2016 PROCUREMENT FRAMEWORK Selection Methods and Approaches Goods,

2016 PROCUREMENT FRAMEWORK Selection Methods and Approaches Goods,

2016 PROCUREMENT FRAMEWORK Selection Methods and Approaches Goods, Works, Non-consulting and Consulting Services April 2018 Copyright World Bank 2017 Goods, Works and Nonconsulting Services Copyright World Bank 2017 Selection Methods, Arrangements and Approaches (GWNcS) Selection of Suppliers / Contractors for Goods, Works and Non-consulting Services (GWNcS) is based on: Selection Methods e.g.: Request for Bids (RFB) / Request for Proposals (RFP) Selection Arrangements e.g.: Public Private Partnership (PPP) Agencies / Commercial Practices Market Approach Options e.g.: Open / Limited / Direct / National / International etc. Slide 3 Copyright World Bank 2017 Overview Selection Methods, Market approach and Arrangements Goods, Works, and Non-consulting Services

Rated criteria Negotiation BAFO Multi- stage Single-stage IS PQ National Inter-national Direct Limited Open Approved selection methods and arrangements Market approach options Selection methods Request for Proposals

x x * normally Request for Bids Request for Quotations Direct Selection x optional

x * not normally x x x x x x x x

x x x x x x x x x x required

x x x x

x x x x x x x x x x

x x x x x x x x

x x x x x x x x x x x x normally x Selection arrangements Competitive Dialogue Public-Private Partnerships Commercial Practices UN Agencies E-Auctions

Imports Commodities Community-driven Development Slide 4 Force Accounts x Copyright World Bank 2017 x x x x x Selection Methods (GWNcS) 1 2 3 4 Slide 5 Direct Selection: Approach and negotiate with only one Direct firm. Price must be reasonable and consistent with market.

RFQ Request for Quotation: Competitive method of seeking quotations for readily available, off-the-shelf GWNcS. There is no Standard Procurement Document for RFQ. RFB Request for Bids: Competitive method used when Borrower specifies requirements and wishes to maintain a higher degree of control in delivery. RFP Request for Proposals: Competitive method used when Borrower specifies functional/performance needs and market proposes solutions. Rated criteria are normally used. Copyright World Bank 2017 Selection Arrangements Contracts under ongoing PPP activities may be financed by the Bank, If: the justification, feasibility, PPP structure and Ongoing contractual arrangements are acceptable the selection process for the private partner is consistent with the Banks Core Procurement Principles there is no Conflict of Interest the private partner is eligible for Bank financing Commercial Banks sanction requirement is agreed to apply Practices Banks Governance requirements such as Banks

inspection and review rights are accepted. 1 Slide 6 Public-Private Partnership Copyright World Bank 2017 . Selection Arrangements 1 Contracts under new PPP activities may be financed by the Bank, Public-Private under the following main conditions: Partnership consistent with the Banks Core Procurement Principles; using selection methods in the procurement regulations no longer restricted to open competitive bidding NEW Banks eligibility requirements and Anti-corruption guidelines apply the private sector partners can then procure from eligible sources using own procedures unsolicited proposals may be considered if fit for purpose and results in achieving value for money (vfm). If the unsolicited proposal will be subject to a competitive process: no advantage is granted to the proposer in a competitive process; or if reasonable advantage is granted (such as a point bonus), the advantage shall be disclosed to bidders/proposers.

