Project Procurement Guidelines

Transcription

1 Project Procurement Guidelines

2 These Procurement Guidelines were adopted by the Executive Board of IFAD at its 100th Session in September Table of contents Definitions 3 I. Introduction A.Background 3 B.Purpose 4 C.Contents 5 D.Applicability 5 II. Procurement Principles A.Ethics 5 B.Accountability 6 C.Competition 6 D.Fairness 7 E.Transparency 8 F.Efficiency,Effectiveness,Economy 8 G.Valueformoney 9 III. Procurement Arrangements A.Borrower/Recipientobligations 9 B.GeneralConditionsforAgriculturalDevelopmentFinancing 10 C.UseofNationalProcurementSystems 10 D.ProcurementPlanning 12 E.Eligibility 12 F.DomesticPreferences 13 G.Procurementinvolvingcommunityparticipations 13 H.IFADmonitoringandreview 15 I.Misprocurement 15 J.FraudandCorruption 15 K.Disputeresolutions 16 L.ReferencestoIFAD 17 ANNEX Methods of procurement in the event that national systems are not suitable 2

3 Definitions ThefollowingtermshavethefollowingmeaningswheneverusedintheseGuidelines: Borrower/Recipient meansthepartydesignatedassuchinthefinancingagreementorotheragreement. Community referstoindividualsorgroupsofprojectbeneficiaries,communitygroupswithnolegal status, associations or groups with legal status but with or without separate legal personality as a group,small-scaleartisansandothersmallcommercialorganizationsandguilds,andsmalllocal-level organizations that support and facilitate rural agricultural and social activities. The community in suchcasesmayparticipateasprocurementagent,implementingagency,orcontractorandsupplier ofgoods,worksandrelatedservicesforprojectactivities. Procurement process is the entire procurement cycle starting from the identification of need throughtothecompletionofthecontract. Project management means the party designated as such in the financing agreement by the Borrower/Recipientandresponsibleforimplementingandmanagingtheproject.Itrefersequallyto theleadproject/programmeagencyandprojectcoordinationunitsandprojectimplementationunits. Services isageneraltermreferringtobothconsultancyandnon-consultancyservices. I. Introduction A. Background 1. Article7,section2(j)oftheAgreementEstablishingIFADprovidesthattheExecutiveBoardwill adoptsuitableregulationsforprocuringgoodsandservicestobefinancedfromtheresourcesof the Fund. These revised Procurement Guidelines will apply to all projects and programmes financed from IFAD s resources, and to financing provided from supplementary funds unless otherwiseagreed.theyreplacetheprocurementguidelinesadoptedbytheexecutiveboardin 1 December IFAD s revised General Conditions for Agricultural Development Financing (April 2009) (hereafter:thegeneralconditions)adoptanewapproachtoprocurementthatisfinancedbyifad loans and grants, stating that: Procurement of goods, works and services financed by [IFAD] shallbecarriedoutinaccordancewiththeprovisionsoftheborrower/recipient sprocurement regulations, to the extent such are consistent with the IFAD Procurement Guidelines. Each Procurement Plan shall identify procedures which must be implemented by the Borrower/RecipientinordertoensureconsistencywiththeIFADProcurementGuidelines. 3. Inadoptingthisapproach,IFADisfollowingtheprinciplessetoutintheParisDeclarationonAid EffectivenessandtheAccraAgendaforActioninrespectoftheuseofexistingnationalprocurementsystems. 1 The IFAD Procurement Guidelines adopted in December 2004 will continue to apply to agreements approved or entered into before the adoption of these revised Guidelines. 3

4 4. TheuseofaBorrower s/recipient sregulationsforprocurementwillalwaysbesubjecttoverificationbyifadthat: Thoseregulationsareinlinewithinternationallyacceptedpractices forpublicprocurement; Those regulations also encompass the basic principles of procurement and support the developmentofnationalprocurementcapacityintheprocess;and Practicalimplementationcomplieswiththoseprinciplesandwithnationallegalandregulatoryrequirements. 5. Asaresult,theserevisedProcurementGuidelinesfocuslessonthedetailsofprocurementmethodsandmoreonthegeneralprinciples,standardsandpoliciesthatBorrowers/Recipientsmust adheretoinimplementingifad-financedprojects. 6. IFAD will therefore take a more active role in assessing and monitoring national procurement regulationsandprocedurestoensurethattheyareconsistentwiththeserevisedguidelines.in supervisingprojectprocurementandprovidingimplementationsupport,thefundwillensure thattheprocurementprocessconformstoagreednationalrules. 7. In cases where IFAD deems that a Borrower s/recipient s system for procurement, either in wholeorinpart,isnotinlinewiththeseguidelines,thenalternativeprovisionsforprocurement willapply,asprovidedforinsectioniiiandintheannexoftheseguidelines. 8. Theonlyexceptionwillbeinthecaseofinternationalcompetitivebidding,where,regardlessof theresultsofanyassessmentofnationalprocurementregulationsorprocedures,theprocedures oftheworldbankassetforthinitsprocurementguidelineswillalwaysapply. B. Purpose 2 9. This document sets out the policies, principles and standards that IFAD requires Borrowers/Recipientstoadheretowhenundertakingtheprocurementofgoods,worksorservicesneededunderdevelopmentprojectsorprogrammesgovernedbyafinancingagreement (SectionI.DoftheseGuidelines) Forpurposesofharmonization,theseGuidelineshavebeencloselyalignedtogenerallyacceptedinternationalprocurementprinciplesandoperatingprocedures,andtotheprocurementpoliciesandstandardsofotherdevelopmentfundinginstitutions.Theyhavealso,wherepracticable, takenintoaccountthesizeandspecializednatureofifad soperationsandmandate. 11. TherightsandobligationsoftheBorrower/Recipientandallprovidersofgoods,worksandservices are governed by the conditions of the bidding documents and contracts signed by the Borrower/Recipientandsuchproviders,andnotbytheseGuidelinesorthefinancingagreement. Nopartyotherthanthepartiestothefinancingagreementwillderiveanyrightsfromtheagreementorhaveanyclaimtofinancingproceeds. 4 2 Both consultancy and non-consultancy services. 3 As defined by the General Conditions. 4 For the purposes of these Guidelines, bid / bidding and tender / tendering have the same meaning. 4

