World Bank Procurement Short Note

What Is Good Procurement? What Does It Look Like?
The principal hallmarks of proficient public procurement are:

• Economy;
• Efficiency;
• Fairness;
• Reliability;
• Transparency; and
• Accountability and Ethical Standards.
Economy: Procurement is a purchasing activity whose purpose is to give the

purchaser best value for money. For complex purchases, value may imply more
than just price, for example, since quality issues also need to be addressed.
Moreover, lowest initial price may not equate to lowest cost over the operating life
of the item procured. But the basic point is the same: the ultimate purpose of sound
procurement is to obtain maximum value for money.
Efficiency: The best public procurement is simple and swift, producing positive
results without protracted delays. In addition, efficiency implies practicality,
especially in terms of compatibility with the administrative resources and
professional capabilities of the purchasing entity and its procurement personnel.
Fairness: Good procurement is impartial, consistent, and therefore reliable. It
offers all interested contractors, suppliers and consultants a level playing field on
which to compete and thereby, directly expands the purchaser’s options and
opportunities.
Transparency: Good procurement establishes and then maintains rules and
procedures that are accessible and unambiguous. It is not only fair, but should be
seen to be fair.
Accountability and Ethical Standards: Good procurement holds its practitioners
responsible for enforcing and obeying the rules. It makes them subject to challenge
and to sanction, if appropriate, for neglecting or bending those rules.
Why Is Proficient Public Procurement So Important?
Yet procurement costs can be substantial, consuming scarce resources of tightly

constrained government budgets. Often the required funding must be borrowed.
Moreover, the process also consumes scarce skilled public-sector human resources.
It takes time, not merely for procurement planning and contracting but also for
contract supervision and execution.
 The World Bank has five basic concerns that govern its procurement policies:
• to ensure that the goods and services needed to carry out the project are
procured with due attention to economy and efficiency;
• to ensure that the loan is used to buy only those goods and services
needed to carry out the project;
• to give all qualified bidders from the Bank’s member countries an
equal opportunity to compete for Bank-financed contracts;
• to encourage development of local contractors and manufacturers in
borrowing countries; and
• to ensure that the procurement process is transparent.
 Procurement under a Bank loan is the Borrower’s responsibility, not the
Bank’s. But the Bank, through its Guidelines, its training, and mostly its staff,
can render support in helping Borrowers implement procurement properly.
Chapter 1. Procurement Policy and Institutional Topics

Section 1: Operational Policies
 The Bank’s ability to raise financial resources from its member countries and in
the capital markets also depends in part on the impartial administration of
this procurement. Accordingly, the Bank has established rules for the use of
its loans and for supervising the execution of projects it helps to finance.
 The rules, which are endorsed by the Bank’s Executive Directors, are set out in
the Guidelines for Procurement under IBRD Loans and IDA Credits (the
Procurement Guidelines) and the Guidelines for Selection and Employment of
Consultants by World Bank Borrowers (the Consultant Guidelines).
 The Bank requires careful procurement planning before project approval and
supervises procurement during project implementation to ensure the appropriate
application of these rules.
Section 2: Eligibility
 Under the Bank’s Articles of Agreement, the resources and facilities of the
Bank are to be used solely for the benefit of Bank member countries.
Membership of the Bank includes countries that are members of the
International Monetary Fund, and those which accepted membership in
accordance with the Articles of Agreement, and in accordance with such other
terms as may be prescribed by the Bank.
 Funds from Bank loans are thus only disbursed on account of expenditure on
goods, works and services provided by nationals of, and produced in or
supplied from, Bank member countries.
 Consequently, only bidders from member countries of the World Bank may bid
for and be awarded contracts in Bank financed procurement. (For a list of
ineligible source countries in Bank financed procurement refer to the following
website address - www. worldbank.org/html/pic/procure.html)
 The Borrower may exclude suppliers, contractors and consultants from
tendering for procurement opportunities in Bank projects on the following
basis:
• the Borrower’s country prohibits as a matter of law or official
regulation, commercial relations with the country of the bidder;
• the Borrower’s country in compliance with decisions taken by the United
Nations Security Council, under Chapter VII of the UN Charter,
prohibits import of goods from or payments to persons in the country of
the Bidder;
• the bidders in question or their affiliates provided consulting services
for the preparation and implementation of a project, and in order to
prevent a conflicts of interest, they and their affiliates are disqualified
from subsequently providing goods and works under Bank financing for
the same project; or
• firms or individuals who have been debarred by the Bank for having
been engaged in fraudulent or corrupt practices.
Section 3: Roles and Responsibilities of Bank Staff and Organizations in

Procurement
 Bank staffs has a vital role to play at each step of the procurement process to
ensure compliance with Bank policies and procedures and to help Borrowers
address procurement issues in all phases of the project. Therefore, Bank
procurement staffs are expected to have a broad understanding of development
issues and specific professional knowledge, skill and experience in
procurement, in order to make sound and independent judgments on
procurement issues.
 The Bank exercises its fiduciary and developmental responsibilities with respect
to procurement by:
• assessing Borrower and implementing agency procurement capacity and
procedures and helping them improve their capacity;
• requiring appropriate procurement plans for each project before
procurement begins;
• providing guidance to Borrowers in the use of standard procurement
documents and related instructions to help ensure compliance with the
Guidelines; and
• supervising and monitoring project implementation through site visits,
prior reviews, post reviews and audits.


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What Is Good Procurement? What Does It Look Like?

The principal hallmarks of proficient public procurement are:

Economy: Procurement is a purchasing activity whose purpose is to give the

Why Is Proficient Public Procurement So Important?

Yet procurement costs can be substantial, consuming scarce resources of tightly

Chapter 1. Procurement Policy and Institutional Topics

Section 3: Roles and Responsibilities of Bank Staff and Organizations in

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