Slide 7 Copyright World Bank 2017 Selection Arrangements 2 3 Slide 8 use of well established procurement arrangements used by private sector should be consistent with Banks Core Procurement Principles may be used for programs of Imports Borrower may select UN Agency directly: when Agencys expertise or rapid mobilization is critical or where there is urgent need of assistance or capacity constraints use UN Standard Agreement use Bank-UN Framework Agreement (where available)

Commercial Practices UN Agencies Copyright World Bank 2017 Selection Arrangements (contd) 4 5 Slide 9 E-reverse auctions Program of Imports E-reverse auction is a particular application of a RFQ It is a scheduled on-line auction where PQ/registered firms compete may be used when Borrowers requirements are unambiguously specified and there is adequate competition Covers program of imports handled by the Borrowers public sector entities use RFB selection method with simplified advertisement and currency provisions Period for submission of bid may be reduced to 20 days General Procurement Notice not required Payment may be limited to one international currency If private sector entity handles the procurement, Commercial Practices may be used. Copyright World Bank 2017

Selection Arrangements (Contd) 6 Commodities 7 Community Driven Development 8 Force Accounts Slide 10 Can use: Framework Agreement Request For Quotation (RFQ) E-reverse auction where there are PQ/registered firms Call for participation of local communities/NGOs with local know-how, Goods, or employ local labor usually a large number of small-value contracts often in remote areas use RFQ: local competitive bidding for Goods or Works use direct contracting: small-value GWNcS works and non-consultant services carried out by government department using own personnel and equipment Force Account unit use departments own procedures apply rigorous quality checks and inspections Copyright World Bank 2017

Particular Types of Contractual Arrangements Framework Agreements (FA) An agreement with one or more firms to supply GWNcS, on an as-needed basis, over an agreed period of time Key changes for new FA = restrictions on use have been Examples removed desktops + laptops for pre-existing FA = consistent with Core stationery + Procurement Principles consumables pharmaceuticals more detailed procedures provided for the operation of FAs vehicles use of FAs now expanded beyond GWNcS to panel of experts include Consulting Services emergency response small works Slide 11 Copyright World Bank 2017 Market Approach Options 1 DIRECT APPROACH

2 OPEN COMPETITION 3 LIMITED COMPETITION Approach and negotiate with only one firm. Opportunity is openly advertised. All eligible firms have equal opportunity to participate. This is the Banks preferred option. Competition is limited to those firms that are invited to participate. No open advertisement. NOTE: All of these options may be used when approaching national or international markets. Slide 12 Copyright World Bank 2017 Market Approach Options (contd) 4 POSTQUALIFICATION Verification of qualifications and capability of bidder recommended for contract award 5 PREQUALIFICATION

Shortlisting process normally used with RFBs. PQ is optional depending upon the category of procurement, size, risk and complexity. 6 INITIAL SELECTION Shortlisting process normally used with RFPs. It must be used when Competitive Dialogue (CD) s adopted. 7 SINGLE STAGE Appropriate when the Borrower can describe the requirements in detailed specifications 8 MULTI STAGE Slide 13 Appropriate when the Borrower describes the requirements in terms of business/functional needs. Examples: complex Plant, Design and Build Works, turnkey ICT contracts. Copyright World Bank 2017 Market Approach Options (contd) 9 10 11

Slide 14 BAFO NEGOTIATION RATED CRITERIA An option where the Borrower requests Best and Final Offers. Bidders/Proposers are not required to submit a BAFO. An option that allows the Borrower to conduct a negotiation with the Bidder/Proposer with the most advantageous Bid/Proposal. Rated-type evaluation criteria normally used with RFPs to evaluate non-price / quality attributes using point system. Copyright World Bank 2017 Direct Selection May be appropriate for: extension of existing contracts where competition is not justified, and terms and conditions including prices are reasonable. re-engagement of firm that has completed contract within last 12 months where competition is not justified, prices are reasonable and firm performed satisfactorily. low value, low risk procurement exceptional circumstances e.g. emergency situation standardization of goods proprietary equipment achievement of essential performance or functional guarantee services or goods provided by SOE, university, research center of a unique and exceptional nature selection of a UN Agency

