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Issyk-Kul Wastewater Management Project (RRP KGZ 50176) Supplementary Appendix

Project Procurement Risk Assessment Report

Project No.: 50176-002 July 2018

KGZ: Issyk-Kul Wastewater Management Project

Prepared by Department of Drinking Water Supply and Sewerage Development (DDWSSD) under the State Agency for Architecture, Construction and Public Utilities under the Government of the Kyrgyz Republic (Gosstroy) for the Asian Development Bank.

http://www.adb.org/Documents/RRPs/?id=50176-002-3

http://www.adb.org/Documents/RRPs/?id=50176-002-3

This draft Project Procurement Risk Assessment Report is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the “terms of use” section of this website.

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Table of Contents EXECUTIVE SUMMARY ............................................................................................................................. 1

I. INTRODUCTION .................................................................................................................................. 1

II. OVERVIEW OF PROCUREMENT ENVIRONMENT ........................................................................... 2

III. PROJECT PROCUREMENT RISK ASSESSMENT ............................................................................ 2

A. Overview ......................................................................................................................................... 2

(i) Organization and Staff Capacity ............................................................................................ 2

(ii) Information Management ...................................................................................................... 3

(iii) Procurement Practices ........................................................................................................... 3

(iv) Performance of e-procurement system .................................................................................. 4

(v) Effectiveness .......................................................................................................................... 4

(vi) Accountability Measures ........................................................................................................ 4

B. Strengths ......................................................................................................................................... 4

C. Weakness ....................................................................................................................................... 5

D. Procurement Risk Assessment and Management Plan ................................................................. 5

IV. PROJECT SPECIFIC PROCUREMENT THRESHOLDS ................................................................... 7

V. PROCUREMENT PLANS .................................................................................................................... 8

VI. CONCLUSION ................................................................................................................................... 8

APPENDIX .................................................................................................................................................... 9

1. Project Procurement Risk Assessment questionnaire ....................................................................... 9

2. Procurement Plan ............................................................................................................................. 35

3. Master Bidding Documents .............................................................................................................. 41

EXECUTIVE SUMMARY

1. This Procurement Assessment Report has been prepared for the proposed Issyk-Kul Wastewater Management Project. The purpose of the assessment is to determine the overall procurement risk for the proposed project and establish appropriate measures to mitigate these risks, prepare procurement plan for the proposed project with appropriate procurement method as well as type of ADB review (prior or post). The overall assessment of project procurement risk was assessed as high.

2. The main weakness identified are: (i) lack of experience of EA and IA’s in public procurement especially on IFI’s projects; (ii) absence of dedicated procurement unit including English proficient staff in the EA and IA; and (iii) record keeping within the EA and IA’s are not centralized and supported by an IT system. In the country context of public procurement: (i) the absence of sanctions for procuring entities’ staff/officers involved in procurement fraudulence; (ii) the absence of English documents and information that hinders foreign bidders participation in the bidding process; (iii) the gaps in the e-portal for newly introduced form of tender such as framework agreement and other modules for consultancy service and two-stage bidding; and (iv) the rejection of bids exceeding the cost estimates stipulated by the public procurement law are the observed weaknesses.

3. The proposed mitigation measures are to established one procurement unit in the EA/PMO, staffing this unit with an English proficient personnel or a translator, equipping this unit with adequate computers, furnishings and IT support system; inclusion of training the EA/IA’s staff for the ADB procurement regulations and practices in the Procurement Specialists’ TOR and to encourage the staff to attend MOF offered training on public procurement at the least the basic 5-day course. On the general procurement environment, the e-portal to be upgrade and the PPL to fully be aligned with the international best practices.

I. INTRODUCTION

4. The assessment was conducted in accordance with the Guide on Assessing Procurement Risks and Determining Project Classification (August 2015), including: (i) Organizational and Staff Capacity; (ii) Information Management; (iii) Procurement Practices; (iv) Performance of e-procurement system, (v) Effectiveness, and (vi) Accountability measures.

5. To facilitate the assessment, the Procurement Risk Assessment (PRA) questionnaire was issued to the proposed executing agency, the Department on Development of Water Supply and Sanitation (DWWSD) under the State Agency on Architecture, Construction and Public Utilities at the Government of the Kyrgyz Republic (Gosstroy), and the implementing agency, the Plenipotentiary Representative of the Government for Issyk-kul, and the local states administrations and the Vodokanals in each of the cities. The completed questionnaires are shown in Appendix 1.

6. Other activities included in the project procurement risk assessment are reviewing of the existing Public Procurement Law (PPL), previous and on-going ADB’s project procurement experience, interviews with staff, study of country procurement assessments and discussions with various stakeholders. The project procurement risk assessment report was prepared in accordance with the Guide on Assessing Procurement Risks and Determining Project Classification, August 2015.

7. The proposed project will have sub-projects that fall into the two categories: (i) Rehabilitation of

wastewater treatment plants and effluent disposal systems; and (ii) sewerage infrastructure comprising

pumping stations and sewer pipelines. The project is expected to have the following outcome: improved

and expanded access to reliable, sustainable, and affordable wastewater services in Balykchy and Karakol.

The Project will connect approximately 850 households in Balykchy and 1,200 households in Karakol to the

centralized wastewater system, increasing the service coverage from about 35% to 45% in Balykchy, and

45% to 60% in Karakol. The impact of this project is improved living standards, health, and economy in the

Issyk-Kul Region

8. The proposed project envisioned to procure civil work packages for waste water treatment facilities and sewer networks of the two cities as well as goods that may include waste water facilities’ maintenance equipment, vehicles, laboratory equipment, etc. It will also recruit and project related consultancy services

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such as Design & Supervision Consultant, Institutional Development and Capacity Building, Audit of Project Financial Statements and various individual consultants that will fill-up the positions required in Project Management Office, Project Implementation Office, Project Management Consultants and Chief Technical Advisor.

