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WB ITF Frequently Asked Procurement Questions
Procurement

WB ITF Frequently Asked Procurement Questions

FAQ (June 2005 Update)

PROCUREMENT PROCEDURES :

  1. WHO IS RESPONSIBLE FOR PROCURING GOODS, CONTRACTING CONTRACTORS FOR CIVIL WORKS, AND HIRING CONSULTANTS UNDER WORLD BANK-FINANCED PROJECTS ?

  2. WHAT PROCEDURES MUST IRAQ FOLLOW WHEN PROCURING GOODS AND CIVIL WORKS UNDER PROJECTS FINANCED BY THE WB ITF ?
  3. ARE OTHER METHODS OF PROCUREMENT BESIDES INTERNATIONAL COMPETITIVE BIDDING BEING USED IN IRAQ ?
  4. DOES PROCUREMENT EVER OCCUR BEFORE THE WORLD BANK APPROVES A LOAN ?
  5. HOW DOES THE WORLD BANK MAKE CERTAIN ITS GRANTS/CREDITS ARE USED FOR THE INTENDED PURPOSE ?

BIDDING :

  1. WHO PREPARES BIDDING DOCUMENTS ?
  10.  

CONSULTANT OPPORTUNITIES :

  1. WHAT OPPORTUNITIES ARE AVAILABLE FOR CONSULTANTS TO WORK ON WORLD BANK-FINANCED/ADMINSTRATED PROJECTS ?
  7. CAN A BIDDER ASK FOR A DEBRIFING ?

 

PROCUREMENT PROCEDURES :

1. WHO IS RESPONSIBLE FOR PROCURING GOODS, CONTRACTING CONTRACTORS FOR CIVIL WORKS, AND HIRING CONSULTANTS UNDER WORLD BANK-FINANCED PROJECTS ?

Iraq and its project management teams are responsible for all procurement associated with Bank- administrated Iraq Trust Fund projects in Iraq. Grant agreements are negotiated between implementing agencies and the Bank on the basis of each project's needs and requirements. These agreements are contractual.  An implementing agency is made responsible for the project and a project management team (PMT) from that implementing agency is responsible for the day to day implementation of the project. This PMT with assistance from local and international consultants procures goods and equipment, contract contractors for civil works, and recruits consultants according to the Bank procurement guidelines and provisions in the grants agreements.

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2. WHAT PROCEDURES MUST IRAQ FOLLOW WHEN PROCURING GOODS AND CIVIL WORKS UNDER PROJECTS FINAQNCED FROM THE IRAQ TRUST FUND ADMINSTRAED BY THE WORLD BANK ?

International competitive bidding (ICB) is the preferred method of procurement for goods and works financed by the Bank. ICB is used when a procurement is of a size and nature that would interest eligible bidders outside Iraq. It requires that eligible prospective bidders receive adequate notification, and that they have an equal opportunity to bid.

Under ICB, implementation agencies must specify their requirements in the bidding documents. Bidding opportunity advertisements must fully describe what is needed and give those who are interested enough time to prepare and submit a bid.  The PMT for each project is responsible for the advertisement.

The relevant PMT would receive bids.  Bids must be opened in public in the place named in the relevant bidding document. All bidders who wish to attend may do so. Prices are read aloud and recorded at this time. Using the criteria established in the bidding document, evaluating committees formed by the relevant implementing agency would then evaluate the bids. The contract must be awarded to the lowest-evaluated responsive bidder that is qualified to perform the contract. The award is based purely on the bid submitted. Other than clarifying the purchaser's questions, there may be no discussions or negotiations. After bids have been opened, bidders may not make changes.  There are no negotiations of bidders prices.

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3. ARE OTHER METHODS OF PROCUREMENT BEING USED IN IRAQ BESIDES INTERNATIONAL COMPETITIVE BIDDING ?

Yes if stated in the grant agreements. If the procurement value is small or not of interest to foreign bidders, the borrower may use national competitive bidding (NCB) procedures.  NCB allows Iraq to advertise only in local newspapers in Iraq, using the Arabic language and its currency, the Iraqi Dinar. Foreign bidders may, however, participate in NCB.

Limited international bidding (LIB) may also be used if there are only a few known manufacturers of a particular item. Advertising is not required in these cases. Instead, known suppliers are informed of a procurement opportunity and the availability of bidding documents, and are invited to bid.

Shopping is permitted for small quantities of off-the-shelf and catalog items. In these cases, the PMT asks a number of foreign or local suppliers (at least 3 different suppliers) for prices and purchases from the one offering the best quotation.

When an item is available only from one source, direct negotiated procurement is sometimes necessary and appropriate. Similarly, when an item must be purchased immediately-due to emergency needs a lengthy competitive bidding process would cause financial losses-a directly negotiated procurement might be used. This method might also be used to purchase small items or to extend ongoing contracts.

