Procurement Guidelines in

Externally Aided Projects

By. Goutam Mohanty

 Unlike Private sector,
a Public Procurement System follows…

Competition Complaints management

Advertisements Bid opening Evaluation
Eligibility conditions Performance security
Qualification of bidders Liquidated damages
Bidding periods Arbitration and Dispute
Bid security settlement
Contract
Example: The Donor Agencies and EAP Projects
Name of the Donor Agencies
International Bank for Reconstruction and
Development (IBRD)
International Development Association
(IDA)
International Finance Corporation (IFC)
Multilateral Investment Guarantee Agency
(MIGA)
International Centre for Settlement of
Investment Disputes (ICSID)
Asian Development Bank (ADB)
Japan Bank for International
Cooperation(JBIC)
Japan International Cooperation Agency
(JICA)
Externally Aided Projects
Hydrology, Sewage health system ,rural
Sanitation, Sarva Shiksha Abhiyan, TB control,
Water supply, Agriculture support, State forestry,
District Poverty initiative, urban Transport,
Hazardous Waste management, Reproduction
and Child Health Services, Nutrition
Development, Malaria Control Public health
capacity building.
Skill Development, Thermal Power, Public sector
management programme, Telecommunication.
Sewerage project ,canal project, Power
Transmission project, Hydroelectric project, small
Industries Development Programme , Forestry,
four laning of road, Tourism project, Transport
Infrastructure Dev. Project, canal Major Irrigation
project, Ground water Development project,
women development programme, Development
of Sericulture Industry Housing Project.
Guiding Principles of Public Procurement

Economy 1

…Achieving ECONOMY is getting the

right thing at the right price.

It is getting VALUE FOR MONEY (VfM)

Guiding Principles of Public Procurement

2
Efficiency

…With ECONOMY in price and choice of item, ensuring its

arrival , in the RIGHT TIME and RIGHT PLACE for its intended
use is EFFICIENCY.
Guiding Principles of Public Procurement
Transparency 3

is letting everyone know not only facts and

figures of procurement, but also mechanisms
and processes followed.

A transparent selection process increases the quality

of competition by creating an environment of trust
between the parties involved, reducing perceived
and actual business risks for consultants, and
minimizing the occurrence of complaints and claims
Guiding Principles of Public Procurement
4 Fairness
…is conforming with rules and standards, free from discrimination
& dishonesty

For each selection method, the procedure set out

in the RFP should be fair; that is, it should not

• provide unfair advantages to any particular consultants

Or
• make onerous demands on consultants, such as denying
sufficient time to prepare proposals or requesting
unduly large proposals and drawn out proposal validity
periods.
Public Procurement
Economy [VfM]
1
100

If these
4 principles are Transparency
100 met at 100 points
0 on 100
4 Fairness 3
each scale,
Public Procurement
Meets its objectives

100
2 Efficiency
Procurement Manual
Brings forth a comprehensive guidance to
National and State Level for procuring
Goods, Works and Services from the funds
secured for the mission.

Outlines various methods and

detailed steps of procurement to be
followed by all implementing
agncies.

Obligatory on all states, district societies and

implementing agencies to strictly adhere to
these guidelines.
 Types of Procurements
Goods
Civil works

Non-consulting
services
Services

Community based
procurements
Procurement
Goods
( IT and non-IT Equipments)

methods
applicable Works
( Construction , renovation,

for these 3 refurbishment, extension)

categories Non-consulting
are same. ( Security,
manpower, IT facility management,
housekeeping, catering etc)
 ICB
Ra
te
Co B
ntr N C
a ct
Methods….
Methods…

rc e Sho
S ou pp
g le ing
Si n
Petty Purchase
 NCB-National Competitive Bidding …
Preferred method of procurement for goods and works.
Generate adequate competition to ensure best prices.
Substantially Responsive Bid is required.
Bid security & Performance Security
Liquidated Damages

Bidders be made aware of the

criteria for evaluation.
Standard Bidding Documents
to be used.
Bidders are informed of the
award of contract on time.