Slide 15 Copyright World Bank 2017 BAFO or Negotiation Best and Final Offer (BAFO) or Negotiation may be used following bid/proposal evaluation if disclosed in the RFB/RFP documents give substantially responsive bidders/proposers an opportunity to improve their bids/proposals BAFO and Negotiation are mutually exclusive i.e. you cannot use both in the same procurement to apply competitive pressure, financial proposals are not opened in public to maintain integrity, the financial proposals are opened in front of a Probity Assurance Provider. Slide 16 Copyright World Bank 2017 National Competition National competition (approaching national market) may be appropriate when procurement is unlikely to attract foreign competition because of: size and condition of market value of contract scattered geographical distribution spread over time or are labor intensive or goods, works or non-consultant services are available locally at price below the international market foreign firms allowed to participate under same conditions as national firms national procurement procedures may be used if acceptable Slide 17 Copyright World Bank 2017 International Competition

General Applying international competition (approaching international market) may be appropriate when the participation of foreign firms: will increase competition, and may lead to best VfM and fit-for-purpose results. Open international competition is the preferred approach for contracts that are: complex high-risk and/or when the applicable national competitive procurement thresholds are exceeded. Procurement Documents For international competitive procurement, the borrower shall use the Banks applicable Standard Procurement Documents (SPDs). Slide 18 Copyright World Bank 2017 OPEN vs LIMITED Competition When to use LIMITED (by invitation only without advertisement) When to use OPEN where there are only a limited number of firms in the market, and they can be identified or there are other exceptional reasons that justify departure from open competition. this is the Banks preferred

approach as the default choice for competition Slide 19 Copyright World Bank 2017 Request For Quotation (RFQ) key characteristics This is the simplest form of competitive procurement competitive method of seeking quotations for readily available, offthe-shelf GWNcS, standard specification commodities or simple civil works there is no SPD for RFQ quotations normally from not fewer than three firms E-reverse auction may be used Slide 20 Copyright World Bank 2017 Request For Bids (RFB) key characteristics Competitive method that seeks Bids that comply with the Borrowers detailed specifications. appropriate SPD is used based on the category of GWNcS, risk, size and complexity of procurement BAFO or Negotiations may be used with Banks prior concurrence Typical characteristics: The borrower has the design to enable it to specify its requirements requiring compliance is fit for purpose as opposed to seeking solutions the Borrower retains control over design and delivery the Borrower accepts the design risks Rated criteria are normally not needed procurement decision is normally based on the lowest evaluated and responsive Bid

Slide 21 Copyright World Bank 2017 Examples road construction designed by the employer vehicles pharmaceuticals Request for Bids Pros Cons Can take longer to get to market as Borrower develops the specifications Borrower carries risk if design and specifications are wrong Limited scope for innovation and alternative solutions 1 2 1

2 3 Copyright World Bank 2017 Simple identification of MAB based on qualifying criteria and lowest evaluated cost Borrower retains control over design and delivery Request For Proposal (RFP) key characteristics Competitive method that seeks Proposals that offer solutions in response to performance/functional requirements. appropriate SPD is used based on the category of GWNcS, risk, size and complexity of procurement Typical characteristics: the borrower does not have the design to specify its requirements procurement is for non standard/customized solution borrower seeks solutions that fit the purpose rather than compliance borrower has less control over the design, contractor takes the design risk rated criteria are normally used procurement decision is normally based on the best value for money by weighting quality and cost normally uses a multistage approach to optimize solutions BAFO or Negotiations may be used with probity auditor and closed opening of financial proposal Slide 23 Copyright World Bank 2017 RFP key characteristics (contd) 3 model RFPs:

RF P RF P RF P MODEL 1 MODEL 2 MODEL 3 Slide 24 Two-Stage following Initial Selection Streamlined Competitive Dialogue Copyright World Bank 2017 Request for Proposals Pros Cons Transaction costs and time could be higher than RFB Requires higher Borrower capacity and may demand

additional specialist support to: (1) define the functionality and performance criteria, (2) design and apply appropriate rated-type criteria and (3) manage the deliverables 1 1 Delivers a customized, fit-for-purpose solution 2 2 The Borrower shifts the design risk to contractor Copyright World Bank 2017 Fit-for-purpose Procurement Process Summary HIGH RFP RFP CD CD COMPLEXITY AND RISK closed opening BAFO or

