|Project Rationale and Linkage to Country/Regional Strategy
As an integral part of its effort to reduce poverty and promote inclusive economic growth in its developing member countries, ADB is committed to strengthening national governance systems and reducing vulnerability to corruption. ADBs 2013 review of governance of procurement processes found that the procurement capacity of executing and implementing agencies is generally weak and that procurement governance is inefficient. Even agencies that have participated in short-term procurement workshops and training, and which have been implementing ADB projects for years, the quality and timeliness of procurement activities have not always improved. ADBs midterm review of Strategy 2020 noted that while project performance improved during 2011/2012, disbursements declined due, in part, to the weak capacity of executing and implementing agencies and prolonged procurement processes. The midterm review recommended better targeting and more intensive development of agency capacity, together with an increase in resources to assist.
In 2013, the 10 developing member countries of Central and West Asia held 25% (or $16.2 billion) of ADBs sovereign portfolio with 126 active projects. Translating these investments into poverty reduction and inclusive economic growth requires that the executing and implementing agencies responsible for implementing those projects are able to secure quality goods, works, and consulting services in a timely manner. For ADB-financed activities, these agencies procure goods, works, and consulting services in accordance with ADBs procurement and consulting guidelines, which emphasize efficiency, transparency, and accountability. The ability of executing and implementing agencies to secure quality goods, works, and services in a timely manner requires a number of related and independent conditions, including (i) the ability of such agencies to prepare proper bidding documents; (ii) the presence of qualified vendors in the local, regional, or global markets; (iii) vendors awareness of a projects need for the goods, works, or services; (iv) interest by qualified and reputable vendors to provide them; (v) vendors ability to submit quality prequalification applications, bids, and proposals; and (vi) the proper evaluation of those bids by executing and implementing agencies. The absence of any of these conditions may delay procurement processes and may result in the award of contracts to unqualified entities, which may lead to underperformance and/or delays in project implementation. As a result, development objectives may not be met.
ADBs procurement governance review found considerable delays in procurement processes, often resulting from additional time needed to correct or clarify bid documents and bid evaluation reports. The review observed that past action plans to strengthen the capacity of agencies implementing ADB-financed activities were insufficient to develop the skills needed to ensure timely, accountable oversight of procurement processes; and recommended to strengthen training programs for executing and implementing agencies and to redeploy or recruit procurement personnel who can contribute to capacity development of these agencies. Additionally, more critical review of submitted bids identified that additional integrity due diligence is needed to verify material information presented within them, to ensure that contracts are awarded to vendors who have the necessary experience and, when relevant, financial resources to execute them successfully.
The executing and implementing agencies are aware of their weaknesses and the delays in procurement which result from the comprehensive clarification process prior to ADB approval of evaluation reports. In 2012 and 2013, during in-house integrity and procurement training missions conducted by staff of the Central and West Asia Department (CWRD) and the Operations Services and Financial Management Department (OSFMD), agencies requested additional procurement assistance and training. In response to these requests, and to address concerns identified by ADB, CWRD designed this TA to improve the quality and efficiency of procurement processes of executing and implementing agencies in participating DMCs in Central and West Asia.
Tied to procurement capacity is the environment in which ADB projects occur, and corresponding governance risks. Procurement processes are part of a projects larger financial management and governance responsibilities, and, as such, procurement processes may be strengthened or constrained by governance matters.
This TA seeks to maintain ADBs efficiency and effectiveness to strengthen the capacity of developing member countries to conduct procurement activities and responsibly implement projects. It complements and reinforces procurement-related initiatives being conducted by OSFMD and other regional departments. Working with OSFMD to draw on lessons learned from these initiatives, CWRD will continue to develop appropriate activities for longer-term sustainability of procurement capacity development in Central and West Asia.