II. OVERVIEW OF GENERAL PROCUREMENT ENVIRONMENT

9. The public procurement in Kyrgyz Republic is now being governed by the new Public Procurement Law (April 3, 2015 No. 72). This law is a revision of the 2004 PPL. The Kyrgyz Republic initiated their procurement reform in 1994 and has passed the first PPL in 1997 which was based on the 1994 UNICITRAL standards. In April 2015, with the support from donors such as ADB and WB, the government of the Kyrgyz Republic revised and enacted the PPL.

10. The new PPL introduced among other things framework agreements and reverse auction; development of standard bidding documents; establishment of special committee tasked to review procurement-related disputes; establishment of a clear criteria for blacklisting of bidders and establishment of a database of the blacklisted bidders; introduction of anti-bribery clause; publication in the e-portal of planned direct contracting; prohibiting of contract slicing and prohibition of conducting procurement if not included in the approved and published procurement plan.

11. The PPL covers procurement activities in the national and local level. Specific rules and regulations in for the utilities sector and public institutions including state-owned companies are included. The PPL, however, procurement related to state security, national defense, state secrets, food security and natural disasters, are under a special procedure defined by the Kyrgyz Republic.

12. The PPL had established the Division on Public Procurement Methodology within the MOF as the central agency in-charge of overseeing government procurement which was later on reorganized into Public Procurement Department (PPD). Amongst the PPD’s responsibilities are to develop public procurement policies, laws, regulations and guidelines; establish and update of the unified registers of procuring agencies, contracts, and the database of the non-reliable bidders; conduct capacity building and professionalization; and monitor and co-ordinate all procurement activities and review of complaints. An Electronic Government Procurement system (e-Portal) was developed by the PPD.

13. Amendment to the PPL has been initiated, and part of initiative is to link the budget and treasury systems to the contract management/payment modules in the e-Portal. It will improve the budgeting and procurement planning process of the government procurement entities once realized.

14. Competitive Bidding remains to be the procurement method employed in most of the government

procurement, although other methods of procurement can be used as stipulated in the PPL.

III. PROJECT PROCUREMENT RISK ASSESSMENT

A. Overview

1. Organization and Staff Capacity

15. The proposed EA, DWSSD, is a department of the Gosstroy, and is the designated core agency for the WSS sector in the Kyrgyz Republic. Created through a major restructuring program in 2011, the DWSSD has grown in capacity and autonomy, as demonstrated through annual increases in allocations from the central budget. Currently, there are 33 public servants who have higher educational background such as engineers, lawyers, economist, and teachers. Another 7 staff serve as supporting staff.

16. The Plenipotentiary Representative of the Government for Issyk-kul is an extended office for central government in the Issyk-kul region, responsible for coordination with the local governments and other agencies on behalf of the central government. Vodokanals are municipal enterprises responsible for WSS

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services in the nation’s cities and towns.1 They are independent municipal enterprises, relying almost exclusively on the collection of tariffs from households, and institutional and commercial enterprises for which they supply potable water and collect wastewater. Being self-sustained and self-financing organizations, they can enter into contracts for the procurement of services, and have the right to implement limited construction works related to operation and maintenance of the infrastructure. However, major projects such as new water supply and wastewater infrastructure are carried out through city administrations (through their Department on Municipality Property) as well as other responsible state/governmental Authorities.

PROCUREMENT DEPARTMENT/UNIT

17. The DWSSD, the IA and the two Vodokanals do not have a dedicated Procurement Unit or Department. No personnel, equipment and office allocated for procurement activities. Procurement is being conducted by department in the organizations that has the need to procure. Procurement by DWSSD is limited to operational purchases such as purchase of stationeries, fuel and lubricants, IT services, etc. Both IA and Vodokanals had not indicated any type of procurement that they have undertaken.

18. The organizations’ staff are not English proficient and do not have the qualifications to handle procurement as they normally hire a Procurement Specialist that does the procurement for them. Although the new PPL covers capacity building and professionalization through training courses, none of the respondents had undertaken training.

PROJECT MANAGEMENT OFFICE

19. Currently there are no Project Management Office (PMO) in DWSSD and the Vodokanals. The PMO are being established on a project basis and the staffs are recruited on contractual basis. The PMO will be equipped with facilities such as PCs, internet connection, photocopy facilities, printers and furnished once established and office allocated.

2. Information Management

20. As mandated by the PPL all procurement documentations should be posted in the centralized public procurement web portal. All government procurement documentation referencing systems are set up on this procurement web portal.

21. The DWSSD had an in-place referencing system to their procurement files and keep their records following a retention policy however they do not have a record keeping infrastructure such as office space, personnel and IT support system. The Vodokanals on the other hand had no referencing system in place although they keep a registry book for contracts. As procurements are done by department, procurement records are also kept and stored by department and no centralized record keeping is practiced.

3. Procurement Practices

22. None of the respondent organizations had experience in procurement of works and goods under foreign assisted projects. They have experience on public procurement under the government budget in accordance with the PPL. Mostly they have procured works and goods for their operational requirements.None of the respondent organizations had experience in recruitment of consultants either under foreign assistance or government funding.

1 The Law on Local Self-Government and Local State Administration No.99, dated 29th May 2008, states that safe

drinking water supply to the population and maintenance of sewerage systems and treatment facilities are local

governance issues.

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4. Performance of e-procurement system

23. The Kyrgyz Republic in one of its key policy initiative and governance reform had embarked in implementing an e-procurement system and had requested development partners such as the ADB for support. In March 2012, ADB proposed a Technical Assistance support to (i) conceptualize an e-procurement reform strategy, (ii) initiate the stakeholder consultation process, and (iii) provide technical advice on improving the e-procurement portal developed by the government and in September 2012 the government approved the Public Procurement Development Strategy for 2012–2014. This Procurement Development Strategy 2012-2014 reflected the government’s commitment and ownership of the public procurement reform. In response to the government’s request, on 11 December 2012 ADB approved $1,000,000 financing for the Kyrgyz Republic: Implementing the e-Procurement System Capacity Development Technical Assistance (TA).

