1. Asian Development Bank Business Opportunities
Procurement of
Goods and Works

2. Asian Development Bank Procurement System – Principles
Key Principles
Source of Procurement
Economy and Efficiency
Fairness
Transparency
Promotion of Domestic Industries

3. Asian Development Bank Procurement System - Guidelines
ADB
Charter
Commercial Practices
Other
MDBs
ADB
Board Policy
ADB
Experience

4. Asian Development Bank Procurement System - Eligibility
Goods
must be produced in a member country
Bidders
must be nationals of eligible source countries
must not have a conflict of interest
must not be under declaration of ineligibility by ADB
must not be ineligible due to an UN Security Counsel resolution
must be, in case of a GOE, legally and financially autonomous, operate under commercial law and be independent of the Employer

5. Asian Development Bank Procurement System - Responsibilities
The Borrower (Executing Agency) is responsible for all procurement activities
ADB will review the procurement activities to ensure that the ADB’s Guidelines for Procurement are followed

6. Asian Development Bank Procurement System - Anticorruption
Definitions
Corrupt Practice
offering, giving, receiving, or soliciting, directly or indirectly, anything of value to influence improperly the actions of another party
Fraudulent Practice
any act or omission, including a misrepresentation, that knowingly or recklessly misleads, or attempts to mislead, a party to obtain a financial or other benefit or to avoid an obligation
Coercive Practices
impairing or harming, or threatening to impair or harm, directly or indirectly, any party or the property of the party to influence improperly the actions of a party
Collusive Practice
an arrangement between two or more parties designed to achieve an improper purpose, including influencing improperly the actions of another party

7. Asian Development Bank Procurement System – Anticorruption
Actions
ADB will if it determines at any time that any party has engaged in corrupt, fraudulent, coercive, or collusive practices
reject a proposal to award contract
cancel the portion of a loan
declare a firm ineligible either indefinitely or for a stated period of time
inspect accounts and records of suppliers and contractors and have them audited by auditors appointed by the Bank

8. Asian Development Bank Procurement System – Procurement Methods
International Competitive Bidding
Limited International Bidding
National Competitive Bidding
Shopping
Direct Contracting
Force Account
Procurement from Specialized Agencies
Procurement Agents
Inspection Agents
Procurement in Loans to Financial Intermediaries
Procurement under BOO / BOT / BOOT, Concessions and Similar Private Sector Arrangements
Performance Based Procurement
Procurement under Loans Guaranteed by ADB
Community Participation in Procurement
Procurement under Disaster and Emergency Assistance

9. Asian Development Bank Procurement System – Procurement Methods
International Competitive Bidding (ICB)
For supply contracts valued at US$1.0 million or more
For works contracts valued at US$10.0 million or more
Value for money
Provides for adequate, fair and equal opportunities

10. Asian Development Bank Procurement System – Procurement Methods
Prequalification
ICB Activities
Preparation of Bids
Bid Opening
Bid Evaluation
Award of Contract

11. Asian Development Bank Procurement System – Procurement Methods
Key Provisions of ICB
Source of Procurement
Use of SBDs
Reference to ADB
Bid Validity & Bid Security
Language
Clarity
Standards
Use of Brand Names
Pricing
Price Adjustment
Transportation and Insurance
Currency of Bid
Currency of Bid Comparison
Currency of Payment
Terms of Payments
Alternative Bids
Conditions of Contract
Performance Security
Liquidated Damages & Bonus
Force Majeure
Settlement of Dispute

12. Asian Development Bank Procurement System – Procurement Methods
Key Provisions of ICB
Time for Preparation of Bids
Bid Opening Procedures
Clarification or Alteration of Bids
Confidentiality
Examination of Bids
Evaluation and Comparison of Bids
Domestic Preference
Extension of Bid Validity
Postqualification of Bidders
Award of Contract
Publication of the Award of Contract
Rejection of all Bids
Debriefing

13. Asian Development Bank Procurement System – Procurement Methods
Limited International Bidding
ICB by Invitation
Appropriate for
if there is only a limited number of suppliers
other exceptional reasons

14. Asian Development Bank Procurement System – Procurement Methods
National Competitive Bidding
Procurement is done domestically, within the borrowing DMC
Allowed when :
Domestic production or construction facilities are available
Foreign contractors and suppliers are unlikely to be interested
Procedures for domestic procurement are acceptable to ADB
Borrower has requested for NCB

