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NAHEP
This project was approved by Bank Board on August 3, 2017 with closing
date of November 30, 2022. The Project is being implemented by 61
agencies (universities) in several states.
The Project Agreement require that the PMU engage a Procurement
consultant to carry out procurement review .The selection process has
been initiated and we expect ICAR will have a consultant onboard within
next couple of months .
In FY19, over 427 contracts were awarded ( as per STEP DATA)and to
ensure compliance the Bank team sampled 12% contracts for PPR .
A number of non -compliances have been identified in the PPR.
All the IA must note that these possible noncompliance can lead to
declaration of mis procurement.
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STEP STATUS
July 15, 2020
Number of Procurement plans in STEP :61
Completed : $ 10 Million
Signed : $9.6 Million
Pending for Initiation : $16.70 Million
Under Implementation: $8.00 Million
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NAHEP
Applicable Guidelines
of The World Bank
– “Procurement Guidelines” means the “Guidelines:
Procurement of Goods, Works and Non-consulting
Services under IBRD Loans and IDA Credits and Grants
by World Bank Borrowers” dated January 2011
(revised July 2014).
-Consultant Guidelines” means the “Guidelines:
Selection and Employment of Consultants under IBRD
Loans and IDA Credits and Grants by World Bank
Borrowers” dated January 2011 (revised July 2014).
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CONSIDERATIONS
THAT GUIDE
PROCUREMENT IN
BANK FINANCED
PROJECTS
PROCUREMENT PRINCIPLE :
Need for economy and efficiency in the execution of the project.(Encourage open competition).
All eligible bidders to get equal opportunity to compete.
Make the procurement process transparent.
BANK GUIDELINE REQUIRES THAT HIGHEST STANDARD OF ETHICS ARE OBSERVED DURING THE PROCUREMENT AND
EXECUTION .
F&C DEFINITIONS:
“CORRUPT PRACTICE” – OFFERING, GIVING, RECEIVING, SOLICITING ANYTHING OF VALUE TO INFLUENCE
A PUBLIC OFFICIAL IN THE PROCUREMENT PROCESS OR CONTRACT EXECUTION.
“FRAUDULENT PRACTICE” – MISREPRESENTATION OR OMISSION OF FACTS IN ORDER TO INFLUENCE A
PROCUREMENT PROCESS OR CONTRACT EXECUTION.
“COLLUSIVE PRACTICE” – ARRANGEMENT BETWEEN BIDDERS IN ORDER TO ESTABLISH BID PRICES AT
ARTIFICIAL NON-COMPETITIVE LEVELS.
“COERCIVE PRACTICE” – HARMING OR THREATENING TO HARM PERSONS TO INFLUENCE THEIR
PARTICIPATION IN A PROCUREMENT PROCESS OR AFFECT THE EXECUTION OF A CONTRACT
‘OBSTRUCTIVE PRACTICE ‘-DELIBERATELY DESTROYING FALSIFYING ALTERING OR CONCEALING OF
EVIDENCEMATERIAL TO THE INVESTIGATION OR MAKING FALSE STATEMEMT TO INVESTIGATORS TO
MATERIALLY IMPEDE BANK INVESTIGATION INTO CORRUPT,FRAUDULENT,COERCIVE,COLLUSIVE
PRACTICE
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TYPES OF PROCUREMENT
PROCUREMENT
OF
CONSULTANT
SERVICES
“CONSULTANT SERVICES” INCLUDE SERVICES OF AN INTELLECTUAL AND
ADVISORY NATURE (SUCH AS POLICY ADVISE, INSTITUTIONAL REFORMS ADVICE,
SOCIAL AND ENVIRONMENTAL STUDIES, TECHNICAL ASSISTANCE–ENGINEERING
SERVICES AND CONSTRUCTION SUPERVISION, FINANCIAL SERVICES
PROCUREMENT
OF GOODS
“GOODS” INCLUDE: COMMODITIES, RAW MATERIAL, MACHINERY, EQUIPMENT
AND INDUSTRIAL PLANT.
PROCUREMENT
OF WORKS
“WORKS” INCLUDE SERVICES WHICH ARE BID AND CONTRACTED ON THE BASIS
OF PERFORMANCE OF A MEASURABLE PHYSICAL OUTPUT (SUCH AS
CONSTRUCTION OF WORKS, MANUFACTURE OF GOODS, OPERATION AND
MAINTENANCE OF FACILITIES OR PLANTS, DRILLING, MAPPING A.S.O.)
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PROCUREMEN
T PLANNING-
TAKE THE
FIRST STEP
Prior Agreed Procurement Plan to be the basis for any
procurement under the project.