24. The TA became effective on 11 January 2013. Consequently, in June 2013 the development of the e-GP system commenced. This was then followed by the installation of server infrastructure in December 2013 and afterwards the technical training of the consultants. In line with these activities, MOF training centers were also improved and put into operating in March 2014.

25. The system piloted the first tender by the MOF on June 2014 and was further rolled-out to 125 agencies for utilization. The website www.zakupki.gov.kg has become the official public procurement web portal (e-GP) of the Kyrgyz Republic starting in May 2015.

26. The procurement law now mandates state and municipal organizations to publish on a centralized web portal all tender announcements and documents, information about tender participants, as well as the reasons for selecting or rejecting a particular bidder, thus providing a single point access to the information on public procurements.

27. However, e-portal is not being fully utilized by projects funded by Development Partner’s. According to the Procurement Specialist of the Issyk-Kul Sustainable Development Project which was interviewed on the initial procurement assessment, the project only used the portal by posting the Invitation for Bids.

5. Effectiveness

28. The respondent organizations are monitoring all their contractual performance and being reported to the head of the procuring entity and also they kept track of all their contractual payment obligations as mandated by the new PPL.

29. The new PPL had a complaints resolution mechanism and established the Independent Complaints Commission (ICC) which handles and reviews any complains pertaining to procurement. All complaints must be submitted through the e-portal with the ICC and not on the procuring entity. The complaints can further be brought up to court case if the ICC so recommended.

6. Accountability Measures

30. The new PPL does not have a clause/s on accountability measures for procurement for committee members to follow. Although a complaint mechanism and a committee on handling complaints and protests are stipulated in the PPL, no sanctions are indicated on person/s involved in the complaints/protests. The complainant has to bring it to the court if the ICC recommended it after reviewing the complaints.

B. Strengths

31. The new PPL is now considered to be in accordance with the international standards and best practices and is still improving. It has a comprehensive procurement regulations, procedures and guidance documents covering public procurement. Competitive bidding is the default procurement method and had

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other procurement methodologies and its conditions outlined in the PPL. Standard Bidding Documents for works, goods and consulting services are available for utilization of all government procurement entities and accessible through the e-portal.

32. Trainings are offered for all procurement professionals, private or government staff and have a mandatory 5-day training course aside from other courses being offered such as a 9-day course and on-line courses. All the training courses give certificate and accreditation to all attendees passing an examination conducted after the trainings. This practice advances, professionalizes and sustains the abilities of the procurement staff or procurement practitioner in government entities.

33. The introduction of the e-Portal and its mandatory use has strengthened the transparency of public procurement. It also made procurement process effective and sufficient.

34. The governance and oversight of the public procurement is also improved with the establishment of PPD, ICC and Chamber of accounts which have the responsibility of ensuring the compliance to PPL by the procuring entities.

C. Weaknesses

35. The observed weaknesses fully fall on the identified EA and IAs for this project having no experience on foreign-assisted or DP’s funded projects. Both the EA and IA’s have no procurement staff within the agency and rely only on Procurement Specialist being hired on a need and project and basis. They have a general knowledge of the Public Procurement Law and had experience only on operational procurements of works and goods; they have none on consultant services whether funded by DPs or by the government budget.

36. English language proficiency is another weakness noted amongst the procurement practitioner. The need for multi-lingual proficiency seems not to be high on the priority list of the staff interviewed, as government procurement is mainly conducted in the Russian language and on foreign-funded projects they are normally supported by international consultants.

37. There are also weaknesses observed in PPL that may affect the project if this law will be considered in the project procurement. One of this is the rejection of bid if the bid exceeds the estimated cost or allocated budget for the bid package being procured.

38. Moreover the PPL although having the complaint mechanism through the e-portal, the bidders cannot submit their complaints directly to the procuring entity. The PPL also lacked a clause on sanctions on person/s involved in the complaints/protests. Instead the ICC has to recommend to the complainant to bring the case to the court.

39. Another weakness observed is the limited information and documentation in English which hinders foreign contractors to participate in the bidding process.

40. The e-portal also observed to still have some gaps as it lacks modules consulting services, two-stage bids and framework agreement and lacking in feedback mechanism for the users. The server capacity is also not sufficient to make the system work seamlessly.

D. Procurement Risk Assessment and Management Plan

41. Procurement for proposed project is complex as it involves procurement of facilities/plants through a Design and Build method that the EA/IA are not familiar with.

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42. The overall risk rating concluded from the results of the general procurement environment risk assessment and the agencies’ procurement risk assessment is High. The summary is presented in Table 1 and 2. The assessments questionnaires are in Appendix 1.

Table 1: Summary Ratings of EA/IAs Criterian Risk

i. Organization and Staff Capacity High ii. Information Management High iii. Procurement Practices High iv. Performance of e-procurement system Moderate v. Effectiveness High vi. Accountability Measures Moderate Overall Risk Rating High

43. The Project procurement Risk Assessment and Management Plan (P-RAMP) is showed in the table 2 below based on the weaknesses identified during the assessment

Table 2: Project Procurement Risk Assessment and Management Plan (P-RAMP)

Risk Description Risk

Assessment

Mitigation Measures or Risk Management

Plan

General Procurement Environment

- PPL’s outright rejection of bid if it is higher that the allocated budget (cost estimates)

Moderate - Revise or amend this ruling for the project to consider the use of the e-portal in NCB and shopping packages

- No English procurement documents and information

Moderate - To have procurement documents and information in English

- Lacking of sanction for procuring entities’ staff/personnel involved in the complaints

Moderate - Amend PPL to include appropriate sanctions for personnel/staff involved in the complaints if proven guilty

- Lacking modules consulting services, two-stage bids and framework agreement and lacking in feedback mechanism for the users

Moderate - Upgrading and updating of the e-portal to cover for the gaps identified

Organization and Staff Capacity

- No full time staff of EA & IA’s involved in procurement

- Members of Procurement Committee are working for project on a part-time basis

High - Establishment of at least an administrative unit focused on procurement

- Members of procurement committees must arrange enough time for project procurement activities to ensure the procurement progress.

