7 Plenary - ADB's Role in Procurement by DBinns and JTaylor 12Mar2015

8/9/2019 7 Plenary - ADB's Role in Procurement by DBinns and JTaylor 12Mar2015

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6th ADB Business Opportunities Fair

26 March 2015

ADB’s Role in Procurement: Review,

Oversight and Integrity

By: David Binns, OAI

Jeff Taylor, OSFMD


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ADB’s Procurement Framework

ADB

Board Policy

CommercialPractices

Other

MDBs

ADBExperience

ADBCharter


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The Charter

• ADB-financing shall be used onlyfor procurement in member

countries of goods and servicesproduced in member countries.

• For which the loan was granted,

with due attention to economy andefficiency


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The Procurement Guidelines

• Board approved January 2006

• Harmonized with those of the

World Bank• Last updated 2013 (Eligibility)

• Material deviations from

Guidelines require Board approval


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Harmonization with

Other MDBs• Procurement and Consulting

Guidelines harmonized with other

MDBs

• Regular coordination meetings,e.g. Heads of Procurement

• Common standard biddingsdocuments


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Identification and Preparation

• The EA’s procurement capacity is

assessed

• The EA prepares a procurementplan

• ADB reviews the plan at loan

negotiations• The plan is published in the

project administration manual


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Implementation

• First use of all NCB and ICB biddingdocuments prior reviewed by ADB

• Then after prior review of those

above the procurement planthreshold

• Bid evaluations reviewed for ICB and

NCB, prior or post respectively• Bid evaluations for all contracts

above $10 million approved by the

Procurement Committee


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Points to Note for Firms

• Borrowers have sole legalresponsibility for procurement

• It is the entity(ies) bidding/proposing

that is assessed, not associated firms• Experience of parties not bidding is not

considered

• ADB and its borrowers are notpermitted by the procurement policies

to waive pass/fail criteria


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Contracts and

Dispute Resolution


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Standard Bidding Documents

• Borrower must use theappropriate StandardBidding Document (SBD)

issued by ADB, withminimum changes.

• The SBD for Works

makes use of the relevantGeneral Conditions ofContract prepared by

FIDIC.

ADB’s Role:

Ensure that draftbidding documents are

consistent with:

SBDs ADB’s

ProcurementGuidelines

Financing Agreement

Project AdministrationInstructions.


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Conflict Resolution

• Prior to Contract Award

• Post Contract Award


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Conflict Resolution:

Post Contract Award• Involves disputes arising out of or inconnection with the Contract

• ADB is not a Party to the

Contract.

• Privity of Contract Principle: acontract cannot confer rights orimpose obligations arising under it

on any person or agent except theparties to it.

• Thus: ADB has no right or obligationto sue to enforce the Contract.

It is not

ADB’s Role:

• To resolve thedispute

• To advise aParty to acceptany decision

• To determinewhether anarbitrationshould ensue


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Dispute Resolution

Mechanism under FIDIC

Project Engineer

Dispute Adjudication Board

Amicable Settlement

Arbitration


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Office of Anticorruption

and Integrity (OAI)Initial contact for

allegations of integrity

violations

Undertake ProjectProcurement-Related

Reviews (PPRRs)

Promote awareness of Anticorruption Policy

Integrity Due Diligence

Investigate allegationsof fraud and corruption


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ADB’s Anticorruption Policy

POLICY


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The Project Cycle

1

Identification

Evaluation 6 2

Preparation

4

Loan Negotiation &Board Approval

5Implementation

3 Appraisal


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Integrity Violations

Corruption Fraud

Coercion Collusion

MDB harmonized definitions

Obstruct ive

Pract ice

Conf l ic t

of InterestMisconduct

Abuse


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Remedial Actions Against

Proven Integrity Violations

Caution

Reprimand

Debarment

Baseline period

three (3) years

Aggravatingcircumstances

Mitigating


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Impact of Sanctions

Ineligible toparticipate in

future ADB-relatedactivities

Likely not tohave an

impact onongoingactivities

Contractvariationssubject to

OAIendorsement

No automaticreinstatement

Cross debarment where applicable


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Effect of Substandard WorkRural Development Project

Sl id ing /co l lapse of retain ing wall

DISBURSEMENTS SUSPENDED

IMMEDIATELY

FINANCING CANCELLED


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Effect of Substandard Work

Non-operational water pumps due to

non-maintenance and mechanical problems

Worms found in the muddy well

PROJECT CANCELLED

Community-Based Infrastructure Services

Sector Project


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Report Issues

Conduct DueDiligence (for

those whonominate

personnel)

Join/Give

TrainingProvide/ Askfor Advisory

Adhere to thehighestethical

standards

How can you help?


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Working Together As

Development Partners

Contractors,suppliers,consultants

projectsuccess

7 Plenary - ADB's Role in Procurement by DBinns and JTaylor 12Mar2015

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