WORLD BANK’S PROCUREMENT GUIDELINES (January 2011, Revised July 2014)

1. GUIDELINES Procurement of Goods, Works, and Non-Consulting Services Under IBRD Loans and IDA Credits & Grants By World Bank Borrowers January 2011, Revised July 2014 Contents of Guidelines • Introduction • International Competitive Bidding • Other Methods of Procurement Appendices • Review by the Bank • Domestic Preferences • Guidance to Bidders WORLD BANK’S PROCUREMENT GUIDELINES (January 2011, Revised July 2014) MISSION - JULY 2017

2. PROCUREMENT GUIDELINES Loan Agreement & Procurement Guidelines Procurement of goods, works and services in a Bank - funded Project follows the Procedure agreed with the Bank. Agreed procedure is specified in the Loan Agreement, PAD and Procurement Plan The responsibility for the implementation of the project, and therefore for the award and administration of contracts, rests with the Borrower. The rights and obligations of the Borrower and the suppliers/contractors are governed by the bidding documents, and by the contracts signed by them. IA invites and evaluates bids, and awards the contract. The contract is between the IA and the supplier or contractor. The Bank is not a party to the contract. MISSION - JULY 2017

3. PROCUREMENT GUIDELINES The Bank reviews the procurement procedures to ensure that the proceeds of the loan are used only for the purposes for which the loan was granted, with due attention to considerations of economy and efficiency. In the case of major contracts, the documents are reviewed by the Bank prior to their issue. Contracts which are below the specified threshold values are taken up for Post Review at a later stage. The Bank has published Standard Bidding Documents (SBDs) and it is mandatory for the IA to use these documents, with minimum changes to address project-specific issues. For NCB procurement only the Model Bidding Documents agreed with the Government of India are to be used. Bank’s Procurement Guidelines have to be followed. MISSION - JULY 2017

4. PROCUREMENT GUIDELINES General Considerations While specific procurement rules and procedures to be followed depend on the circumstances of the particular case, four considerations as under generally guide the Bank’s requirements: (a) need for economy and efficiency in the implementation of the project, including procurement of goods, works and services; (b) Bank’s interest in giving all eligible bidders the same information and equal opportunity to compete in providing goods, works and non-consulting services financed by the Bank; (c) Bank’s interest in encouraging the development of domestic contracting and manufacturing industries; and importance of transparency in the procurement process. MISSION - JULY 2017

5. PROCUREMENT GUIDELINES Open competition is the basis for efficient public procurement. However, Borrowers shall select the most appropriate method for the specific procurement. In most cases, International Competitive Bidding (ICB), is the most appropriate method. Where ICB is not the most appropriate method of procurement, other methods of procurement may be used. The particular methods that may be followed for procurement under a given project are provided for in the Loan Agreement. The specific contracts to be financed under the project, and their method of procurement, consistent with the Loan Agreement, are specified in the Procurement Plan. After the Procurement Plan has been prepared and agreed with the Bank, the project should follow the procurement method specified therein for the respective contracts. MISSION - JULY 2017

6. PROCUREMENT GUIDELINES Conflict of interest Bank policy requires that a firm participating in a procurement process shall not have a conflict of interest. Link  Para 1.6 & 1.7 Any firm found to have a conflict of interest shall be ineligible for award of a contract. Eligibility Bank permits firms and individuals from all countries to offer goods, works, and non-consulting services. Exceptions: Exclude firms if Borrower’s country prohibits commercial relations with the country where Goods are manufactured. By an act of compliance with a decision of the United Nations Security Council, the Borrower’s country prohibits any import of goods from, or payments to, a particular country, person, or entity. Government-owned enterprises may participate only if they can establish that they (i) are legally and financially autonomous, (ii) operate under commercial law, and (iii) are not dependent agencies of the Borrower or Sub-Borrower. A firm sanctioned by the Bank. MISSION - JULY 2017

7. MISPROCUREMENT Bank does not finance expenditures under a contract if it concludes that such contract: has not been awarded in accordance with the provisions of the Loan Agreement. could not be awarded to the bidder otherwise determined successful due to unjustifiable delays. involves the engagement of a representative of the Borrower in fraud and corruption. In such cases, whether under post or prior review, the Bank will declare misprocurement, and cancel that portion of the loan allocated to the goods, works or non-consulting services that have been misprocured. MISSION - JULY 2017

