Business Opportunities Seminar Procurement of Goods and Works United States (August 2014)

1. Business Opportunities Seminar Procurement of Goods and Works United States (August 2014) Presented By: Amr J. Qari Senior Procurement Specialist Asian Development Bank

2. Agenda • ADB Business Opportunities • ADB’s Procurement Policy Framework • Bidding Dos and Don’ts • Q&A

3. ADB Business Opportunities

4. Why pursue ADB financed goods and works contracts? • Significant expenditure on goods and works (approximately $6Bn in 2013) • Gateway to new opportunities in fast growing emerging economies across multiple sectors • Availability of funds is assured • Internationally accepted procurement procedures • Risks related to transparency, fairness and integrity of procurement activities mitigated through ADB oversight • Support a worthy development mission

5. Identifying Opportunities for Goods and Works • Country Strategy and Business Plans • Early notices • General Procurement Notice • Procurement Plan • Specific Procurement notices • Invitation for Prequalification • Invitation for Bids • Hop-on Opportunities • Prequalified Contractors • Contracts Awarded

6. VIE Country Operations Business Plan

7. adb.org Business Opportunities Portal

8. Early Notices: Procurement Plans

9. Early Notices: Procurement Plans

10. Early Notices: Procurement Plans

11. Early Notices: Procurement Plans

12. Specific Procurement Notices

13. Hop-on Opportunities

14. Customized E-mail Alert Sign-up

15. Geographies to Consider for New Business Development • Solomon Islands • Papua New Guinea • Timor-Leste and other Pacific States • Afghanistan • Cambodia • Pakistan

16. ADB’s Procurement Policy Framework

17. Documents Governing Procurement • Loan Agreement (Schedule 4) • Procurement Guidelines • Standard Bidding Documents

18. Procurement GuidelinesPurpose PROCUREMENT GUIDELINES • To inform Borrowers as well as Suppliers, Manufacturers and Contractors of the general principles and procedures to be observed in carrying out procurement under ADB finance • Additional arrangements may be set out in the Loan Agreement

19. Procurement GuidelinesResponsibilities • The Borrower (Executing Agency) is responsible for all procurement activities • ADB has the obligation ensure compliance with key principles • Goods/Woks from ADB member countries • Economy and Efficiency • Fairness • Transparency • Promotion of Domestic Industries

20. Procurement GuidelinesApplicability Contracts financed by ADB entirely or partly • Guidelines must be followed Contracts not financed by ADB but part of Project • Borrower may adopt its own procurement procedures. • Works/goods to be procured must be . . . . . . of satisfactory and compatible quality . . . completed and/or delivered in timely fashion . . . priced not to affect adversely viability of project

21. Procurement GuidelinesEligibility Limitation for Participation • Ideally only by bidders' capability to fulfill the contract Exceptions • Compliance with UN Security Council decision • Conflict of interest(i.e., party has interests that could improperly influence that party’s performance of official duties or responsibilities, contractual obligations, or compliance with law) • Government owned enterprises (unless they are legally and financially autonomous, operate under principles of commercial law and not dependent on executing agency) • Declaration of ineligibility by ADB

22. Procurement GuidelinesMisprocurement If Procurement is not carried out as agreed ADB will . . . declare misprocurement . . . cancel corresponding portion of financing . . . exercise other remedies If appropriate, ADB may permit rebidding

23. Procurement GuidelinesFraud and Corruption Corrupt Practice the offering, giving, receiving, or soliciting, directly or indirectly, anything of value to influence improperly the actions of another party (e.g. bribery, kickbacks, extortion, bid manipulation) Fraudulent Practice action or omission, including a misrepresentation, that knowingly or recklessly misleads, or attempts to mislead, a party to obtain a financial or other benefit or to avoid an obligation (e.g., false bid security/bank guarantees, work certificates, financial statements) Collusive Practice an arrangement between two or more parties designed to achieve an improper purpose, including influencing improperly the actions of another party (e.g. leaking of bid information, rigged specifications) Coercive Practice impairing or harming, or threatening to impair or harm, directly or indirectly, any party or its property to influence improperly the actions of a party