- No English proficient staff Moderate - Recruit a translator or have English language training for staff and personnel

- No PMU for this project currently in place.

High - A PMU for specific project shall be established before starting of the project and equipped with experienced procurement staff.

- EA and IA’s staff have a general knowledge of PPL and experience only on procuring goods and works

- No foreign-assisted project experience

- Encourage EA and IA’s staff to take-up the procurement training course offered by the MOF Training center at the least the 5-day course

- Recruitment of Procurement Specialist for the project and inclusion of training the

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Risk Description Risk

Assessment

Mitigation Measures or Risk Management

Plan

EA/IAs’ staff on ADB Procurement Guidelines in his/her tasks.

Information Management

- Record keeping function does not supported by IT

Moderate - IT shall be used for record keeping - Procurement management information

system may be developed and used. - Appropriate staffing must be arranged for

this area.

Procurement Practices

- Non-experience on IFI procurement practices

- Working on part-time basis of members of procurement committees delays progress of project procurement

High - Appointment EA and IA’s staff to be involved in the PMU instead of recruiting consultants to fill-up the positions in the PMU

- Members of procurement to arrange enough time for project procurement activities to ensure progress

Performance of e-procurement system

- E-procurement was not fully applied on project

Moderate - Efforts must be made to adopt e-procurement for project related procurement

Accountability Measures

- Lacking of sanction for procuring entities’ staff/personnel involved in the complaints

Moderate - Amend PPL to include appropriate sanctions for personnel/staff involved in the complaints if proven guilty

IV. PROJECT PROCUREMENT THRESHOLDS

44. Except as the Asian Development Bank (ADB) may otherwise agree, the following process

thresholds shall apply to procurement of goods and works.

Procurement of Goods and Works

Method Threshold Comments

International Competitive Bidding (ICB) for Works $1,000,000 Prior review for all

contract packages

International Competitive Bidding for Goods $1,000,000 Prior review for all

contract packages

National Competitive Bidding (NCB) for Works Beneath that stated for

ICB, Works

First package prior

review, thereafter post

review

National Competitive Bidding for Goods Beneath that stated for

ICB, Goods

First package prior

review, thereafter post

review

Shopping for Goods Below $100,000

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Consulting Services

Method Comments

Quality and Cost Based Selection (QCBS) Ratio of 90:10

Consultants’ Qualifications Selection (CQS)

Individual Consultant Selection (ICS)

V. PROCUREMENT PLANS

45. Scope of procurement. The proposed project procurement will include civil work packages for

waste water treatment facilities and sewer networks of the two cities; goods that may include waste water

facilities’ maintenance equipment, vehicles, laboratory equipment, etc. It will also recruit and project related

consultancy services such as Design & Supervision Consultant, Institutional Development and Capacity

Building, Audit of Project Financial Statements and various individual consultants that will fill-up the

positions required in Project Management Office, Project Implementation Office, Project Management

Consultants and Chief Technical Advisor

46. Packaging: The procurement plan will include civil works packages for the treatment facilities that

will be procured through DB modality using ICB single stage – two envelope procedure; civil works

packages for the sewer network and pumping stations using ICB single stage – one envelope procedure.

Goods will be packaged as one for both cities and will be procured through NCB single stage – one

envelope procedure. Consultancy services are packaged separately according to scope of work and terms

of reference and will be procured through QCBS, CQS and ICS accordingly.

47. The EA requested advance contracting for the early recruitment of the PMO and the project

management consultants (PMCs).

48. The proposed project procurement plan is attached in Appendix 2.

VI. CONCLUSION

49. The overall procurement risks are assessed as high. The procurement risk assessment and management plan is prepared with appropriate mitigation measures. Strict monitoring during project implementation must be performed to help identify procurement issues that need to be addressed immediately to avoid delays. Further, compliance and adherence to the ADB Procurement Guidelines must be ensured.

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Appendix 1

PROJECT PROCUREMENT RISK ASSESSMENT QUESTIONNAIRE

Mr. Toktogul Kasymuulu, Head/Procurement specialist, Chui-Talas Inter-Regional Unit, DWSSDD Phones: +996 312 313235 (office); +996 773 179 666 (mob.1); +996 553 179 666 (mob.2). E-mail: [email protected].

QUESTION RESPONSE RISK2

A. ORGANIZATIONAL AND STAFF CAPACITY


A.1 Does the agency or Government have a Procurement Committee that is independent from the head of the agency?

No

A.2 Does the agency have a procurement department/unit, including a permanent office that performs the function of a Secretariat of the Procurement Committee?

No, (DWSSDD undertake procurement according to the Law of the KR on Public Procurement)

A.3 If yes, what type of procurement does it undertake?

No, (purchase of staitionaires, fuel and lubricants, IT services).

A.4 How many years’ experience does the head of the procurement department/unit have in a direct procurement role?

N/A

A.5 How many staff in the procurement department/unit are:

i. full time

ii. part time

iii. seconded

N/A

A.6 Do the procurement staff have a high level of English language proficiency (verbal and written)?

No

A.7 Are the number and qualifications of the staff sufficient to undertake the additional procurement that will be required under the proposed project?