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4. DOES PROCUREMENT EVER OCCUR BEFORE THE WORLD BANK APPROVES A LOAN ?

Occasionally, advance contracting takes place before grant agreement signing. Such contracts are eligible for financing if they are awarded in accordance with the Bank's procurement guidelines. The notice of intent to purchase would state that Iraq has applied for a Bank grant/credit and intends to use the proceeds to finance the contract. This notice does not obligate the Bank to approve the project, however. If the grant/credit is not approved, Iraq must use its own funds or find other funds to finance signed contracts.

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5. HOW DOES THE WORLD BANK MAKE CERTAIN ITS GRANTS/CREDITS ARE USED FOR THE INTENDED PURPOSE ?

The Bank's articles of agreement provide that the funds allocated for a specific loan shall be used only for that purpose. Under normal situations, Bank staff regularly visit the project site to review all aspects of the project.  However, because of the security conditions in Iraq, the Bank staff relies mainly on local consultants in the field to visit project site and provide the Bank with reports.  Also, Bank staff meets with client counterpart staff to supervise the project.  In certain case where suppliers are outside Iraq, Bank staff may plan to visit suppliers and goods before delivery or in the process of manufactures like the case of reprinting of textbooks.   Funds are disbursed only after the grant/credit agreement provisions related to goods, works, and services have been met. Under a construction contract, for example, progress payments are not made until the engineer has certified that the work has been satisfactorily completed. Payment is made for goods only after they have been delivered on board the ship or at a specified destination.

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BIDDING :

1. WHO PREPARES BIDDING DOCUMENTS ?

Iraqi implementation agencies through PMTs with assistance of consultants prepare bidding documents. These documents must include instructions to bidders, evaluation criteria, conditions of the proposed contract, and a detailed description of the goods or works to be procured. Bidding documents must be made available to everyone who asks for them and pays the required fees, if any.

To help with bid preparation, the Bank has developed Standard Bidding Documents (SBD). Iraq has also prepared as part of a Master Implementation Manual (MIM) with the assistance of the Bank some National Competitive Bidding documents (NCB) in English and Arabic. By using these documents, Iraq can considerably accelerate the preparation process. Suppliers and contractors should also be familiar with these sample documents to facilitate the bidding process. The Bank monitors the procurement process for all ICB transactions to ensure that its guidelines are followed. Bank staff thus reviews bidding documents before they are issued, the client's evaluation of the bids, and proposal for contract award. When the contract is awarded, it is reviewed to make certain that it corresponds with the bid.

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2. IS PREQUALIFICATION REQUIRED BEFORE BIDDING ?

Prequalification of bidders is often required for contracts to construct civil works and for large, complex industrial facilities; in some cases, prequalification is used for suppliers of specialized equipment. Prequalification is designed to ensure that invitations to bid are extended only to contractors/firms capable of undertaking the work. Invitations to prequalify are advertised internationally (or nationally for NCB) so that prospective bidders can obtain documents and submit their responses. Any bidder who is qualified during the prequalification process must be allowed to participate in the bidding.

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3. IF A FIRM IS INTERESTED, HOW DOES IT SUBMIT A BID ?

When a firm learns that procurement is about to occur, it should write to the purchaser and ask to receive the bidding documents as soon as they are available. Interested bidders should send the purchaser the fee specified for the documents. After the firm receives the bidding document, it should carefully examine the provisions and requirements to decide whether it can submit a competitive responsive bid. The bidder should be certain that it understands both the commercial and technical requirements, and follows them in bid preparation. No assumptions should be made regarding bidding terms and conditions. Any questions or doubts should be clarified with the purchaser before preparing the bid. If a company decides to bid, it must follow precisely the instructions spelled out in the document and submit its bid by the specified time and date to the specified place.

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4. ARE STATE OWNED ENTERPRISES (SOEs) IN IRAQ ELIGIBLE TO BID FOR WB ITF CONTRACTS ?

Yes, if they can establish that they (i) are legally and financially autonomous and (ii) operate under commercial law. No dependent agency of the client under a World Bank-financed/administered project shall be permitted to bid or submit a proposal for the procurement of goods and works under the project.  However, most Iraqi SOEs are not meeting the above conditions.

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5. IS THE INTERNATIONAL COMPETITIVE BIDDING PROCEDURE THE SAME FOR BOTH GOODS AND CIVIL WORKS ?

The bidding procedure for goods and works is similar, although the evaluation criteria differ. In the case of civil works, for instance, the price-and sometimes the completion period-may be considered. When goods are purchased, technical factors like capacity, maintainability, fuel efficiency, and after-sales service may be considered in addition to price.

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6. IF THERE IS ONLY ONE BIDDER, WILL THAT BIDDER BE AWARDED THE CONTRACT ?

