This regional capacity development technical assistance (TA) project seeks to maintain the Asian Development Bank's (ADB) efficiency and effectiveness to support better project implementation during the reform and rationalization of ADB's procurement system, in accordance with its commitments in the midterm review of Strategy 2020. Changes of scope were approved to increase the number of international procurement consultants to five, to help strengthen the capacity of executing and implementing agencies in ADB member countries in Central and West Asia. These consultants will provide applied training and on-the-job assistance during key stages of procurement processes to strengthen the capacity of our partners to prepare prequalification and bid documents, conduct pre-bid meetings, verify information presented in bids, apply evaluation criteria properly, and improve the quality of bid evaluation and consultant selection reports. Additional short-term and specialized national or international consultants may be engaged subject to availability of funds to assist on an ad hoc basis or to undertake specialized technical work as requested by participating executing and implementing agencies. A national consultant will also be engaged to assist with coordination of the TA.
The TA will also provide financial resources to verify information presented in bids and assist with qualitative bid evaluation. This may include subscriptions to closed-source databases, fees associated with obtaining transcripts from university clearinghouses to confirm education experience, or costs associated with acquiring documents from government institutions. For more complex inquiries, additional due diligence reports may be commissioned to validate material information.
|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. ADB's 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. ADB's 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.
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 have requested additional procurement assistance and training. In response to these requests, and to address concerns identified by ADB, CWRD has 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.
In 2013, the 10 developing member countries of Central and West Asia held 25% (or $16.2 billion) of ADB's 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 ADB's 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 project's 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.
ADB's 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 has 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.
Tied to procurement capacity is the environment in which ADB projects occur, and corresponding governance risks. Procurement processes are part of a project's larger financial management and governance responsibilities, and, as such, procurement processes may be strengthened or constrained by governance matters. ADB's Governance Framework, as described in the Second Governance and Anticorruption Action Plan (GACAP II), recognized that procurement is a key challenge throughout ADB's developing member countries. It recommended that procurement capacity and risk(s) be assessed at the country, sector, and project levels during preparation of country partnership strategies (CPSs), and be assessed and mitigated at the project level during project preparation. As part of the CPS process, risk assessments and risk management plans are developed to identify risks in the areas of public financial management, procurement, and anticorruption together with plans to mitigate those risks. However, a review of GACAP II, conducted in 2013, found that in the majority of projects developed, risk assessment and management plans were not incorporated in subsequent project design resulting in continued risk. Similarly, while all CPSs in Central and West Asia identify procurement and corruption risks, no specific measures have been taken in any of the 10 DMCs to directly address the concerns raised. Human and financial resources are needed to address the procurement and corruption-related risks identified in the risk assessment and management plans and CPSs.
This TA seeks to maintain ADB's efficiency and effectiveness to support better project implementation during the reform and rationalization of ADB's procurement system, in accordance with ADB's commitments in the Midterm Review of Strategy 2020. It will complement and reinforce 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.