Presentation made with Payal Madan during the 2010 Fiduciary Forum organised by World Bank in Washington DC USA. Based on a research study conducted in 4 projects in India.

1. Innovative Approaches to Community Based Procurement in South Asia A.K.Kalesh Kumar & Payal Malik Madan South Asia Regional Procurement Services, World Bank 2010 Fiduciary Forum Washington DC

2. Background Based on a 2009 study sponsored By WB-Norwegian Governance Trust Fund in 3 CDD Projects and one Local Self Government System in India, and Outcomes of a South Asia Regional Workshop on “ Community Based Procurement: Learning from Field” organised in New Delhi, India in October 2009

4. Study Scope

6. Study Methodology Qualitative study Semi Structured Questionnaires used for measuring procurement performance, community participation, need prioritization, capacity enhancement, governance, and sustainability in the subprojects

7. Study Methodology Rating Scale On a scale of 1 to 5. on a worst and best case scenario, all performances were rated. The best practice scenario depicts what is envisaged as per the project manual or Legal agreements and Procurement/ Community operation Manuals.

8. Models of Community Based Procurement found by Study Category I- Family Based Private asset Generating Procurement Category II-Village Organization Based Force Account Type Procurement Category III- NGO Based Procurement Support Agency Type Procurement for CDD Implementation Category IV-Third Party Contracted but community monitored Procurement www.CDD details www.CBP details

10. Procurement Performance against Procurement Cycle by Sub projects

15. Rating on Governance and Accountability Important indicators of good governance include participation in Decision-making and implementation, accountability, transparency, Responsiveness, efficiency and equity

16. A Flexible FM arrangement: rating in subprojects

21. choosing a good facilitation team

22. intensive capacity building of the beneficiaries

23. ensuring consensual decision making in procurement and financial management - free access to information, documentation and record keeping for the group, families and village

24. 20 PART II Innovations in Community Based Procurement

25. Relationship Based Procurement (RBP) influencing Procurement Outcomes RBP is a recent concept: In RBP, the communities establish a mutually beneficial and accountable commercial relationship with the supplier. RBP Approach argue that risk and crisis can be better managed and resolved through mutual dependability. In the sub projects reviewed by the study, the community opting for RBP based on trust and inter dependability shown to have ensured quality of materials, Just-in-Time Supply and efficient post delivery servicing.

26. RBP in Action… Working with Suppliers to Achieve Innovative and Cost Effective Solutions Some 100 kms. away from district head quarters, the only available resources available in Obari are the natural resources: the river, land and forest As part MPDPIP, the income generation activity for SHG planned was: using the river water for irrigation of the surrounding lands. However, the challenges were, fields were at a height of 6 meters and 1.5 km away from the river. SHG approached vendors with this unique requirement. Among 3 Suppliers approached, Sanjay Agrico, the villagers took the challenge of assembling pump manufactured by Greaves and rail pipes manufactured by Reliance.

27. RBP in Action… Working with Suppliers to Achieve Innovative and Cost Effective Solutions The pump failed on the day of inauguration! Supplier through in-house R&D came up with another solution which was a modified auto rickshaw engine which had the capacity to pump the water up to the needed height. Surprisingly, this unconventional solution worked! The SHG had successfully implemented the work with nearly a 50% cost savings, passed on by Supplier (RBP working!) and the Supplier had created a credible market where private individuals are opting for their innovative solution, not a registered trade mark (again RBP at work!)

28. RBP in Action… A Buy Back Arrangement Delivering VfM for Silk Weavers Mahan Laxmi SHG started the livelihoods initiative by extending $100 loans to 15 poor women members of the village depended on their household looms The next big step was SHG deciding to join Silk Federation Group. “… there was resource mapping done in the village and we decided to federate as group to work for ourselves and not for the Muddalali (Moneylender)…”who first loaned money to the poor to buy raw material from him and then bought back their produce for servicing the interest on the original loan! As some members wanted the traditional machines, and others the Jacobean ones, SHG did a market survey to get rate estimates to guide the members for these individual purchases. A manufacturer of machines and yarn was identified through this process.

29. in Action… A Buy Back Arrangement Delivering VfM for Silk Weavers RBP Offer to procure yarn in bulk and directing new members for machines were the negotiation points for SHG A weekly run of service mechanic, free oil and servicing and delivery of yarn at door step were the counter offers from the supplier A 30% savings on cost of yarn and the good manners of the supplier and service mechanic resulted in an instant establishment of Relationship Based Procurement SHG has proudly announced that they supply to 2 leading Silk Saree Show Rooms in Chennai- Chennai Silks and Mudra Sons- another spin off from the good business SHG had offered the Supplier…And the Procurement Committee still travels to the city- Trichy every month to verify the rates!!

30. 26 Innovations in Community Procurement: Posters replacing Manual for Community

31. Entry Point Activity (EPA) Entry Point Activities chosen to generate interest, participation amongst target communities and establish project credibility through addressing dire needs. -In MPDPIP a ‘Z’ Category of subproject that provided strategic Public Goods and Services; -In TNERP entry point intervention focused on services for the Disabled -In APIKP entry point was revival of erstwhile SHGs.

32. Innovations in Community Procurement “Parity Charts” help Community and Suppliers to engage in 28 The project team organized village and district level meetings with suppliers to establish linkages, understand product specifications and their prices. Selected community representatives from all villages were invited to identify and shortlist their needs. Local suppliers were identified and listed with the positive and negative aspects of their quality and service Local suppliers were identified and listed with the positive and negative aspects of their quality and service.

33. Innovations in Community Procurement “Parity Charts” help Community and Suppliers to engage in Invitations were sent to the short listed suppliers for a public demonstration and negotiations. The suppliers presented their products, prices, offers, service arrangements etc. Factors like service, guarantee, transportation cost, and payment conditions were noted. A comparative Parity Chart was made after these meetings, to facilitate decision-making by the community members. 29

35. Credits study team : a. k. kaleshkumar shwetarajwade payalmalikmadan julianboyle siddharthdasgupta editorial support: sanchitaghosh peer reviewers: naushad a khan benjaminpowis toufiqahmed support and guidance: nadjibsefta amadoutidianetoure asmeen khan joel a turkewitz