34875 PROCUREMENTUNDERWORLD BANK-FINANCED PROJECTS: FY05ANNUAL REPORT OPERATIONS POLICYAND COUNTRY SERVICES JANUARY23,2006 PROCUREMENT UNDER WORLD BANK-FINANCED PROJECTS: FY05ANNUALREPORT CONTENTS Page IIntroduction............................................................................................................................. . 1 I1 ProcurementProgramsand Outlook.................................................................................... . 1 A Project-Based Activities............................................................................................. . 1 B Region-Specific Activities ......................................................................................... . 6 I11 ProcurementSector Perspectives........................................................................................ . 26 A. Staffing and Professional Development......................................................................... 26 B Procurement Policy andTools ....................................................................................... . 29 C Technical Support .......................................................................................................... . 28 D. Harmonization with Multilaterals.................................................................................. 29 E. InstitutionalInitiatives.................................................................................................... 32 Table 1 Prior Review Contract FY98-05 ...................................................................................... Tables andFigures 3 Table 2 Procurement Post Review inFYO5.................................................................................. .. 3 4 Table 4 Independent Procurement Review inFY05...................................................................... Table 3 Percentage o f Procurement Post Review, FY02-03......................................................... .. 4 Table 5. OPRC Case ReviewsFY03-05........................................................................................ Table 6 Number o f Complaints..................................................................................................... 5 . 4 Table 8. Procurement Decentalization, FY04-05 .......................................................................... Table 7. Misprocurement Declared inFY05 ................................................................................. 5 6 Table 9 Procurement Resources, End-June 2005 ....................................................................... . 26 Figure2. AFR Decentalization o f Responsibilities to COS........................................................... Figure 1 Decentalization Program o f Procurement Function during FYOl-05 ............................ . 6 7 Figure 3 Percentage o f Projects with Procurement Sign-offAuthority Located at COS . ..............7 Figure 4. Progress inProcurement Reform. 2001-2005 ................................................................ 8 ABBREVIATIONS AND ACRONYMS ACS Administrative Core Service AFD Agence franqaise de d6veloppement AFR Africa Region AFT Africa Technical Department AFTPC Quality andKnowledge Operations Support of Africa Technical Department AsDB Asian Development Bank BCSA Behavioral change and social accountability BIMILACI BiennialMeeting o fthe International Lending Agencies and Consulting Industry BIS Baseline indicators system CAS Country Assistance Strategy CDR Council for Development and Reconstruction CEMU Economic and Monetary Community of Central Africa CFAA Country FinancialAccountability Assessment C M U Country management unit co Country office COMESA Common Market for Eastern and Southern Africa cos0 Committee o f Sponsoring Organizations of the Threadway Commission CPAR Country Procurement Assessment Report CSA Consulting Services Assessment CSM Consulting service manual cso Civil society organization DflD Department for International Development EAP East Asia and Pacific Region EC European Commission ECA Europe and Central Asia Region E-GP Electronic Government Procurement ESFA Education Sector Fiduciary Assessment ESSP Education Sector Development Project EU EuropeanUnion FIDIC International Federation o f Consulting Engineers FM Financialmanagement IAPSO Inter-Agency Procurement Services Office IBRD International Bank for Reconstruction and Development IDA International Development Association IDB Inter-AmericanDevelopment Bank IDF InstitutionalDevelopment Fund IFA InstitutionalFiduciary Assessment ILO International Labor Organization IRS Internationally recruited staff INT InstitutionalIntegrity Department IPR IndependentProcurement Review IPPR IndependentProcurement Performance Review JBIC Japan Bank for International Cooperation 11 .. KfWDB Kreditanstalt fir Wiederaufbau Development Bank LCR LatinAmerica and the Caribbean Region LEGPR Central Procurement LegalTeam MBD Master bidding document MDB Multilateral development bank MIS Management informationsystem MNA MiddleEast andNorthAfrica Region M O U Memorandumo f understanding NCB National competitive bidding NGO Nongovernmental organization OECD-DAC Organisation o f Economic Co-operation andDevelopment-Development Assistance Committee OPCPR Procurement Anchor OPCS Operations Policy and Country Services OPR Operational Procurement Review OPRC Operations Procurement Review Committee Activities PAD Project Appraisal Document PAS Procurement accredited staff PCC Procurement country coordinator PEFA Public Expenditure and FinancialAccountability PER Public ExpenditureReview PFMA Public FinancialManagement Assessment PREM Poverty Reductionand Economic Management Network PRSC Poverty reductionsupport credit PPR Procurement Post Review PQ Prequalification document QCBS Quality and cost basedselection RFP Request for proposals RMT Regional management team RPM Regional procurement manager RSS N Regional Systems Support Network SAR South Asia Region SBD Standardbidding document SWAP Sectonvide Approach TTL Task team leader UNCITRAL UnitedNations Commission on International Trade Law UNEP UnitedNations Environment Programme WAEMU West African Economic and MonetaryUnion WB World Bank PROCUREMENT UNDERWORLD BANK-FINANCEDPROJECTS: FY05ANNUALREPORT I. INTRODUCTION 1. The FY98 Procurement Strategy set four objectives that still guide the efforts o f the Procurement Sector: (a) improve fiduciary compliance by placing greater emphasis on up- front project work and strengthening post reviews, (b) increase the focus on the development impact o f procurement in order to build clients' capacity and help them establish sound procurement systems, (c) strengthen the Bank's internal capacity to manage the procurement function, and (d) enhance partnerships and improve outreach. This report, the sixth annual measure o f progress against these objectives, focuses on advances in the quality of implementation and discusses the FY05 roll out o f new products. New Guidelines for the procurement o f goods and works and for selection o f consultants were issued inMay 2004 as part of the simplification and modernization initiative undertaken by Operations Policy and Country Services (OPCS). The new Guidelines set the course for much of FY05 work because they required that the full range of bidding documents, manuals, and training materials be updated, that Bank staff be trained on the newproducts and policies, andthat the changes be communicated effectively to partner countries. Also inFY05, newproducts were introduced to improve impact, effectiveness, and monitoring of results in support o f capacity development andpublic procurement reforms inpartner countries. 