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World Bank
With 185 member countries, the World Bank Group (WB) is the largest multilateral development bank (MDB) and the only MDB that is not bound to a specific region. Its mission is to help people help themselves and their environment by providing resources, sharing knowledge, building capacity and forging partnerships in the public and private sectors.
The World Bank Group is currently involved in more than 1,800 projects in virtually every sector and developing country. In FY2008, the WB provided US$24.7 billion for 279 projects in developing countries worldwide. Its investments generated around 40,000 contracts, ranging in size from a few thousand dollars, to multimillion dollar expenditures for the delivery of a vast range of goods and services. The WB provides an extensive array of services and advice and facilitates private sector finance and investment in developing countries. The World Bank Group is made up of five institutions:
- International Bank for Reconstruction and Development (IBRD)
- International Development Association (IDA)
- International Finance Corporation (IFC)
- Multilateral Investment Guarantee Agency (MIGA)
- International Centre for Settlement of Investment Disputes (ICSID)
IBRD and IDA are the World Bank Group's instruments for public lending. Together they are referred to as the World Bank (WB). IBRD provides low-interest loans to middle income and creditworthy poor countries. In FY2008 it committed US$13.5 billion. In FY2009, IBRD lending is expected to almost triple to more than US$35 billion to meet additional demand due to the worldwide economic and financial crisis.
IDA is the world's largest source of interest-free loans and grants to the 78 poorest countries, 39 of which are in Africa. IDA's funds are replenished every three years by 40 donor countries. In 2008, donors committed US$42 billion for the next 3 years.
Through IBRD and IDA the World Bank offers two basic types of loans and credits: development policy operations, which provide financing to support a country's policy and institutional reforms and investment operations, which countries can invest in development projects in a broad range of economic and social sectors. Investment projects generate procurement of goods, works and services and therefore, business opportunities. The procurement process for both institutions is the same.
In FY2008, WB's most important development themes were: Financial and Private Sector Development; Public Sector Governance; Urban Development; Environmental and Natural Resource Management and Human Development. Procurement within these themes, included projects in the following sectors:
| Sector | US$million | Percent |
|---|---|---|
| Agriculture, Fishing, and Forestry | 1,360.6 | 5.5 |
| Education | 1,926.6 | 7.8 |
| Energy and Mining | 4,180.3 | 16.9 |
| Finance | 1,540.7 | 6.2 |
| Health and Other Social Services | 1,607.9 | 6.5 |
| Industry and Trade | 1,543.5 | 6.2 |
| Information and Communication | 56.5 | 0.2 |
| Law and Justice and Public Administration | 5,296.4 | 21.4 |
| Transportation | 4,829.9 | 19.6 |
| Water, Sanitation, and Flood Protection | 2,359.9 | 9.6 |
| Total | 24,702.3 | 100 |
The purpose of the WB Country Assistance Strategy (CAS) is to describe the strategic priorities and composition of its support to a country over the next 4 to 5 years. The CAS begins with the country's vision for its own long-term development and, is further developed by the Bank in close collaboration with other stakeholders. The CAS provides companies with the earliest indication of possible World Bank-financed business opportunities in a developing country.
The World Bank project cycle consists of 7 stages: Identification, Preparation, Appraisal and Negotiation, Approval, Implementation, Completion and Evaluation. A complete cycle can take from 1 to 10 years.
Project Identification: The World Bank works with a borrowing country's government and other stakeholders, to determine how financial and other assistance can be designed to have the largest impact. The World Bank and the government agree on an initial project concept and its beneficiaries, then the Bank's project team outlines the basic elements.
Documents available during this stage include:
- Country Assistance Strategy (CAS).
- Monthly Operational Summery (MOS): monthly summaries on the status of projects in the pipeline, from the point they are identified up to the signing of the loan. The MOS is a useful tool to monitor the progress of a project through the project cycle.
- Project Information Document (PID): typically 8-10 pages, they describe the main objectives, components, financing, and risks, of a project.
- Integrated Safeguards Data Sheet: identifies key issues related to the Bank's safeguard policies for environmental and social issues.
Project Preparation: During this phase the World Bank takes an advisory role. The government is responsible for project preparation, which includes conducting feasibility studies and preparing engineering and technical designs, environmental assessment reports and social impact studies. The Bank does provide a Project Preparation Fund, which enables the borrower to contract external consultants for this work, if necessary.
Documents available during this stage include:
- Environmental Assessment Report (EAR): analyzes the planned project's likely environmental impact and describes steps to mitigate possible harm.
- Monthly Operational Summery (MOS)
Project Appraisal and Negotiation: The government and the World Bank review the work done during the identification and preparation phases and confirm the expected project outcomes, intended beneficiaries and evaluation tools for monitoring progress. They reach an agreement on the viability of all aspects of the project and on a project timetable.
