Public Procurement and Multilateral Development Banks: Law, Practice and Problems

by Sope Williams-Elegbe

Overview

The multilateral development banks cumulatively channel billions of dollars annually in development assistance to borrower countries. This finance is usually spent through processes that incorporate the public procurement regulations of the banks and it is often a condition of this finance that the funds must be spent using the procurement regulations of the lender institution.

This book examines the issues and challenges raised by procurement regulation in the multilateral development banks. The book examines the history of procurement regulation in the banks; the tripartite relationship created between the banks, borrowers and contractors in funded procurements; the procurement documents and procurement cycle; as well as how the banks ensure competition and value for money in funded procurements. The book also examines the banks' approach to sustainability concerns in public procurement such as environmental, social or industrial concerns; as well as how the banks address the issue of corruption and fraud in funded contracts. Another issue that is addressed by this book is how the banks have implemented the aid effectiveness agenda. It will be seen that the development banks have undertaken steps to harmonise their policies and practices, increased borrower procurement capacity, taken steps to reduce the tying of aid, and play an important role in the reform of borrower procurement systems, all in an effort to improve the effectiveness of development finance. The book also considers the contractual and other remedies that are available to parties that may be aggrieved as a result of a funded procurement.

The book analyses, compares and contrasts the legal, practical and institutional approaches to procurement regulation in the World Bank, the Inter-American Development Bank, the African Development Bank, the Asian Development Bank and the European Bank for Reconstruction and Development.

Product Details

ISBN-13:	9781509930791
Publisher:	Bloomsbury Academic
Publication date:	07/25/2019
Pages:	344
Product dimensions:	6.14(w) x 9.21(h) x 0.72(d)

About the Author

Sope Williams-Elegbe is an Associate Professor at Stellenbosch University, South Africa, a public procurement consultant and former lecturer at University of Nottingham.

Table of Contents

Preface vii

Table of Cases xv

Table of Legislation xvii

Part I History and Law

1 Introduction 3

2 A Historical Overview of the MDBs and the History of Public Procurement Regulation in the World Bank 9

I Introduction 9

II History of the Multilateral Development Banks 9

A The World Bank 9

B The Inter-American Development Bank (IDB) 11

C The African Development Bank (AfDB) 12

D The Asian Development Bank (ADB) 14

E The European Bank for Reconstruction and Development (EBRD) 15

III Background to Public Procurement Regulation in the MDBs: A Case Study of the World Bank 16

IV The History and Evolution of Procurement Policy in the World Bank 18

V Conclusion 29

3 The MDBs and International Law 31

I Introduction 31

II International Personality of MDBs: Capacity, Immunity and Liability 32

A Capacity 33

B Immunity 34

C Liability 37

III The Status of MDB Loan Agreements in International Law 39

A Interpretation 41

B Adherence 42

C Dispute Resolution 43

IV The Relationship Between the MDBs and Their Borrowers 45

V MDBs, Public Procurement and Global Administrative Law 47

VI Conclusion 49

Part II Practice: Documents, Processes and Procedures

4 The Procurement Documents 53

I Introduction 53

II Country Intervention Documents 53

III The Loan Agreement 55

IV The General Conditions for Loans 56

V The Procurement Rules 58

A The 2011 Procurement Guidelines 58

i The 2011 Procurement Guidelines for Goods, Works and Non-consulting Services 60

ii The 2011 Procurement Guidelines for the Selection of Consultants 62

B The 2016 Procurement Framework 64

i The 2016 Procurement Regulations for Borrowers 65

ii Bank Policy: Procurement in IPF and Other Operational Procurement Matters 68

iii Bank Directive: Procurement in IPF and Other Operational Procurement Matters 69

iv Bank Procedure: Procurement in IPF and Other Operational Procurement Matters 70

VI The General Conditions of Contract (GCC) 70

VII The Standard Procurement Documents (SPDs) 72

VIII The Project Procurement Strategy for Development 73

IX The Procurement Plan 74

X The Project Implementation Plan/Manual 75

XI Conclusion 76

5 The Project Cycle and the Procurement Process 77

I Introduction 77

II An Overview of Procurement Organisation in the MDBs: The Example of the World Bank 78