FACTORS :
What? (Contract packages)
What Price ?($)
How? (Strategy)
Who? (Organization)
When? (Scheduling & Monitoring)
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PROCUREMENT CYCLE-Goods &Works
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Steps to follow
Contract
performance
Prepare Bidding
document
Contract award
BID OPENING
Issue Bidding
Documents
Bid evaluation and
selection
Pre Bid conference (if
required)
Advertising in
National press
Bids Received
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MISPROCUREMENT
THE BANK DOES NOT FINANCE
FOR CONSULTANT SERVICES, GOODS AND
WORKS WHICH HAVE NOT BEEN PROCURED
ACCORDANCE WITH AGREED PROCEDURES
THE LOAN AGREEMENT
IN CASE OF MISPROCUREMENT, IT IS THE
BANK POLICY TO CANCEL THAT PORTION
THE LOAN ALLOCATED TO SERVICES,
OR WORKS THAT HAVE BEEN
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Goods & WORKS
ICB
Some Aspects ICB NCB SHOPPING DIRECT CONTRACTING
ADVERTISE UNDB/National and
international
Newspapers
National Newspaper
and FREELY
ACCESSIBLE website
NA
BIDDING PERIOD Appx 45 days from date
of availability of
document
Minimum 30 days 7-14 days NA
MINIMUM
BIDDERS
1 1 3 1
Bidding Document SBD of WB Country specific as
agreed with
Government
Model RFQ Same as ICB/NCB/Shopping
Threshold $3 million for goods
> $40 million for works
< $3 million for
<$40 million for
< $100,000 As per the provision of the
regulations
NA
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RISK &
Required
SYSTEMS
Procurement system risk
Organization/Staffing: Organization of the procurement unit and allocation of functions; quality and
adequacy of procurement staff.
Controls/Manuals: complaints handling, existence of dispute resolution systems, internal procedural
manuals and instructions, oversight and auditing practices, and code of professional behavior and
ethics.
Record-keeping: Availability, quality, security, and completeness of procurement records and files.
Procurement process risk
Procurement Planning: adherence to the Procurement Plan, including any /updates.
Publications: adhere to advertising and contract award publication requirements for applicable
contracts.
Bidding: adhere to requirements for bidding documents, including RFPs, LOIs, shortlists, terms of
reference, invoices, and other applicable documents.
Evaluation: adhere to bid evaluation requirements/criteria, including draft contracts, technical and
financial evaluation reports, and any bid amendments.
Awards: adhere to contract award requirements, including complaints handling, amendments,
variation orders, and extensions
Implementation: adhere to contract implementation criteria, including results of physical inspections.
Contract Administration risk
Payments: adhere to contract payment schedules, including timeliness of payments to contractors.
Compliance: adhere to all contractual provisions; adherence to all related anticorruption practices.
Disputes: promptness and equity in resolving contractual disputes
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SOME PPR OBSERVATIONS
Supply Order and payment detail not available in the system.
Delay in contract completion by 3 weeks for which no amendment issued.
RFQ does not have provision for splitting of contract while the contract has been awarded to two bidders for the two items.
Delay in supply.
The item approved in PP and actual procured are different.
The Quotation request is undated. No last date for submission mentioned.
Comparison based on model /Brand which is not an acceptable method as per Bank norms.
The dates of quotation request and the roadmap dates do not match as the activity had been updated in the system after the same was carried out (contract /Work order issued)
plan being cleared by the Bank.
There is huge variation in estimated price and most of the bids that have been received for which no reason is amplified in the comparative statement to establish that the lowest
meets the technical requirement and the reason for such large variations.
While the completion period was three months, the contractor has been able to complete the same not before 8 months for which no extension / amendments has been carried
No Work Order/Contract Agreement available in STEP
There is no contract issued to the individual except for the draft Negotiated Contract. The value of contract captured in the system mention Rs 1 lac without specifying the unit or
contract which should be the complete period. No amendments issued
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SOME PPR OBSERVATION
From the document uploaded in STEP, AU has mentioned value which is inconsistent with the contract value
( with GST/without GST)
Supply order is issued beyond the quotation validity period
No communication to the supplier on contract termination available in STEP.Not clear if any payment has been made against this contract. The relevant documents not available in STEP
Delay in supply of materials for which there is no amendment or extension carried out. ( EgEM)
Two contracts awarded while this should have been awarded on single responsibility basis
While the chosen method is Single Stage- Single Envelope, the evaluation is based on two envelope.
BER does not have the complete information of the tender value.
RFQ was for larger number while the actual contract was awarded for lower numbers for which no prior indication was made in RFQ. (FQ and the final contract needs to be aligned. At the
25 Nos. while contract is for only 10 nos)
There is a contract Agreement which has been drawn on the letter head of SUPPLIER
There appears to be a complaint which is not properly captured in the system which needs to be updated .
Quotation received from an agent while the SO is placed on a foreign supplier. (No authorization document is in STEP)
Against requirement of 3 Quotation only one quotation received
There is no contract issued to the individual except for the draft Negotiated Contract. The value of contract captured in the system mention Rs 1 lac without specifying the unit or period
which should be the complete period. No amendments issued
The PP approved is for a lumpsum consultancy the contract signed is a time-Based consultancy.
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Procurement
compliance &
Review –
Way Forward-I
Incorporating wrong methods /estimates/specs can lead to avoidable delays and transactions .
Prior to arriving at method and estimate in STEP do a market survey.
The process as mentioned in STEP to be adhered to and documents to be promptly uploaded at
each stage.
The contract value and value updated in STEP should be consistent .Do not skip steps in STEP .
