Procurement under CDD Projects

1. Procurement under CDD Projects By Sunil Bhattacharya

2. Procurement under CDD Projects Main Characteristics of Successful CDD Projects Maximum Community Ownership and Sustainability • Completion of scope of works as planned and beyond • Actual cost within budget as estimated • Timely delivery/completion • Compliance with agreed quality standards • Maintenance plan in place • No misappropriation or misuse of funds • Positive impact assessment

3. Procurement under CDD Projects • Economy • Efficiency • Equal Opportunity • Transparency • Social Objectives • Community Ownership and Participation • Use of Local Technology, Labor, Materials and Other Resources

4. Procurement under CDD ProjectsRelevant Provisions of the Guidelines Para 3.15 of Guidelines on Procurement of Goods and Works • Where, in the interest of project sustainability, or to achieve certain specific social objectives of the project, it is desirable in selected project components to (i) call for the participation of the local communities and/or nongovernmental organizations (NGOs), (ii) increase the utilization of local know-how and materials, or (iii) employ labor-intensive and other appropriate technologies, the procurement procedures, specifications, and contract packaging shall be suitably adapted to reflect these considerations, provided these are efficient. The procedures proposed shall be outlines in the SAR (PAD), the President’s Report and Loan Agreement Para 3.14 of Guidelines on employment of Consultants • Use of Nongovernmental organizations (NGOs): ------For assignments that emphasize participation and considerable local knowledge, the shortlist may comprise entirely NGOs-- -----

5. Procurement under CDD Projects DO’ s and Don’ts • Design simple implementation and procurement arrangements carried out by communities except in cases of highly technical works which may be beyond the capacity of communities to implement • Conduct thorough “needs assessment” of communities as this is critical. If there was a pilot or an earlier project, consider past experience and lessons learnt in the design • Spend more time in project preparation and in identifying suitable procurement arrangements after checking realities on ground. Tailor one’s approach to the needs • Community needs may vary as also their capacity--Adopt broad and flexible arrangements

6. Procurement under CDD ProjectsDO’ s and Don’ts • Conduct early capacity and risk assessments of key players and identify their interest, roles and responsibilities • SIF • Communities • NGOs • Private Contractors, Suppliers and Consultants • Governmental Bodies • Regions/Municipalities • Modify/Adapt appropriately OPCPR standard capacity assessment format. Ignore sections not relevant and prepare an action plans to build community capacity in each relevant activity

7. Procurement under CDD ProjectsDO’ s and Don’ts • Capacity building action plans should not only focus on procurement and contract management aspects but should also cover other inseparable and closely related matters e.g. sub-project preparation, organization and coordination, project committees, banking, project budget and accounts, management of funds, accounting and book/record keeping, project planning, management of work program and implementation, technical, stores management, care of works and maintenance, monitoring and reporting, etc. • Project team to involve more Bank country office staff with local knowledge and language skills to interact with communities

8. Procurement under CDD Projects DO’ s and Don’ts • Accord first preference to implementation arrangements where Community rather than SIF or NGO executes works or conducts procurement. If community capacity is weak in certain areas suggest measures (hands-on training or external specialized support) to fill gaps • Do not be too prescriptive in procurement arrangements and leave scope for flexibility e.g. no need to identify value of goods, civil works, etc. as the sub-projects are demand driven. But instead indicate total amount under “Community Sub-Projects”. No need to specify aggregate amounts for Shopping, Sole Sourcing, etc. • Conduct project launch procurement workshop involving all key players and reach out to communities as per their training needs. Design and deliver simple training programs for all concerned

9. Procurement under CDD Projects DO’ s and Don’ts • Describe procurement arrangements in the PAD in brief under para 3.15 of the Guidelines. Expand the procedure and process in detail step by step in the Operations/Implementation Manual (OM) • Ensure consistency between PAD and OM--Past Audits have found inconsistencies • Initiate early action in preparation of OM. Do not repeat or reword the language of the Guidelines in describing procedures as it will not be adequate for purposes of implementation by communities that need to understand the exact process i.e. how it will work in practice. Give examples where appropriate and use simple language that would be easily understood

10. Procurement under CDD ProjectsDO’ s and Don’ts • Procurement procedures such as ICB, QCBS, QBS, Fixed Budget, LCS, etc. are rarely applicable for CDD projects except in some cases when executed by SIF. Use of such procedures by communities given generally very small value contracts is neither practical nor appropriate • Most commonly used procurement methods are: i) For Goods-Shopping, NCB (in some cases); ii) For Works-three quotes and in some cases NCB; and iii) For Consultants--generally selection of individuals. In some other cases hiring of service delivery contractors, retainer contracts, etc. may be appropriate, and CQ in some cases for hiring firms below $100,000 • Do not combine contracts for bigger packages as this is generally unproductive and costly for CDD projects

11. Procurement under CDD Projects DO’ s and Don’ts • It is generally not possible to prepare a procurement plan in advance as sub-projects are yet to be appraised. Guidance on key procurement steps and their gestation times to be identified in OM is adequate • Design a strong Information, Education and Communication (IEC) system to disseminate procurement opportunities to providers of Goods, Works and Services and awareness of procedures and expectations to communities • Permit communities to negotiate and use single sourcing where appropriate to control costs especially if national regulations so require given limited local construction/supply sources availability • Monitor timely contributions of Communities as promised

12. Procurement under CDD Projects DO’ s and Don’ts • SIF to monitor compliance of local regulations by communities • Promote development and updating of Unit Price data base for communities located region-wise for purposes of preparing estimates and establishing reasonableness of contract price • Maintain Unit Price data base in harder currency denomination to address inflation. Alternatively, provide for price adjustment mechanism in contracts if high local inflation • Promote development and updating of data base on Contractors, Suppliers and Consultants to ensure award of contracts to reliable firms/individuals. Communities may look to other neighboring database in case their own local capacity is thin

13. Procurement under CDD Projects DO’ s and Don’ts • Avoid delays in completion which generally results in community failing to meet its commitment and/or project cost increase • Avoid delays in release of funds to community which is one of the main causes of delay in contract execution • Agree on procedures for use of funds when there are cost savings. Permit additional works by extension of contracts/services as appropriate • Provide suitable arrangements for technical supervision of works • Strengthen Bank procurement supervision. Generally very little prior reviews (first few contracts). Systematic post review should be carried out to ensure compliance and provide guidance during implementation

14. Procurement under CDD Projects - DO’ s and Don’tsProcurement Audits • Given the large number of sub-projects scattered throughout the project area, supervision of fiduciary functions and technical standards poses the biggest challenge • Procurement audits are suggested at three levels: • a social audit seeking stakeholder views of performance • an independent audit capacity at SIF to conduct spot checks • a Bank-led audit to ensure that fiduciary responsibilities were met

15. Procurement under CDD Projects DO’ s and Don’tsProcurement Training • Design Structured Training Programs for • Bank Staff • SIF, Communities, NGOs, Regional Staff, Local Auditors, Bankers, etc. • Contractors, Suppliers and Consultants

16. Procurement under CDD ProjectsDO’ s and Don’ts • Contract and Bidding Documents • Develop simple sample forms providing basic minimum contractual conditions for use throughout the project and approve them before use • Ensure provisions under the PAD/OM/LA are followed • Do not permit political or other non-economic pressures at SIF or Community levels • Misuse or Misappropriation of funds if detected should be reported and appropriate action taken to cancel the sub-project