15. Asian Development Bank Procurement System – Bidding Procedures
Single-Stage: One-Envelope
Single-Stage: Two-Envelope
Two-Stage: Two-Envelope
Two Stage

16. Bidding Procedures Single-Stage: One-Envelope
ADB
Approval
Deadline
STOP
Technical
Proposal
Technical
Proposal
Financial
Technical
Financial
Financial
Proposal
Preparation
Evaluation

17. Bidding Procedures Single-Stage: Two-Envelope
ADB
Approval
ADB
Approval
Deadline
Technical
Proposal
STOP
Financial
Proposal
Technical
Proposal
Technical
Financial
Proposal
Financial
Financial
Preparation
Evaluation 1
Evaluation 2

18. Bidding Procedures Two-Stage: Two-Envelope
ADB
Approval
ADB
Approval
Deadline
Deadline
Technical
Proposal
Technical
Proposal
Revised Technical
Suppl. Financial
Revised Techn.
Proposal
Revised Techn.
Proposal
Suppl. Financial
STOP
STOP
Financial
Proposal
Financial
Proposal
Financial
Financial
Preparation 1
Evaluation 1
Preparation 2
Evaluation 2

19. Bidding Procedures Two-Stage
ADB
Approval
ADB
Approval
Deadline
Deadline
STOP
STOP
Technical
Proposal
Technical
Proposal
Revised Technical
Financial
Revised
Technical Proposal
Proposal
Revised
Technical Proposal
Financial
Proposal
Preparation 1
Evaluation 1
Preparation 2
Evaluation 2

20. Asian Development Bank Procurement System – ADB Prior Review
Procurement Plan
Contracts (Goods, Works, Services)
Procurement Mode
Procurement Timing
ADB review (post/prior)
Prequalification
Advertisement and Invitation to Prequalify
Evaluation Criteria
Evaluation of Applications
Preparation of Bid Documents
Invitation to Bid
Advertisement
Bid Documents EA
Bid Evaluation
Evaluation Report
Proposal of Award
Award of Contract
Certified Contract

21. Asian Development Bank Procurement System – ADB Prior Review
Additional ADB Approval Requirements
Extension of bid validity
Complaints from bidders after contract award
Change in contract award recommendation
Change in the terms and conditions of contract
Time extensions, modifications of conditions, change orders increasing in aggregate the original contract amount by more than 15%

22. Asian Development Bank Procurement System – ADB Post Review
Prerequisite - EA capacity assessment
Procedure - Prior review of 1st set of procurement documents in project only
- Advertisement provided after posting
- ADB reviews contract award decisions post facto
Timing - BER and contract documents to be submitted as soon as completed
- ADB must respond in 6 months
- EA required to keep files for 2 years
Risk - Misprocurement  cancellation of funds

23. Asian Development Bank Procurement System – ADB Review
Award of contracts for values of $10.0mill. and above must be approved by the Bank’s
— Procurement Committee —
Chairman : Principal Director, COSO
Members : Assistant General Counsel Director, Sector Division
Secretary : Senior Procurement Specialist (Non-Voting)

24. Asian Development Bank Procurement System – ADB Review
Matters for Consideration
For contracts estimated at $10.0 million or more
Prequalification Evaluation
Technical Evaluation (2-stage/2-envelope bidding)
Bid Evaluation  Award
Proposal for Rebidding
Proposal for Cancellation
Actions in conflict with the ADB requirements
Proposal to vary previous PC decisions
Any matters designated by management

25. Asian Development Bank Procurement System – Prequalification
Purpose
to ensure that bids are submitted only by firms that have the necessary qualifications in terms of
Eligibility
Experience
Financial Capacity
Pending Litigation
to undertake the work for which bids are to be invited.

