BUSINESS OPPORTUNITIES WITH THE AFRICAN DEVELOPMENT BANK

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• BUSINESS OPPORTUNITIES WITH THE AFRICAN
  DEVELOPMENT BANK
• Ahmed Benbarka
• Head of Procurement and Financial Management
  Unit
• Canada (Calgary, Vancouver, Toronto, Montreal)
• June (11, 13, 15 and 19 June 2007)

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ADB Business Opportunities - Summary

• The opportunities
• Canadian Share of Procurement
• Procurement Environment and Harmonization
• Basic Principles of Procurement
• Good Procurement Practices
• Good-Works and Consultancy
• Division of Labour
• Winning Strategy and Success
• Sources of Information

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The Opportunities

• The Lending Operations Will Translate Into
  Opportunities to Source
• Goods
• Works
• Consultancy Services
• Technical Assistance and Training
• From National International Markets
• Using Bank Procurement Rules

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ADB Procurement Statistics on Winning Canadian
Companies

• Canadian Companies 2004
• Amounts in UA
• Contracts Won
• Number 27
• Goods 1 (0.61 m)
• Civil Works 0
• Consultancy Services 26 (6.7 m)
• Total Value 9.4 m
• of Total Number 2,61
• of Total Value 1,94
• 1 UA 1.5 CAN

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ADB Procurement Statistics On Winning Canadian
Companies

• Canadian Companies 2005
• Amounts in UA
• Contracts Won
• Number 14
• Goods 0
• Civil Works 0
• Consultancy Services 14 (1.6 m)
• Total Value 1.59 m
• of Total Number 1,14
• of Total Value 0,33

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ADB Procurement Statistics On Winning Canadian
Companies

• Canadian Companies 2006
• Amounts in UA
• Contracts Won
• Number 20
• Goods 1 (0.475 m)
• Civil Works 0
• Consultancy Services 19 (10.14 m)
• Total Value 10.61 m
• of Total Number 1,78
• of Total Value 2,30

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Procurement Environment

• In the Bank (Complete Overhaul of procurement
  Process)
• Revision of Procurement Rules
• Goods and Works
• Consultancy Services
• Harmonized with other MDBs
• Posted on website for Comments

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Procurement Environment

• In the Bank
• Revision of Internal Procedures
• New and efficient Review Process
• Monitoring and Guidance
• Procurement (Accreditation)
• Automated Review Process
• More Use of Field Offices
• Results Quality at Entry and Speedy Delivery

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Procurement Environment

• In the Borrowing Countries
• Reform of Country Systems
• Training of Implementers
• Country Procurement Assessment
• Project Financial Management
• (New)
• Results Quality at Entry and Speedy Delivery

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Harmonization - Procurement Environment

• Major Aspects of Rules Harmonized in concepts
• Master Standard Bidding Documents (Goods and
  Works)
• Country Procurement Assessments Reports
• Reforms of Public expenditure and Procurement
• Other documents under preparation

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Harmonization - Procurement Environment

• Annual Meeting Heads of Procurement
• Fighting Fraud and Corruption
• Sharing Information and Training

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Good Procurement Practice

• Pursuit of Economy and Efficiency - ICB
• Ensuring Equal Opportunity for all Eligible
  Bidders - Advertisements / Eligibility
• Encouragement of the Development and
  Participation of Regional Firms
  Domestic/Regional PreferenceGoods/Works
  National/Regional Shortlists for Services
• Transparency in Procurement Process - Role of the
  Bank

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Good Procurement Practice Goods and Works (1)

• International Competitive Bidding
• Use of International Competitive Bidding is the
  Rule
• Other Limited Modes of Procurement Must be
  Justified
• One Envelope System
• Two Stage Bidding Permitted when suitable

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Good Procurement Practice Goods and Works (2)

• International Competitive Bidding
• Advertisements Publication of GPN in UNDB
  Publication of SPN in UNDB
• Use of Standard Bidding Documents Mandatory
• Bidding Documents must contain all conditions
  placed on procurement
• Minimum Period of 60 days allowed for Preparation
  of Bids
• Possibility for Bidders to seek Clarifications on
  aspects of bidding documents

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Good Procurement Practice Goods and Works (3)

• International Competitive Bidding
• Public Opening of Bids
• Evaluation Criteria are Specified in Bidding
  Documents and evaluation is undertaken following
  these known criteria
• Contract is awarded to Bidder with the "LOWEST
  EVALUATED COST BID
• Other Evaluation Methods

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Good Procurement Practice Goods and Works (4)

• International Competitive Bidding
• International Specification or their equivalent
• International Contract conditions
• Options Adjudication or Arbitration

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Good Procurement Practice Goods and Works (5)

• Domestic Preference Margin
• Manufactured Goods and Related Services 15
• Construction Works 10

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Good Procurement Practice Goods and Works (6)

• Regional Preference Margin
• Manufactured Goods and Related Services 10
• Construction Works 7.5

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Good Procurement PracticeConsultancy Services

• Types of Services
• Pre-Investment Studies (Economic, Financial,
  Technical, Institutional)
• Detailed Engineering Designs and Preparation of
  Tender Documents
• Supervision, Monitoring and Control of Project
  Implementation
• Technical Assistance and other Advisory Services

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• Good Procurement Practice Consultancy Services
  Short-listing