If only one bid is submitted, the purchaser should contact others who bought bidding documents to determine why they did not bid. The conditions or requirements may have been too restrictive or unclear, causing the bidders to conclude that participation was too risky. In such cases, and after seeking the Bank clearance, the bidding may be cancelled and the bidding documents would need to be revised. In this case, the process should begin again, using the revised documents.

If, however, it is determined that the bidding documents are not restrictive, that the prices quoted in the bid are reasonable, and that the bid is technically and commercially responsive, the Bank may agree to the recommendation of the client to award the contract to the single bidder.   Furthermore, if several bids are received but only one is responsive and quoted prices are reasonable, the Bank may agree to the recommendation of the client to award contract to that bidder.

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7. IS THE BIDDING PROCESS CARRIED OUT IN THE ARABIC LANGUAGE ?

Not under international competitive bidding (ICB) and limited international bidding procedures (LICB). The Bank's guidelines prescribe that for these procedures, the bidding process must be carried out in a language that is customarily used in international commercial transactions such as English, French, or Spanish.   However, in Iraq English is commonly used in bidding documents under ICB and LICB.  Under NCB and shopping, Arabic is used while English could also be used in the bidding documents.

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8. IN WHAT CURRENCY MAY A BID BE MADE?

For supply contracts, firms may bid either in their own currency or in a major currency widely used in international trade and specified in the bidding documents. They may also bid in the currency of the country from which the goods are actually coming.    Under NCB and shopping, US dollar is currently preferred as the currency of bids, contract and payment because of the fluctuation of the Iraqi Dinnar.

For civil works, bids currently are expressed in US dollar because of the fluctuation of the Iraqi Dinnar. Under ICB, bidders may, however, ask that a percentage of the bid price be paid in another currency to meet expenditures for foreign inputs.

To compare and evaluate bids with different currencies, the evaluation committee must convert all the bids into one common currency. This is done using an exchange rate provided by an authoritative source, such as the Wall street Journal, on a date specified in the bidding documents. The contract is written in the currency or currencies of the bid and payment is made in the same currency.

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9. HOW ARE BIDS EVALUATED ?

Bids are evaluated solely on the basis of the criteria specified in the bidding document. Where feasible, the documents outline the methodology for quantifying each aspect of the bid in monetary terms. The lowest-evaluated bidder may not necessarily be the lowest-priced bidder. The evaluation criteria spelled out in the bidding documents often include factors other than price. Performance, availability of spare parts, or maintenance service provisions may be included, for example. In addition, domestic contractors and bidders offering locally manufactured goods sometimes receive a domestic preference. Bidding documents must clearly explain all these evaluation criteria and comparison procedures.

Bids that fail to conform to the commercial and technical requirements or submit bid later than the closing date specified in the bidding documents will be rejected. Bidders that find the criteria specified in the documents unclear or proprietary should bring this to the attention of the purchaser before submitting bids. It is too late to question evaluation criteria after the bid closing date.

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10. WHAT ARE DOMESTIC PREFERENCES, AND HOW DO THEY AFFECT BID EVALUATION ?

There are two kinds of domestic preferences: one is for goods, the other for civil works. They operate independently. In either case, grant/credit agreement must state that domestic preference is allowed, and the bid documents must state this in order to apply the preference.

Iraq is eligible to receive the domestic preference for goods. It gives a margin of preference to a bid offering locally manufactured goods, provided the manufacturing cost of the goods includes labor, raw materials and components within Iraq accounts for at least 30% of the ex-factory bid price. The preference is given by increasing the cost, insurance, and freight (C.I.F.) price of competing imported goods by the applicable customs duty or by 15%, whichever is less.

The domestic preference for civil works is limited to those borrowing countries with an annual per capita income of $ 760 or less (currently).   Iraqi domestic contractors (in 2005) are eligible for this preference. If grant agreements allow domestic preference, it allows a 7.5% preference to a domestic contractor, provided the majority of the ownership is locally held and it does not subcontract more than 10% of the contract price to foreign contractors. The percentage is added to the foreign contractor's bid price in the comparison process.

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CONSULTANT OPPORTUNITIES :

1. WHAT OPPORTUNITIES ARE AVAILABLE FOR CONSULTANTS TO WORK ON WORLD BANK-FINANCED/ADMINSTRATED PROJECTS ?

Opportunities for consultants are available in many areas. In the early stages of Project preparation, for instance, consultants may be required to prepare feasibility studies, environmental, resettlement and social assessments, engineering and project design, and cost estimates. During the implementation phase, consulting services are frequently necessary to prepare bidding documents, to evaluate bids, and to supervise construction and installation. Consultants are also used to conduct studies in such areas as marketing, distribution, export opportunities, sector master plans, and investment. There are also opportunities to prepare feasibility studies for follow-on projects and to provide training.

