1. Inter-American Development Bank Procurement of Goods, Works and Consulting Services in projects financed by IDB Washington, DC – February 2004

2. 2 Business Opportunities at IDB There are two markets: Procurement contracts with IDB for feasibility and design studies as part of project preparation~5% Procurement contracts with Executing Agencies in projects financed by IDB ~95%

3. 3 Basic Principles in Procurement  Economy  Efficiency  Competition  Equality  Transparency  Due process, and  Publicity

4. 4 IDB Procurement Policies Practices Bank’s procurement practices reflect best practices used worldwide. For IDB-financed projects the following rules apply: National legislation applies. National legislations stipulate that for procurement financed by Multilateral Development Banks their procurement policies and procedures apply Eligibility – nationality of private entities/individuals must be from IDB member countries Origin of goods and related services – must originate from IDB member countries

5. 5 Division of Responsibilities in Procurement Financed by IDB Bank Oversees the application of IDB procurement policies and procedures Gives its “no-objection” at different stages in the procurement process Contracting Agency Owns the bidding process Publishes procurement notices Issues bidding documents Evaluates bids Awards the procurement contracts Manages contracts

6. 6 Procurement Methods Competitive bidding  International Competitive Bidding (ICB)  National Competitive Bidding (NCB) Both methods are open to all eligible participants from IDB member countries Use of one or the other determined by the Project Procurement Plan and the specific threshold amounts set forth in the Loan Contract

7. 7 Threshold Amounts for Procurement Agreed in specific Loan Contract (by project and country) Range for maximum threshold amounts:  Works = US$ 1 million to US$ 5 million  Goods = US$ 150,000 to US$ 350,000  Consulting services = US$ 200,000 All procurement at the threshold level or above requires the use of ICB For procurement under the threshold amounts NCB can be used

8. 8 Exceptions to Competitive Bidding Competitive bidding restricted to a pre- established list of qualified providers/contractors, whenever there is: A need to standardize specialized equipment Emergency projects (natural disasters)

9. 9 Publicity - Competitive Bidding General Procurement Notice (GPN) Published once within 30 days of approval of Loan by the Board of Directors  In: -“Development Business” (electronic issue) - IDB’s web page immediately thereafter (within 24 hours).

10. 10 Competitive Bidding Publicity Specific Procurement Notice (SPN)  Published for every NCB, in: –One local newspaper of wide circulation  In case of ICB, in addition to national publicity, the SPN is published in: - United Nations “Development Business” (electronic issue). - IDB’s Web Page immediately thereafter (within 24 hours).

11. 11 Minimum Number of Days for Publication of SPN prior to Documents Submission For Prequalification Applications: Goods45 days Works45 days Consulting Services30 days For Bids: Small Works45 days Major Works90 days Goods45 days Consulting Services30 days

12. 12 Contracting Agency’s Responsibilities in a Bidding Process Provide enough time to Bidders for bid preparation – extend this period, if deemed necessary Inform how to obtain clarifications to bidding documents Evaluate bids in accordance with specified criteria Preserve confidentiality of bidding process Award the procurement contract Notify all parties of the results of the process

13. 13 Bidder’s Responsibilities in a Bidding Process Carefully analyze technical specifications/Terms of Reference included in the bidding documents Strictly comply with the instructions and specifications in the bidding documents Require clarifications to documents in writing Make sure that bid submitted complies with all requirements of bidding documents Submit bid before deadline

14. 14 Factors/Criteria Evaluated in a Bid Bidder’s Qualifications  Eligibility  Historical Contract Non-Performance  Financial Situation  Experience Technical Proposal  Technical specifications  Methodology and work plan  Proposed personnel (CV)  Delivery schedule Price proposal

15. 15 Who is Awarded the Contract? For Goods and Works: The Bidder whose bid has been determined to be the lowest evaluated bid and is substantially responsive to the bidding documents.

16. 16 Who is Awarded the Contract? For Consulting Services: The Bidder with the best evaluated bid

17. 17 Who is Awarded the Contract? For Consulting Services 4 Selection Methods: Quality Quality & Cost Fixed Budget Least Cost

18. 18 Special Characteristics in Procurement of Consulting Services Represents a small portion of total cost in projects But amounts to a large number of contracts Significant impact on the success of the project

19. 19 Special Characteristics in Procurement of Consulting Services Difference in procedures from procurement of Goods and Works:  Emphasis on technical competence/capacity and qualifications over price  When a pre-selection process takes place prior to the bidding process, invitations are sent to a Short List of pre-selected Applicants (3 to 6 Applicants) instead of all prequalified Applicants,

20. 20 Right to Protest Throughout the Procurement Process Bidders/Applicants may submit a protest in writing at any stage of procurement process First instance: Executing Agency and party submitting protest try to come to an agreement Second instance: If protest confirmed, reviewed by the Bank who decides on its merit Decision cannot be appealed

21. 21 Contracts of Consulting Firms and Individual Consultants

22. 22 Registration in DACON for Consulting Firms DACON = Data on Consultants Registration is not mandatory Registration requires that firms have 5 or more full-time professionals Online registration is automatic with both, IDB and World Bank (www.wbdacon.com)www.wbdacon.com

23. 23 Tips and other Data Familiarize yourself with IDB Procurement Policies and Procedures and Standard Procurement Documents Learn about projects in the pipeline / Follow up on projects http://condc05.iadb.org/idbppi/asp/mainpage.asp Consider associating in a consortium or joint venture with a local firm Learn local business practices