Negotiation RFP 2 envelope prequalification LOW RFB Fit-for-purpose by design Getting the best fit-forpurpose procurement process can sometimes be a combination of the: right selection method e.g. RFB or RFP and right market approach options e.g. single-stage or two envelope, or negotiation 1 envelope EASY Slide 26 EASE IN DEFINING OUTCOME/S + COMMERCIAL DEAL DIFFICULT Copyright World Bank 2017 Questions? Copyright World Bank 2017

CONSULTING SERVICES Copyright World Bank 2017 Updated RFP Consulting Services No significant changes Quality attributes continue to be the main selection factor for consultants: QBS -100% quality, QCBS normally 80 to 90% quality, Least Cost Selection for standard or routine assignments maintained existing shortlisting process and selection methods, arrangements and market approach Changes removed the restriction of no more than 2 firms from one country and at least one firm from a developing country changed maximum number of short list of 6 to a range = between 5 and 8 explicitly requires that the terms of reference should be attached to the expression of interest. Framework agreement allowed Slide 29 Copyright World Bank 2017 Selection Methods, Arrangements and Approaches (Consulting Services) Selection of Consultants is based on: Selection Methods e.g.: Quality and Cost Based Selection (QCBS), Quality Based Selection (QBS) Selection Arrangements e.g.: Commercial Practices, UN agencies

Market Approach Options e.g.: Open / Limited / Direct / National / International etc. Slide 30 Copyright World Bank 2017 Overview Selection Methods, Market approach and Arrangements Consulting Services Market approach options Approved selection methods and Open arrangements Selection methods Quality Cost Based Selection Fixed Budget Based Selection Least Cost Based Selection Quality Based Selection Consultants Qualification Based Selection x Direct Selection Selection Arrangements Commercial Practices UN Agencies Non Profit Organizations (such as

NGOs) Banks Procurement Agents Selection Methods for Individual Consultants Selection of Individual Consultants Slide 31 Limited Direct International National Shortlist x x x x x x x x x x

x x x x

x x x Copyright World Bank 2017 Useful links World Banks Procurement Regulations for IPF Borrowers https://policies.worldbank.org/sites/ppf3/PPFDocuments/Forms/DispPage.aspx?docid=4005&ver=current World Banks Procurement Policy https://policies.worldbank.org/sites/ppf3/PPFDocuments/Forms/DispPage.aspx?docid=4002&ver=current Standard Procurement Documents templates http://www.worldbank.org/en/projects-operations/products-and-services/brief/procurement-new-framework#S

PD Guidance on SPDs http://www.worldbank.org/en/projects-operations/products-and-services/brief/procurement-new-framework Guidance on how to complain http://pubdocs.worldbank.org/en/975671478891365829/Complaints-Guidance-FINAL-Revised.pdf http://pubdocs.worldbank.org/en/123601488224013672/PPSD-Short-Form-Final.pdf Guidance on PPSD http://pubdocs.worldbank.org/en/847531467334322069/PPSD-Long-Form.pdf Procurement App for IPad: Data on contracts https://itunes.apple.com/us/app/world-bank-project-procurement/id911312962?mt=8 Procurement App for IPad: Data on projects, finances and procurement data https://itunes.apple.com/us/app/world-bank-group-finances/id465555488?mt=8 UNDB Online https://www.devbusiness.com/Search/Search.aspx?PreLoadProjects=1 Copyright World Bank 2017 Questions? Copyright World Bank 2017 FOR MORE INFORMATION

http://www.worldbank.org/procurement Operations, Policy and Country Services Standards, Procurement and Financial Management Department The World Bank 1818 H Street, NW Washington, D.C. 20433 U.S.A. Copyright World Bank 2017

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