No

A.8 Does the unit have adequate facilities, such as PCs, internet connection, photocopy facilities, printers etc. to undertake the planned procurement?

No

2 Questions indicated with * are associated with potentially ‘High’ or ‘Substantial’ risks due to the impact being

‘High’, therefore the strategy for managing those risks should be addressed in the Project Procurement Risk Analysis (Appendix 3).

mailto:[email protected]

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A.9 Does the agency have, or have ready access to, a procurement training program?

No

A.10 At what level does the department/unit report (to the head of agency, deputy etc.)?

DWSSDD doesn’t have such a unit

A.11 Do the procurement positions in the agency have job descriptions, which outline specific roles, minimum technical requirements and career routes?

No

A.12 Is there a procurement process manual for goods and works?

No

A.13 If there is a manual, is it up to date and does it cover foreign-assisted projects?

No

A.14 Is there a procurement process manual for consulting services?

No


No

PROJECT MANAGEMENT UNIT

A.16 Is there a fully (or almost fully) staffed PMU for this project currently in place?

No


N/A


N/A

A.19 Are there standard documents in use, such as Standard Procurement Documents/Forms, and have they been approved for use on ADB funded projects?

N/A

A.20 Does the agency follow the national procurement law, procurement processes, and guidelines?

Yes

A.21 Do ToRs for consulting services follow a standard format such as background, tasks, inputs, objectives and outputs?

N/A

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A.22 Who drafts the procurement specifications?

Consultant/Staff of departments in charged of related procurement

A.23 Who approves the procurement specifications?

Director of DWSSDD

A.24 Who in the PMU has experience in drafting bidding documents?

N/A

A.25 Are records of the sale of bidding documents immediately available?

N/A

A.26 Who identifies the need for consulting services requirements?

N/A

A.27 Who drafts the Terms of Reference (ToR)


A.28 Who prepares the request for proposals (RFPs)


B. INFORMATION MANAGEMENT

B.1 Is there a referencing system for procurement files?

Yes

B.2 Are there adequate resources allocated to record keeping infrastructure, which includes the record keeping system, space, equipment and personnel to administer the procurement records management functions within the agency?

No

B.3 Does the agency adhere to a document retention policy (i.e. for what period are records kept)?

Yes

B.4 Are copies of bids or proposals retained with the evaluation?

Yes

B.5 Are copies of the original advertisements retained with the pre-contract papers?

Yes

B.6 Is there a single contract file with a copy of the contract and all subsequent contractual correspondence?

Yes

B.7 Are copies of invoices included with the contract papers?

Yes

B.8 Is the agency’s record keeping function supported by IT?

No

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C. PROCUREMENT PRACTICES

Goods and Works

C.1 Has the agency undertaken procurement of goods or works related to foreign assistance recently (last 12 months or last 36 months)? If yes, indicate the names of the development partner/s and project/s.

No

C.2 If the answer is yes, what were the major challenges faced by the agency?

N/A

C.3 Is there a systematic process to identify procurement requirements (for a period of one year or more)?

Yes, according to PP

C.4 Is there a minimum period for the preparation of bids and if yes, how long?

No

C.5 Are all queries from bidders replied to in writing?

No. But via the public procurement web portal

C.6 Does the bidding document state the date and time of bid opening?

Yes

C.7 Are bids opened in public? Yes

C.8 Can late bids be accepted? No

C.9 Can bids (except late bids) be rejected at bid opening?

No

C.10 Are minutes of the bid opening taken?

Yes

C.11 Are bidders provided a copy of the minutes?

Yes

C.12 Are the minutes provided free of charge?

Yes

C.13 Who undertakes the evaluation of bids (individual(s), permanent committee, ad-hoc committee)?

The permanent committee

C.14 What are the qualifications of the evaluators with respect to procurement and the goods and/or works under evaluation?

Average. One certified specialist and other responsible employees are accountants, supply officer, etc.

C.15 Is the decision of the evaluators final or is the evaluation subject to additional approvals?

Yes, the decision of the evaluators is final

C.16 Using the three ‘worst-case’ examples in the last year, how long

From 30 days up to 6 months

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from the issuance of the invitation for bids can the contract be awarded?

C.17 Are there processes in place for the collection and clearance of cargo through ports of entry?

Never encountered

C.18 Are there established goods receiving procedures?

Never encountered

C.19 Are all goods that are received recorded as assets or inventory in a register?

Never encountered

C.20 Is the agency/procurement department familiar with letters of credit?

No

C.21 Does the procurement department register and track warranty and latent defects liability periods?

N/A due to absence of such a unit

Consulting Services

C.22 Has the agency undertaken foreign- assisted procurement of consulting services recently (last 12 months, or last 36 months)? (If yes, please indicate the names of the development partner/s and the Project/s.)

Never encountered

C.23 If the above answer is yes, what were the major challenges?

N/A

C.24 Are assignments and invitations for expressions of interest (EOIs) advertised?

Yes, in frame of PP

C.25 Is a consultants’ selection committee formed with appropriate individuals, and what is its composition (if any)?

Never encountered

C.26 What criteria are used to evaluate EOIs?

Never encountered

C.27 Historically, what is the most common method used (QCBS, QBS, etc.) to select consultants?

Never encountered

C.28 Do firms have to pay for the RFP document?

Never encountered

C.29 Does the proposal evaluation criteria follow a pre-determined structure and is it detailed in the RFP?

Yes, in frame of PP

C.30 Are pre-proposal visits and meetings arranged?

Yes, in frame of PP

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C.31 Are minutes prepared and circulated after pre-proposal meetings?

Yes, in frame of PP

C.32 To whom are the minutes distributed?

Bidders/applicants

C.33 Are all queries from consultants answered/addressed in writing?

