Procurement Priorities and Challenges Bernard Becq Fiduciary Forum March 25, 2008

Priority Areas Fiduciary oversight function -- quality assurance Country systems, capacity-building and procurement reforms Impact of trade issues Best international practice / standards New demands, including Global Public Goods The GAC agenda Partnership and Harmonization Are our policies/GLs --that served us well-- still adapted to a changing environment (outside, inside)? Think outside of the box

The oversight/quality assurance function Design projects better to mitigate procurement risks --India DIR lessons Clarify accountabilities of all involved -- not confusing procurement from broader supervision issues (procurement is a WB trademark) / Bank model. Establish the limits on PR assurance More effectively pick up warning signs/red flags: what to do when risks identified beyond reporting to INT, anticipate what’s ahead of the curve, risk-based approach (how?) Manage risks during implementation Special challenges: UN agencies, MDTFs, NGOs Work with PREM, FM, INT and sector staff to share issues and address them as a team, collaborative approach Transparency Checks and balance

Country Systems Move further beyond fiduciary diagnostics to implementation –piloting program that meets the principles of economy and efficiency, eligibility, transparency, and development of local industries Key role in capacity-building and strengthening procurement systems (support to reforms) Concerns of the industry and some country governments (not enough / too much) Getting procurement more firmly into the public sector management framework Leveraging the UCS approach How to do it right (resources, independent assessments, partnerships) Last too often forgotten

Best International Practice Challenges: Alignment or inconsistencies with GPAs Harmonization / alignment with different procurement policies, systems and procedures Others’ initiatives, inter alia in private sector EU directives, et al New methods in consulting and contracting

New Demands President’s priorities -- playing a more active role in Global Public Goods and more effective World Bank Group Support Challenges: Demand for advice on procurement issues in the provision of Global Public Goods Operations involving non-standardized procurement such as public-private partnerships, OBA, OBD Complex procurement (from large infrastructure to CDD or HD services) New types of procurement, e.g. advanced market commitment for certain vaccines

The GAC Agenda Procurement central, given its key front-line role in fighting fraud and corruption Avoid narrow focus on Bank operations: from diagnostics to implementation on the ground Differentiate project preparation and supervision: build into various diagnostics and risk analysis (mapping, value chain, red flags), tackle ex-ante through project design and mitigation measures, monitor with partners during project implementation Be part of the CGAC process and GAC implementation plan: what should we do, how to live up to the “no one-size fits all” motto and avoid SOPs ? Compact global / country / project: how to handle ? : harmonization / UCS / risk management ! What more ? Country legal framework and international conventions : which standards ? Ethics and integrity plans for the private sector What to do with decentralized country procurement (e.g. CDD)? Are we really the key vulnerability? Harmonization: AC conventions (UN, OECD) but attention as cannot be imposed, PEFA model to focus more on procurement, OECD/DAC: road to Accra HLF 3, HoP (F&C definitions, sanctions reform) UCS: work on country procurement reforms upfront; broad country risk assessment; web-based dynamic management model, independent third party audits and enhanced ex-post at project level under UCS, performance inter alia w regard to F&C Risk management: dynamic risk management throughout, mitigation measures, enhanced ex-post, red flags” Ok, what’s next? What do we do when indicators seem to highlight F&C? How to discriminate between indicators and other possible reasons for e.g. bid prices close to cost estimate (I could argue it is rather a sign of sound and close competition)

Partnership and Harmonization HoP: a new frontier OECD/DAC : after Accra PEFA : better focus on procurement UN agencies : special agreements for supply and TA, Fiduciary Framework Agreement NGOs (CDD context in particular) MDTFs, particularly when emergency / rapid response

The procurement network Highly decentralized staff, facing growing demands Balance country work – fiduciary oversight Adjust/participate in development of new initiatives / lending instruments Develop new policies/procedures/methods ? Procedures and standards vary across Regions (IDA 14 review) Bank-wide standards of quality assurance, so borrowers are treated equally across Regions Procedures to regularly verify quality Differentiation vs simplification

Challenges for the Procurement Network New skills for risk-based approach, and support for defining better risk mitigation measures Role in supervision : balance of power / voices heard. Attention to risk adverse attitude Resources-constrained environment: What to do differently ? Working better together ! Upfront work Managing the UCS piloting program, and other new initiatives Role in project design / investment lending reform Educating others Sharing knowledge and providing learning opportunities: virtual network to exchange information and best practice Career development (new streams?), staff mobility Skills mix, K&L Strategy INT: e.g. indicators of F&C one thing, reality another, which implies questions as to what to do next Avoid the monkey on our back