5 12. TheseGuidelinesarenotdesignedtoprovidethedetailedoperationalproceduresforundertakingproject-relatedprocurement.ThatinformationiscontainedintheProcurementHandbook for use by IFAD staff and borrowers/recipients, which is available on the IFAD website ( C. Contents 13. TheseGuidelinesareinthreeSections: SectionIcoverstheguidelines background,purpose,contentsandapplicability; SectionIIoutlinestheprocurementprinciplesthatapplytoIFAD-fundedprojectsorprogrammes;and SectionIIIprovidesinformationaboutprocurementarrangements,outliningthebasicstandardsexpectedduringimplementation. D. Applicability 14. TheseGuidelinesapplytoanyprocurementactivityundertakenbyaBorrower/Recipientwhen procuringgoods,worksorservicesunderanydevelopmentprojectorprogrammegovernedby anifadfinancingagreementwhereifadisthesolefundingsource SomeIFADprojectsmayinvolvecofinancingwithcooperatinginstitutions,someofwhichhave theirownprocurementguidelines.whereacooperatinginstitutionwithestablishedguidelines assumesresponsibilityforprojectadministrationandsupervisiononbehalfofifad,thenthat institution sownprocurementguidelineswillnormallybefollowedunlessotherwiseagreedwith IFAD.TheIFADGuidelinesshouldbefollowedforallprojectsadministeredbycooperatinginstitutionsthatdonothavetheirownprocurementguidelinesandforallprojectsdirectlysupervisedbyIFAD. 16. Where these Guidelines apply, deviations are permitted only where expressly stated in the financingagreement. II. Principles A. Ethics 17. Theguidingprinciplesofethicalbehaviourareimpartiality,independenceandintegrity. 18. Nopersonorentityshallusehis/her/itsauthority,positionorofficeforpersonalgain,whichwill bedefinedassoliciting,acceptingorotherwisebenefitingfromanythingofmaterialvalue,inany 5 form,eitherinpersonorindirectlythroughcloserelativesorassociates,as aresultofprocurementfinancedbyifad. 19. Borrower/Recipientofficialsengagedinprocurementactivityhaveadutyto: MaintainandenhancethereputationoftheBorrower/Recipientcountryby: 5 Including, but not restricted to, gifts, services, favours or hospitality. 5

6 (i)maintainingthehigheststandardsofhonesty andintegrityinallprofessional relationships; (ii)developingthehighestpossiblestandardsofprofessionalcompetence; (iii)maximizingtheuseofifadfundsandotherresourcesforwhichtheyareresponsible for the purposes for which these funds and resources were provided to the Borrower/Recipientcountry;and (iv)complyingwithboththeletterandthespiritof: Thefinancingagreement; ThelawsandregulationsoftheBorrower/Recipientcountry; Acceptedprofessionalethics;and Contractualobligations; Declareanypersonalinterestthatmayaffect,ormightreasonablybedeemedbyothersto affect,impartialityinanymatterrelevanttotheirduties(conflictofinterest).inasituation ofthisnature,theofficialconcernedshouldnotparticipateinanywayintheprocurement process,toavoidmisprocurement;and Respecttheconfidentialityofinformationgainedinthecourseofdutyandnotusesuch informationforpersonalgainorfortheunfairbenefitofanybidder,supplierorcontractor. Informationgiveninthecourseoftheirdutiesshallbetrue,fairandnotdesignedtomislead. B. Accountability 20. TheBorrower/RecipientisaccountabletoIFADforallactionsanddecisionsinrelationtoproject-fundedprocurement. 21. Thisincludes,butisnotlimitedto: Ensuringthatthefundsareusedsolelyforthepurposeforwhichtheywereprovided;and EnsuringthatprocurementisundertakeninaccordancewiththeseGuidelines. 22. Borrowers/Recipients are further directed to the provisions of Section 4.09 Refund of Withdrawals of the General Conditions and Section III.A of these Guidelines, Borrower/Recipientobligations. C. Competition Full,fairandlegitimatecompetitionamongeligiblesuppliersandcontractorsisthefoundation onwhichproject-fundedprocurementactivitiesshouldbebased. 6 As defined in Section III. 6