Minimum three quotations are required for RFQ method of procurement.
RFQ needs to carry complete information in regard to date of submission; required specification,
quantity, quantity variation, if contracting will be based on individual items or all evaluated
together only, payment terms, delivery period, guarantee warrant requirements etc .
Do not proceed with award before the last date of submission as mentioned in RFQ.
Comparative should be based on the invited RFQ.
For RFB procurement use standard BER format and duly upload it in STEP.
No change in specification and terms can be made at the contract award stage. The RFQ and
contract to be consistent.
All Contract should be awarded within the bid validity period.
Civil work contracts to be awarded on single responsibility basis.
Contract terms, contract amount and contract period are important aspects which need to be
captured in the contract .
Cannot change method after the contract is signed.
Payments to be made as per contract terms
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Procurement
compliance &
Review –
Way Forward-II
No retendering if responsive bids have been received. For retendering
provide appropriate justification (refer to the guideline) and upload
in STEP.
All complaints need to be updated in STEP and upon resolution
should be closed with all documentation fully uploaded else PMU
should review the complaints and escalate it, as appropriate.
If the contract is likely to be delayed then issue EOT before contract
expiry with justification in files. Upload the addendum with
justification note in STEP
If item in the RFQ is to be evaluated separately then same to be stated
in RFQ upfront.
If there are delays in supplies (even if procured thru eGem) then
either issue an amendment or terminate the contract (record the
justification in both instances ).
Timely amendment to be issued
If the items need to be changed then update STEP before proceeding
with the activity.
Use generic specification. Wherever unavoidable please add ‘or
equivalent’
Backdated document not to be uploaded unless agreed with Bank
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eGem in Lieu of RFQ
eGem only for RFQ method i.e upto $100,000.
Not to be used for procurement above $100,000 (RFB)
up to INR 50,000 in catalog mode (viz. any available item could be selected by IA without
further competition), provided selected Item/Supplier meeting the requisite quality,
specification and delivery period.
up to INR 3 Million from the Supplier having lowest price amongst at least three Suppliers
meeting the requisite quality, specification and delivery period. The tools for online bidding
and online reverse auction available on GeM may be used by the Purchaser.
up to INR equivalent of US$ 100,000 from the Supplier having lowest price and meeting
the requisite quality, specification and delivery period after mandatorily obtaining bids from
at least three Suppliers, using online bidding or reverse auction tool provided on GeM.”
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REMEMBER
PREPARE Good Estimates
Cost & time overruns can be arrested simply by making good estimates.
Estimates should be proposed after proper ground survey and market rates.
variations during execution reflects poor quality of estimation.
VERIFY Documents
Due diligence in checking Documents such as completion certificates for past experience,
Bank Guarantees etc should be done independently to ensure authenticity.
EXAMINE Quality
Some times forged records of testing are created. This results in execution of sub-standard
quality of works, which adversely affects the performance and life of the projects besides
undue benefit to the contractor. Third part inspection gives an unbiased confirmation on the
quality .
KEEP Records
Records authenticate quality and quantity audits conducted by field staff and regulate
mandatory requirements. These become handy for fixing accountability also.
Thus record generation, safe custody and authenticity of records need attention and
verification by Sr Officers.
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ACTION TO
BE TAKEN :
WAY
FORWARD
PMU and IA to propose actions to minimize these occurrences.
PMU and each AU must prepare a kit of most critical document which includes but not limited to –
Applicable Guidelines ,Project Procurement manual, Model Bid document, Formats for evaluation ,contract
format and PPR format and upload on website for easy access.
Each IA shall have designated procurement person who have received training at ASCI Hyderabad or held by
PMU to carry out procurement. The names of officers to be shared with the PMU and Frequent change in the
procurement personnel to be avoided as it is an impediment in smooth functionality. Should that be
necessitated then ensure proper handover is done.
PMU shall prepare an annual calendar of Regular clinics and workshops and disseminate to all AU’s and
ensure that each university has more than one official who is trained and familiar with Bank procurement
requirements . to disseminate the procurement guidance and findings and get commitment from implementing
agencies and PMU on actions that will be taken to mitigate these issues.
An independent consultant to be onboarded without further delay for conducting regular procurement review
and sharing the report ever six months
PMU to proactively disseminate regularly norms which are commonly applicable for all AU’s , Provide an update
in regard to FAQ, specific observations, guidance ,training material from time to time .
All complaints to be closely monitored by PMU and ensure that they are duly addressed and closed in an
amicable manner .
Bank standard/Model documents as agreed with Bank shall be used consistently across board. All agencies
need to ensure compliance to the agreed procedures and processes
All IA must ensure that all the documents are uploaded in STEP in a timely manner .
Regular internal Quality assurance by the AU’s and PMU by reviewing if the documents are uploaded in STEP
and if the procurement process are being correctly and consistently followed .
Ensure procurement MIS is developed and information is updated on real time basis .
Action to be initiated for large number of activities cleared in STEP. This will require proactive review and
engagement by PMU.
Action plan should be updated by PMU and agreed with Bank in addition to the PPR report response.