No, in frame of PP

C.34 Are the technical and financial proposals required to be in separate envelopes and remain sealed until the technical evaluation is completed?

Yes

C.35 Are proposal securities required? Yes

C.36 Are technical proposals opened in public?

Yes

C.37 Are minutes of the technical opening distributed?

Yes

C.38. Do the financial proposals remain sealed until technical evaluation is completed?

Yes

C.39 Who determines the final technical ranking and how?

Bidding committee according to the approved criteria

C.40 Are the technical scores sent to all firms?

Yes

C.41 Are the financial proposal opened in public?

Yes

C.42 Are minutes of the financial opening distributed?

Yes

C.43 How is the financial evaluation completed?

Minutes on the decision made by the bidding committee

C.44 Are face to face contract negotiations held?

No

C.45 How long after financial evaluation is negotiation held with the selected firm?

In a timeframe indicated by the law of KR on PP

C.46 What is the usual basis for negotiation?

Clarification of technical features and characteristics of equipment and/or goods

C.47 Are minutes of negotiation taken and signed?

Yes

C.48 How long after negotiation is the contract signed, on average?

In a timeframe indicated by the law of KR on PP

C.49 Is there an evaluation system for measuring the outputs of consultants?

Never encountered

15


Payments

C.50 Are advance payments made? Yes

C.51 What is the standard period for payment included in contracts?

Contract specified and as indicated by the law of KR on PP

C.52 On average, how long is it between receiving a firm’s invoice and making payment?

In a week time

C.53 When late payment is made, are the beneficiaries paid interest?

No

D. EFFECTIVENESS

D.1 Is contractual performance systematically monitored and reported?

Yes

D.2 Does the agency monitor and track its contractual payment obligations?

Yes

D.3 Is a complaints resolution mechanism described in national procurement documents?

Yes, in the law on PP

D.4 Is there a formal non-judicial mechanism for dealing with complaints?

Yes

D.5 Are procurement decisions and disputes supported by written narratives such as minutes of evaluation, minutes of negotiation, notices of default/withheld payment?

No

E. ACCOUNTABILITY MEASURES

E.1 Is there a standard statement of ethics and are those involved in procurement required to formally commit to it?

Yes

E.2 Are those involved with procurement required to declare any potential conflict of interest and remove themselves from the procurement process?

Yes

E.3 Is the commencement of procurement dependent on external approvals (formal or de-facto) that are outside of the budgeting process?

Yes

E.4 Who approves procurement transactions, and do they have

The Director/Head of Agency (DWSSDD). Does not have.

16


procurement experience and qualifications?

E.5 Which of the following actions require approvals outside the procurement unit or the evaluation committee, as the case may be, and who grants the approval?

The Director/Head of Agency (DWSSDD)

a) Bidding document, invitation to pre-qualify or RFP

On the public procurement web portal

b) Advertisement of an invitation for bids, pre-qualification or call for EOIs


c) Evaluation reports On the public procurement web portal

d) Notice of award On the public procurement web portal

e) Invitation to consultants to negotiate


f) Contracts On the public procurement web portal

E.6 Is the same official responsible for: (i) authorizing procurement transactions, procurement invitations, documents, evaluations and contracts; (ii) authorizing payments; (iii) recording procurement transactions and events; and (iv) the custody of assets?

No

E.7 Is there a written auditable trail of procurement decisions attributable to individuals and committees?

Yes, the Accounting Chamber of KR

17


Mrs. Aijamal Bolotbekova, Procurement Specialist, Balykchy Vodokanal Phone: +996 708 099796. E-mail: [email protected]





No


No. There is one procurement specialist at the vodokanal.


N/A


6 months


i. full time

ii. part time

iii. seconded


No


The both are not sufficient


Yes


There is access to MoF’s Public Procurement training program

3 Questions indicated with * are associated with potentially ‘High’ or ‘Substantial’ risks due to the impact being

‘High’, therefore the strategy for managing those risks should be addressed in the Project Procurement Risk Analysis (Appendix 3).


18



To the head of agency


No


No


N/A


No


N/A



No


N/A


N/A


No


Yes. There is the law of the Kyrgyz Republic on Public Procurement


N/A


Director/Head of Vodokanal (VK)

19





Director/Head of Vodokanal (VK), Chief Engineer, Engineer of Production-and-Technical Unit


Yes




The procurement specialist





No

B.2 Are there adequate resources allocated to record keeping infrastructure, which includes the record keeping system, space, equipment and personnel to administer the procurement records management functions within the agency?

No


Yes. There is own archive of Balykchy VK


Yes


Yes


Yes


No


No

20



Goods and Works


No


N/A


N/A


No


Yes


Yes




No


Yes


Yes


Yes


The permanent bidding committee


A certified specialist


Yes, the decision of the evaluators is final, although for certain cases additional approvals may be required

21


C.16 Using the three ‘worst-case’ examples in the last year, how long from the issuance of the invitation for bids can the contract be awarded?

Not encountered yet. Balykchy Vodokanal has started procurement activities in 2018 only.


Not encountered yet


Yes


Yes


No


Yes

Consulting Services


No


N/A


No


Not encountered yet.


N/A


Not encountered yet


No


Yes

22



No


No


Do not know


Yes


No

C.35 Are proposal securities required? No


No


Do not know


Do not know


Do not know


Do not know


Do not know


Do not know


Do not know


Do not know


Do not know


Do not know


No

23



Do not know


No

Payments



Payments are made upon receipt (availability) of funds


Do not know


Yes

D. EFFECTIVENESS


Yes


Yes


Yes


No


No



Yes


No

E.3 Is the commencement of procurement dependent on external

No

24


approvals (formal or de-facto) that are outside of the budgeting process?

E.4 Who approves procurement transactions, and do they have procurement experience and qualifications?