Where only one bid is received, efforts should be made to
Single Bid

ascertain the reasons. If it is determined that publicity was not

adequate, bid specifications or any of terms were restrictive or
unclear, prices are unreasonable in comparison to market
rates ,the bid should be cancelled and invited afresh after
amending the specifications/ terms.
If however, it is determined that bid specifications are not
restrictive and the prices quoted are reasonable and bid is
technically and commercially responsive, the single bid should
be considered for award.
If consistently less than 3 bids are received the reasons for
poor competition should be analyzed and remedial action should
be formulated and taken to promote better competition.
 NCB-National Competitive Bidding …
Invitation to Bid: to be advertised
in at least one National daily / Evaluation and selection of lowest
Official gazette / website - 30 evaluated responsive tender. Issue
days prior to the deadline for of detailed Purchase Order.
submission

Use of Model bidding documents Public opening of Tenders

for issuing and Sale of Tender. immediately after closing date and
Minimum period for purchase and time in presence of bidders.
submission of tenders.
 Shopping… (1/3)

Limited tendering is used for Goods and Works.

Large supplier / contractor data base exist with the procuring entity
Inquiries issued to approved supplier/contractors

Procuring entity is responsible

for transparent and fair
identification and selection of
shortlisted suppliers for
inquiries.

OEMs, or authorized dealers

get preference.
 Shopping… (2/3)
Issue
request Tender Selectio Issue
for submissio n Purchase
quotation n process Order
s
7 days period Minimum 3 Mention detail
Post on the items, quantity,
for submission responsive
notice board in writing price, terms &
bids conditions etc.

Issued to all Preparation

relevant enlisted public opening and evaluation Post on the
suppliers or use of tenders of notice board
yellow pages or required. comparative for 7 days.
other databases.
statement.
 Petty Purchase…

• Office stationery, similar everyday items, small

What office repairs and maintenance, minor
refurbishment works…

• No need for formal procurement

How procedures.

• Must be approved by the competent

Who authority
Single Source / Direct Purchase…

Extension Proprietary Emergencies

Most Important : All single source transactions must be justified and

signed by Implementing Officer and pre-approved by the Competent
Authority with in their delegated financial limits…
 Not Permissible

• Price negotiations.

• Special preference to any bidder, neither for

price nor for terms and conditions.

• Rejection even of single responsive tender in

Open tendering.
 The Procurement Process…
1. Review of
1. Needs and Budgets
4. Inventory and specifications
2. Requisition
Disposal Plan 2. Methods
3. Procurement Plan 3. Sourcing
4. Define Objectives 4. Bidding Documents
5. Specifications 5. Bid receipts
6. Evaluation
7. Contract Approval
1. Planning 2. Solicitation & 8. Contract Award
Contract Award

4. Assets 3. Contract
Disposal Management
1. Asset usage 1. Debriefing Bidders
2. Disposal 2. Contract Mgmt
3. Receipt & Inspection
4. Payment
5. Updating records
 Services….
Institutional Consultancies
• Diagnostic studies, Baseline surveys,
project design and management,
advisory support, capacity building,
construction of works….

Individual Consultancies
Thematic experts……
Methods of procuring Services…..

CQS
QCBS Selection
LCS FBS
Quality and Cost based on
Least Cost Selection Fixed Budget Selection
Based Selection Consultant’s
Qualification

QBS SSS ICS

Quality based Single Source Individual
Selection Selection Consultant Selection
Key processes for all services….(1/4)

Terms of Cost estimate

Reference: Contracting
and budget :
Background, Strategy :
Resources, staff time,
objectives, tasks, logistics, fee, Time based &
time, input, key reimbursable or misc lump sum based
personnel…. charges.
Key processes for all services….(2/4)

Short listing of Request for

Advertising : consulting Proposals:
Expression of Interest firms:
to be published in
Technical and
Select 6 agencies on Financial in
national dailies with relevant qualifications
wide circulation separately sealed
and experience
specified for RFP. envelopes .
Key processes for all services….(3/4)

Evaluation :
- Minimum 3 members technical evaluation committee for quality. Minimum
passing score 70 -80 out of 100.
- Financial proposals (weight age 20-30%) to be opened only for the
minimum qualifiers.
- Highest scoring consultant will be recommended and invited for
negotiations.