26. Asian Development Bank Procurement System – Prequalification
Used for
Large complex works contracts
Turnkey contracts
Contracts for fabrication of custom designed plant and equipment
Specialized service contracts
Complex IT contracts

27. Asian Development Bank Business Opportunities
Preparing responsive bids
Avoiding common pitfalls

28. Asian Development Bank Preparing Responsive Bids
Joint Venture Requirements
All partners must be eligible
J.V. agreement must contain provision for joint and several liability
One of the partners must be authorized to be in charge
Copy of Joint Venture agreement must be included in the bid

29. Asian Development Bank Preparing Responsive Bids
Be compliant !
Submit a basic offer that complies with all terms and conditions of the bidding document, even if some of these conditions appear irrelevant
Don’t qualify !
Do not add any conditions. Conditionalities or qualifications will lead to rejection
Get official clarification !
Submit an official inquiry to the EA if any provisions of the bidding document are unclear or unacceptable before the bid closing date or such date as may be specified. A copy may also be submitted to the bank if appropriate

30. Asian Development Bank Preparing Responsive Bids
Be aware of bid evaluation criteria !
Check if other factors besides price, such as delivery periods, efficiency, operating & maintenance costs, will be considered in the bid evaluation. These factors must be specified in the bidding document to be applied.
Be clear with alternatives !
Submit alternatives only if explicitly allowed in the bidding document. Alternative proposal, if allowed, should be submitted in addition to the compliant proposal. The proposed alternatives and corresponding changes in bid price should be clearly indicated. Only the alternative proposal submitted by the bidder with the lowest evaluated and substantially responsive compliant bid can be considered, unless otherwise provided in the bidding documents.

31. Asian Development Bank Preparing Responsive Bids
Ensure bid is complete !
Check if the bid complies with all the requirements of the bidding document such as bid security, power of attorney, additional documents such as test certificates and technical brochures. Incomplete Bids may be rejected.
Make final check of bid !
Amount, validity and text of Bid Security
Signatures and power of attorney
Joint venture agreement enclosed
References enclosed
Discounts in covering letter or appropraiate place as specified in the bidding document
Marking of envelopes

32. Asian Development Bank Preparing Responsive Bids
Be on time !
Submit bid within the stipulated deadline. Late bids will not be accepted.
During opening ensure !
All relevant prices are read out
All discounts are read out
Presence and amount of bid security is read out
No envelope remains unopened
All the above is recorded correctly
The record is signed by all bidders present and by the buyer
Be Aware of Possible Extension !
There may be a request to extend the bid validity period by several months, as in certain cases the evaluation of bids requires more time than originally expected.

33. Asian Development Bank Business Opportunities
How your bid is evaluated
Determining the winning bid

34. Asian Development Bank Bid Evaluation – Purpose
Determination of the
lowest evaluated and
substantially responsive bid

35. Asian Development Bank Opening of Bids
Public Opening of Bids
Bids received are opened publicly by the EA at the time and place indicated in the bidding documents
Required for the sake of Fairness and Transparency
Gives bidders assurance that all bids will be treated fairly and impartially
Bidders’ attendance is encouraged
Record of the items read out is to be kept by the EA
Record is initialed by the representatives of bidders present

36. Asian Development Bank Opening of Bids
Information read out
Bidder’s name
Total bid price
Price of alternative bids, if any
Amount or percentage of any discounts offered and the conditions under which the discounts are applicable
Bid security - amount and validity
Any other information which is deemed necessary to be announced by the Tender Committee.

37. Asian Development Bank Bid Evaluation – Typical Sequence
Complete Basic Data Sheet
Prepare Record of Bid Opening
Prepare Table of Bid Prices
Examine Bids for Responsiveness
Identify Bids for Detailed Evaluation
Evaluate Bids in Detail
Adjust Bid Prices
Apply Other Adjustments

38. Asian Development Bank Bid Evaluation – Basics
Time Frame
The bid evaluation of bids and the award of contract should be completed before the expiration of the bid validity as stipulated in the bid documents
Confidentiality of Procedure
After opening of bids no information to non-authorized persons on :
Substance of bid
Preliminary examination results and status
Evaluation results and status
Recommendation of award 10

39. Asian Development Bank Bid Evaluation – Basics
Clarification and Alteration of Bids
Only clarifications not changing the substance or the price of the bid may be requested or accepted by the Borrower
Arithmetical Errors
No cause for bid rejection. Can be corrected :
Discrepancy between Unit Price and Total Price
Unit Price will prevail
Discrepancy between Total Bid Amount and Sum of Total Prices
Total Prices will prevail 10

40. Asian Development Bank Bid Evaluation – Basics
Postqualification
Purpose
Identifies qualified bidders during initial examination of opened bids
Spares borrowers/EA from detailed evaluation of bids of unqualified bidders
Typical Criteria
Experience
Financial position
Staff Qualifications
Technical capability
After sales service
Past performance 58

