Presentation By Egal N. Roble (Chief Officer, Procurement Reform)

1. REGIONAL CONFERENCE ON EHNANCING INTEGRITY IN PUBLIC PROCUREMENT Presentation By Egal N. Roble (Chief Officer, Procurement Reform) REGIONAL CONFERENCE ON EHNANCING INTEGRITY IN PUBLIC PROCUREMENT Venue: Rabat, MOROCCO Date: APRIL 3-4, 2008

2. Content • Introduction/Context • Role of Borrower • Role of Bank • Before Award • During Award • After Award • Anti-Corruption Strategy • Redress Mechanism • Integrity Measures

3. Financed Operation Translates to: Works Goods Services Through Lending Instruments • Project Loans • Lines of Credit • Investment Loans • Structural Adjustment Loans • Technical Assistance Grants

4. MOROCCO: Example 2 • Total Amount approved in: • 2003:  UA 179 million • 2004:  UA 257 million • 2005:  UA 114 million • 2006:  UA 172 million • 2007:  UA 174 million • Cumulative amount approved over the last 5 years:  UA 896 million

5. Context • Pursuit of Economy and Efficiency • Ensuring Equal Opportunity for all Eligible Bidders • Encouragement of the Development and Participation of Regional Firms • Transparency and Integrity in theProcurement Process

6. Role of the Borrower • Preparation of Bidding Documents and • Prequalification Documents • Prequalification Process • Bid Evaluation

7. Role of the Borrower • Advertises and Issues Bidding Documents; • Evaluates and Selects; • Awards, Signs and Administers Contract; • Supervises Contract Execution • Processes Invoices for Payment Bank required to approve or commenton each stage of the selection process PPRU/Procurement Unit

8. Role of the Borrower • Negotiation, Award and Signing of Contracts • Contract performance • Consideration of Claims • Settlement of Invoices

9. Role of the Bank • The Bank is not Party to the Contract • Preparation of Bidding Documents: Mandatory Use of Standard Bank Documents, • Free Access to UNDB • Bank’s “No objection” for Bidding Documents

10. Role of the Bank • Procurement Process Verified at Each Stage • Bank’s “No objection” for Bid Evaluation Report Prior to the Award of Contracts • Imposition of Sanctions relating toFraud and Corruption

11. Issuesin Procurement Planning • 3. Types of Financing: • Parallel Financing or Joint Financing • Who is Procuring What? • 2. Sources of Financing: • Government or Local Administration; • Bilateral Funding Agency; • Multilateral Funding Agency; • Several Sources of Funding. • 4. Procurement Rules to be Followed: • Local Procedures; • Procedures of Bilateral Sources; • Procedures of Multilateral Sources; • Procedures of the Major Financier; • A Combination of Procedures.

12. Before Award: Sources of Information on Bank Group-financed Projects • Press Releases • Appraisal Reports • Quarterly Operational Summary (QOS) of Projects • United Nations Development Business • Bank's Web site: www.afdb.org • ADB Business Bulletin • Project Executing Agencies in Borrowing Countries

13. Registration- DACON A new on-line registration system is now available at the following address: http://ext.afdb.org:8080/ADBDaconWeb/dacon/Home.htm

14. Before Award • List of procurement items to be acquired under the project: Goods (equipment, vehicles, supplies, fertilizers, books), Works to be constructed or rehabilitated; and Consultancy Services (technical assistance, advisory, training, supervision) to be acquired. • Determine (APA) target dates (inter-relationships) within the overall project implementation framework. • Decide on the content of procurement packages;

15. Before Award: Bid Packaging • Time Element: items are needed at different times; • Management Aspects: one main contractor or EA; • Competitive Aspects (how to divide items into lots of optimum size to encourage maximum competition); • Business Structure (goods or services are not available from a single source); • Administrative Costs of Tendering; • Point of View of Co-financing.