24. Procurement GuidelinesFraud and Corruption ADB’s Anticorruption Policy requires all parties to observe the highest standard of ethics during the procurement and execution of such contracts. In pursuance of this policy, ADB will • Reject a proposal to award contract if it determines that bidder recommended for award has engaged in a prohibited practice • Cancel the corresponding portion of a loan if it determines that representatives of Borrower have engaged in prohibited practices during procurement or execution of contract • Declare a firm ineligible either indefinitely or for a stated period of time • Inspect accounts and records of suppliers and contractors and have them audited by auditors appointed by the Bank

25. How to Report Integrity Violations http://www.adb.org/site/integrity/how-to-report-fraud

26. Procurement GuidelinesForms of Procurement • International Competitive Bidding • Limited International Bidding • National Competitive Bidding • Shopping • Direct Contracting • Force Account • Procurement from Specialized Agencies • Procurement Agents • Inspection Agents • Procurement in Loans to Financial Intermediaries • Procurement under BOO / BOT / BOOT, Concessions and Similar Private Sector Arrangements • Performance Based Procurement • Procurement under Loans Guaranteed by ADB • Community Participation in Procurement • Procurement under Disaster and Emergency Assistance

27. Procurement GuidelinesInternational Competitive Bidding ICB is the default procurement method • Fairness, Transparency For prospective bidders from eligible source countries, adequate, fair and equal opportunities • Threshold Contract Values (US $) Goods - $500,000 to $1,000,000 Works - $1,000,000 to $10,000,000 • Value for Money For Borrower, wide range of choices in bid selection from among competing suppliers / contractors

28. Procurement GuidelinesICB Bidding Procedures Two Stage Single-Stage: One-Envelope Single-Stage: Two-Envelope Two-Stage: Two-Envelope

29. Typical Time Line For ICB Activities Bid Packaging Preparation of PQ Document Prequalification Preparation of Bidding Document Bidding Award Month

30. Procurement Guidelines ADB Prior Review • Contracts (Goods, Works, Services) • Procurement Mode • Procurement Timing • ADB review (post/prior) Procurement Plan • Advertisement and Invitation to Prequalify • Evaluation Criteria • Evaluation of Applications Prequalification • Invitation to Bid • Advertisement • Bid Documents Preparation of Bid Documents EA • Evaluation Report • Proposal of Award Bid Evaluation • Certified Contract Award of Contract

31. Procurement Guidelines Bidder Debriefing and Complaints Debriefing: • Bidders may request an explanation from the EA as to why their bids were not selected • The EA shall promptly provide an explanation in writing or in a meeting • If bidders are not satisfied with the explanation given, they may request a meeting with ADB Complaints: • Bidders may file complaint directly with ADB • Bidders may copy ADB on correspondence with EA

32. Bidding Dos and Don’ts

33. Bidding Dos • Carefully review qualification and evaluation criteria Failure to satisfy qualification criteria results in high bid rejection rate • No conditionalities Do not add any conditions. Conditionalities or qualifications will lead to rejection • Get official clarification If any provisions of the bidding document are unclear or unacceptable, submit an official inquiry in writing to the EA before the bid closing date or such date as may be specified.

34. Bidding Dos • Be on time Submit bid within the stipulated deadline. Late bids will not be accepted. • During bid opening ensure • All relevant prices are read out • All discounts are read out • Presence and amount of bid security is read out • No envelope remains unopened • All the above is recorded correctly • The record is signed by all bidders present and by the buyer • Be Aware of Possible Extension There may be a request to extend the bid validity and bid security periods by several months, as in certain cases the evaluation of bids requires more time than originally expected.

35. Bidding Dos Make final check of bid • Amount, validity and text of Bid Security • Signatures and power of attorney • Joint venture agreement enclosed • References enclosed • Discounts in covering letter or appropriate place as specified in the bidding document • Marking of envelopes as appropriate

36. Bidding Don’ts • No Bid Security • Insufficient Amount of Bid Security • Lack of Supporting Documents • Incomplete Bids • Expiration and Extension of Bid Validity • Partial Quantities • Absence of test reports if required • Bids not signed • Conflict of interest

37. Q&A