7 24. The most common method of seeking competition is through a competitive bidding process, and,inthisregard,ifadspecifiesthatallgoods,worksandservicesshouldbeobtainedthrough 7 8 anagreedprocurementprocessinvolvingatleastthreeseparatesuppliersorcontractorswhose businessisdirectlyrelatedtotheprocurementbeingundertaken. 25. Itisrecognizedthatitisneitherpracticalnorefficienttoadvertiseinternationallyforlow-value contractsforgoods,worksorservices,andthedegreetowhichtheprincipleofcompetitionis requiredforeachprocurementactivitywillbeoutlinedintheprocurementmethodapprovedby IFADwithintheprocurementplan. 26. Borrowers/Recipients will be expected to promote genuine competition at every opportunity andmayberequiredtoprovideevidenceof: Fairandgenuinecompetitioninthecompilationofshortlistsandinthesolicitationofbids; and Theeffectivenessofcompetitionduringthebiddingprocess. 27. Singlesourcinganddirectcontractingdonotprovidetheelementsofcompetitionrequiredby 9 IFAD.Onlyinexceptionalcircumstanceswilltheseapproachesbeconsideredandapprovedin procurementplansagreedwithifad. D. Fairness 28. IFAD sexpectationisthatproject-fundedprocurementwillbeopentoasmanyeligiblebidders from IFAD s developed and developing Member States as is practicable in order to meet the requirementsofcompetition. 29. IFADexpectsBorrowers/Recipientstoensurethatallprospectivebiddersare: Managedwithaconsistentapproachandapplicationoflaws,regulationsandrequirements inrespectoftheprocurementprocess; Offeredalevelplayingfieldonwhichtogenuinelycompete;and Treated in a fair, impartial and unbiased way, so that principles of impartiality and equal opportunitycanbedemonstratedinallprocurementactivities. 30. Instrivingforfairnessinitsprocurementoperations,IFAD: Will not tolerate exclusion of, discrimination, bias or prejudice against, or favouritism or inequalitytowardsanypotentialsupplierorcontractor,eitherdirectlyorindirectlythrough manipulation of any part of the procurement process, including, but not limited to, the preparationoftechnicalspecifications,evaluationcriteriaorbiddingrequirements.where anysuchactivityissuspectedorproven,ifadreservestherighttotakeanypreventative, correctiveorpunitiveactionitconsidersappropriate;and 7 Agreed refers to the use of a recognized procurement method approved in the procurement plan. 8 In this context, separate means that the suppliers or contractors must (i) all have separate ownership, (ii) not have any affiliation, connection, association or attachment with each other that may be deemed to compromise the principle of competition, and (iii) have no common shareholders or directors. 9 Conditions for applying single source/direct contracting are defined in the Procurement Handbook. 7

8 Willseektoaddress,inconsultationwiththeBorrower/Recipient,anyimpositionsthatmay deterorimpingeontheattainmentoffairnesswithintheprocurementprocess. E. Transparency 31. IFADexpectsthehighestdegreeoftransparencyandopennesswithintheprocurementprocessesundertakenunderitsprojects.Alackoftransparencycanbeperceivedasanattempttowithholdinformation,whichinturnmaymakethefairnessandintegrityoftheprocurementprocess suspect Transparency within procurement relates to disclosing, in the public domain, information for partiesinvolved,interestedinoraffectedbytheprocess,includingbutnotlimitedtoinformationon: (d) (e) (f) Theavailabilityofpotentialandexistingprocurementopportunities; Wheretoaccessrelevantdata; Theprocessesbywhichtheprocurementisbeingundertaken; Themechanismsbywhichcontractswillbeawarded; Contractawarddata;and Appealprocedures. 33. Modesofcommunication/publicationofsuchinformationwillvarydependingonthenatureof the data but will generally be through existing means of public information (e.g. government websites,publicnoticeboardsormedia)orintheprocurementdocumentationrelevanttoan individualprocurementactivity(e.g.bidnoticesandbiddingdocuments). 34. Borrowers/Recipientsarerequiredatalltimestoactopenly,predictablyandinaccordancewith theinformationprovided. F. Efficiency, Effectiveness and Economy 35. IFADrequiresBorrowers/Recipientstodemonstrateefficiencyandeconomyinundertakingproject-relatedprocurement,toavoidundueimplementationdelaysandtoachievevalueformoney. 36. Procurementmustbewellorganized,carriedoutcorrectlywithregardtoquantity,qualityand timeliness,andattheoptimumprice,inaccordancewiththeappropriateguidelines,principles andregulations. 37. Processesmustbeproportionatetotheprocurementactivity,sothattheoverallcostofconductingtheprocurementprocessisminimizedandtailoredtothesizeofthebudgetfortheactivity beingundertaken,whileupholdingtheguidingprinciples. 10 IFAD recognizes that some countries have national legislation governing the disclosure of information, and in such circumstances specific provision will be made during negotiations to ensure that the principle of transparency is maintained. 8

9 38. Efficiencies can be obtained through a combination of methods. For instance, a strategic approachcanbetakentoplanning,combiningandconductingprocurementactivitiessoasto minimizelossoftimeandresources.forthisreason,thedesignofallifad-fundedprojectsmust nowincludeaprocurementplanaspersectioniii.doftheseguidelinesandasdefinedin,and requiredby,thegeneralconditions. G. Value for money 39. Underpinningalloftheaboveistheneedtoobtainvalueformoneyforallprojectprocurement activitiesthroughtheoptimumcombinationofseveralfactors,including: Applyingsound,internationallyrecognizedprocurementprinciples; Ensuringthatthegoods,worksorservicesprocuredmeettherequirementsforthetaskand arenotoverspecified; Ensuringthatthegoods,worksorservicesarecontractedonthebestpossibleterms,taking intoaccounttheirexpectedlifecycle;and (d) Ensuringthattheprovider/supplierofthegoods,works orservicesisqualified,legallyentitled andcompetenttoexecutethecontract. 40. Bestvaluedoesnotnecessarilymeanthelowestinitialpriceoption,butratherrepresentsthe best return on investment, taking into consideration the unique and specific circumstances of each procurement activity; the balance of time, cost and quality required; and the successful overalloutcomeofthecontractinmeetingitsoriginalobjectives. III. Arrangements A. Borrower/Recipient obligations 41. Borrowers/Recipientsmust: Actatalltimesinaccordancewiththelegalrelationshipgovernedbythefinancingagreement; Takefullresponsibilityforprojectimplementation,planning,andtheawardandadministrationofcontractsundertheproject;and Undertakeallproject-relatedprocurementinaccordancewiththepolicies,principlesand standardssetoutintheseguidelines. 42. IFAD sreviewofprocurementprocedures,documents,evaluationsandawardrecommendations aspartofitssupervisionfunctionsdoesnotinanywayabsolveborrowers/recipientsfromanyof theirobligationsasspecifiedabove. 9