2. Organization of the FY05 Annual Report. Following this introduction, Section I1 discusses FY05 project- and region-specific activities across the Bank's six Regions-Africa (AFR), East Asia andPacific (EAP), Europe and Central Asia (ECA), LatinAmerica andthe Caribbean (LCR), Middle East and North Africa (MNA), and South Asia (SAR). Section I11 examines Procurement Sector perspectives with respect to staffing, policies and tools, harmonization, and institutional initiatives. 11. PROCUREMENTPROGRAMS AND OUTLOOK 3. Regional procurement work supports project teams inthe design and implementation o f projects and in carrying out management and oversight responsibilities related to procurement. This work reflects the traditional fiduciary role played by procurement staff in project lending and supervision. A second, and growing, area of responsibility for procurement staff is broadly termed country-based work and relates to improving the capacity o f partner country staff and the development o f better performing procurement systems within the country through assessment of systems and the design, support, and monitoring o f procurement reform initiatives. The high degree of decentralization of procurement staff to country offices has improved implementation inboth areas o f work. A. Project-BasedActivities 4. Project-based activities primarily relate to World Bank fiduciary compliance responsibilities in investment projects. The new Guidelines issued May 2004 introduced 2 changes to modernize and simplify procedures and provide for greater flexibility in support of improved project implementation. The changes to the Guidelines take advantage o f the strengthened presence o f procurement staff on operations teams following the guidance issued inFY04 that increased the authority o f operations line managers working closely with assigned procurement staff.' The stated objectives of this guidance were to (a) increase ownership of project staff; (b) align risk with development effectiveness; (c) strengthen line management responsibility; (d) improve the balance between preparation and supervision; and(e) improvetimeliness andeffectiveness. 5 . Fiduciary Oversight and Compliance. In FY05, Regional procurement teams continued their efforts to improve operational responsivenessand development effectiveness with regard to fiduciary oversight and compliance activities for 1,282 active investment projects, representing a total commitment of $93 billion. The Regional Procurement Managers (RPMs) worked on implementation and to streamline project-related activities through the use o f new tools, training, and guidance for Regionaloperations and procurement teams. A summary o f these activities follows. 1. Lending 6. In FY05, 278 new operations (118 IBRD and 160 IDA) in 103 countries were approved, with a total commitment o f $22.3 billion. In addition to lending, 35 Institutional Development Fund(IDF) grants were approved. As noted, FY05 was the first year inwhich the newly revised Procurement Guidelines were implemented. Operations procurement teams provided timely advice on project designs, conduct o f procurement capacity assessments both at the project and country levels (depending on the type o f the lending activity), preparation o f the required procedures and simplified schedules in Loadcredit Agreements and Project Appraisal Documents (PADS), and they conducted project launch procurement workshops. 2. Supervision 7. InFY05, 1,282 active investmentprojects with a total lendingamount of $93 billion were under implementation. Procurement supervision responsibilities in project implementation included prior and post reviews of the contract documents and activities throughout the project and contracting cycles. 8. Contracts Subject to Prior Review. To mitigate procurement risk for high-value contracts, Bank procurement staff carry out prior review o f certain borrower procurement decisions for procurement above the agreed prior review threshold. During FY05, some 6,740 contracts valued at $7.6 billion were prior reviewed. Table 1 shows the decline inthe value and number of prior-reviewed contracts from FY98 to FY05, and that while the dollar value o f prior reviews has remained consistent over the past five years, FY05 saw a significant reduction in the number of contracts subject to prior review. (The FY05 figure ~' "Guidance on Management of Fiduciary and Safeguard Procedure," October 20, 2003, on the integration of procurementstaff into operational teams and the elimination of prior clearance of appraisal documents by specialized managers, placedresponsibility and accountability in the line manager. 3 was 15 percent less than that o f FYO1 which was itself the lowest number in the past five years.) These figures confirm the continuously increasing prior review threshold levels for new projects. 9. Procurement Post Review. As Table 2 indicates, 1068 projects (80 percent o f the total lending operations portfolio) were subject to procurement post review (PPR) in FY05. And the Regions increased efforts to follow-up on the findings o f these reports and, where applicable, used the PPR as a tool to strengthen borrower capacity. These activities effectively impacted project implementation. Table 3 provides the post review progress o f the Regions since FY02, when post review received greater attention because o f the gradual increase o f prior review threshold levels, and shows the consistency o f the effort Bankwide inrecent years. I Projects inportfolio I 371 I 246 I 324 I 291 I 118 I 167 I 1,517* Projectsnot subject to post Ireview* * 6 117 203 46 18 59 449 Projectssubjecttopostreview I 365 I 129 I 121 1 245 I 100 I 108 I 1,068 Projectspost reviewed** * (accumulated) 148 111 112 116 54 39 580 Projects post reviewed (accumulated%) 41% 86% 93% 47% 54% 36% 60% *** Projects Total numberofactiveprojectsinportfolio, including developmentpolicy operationsandtrust funds. 100percentsubjectprior review, or projectswith insufficientcontractsfor post review. *** Data including projectsunder independentprocurementreview. 4 10. Independent Procurement Reviews (IPRs). As part of monitoring project fiduciary compliance, IPRs complement the prior review and regular post review procedures, and inform Regional management of the quality o f the Region's fiduciary work on procurement. DuringFY05, IPRs were conducted for 50 projects in 14 countries (see Table 4), an increase over the 11 countries covered in FY04. While carrying out new IPRs, Regional and country procurement teams undertook follow-up activities on the results o f previous IPRs. I Numberofprojectsreviewed 1 21 I 0 I 10 I 10 I 5 I 4 I 50 I 11. Operations Procurement Review Committee Activities (OPRC). The OPRC provides an important contributionto the fiduciary oversight role o f the procurement function through review and clearance of the most complex and high value contracts financed through Bank loans. During FY05, OPRC reviewed 58 cases (up from 52 each in FY03 and FY04), valued at approximately $3.7 billion. 