Ensure that the proposal is valid at all times till the contract is signed.
Key processes for all services….(4/4)

Negotiations:
- With the selected consultant only on
technical viz. ToR, methodology…. Award :
- No substantial alteration to ToR is Based on final negotiated
allowed. ToR and contract to the
- Price Negotiations only allowed for QBS, selected agency.
CQS and SSS methods ( if quoted prices
seem unreasonably high)
Ensure that the proposal is valid at all times till the contract is signed.
 Contract Types…..
Lump Time
Sum Content, duration
and output of the
based When scope and
length of services is
difficult to define.
assignment are
Maximum price
clearly defined.
ceiling is fixed.

Such as feasibility Such as complex

studies, studies, construction
environmental supervision, advisory
studies…. services, training
Payments are linked assignments.
to outputs.. Payments are on
hourly, daily, weekly
or monthly rates.
 ity
ex
pl
m
Co
Choice of the appropriate method is based on

Project specific Financial thresholds agreed in the Finance Agreements

Quality and Cost Based Selection
Appropriate for Feasibility studies,
Management services, detailed designs etc..
Takes into account the quality of the proposal
and cost of the services.
 ToR and Scope of Work is well defined.
Staff time, consultants’ fees can be assessed
with realistic correctness.

Evaluation of proposals is carried out in two stages:

quality and cost

The technical envelopes are opened by

a committee of officials..

The financial envelopes of those consultants who submitted

responsive technical proposals over the minimum qualifying mark
are opened in the presence of the consultants or their
representatives wishing to attend.
 Least Cost Selection….
Minimum qualifying mark for quality is established in RFP.
2 enveloped proposals.
Qualified technical and lowest priced proposal is selected.

Method is appropriate for

small routine assignments
where standard outcome is
expected.
Like auditing, routine
maintenance work, simple
surveys….
 Quality based Selection … (QBS) 1/2

For complex and highly specialized assignments with no

defined and precise TOR and scope.

Urban master plans, financial sector reforms, country

economic studies , large dams, etc.

Assignments that can be carried out in substantially different

ways, such that proposals will not be comparable (country
policy studies, management advice etc….)

Innovations are required from experts.

 Quality based Selection … (QBS) 2/2
The method is based on the evaluation of the proposal quality without any initial
consideration for cost. The consultant that submitted the highest-ranked technical proposal
is then invited to negotiate its financial proposal and the contract.

The staff effort indicated by the consultants or the proposed cost may differ considerably
from the Borrower’s estimates, depending on the particular methodology adopted by the
consultant. Such differences shall not constitute a reason for rejection.

Shortlist 6 and
Prepare the ToR. invite Tech and
Requests for EoI Fin proposals.
Establish quality After Technical
and experience evaluation
relevant to the Financials of only
assignment. best Tech scoring
agency is opened.
 Selection based on Consultant’s
Qualification… (CQS)
Applies to very small assignments where complete process is
not required.
For short term legal advice, participation in project review….

Prepare the ToR.

Request for EoI
Establish qualification and experience relevant to the assignment.
Shortlist and selection of firm with best fit qualification and
references.
Combined technical and financial proposal being requested.
Negotiate if technical proposal is acceptable.
 Fixed Budget Selection…
Budget is fixed.
Disclosure of the available budget in the RFP.
Selection of the consultant with highest technical scoring.

Ensure :
Budget is compatible with the ToR.
Time and fees can be assessed with
precision.
Financial proposal found above the
fixed budget will be rejected.
The firm having highest tech mark will
be awarded( ensure within the buget)
Ex: audits, market studies, simple pre-
feasibility studies…
 Single Source Selection
When competition appears unlikely to add significant value to the choice of the
consultant.
This method is acceptable to the Bank only in exceptional cases and should be
adopted only when it offers obvious advantages over a competitive method.

Extension Proprietary Emergencies

There is a natural or direct continuation of previously awarded contract

Only one consulting firm has the experience and qualification

To address an emergency crisis.

Selection of Individual Consultant

Finalize the job description, qualification and experience

Advertise Applications scrutinized and ranked

Compare the qualifications of interested candidates.

Select at least 3 qualified CVs Invite the top-ranked for discussions

Offer the assignment.

THANKS
Goutam Ku. Mohanty