1. Procurement in Projects Financed by Islamic Development Bank
4/26/2017
Procurement in Projects Financed by Islamic Development Bank
Country Procurement Workshop
September 2015, Jakarta, Republic of Indonesia
Project Procurement (PPR) Division
Operations Policy And Services Department (OPSD)
Project Procurement Division, OPSD

2. 04. Procurement of Goods, Works, Services
Islamic Development Bank
Module 4
Project Start-up Workshop
04. Procurement of Goods, Works, Services
Project Procurement Division, OPSD

3. Project Start-up Workshop
04.1 Prequalification

4. Prequalification Process
Islamic Development Bank
Prequalification Process
Module 4
Qualification and Experience Requirement
Draft Prequalification Document sent to IsDB
IsDB NOL
Advertisement – SPN for Prequalification
Preparation and Submission of Application Document
Prequalification Report sent to IsDB
Qualification requirement based on design requirement
2 No Objection Letters (NOLs) required ± 4months after advertisement
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
Project Procurement Division, OPSD

5. Republic of Indonesia, September 2015
Prequalification
Large or complex contracts, supply contracts of specialized equipment and machinery or turnkey contracts
Application
To ensure that the bids are submitted by the firms who have relevant expertise and adequate resources
Purpose
Eligibility
Experience and past performance (overall & on similar scope)
Capabilities
Current commitment of works in progress
Financial position during the past 3 to 5 years
Evaluation Criteria
Project Procurement Division, OPSD
Republic of Indonesia, September 2015

6. Republic of Indonesia, September 2015
Prequalification
Saves cost of tendering for unqualified bidders
Improves participation by qualified firms
Identifies possible conflict of interest
Encourages joint ventures and pooling of resources
Advantages
Increases procurement lead time
Requires reviewing all prequalification applications vs to only one or two at post-qualification
Collusion/Price rigging easier with limited number of identified tenderers
Possible disadvantages
Project Procurement Division, OPSD
Republic of Indonesia, September 2015

7. Republic of Indonesia, September 2015
Prequalification
Description of Works, Size (Cost), Quantities
Type of Contract
Implementation Schedule
Prequalification requirements
Criteria for evaluation of applicants
Information Provided to Applicants
Eligibility (Applicants’ Legal status, Form of JV)
Historical Non-Performance (litigations if any)
Financial Capability
Relevant experience
Information Requested from Applicants
Project Procurement Division, OPSD
Republic of Indonesia, September 2015

8. Republic of Indonesia, September 2015
Prequalification
Use IDB Standard Pre-Q Documents/Forms
The time allowed for preparation and submission of PQ applications — preferably eight weeks,
Public Opening is not necessary
Late submission (within reasonable time) not automatically rejected
Evaluation is based on pre-set Pass/Fail standards; no scoring system!
All firms who meet the criteria prequalified (No maximum or limitation)
Submission and Evaluation of Applications
Project Procurement Division, OPSD
Republic of Indonesia, September 2015

9. Notification and Advertisement in Prequalification
Islamic Development Bank
Notification and Advertisement in Prequalification
Module 4
Specific Procurement Notice (SPN)
Advertised in the same manner as GPN, including in terms of type of media and distribution channel
Choice of media in all working languages of IsDB (Arabic, English & French)
At least in one local newspaper as well, twice on two nonconsecutive days within a span of ten (10) days
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
Project Procurement Division, OPSD

10. Prequalification Document
Islamic Development Bank
Prequalification Document
Module 4
PART 1 – Prequalification Procedures
Section I. Instructions to Applicants
Section II. Prequalification Data Sheet
Section III. Qualification Criteria and Requirements
Section IV. Application Forms
Section V. Eligible Countries
Section VI. Bank Policy - Corrupt and Fraudulent Practices
PART 2 – Works Requirements
Section VII. Scope of Works
Section I, V, VI shall not be changed or revised,
Sections II, III, IV VII shall be customized as per the assignment,
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
Project Procurement Division, OPSD

11. Islamic Development Bank
Evaluation
Module 4
Administrative & Legal Information
Legal status, registration, principal place of business, ownership
Power of attorney of signatory of the application/bid
Litigation record in the past # years
Criteria
Bidder shall be eligible to participate
Authorized person signs the bid
No consistent history of litigation or arbitration
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
Project Procurement Division, OPSD

