Inter-American Development Bank

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

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

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

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. 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. 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. 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. 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. 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. 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. Minimum Number of Days for Publication of SPNprior to Documents Submission • For Prequalification Applications: • Goods 45 days • Works 45 days • Consulting Services 30 days • For Bids: • Small Works 45 days • Major Works 90 days • Goods 45 days • Consulting Services 30 days

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. Bidder’s Responsibilities in aBidding 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. 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. 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. Who is Awarded the Contract? • For Consulting Services: • The Bidder with the best evaluated bid

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

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. 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. 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. Contracts of Consulting Firms and Individual Consultants

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)

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