10 B. General Conditions for Agricultural Development Financing 43. AsstatedinSectionI.AoftheseGuidelines,theGeneralConditionswererevisedinApril2009 takingintoaccountifad snewapproachtoprocurementfinancedbyitsloansandgrants.these Guidelinesarealsoinlinewiththevariouscommitmentsoftheinternationaldonorcommunity 11 toworktowardsincreasingtheuseofnationalsystems. 44. The revised General Conditions are designed to be clearer and less complex for IFAD and Borrower/Recipientstaff.Theyapplytoallfinancingagreementsforprojectsapprovedafterthe ninety-sixthsessionoftheifadexecutiveboard. 45. Specificallyinrelationtoprocurement,theGeneralConditionsfocuson: TheemphasisplacedonusingtheBorrower s/recipient sprocurementregulations,providedtheyaredeemedtobeconsistentwithifad sguidelines;and TheincreasedimportanceoftheprojectprocurementplaninidentifyingprocurementprocedurestobefollowedbytheBorrower/Recipienttoensureconsistencyduringimplementation. 46. BothoftheseaspectsarediscussedinmoredetailinSectionsIII.CandD. C. Use of national procurement systems 47. InlinewiththeprovisionsoftheGeneralConditions,procurementofgoods,worksandservices financed by IFAD shall be carried out in accordance with the provisions of the Borrower s/recipient s procurement regulations, to the extent such are consistent with these Guidelines.Eachprocurementplanshallidentifyproceduresthatmustbeimplementedbythe Borrower/RecipientinordertoensureconsistencywiththeseGuidelines. 48. ThisSectionthereforeelaboratestheprocessthatIFADwillusetoassesswhetheracountry s nationalprocurementsystemandregulationsareconsistentwiththeprocurementpolicies,principlesandstandardslaiddownintheseguidelines. Stage 1: Overarching country assessment 49. Duringpreparationofacountrystrategicopportunitiesprogramme(COSOP),orintheabsence of a COSOP process, when deemed appropriate, IFAD in conjunction with the Borrower/Recipient,willundertakeadeskreviewofexistingavailabledatatoascertainthestatus oftwoaspects: Theoveralllegislativeandregulatoryframework;and Thenationalstructureforpublicprocurement. 50. Sourcesofsuchdataforthiskindofassessmentwillvaryaccordingtotheavailabilityandcompletenessofinformationandthesizeoftheoverallcountryportfolio,butwillusuallyinclude: 11 For example, the Paris Declaration on Aid Effectiveness, to which IFAD is a signatory, affirmed the commitment for increasing alignment of aid with partner countries priorities, systems and procedures and helping to strengthen theit capacities (paragraph 3 (ii)). The Accra Agenda for Action reaffirmed this by committing to strengthen and use developing country systems to the maximum extent possible (paragraph 15). 1 0

11 Results from assessments of national procurement systems made by the Organisation for EconomicCo-operationandDevelopment sdevelopmentassistancecommittee; Recentfindingsfromothergovernmentalimplementingagencies,donorsanddevelopment partners;and PreviousworkingexperiencefromIFADprojects. 51. Asaresultofthisreview,IFADwillinclude,forgeneraloverviewpurposes,somehigh-levelstatementswithintheCOSOPregardingitsfindings.Thesestatementswillnotbeabsolutedecisions but will merely serve as the starting point for more detailed assessment at the project design stage. 52. ShouldIFADconclude,asaconsequenceofthisreview,thattherearenumerousand/orfundamentalconcernsinrelationtotheissuesassessed,thentheoverarchingcountryassessmentwill statethattheprocurementsystemcannotbeadoptedatthepresenttime. 12 Stage 2: Specific project assessment 53. Carryingoutprocurementefficientlyiscriticaltogoodprojectimplementation,totheattainment ofaproject sobjectives,andtoitssustainability.duringprojectdesign,ifadwillundertake,in 13 conjunctionwiththeborrower/recipient,amorecomprehensiveassessmentoftheagencyor agenciesdesignatedtoundertakeprojectprocurement.thiswillinclude,butnotberestricted to,issuessuchas: (d) (e) (f) The level of practical application of any existing laws, decrees, regulations or procedures coveringprocurementandtheextenttowhichtheymeettherequirementsofsectioniiof theseguidelines; Theleveloftheexistinghumancapacitytoundertakeprojectprocurement; Organizationandfunctions; Thesupportandcontrolsystemsrelatingtoprocurement; Recordkeeping;and Theoverallprocurementenvironmentwithintheagencyoragencies. 54. AchecklistoftheissuestobereviewedisincludedintheProcurementHandbook. 55. As a result of this stage-2 assessment, IFAD will classify these aspects individually into one of threecategories: Fullyinlinewithrequirementsandconsideredsuitableforuseforprojectprocurement; Generally in accordance with requirements and possibly suitable for use for project procurementwithsomemodifications;and 12 To be conducted at project design. 13 IFAD will depend on relevant assessments carried out by other regional development banks and partners where available. 1 1