5 12. Complaints. An important element in ensuring compliance with the procurement process i s the ability o f bidders and consultants to submit formal complaints andto have their complaints addressed. In FY05, 301 complaints were received by the Bank, substantially fewer than in recent years (see Table 6). The assigned procurement staff and WM offices followed up with the relevant borrower implementing agencies to ensure that the complaints were addressedinatimely manner. AFR 42 58 36 EAP 115 51 22 ECA 51 59 32 LCR 19 13 9 MNA 12 20 33 SAR 209 247 169 Total 448 475 301 13. Misprocurement. Bank policy i s to cancel any portion o f the loan allocated to the goods, works, and services that has not beenprocured in accordance with the procedures set out in the Loan Agreement (misprocurement). Most misprocurement cases have been detected through the post review process, underscoring the importance o f PPRs. In FY05, misprocurement was declared in 22 contracts in six countries, for a total value of $1.20 million, compared to FY04 and FY03 misprocurement cases valued at $17.57 million infive countries and $60.8 million in 10countries, respectively. I AFR I Chad I 9 I $39,655 I Post review I Tanzania Mauritania Complaint 1I review Timor Leste 1 $121,287 Postreview SAR 11Nepal 1I 11 ' Euro541,332 $104,950 1IPrior reviewII 14. Decentralization. Procurement work i s increasingly undertaken by country-based procurement staff (see Table 8 and Figure 1). This has facilitated increased client services and access, andmaintenance o f current knowledge o f country governance systems. 6 Figure 1: Decentralization Progressof Procurement Function During FYOI - FY05 99% I AFR EAP ECA LCR MNA SPR 1 Region B. Region-Specific Activities 15. The growth inuse of newer Bank instrumentsand approaches, such as programmatic lending, development policy lending, poverty reduction support credits (PRSCs) and sectorwide approach (SWAp) activities, has underscored the importance of the developmental function o f procurement and the need to approach procurement from a country perspective. Along with performing fiduciary responsibilities (a task that has been aided by having procurement staff more integrated with sector and project teams), Regional procurement teams continued inFY05 to support country-based activities and harmonization efforts with multilateral and regional development banks and partners. A summary of each Region, LEGPR (central procurement legal team), and OPCPR (Procurement Anchor) with respect to their resources and FY05 Region-specific activities follows. 1. AFR 16. Among other things, this review o f the FY05 work o f the Regionalprocurement team covers decentralization, country procurement reforms and Country Procurement Assessment Reports (CPARs), and capacity building, harmonization andregional initiatives. 7 17. Decentralization. During FY05, procurement staff based in country offices (COS) and inWashington, D.C., continued to provide assistanceto the project teams inall phases of the project cycle and continued to work on helping to build national procurement systems. The enhanceddecentralization of the procurement function started inFY02, with the creation o f four country procurement hubs, with procurement hub coordinators having responsibilities (including mentoring and coaching o f CO procurement staff) for a group o f countries. In FY05, seven new CO procurement staffjoined the AFTPC family, andtwo hub coordinators returned to Washington. Currently, 30 local procurement staff (23 of whom have been granted limited procurement accreditation) work in 23 COS. Washington i s served by 11 procurement staff (see Figure 2), split into six hubs (four hub coordinators are located in Washington, and one each in Mozambique and Uganda). InFY05, 87 percent o f clearances were delegated to CO procurement specialists (see Figure 3). Decentralization has enhanced Regional procurement support to project teams and helped integrate procurement specialists (PSs) in project teams, enabling procurement staff to conduct quality checks on project documents, while receiving support and guidance from hub coordinators or the RPM Office as needed. Figure2 Figure3 AFR decentralization Percentageof projectswith procurementsign-off of responsabilitiesto COS authority located at COS 10 80 OhaS k f 60 CO Staff 40 20 0 l FYOl FY02 FY03 NO4 FY05 FYLX I 1Q FYOl FYO2 0 FY03 0 FY04 BFY05 1 18. Country Procurement Reforms. There are active country procurement reform efforts ongoing in 34 Sub-Saharancountries, for a total FY05 funding o f $5.27 million through IDF grants (5 IDFs in FY05), through PRSCs (Benin, Burkina Faso, Cape Verde, Ghana, Tanzania, and Uganda), or through a project component. Beginning in FY05, reform progress in two countries (Burkina Faso and Cameroon) i s being measured against the Baseline Indicators System (BIS), the Organisation of Economic Co-operation and Development-Development Assistance Committee (OECD-DAC) methodology that provides a tool to governments to assess the quality o f national public procurement systems and to monitor their performance. The objective has been to develop country awareness of the importance o f using mutually agreed standards and benchmarks and to launch BIS monitoring and evaluation (M&E) activities in a further five countries. (Measured against a precursor to the BIS developed in AFR, the Region has seen steady progress on the country procurement reform front on the basis o f the implementation o f CPAR follow-up action plans, as indicated in Figures 4 and 5.) Integrated regional procurement reform will remain an important activity o f AFTPC because of the strong impetus it i s expected to give to the national procurement reform process supported by CPARs and capacity building. AFTPC 8 has explored the possibility o f broadening the support for national procurement reform to the Economic andMonetary Community of Central Africa (CEMAC).' Figure 4 I Progress in Procurement Reform, 2001-2005 100 80 Q, 3 60 rn J!c 40 - 20 0 2001 2002 2003 2004 2005 Note: Percentagesrefer to progressagainst reform objectives. 19. Capacity Building. Country office procurement staff received training in Bank operations-and-specialized fields o f procurement (a Health procurement workshop was held inMalawi) and attended the Fiduciary Week organized inEthiopia by the Procurement and Financial Management Clusters. In addition, procurement seminars, such as the ones in Morocco (October 2004) and Ghana (June 2005), were held together with borrower and procurement staff, which proved to be a useful cross-fertilization and training formula, especially for dissemination o f the new Procurement Guidelines publishedinMay 2004 and the recommendations of the Paris Declaration onperformance measurements. During FY05, procurement workshops for clients were delivered on a regular basis (focusing on investment operations and sector-specific procurement issues such for infrastructure, health, and education). Some countries and two subregional organizations-West African Economic and Monetary Union (WAEMU) and Common Market for Eastern and Southern Africa (C0MESA)-are in the process o f installing sustainable procurement training programs. Regional training centers in Ghana and Tanzania (both Anglophone) and in Senegal (Francophone) continued to train borrower procurement staff. In FY05, CO procurement staff conducted procurement clinics in 11 countries, reaching some 440 participants and fostering understanding o f Bank procurement procedures and cooperation. 20. Harmonization and Regional Initiatives. Sector Wide Approaches (SWAPs) inmany countries in sub-SaharanAfrica such as, Malawi, Ghana, Tanzania and Zambia, have enabled the application of harmonized procurement procedures accepted by government and all donors. Inaddition, as part of harmonization, AFTPC and AFDB have launched programs to support procurement reforms inthe regional organizations WAEMU and COMESA andtheir member countries. In particular, the Bank in FY03 granted an IDF to the WAEMU Commission to review the status o f national procurement reforms in the eight member countries3. The IDF closed in December 2005 and enabled the preparation o f regional Cameroon, CAR, Chad, Republic o f Congo, Gabon, and EquatorialGuinea. Benin, Burkina Faso, CBte d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal, andTogo 9 procurement regulations and strengthened procurement proficiency, capacity and transparency within WAEMU in public procurement. A second IDF, under preparation, will provide funding for the monitoring of the implementation of the procurement reforms and harmonization o f the national procurement legislations and practices in Member-Sates, the identification o f a national strategy for capacity building ineach Member State inconformity with the overall regional objectives, the establishment of regional mechanisms and the training in regional procurement mechanisms. A similar approach i s adopted for COMESA4. An IDF grant was approved to support and guide the legislative process through the preparation o f tools for harmonizing public procurement rules, regulations and procedures and to improve national procurement systems and strengthen the capacity of COMESA Member States inpublic procurement. 