III Project Preparation 81

A Assessing Borrower Capacity 81

B Project Identification and Preparation 83

C Project Appraisal 84

D Loan Negotiations and Approval 85

IV Project Implementation and Procurement 85

A The Procurement Cycle 86

i Procurement and Project Plans 87

ii Preparation of Standard Procurement (Bidding) Documents 87

iii Advertisement 87

iv Bid Opening 88

v Bid Evaluation 89

vi Standstill Period 91

vii Contract Award 91

viii Contract Management 92

ix Post Reviews 92

V Procurement Procedures Used by the Bank 93

A The 2011 Procurement Guidelines 93

i Goods, Works and Non-consulting Services 93

ii Consulting Services 97

B The 2016 Procurement Regulations 98

VI Evaluation and Monitoring 101

VII Conclusion 102

6 Value for Money, Competition and Selection Procedures 103

I Introduction 103

II Value for Money: Meaning 103

III Competition in Procurement: Meaning 107

IV Competitive Award Procedures Under Bank-financed Contracts 109

A Competitive Procedures for Goods, Works and Non-consulting Services 110

i Request for Proposals (RFP) 110

ii Request for Bids (RFB) 111

iii Request for Quotations (RFQ) 112

B Competitive Procedures for Consulting Services 112

i Shortlisting 113

ii Quality and Cost-based Selection (QCBS) 113

iii Fixed Budget-based Selection (FBS) 115

iv Least Cost-based Selection (LCS) 116

v Quality-based Selection (QBS) 116

vi Consultant's Qualification-based Selection (CQS) 117

V Non-competitive Procedures 118

A Goods, Works and Non-consulting Services 118

B Consulting Services 121

VI Market Approaches 122

VII Selection and Contractual Arrangements 131

A Competitive Dialogue 132

B Public-Private Partnerships (PPP) 134

i Build, Own and Operate (BOO) 135

ii Build, Operate and Transfer (BOT) 136

iii Build, Own, Operate and Transfer (BOOT) 136

C Commercial Practices 136

D United Nations Agencies 137

E Electronic Reverse Auctions 137

F Operations Involving a Programme of Imports 138

G Commodities 138

H Community Driven Development 139

I Force Accounts 139

J Framework Agreements 140

K Performance-based Contracts 141

VIII Conclusion 142

7 Secondary (Sustainability) Concerns in MDB Procurement 143

I Introduction 143

II Secondary Concerns in Public Procurement: Meaning 143

III Secondary Policies in Other Jurisdictions: A Synopsis 148

IV The World Bank and Secondary Policies: Rationale 153

V The Implementation of Secondary Policies in the World Bank 155

A Prequalification of Firms 159

B Functional and Technical Specifications 159

C Evaluation Criteria 161

D Contract Terms and Conditions 161

E Contract Monitoring 162

VI The Frequency of the Use of Secondary Considerations in Bank-funded Contracts 162

VII Secondary Policies and the Other MDBs 163

A The Inter-American Development Bank 163

B The African Development Bank 164

C The Asian Development Bank 166

D The European Bank for Reconstruction and Development 167

VIII Conclusion 168

Part III Problems and Issues Affecting MDB Procurement

8 Corruption in MDB Funded Procurement 171

I Introduction 171

II Corruption in Public Procurement: A Primer 172

III Anti-corruption in the World Bank 177

A The History of Anti-corruption in the World Bank: From Turning a Blind Eye to Mainstreaming Anti-corruption 178

B Addressing Corruption in Bank-funded Contracts 187

i The Corruption Offences in the Bank's Anti-corruption Policy 187

ii Prevention of Corruption in Bank-funded Contracts 189

iii Ensuring Compliance with Bank Anti-corruption Norms 193

iv Detection, and Investigation of Corruption in Bank-funded Contracts 195

v Deterrence, Sanctions and Resolution of Corruption Cases 199

a Sanctions Against Borrowers 200

b Sanctions Against Contractors 203

c Settlements and Resolution of Cases with Contractors 209

d Bank Contractors After Sanctions: Integrity Compliance Programmes 210

IV Anti-corruption and Bank Borrowers 211

A The Procurement Guidelines and Regulations 211

B The Anti-corruption Guidelines 212

C The General Conditions of Contract 214

D Standard Procurement Documents 214

V Concluding Remarks 215

9 The Aid Effectiveness Agenda: Harmonisation, Tied Aid and Use of Country Systems 217

I Introduction 217

II Aid Effectiveness 217

A The Meaning of Effective Aid 217

III Harmonisation 220

A The Meaning of Harmonisation 220

B A History of the Harmonisation Agenda 221

C The Procurement Harmonisation Agenda 227

i Standardisation of Procurement Documents 228

ii Co-operation in the Area of Anti-corruption 230

IV Tied Aid 232

A What is Tied Aid? 232

B Effects of Tied Aid on Development: A Primer 234

C Multilateral Efforts at Untying Aid: A Chronological Review 236

V Use of Country Systems in Funded Procurement 239

A The Meaning of Use of Country Systems 239

B The Methodology and the Pilot 241

VI Conclusion 242

10 Public Procurement Reform and the Development of Procurement Capacity in Developing Countries: The Role of MDEs 243

I Introduction 243

II Conceptual Framework 243

A Public Procurement Reform 243

B The Development of Procurement Capacity 249

C Use of Country Systems 251

III The Multilateral Agenda on Procurement Reform and Capacity Development in Developing Countries 256

IV Initiating the Reform Process: Assessing Procurement Systems 264

A Country Procurement Assessment Reports (CPAR) 264

B Methodology for Assessing Procurement Systems (MAPS) 267

C Methodology for Assessing Alternative Procurement Arrangements (MAAPA) 272

V The Role of the UNCITRAL Model Law on Procurement 273

VI The Role of the MDBs in Procurement Reform 275

A Promoters 276

B Funders 277

C Implementers 277

VII The Role of the MDBs in the Development of Procurement Capacity 277

VIII Conclusion 280

11 Remedies Under MDB-funded Procurement 281

I Introduction 281

II Introduction to Supplier Remedies in Public Procurement 281

III The World Bank's Approach to Remedies 283

IV Complaints Forum for Bidders Under MDB-funded Contracts 284

A The Kinds of Remedies Available to Bidders 291

V Forum for Disputes Between Contractors and Borrowers 292

A The Kinds of Remedies Available to Contractors 296

VI Disputes Between Borrowers and the World Bank 296

A Remedies Available to the Parties to a Loan Agreement 299

VII Conclusion 304

Index 305