12 Notinlinewithrequirementsandconsideredunsuitableforuse. Findings and results 56. Basedontheresultofthefindingsoftheindividualassessments,IFADwilldecidetowhatextent thenationalsystemforprocurementcanbeusedinwhole,inpart,ornotatall.thisdecision willbesharedwiththeborrower/recipientandbereflectedintheprojectdesign. 57. Whereprocurementmethodsorpracticeswithinthelegalandregulatoryframeworkareclassed as notinlinewithrequirementsandconsideredunsuitableforuse,ifadwillusetheprocurementmethodsattachedasanannextotheseguidelines.theseprocurementmethodsareconsistentwiththoseofotherimplementingagencies,donorsanddevelopmentpartners. 58. Whereanyotheraspectsofnationalsystemsarefoundtobe notinlinewithrequirementsand considered unsuitable for use for project procurement, then IFAD, in conjunction with Borrowers/Recipients,willseektoidentifymeasurestobeintroducedthatwillapplytoitsprojects and support Borrowers/Recipients in meeting their own development goals through the managementoftheirownresources. D. Procurement planning 59. Accurateandrealisticplanningandprioritizationofneedsisanessentialprerequisitetoeffective procurementandakeytoolformonitoringprojectimplementation. 60. Atthetimeofnegotiationofeachproject,theBorrower/Recipient,inconsultationwithIFAD, mustestablishan18-monthprocurementplan,whichmustinclude,asaminimum: (d) Abriefdescriptionofeachprocurementactivitytobeundertakenduringthatperiod; Theestimatedvalueofeachactivity; Themethodofprocurementtobeadoptedforeachactivity;and The method of review IFAD will undertake for each activity (Section III.H of these Guidelines); 61. WherenationalprocurementplantemplatesexistandareagreedbyIFADassuitable,thensuch templatesshouldbeused.ifnosuchtemplatesexist,ifadwilladoptthosefromotherinternationalfinancinginstitutionswithwhichtheborrower/recipientisfamiliarandwhichareinuse forotherprojects. 62. Borrowers/Recipients are required to keep plans updated frequently to reflect changes to the projectortimescales. 63. IFAD sreviewofandnoobjectiontoprocurementplansiscompulsoryunderallfinancingagreementsdirectlysupervisedbyifad. E. Eligibility 64. IFAD financing proceeds are disbursed exclusively for expenditures for goods, works and ser- 1 2

13 vicesproducedinorsuppliedfromtheterritoryofanycountry. F. Domestic preferences 65. TheBorrower/Recipientmay,withtheagreementofIFAD,grantamarginofpreferenceinthe evaluation of bids conducted under the international competitive bidding method of procurementto: GoodsmanufacturedintheBorrower s/recipient scountry,whencomparingagainstbids offeringgoodsmanufacturedfromabroad;and WorksinMemberStatesthatareBorrower/RecipientsunderIFADfinancingonhighlyconcessionalterms,whencomparingbidsfromeligibledomesticcontractorswiththosefrom foreignfirms. 66. The conditions for the application of any such preference will be stipulated in the financing agreement. G. Procurement involving community participation 67. GiventhesizeandnatureofIFADprojects,thereisahighdegreeofinvolvementwithcommunity-basedprocurementactivities. 68. It needs to be underscored that procurement with community participation is not a distinct methodofprocurementanditthereforerequiresthesameadherencetoallprinciplesandstandardssetoutintheseguidelines.projectdesignersaretoensurethatsimpleyetreliablearrangements,whichadheretotheseguidelines,areinplacewithintheprojectto: FacilitatetranslationofdocumentsandrecordsfromtheBorrower s/recipient sofficiallanguage(s)tooneoftheifadofficiallanguagesasmayberequiredforpurposesofauditand review; Provide appropriate procedures for regular monitoring and audit of community procurementactivities,includingtheretentionofrelevantrecordsbytheprojectmanagementstaff and/ortheintermediaryagency; (d) Ensureproperhandoverofassets. 69. Undertheterm communityparticipation,itisunderstoodthatthecommunitymayplayoneor moreofthefollowingrolesduringprojectimplementation. 70. Asaproviderofgoods,worksorservicesdirectlytotheproject, communitiesarepermittedto undertakeworksorprovidegoodsorservicestotheprojectwhere: Itisanimplementationmodalitywithintheprojectdesigndocument;or Definetherelationships,rolesandresponsibilitiesbetweenintermediariesandthecommunity,includingaclearexitstrategyforthecompletionoftheintermediaryassistance;and ItisnotanimplementationmodalitybutitisagreedwithIFADthatthisrepresentsacosteffective and practical alternative to procuring externally. IFAD will also consider factors 1 3

14 suchasfosteringownership,thesustainabilityofprojectactivities,effectiveoperationand maintenanceofaprojectfacility,andtheoverallrisk/rewardequation. 71. Generally,agreementwillonlybegrantedwhereitcanbedemonstratedthatsuchgoods,works orserviceshavebeenorcouldbesuccessfullyprovidedorproducedbythecommunity. 72. Asaprovider,acommunitymayacteither: Onacommercialbasisundercontract;or Aspartorallofthebeneficiarycommunity scontributiontotheproject; 73. Ineithercase,theestimatedfinancialvalueofthecommunitycontributionandthemodalities forsupervisionmustbequantifiedandagreedwithifad. 74. Astheimplementingagencyundertakingprocurementfortheproject,communitiesorinformal groupsmaybebroughttogethertoactasimplementingagenciestoundertake project procurement. 75. Wherethisisthecase,theirrolewillinclude: Competitivecontractingusinganyoftheagreedprocurementmethods;and Supervisionofacontractedproviderofworks,goodsorservices. 76. Theextenttowhichthisispermittedwillbedeterminedonaproject-by-projectbasis,identified intheprojectdesignand/orintheimplementationmanual,andclearlydefinedintheapproved procurement plan. Factors to be considered as part of the assessment are defined in the ProcurementHandbook. 77. Where the project s beneficiary community does not have adequate institutional capacity to receiveandaccountforfundsoradministerprocurementreliably,itmaybenecessarytointroduceintermediariestoactonbehalfofthecommunity.suchintermediariescouldbecivilsociety organizations,cooperativesocieties,privateentitiesorothers. 78. Theprojectmanagementwillensurethatsuchintermediarieshaveadequatecapacitytoperform suchduties. 79. When civil society organizations or other entities are included as implementing agencies for weakcommunitygroups,thefollowingaspectswillbeaddressedduringprojectdesign: Legal status of intermediary. Thiswillincluderegulationsgoverningregistration(with thegovernmentorlocalauthority),functioninginspecificsectors,authoritytoreceiveand accountforpublicfunds,andabilitytoparticipateintheproject; Selection of intermediary. Intermediaries can be hired either through a transparent competitive process (if more than one intermediary is available) or through sole-source directcontracting(ifonlyonefunctioningintermediaryexistsinthetargetedcommunity); and 1 4