21, Impact of Integrated Team Efforts on Project Management. In addition to the increase inPPRs conducted compared to recent years, procurement and project performance have improved inFY05 withthe integration o fprocurement staff into project teams. 2. EAP 22. Among other things, this review o f the FY05 work of the Regionalprocurement team covers decentralization, country procurement reforms and CPARs, harmonization, and capacity building. 23. Decentralization. EAP continues to be among the Bank's most decentralized Regions, with 29 o f its 34 procurement staff (85 percent) based in countries offices and with the fiduciary function decentralized to CO procurement staff for around 90 percent of projects under implementation in the Region. Projects for which the procurement fiduciary function is retained in Washington are usually those which finance highly technically complex procurement, requiring a regular interface between engineering and procurement staff, which can best be achieved when both are co-located. Procurement staff are organized into five hubs: 0 China andMongolia: hub inBeijing 0 Philippines: hub inManila 0 Indonesia: hub inJakarta 0 Cambodia, Lao PDR, Thailand, and Vietnam: hub inHanoi 0 Pacific Islands,PapuaNew Guinea, Timor-Leste: hub inWashington, D.C. Each hub is led by an internationally recruited staff (IRS) as Procurement hub leader and i s staffed by well-qualified national procurement staff, some o f whom have earned partial or fullprocurement accreditation from the Procurement Sector Board. 4 Angola, Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe. 10 24. Fiduciary Review. In addition to its regular procurement fiduciary activities, which form a part of Bank supervision, EAP conducted a more detailed Fiduciary Review of four Bank-financed projects in Cambodia, jointly with Financial Management (FM), Department o f InstitutionalIntegrity (INT), and Operations colleagues. The Fiduciary Review, which i s a newly-developed instrument, comprises: 0 an in-depthreview to identify how and at which stages of the project cycle fraud and corruption may occur, and ways to enhance the design of fiduciary measures to minimize them 0 a thorough review of procurement, financial management, and implementation documentation (inthis instance, on 119 contracts drawn from the four projects) 0 interviewswith project staff, contractors, consultants, and beneficiaries 0 site inspections of completed facilities and contracts 0 a review o f the extent of disclosure to civil society and handling of complaints. Key findings and lessons learned from the FiduciaryReview were publishedand have been shared with the Government at a joint Government-Bank workshop in Phnom Penh in September 2005. In addition, based on what was learned from this review, the Bank has developed enhanced, integrated fiduciary arrangements for procurement and financial management, which are now being applied to Bank-financed projects inCambodia. 25. CPARs and Public Procurement Reforms. In FY05, CPARs were completed for Thailand and Vietnam and an Operational Procurement Review (OPR) was completed for Samoa. 26. Monitoring for Results. During FY05, the EAP RPM Office, with support from OPCPR, launched a series of initiatives to raise awareness among partner countries o f the importance of monitoring for results inpublic procurement. This effort included workshops infive countries (Cambodia, Lao PDR, Philippines, Thailand, andVietnam) emphasizing the managerial side o fprocurement andpresenting a variety of topics, includingthe following: The importance of moving from transactions to systems inmanaging procurement at boththe national and agency levels Positive outcomes obtained by countries that have taken a performance-based approach to public procurement Piloting o fthe Baseline Indicators System The importance of information on public procurement management and the need to buildon existing sources Implications of this approach for future reforms inpublic procurement. 11 0 The effort also includedfour IDFgrants to: J PromoteE-Government ProcurementinChina J Strengthen Internal Audit Unitsfor Effective Procurement Monitoring and Enforcement inthe Philippines; J Strengthen Implementation Monitoring and Evaluation o f the ImprovedPublic Procurement SysteminLao PDR J Strengthen Implementation and Monitoring and Evaluation of the Public Procurement SysteminVietnam. 27. Harmonization. Harmonized approaches to procurement have been followed throughout the Region, with particular progress made in Cambodia, Lao PDR, the Philippines, and Vietnam. Inthe process, the Bank has strengthened its partnershipswith the Agence francaise de developpement (AFD), Asian Development Bank (AsDB), Japan Bank for International Cooperation (JBIC), and Kreditanstalt fir Wiederaufbau Development Bank (KfWDB), particularly around documents for National Competitive Bidding (NCB) and Request for Proposals (RFP). 28. Cambodia. In Cambodia, the Government and the multilateral development banks (MDBs)--primarily the World Bank and AsDB-have worked on harmonizing the procurement procedures for externally financed projects. This effort has led to the preparation of the Procurement Manual for Externally Financed Projects. The AsDB and the Bank are in the process of reviewing the Five Standard Procurement Documents (NCB- Goods, Shopping-Goods, NCB-Works, Shopping-Works, RFP-national consultants, and Contract Agreement-national individual consultant) prepared by the Government for intended use on all externally financed projects in Cambodia (although the documents include provisions to allow their use also on government-funded procurement). Support i s also being provided for improving national procurement rules and regulations on the basis of international best practice and country-specific needs, which would further promote harmonization o f procurement procedures between the Government and its external development partners. 29. Lao PDR. The Bank has strongly supported Government efforts to improve procurement legislation, which led to the passage last year o f a new procurement decree and implementation rules and regulations consistent with international best practice. As a result, there is close alignment between the procurement procedures o f the Government and the Bank, and Lao PDR i s one o f the few countries in which the Bank no longer requires an NCB-Annex (side letter) in its legal agreements. The Bank has also supported the development of a harmonized nationalprocurement manual and standardbidding documents, whose preparation i s now inthe final stages. 