Composition Qualified Firms or Consortia

• Requirements
• 5 to 7 firms
• Wide geographic distribution (not more than
  two firms from one country
• At least one firm from a regional member
  country and
• Consortium/joint venture of firms from member
  countries encouraged

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• Good Procurement Practice Consultancy Services
  Short-listing

Source of Shortlists

• Consultants who have Expressed Interest
• Borrowers Experience
• Banks Register of Consultants (Dacon)
• Through Pre-qualification (Advertisement)

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• Good Procurement Practice Consultancy Services
  Short-listing

Source of Shortlists
Advertisement Pre-Qualification of
Consultants Complex and Costly Services (more
than UA 1,000,000) Procurement Announcement In
the Untied Nations Development Business Journal
(contracts more than UA 350,000)
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Good Procurement Practice 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
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Good Procurement Practice Evaluation of
Consultants Proposals
Evaluation of Proposals

• Two Envelope System
• Technical Evaluation First
• Financial Evaluation Carried on Proposals Meeting
  the Minimum Requirements
• Financial Offer of Successful Firms will be
  Opened
• No Public Opening of Proposals

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Good Procurement Practice Evaluation of
Consultants Proposals
Evaluation of Proposals

• Technical Quality Only
• Only The Financial Offer of the First Ranked will
  be Opened
• Negotiations Initiated for possible contract
  award
• If not successful second invited for negotiations

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Good Procurement Practice Evaluation of
Consultants Proposals
Evaluation of Proposals

• Selection Based On Technical Quality with Price
  Consideration
• weights Technical70 Financial 30
• Financial Offer of all Qualified Offers will be
  Opened
• Firm with Highest Combined Score be Invited for
  Negotiations

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Good Procurement Practice Evaluation of
Consultants Proposals
Evaluation of Proposals

• Selection Based on Establishing the Comparability
  between Technical Proposals and Selection of the
  Lowest Offer
• Financial Offer of All Qualified Firms Will be
  Opened within 10 of the Highest
• Lowest Evaluated Cost Offer will be Invited for
  Negotiations

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• Role of the Borrower
• Advertises and Issues Bidding Documents
• Evaluates and Selects a winner
• Awards, Signs and Administers Contract
• Supervises Contract Execution

Bank required to approve or commenton each stage
of the selection process
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• Role of the Borrower
• Settlement of Payments
• Responding to Complaints
• Consideration of Claims
• Reporting to the Bank

Bank required to approve or commenton each stage
of the selection process
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Role of the Bank

• Preparation of Standard Bidding Documents for
  Mandatory Use by Borrowers
• Provision of Free Access to UNDB
• Verification of Each Stage of the Process to
  Ensure Transparency

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Role of the Bank

• Provision of No objection to Borrowers'
  Bidding Documents, Bid Evaluation Report and
  Contract Award Recommendation
• The Bank is not a party to the Contract
• Imposition of Sanctions in case of Fraud and
  Corruption

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Role of the Bank

• Make Payments Upon Borrowers Request
• Review Serious Receivable Complaints
• Applying sanctions on fraud and corruption

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Positioning Strategy

• Project Cycle Information Flow
• Identification Preparation (When Project
  included in Pipeline)
• Appraisal (Technical, Environmental, Economic)
• Approval (Press Release)
• Implementation (General and Specific Procurement
  Notices)

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Winning Strategy

• Strategic Positioning (Monitor announcements and
  pipeline)
• Targeted Selection Country, Sector, Project
• Reliable Local Partner
• Visit Client and Project Area
• Team up with Canadian firms

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Winning Strategy

• Use Canadian Representation in Project Country
• Your Bank must Know Local financial Tools
• Price Competitively
• Get Bidding Document and Bid on Time
• Prepare Clear Bid with no Major Deviations

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Contract Conditins

• How ADB sees Contracts
• Integral Part of Bidding Process
• Equitable Among Bidders
• Fair to Clients and Contractors (Win-Win)
• Includes Provisions on Fraud Corruption
• Use of International Standards (e.g. FIDIC)

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• On Winning Contracts

• Demonstrate Strengths (technical, financial,
  personnel) in specific fields
• Establish proven track record
• Senior management must be ready to investment
  time and energy required
• Exhibit capacity to prepare written proposals in
  accordance with TOR and Specifications

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• On Winning Contracts

• Develop well thought-out Business Plan for Africa
• Establish linkages with firms/agencies in Africa
• Defend your bid
• Avoid underbidding
• Avoid fraud and corruption

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Should Bidding Problems Arise?

• Seek clarification from Contracting Agency
• May write to the ADB Director of Operations
• May write to the ADB Executive Director
• Observe period of confidentiality

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Should Bidding Problems Arise?

• Make use of Redress Mechanisms Procurement Review
  Committee (PRC)
• Neutral and Independent
• Reviews receivable complaints
• makes final decision on behalf of the Bank

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During Contract Execution?

• Control unfounded contract variations
• Variations above certain thresholds will not be
  accepted by the Bank (re-tender)
• The Bank does not finance penalties, claims

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Sources of Information on Bank Group-financed
Projects

• Press Releases
• 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

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Online Registration of Consultants from AfDB
Dacon Web Site

• Type http//www.afdb.org in the address bar
• Click on OPPORTUNITIES link
• Click on CONSULTANCY SERVICES
• Click on DACON Data on consultant
• Read carefully the Registration User Guide
• Follow the Registration User Guide to complete
  the registration forms