15 Financial viability and administrative capacity. Theintermediary sprimarysourceof funding,staffing,management,administrativecapacityandaccountabilityviaindependent audits,etc.,shouldbeexaminedtoensuresafetyandsecurityinhandlingpublicfundson behalfoftheprojectmanagementandthecommunity. H. IFAD monitoring and review 80. ToensurethattheprocurementprocessiscarriedoutinconformitywiththeseGuidelinesand with the agreed procurement plan, IFAD will review arrangements for procurement of goods, worksandservicesproposedbytheborrower/recipient,including: (d) (e) (f) Contractpackaging; Applicableproceduresandprocurementmethods; Biddingdocumentation; Compositionofbidevaluationcommittees; Bidevaluationsandawardrecommendations;and Draftcontractsandcontractamendments. 81. Theextenttowhichthesereviewprocedureswillbeappliedtoeachprojectorprogrammewill becontainedinthelettertotheborrower/recipientandtheprocurementplan. 82. Forfulldetailsonthereviewprocesses,refertotheProcurementHandbook. I. Misprocurement 83. IFADwillnotfinanceexpendituresforgoods,worksorconsultingservicesthathavenotbeen procuredinaccordancewiththeseguidelinesandthefinancingagreement.insuchcases,ifad may,inaddition,takeotherremedialactionunderthefinancingagreement,includingcancellationoftheamountinquestionfromtheloanand/orgrantaccountbydeclaringitineligible.even ifthecontractwasawardedfollowingifad s noobjection statement,thefundmaystilldeclare misprocurementifitconcludesthatthisstatementwasissuedonthebasisofincomplete,inaccurateormisleadinginformationfurnishedbytheborrower/recipient,orthatthetermsandconditionsofthecontracthadbeenmodifiedwithoutifad sapproval. J. Fraud and corruption 84. IFADrequiresthatitsownstaffandthestaffofBorrowers/Recipients(includingbeneficiariesof IFAD financing), and all bidders, suppliers, contractors and consultants under IFAD-financed contracts,observethehigheststandardofethicsandintegrityduringtheexecutionofandprocurementundersuchcontracts.thispositionisclearlystatedintheifadpolicyonpreventing 14 Fraud and Corruption in its Activities and Operations (hereafter: the anticorruption policy), whichappliestotheseguidelines.inlinewiththispolicy,ifadwillhavetherightto: 14 The IFAD Policy on Preventing Fraud and Corruption in its Activities and Operations (EB 2005/85/R.5/Rev.1) is available on the IFAD website at 1 5

16 (d) (e) (f) Rejectaproposalforawardifitdeterminesthatthebidder,supplier,contractororconsultantrecommendedforawardhas,directlyorthroughanagent,engagedincoercive,collusive,corruptorfraudulentpracticesincompetingforthecontractinquestion; 15 SuspendorcancelallorpartofthefinancinginaccordancewiththeGeneralConditionsifit determinesatanytimethatrepresentativesoftheborrower/recipientorofabeneficiaryof thefinancingengagedincoercive,collusive,corruptorfraudulentpracticesduringtheprocurementortheexecutionofthatcontract,withouttheborrower/recipienthavingtaken timelyandappropriateactionsatisfactorytoifadtoremedythesituation; Require that bidding documents and the contracts that it finances include a provision requiringsuppliers,contractorsandconsultantstopermitifadtoinspecttheiraccounts, recordsandotherdocumentsrelatingtothebidsubmissionandcontractperformance,and tohavethemauditedbyifad-appointedauditors; Sanctionanindividualorfirm whichmayincludedeclaringtheindividualorfirmineligibletobeawardedanifad-financedcontractindefinitelyorforastatedperiodoftime if at any time it determines that the individual or firm has, directly or through an agent, engagedincoercive,collusive,corruptorfraudulentpracticesincompetingfor,orinexecuting,anifad-financedcontract; Referanycasesofirregularpracticesthatinclude,butarenotlimitedto,fraudandcorruptiontotherelevantnationalauthoritiesforfurtherinvestigation;and 16 Apply,intheeventofcasesinwhichirregularpracticeshavebeendetermined,thesanctionsitdeemsnecessaryandappropriate. 85. WiththespecificagreementofIFAD,aBorrower/Recipientmayinclude,inbidformsforIFADfinancedcontracts,anundertakingofthebidderorconsultanttoobserve,whencompetingfor andexecutingacontract,thecountry slawsagainstfraudandcorruption(includingbribery),as 17 listed in the bidding documents or requests for proposals. IFAD will accept the inclusion of sucharequirement,attherequestoftheborrower s/recipient scountry,providedthearrangementsgoverningsuchanundertakingaresatisfactorytoifad. K. Dispute resolutions 86. In the event of a dispute between IFAD and its Borrower/Recipient, the provisions of Section 14.04oftheGeneralConditionswillapply. 87. WherethereisadisputebetweentheBorrower/Recipientandabidderorcontractor,thenthe process for dealing with this dispute will be as outlined in the bidding documents, contract and/or national laws of the country, as applicable. In these circumstances, IFAD will not be namedasanarbitratororbeaskedtonameanarbitrator. 15 As defined in the General Conditions. 16 As defined in IFAD s anticorruption policy as may be amended from time to time. 17 An example might be: We undertake that, in competing for (executing) the contract, we will strictly observe the laws against fraud and corruption in force in the country of the (purchaser) (employer), as such laws have been listed by the (purchaser) (employer) in the bidding documents for this contract. 1 6