41. Asian Development Bank Bid Evaluation – Basics
Major Deviations
Has an effect on the validity of the bid; or
Has been specified in the bid documents as grounds for rejection of the bid; or
Is a deviation from the provisions of the bidding documents with effect on the bid price, but cannot be given a monetary value; or
Is a deviation from the minimum experience qualifications specified in the bidding documents; or
Is an unacceptable deviation from the specifications
Conditional bid

42. Asian Development Bank Bid Evaluation – Basics
Minor Deviations
Has no effect on the validity of the bid; or
Has no effect on the price, quality or delivery of the goods or services offered; or
Has such effect, but the difference from commercial terms and technical specifications can be given a monetary value; or
Has not been specified in the bid documents as grounds for rejection, provided total amount of deviations does not exceed a previous determined percentage of the bid price (usually 15 per cent)

43. Asian Development Bank Bid Evaluation – Basics
Extension of Bid Validity
Considered in exceptional cases
When considered, all bidders should be asked
Bidders willing to extend bid validity
cannot modify substance of bid
must extend validity of bid security
Commercial Aspects
Exercise flexibility in evaluating commercial aspects such as :
Delivery Schedule
Terms of Payment
Mode of Payments 10

44. Asian Development Bank Bid Evaluation – Basics
Price Adjustment Provision
In evaluating bids do not take into account price adjustment provisions. Use base price for comparison. All bids are subject to same degree of adjustment.
Alternative Bids
When acceptable, specify
Conditions in Invitation to Bid and Instructions to Bidders
Method of evaluation and comparison 10

45. Asian Development Bank Bid Evaluation – Basics
Basis for Price Comparison
Goods
for Goods from outside
Includes cost of insurance and freight (CIF or CIP)
Excludes custom duties or other taxes levied on goods
for Goods from inside
Includes ex-factory price (EXW)
Excludes any sales or similar taxes levied on goods
Related Services including all taxes and duties
Works
Includes all taxes, duties and other levies 10

46. Asian Development Bank Bid Evaluation – Basics
Exchange Rates
For bid comparison use single currency as specified in bid documents (usually local currency or US$)
The rates to be used are the selling rates quoted by an official source (central bank, commercial bank, or internationally circulated newspaper)
Date of exchange rate to be specified in bidding documents shall be :
Not earlier than 28 days prior to the deadline for submission of bids
Not later than the original date for the expiry of bid validity 10

47. Asian Development Bank Bid Evaluation – Basics
Factors to be considered
payment schedule
delivery time
operating costs
efficiency and compatibility of the equipment
availability of service and spare parts, and related training
safety, and environmental benefits
The factors other than price to be used for determining the lowest evaluated bid shall, to the extent practicable, be expressed in monetary terms 10

48. Asian Development Bank Bid Evaluation – Domestic Preference
Supply Contracts
Example
BIDDER A
BIDDER B
33,973,305
1. Bid Price (arithmatically corrected)
31,403,725
240,000
2 Adjustment for Scope
2,053,000
A. Bid Price (adjusted for Scope)
33,456,725
34,213,305
3. Technical Compliance
477,000
723,017
4. Performance
2,488,614
232,000
105,000
340,000
5. Terms of Payment
6. Delivery
1,023,000
123,000
B. Evaluated Bid Price
37,785,339
35,396,322

49. Asian Development Bank Bid Evaluation – Domestic Preference
Purpose
To provide margin of preference to domestically manufactured goods or domestic contractors for ADB-financed projects
To allow domestic firms to compete with foreign firms on more equal footing
Conditions
Granting of preference subject to conditions
Applies only to ICB
Needs to be applied for by Borrower
To be specified in Loan Agreement if scheme is applied

50. Asian Development Bank Bid Evaluation – Domestic Preference
Supply Contracts
Responsive bids are to be classified into three groups:
Group A: Goods manufactured locally with more than 30% domestic value added
Group B: Goods manufactured locally with less than 30% domestic value added
Group C: Imported goods

51. Asian Development Bank Bid Evaluation – Domestic Preference
Supply Contracts
Procedure
Determine lowest bid in each group
Compare lowest evaluated bids among the groups
If lowest is from group A or B, select it for contract award
If lowest is in Category III, compare: x CIF price of Group C against EXW price of Group A