8. FRAUD & CORRUPTION Link  Para 1.16 It is the Bank’s policy to require that Borrowers, bidders, suppliers, contractors, sub-contractors, service providers etc. observe the highest standard of ethics during the procurement and execution of Bank-financed contracts. In pursuance of this policy, the Bank defines the terms, corrupt practice, fraudulent practice, collusive practice, coercive practice, and obstructive practice. The Guidelines provide that the Bank will: reject a proposal for award if it determines that the bidder recommended for award has, directly or indirectly, engaged in corrupt, fraudulent, collusive, coercive or obstructive practice; declare misprocurement and cancel the portion of the loan allocated to a contract if it determines at any time that representatives of the Borrower engaged in corrupt, fraudulent, collusive, coercive or obstructive practices; sanction a firm or individual in accordance with prevailing Bank’s sanctions procedures, including by publicly declaring such firm or individual ineligible, either indefinitely or for a stated period of time to be awarded a Bank-financed contract; require that a clause be included in bidding documents and in contracts, requiring bidders, suppliers and contractors etc. to permit the Bank to inspect all accounts. MISSION - JULY 2017

9. PROCUREMENT PLAN Para 1.18 of the Bank’s Procurement Guidelines and Para 1.25 of the Consultant Guidelines provide as under: The Borrower shall prepare Preliminary Procurement Plan for the entire scope of the Project; and Detailed and comprehensive procurement plan including all contracts for which procurement action/selection of consultants is to take place in the first 18 months. An agreement with the Bank shall be reached at the latest during loan negotiations. The Borrower shall update procurement plans throughout the duration of the project at least annually. All procurement plans, their updates or modifications shall be subject to Bank’s prior review. After loan negotiations, the Bank will publish on its external website the agreed initial procurement plan and all subsequent updates after a no objection has been provided. MISSION - JULY 2017

10. Contents of Guidelines • Introduction • Quality– and Cost– Based Selection • Other Methods of Selection • Types of contracts and Important Provisions • Selection of Individual Consultants Appendices • Review by the Bank • Instructions to Consultants and ITC of the RFP • Guidance to Consultants GUIDELINES Selection and Employment of Consultants Under IBRD Loans and IDA Credits & Grants By World Bank Borrowers January 2011, Revised July 2014 WORLD BANK’S CONSULTANT GUIDELINES (January 2011, Revised July 2014) MISSION - JULY 2017

11. CONSULTANT GUIDELINES General Considerations Five main considerations which guide the Bank’s policy on the selection process are: the need for high-quality services, the need for economy and efficiency, the need to give all eligible consultants an opportunity to compete in providing the services financed by the Bank, Bank’s interest in encouraging the development and use of national consultants in its developing member countries, and the need for transparencyin the selection process. The Bank considers that, in the majority of cases,these considerations can best be addressed through competition among qualified short listed firmsin which selection is based on the quality of the proposal and on the cost of the services to be provided. Hence Quality- and Cost-Based Selection (QCBS) is the most commonly recommended method MISSION - JULY 2017

12. CONSULTANT GUIDELINES GENERAL CONSIDERATIONS QCBS is not the most appropriate method of selection for all cases. Other methods of selection are used where they are more appropriate. The particular methods that may be followed for the selection of consultants in a project are provided for in the Loan Agreement. The Guidelines require that the specific consultancy contracts to be financed in a project and the respective methods of selection shall be specified in the Procurement Plan. CONFLICT OF INTEREST Consultants shall not be hired for any assignment that would be in conflict with their prior or current obligations to other clients, or that may place them in a position of being unable to carry out the assignment in the best interest of the Borrower. MISSION - JULY 2017

13. CONSULTANT GUIDELINES Eligibility To foster competition the Bank permits consultants (firms and individuals) from all countries to offer consulting services for Bank-financed projects. Exception to the above Consultants may be excludedif: (i) as a matter of law or official regulations, the Borrower’s country prohibits commercial relations with the consultant’s country, or (ii) by an act of compliance with a decision of the United Nations Security Council, the Borrower’s country prohibits any payments to any country, person, or entity. Government-owned enterprises or institutions of the Borrower’s country may participate only if they can establish that they (i) are legally and financially autonomous, (ii) operate under commercial law, and (iii) are not dependent agencies of the Borrower or Sub-Borrower. A firm or an individual sanctioned by the Bank. Misprocurement - similar provisions as in Procurement Guidelines MISSION - JULY 2017

14. APPENDIX 1 TO PROCUREMENT GUIDELINES REVIEW BY THE BANK OF PROCUREMENT DECISIONS & PUBLICATION OF AWARDS OF CONTRACT MISSION - JULY 2017