12. Islamic Development Bank
Evaluation
Module 4
Technical Information
Works of “similar” nature & size (last # years or ongoing)
Major construction equipment proposed
Key site management & technical personnel
Proposals for subcontracting (≥ # percent)
Criteria
≥ # similar works.
Acquisition plan (own, lease, hire, etc.)
Contract Manager ≥ # years, Managers ≥ # years
As per requirement in the future bidding
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
Project Procurement Division, OPSD

13. Islamic Development Bank
Evaluation
Module 4
Financial Information
Audited financial standings (past n years)
Value of construction works in each of last n years
Net liquid assets or credit facilities
Bank’s reference
Criteria
Valid financial information
≥ # x annual average of contract value
≥ # months of average contract cash-flow
Availability of working capital confirmed
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
Project Procurement Division, OPSD

14. Islamic Development Bank
Evaluation
Module 4
Joint Venture Association
All information provided for each partner
Signed and legally binding on all partners
All partners are eligible (excludes MC requirement)
All partners are jointly and severally liable
One partner in charge & fully meets MC requirement
Partner in charge meets 40% technical and financial requirement
Other partners meets 25% technical and financial requirement
Combined JV meets 100% technical and financial requirement
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
Project Procurement Division, OPSD

15. Issues with Prequalification
Islamic Development Bank
Issues with Prequalification
Module 4
Discouraging otherwise prospective firms to participate
Extra application forms which ask for excessively detail information
Requirement relevant only to local firms
Discarding otherwise fully qualified firms
Ignoring permissible clarifications due to incomplete application
Over-emphasize on administrative aspects
Scoring instead of pass/fail with assessment on responsiveness
Inclusion of otherwise non-qualified firms
Claiming experience of joint-venture partner(s) or parent company’s
Claiming incomplete/ongoing works
Low qualification threshold
Reducing overall competition
Excessively high requirement
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
Project Procurement Division, OPSD

16. Key Success Factors in Prequalification
Islamic Development Bank
Key Success Factors in Prequalification
Module 4
Wider advertisement.
Well-defined & sufficient evaluation criteria and its consistent application
Thorough and consistent evaluation
Rectify non-material deficiencies, avoid premature ‘disqualification’
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
Project Procurement Division, OPSD

17. Project Start-up Workshop
04.2 Bidding

18. ICB or ICB/MC Single-Stage One-Envelope with Prequalification
Draft Bidding Document
IDB NOL
Bid document sent to prequalified firms
Bid Preparation (≥60-90 days) & Bid Submission
Bid Opening
Bid Evaluation
Bid Evaluation Report & Recommendation
Contract negotiation, draft negotiated contract
Contract Award
3 No Objection Letters (NOLs) required ± 5 months bid documents issuance
Project Procurement Division, OPSD
Republic of Indonesia, September 2015

19. Republic of Indonesia, September 2015
Bidding Process
Tender submission, evaluation and contract award recommendation in one-stage
Administrative, technical and financial bids are all submitted at one time and opened simultaneously for evaluation
All opened bids are evaluated
Single-Stage One-Envelope Bidding
Project Procurement Division, OPSD
Republic of Indonesia, September 2015

20. Documents Comprising a Bid
Islamic Development Bank
Documents Comprising a Bid
Module 4
Bidder shall submit:
The Bid, following the format given in the bid document
Bid Security
Priced Bill of Quantity (BOQ)
Updated qualification Information forms and documents
Alternative offers (if allowed)
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
Project Procurement Division, OPSD

21. Islamic Development Bank
Bidding Document
Module 4
Specifications and Standards
Shall be based on relevant characteristics, performance, capability, and quality, and shall not prescribe brand names, catalogue numbers, or products of a specific manufacturer. If there is a need to quote then the words “or equivalent” shall be added after such reference. As far as possible, internationally accepted standards shall be specified.
Bid Validity Period (BVP)
Normally from 60 to 120 days and may be up to 180 days for large and complex bids.
Bid Security
In the form and amount specified in the Bidding documents, generally 2% is considered fair and reasonable. Shall remain valid for a period of 4 weeks beyond the BVP, and will be returned to unsuccessful bidders within 10 days after notification of contract award.
Alternative bids
Shall clearly be stated in the Bidding documents. The bidder shall first quote the price for the method and specifications indicated in the bidding documents and secondly indicate the price for deviation or alternative solution. Only the alternative bid submitted by the substantially responsive lowest evaluated bid shall be considered.
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
Project Procurement Division, OPSD