Project Approval: The project team prepares the project appraisal, along with other financial and legal documents. The proposed loan and project require approval by the Bank's Board of Executive Directors.
Documents available during this stage include:
- Project Appraisal Document (PAD): provides the most comprehensive description of a project, including a detailed description of the objectives, risks, financing, conditions, implementation arrangements and procurement schedule.
- General Procurement Notice (GPN): provides a broad overview of the types of equipment, goods and services that will be procured under the project.
Project Implementation: The Implementing Agency in the borrowing country is responsible for the implementation of the project. With technical assistance from the Bank, it prepares the specifications for the project and carries out all procurement of goods, works and services needed, as well as any environmental and social impact assessments.
Documents available during this stage include:
- Specific Procurement Notice (SPN): invitations to bid for goods, equipment and civil works contracts.
- Request for Expressions of Interest (REI): invitations to consultants to submit their interest in a project.
Project Completion: The World Bank and the borrower document results achieved, any problems encountered and lessons learned.
Evaluation: The Bank's Independent Evaluation Group will assess the performance of approximately one out of every four projects, measuring outcomes against the original objectives, sustainability of results and institutional development impact.
The procurement process of World Bank funded projects is very similar to that of the other MDBs. The borrower is responsible for all procurement and the Bank's role is limited to ensuring that procurement is conducted efficiently and in an open, competitive and transparent manner. Procurement procedures are defined in two documents:
- The Guidelines for Procurement Under IBRD Loans And IDA Credits
- The Guidelines for Selection and Employment of Consultants by World Bank Borrowers
Both guidelines address issues related to advertising, bid and proposal submission, evaluation, pricing, currency, terms of payment and local content. Companies are advised to familiarize themselves with the guidelines. The relationship between the borrower and the suppliers of goods and works is governed by the bidding documents and the contract. The relationship between the borrower and consultants is governed by the Request for Proposals and the contract.
Project and Procurement Information
During the early phases of project development, governments in borrowing countries and WB staff in field offices and at headquarters, are good sources of information. Another source is the WB website where most of the information that a firm needs to pursue WB-funded business opportunities, can be found. However, the WB website contains so much data that it is often difficult for firms to find the information they need. The following references will guide you to the more important sections of the website:
General business information:
- The guidelines for procurement of goods, works and (non-consulting) services and the guidelines for the selection of consultants govern all WB-financed procurement.
- The WB requires its borrowers to use Standard Bidding Documents for procurement.
- The CAS provides the earliest indication of possible business opportunities.
- The Contract Awards database is an interesting section for firms that want to check out potential competition or, search for a suitable partner.
Project information:
- The MOS describes the status of project in the pipeline and is a useful tool to monitor the progress of a project through the project cycle.
- The Projects Database contains all the pipeline and active projects. Each project page offers a brief outline and links to all the publicly available documents, including the PID and the PAD.
Procurement information:
- GPNs, SPNs and REIs for project-related procurement, are generally NOT posted on the WB website. Borrowers are required to post the notices on the subscription services UN Development Business Online and dgMarket.
Suppliers of Goods, Works and Non-Consulting Services
Open competition is the basis for efficient public procurement. World Bank guidelines demand borrowers to select the most appropriate procurement method and can depend on a number of factors including the type and value of the good or service and, the interest of foreign bidders. The preferred method for larger contracts is International Competitive Bidding (ICB), with or without the allowance for domestic preference. Under ICB the borrower awards the contract to the bidder whose bid is substantially responsive and who offers the lowest evaluated cost.
Prequalification is usual for large or complex works, or if the high cost of preparing a bid would discourage competition. It is based entirely upon the capability and resources of prospective bidders. Other methods for procuring goods and civil works include National Competitive Bidding, and International Shopping.
Consultants and Consulting Services
Five principles guide WB policy on the selection of consultants: high-quality services; economy and efficiency; equal opportunity; transparency and the encouragement of the use of national consultants. In most cases the preferred selection method is Quality and Cost-Based Selection (QCBS); a competition among qualified short-listed firms in which the selection is based on the quality of the proposal and to a lesser extent, on the cost of the services to be provided. Other methods for selecting consultants include Quality-Based Selection (QBS) and Least-Cost Selection (LCS).
Opportunities for consultants exist in almost every stage of the project cycle. It is very common for the WB task team, as well as the borrower to hire external expertise during the development phases of the project. The borrower too may need external consultants for preparation activities including feasibility studies, project design, environment assessment and social impact studies.
During the project implementation and completion phases, consultants may be hired for project and procurement management, supervision, various types of studies, technical advisory services, training, capacity building and institutional strengthening.
Besides IBRD and IDA the private sector arm of the WBG generates opportunities for consultants. IFC provides technical assistance in business, finance, environmental and social sustainability and infrastructure.