Do not know


None of below


N/A


N/A

c) Evaluation reports N/A

d) Notice of award N/A


N/A

f) Contracts N/A


No


No

25


Mr. Melis Usengaliev, OHS Engineer, Karakol Vodokanal Phone: +996 505 942636 E-mail: [email protected]





No


No. One employee has been appointed as a procurement specialist by Director’s internal order


N/A


1 year (as the procurement specialist)


i. full time

ii. part time

iii. seconded

N/A


No, does not have.


No

4 Questions indicated with * are associated with potentially ‘High’ or ‘Substantial’ risks due to the impact being ‘High’,

therefore the strategy for managing those risks should be addressed in the Project Procurement Risk Analysis (Appendix 3).


26



Yes


No


To the head of agency


No


No. There is the law of the Kyrgyz Republic (KR) on Public Procurement (PP)


No


No


No



No


No. But there are employees experienced in project implementation

A.18 Does the unit have adequate facilities, such as PCs, internet connection, photocopy facilities,

No

27


printers etc. to undertake the planned procurement?


No


Yes


No






N/A


N/A









A registry book for contracts is kept

B.2 Are there adequate resources allocated to record keeping infrastructure, which includes the record keeping system, space, equipment and personnel to administer the procurement records

No

28


management functions within the agency?


Yes


Yes


Yes


Yes


Yes


No


Goods and Works


No


N\A


Yes


No

29



Yes


Yes




No


Yes


Yes, on the public procurement web portal


Yes


The permanent bidding committee


A certified specialist


Yes, the decision of the evaluators is final and no additional approvals are required

C.16 Using the three ‘worst-case’ examples in the last year, how long from the issuance of the invitation for bids can the contract be awarded?

N/A


No


Yes

30



Yes


No


Yes

Consulting Services


No


N/A


No


N/A


N/A


N/A


N/A


N/A


N/A

31



N/A


N/A


N/A


N/A

C.35 Are proposal securities required? N/A


N/A


N/A


N/A


N/A


N/A


N/A


N/A


N/A


N/A

32



N/A


N/A


N/A


N/A


N/A

Payments



30 days (1 month)


30 days (1 month)


Yes

D. EFFECTIVENESS


Yes


Yes


Yes


Yes

33



Yes



No


Yes

E.3 Is the commencement of procurement dependent on external approvals (formal or de-facto) that are outside of the budgeting process?

No

E.4 Who approves procurement transactions, and do they have procurement experience and qualifications?

No


None of below


N/A


N/A

c) Evaluation reports N/A

d) Notice of award N/A


N/A

34


f) Contracts N/A


No


Yes

35

Appendix 2

PROCUREMENT PLAN (DRAFT)

Basic Data

Project Name: Issyk-Kul Wastewater Management Project

Project Number: Approval Number:

Country: KYRGYZ REPUBLIC Executing Agency: Department of Drinking Water

Supply and Sewerage Development under the State

Agency for Architecture, Construction, Housing and

Public Utilities

Project Procurement Classification: A Implementing Agency: Office of Plenipotentiary

Representative of the Government in Issyk-Kul Oblast Procurement Risk: High

Project Financing Amount:

ADB Financing: $36.52 Million

Non-ADB Financing:

Project Closing Date: 30 June 2025

Date of First Procurement Plan: 26 May 2018 Date of this Procurement Plan: 12 October 2018

Methods, Thresholds, Review and 18-Month Procurement Plan

1. Procurement and Consulting Methods and Thresholds

Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to

procurement of goods and works.

Procurement of Goods and Works

Method Threshold Comments

International Competitive Bidding (ICB) for Works $1,000,000

International Competitive Bidding for Goods $1,000,000

National Competitive Bidding (NCB) for Works Beneath that stated for ICB, Works

National Competitive Bidding for Goods Beneath that stated for ICB, Goods

Shopping for Goods Below $100,000

Consulting Services

Method Comments

Quality and Cost Based Selection (QCBS)

Consultants’ Qualifications Selection (CQS)

Individual Consultant Selection (ICS)

2. Goods and Works Contracts Estimated to Cost $1 Million or More

36

The following table lists goods and works contracts for which the procurement activity is either ongoing or expected to

commence within the next 18 months.

Package

Number

General

Description

Estimated

Value

(M US$)

Procurement

Method

Review

Bidding

Procedure

Advertisement

Date Comments

B’chy-DB-

01

Design and

Build WWTP in

Balykchy

7.05 ICB Prior 1S2E Q2/2019

SBD for

Plant

B’chy-S-

01

Expansion of

sewer network

in Balykchy

2.12 ICB Prior 1S1E Q1/2020 SBD for

Small Works

K’Kol-

WWTP

Construction of

WWTP in

Karakol


Large Works

K’Kol-S-

01-Lot1

Expansion of

sewer network

in Karakol


Small Works

K’Kol-S-

01-Lot 2

Pump station

and rising main

in Karakol

ICB Prior 1S1E Q1/2020 SBD for

Small Works

3. Consulting Services Contracts Estimated to Cost $100,000 or More

The following table lists consulting services contracts for which the recruitment activity is either ongoing or expected

to commence within the next 18 months.

Package

Number General Description

Estimated

Value

(M US$)

Recruit

ment

Method

Review

(Prior /

Post)

Advertisement

Date

(quarter/year)

Type of

Proposal Comments

PMO-DS-

01

Design and

Supervision

Consultants

3.25 QCBS Prior Q1/2019 Full International

90:10

PMO-CB-

02

Institutional

Development and

Capacity Building

0.72 QCBS Prior Q4/2019 Simplified International

90:10

Auditor Audit of Project and

Vodakanal Financial

Statements

0.2 CQS Prior Q3/2019 Bio-Data

IWMP-

PMC

Project Management

Consultants (including

for internal control

environment and

preparation for audit)

1.82 QCBS Prior Q1/2019 Full International

90:10

37

4. Goods and Works Contracts Estimated to Cost Less than $1 Million and Consulting Services Contracts Less than $100,000 (Smaller Value Contracts)

The following table groups smaller-value goods, works and consulting services contracts for which the activity is

either ongoing or expected to commence within the next 18 months.

