consistent and timely manner, through readily accessible and widely available sources. It
should be available at reasonable or no cost.

 Appropriate reporting of procurement activity.

 Use of confidentiality provisions in contracts in justified areas.

9 Presentation Title
Core Procurement Principles

 Fairness:

The principle of fairness refers to:

 Equal opportunity and treatment for bidders and consultants.

 Equitable distribution of rights and obligations between Borrowers and

suppliers, bidders, consultants, and contractors.

 Credible mechanisms for addressing procurement-related complaints and

providing resource.

World Bank prefers open competitive procurement, whenever possible, to

maximize fairness of opportunity to bid. The Borrower should provide eligible
individuals and firms the same opportunities to compete for Bank-financed
activities, whenever possible.

10 Presentation Title
Procurement Framework 2016

Board control
Policy

management control Directive

Procedures Regulations

Sustainability
toolkit SPDs
Best
practice Case Tools and
guidance studies templates
Slide
11
Content of PF / Regulations
 Section I – Introduction
 Section II – General Considerations and Applicability
 Section III – Governance
 Section IV – PPSD and Procurement Plan
 Section V – Procurement Provisions
 Section VI – Approved Selection Methods: Goods, Works & Non-Consulting Services
 Section VII – Approved Selection Methods: Consulting Services
Annex I. Value for Money
Annex II. Procurement Oversight
Annex III. Procurement-related Complaints
Annex IV. Fraud and Corruption
Annex V. Project Procurement Strategy for Development
Annex VI. Domestic Preference
Annex VII. Sustainable Procurement
Annex VIII. Contract Types
Annex IX. Contract Conditions in International Competitive Procurement
Annex X. Evaluation Criteria
Annex XI. Contract Management
Annex XII. Selection Methods
Annex XIII. Competitive Dialogue
Annex XIV. Public-Private Partnerships
Slide 12 Annex XV. Framework Agreements
Governance Aspects in PF

Roles and Responsibilities of Borrowers and Bank

The governance of procurement in IPF operations shall be managed through clear and
transparent lines of accountability, and clear definition of the roles and responsibilities of each
party.

Responsibilities of Borrowers:
 Carrying out procurement activities including planning, strategizing, seeking and evaluating
Quotations/Bids/Proposals, and awarding and managing contracts.
 Proper record-keeping and making available all documents
 Engage independent Probity Assurance Providers when required by Bank

Responsibilities of the Bank:

The Bank plays a supervisory (fiduciary) role and will provide implementation support, including:
 Prior and Post Reviews – refer to next slide for Prior Review Threshold
 Independent Procurement Review (IPR)
 Hands-on expanded implementation support

Slide 13
Governance Aspects in Procurement Regulations

Procurement Prior Review Thresholds (in US$ millions)

Slide 14
 Governance Aspects in Procurement Regulations (contd)

Eligibility (refer to PF section 3.21, 3.22, 3.23)

 State-owned enterprises (SOEs) are eligible to compete if they:
i. are legally and financially autonomous;
ii. operate under commercial law; and
iii. are not under supervision by the agency contracting them
Exception, if the GWnC or Consulting Services are unique and exceptional nature because
of the absence of suitable private sector alternatives, or as a consequence of the regulatory
framework.
 Hiring of civil servants, on the basis that their services:
(i) are critical to project implementation,
(ii) do not create conflict of interest, and
(iii) do not conflict with the Borrower’s laws and the Bank’s Procurement Framework
 A firm or individual declared ineligible, sanctioned pursuant to Bank’s ACG is ineligible to
participate in procurement process

 Acceptance of national debarments to the Bank’s satisfaction (related to F&C, issued by a

judicial or administrative entity, under a due process)

Slide 15
Governance Aspects in Procurement Regulations (contd)

Non-compliance
 More options beyond misprocurement (legal remedies)
 Corrective actions shall be proportional to the severity and impact of the infringement
and shall take into account all relevant factors, including any valid action/s, inaction/s or
omission/s by the Borrower, or any party involved in the procurement, including the
Bank
 Professional judgement
Fraud and Corruption
 The Bank requires application of, and compliance with, the Bank’s Anti-Corruption
Guidelines, including without limitation the Bank’s right to sanction and the Bank’s
inspection and audit rights

 Letter of Acceptance of WB ACGs for APAs, NCB, PPP (Bank financing after the PPP
contract award)

Slide 16
Governance Aspects in Procurement Regulations (contd)

Complaints Handling
 Introduces standstill period (10 business days), allowing unsuccessful bidders
(standing) to lodge a complaint within an specific time prior to contract award
 Introduces debriefings by Borrower within standstill period
 Business standards (response time)

Slide 17
 Procurement Regulations
July 2016, Revised November 2017
key changes
Key changes

 Exclusions (covered in slide page 4 – Applicability of PF)

 Alternative Procurement Arrangements (APAs)
 Advance Procurement and Retroactive Financing
 Hands-on Expanded Implementation Support (HEIS)
 Eligibility of State Owned Enterprise (SOEs)
 Project Procurement Strategy for Development (PPSD)
 Selection Methods and Market Approach Options
 Public-Private Partnerships (PPPs)
 National Procurement Procedures
 Sustainable Procurement
 Value Engineering (VE)

Slide 19
 Alternative Procurement Arrangements (APAs)