22. Bids Submission & Opening
Bids preparation shall not be less than 60 days for ICB or ICB/MC, and 90 days for large and complex contract.
Invitation specifies date, time and place for bids submission & opening.
Bid Submission
Time for bid opening shall be the same as for the deadline for bid submission.
Bids received after deadline are returned unopened
Bids opened publicly and bidders’ attendance is encouraged and should be facilitated.
Bids Opening
Name of the bidder, total bid price, price of alternative bids - if any, any unconditional discounts
Bid security amount and validity
Minutes of the meeting shall be recorded and kept, and a copy of this record shall promptly be sent to all bidders and to IDB.
Read out Information
Project Procurement Division, OPSD
Republic of Indonesia, September 2015

23. Bids Examination & Evaluation
To verify substantially responsive bids: whether the bidding document has been signed, valid bid security provided, prices for all items have been quoted, if required, eligibility criteria is met. If the bids is not substantially responsive to the bidding document it shall be rejected and not be considered further.
Complete basic data sheet  Prepare record of bid opening  Prepare table of bid price Examine bids for responsiveness
Preliminary
Used to determine the cost of each responsive bid in a manner that permits a comparison on the basis of their evaluated cost in order to select the technically acceptable lowest evaluated bid price.
Identify bids for detailed evaluation  Evaluate bids in detail  Apply corrections and errors  Apply other adjustments (discount)
Evaluation
Project Procurement Division, OPSD
Republic of Indonesia, September 2015

24. Republic of Indonesia, September 2015
Exchange Rate
Use single currency specified in the bidding documents
The Rates to be used are the selling rates quoted by and official source (Central bank, Commercial bank or internationally circulated newspaper)
The date shall not be earlier thank 4 weeks prior to deadline for bid-submission and not later than the original expiry date of the bids.
Project Procurement Division, OPSD
Republic of Indonesia, September 2015

25. Bids Evaluation – Works
Review of BoQ & Correction of arithmetical Errors
Correction of errors
Correction of Provisional Sum
Modification and Discount
Evaluation of Currency
Additions and Adjustment
Alternatives time
Alternative times for completion can be permitted when the Employer sees potential net benefits in different times for completion.
If permitted under ITB 13.2 of the Bidding documents, the method for evaluating the differences offered by bidders should be specified as a specific amount for each week of delay from a specified “standard” or minimum completion date related to the loss of benefits to the Employer.
Project Procurement Division, OPSD
Republic of Indonesia, September 2015

26. Evaluation of the Bids – Evaluation Steps
1.Preliminary Examination
Verification
Eligibility
Bid Security
Completeness of Bid
Substantial Responsiveness
2. Detailed Examination
Correction of Errors
Correction of Provisional sum
Modifications & Discounts
Evaluation Currency
Additions
Adjustments
Priced Deviations
3. Determination of Award
Qualification (Post)
Alternative Bids
Proposed Award
Project Procurement Division, OPSD
Republic of Indonesia, September 2015

27. Bids Evaluation – Goods
Islamic Development Bank
Bids Evaluation – Goods
Module 4
delivery schedule;
the projected operating and maintenance costs during the life of the equipment;
the cost of components, mandatory spare parts, and service;
the performance and productivity of the goods/equipment offered;
the availability in the Purchaser’s country of spare parts and after-sales services; and/or
other specific criteria indicated in the Bidding Documents and/or in the Technical Specifications.
Factors
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
Project Procurement Division, OPSD

28. Bids Evaluation – “Plants”
Example approach: Life-cycle Cost Evaluation (LCC)
“Total Cost of Ownership”
Evaluate and compare alternative products/equipment
Assess economic viability of projects or products/equipment
LCC Benefits
Acquisition (design, investment, installation & commissioning), operation, maintenance
LCC Elements
Determine time-frame for each element and guaranteed value of each element
NPV of total of all elements to be considered for recommending the winner
LCC Steps
The evaluation period, guaranteed parameter within evaluation period but post defect liabilities period
Issues with LCC
Project Procurement Division, OPSD
Republic of Indonesia, September 2015