15. APPENDIX 1 - REVIEW BY THE BANK &PUBLICATION of AWARDS OF CONTRACTS(PROCUREMENT GUIDELINES) The Bank shall review Procurement Plans and their updates that are prepared by the Borrowers. PRIOR REVIEW For all contracts subject to the Bank’s prior review, following procedure will be followed. PREQUALIFICATION In cases where prequalification is used, the Bank will review: Draft documents; Report of evaluation of applications. MISSION - JULY 2017

16. APPENDIX 1 - REVIEW BY THE BANK &PUBLICATION of AWARDS OF CONTRACTS Stages of prior review for contacts subject to prior review: Bidding documents Addendum as a result of Minutes of pre-bid conference Bid evaluation report together with summary of the procurement on the specified form First request for extension of bid validity, if it is longer than four weeks, and all subsequent requests for extension, irrespective of the period. If after publication of the award, the Borrower receives protests or complaints from bidders, a copy of the complaint, the Borrower’s comments and a copy of the Borrower’s response shall be sent to the Bank for its review and comments. MISSION - JULY 2017

17. APPENDIX 1 - REVIEW BY THE BANK Stages of prior review for contacts subject to prior review (continued): If as a result of analysis of a complaint, the Borrower changes its award recommendation, a revised evaluation report shall be submitted to the Bank for no objection. Conformed copy of the contract, advance payment security and the performance security shall be furnished to the Bank promptly after signing of the contract, and prior to first application for withdrawal of funds. Modification of the signed contract (before the borrower agrees to it) regarding: material extension of the stipulated time for performance of a contract; any substantial modification of the scope of services; any variation order which combined with all variation orders previously issued would increase the original contract amount by more than 15 percent; proposed termination of the contract. MISSION - JULY 2017

18. APPENDIX 1 - REVIEW BY THE BANK Post Review Procurement Post Reviews are normally carried out by the Bank. Borrower shall retain all documentation with respect to each contract which is not subject to prior review up to two years after the closing date of the Loan Agreement for examination by the Bank or by its Consultants/Auditors. Bank may declare misprocurement for any of the reasons provided in paragraph 1.14 of the Guidelines, (discussed in an earlier slide) including if it determines that the goods, works or non-consulting services were not procured in accordance with the agreed procedures. Bank may also agree with the Borrower that they appoint independent entities to carry out Post Reviews, in such cases, the Bank will review the reports submitted by the Borrower. MISSION - JULY 2017

19. APPENDIX 1 - REVIEW BY THE BANK Change from Post Review to Prior Review A contract whose cost estimate was below the Bank’s prior review threshold indicated in the Procurement Plan shall fall under prior review if the price of the lowest-evaluated bidder exceeds such threshold. In such case, all documentation including evaluation report shall be submitted to the Bank for its prior review and no objection before award of the contract. When, to the contrary, the price of the selected bidder falls below the prior review threshold, the prior review process shall continue. When the procurement method requires change due to higher or lower cost estimates, for example from NCB to ICB or inversely, the procurement plan shall be modified and submitted to the Bank for review and no objection. MISSION - JULY 2017

20. APPENDIX 1 - PUBLICATION of AWARDS OF CONTRACTS Publication of Award of Contracts Borrower shall publish information of contract award with details as per Guidelines: in UNDB online for (i) all contracts under ICB and LIB, (ii) contracts with concessionaires under PPP arrangements and (iii) sub-projects under Loans to Financial Intermediary Institutions and Entities, and (iv) all direct contracts; in the National press@ for all NCB and small value direct contracts. @In a national newspaper of wide circulation and/or in the official gazette provided that it is of wide circulation, or on a widely used website or electronic portal with free national and international access, in the National Language. Publication shall be done within two weeks of receiving Bank’s no objection to the award recommendation. Bank will arrange publication of award of contracts under prior review on its external web-site upon receipt of a conformed copy of signed contract and performance security. MISSION - JULY 2017

21. APPENDIX 1 TO CONSULTANT GUIDELINES REVIEW BY THE BANK OF SELECTION OF CONSULTANTS & PUBLICATION OF AWARDS OF CONTRACT MISSION - JULY 2017

