E- Procurement: Asian Development Bank

’s

Policy and Practice

A paper

prepared for the National e-Procurement Forum on 27 April 2009 in Beijing, China

By Yinguo Huang, Principal Procurement Specialist, Asian Development Bank

I. Introduction

1. This paper briefly describes Asian Development Bank (ADB), its mission and itspartnership with the People's Republic of China; highlights ADB's procurement principles;discusses e-procurement requirements for ADB financed projects; and provides some updateson ADB's current practice and the way forward in e-procurement. The scope of this papercovers mainly procurement of goods, works and consulting services required by the publicsector and e-Government Procurement (e-GP) is defined as the use of information technologysystems and networks by governments in conducting their procurement relationships withsuppliers and contractors for such procurement.

II. ADB's Partnership with the People's Republic of China (PRC)

2. ADB is an international development finance institution whose mission is to help itsdeveloping member countries reduce poverty and improve the quality of life of their people.Headquartered in Manila, and established in 1966, ADB is owned and financed by its 67member countries/regions. The PRC has received $19.25 billion loans in total assistance since

joining the Asian Development Bank (ADB) in 1986. ADB’s Country Partnership Strategy (CPS)

for 2008

–

2010 supports the PRC's people-centered outlook on development by focusing oninclusive, environmentally-friendly, private sector-led development, and by assisting the

Government’s participation in and contribution

to public goods, regional cooperation andintegration, knowledge sharing, and regional infrastructure initiatives. The 2008

–

2010 lendingpipeline totals about $5.06 billion.3. The implementation of ADB's projects in PRC generates an annual average of over $1billion of contract awards for goods, works and consulting services and this figure will continueto grow. Although ADB's finance assistance to PRC accounts for a very small portion of PRC'smore than $1 trillion fixed assets investment, ADB sees its partnership with PRC as anopportunity to work together with the Chinese Government and the ADB project executingagencies on strengthening governance on development projects. Building up a legal frameworkand capacity for government procurement has been a part of ADB's efforts. For example, thearea of government procurement, ADB provided two technical assistances, in 1999 and 2001respectively, to help the PRC Government draft the Tendering and Bidding Law and theProcurement Law. The former was adopted by the National People's Congress (NPC) in 1999and the latter adopted by PNC in 2002.4. ADB's projects provide opportunities to Chinese companies to bid for procurement ofgoods and works not only domestically but also overseas in other developing member countriesof ADB. In the past three years, PRC has been ranked among the top two winners of ADB'scontract awards for procurement.

A large part of this paper is based on the following ADB documents:



Country Partnership Strategy for P. R. China (2008-2010)



ADB Facts Sheet, China



ADB Procurement Guidelines



ADB Project Administration Instructions



E-Bidding Requirements for MDB Financed Procurement

III. ADB's Procurement Principles

5. ADB's Charter (Agreement Establishing the Asian Development Bank, of which PRC is asignatory) states ADB's operating principles. Those relating to procurement are:



Source of Procurement - Proceeds of a loan can be used only for procurement of goodsand works supplied from, and produced in, member countries of ADB.



Economy and Efficiency - To achieve economy and efficiency, contracts are to beprocured through international competition unless other forms of procurement are moresuitable and have been agreed upon between ADB and the borrower.



Fairness - Procurement procedures must give member countries adequate, fair, andequal opportunity to compete for contracts.



Transparency - Transparency is essential in the procurement process to achieveeconomy and efficiency and to combat fraud and corruption.6. E-Procurement for ADB Financed projects are also guided by the above principles.

IV. E- Procurement requirements for ADB Financed Projects

7. ADB's borrowers are increasingly inclined to use electronic procurement systems andmeans for processing and managing procurement activities. This trend is also observed in theborrowing countries of other Multilateral Development Banks (MDBs). MDBs noted the need ofthe individual governments for finding their own paths in the development and implementation ofe-procurement, and that for each government, there is no single 'right' solution. However, inrecognizing these individualities the MDBs also have responsibilities to their donors, otherborrower countries and their own governance rules. These responsibilities mean that the MDBshave some minimum standards and qualities that must be met if such electronic systems are tobe applied to the activities that they fund. For this reason, ADB, in cooperation with the WorldBank and the Inter-American Bank, has prepared specific guides on e-procurement, which canbe accessed atwww.mdb-egp.org.The key principles and requirements are highlighted below.



transparency,



non-discrimination,



equality of access,



open competition,



accountability and



security of process8. The following requirements are designed to support these principles for MDB relatedactivities.a.

System Access

9. Access to e-GP system should be free, open, equal and unrestricted to all prospectivebidders/consultants to the public. The system shall be an Internet based approach accessible by

users through commonly used browser software. Downloaded documents shall be readablethrough open standard office software.b.

Advertising

10. Electronic advertising of procurement opportunities should be posted on a publiclyaccessible web site that is well known nationally, well maintained, functional, and affords freeand unrestricted access. There shall be no material difference between the paper documentsand those advertised online.c.

Correspondence, Amendments, Substitutions and Clarifications

11. Correspondence with bidders during bid preparation may be done electronically so longas print correspondence is used for bidders who request it. All clarifications and amendments orsubstitutions of the bidding documents, as well as any pre-bid conference minutes, shall beposted simultaneously onto a bid tracking page of the bid advertising website that is freelyaccessible to all. Amendments or substitutions by any official will be tracked and recorded foraudit. Systems shall ensure that only authorized changes can be made.12. Correspondence during bid evaluation for the purpose of clarification may also be doneelectronically with the normal restrictions against modification of the substance and price of thebid. Any correspondence of this type shall be directed through the Chairperson of the evaluationcommittee. Confidentiality of the bid evaluation process shall be maintained.d.

Bidding Documents

13. Contracting Authorities may distribute Bidding Documents/RFPs by using electronicsystems (download from website). The use of ADB's Standard Bidding Documents/RFPs isrequired. There shall be no difference between electronic and print versions of the BiddingDocuments/RFPs. Contracting Authorities shall ensure the integrity of Bidding Documents inelectronic format and their online publication and bidders/ consultants should have access to thelegally binding Bidding Documents/RFPs.e.

Submission of Bids/Proposals

14. Contracting Authorities may offer enrolled bidders/consultants the use of electronicsystems to submit bids/proposals conditional on the following:



There shall be security arrangements to ensure confidentiality and integrity ofbids/proposals in electronic format.



Bids/proposals submitted online shall be virus scanned by the Contracting Authoritybefore being uploaded into the online bid box, and where this causes a bid to be rejectedthe bidder/consultant shall be notified immediately.



Online submissions shall be received into an electronic bid box and maintained to highstandards of security for record-keeping and audit. At no time shall bids/proposals be inunencrypted format. Copies taken and decrypted for bid evaluation purposes shall notaffect the integrity of the original record.f.