30. Philippines. The Procurement HarmonizationProgram agreed to by the Government, the AsDB, JBIC, and World Bank (WB) that started inJanuary 2003 and was captured inthe CPAR Update Report, has completed implementing rules and regulations procurement in 12 projects (September 2003) and harmonized bidding documents for works, goods, and consulting services (August 2004). Ongoing activities include pilot-testing of the harmonized procurement manual (to be completed in early 2006) and development o f training and certification for procurement professionals (to be completed by June 2006). With AsDB, JBIC, and the Bank accounting for more than 90 percent of the official development assistance (ODA) portfolio, the harmonization and simplification o f procurement procedures has ledto significant capacity enhancement, transparency, economy, and efficiency gains and has contributed to furthering the procurement reform agenda of the Government, whose aims include prevention and deterrence of corruption at the implementingagency level. 31, Vietnam. Procurement harmonization has beenvigorously pursuedinVietnamby the Government and the "Five Banks" (AFD, AsDB, JBIC, KFW, and WB). Progress has been made on three priority actions: (a) supporting Government preparation of procurement legislation and implementation o f the recommendations o f the CPAR; (b) developing harmonized procurement documents for National Competitive Bidding; and (c) developing common reporting formats. The Bank has recently provided significant support to the Government in upgrading its procurement legislation to a law status and in establishing a complaint mechanism. The Bank commitment to harmonization has also been exemplified by a SWAPinsupport o f the Education for All (EFA) program of the Ministry of Education and Training. On the basis of an annual work plan, disbursements of Bank and other donor hnds are made directly to a foreign exchange account inthe name ofthe Ministryof Finance and then converted to local currency and pooled with Government funds. The expectation o f the SWAPis that the funding by IDA andother donors will have greater impact onthe whole program, instead of being limited to the individual projects that would be financed under traditional specific investment loans. Potential risks for using country systems have been identified during appraisal and a series of actions has been incorporated in the Legal Agreement to mitigate the identifiedrisks. 32. Capacity Building. During FY05, EAP conducted 91 borrower training events, dealing with Basic Procurement, the new Procurement Guidelines, Procurement Planning, and Project Launch, as well as a Fiduciary Review of procurement contracts and detailed discussion on the correct use of the Quality and Cost Based Selection (QCBS) method. Among the events are the following: 0 The Regional procurement team visited Cambodia in June 2005 to discuss with the Government implementation of the Public Financial Management Reform Program and co-sponsor a Joint World Bank-Government Workshop on Monitoring and Improving Procurement Outcomes, which drew some 100 participants. 0 Client Connection Training on Procurement Functionality was provided through a videoconference with Filipino implementingagencies (40 participants) 0 A training event on the "Integrated Approach to Procurement of Health Sector Goods" was held in Bangkok, attended by borrowers from SAR and EAP countries, as well as from Iraq. 13 As part of the effort to provide learning opportunities to EAP procurement staff and to assist staff indeveloping soundjudgment on procurement matters, the EAP RPMoffice also launched anewinitiative called EAP Procurement Case Studies. 33. Information Dissemination. In FY05, EAP invested substantial resources in enhancing the design and developing the content o f its internal procurement website, to deliver greater utility to regional procurement and operations staff. New developments include the following: 0 copies o f the current procurement legislation and standard procurement documents (including standard bidding documents and forms o f contract) o f all borrowing member countries inthe Regionwere posted on the website 0 all Regionalprocurement policies, procedures, and instructions were consolidated into a single portal a comprehensive set o f Procurement Tools and Best Practices, such as sample forms of agreement and technical guidance notes, on how to conduct different types o fprocurement was disseminated 0 a new Knowledge and Learning Zone, which provides regional colleagues with answers to "frequently asked questions" on procurement and a number of procurement case studies suitable for self-learning or for delivery of procurement training for Bank staff and borrowers, was disseminated information on procurement of the Region's hubs against Bankwide service standards for procurement, as stipulated inBP 11.OO, was disseminated. 3. ECA 34. Among other things, this review o f the FY05 work of the Regionalprocurement team covers decentralization, country procurement reforms and CPARs, capacity building, and harmonization. 35. Decentralization. ECA has 32 GE+ professional procurement staff, 15 o f whom (47 percent) are stationed in COS. The Region also benefits from 13 "associated staff' (mainly CO-based Administrative and Client Support, or ACS, staff) that are not mapped to the RPM but who spend the majority of their time on procurement-support activities. The "net figures" indicated above are identical to those reported in FY04, but the Regional mix o f IRS/LRS (locally recruited staff) has changed over the past year. InFY05, the Region lost one Grade GH position (Washington-based IRS) and three GG positions (two field-based IRSs and one LRS); the loss of these higher level staff i s being offset to an extent by an increase of three GE LRSs stationed indifferent country offices. This staffing shift conforms to the Regional staffing strategy that i s prompted by budget constraints, country office closings, and changes in country portfolios. The decentralized staff are located in 13 different countries, with at least one PS in each o f the eight Country Management Units (CMUs) except ECCU7, where declining portfolios are prevalent as most countries have 14 joined the European Union. In a "quasi-hub" arrangement, the CO-based IRSs are each given oversight responsibilities to monitor and mentor the 11 LRS in neighboring field locations. Inaddition, one retiree (formerly an IRS Senior Procurement Specialist) i s filling the PS post inthe Georgia office, fulfillingthe same role as hub leader inthat CMU, albeit in a full-time consulting staff status. With staffing levels presently close to the FY08 targets for the Regional Strategic Staffing Plan, significant changes in staff levels or mix for the near term are not anticipated. DuringFY05, there were 18 Procurement Accredited Staff (PAS) in the Region. 36. CPARs and Public Procurement Reforms. In FY05, the Region successfully completed the first-ever Joint Procurement Assessment with the European Commission(EC), inRomania. The resulting report was delivered inMay 2005 to the Government, which is now preparing action plans to improve its procurement function. The Region also hosted a joint workshop with the EC on fiduciary and safeguard policies inApril 2005, inWashington D.C. Among the participants at the workshop were senior EC officials and Bank staff who have worked extensivelyon EUfiduciary and safeguards issues. One o f the main focus areas for the workshop was laying the groundwork for cooperation and possible joint World Bank/EC financing o f project work inthe EUaccession countries. On the fiduciary side, the workshop materials included a comprehensive overview o f the relevant EU requirements, which the Regional procurement (and FM) team will continue to update on a regular basis. FY05 also saw the introduction o f a new "ECA-developed" diagnostic instrument, the Institutional Fiduciary Assessment (IFA), designed to support a SWAP in the Croatian Education sector. Dubbedthe Education Sector Fiduciary Assessment (ESFA), the exercise was a combined financial management andprocurement diagnostic that servedtwo purposes: (a) to assess the financial management and procurement arrangements o f the institutions implementing the country's education policies and programs, with a view to making recommendations to improve the performance of those institutions; and (b) to determine whether the World Bank can place fiduciary reliance on the financial management and procurement arrangements o f those institutions for purposes o f implementing the proposed Bank-financed EducationSector Development Project (ESSP). 