Goods and Works

Package

Number

General

Description

Estimated

Value

(M US$)

Number of

Contracts

Procurement

Method

Review

Bidding

Procedure

Advertise

ment

Date

Comments

B’chy &

K’Kol V-01

Procurement

of Vacuum

tankers

0.42 1 NCB Prior 1S1E Q3/2019 Goods

Equipmen

t – Project

Mgt

Support

Equipment

and vehicle

for PMO and

PMC (Vehicle,

office

equipment,

office

furniture)

0.12 multiple Shopping Prior Q1/2019 Goods

Consulting Services

Package

Number

General

Description

Estimated

Value

(M US$)

Number of

Contracts

Recruitment

Method

Review

(Prior /

Post)

Advertise

ment

Date

(quarter/

year)

Type of

Proposal Comments

IND-2 Individual

Consultants

0.38 2 ICS Prior Q4/2018 Bio-Data Chief

Technical

Advisor;

Procurement

Specialist

E. National Competitive Bidding

1. General

The procedures to be followed for national competitive bidding shall be for tendering with

unlimited participation and the two-stage tendering set forth in Law of the Kyrgyz Republic on Public

Procurement of Goods, Works and Services effective on April 2004 with the clarifications and

modifications described in the following paragraphs required for compliance with the provisions of the

ADB Procurement Guidelines.

38

2. Eligibility

ADB: The eligibility of bidders shall be as defined under section I of ADB's Procurement Guidelines

published by ADB in April 2010, as amended from time to time; accordingly, no bidder or potential bidder

should be declared ineligible to ADB-financed contracts for other reasons than the ones provided by section

I of ADB’s Guidelines. Bidders must be nationals of member countries of ADB, and offered goods, works

and services must be produced in and supplied from member countries of ADB.

3. Prequalification

Normally, post-qualification shall be used unless explicitly provided for in the loan

agreement/procurement plan. Irrespective of whether post qualification or prequalification is used, eligible

bidders (both national and foreign) shall be allowed to participate.

4. Registration and Licensing

(i) Bidding shall not be restricted to pre-registered/licensed firms.

(ii) Where registration or licensing is required, bidders (i) shall be allowed a reasonable time to complete the registration or licensing process; and (ii) shall not be denied registration/licensing for reasons unrelated to their capability and resources to successfully perform the contract, which shall be verified through post-qualification.

(iii) Foreign bidders shall not be precluded from bidding. If a registration or licensing process is required, a foreign bidder declared the lowest evaluated bidder shall be given a reasonable opportunity to register or to obtain a license.

5. Bidding Period

The minimum bidding period is twenty-eight (28) days prior to the deadline for the submission of

bids.

6. Bidding Documents

Procuring entities should use standard bidding documents for the procurement of goods, works

and services acceptable to ADB.

7. Preferences

No domestic preference shall be given for domestic bidders and for domestically manufactured

goods.

8. Advertising

Invitations to bid shall be advertised in at least one widely circulated national daily newspaper or

freely accessible, nationally-known website allowing a minimum of twenty-eight (28) days for the preparation and submission of bids.

Bidding of NCB contracts estimated at US$500,000 equivalent or more for goods and related services or US$1,000,000 equivalent or more for civil works shall be advertised on ADB’s website via the posting of the Procurement Plan.

39

9. Bid Security

Where required, bid security shall be in the form of a bank guarantee from a reputable bank.

10. Bid Opening and Bid Evaluation

(i) Bids shall be opened in public.

(ii) Evaluation of bids shall be made in strict adherence to the criteria declared in the bidding

documents and contracts shall be awarded to the lowest evaluated bidder.

(iii) Bidders shall not be eliminated from detailed evaluation on the basis of minor, non-

substantial deviations.

(iv) No bidder shall be rejected on the basis of a comparison with the employer's estimate and

budget ceiling without the Bank’s prior concurrence.

(v) A contract shall be awarded to the technically responsive bidder that offers the lowest

evaluated price and who meets the qualifying requirements set out in the bidding

documents.

(vi) No negotiations shall be permitted.

(vii) Price verification shall not be applied.

11. Rejection of All Bids and Rebidding

Bids shall not be rejected and new bids solicited without ADB’s prior concurrence.

12. Participation by Government-owned enterprises

Government-owned enterprises in Kyrgyz Republic shall be eligible to participate as bidders only if

they can establish that they are legally and financially autonomous, operate under commercial law and are

not a dependent agency of the contracting authority. Furthermore, they will be subject to the same bid and

performance security requirements as other bidders.

13. Right to Inspect/Audit

A provision shall be included in all NCB works and goods contracts financed by ADB requiring

suppliers and contractors to permit ADB to inspect their accounts and records and other documents relating

to the bid submission and the performance of the contract, and to have them audited by auditors appointed

by ADB.

14. Fraud and corruption

(i) The Borrower shall reject a proposal for award if it determines that the bidder

recommended for award has, directly or through an agent, engaged in corrupt, fraudulent,

collusive, or coercive practices in competing for the contract in question.

(ii) ADB will declare a firm or individual ineligible, either indefinitely or for a stated period, to

be awarded a contract financed by ADB, if it at any time determines that the firm or

individual has, directly or through an agent, engaged in corrupt, fraudulent, collusive,

coercive or obstructive practices in competing for, or in executing, an ADB-financed

contract.

15. National Sanctions List

National sanctions lists may be applied only with prior approval of ADB.

40

Appendix 3

MASTER BIDDING DOCUMENTS

(see separate file)

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