52. Asian Development Bank Bid Evaluation – Domestic Preference
BIDDER X
BIDDER Y
Group A Bid
Group C Bid
Example
Supply Contract
33,973,305
1. Bid Price (arithmetically corrected)
31,403,725
240,000
2. Adjustment for Scope
2,053,000
A. Bid Price (adjusted for Scope)
33,456,725
34,213,305
3. Technical Compliance
477,000
723,017
4. Performance
2,488,614
232,000
105,000
340,000
5. Terms of Payment
6. Delivery
1,023,000
123,000
B. Evaluated Bid Price
37,785,339
35,396,322
5,131,996
7. Domestic Preference (15% of A.)
C. Evaluated Bid Price (w. Dom .Pref.)
37,785,339
40,528,318

53. Asian Development Bank Bid Evaluation – Domestic Preference
Examples
Group A
Group B
Group C
Supply Contracts
9,900
BID PRICE
COMPARE
10,000
9,000
AWARD
9,000
BID PRICE
COMPARE
10,000
9,900
AWARD
9,900
BID PRICE
COMPARE
9,000
9,000 x 1.15 =10,350
10,000
AWARD

54. Asian Development Bank Bid Evaluation – Domestic Preference
Turnkey / Supply & Installation
Procedure
Goods offered from outside the Borrower’s country are quoted CIF
Locally manufactured goods are quoted EXW
Other components such as design, installation, commissioning, testing and supervision are quoted separately
For comparison of local goods with imported goods, add to the offered CIF price of the imported goods the lesser of either
15% , or
applicable duties and taxes to be paid for each item

55. Asian Development Bank Bid Evaluation – Domestic Preference
Example
Turnkey / Supply & Installation
BID PRICE
Bidder A Bidder B
Design , ,500
Civil works 23, ,500
Equipment EXW 10, ,000
Equipment CIF 100, ,000
Total 135, ,000
Domestic Preference loading 15% of CIF: , ,500
COMPARE: 150, ,500
SERVICES
WORKS
SUPPLY
AWARD

56. Asian Development Bank Bid Evaluation – Domestic Preference
Civil Works
Responsive bids are to be classified into two categories
Category I
Bids offered by Domestic Contractors and Joint Ventures eligible for the Preference
Category II
Bids offered by other Contractors

57. Asian Development Bank Bid Evaluation – Domestic Preference
Civil Works
Eligibility Criteria for Domestic Contractors
Incorporated in the borrower’s country
Majority ownership by nationals of borrowing country
Will not subcontract to foreign contractors more than 50% of the total value of their work

58. Asian Development Bank Bid Evaluation – Domestic Preference
Civil Works
Eligibility Criteria for Joint Ventures between Domestic and Foreign Firms
The domestic partner is individually eligible according to the criteria stated previously
The domestic partner would not qualify for the works without the participation of the foreign partner
The domestic partner will carry out at least 50% of the works in terms of value

59. Asian Development Bank Bid Evaluation – Domestic Preference
Civil Works
Procedure
Determine lowest evaluated bid from each category
Compare lowest bids from each category
If lowest bid is from category I, award contract
If lowest bid is from category II add 7.5% and compare it with lowest bid from Category I, award contract to lowest

60. Asian Development Bank Bid Evaluation – Domestic Preference
Example
Civil Works
Category I
Category II
BID PRICE
10,000
9,900
COMPARE
10,000
9,900
AWARD
BID PRICE
9,000
9,500
COMPARE
9,000 x = 9,675
9,500
AWARD

61. Asian Development Bank Business Opportunities
Getting Paid
ADB Disbursement Procedures

62. Asian Development Bank Disbursement Procedures
Direct Payment Procedure
used for payment of large civil works progress payments, consultant’s fees, and importation of goods where not practical to open a letter of credit
Reimbursement Procedure
used for payment of local currency costs, petty purchases and small civil works payments
Commitment Procedure
used extensively for financing import of goods
Imprest Fund Procedure
used for payment of contractors’ bills and suppliers’ invoices in small amounts or numerous items of operating expenses

63. Asian Development Bank Disbursement Procedures2
2 - LC Opened
Supplier’s
Bank
Executing
Agency
Borrower’s
1 - Application for LC 1 5
5 - Issue of CL 3
3 - Application for CL 4
4 - CL Approval

64. Asian Development Bank Business Opportunities
Questions, Clarifications, Debriefing, etc