37. Harmonization. DuringFY05, harmonization activities centered on work for Croatia (in its efforts leading toward EU accession) and with Central Asian countries. InCroatia, following a joint FM/Procurementteam mission, a draft report was completed in July 2005 and presentedto the government in which the Bank made recommendations to address the capacity buildingneededby Croatia to (a) meet basic fiduciary criteria for EUaccession, and (b) establish or strengthen existing institutions and their fiduciary systems to absorb post- accession EU funds and contribute to a smooth integration process. In April 2005, the Regional procurement team hosted a forum in Tashkent, Uzbekistan, bringing in expertise from the Legal staff in Washington, D.C., as well as procurement expertise from around the region to meet with key officials from Kazakhstan, Kyrgyz Republic, Tajikistan, and Uzbekistan. The primary objective o f this "Joint Fiduciary Forum o f CIS Countries" was to bring together the public procurement officials of the four countries to foster regional cooperation and to provide them with a platform to exchange their knowledge and experiences over public procurement reforms. 15 38. CapacityBuilding. During FY05, the RPMunit continued its efforts to provide local training opportunities for borrower staff. Nearly 700 staff were trained in seven countries at major outreach events sponsored by the procurement team or at numerous smaller procurement training activities conducted at project launches or similar "proj ect-level" events. Regional procurement staff served as guest lecturers at the International Labor Organization training facility in Turin, Italy, and at business briefings in Turkey, as well as presentedan information technology procurement presentation in Indonesia at the invitation o f EAP in a cross-regional cooperative effort. The procurement team also sponsoredjoint sessions involving borrowers from ECA countries visiting with government officials inIndia to share experiences inthe creation o f e-procurement at the country level. 39. Other Activities. The Regional procurement team is changing in line with the challenge identified by Regional management as "climbing toward the northeast quadrant" (i.e., in reference to a graphic matrix showing the new paradigm for fiduciary work, moving from micro-fiduciary work at the project level toward policy dialogue and capacity building at the institution and country levels). The changing staff mix described earlier inthis report i s one aspect o f this movement, with a gradual shift o f junior PSs (often LRS in the field) beingtrained and empowered to carry out much o fthe transactional reviews that will always be a part of the fiduciary function, thus freeing-up time for more senior staff to work in substantive policy dialogue with borrowers in a capacity-building role. The FY08 strategic staffing strategy for ECA's procurement team includes the goal of doubling the capacity- building activities of staff, currently estimated at 20 percent of the team's efforts, to a 40 percent/60 percent balance with traditional "transactional activities." The work described above with EUcounterparts, and with development o f new diagnostic tools inpreparation for SWAPoperations, are two cutting-edge activities typical of the Region's new approach to its work. Other signs o f the shifting focus are evidenced inthe following FY05 activities: 0 In conjunction with the Public Procurement Authority of Turkey, and with the participation o f OPCPR staff, the procurement team conducted a joint study on BIS for the assessmentofthe structure ofnationalpublic procurement system. 0 In a continuing effort to upgrade skills of the CO junior procurement staff to enable them to take on a greater share o f portfolio management, for the second year the RegionalProcurement unithosted 12 staff inWashington for an intensive eight-week course o f instruction in all phases o f procurement. Class sessions were typically heldfor at least six hours each day, with primary instruction given personally by the RPM. The Region conducted three IPRs in FY05, two of which were focused on the portfolio of IDA countries, and the third on the quality o f the procurement processing by Regionalprocurement staff. 4. LCR 40. Among other things, this review o f the FY05 work o f the Regional procurement team covers decentralization, country procurement reforms and CPARs, harmonization, and capacity building. 16 41. Decentralization. The LCR procurement team is organized in six procurement teams, one for each CMU, each headed by a Senior or Lead IRS PS. Sixteen operations staff (58 percent) are decentralized on a business-case basis to seven country offices, six o f them serving as hubs for the CMUs. Further decentralization i s expected through the recruitment o f additional local staff. In the Region, 21 PAS provided procurement supporthnput for projects inwhich they serve as task team leaders (TTLs). 42. CPARsand Public ProcurementReforms. InFY05, LCOPR delivered four CPARs, inColombia, Costa Rica, Ecuador, andPeru, which were complemented with CPAR follow- up activities in all countries with recent CPARs. Also, two consolidated fiduciary assessment reports were conducted as pilots, in Guatemala, and Jamaica, fully integratingthe findings and recommendations of the CPARs and Country Financial Accountability Assessments (CFAAs). As a result, all active countries have up-to-date CPARs. The integrated approach to preparing CPARs and CFAAs and the partnerships with other key development partners adds significant value to the product as well as to the dialogue with the country. Finally, several State Procurement Assessment Reports were carried out in Brazil and Mexico. 43. Harmonization. All six of the cited ESW products were prepared jointly with the Inter-American Development Bank (IDB). The unique partnership with IDB started several years ago and was formalized by a Memorandum o f Understanding (MOU) signed by the Regional Vice President and IDB's Executive Vice President in 2001 to foster close cooperation between the two institutions. Cooperation has been most active in fiduciary work at the project and country levels, with the resulting reports prepared in close coordination with the respective CMUs, the Public Expenditure Review (PER) TTL, and Poverty Reduction and Economic Management (PREM) colleagues to ensure full consistency with wider public sector reform programs. Harmonization efforts go beyond the aforementioned pilots to the preparation o f many cofinanced projects, such as the Limabus project in Peru, where common standard tender documents have been agreed with IDB and the borrower. Collaboration extends to critical new endeavors such as e-procurement. Looking forward on the basis of FY05 work, the Bank and IDB have moved ahead using their joint assessment guidelines, and are currently assessing the platforms in Brazil, Chile, and Mexico. These three have all been approved for use under Bank-financed projects to various degrees: Compranet in Mexico i s fully-certified, Chilecompra in Chile has been cleared for shopping for off-the-shelf goods and framework contracts, and Preglio in Brazil for shopping and NCB for off-the-shelf goods. Furthermore, the Bank and IDB have agreed on a plan to assess jointly all countries in Central America and some Caribbean and Andean countries. 