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2. WHAT ARE THE PROCEDURES FOR SELECTING CONSULTANTS ?

Implementation agencies through PMTs are responsible for consultants’ selection. Consultants and consulting firms from Bank member countries are eligible to provide services under Bank-financed/administrated projects. Unlike international competitive bidding for goods and works, the overriding factors in consultants’ selection focus on quality more than on price.

Under a Quality and Cost Based Selection (QCBS) method, which is the preferred selection method, and after preparing the terms of reference and a budget for the assignment, the PMT invites proposals from a short list of six qualified, experienced firms from a wide geographic spread. The client selects the most appropriate firm for the job, based on the proposals submitted. Bank staff review and comment on the terms of reference, the budget, the short list of firms, the request for proposals (RFP) and the proposal evaluation for the final selection as well as the contract.

There are other methods used such as Consultant Qualification (CQ), Least Cost Based Selection method (LCBS), Quality Based Selection method (QBS) and single source.  Under CQ a short list of three firms would be formed and the most qualified firm would be invited by the PMT to submit a technical and financial proposal based on a simplified request for proposal.  Under LCBS method, the procedure is the same as for QCBS but the award would be on the firm that offered a technical proposal passing the passing grade specified in the RFP and offered the lowest price.  Under QCS method, the procedure is the same as for the QCBS but the award would be on the firm that offered the highest ranked technical proposal.  

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3. IF A CONSULTING FIRM ACCEPTS A CONTRACT TO PROVIDE SERVICES ON A PROJECT, CAN IT BID TO SUPPLY GOODS ?

If a consulting firm accepts an assignment to provide services on a project, it cannot participate in bidding to supply goods or to construct works for the same project. This is because the firm would have prior knowledge that might give it an unfair advantage over other bidders. The Bank would not object, however, if the firm accepts an assignment to, for instance, prepare the engineering design for a project and-in a follow-on assignment-prepares bidding documents, evaluates the bids, and supervises the contract for the borrower.

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4. IF A CONSULTING FIRM PROVIDES AN INDIVIDUAL TO HELP APPRAISE A PROJECT FOR THE WORLD BANK, CAN THE FIRM FURNISH OTHER CONSULTING SERVICES OR SUPPLY GOODS FOR THE SAME PROJECT ?

No. Once an individual participates in appraising a project for the Bank, his or her firm cannot bid on supplying goods or services for that project.

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5. WHAT IS THE WORLD BANK’S ROLE IN PROCUREMENT AND CONSULTANT SELECTION ?

Bank staff supervise the procurement and consultant selection process and review all documents subject to prior review. In most cases, borrowers follow the Bank's guidelines closely. If they do not, the Bank reserves the right not to provide financing. If the agreed upon procedures clearly are not followed, the Bank may not finance the contract and may cancel an equivalent part of the loan.

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6. WHAT TO DO IF YOU HAVE AN ISSUE, QUESTIONS OR COMPLAINS ?

Bidders are free to send copies of their communications on issues and questions with the implementing agency to the World Bank or to write to the World Bank directly, when Borrowers do not respond promptly, or the communication is a complaint against the implementing agency. All such communications should be addressed to the Task Team Leader for the project, with a copy to the Country Director (Mr. Joseph Saba) and to the Regional Procurement Manager (Mr. Nadjib Sefta).

References received by the Bank from potential bidders, prior to the closing date for submission of the bids, will, if appropriate, be referred to the Borrower with the Bank’s comments and advice, for action or response.

 

Communication received from bidders after the opening of the bids, will be handled as follows. In the case of contracts not subject to prior review by the Bank, the communication will be sent to the Borrower for due consideration and appropriate action, if any, and these will be reviewed during subsequent supervision of the project by Bank staff. In the cases of contracts subject to the prior review process, the communication will be examined by the Bank, in consultation with the Borrower.  If additional data is required to complete this process, these will be obtained from the Borrower. If additional information or clarification is required from the bidder, the Bank will ask the Borrower to obtain it and comment or incorporate it, as appropriate, in the evaluation report. The Bank’s review will not be completed until the communication is fully examined and considered.

 

Except for acknowledgment, the Bank will not enter into discussion or correspondence with any bidder during the evaluation and review process of the procurement, until award of the contract is published.

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7. CAN A BIDDER ASK FOR A DEBRIFING ?

If, after notification of award, a bidder wishes to ascertain the grounds on which its bid was not selected, it should address its request to the PMT leader of the project. If the bidder is not satisfied with the explanation given and wishes to seek a meeting with the Bank, it may do so by addressing the Regional Procurement Manager, who will arrange a meeting at the appropriate level and with the relevant staff. In this discussion, only the bidder’s bid can be discussed and not the bids of competitors.

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