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The Bank’s procurement policy is based mainly on five considerations, namely:
- Need for economy and efficiency in project implementation;
- Equal opportunity for all eligible suppliers and contractors from member countries to compete in the supply of goods and works services financed by the Bank;
- Encouragement of the development and participation of contractors and suppliers from Regional Member Countries of the Institution, and
- The importance of transparency, accountability, competency, and non-discrimination, in the procurement process; and
- Combating fraud and corruption in the procurement process.
Most of the procurement rules and guidelines for the Multilateral Development Banks (MDBs) can be found on their respective websites.
The proceeds of loan shall be used for procurement of Goods and Works from the eligible member countries of AfDB only. Bidders from Non - member countries offering goods and works are not eligible, even if they offer from an eligible country. All member countries of the Bank are eligible to participate in all the procurements.
The different modes of procurement, which are generally used in the projects financed by AfDB, are: International Competitive Bidding (ICB), Limited International Competition (LIC), National Competitive Bidding (NCB), International Shopping (ISH), National Shopping (NSH), Force Account and Direct Purchase. Every procurement mode differs and depends on the nature, type and complexity involved in different components of the Project. Generally, AfDB prefers International Competitive Bidding (ICB) for the majority of its procurements, except in cases where the amounts are small and may not attract international competition from all Member Countries, in which case, the Bank recognizes that other modes of procurement may be more appropriate.
The most common types of contracts under Bank financed projects are, Unit Price, Lump Sum or combinations thereof. In special cases, such as closely integrated manufacturing or works of special nature, the Bank may resort to Turnkey contracts under which, the design & engineering, supply, installation and construction of works will be procured under one single contract.
The time and cost of winning a contract can vary a great deal. Specifically, the length of time depends on the mode of procurement. Furthermore, the likelihood that a firm will win a contract depends also on how competitive it is in a particular borrowing member country.
The term “mis-procurement” is used cases where the Goods, Works or Consulting Services, financed by the Bank are not procured in accordance with the Bank’s rules and procedures. Under these conditions, the Bank may resort to cancellation of that portion of loan allocated for the goods, works and services that have been mis-procured. In certain cases, the Bank may even cancel the total loan for the project, particularly if the major component of the project has been mis-procured, and the Borrower does not agree to re-tender in accordance with the Bank’s procurement rules.
Yes. The Bank recognizes the formation of “joint-ventures” by companies in order to increase capacity for a specific supply of goods, provision of works or services. Furthermore, in order to encourage the development of domestic industry, suppliers and contractors in the Borrower’s country, are encouraged to participate in the procurement process. The local suppliers or contractors can bid either independently or in “joint-venture” with foreign firms, from member countries, in accordance with the conditions of the Bank’s Rules.
Co-financing can either be parallel-financing or joint-financing. Where the Bank finances a project on a parallel basis, (which refers to several components or contracts) with other financiers, the Bank’s rules and procedures for procurement shall apply to its specific component or contract. If the Bank finances on a joint basis (single contract) with other financiers, other than the Borrower, usually it will require as a condition, that its rules will apply, unless a waiver is given by the Bank’s Board of Directors.
The Bank expects that Staff of Borrowing Member Countries and bidders, suppliers, contractors, consultants and concessionaires shall observe the highest standards of ethics during the procurement process. The Bank will conduct its own investigation, if it comes to know of any fraud or corruption cases during the procurement process. In the event that fraud or corruption is established, the Bank will then take some or all of the following actions:
- Reject a proposal for award, if the award of contract was recommended by the Borrower;
- Cancel the portion of the loan allocated for procurement of goods, works or consultancy services during the procurement process or during the execution of the project;
- Declare the firm an ineligible supplier, either indefinitely or for a stated period of time to be awarded a Bank financed contract.
Contracts awarded on Goods, Works or Consultancy Services are published in the Bank’s AfDB Business Bulletins and on the Website.
Yes. The Bank has Standard Procurement Documents, eg for Prequalification and Bid Evaluation.