44. CapacityBuilding. InFY05, the Regionalprocurement team conducted 78 training activities in 20 countries, with a total o f 4,164 participants. Training was delivered to internal and external participants, although the bulk o f the training was directed to external audiences such as the employees o f govemmenthmplementing agencies working with Bank- financed projects. The length of the training activities ranged from one day to five days. Topics included selection o f consultants, procurement of goods, performance indicators, institutional indicators, new Procurement Guidelines, basic and advanced procurement, and SAP Form 384 certification. "One-off' activities included Procurement Issues in 17 Infrastructure, IT Two Stages, and Progress Report on State Review, and Technical Specifications and Quality Assurance under International Competitive Bidding (ICB). Other significant FY05 activities included the Procurement International Conference organized in Peru, in June 2005 for the presentation of the Peru CPAR Update Results and Action Plan. Among the 1,200 participants were staff from 53 public agencies from local, departmental, and the central government units o f the government and representatives o f private sector procurement agencies from Argentina, Bolivia, Chile, and Mexico. 45. Responsiveness to Clients. The Procurement family in LCR has undertaken measures to respond more quickly to client demand by hiring staff at the field level, decentralizing some procurement decisions, and establishing new systems to support internal and external clients. Two o f the largest country offices (Brazil and Mexico) have established a tracking system to measure performance and produce statistics that would allow assessing compliance with service standards. The cluster is currently extending such tracking systems to all procurement teams and country offices, and is also working to share the information eventually with external clients through the Internet. 46. Other Key Activities. Harmonization, sector programs, and free trade agreements are important new drivers creating incentives for acceleratedreform efforts and opportunities for increased use o f improved national procurement systems. To foster this trend, the Region's procurement team provided input on public procurement reforms in all new Country Assistance Strategies (CASs) and PRSCs, and was closely involved in all programmatic loans, such as education and health SWAps inHonduras andNicaragua. 5. MNA 47. Among other things, this review o f the FY05 work o f the Regionalprocurement team covers decentralization, country procurement reforms and CPARs, harmonization, and capacity building. 48. Staffing and Decentralization. In FY05, the RPM office continued its efforts to streamline and integrate the procurement function into operations teams, and worked with the Regional Management Team (RMT) to develop a sustainable support mechanism for the procurement needs of the Region. Four newly recruited local procurement staff for the Egypt, Lebanon, Morocco, and West Bank & Gaza country offices and an Extended Term Consultant (ETC) in Iraq and another in Iran started work in the second or third quarters o f FY05. By end-FYO5, decentralization was achieved for 50 percent o f the GE+ procurement staff and the decentralization o f procurement authority to COS was achieved for 40 projects representing 34 percent o f the total lending portfolio. A significant change in procurement service delivery was better alignment o f the procurement support to the growing Bank commitment to client support, reform o f public institutions, reinforcement o f public sector governance, and country-focused support. To this end, in FY04, MNACS restructured the existing procurement support group and created country procurement teams headed by Procurement Country Coordinators (PCC) for each country. InFY05, such teams were established for the 11 active countries inthe Region. 18 49. CPARs and Public Procurement Reforms. During FY05, a CPAR was completed for West Bank and Gaza. OPRs were completed for Iran and Iraq. Except for Lebanon, these complete the whole set o f CPARs/OPRs for the Region's countries. Follow-up on the completed CPAR Action Plans resulted in preparing IDF grants for public procurement reforms in Djibouti, Morocco, Tunisia, and West Bank & GazaY5while Bank support for public procurement reforms continued inMorocco, Tunisia, and Yemen. Achievements for Yemen included preparation of the "National Procurement Manual" and (through the use of an IDF grant and support from the Dutch government) its dissemination and complementary training o f a pilot roll-out for civil servants. 50. Public Procurement Reforms. The country procurement teams and the RPM office also provided procurement input and support in other country-related activities, including participation in CPPRs for Iran, Morocco, and Tunisia, and inthe Tunisia CAS (including its implementation follow-up). Other country-related activities included working on the possible Regional pilot inMorocco for use of country systems.6 DuringFY05, the review o f the country public procurement systems in Morocco was completed, including the primary evaluation o f the baseline indicators of the procurement framework and the resulting paper was reviewed in June 2005. This document was also submitted to Moroccan counterparts. The next step i s to review the actual performance of selected sectors/projects and ultimately make the recommendation on full or partial use of country systems in Morocco if the pilot program goes forward. At the request o f Government o f Lebanon (GOL), the procurement team examined the country's institutional arrangements for public procurement, particularly the Council for Development and Reconstruction (CDR), and provided recommendations to GOL. 51. Coordination, Integration, and Harmonization. The CPAR was a collaborative effort with other donors, including DflD, EU, and Iran (although budgetary-related issues hampered this process). Follow-up work continued on the "Harmonization o f Public Procurement Project," in which the Bank i s helping Algeria, Mauritania, Morocco, and Tunisia to work more closely together. To this end, in FY05 the RPM office led a joint BanMDevelopment Gateway Foundation identification mission to Tunisia and Morocco and initiatedan IDF request insupport ofthe Tunisian andMoroccanproject components. 52. Capacity Building. InFY05, the procurement team was involved in extensive client capacity building activities in Washington and in all 11 countries with active portfolio^.^ These included hub training activities in Algeria, Iran, Lebanon, Morocco, Tunisia, Yemen, and Washington.' With support from ILO, the RPM office also provided extensive procurement training for Iraq portfolio project officers. The training activities included 32 procurement workshops and seminars involving 1,090 participants. MNA i s also exploring The IDF Secretariat citedthis IDF proposalas model for IDF grant proposals. The Bank is consideringpiloting the use of country systems inprocurementfor select countries; to this end Increasing the Use ofcountry Systems in Procurement (R2004-0204, November 8, 2004) was preparedby OPCPR and discussed at an informal meetingof the Board. Basedon comments receivedfrom the Board, the paper is currently underreview. ' Capacity-building activities for Iraqwere carriedout inAmman, Jordan. These events included training on Bank Procurement Guidelines; Procurement of Goods, Works, Selection of Consultants;Project Management Training; Project Launch; Procurementin Community-Driven Development (CDD) Operations; Training of Trainers; OperationsProcurement-384 Certification; and the role of ACS staff in operations procurement. These events drew more than 1,800 participants. 