22. APPENDIX 1: REVIEW BY THE BANK The Bank shall review Procurement Plans and their updates that are prepared by the Borrowers which shall be consistent with the Project Implementation Plan, the Loan Agreement and the Guidelines. For contracts subject to Prior Review, the Borrower will furnish the following for Bank’s review: Cost estimate of the proposed Assignment RFP along with the Short list Evaluation Report of the Technical Proposals Final (Combined) Evaluation Report after evaluation of financial proposals, with its recommendation of the successful consultant) [At this stage, Borrower shall invite the highest ranked consultant for negotiations without obtaining Bank’s no objection.] MISSION - JULY 2017

23. APPENDIX 1: REVIEW BY THE BANK If the Bank notes any discrepancies in the financial evaluation, it shall promptly notify the Borrower. The Borrower shall address promptly all issues to the satisfaction of the Bank before proceeding for negotiationsorsuspend negotiations if commenced. In such cases, further action shall not be taken until the Bank has given its no objection. First request for extension of validity of proposals, if it is longer than four weeks, and all subsequent requests for extension, irrespective of the period. If the Borrower receives complaints from consultants, it shall send to the Bank for review: a copy of the complaint, Borrower’s comments on each issue raised in the complaint, and copy of the proposed response to the complainant. MISSION - JULY 2017

24. APPENDIX 1: REVIEW BY THE BANK Stages of prior review - (continued): If as a result of analysis of a complaint, or any other reason, the Borrower changes its award recommendation, a revised evaluation report shall be submitted to the Bank for no objection. If negotiations with the successful consultant fail, Borrower shall furnish to the Bank for review the minutes of negotiations and reasons for failure. After obtaining the Bank’s no objection, negotiations may be terminated and the next ranked firm be invited for negotiations. MISSION - JULY 2017

25. APPENDIX 1: REVIEW BY THE BANK Stages of prior review - (continued): Copy of the negotiated contract proposed to be signed by the Borrower. If the negotiated contract resulted in substitution of key experts or any changes in the TOR and original proposed contract, Borrower shall highlight the changes and provide an explanation. Oneconformed copy of the contract shall be furnished to the Bank after its signing and prior to the submission of the first application for withdrawal of funds from the Loan Account. MISSION - JULY 2017

26. APPENDIX 1: REVIEW BY THE BANK Stages of prior review - (continued): Modification of the Signed Contract subject to prior review, before agreeing to: (a) an extension of stipulated time for performance; (b) any substantial modification of scope of services, substitutions of key experts, or significant changes to the terms and conditions of the contract; or (c) termination of the contract. MISSION - JULY 2017

27. APPENDIX 1: REVIEW BY THE BANK Post Review Procurement Post Reviews are normally carried out by the Bank. Borrower shall retain all documentation with respect to each contract which is not subject to prior review up to two years after the closing date of the Loan Agreement. Bank may declare misprocurement for any of the reasons provided in paragraph 1.19 of the Guidelines, including if it determines that the contract was not awarded in accordance with the agreed procedures. Bank may also agree with the Borrower that they appoint independent entities to carry out Post Reviews, in such cases, the Bank will review the reports submitted by the Borrower. MISSION - JULY 2017

28. APPENDIX 1: REVIEW BY THE BANK Change from Post Review to Prior Review A contract whose cost estimate was below the Bank’s prior review threshold indicated in the Procurement Plan shall fall under prior review if the financial offer of the selected firm exceeds such threshold. In such case, all documentation including evaluation report shall be submitted to the Bank for its prior review and no objection before award of the contract. When, to the contrary, the financial offer of the selected firm falls below the prior review threshold, the prior review process shall continue. When the selection method requires change due to higher or lower cost estimates than previously assessed, the Procurement Plan shall be modified by the Borrower and submitted to the Bank for review and no objection. MISSION - JULY 2017

29. APPENDIX 1: REVIEW BY THE BANK & PUBLICATION OF CONTRACT AWARD Publication of Award of Contracts Borrower shall publish information of contract award with details as per Guidelines: on UNDB online for (i) all contracts when the short list included any foreign firm and (ii) all single sourceselection contracts awarded to foreign firms; and in the National press@all contracts where the short list comprises only National firms and all single source selection contracts awarded to National firms. @In a national newspaper of wide circulation and/or in the official gazette provided that it is of wide circulation, or on a widely used website or electronic portal with free national and international access, in the National Language. (National language is defined in Para 1.22 of CGL -(i) the national language of the Borrower; or (ii) the language used nation-wide in the Borrower’s country for commercial transactions, hereinafter each is called the National Language) MISSION - JULY 2017