16. Before Award:Consultancy Services – Short-listing Composition: Qualified Firms or Consortia • Requirements: • 5 to 7 firms; • Wide geographic distribution (not more than two firms from same country); • At least one firm from a regional member country; and • Consortium/joint venture of firms from member countries encouraged

17. During Award International Competitive Bidding • Advertisements: Publication of GPN in UNDB Publication of SPN in UNDB • Mandatory use of Standard Bidding Documents • Bidding Documents to contain all contract conditions • Minimum Bid Period - 60 days • Clarifications on Bidding Documents

18. During Award International Competitive Bidding • Public Opening of Bids • Evaluation Criteria Specified in Bidding Documents • Evaluation undertaken based on these stated criteria • Contract is awarded to Bidder with the "LOWEST EVALUATED COST BID"

19. During Award:Evaluation of Consultants’ Proposals 3 Selection Procedures 1. Selection based on technical quality; 2. Selection based on technical quality with price consideration; 3. Selection based on establishing the comparability between technical proposals and selection of the lowest offer

20. Placing the Contract • Bank reviews contract • All main conditions examined • No Objection needed • If obtained,contract may proceed

21. After Award: Contract Management • Vitally important • The Borrower is responsible.

22. After Award: Contract Supervision • Reporting • Means by which the contract is controlled • Must include: • Progress of work • staff months spent • Money spent

23. After Award: Disbursement • Borrower responsible to settle payments • Payments upon Borrower’s request: • Direct to beneficiary; or • Letter of Credit; or • Revolving Fund (Borrowers Pay) Disbursement (payments) in contract currency The Bank’s policy on arrears and Sanctions

24. After Award: Contract completion-closeout • Draft final reports to be reviewed and approved • Accounts closed • Demobilisation of consultants staff • Evaluation of consultants staff

25. MOST COMMON CORRUPT PRACTICES • BID MANIPULATION/COLLUSION • BRIBERY • KICKBACKS • MISREPRESENTATION

26. Anti Corruption Strategy • Bank’s policy: Borrowers and beneficiaries as well as bidders/ suppliers/ contractors/ consultants must observe highest standard of ethics during the procurement and execution of contracts under Bank financed projects, programs and studies. • Bank’s policy: Borrowers to include standard provisions against corrupt and fraudulent practices. • Standard Procurement Documentation of the Bank includes detailed Clauses on the matter.

27. Anti Corruption Strategy • Following its own investigation and determination in accordance with its procedures, the Bank will: • Reject a proposal for award if it is determined that the bidder recommended has engaged in corrupt or fraudulent practices in competing for the contract; • Cancel the portion of the loan or grant to contract if at any time it is determined that corrupt or fraudulent practices were engaged in by the Borrower or representatives; • Declare a firm ineligible, either indefinitely or for a stated period of time , to be awarded a Bank financed contract if it at any time determines that the firm has engaged in corrupt or fraudulent practices in executing a Bank financed contract.

28. Anti Corruption Strategy • Where a firm has been found by a national or international entity to have engaged in corrupt or fraudulent practice, the Bank reserves the right to declare such a firm ineligible to be awarded a Bank financed contract. • The Bank reserves the right to require that a provision be included requiring suppliers and contractors to permit the Bank to inspect their accounts and records.

29. Misprocurement • Bank Does not finance Expenditure Not in line with Loan Agreement and Bank Rules • Banks’ Policy to Cancel the Misprocured portion of the operation • Bank will Cancel the Entire Loan if the Misprocured Portion is major • Bank will Declare Misprocurement if contract Award was Based on Incomplete, Inaccurate or Misleading Information

30. Redress Mechanisms Procurement Review Committee (PRC) • Neutral and Independent • Reviews receivable complaints • Makes final decision on behalf of the Bank

31. PRCOUREMENTINTEGRITY: MEASURES • Capacity building • CPARs • Party to all conventions: MDBs • Strict Prevention and Punishment tools • Transparency emphasised in all phases/Strict Review for Redress • Institutional Integrity Division built in the OAGL • Management – in all levels - Committed • Staff/Board Code of Conduct

32. ADDITIONAL MEASURES • Voluntary Disclosure Program • Detailed Implementation Review • Tighter Procedures for National Competitive bidding • Rationalization of BEC Membership • Information Sharing and Cross Debarement • Protection of Whistleblowers • Stricter Guidelines on Anti-Corruption and Sanctions

33. THANK YOU