17 L. References to IFAD 88. IftheBorrower/RecipientwishestorefertoIFADinprocurementdocuments,thefollowinglanguageistobeused: (NameofBorrower/Recipientordesignate)hasreceived(orinappropriatecases hasapplied for )afinancingfromtheinternationalfundforagriculturaldevelopment(ifad)invariouscurrencies equivalent to towards the cost of (name of project), and intends to applyaportionoftheproceedsofthisloadtoeligiblepaymentsunderthiscontract.paymentby IFADwillbemadeonlyattherequestof(nameofBorrower/Recipientordesignate)andupon approvalbyifad,andwillbesubject,inallrespects,tothetermsandconditionsofthefinancing agreement.thefinancingagreementprohibitsawithdrawalfromtheloanand/orgrantaccount forthepurposeofanypaymenttopersonsorentities,orforanyimportofgoods,ifsuchpayment or import, to the knowledge of IFAD, is prohibited by a decision of the United Nations SecurityCounciltakenunderchapterVIIoftheCharteroftheUnitedNations.Nopartiesother than(nameofborrower/recipient)shallderiveanyrightsfromthefinancingagreementorhave anyclaimtofinancingproceeds. 1 7

18 AnnexMethods of procurement in the event that national systems are not suitable 1. ThisAnnexoutlinesthevariousmethodsofprocurementthatcanbeselectedwhenithasbeen decided by IFAD that the Borrower s/recipient s national procurement methods or practices within the legal and regulatory framework are not in line with requirements and considered unsuitableforuse inwholeorinpart. 2. Detailsoftheindividualstepstobetakenduringtheprocurementstagearefurtherelaboratedin thespecificmodulesoftheprocurementhandbook. A. International competitive bidding 3. Internationalcompetitivebidding(ICB)isaprocurementmethodsuitedtohigh-valuerequirementsthatwouldbeofinteresttotheinternationalbusinesscommunity.TheobjectiveofICBis to provide all eligible prospective bidders located and operating both within the Borrower s/recipient s country and abroad with timely and adequate notification of the Borrower s/recipient srequirementsandanequalopportunitytobidfortherequiredgoodsand works. 4. Where ICB is the identified method of procurement within an approved procurement plan, WorldBankproceduresassetforthintheirguidelineswillapply. B. Limited international bidding 5. Limitedinternationalbidding(LIB)isessentiallyICBbydirectinvitationwithoutopenadvertisement.Itmaybeanappropriatemethodofprocurementwhere: 1 Contractamountsaresmall; Thereisonlyalimitednumberofsuppliersorcontractors;or OtherexceptionalreasonsexistthatmayjustifydeparturefromfullICBprocedures. 6. UnderLIB,borrowers/recipientsshouldseekbidsfromalistofpotentialsuppliersorcontractors broadenoughtoensurecompetitiveprices.thislistshouldincludeallsuppliersandcontractors whenthereareonlyalimitednumber.domesticpreferencesarenotapplicableintheevaluation of bids under LIB. In all respects other than advertisement and preferences, ICB procedures applytoprocurementunderlib,includingthepublicationofthecontractaward. 1 This applies equally to goods, works and services. For consultancy services, there are also methods of selection (e.g. quality and cost-based selection, selection based on consultants qualifications and least cost selection), which determine the process of evaluation and award. These are discussed further in the Procurement Handbook. 1 8

19 C. National competitive bidding 7. Nationalcompetitivebidding(NCB)isthecompetitivebiddingprocedurenormallyusedforpublic procurement in the country of the Borrower/Recipient, and may be the most efficient and economical way of procuring goods or works that, by their nature or scope, are unlikely to attractforeigncompetition. 8. NCBmaybethepreferredmethodofprocurementwhereforeignbiddersarenotexpectedtobe interestedbecause: (d) Contractvaluesaresmall; Worksarescatteredgeographicallyorspreadoutovertime; Worksarelabour-intensive;or Thegoodsorworksareavailablelocallyatpricesbelowthoseontheinternationalmarket. 9. NCBproceduresmayalsobeusedwheretheadvantagesofICBareclearlyoutweighedbythe administrativeorfinancialburdeninvolved. 10. AdvertisingforprocurementunderNCBmaybelimitedtothenationalpress,theofficialgazette of the Borrower s/recipient s government or, where possible, a free and open-access website. 2 Biddingdocumentsmaybeinanofficiallanguageofthecountry,andlocalcurrencyisgenerally usedforthepurposesofbiddingandpayment.theproceduresaretoprovideforadequatecompetitioninordertoensurereasonableprices,andthemethodsusedintheevaluationofbids andtheawardofcontractsaretobeobjectiveandmadeknowntoallbidders,andarenottobe appliedarbitrarily.theprocedureswillalsoincludepublicopeningofbids,publicationofresults ofevaluationandoftheawardofcontract,andprovisionsforbidderstoprotest.inaddition,bidding documents will provide clear instructions on how bids should be submitted, how prices shouldbeoffered,andtheplaceandtimeforsubmissionofbids.adequateresponsetimefor preparationandsubmissionofbidswillbeprovided.ifeligibleforeignfirmswishtoparticipate underthesecircumstances,theyaretobeallowedtodoso. D. International or national shopping 11. Internationalornationalshoppingisaprocurementmethodthatentailscomparingpricequotationsfromseveralsuppliersorcontractors(usuallyatleastthree)toensurecompetitiveprices.It isanappropriatemethodforprocuringreadilyavailable,off-the-shelfgoodsorstandardspecificationcommoditiesthataresmallinvalue,orsimplecivilworksofsmallvalue.requestsforquotationsshouldindicatethedescriptionandquantityofthegoods,togetherwithdesireddelivery (orcompletion)timeandplace.quotationsmaybesubmittedbymail,electronicmailorfacsimile. The evaluation of quotations will follow the principles of competition. The terms of the acceptedofferaretobeincorporatedinapurchaseorderorbriefcontract. 2 Translation into one of IFAD s or the cooperating institution s official languages is to be provided if required. Pursuant to article (Language of reporting) of IFAD s General Conditions, the agreed language will be specified in the financing agreement. 1 9