29. Update of Qualification
The Bidder shall continue to meet the criteria used at the time of prequalification.
Updating and reassessment of the qualification information which was previously considered during prequalification will be required:
Eligibility, pending litigation, financial situation
Specialized subcontractors
Financial resources
Personnel
Equipment
Project Procurement Division, OPSD
Republic of Indonesia, September 2015

30. Republic of Indonesia, September 2015
Contract Award
The award of contract is subject to IDB’s prior approval.
Upon receipt of IDB’s “no-objection”, the Beneficiary shall promptly inform the successful bidder.
The Beneficiary shall furnish to IDB a copy of signed contract, together with first request for disbursement and the performance guarantee.
Contracts awarded under ICB, ICB/MC and NCB must be published in an appropriate newspaper.
A Contract which is awarded without IDB’s “no-objection” shall not be eligible for IDB financing.
Project Procurement Division, OPSD
Republic of Indonesia, September 2015

31. Review by IDB of Procurement Decisions
Prior Review is carried out for all contracts unless a specific threshold amount is indicated in the Financing Agreement
Before bids are invited, the Beneficiary shall furnish to IDB for its comments:
Advertising procedure;
Draft bidding documents, including the invitation to bid;
Instructions to bidders, including the basis of bid evaluation and contract award;
Conditions of contract and specifications for supply of goods, or installation of equipment, or the civil works.
After bids have been received and evaluated, the Beneficiary shall, before a final decision on the award is made, furnish to IDB in sufficient time for its review, a detailed report on evaluation and comparison of the bids.
Project Procurement Division, OPSD
Republic of Indonesia, September 2015

32. Review by IDB of Procurement Decisions
Islamic Development Bank
Review by IDB of Procurement Decisions
Module 4
Post Review (for contracts below a monetary threshold if specified in the Financing Agreement)
The Beneficiary shall furnish to IDB, promptly after its preparation, the bid evaluation report and recommendation for contract award, for IDB’s comments and “no-objection”.
IDB shall, if it determines that the award of a contract or the contract itself is not in consistent with the Financing Agreement, promptly inform the Beneficiary that paragraph 1.12 of the Guidelines on Misprocurement shall apply and state the reasons for such determination.
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
Project Procurement Division, OPSD

33. Republic of Indonesia, September 2015
National Shopping
National (small works or goods) or International (goods)
Comparing written price quotations
obtained from several suppliers (off-the-shelf goods or standard specification commodities)
or from several domestic contractors (small works)
Project Procurement Division, OPSD
Republic of Indonesia, September 2015

34. National Shopping - Requirement
Reputable suppliers or contractors: provide the intended goods or construction works as part of its core business activities
A minimum of three fully qualified quotations are compared, for international shopping of goods – at least from 2 MCs
Reasonable time to submit quotation (10-30 days).
Goods: description, technical specifications, quantity and cost of the goods, including the cost of inland transportation and insurance if applicable, estimated delivery time if not immediately available.
Works: necessary drawings, estimated quantities, and completion time.
Shall be given in writing and may be submitted by electronic transmission (e.g. telex or facsimile).
Opened at the same time, read out in public before the solicited suppliers or contractors or their representatives, evaluated and compared at the same time.
Brief report prepared
Post-review applicable below agreed threshold
Project Procurement Division, OPSD
Republic of Indonesia, September 2015

35. Key Success Factors in Tender for Goods and Works
Islamic Development Bank
Key Success Factors in Tender for Goods and Works
Module 4
Wider advertisement.
Well-defined & sufficient evaluation criteria and its consistent application
Thorough and consistent evaluation
Rectify non-material deficiencies, avoid premature ‘disqualification’
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
Project Procurement Division, OPSD

36. Republic of Indonesia, September 2015
Question and Answer
Project Procurement Division, OPSD
Republic of Indonesia, September 2015

37. Islamic Development Bank
4/26/2017
معا ً نبني مستقبلا ً أفضل
Together we build a better future
Ensemble nous construisons un avenir meilleur
Thank You Project Procurement Division Operation Policy and Services Department prepared by Amirmehdi Asghari Senior Project Procurement Specialist
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
Project Procurement Division, OPSD 37