30. APPENDIX 1: REVIEW BY THE BANK & PUBLICATION OF CONTRACT AWARD Publication of Award of Contracts - continued Publication shall be done within two weeks after receiving the Bank’s no objection for award of the contract for contracts subject to the Bank’s prior review, and within two weeks of successful negotiations with the selected firm for contracts subject to the Bank’s post review. The same information as published on the web site shall be sent to all consultants who submitted proposals. Bank will arrange publication of award of contracts under prior review on its external web-site upon receipt of a conformed copy of signed contract. MISSION - JULY 2017

31. AGREED METHODS OF PROCUREMENTIN NAGALAND HEALTH PROJECT MISSION - JULY 2017

32. AGREED PROCUREMENT METHODS Goods and Non-consulting services MISSION - JULY 2017

33. AGREED PROCUREMENT METHODS Works MISSION - JULY 2017

34. AGREED METHODS OF SELECTION OF CONSULTANTS Consulting Services MISSION - JULY 2017

35. PRIOR REVIEW THRESHOLDS MISSION - JULY 2017

36. PRIOR REVIEW THRESHOLDS Threshold Values for Contracts subject to Bank’s Prior Review MISSION - JULY 2017

37. TO BE OBSERVED IN PROCUREMENTOF GOODS, WORKS & CONSULTING SERVICES SPECIFIC CONCERNS&IMPORTANTS POINTS MISSION - JULY 2017

38. PROCUREMENT OF GOODS & WORKS (Specific Concerns) Delays in finalization of bidding documents Failure to adequately publicize invitation for bids - resulting in poor response Need to provide price adjustment for contracts which extend beyond 18 months Allowing an unreasonably short time for submitting Bids Large number of bidding documents sold but only one or very few bidders respond to invitation for bids Collusion in bidding Fake experience/performance certificates (need to verify) Requesting or permitting a bidder to alter its bid after the bid has been opened Lack of clarity in specified Qualification Requirements Relaxing/modifying Qualification Requirements MISSION - JULY 2017

39. PROCUREMENT OF GOODS & WORKS (Specific Concerns) Delays in bid evaluation and award of contracts Delays in signing of contracts after obtaining no objection from the Bank Fake Performance Security (need to verify from the issuing bank) Delays in releasing advance & other payments Inadequate engineering (in Works) leading to wide variations at the time of implementation and consequent disputes Delay in handing over the site/land acquisition Weak monitoring of construction program & Sub-contracting Weak contract administration; Need for enforcing specifications Delays in resolving issues during implementation Failure to keep Performance Security valid till contract completion MISSION - JULY 2017

40. PROCUREMENT OF GOODS & WORKS (Specific Concerns) F & C Indicators Similarity between specifications and winning bidder’s product (for goods) Unusual bid patterns Bidders use the same bank for obtaining bid security Bid Security Instruments submitted by bidders have sequential numbers All bidders but one are disqualified for being technically non-responsive Winning bid was not the lowest bid Apparent connections between bidders: common addresses, personnel, phone numbers, etc. conflict of interest MISSION - JULY 2017

41. SELECTION OF CONSULTANTS IMPORTANT POINTS TO BE OBSERVED TOR should indicate estimate of total man months of the key staff, and not the break-up position wise. Weightage for ‘Specific Experience’ should be relatively modest, since this criteria has been taken into account when short listing Consultants. High weightage should be given to Key Staff for complex assignment. Short List should comply with the requirement of geographical spread to the extent feasible. A firm should be short listed on the basis of its own credentials, and not those of its Parent/Group Company. Evaluation of technical proposals should be done strictly as per criteria specified in the RFP. MISSION - JULY 2017

42. SELECTION OF CONSULTANTS IMPORTANT POINTS TO BE OBSERVED Members of the Evaluation Committee (EC) should have no conflict of interest. Under no circumstances the EC should request information or clarifications that may change the proposals. Members of the EC should evaluate the proposals independently, and then the EC should conduct a joint review to reconcile any large differences in individual scores. The scores of various technical proposals should be consistent with their strengths and weaknesses. Discussions by the Client’s team during negotiations with the selected Consultant should not result in altering the original TOR substantially. MISSION - JULY 2017

43. SELECTION OF CONSULTANTS IMPORTANT POINTS TO BE OBSERVED During negotiations, the selected firm should not be allowed to substitute key staff, unless undue delay in the selection process makes such substitution unavoidable. The key staff proposed for substitution, where agreed, shall have qualifications equal to or better than the key staff initially proposed. When the selection method includes price as a component, price should not be negotiated. MISSION - JULY 2017

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