20 12. Underinternationalshopping,thepurchaseristosolicitquotationsfromatleastthreesuppliers intwodifferentcountries.nationalshoppingmaybeusedwherethedesiredgoodsareordinarilyavailablefrommorethanonesourceinthecountryoftheborrower/recipientatcompetitive prices. E. Direct contracting 13. Directcontractingwithoutcompetition(bysingleorsole-sourceselection)istheleastfavourable methodofselection.duetoitsnon-competitivenature,itmayonlybeusedwiththeexpress agreementofifadandisonlypermittedinthefollowingexceptionalcircumstances: (d) (e) Anexistingcontractforgoodsorworks,awardedinaccordancewithproceduresacceptable toifad,maybeextendedforadditionalgoodsorworksofasimilarnaturetoamaximum of25percentoftheoriginalcontractvalue,withthepriorapprovalofifad,providedthat noadvantagecouldbeobtainedbyfurthercompetitionandthatthepricesontheextendedcontractarereasonable.provisionforsuchanextension,ifconsideredlikelyinadvance, istobeincludedintheoriginalcontract; Therequiredequipmentisproprietaryandobtainableonlyfromonesource; Thecontractorresponsibleforaprocessdesignrequiresthepurchaseofcriticalitemsfrom aparticularsupplierasaconditionofaperformanceguarantee;and Standardizationofvehicles,equipmentorsparepartstoensurecompatibilitywithexisting vehicles,equipmentormachinerymayjustifyadditionalpurchasesfromtheoriginalsupplier.forsuchpurchasestobejustified,theoriginalvehicles,equipmentormachineryshould besuitable;thenumberofnewitemsshouldgenerallybelessthantheexistingnumber; thepriceshouldbereasonable;andtheadvantagesofanothermakeorsourceofequipmentaretohavebeenconsideredandrejectedongroundsacceptabletoifad; Purchasesfromtheoriginalsuppliermayalsobejustifiedinexceptionalcasesandemergencies,suchasinresponsetoanaturaldisaster,conflictandpostconflict,orincountries wheretherearerestrictionstofreemarketsandenterprises. 14. Any request for direct contracting from a Borrower/Recipient must be accompanied by a detailedjustification,whichifadwillexaminecarefullytoensurethatitissatisfiedthatnoother alternativeselectionmethodscanbeused. F. Procurement from commodity markets 15. Marketpricesofcommodities,suchasgrain,animalfeed,cookingoil,fuel,fertilizer,pesticides andmetals,fluctuatedependingonthedemandandsupplyatanygiventime.pricesofmany such commodities are quoted in established commodity markets. Procurement often involves multipleawardsforpartialquantitiestoensuresecurityofsupplyandmultiplepurchasesovera periodoftimetotakeadvantageoffavourablemarketconditionsandtokeepinventorieslow.a list of prequalified bidders may be drawn up to whom periodic invitations are issued. Bidders 2 0

21 may be invited to quote prices linked to the market price at the time of or prior to the shipments.bidvaliditiesaretobeasshortaspossible.asinglecurrencyinwhichthecommodityis usuallypricedinthemarketmaybeusedforbiddingandpayment.thecurrencyistobespecifiedinthebiddingdocument.biddingdocumentsmaypermittelexedorfaxedbids,ifthereis norequirementforbidsecurityorifprequalifiedbiddershavesubmittedstandingbidsecurities validoveraspecifiedperiodoftime.contractconditionsandformsconsistentwithmarketpracticesaretobeused. G. Work by force account ForceaccountistheuseoftheBorrower s/recipient sownpersonnelandequipmenttoperformconstructionwork.insomecircumstancesitmaybetheonlypractical,efficientandeconomicmethodforconstructingsomekindsofworks.theuseofforceaccountmaybejustified, andonlyusedafterifad sno-objectionstatement,where: (d) (e) Quantitiesofworkinvolvedcannotbedefinedinadvance; Worksaresmallandscatteredorinremotelocationsforwhichqualifiedconstructionfirms areunlikelytobidatreasonableprices; Workisrequiredtobecarriedoutwithoutdisruptingongoingoperations; TheriskofunavoidableworkinterruptionisbetterbornebytheBorrower/Recipientthan byacontractor;or There are emergencies needing prompt attention such as natural disasters, conflict and postconflict,orcountrieswheretherearerestrictionstofreemarketsandenterprises. 17. Whereforceaccountisused,IFADistobesatisfiedthatlocalforceaccountunitsarestaffed, equippedandorganizedtocarryouttheworksexpeditiouslyandatareasonablecost. 18. Maintenanceandminorimprovementsofroadsareatypicalexampleofforceaccountusage.A government-ownedconstructionunitthatisnotmanageriallyandfinanciallyautonomousisto beconsideredaforceaccountunit.forceaccountmayalsobeusedforspecializednon-consultingserviceswhen,formattersofnationalsecurity,theborrower s/recipient slawonlypermits fortheseservicestobeprovidedbygovernmentagencies(i.e.aerialmapping). H. Procurement from United Nations agencies 19. TheremaybesituationsinwhichprocurementfromspecializedagenciesoftheUnitedNations, actingassuppliersandpursuanttotheirownprocedures,maybethemosteconomicalandefficientwayofprocuringrelativelysmallquantitiesofoff-the-shelfgoods.useofsuchagenciesas supplysources,togetherwiththeprojectcomponentandthetypeofgoodsorworkstobeprocured from such sources, are to be expressly and specifically agreed between the Borrower/Recipient andifadbefore proceeding withtheapplication ofthismethod ofprocurement. 3 Force account is also known as direct labour, departmental force or direct work. 2 1

22 December Via Paolo di Dono, Rome, Italy Tel Fax Telex IFAD-I [email protected]

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