Procurement Planning Accurate & realistic planning & prioritisation of needs is: an essential pre-requisite to effective procurement a key tool for monitoring project implementation Best practice procurement takes time & the process has various steps Preparedness & preparation are crucial for successful procurement
Procurement Planning At the time of negotiation of each project, the borrower/recipient, in consultation with IFAD, must establish an 18-month procurement plan , which must include, as a minimum, for each activity: brief description of each procurement activity to be undertaken during period estimated value method of procurement to be adopted method of review IFAD will undertake
Procurement Planning Where national procurement plan templates exist & are agreed by IFAD as suitable, such templates should be used If no such templates exist, IFAD will adopt those from other international financing institutions with which the borrower/ recipient is familiar & which are in use for other projects Borrowers/recipients are required to keep plans updated frequently to reflect changes to project or timescales IFAD’s review of & no objection to procurement plans is compulsory under all financing agreements directly supervised by IFAD
Procurement at Start-Up Ideal Structure Coherence with project objectives & annual work plan Financial estimates in line with AWPB & overall funds allocation Procurement methods in line with regulatory framework Realistic timing & scheduling of procurement activities Desired Features of a Procurement Plan
Review of Procurement Plan (1) The initial plan covers 18 months (thereafter: 12 months) & shows for each procurement action: financing category & component, financing rate procurement method estimated cost & quantities IFAD review requirement anticipated timeline for the entire process Procurement actions are grouped according to categories (goods/ works/ services) for each component Within each category, procurement actions are grouped into coded lots or packages for increased competition, efficiency & better prices Model Procurement Plan & Templates Ideal Structure
Review of Procurement Plan (2) Procurement actions are relevant to project objectives Nature and quantity of goods/works/services are consistent with appraisal report (detailed cost tables) Nature and quantity of goods/works/services are consistent with activities in the annual work plan Coherence with project objectives and annual work plan Estimated costs for each procurement action are reasonable Cost estimates are properly reflected in the annual budget Cost estimates are within overall project funds allocation (by expense category) Financial estimates in line with annual budget and overall funds allocation
Review of Procurement Plan (3) Compliance with Financing agreement +/ or LTB Compliance with the IFAD procurement guidelines & national regulations Procurement methods in line with regulatory framework Anticipated timeline for each procurement action (from preparation of bidding documents to signature of contract) is realistic Anticipated delivery dates of goods/ works/ services are consistent with physical targets as per the AWPB Realistic timing and scheduling of procurement activities
Review of the Procurement Plan Coherence General coherence: is the nature & quantity of goods/ works/ services generally consistent with the nature of project activities/components as per design report? Coherence with AWPB: do the nature & quantity of goods/ works/ services appear consistent with the activities in the AWPB? Are the costs of procurement adequate & reflected in the budget? Procurement Packaging Is the procurement systematically & logically grouped according to procurement categories (goods/ works/ services)? Within each category, have similar or related items been combined in a single package where possible & sensible? Has packaging been done in a way that facilitates the use of the most competitive and efficient procurement method & that ensures best value for money? Note specifically “split packaging” (e.g. several small, similar packages designed to circumvent threshold for competitive procurement methods); packaging that limits competition by de facto locking a series of contracts to the winner of 1st contract (e.g. separate package for delivery of machinery followed by future packages for spare parts & maintenance)?
Review of the Procurement Plan Procurement Method Is the selection of procurement methods in compliance with provisions of Schedule 4 of Financing agreement +/or LTB ? Procurement Schedule Do the time estimates indicated (for the individual procurement method) seem realistic ? Is the procurement schedule consistent with implementation schedules in the AWPB (does the delivery of goods, works & services correspond to physical targets in the work plan)?
After the Procurement Plan - Contract Contract contents – all pertinent deliverables, timing, deadlines, results-oriented reporting & expected outcomes, with measurable indicators Contract management – monitoring & supervision is crucial Contract execution – procurement is complete only when the contracted product of satisfactory quality is delivered at the appointed time