Corporate and Institutional Procurement
In addition to the operational procurement conducted by borrowers, the WB spends approximately US$700 million per year for its own internal requirements, procuring a wide variety of goods and services, including: information technology, communications equipment and services, office equipment and supplies, graphic design and print services, training and consulting.
Most corporate procurement is conducted by the Bank's Corporate Procurement Unit. The unit issues Requests for Proposals (RFP) and Invitations for Bids (IFB). For very small contracts, it will purchase without formal competition. The World Bank maintains an approved vendor database. Vendors do not have to be registered to participate in a bidding process however; their registration must be approved before they are awarded a contract. On the other hand, completion of the registration form does not automatically lead to inclusion in the vendor master file: the Bank only processes applications from vendors who are about to sign a contract.
World Bank corporate procurement generates many opportunities for consultants, which include project identification, preparation, appraisal, supervision, evaluation, analytical and technical advisory activities, policy and program work, research, training, and activities associated with various partnership programs. Requests for Expressions of Interest for consultants hired directly by the World Bank for assignments over US$50,000 are published on UN Development Business and dgMarkets as well as on the World Bank's new eConsultant website.
eConsultant is a free and secure, web-based tool that supports consulting firms doing business with the WB. eConsultant allows firms to view opportunities, express interest, obtain documents, send proposals, and communicate with the Bank in a secure, online environment. While the 'opportunities' section of the eConsultant is open to all consultants, the 'electronic selection' application is currently designed to support consulting firms only. In the future, the system may be modified to support individual consultants.
The WB's Supplier Diversity Program intends to increase business participation of Minority, Women and Disabled Owned Business Enterprises (MWDBE) by direct contracting, and by subcontracting through the Bank's prime contractors.
World Bank administered trust funds are another source of consulting opportunities. Donor governments, foundations and private institutions contribute to the many trust funds that are housed at the World Bank. They support the Bank in its poverty reduction programs by funding key due diligence activities for development operations, promoting innovative approaches, expanding development collaboration.
Canada used to have a trust fund under the Consultant Trust Fund (CTF) program, which was tied to Canadian consultants. In 2004, the WB declared that it would no longer accept trust funds that imposed nationality restrictions on procurement. The CTF program was phased out in favour of multi-donor funds. For Canadian consultants this means that, although they no longer benefit from funds that are reserved especially for them, they are eligible to compete in all World Bank trust funds.
The funds are leveraged for a broad range of development initiatives, which vary significantly in size, ranging from multi-billion dollar arrangements to much smaller and simpler ones. Some examples are:
- Afghanistan Reconstruction Trust Fund (ARTF): funded by 27 donors to assist the Afghan government, project covering infrastructure, rural development, technical assistance, capacity development, and education.
- Global Environmental Facility (GEF): finances projects to address six critical threats to the global environment: loss of biodiversity; climate change; degradation of international waters; ozone depletion; land degradation; persistent organic pollutants.
- Norwegian Education Trust Fund (NETF): assists Sub-Saharan African countries resume growth toward universal primary education.
- Energy Sector Management Assistance Program (ESMAP): provides policy advice on sustainable energy development to governments of developing countries and economies in transition.
Firms are advised to focus on countries, sectors and projects where they have expertise, experience and local partnerships.
The pipelines stages of the project provide many opportunities for consultants, but keep in mind that the World Bank's 'Conflict of Interest' clause prevents a consultant and its affiliates form providing services during the project implementation that are related to an assignment during the project preparation.
A good time to meet with staff is often right after you have visited the country in which the project is located. Be sure to have read all the relevant project documentation. Names of Task Team Leaders are given at the end of Project Information Documents. December and August can be difficult months to arrange meetings.
When visiting a country, make time to learn about future opportunities that may arise in Bank-financed projects. Contact the Bank's country office and seek information on projects in specific sectors of interest, particularly projects in implementation.
Experience indicates that companies are more likely to win a contract if they have had regular contact with the implementing agency prior to a SPN or RFP being issued. Details of the agency are given in the MOS, PID and PAD.
Trust funds can only be accessed by Bank staff, not by consultants. However, they are not always aware of the existence or possibilities of (smaller) trust funds. Firms that have identified a need that could be solved by use of a specific trust fund could indicate this to the appropriate Bank staff.
In addition to all World Bank financed opportunities subject to ICB, UN Development Business and dgMarket post procurement information and notices by other development banks, national governments and United Nations agencies. Basic subscriptions for both services are about US$550 annually. dgMarkets offers a free e-mail service, that alerts clients whenever a tender notices is published.
Firms are not obliged to work with a local partner, but it often provides many advantages, including language proficiency; knowledge of business culture and customs; access to local networks and insight in the project. The World Bank also maintains a system of domestic preferences, which can be as high as 15 percent of the price for goods and services and 20 percent of the points in selection of consultants.