 The Bank may agree to an APA, being the application of the

procurement rules and procedures of:
 another multilateral or bilateral agency, or
 a borrower’s agency or entity
 The Bank may agree to such a multilateral or bilateral agency taking a
lead role in providing implementation support and monitoring of
procurement activities
 For Borrower agencies, APA shall be assessed through a standard
assessment tool. Member countries of WTO GPA would not require
macro level assessment since they have already been assessed

Slide 20
 Advance procurement and Retroactive financing

 Advance procurement contracts may be eligible for Bank IPF if

procurement procedures consistent with Procurement Regulations:
 Sections I: Core Procurement Principles
 Section II: Applicability
 Section III: Governance Aspects such as; eligibility, non-compliance,
fraud and corruptions, conflict of interest, etc.
 Borrower undertakes such advance procurement at its own risk, and
any concurrence by the Bank on the procedures, documentation, or
award does not commit the Bank to finance the project in question
 Retroactive financing is reimbursement by the Bank of payments
made by the Borrower under a contract prior to signing of the LA. It is
only permitted within the limits specified in the LA

Slide 21
 Hands-on Expanded Implementation Support (HEIS)

 Hands-on help to assist the borrower to advance procurement

activities
 HEIS is not execution by the Bank on behalf of the borrower
The borrower retains:
 responsibility to implement the procurement
 all decision-making authority
 HEIS does not replace the Bank’s fiduciary functions, e.g.:
 independent review
 “No Objection”
 Bank staff providing HEIS do not review/clear procurements on which
they provide HEIS

Slide 22
 Eligibility of State Owned Enterprise (SOEs)

 The requirement of ‘dependency’ on the borrower has been replaced

by ‘supervision’ of the contracting entity
 The ability to be contracted on an exceptional basis has been
extended to include SOEs
 This exception has been expanded beyond consulting services to
cover GWNcS

Slide 23
 Eligibility cross-jurisdictional procurement

When a procurement involves more than one country

 Basic position: a firm, individual or goods from one country may be
excluded by the borrower, if legally the borrower’s
country prohibits commercial relations with that
country
 New provision: where a procurement is implemented across
jurisdictional boundaries (more than 1 country is
involved) then:
1. this type of exclusion, by one country, may be
applied to the procurement across the other
countries
2. if the Bank, and all other borrowers, agree

Slide 24
Project Procurement Strategy for Development (PPSD)

 The Bank requires the Borrower to develop PPSD for each project
 Addresses how the procurement will support development objective
and deliver best value for money
 Provide adequate justification for the selection methods - refer to link
below for Bank’s Approved Selection Method
 New market analysis and procurement planning tool
 Risk-based approach
 Forms the basis for the procurement plan
 Proportional to the risk, value and complexity of the procurement
 Short version for low-value, low-risk projects and emergency situations
 Living document – can be updated periodically

Slide 25
Selection Methods and Market Approach Options

Slide 26
 Public-Private Partnerships (PPPs)

 Bank may finance PPP if the selection:

 is consistent with Bank’s Core Procurement Principles
 reflects the application of the Bank’s Anti-corruption Guidelines
 is consistent with the Regulations (as appropriate)
 Selection of partner using competitive selection method. Exceptionally,
the Bank may agree to a non-competitive selection process.
 Private partner then procures using its own procedures
 Bank may finance a PPP initiated through an unsolicited proposal

Slide 27
 National Procurement Procedures

 National procedures may be used when approaching the national market, as agreed in
the Procurement Plan.
 Requirements for national open competitive procurement include the following:
a. Open advertising of the procurement opportunity at the national level;
b. The procurement is open to eligible firms from any country;
c. The RFB/RFP shall require that Bidders submitting Bids present a signed
acceptance at the time of bidding, confirming application of, and compliance with
the Bank’s ACG;
d. Contracts with an appropriate allocation of responsibilities, risks, and liabilities;
e. Publication of contract award information;
f. Rights for the Bank to review procurement documentation and activities;
g. An effective complaints mechanism; and
h. Maintenance of records of the Procurement Process.
 For national competitive Procurement, the Borrower may use its own Procurement
Documents, acceptable to the Bank.

Slide 28
 Sustainable Procurement

Regulations support application of sustainable procurement

 Sustainable procurement requirements beyond the Bank’s policies (e.g.
environmental and social) are optional – at borrower’s discretion and as
agreed with the Bank
 Application must be consistent with Bank’s Core Procurement Principles and
the borrower’s own policies
 May include sustainable procurement in:
 technical specifications and/or business or performance requirements
 evaluation criteria
 contract terms and conditions, if relevant
Application in evaluation
 RFB normally (i) pass/fail and/or (ii) convert to monetary terms
 RFP normally assessed using combination of pass/fail and rated criteria

Slide 29
 Value Engineering (VE)

VE is a systematic and organized approach to increase efficiency or

effectiveness by changing materials to reduce cost, or process to reduce
time, without sacrificing necessary functionality
 in SBDs the only reference to VE is the clause in the FIDIC conditions
of contract for large Works and Management Services
 Procurement Regulations expand use, as appropriate, and as agreed
in the PPSD
 Examples:
 for RFBs VE can be applied during contract implementation
 for RFPs, this option can also be used at the pre-contract award
stage

Slide 30
 Procurement Resources

All the procurement resources such as :

 Procurement Policy
 Procurement Regulations
 Procurement Guidance
 Procurement Directive
 Standard Procurement Documents (SPD)
 Procurement Templates, such as PPSD templates (Short and Long
including Detailed Guide)

Can be found in the World Bank’s procurement website with the link as
below:
http://www.worldbank.org/en/projects-operations/products-and-
services/brief/procurement-new-framework

Slide 31