19 the use of local academic institutions for procurement training for local officials and project implementation unit staff, and options including identification of a subregional institute for Maghreb countries are being investigated. InFY05, an IDF grant for Iranwas approved that inpartwill support capacity-buildingactivities throughalocallearninginstitute,andwork on identification of a suitable local institute continues. The aforementioned IDF grants for public procurement reforms in Djibouti, Morocco, Tunisia, and West Bank and Gaza also have capacity-building components that cater to government officials in charge o f public procurement. Finally, the MNACS procurement team held its first retreat, in April 2005 in Morocco, in response to the growth in the Region's procurement team (about 30 percent of team members have joined recently) and the shift in the business model from sector to country-based support. The retreat served as a platform for a combination o f procurement training, interaction between team members, COS0 team-building exercises, discussions on the new country-based business model, and development of an action planon work program priorities. 53. Other Activities and Initiatives. A range of initiatives and activities responded to day-to-day opportunities andresponsibilities for the Region's procurement staff, as described inthe followingparagraphs. 54. Partnership and Outreach. With the objective o f providing the private sector with deeper understanding o f all aspects that would lead to increased prospects for securing business in projects funded by the Bank, the procurement team conducted business seminars in France (three cities), Germany, Iran, Jordan, Spain (three cities), and United States for more than 300 participants. These seminars targeted contractors, suppliers, and consultants and were aimed at creating a greater awareness among private sector companies o f the procurement policies and procedures o f the Bank and business opportunities inMNA activities financed by Bank loans. 55. Unscheduled Activities. Unexpected workloads and the impact o f large and complex projects presented challenges for the procurement team. During FY04 and FY05 these cases included the Iraq program, Egypt Airport project procurement activities, and Iran Bam earthquake project; as well, information communications technology projects in Algeria and Tunisia required substantial procurement resources and placed a strain on the available procurement resources for other activities. It i s hoped that the FY05 move to a Work Program Agreement model will provide a more structured program in FY06 that will not require major alteration duringthe year. 56. Independent Procurement Performance Review (IPPR). During FY04, the RPM office commissioned MNA's first Independent Procurement Performance Review (IPPR) to assess the Region's fiduciary performance; the results o f the review were presented to the RMT inJuly 2004. The IPPR included a comprehensive review o f 32 active projects across all sectors covering 124 contracts (110 o f which were subject to prior review). It assessed TTL, PS, and PAS performance in preparing the procurement provisions o f the new projects and capacity and risk assessment as well as in clearing procurement documents through a full compliance review, including the project teams' records management practices. The IPPR revealed that operations teams in some cases had issued procurement clearances without having the necessary procurement accreditation. 20 This inadvertently resulted in the sanctioning of the borrowers' lack o f compliance with the procurement provisions inthe Loan Agreements. This situation arose inpart because o f the Region's past lack o f sufficient procurement resources. Implementation i s expected to improve with the increased procurement resources available; however, full implementation will require a concerted effort among operations managers, TTLs, and the RPMoffice. The RPM office will use the results of the first IPPR as a baseline for measuring future performance improvements. 57. New Tools. In collaboration with MNSRE, the procurement team produced new bidding documents for Design-Build-Operate projects in solid waste management, which were placed on the Bank's internal and external websites inMay 2005. 58. Challenges Going Forward. Among the challenges still facing the MNAPR are the change in the Regional lending portfolio; upstream involvement of procurement staff at project design stage; IPR, PPR, and IPPR follow-up at the unit level; use o f country procurement systemsinBank-financed projects; service standards, enhancedprojectplanning and procurement document management; procurement training for sector units; and staff development. 6. SAR 59. Among other things, this reviewo f the FY05 work o f the Regional procurement team covers decentralization, country procurement reforms and CPARs, harmonization, and capacity building. 60. Decentralization. SAR continues to enjoy the highest level of procurement staff decentralization inthe Bank. Of 20 GE+ professional staff, 17 [85 percent] are stationed in country offices. During FY05, the Regional Procurement Manager in the India CO retired; hispositionwas filled inWashington andanewpositionofHubCoordinator was createdand filled inNewDelhi. 61. CPARs and Public Procurement Reforms. CPARs and other procurement diagnostics or reform efforts are under way inseven SAR countries. 62. India. A CPAR dissemination workshop was held to follow-up on the recommendations o f the CPAR. Workshop findings were communicated to the Government of India, where they were well received. The next steps have been agreed in a meeting between SAR management and the Department of Economic Affairs o f the Ministry of Finance. The most significant progress at the state level has been in Karnataka. The Government o f Karnataka (GOK) is implementing an agreed action plan based on the recommendations o f the CPAR. Several amendments to the Karnataka Transparency in Public Procurement Act, 1999 were issued to improve the procurement rules. GOK requested assistance for capacity buildingand an IDF grant to build institutional capacity for procurement training inthe state was approved. Several entities o f the state have introduced e-tendering in their organizations and GOK i s taking steps to have a common e-tendering platform for the state as a whole. GOK has also taken steps to create an electronic database on the performance o f the contractors, to facilitate speedy evaluation o f tenders and award o f 21 contracts, and i s inthe process o f hiring the services o f a consultant to prepare a roadmap for preparation o f the database of procurement information for the entire state. In addition, several States have approachedthe Bank to assist intheir efforts to initiate an e-procurement platform; this offers an opportunity for the Bank to foster procurement reforms more widely in the country. An international e-GP conference was organized in New Delhi in March 2005, with a view to sharing e-GP experiences across the Region. Several states are interested in introducing e- procurement in Bank-fundedprojects. The MDB guidelines are being shared with them before adoption. A Regional e-readiness assessment is being initiatedto assist the process. 63. Nepal. The draft Procurement Law andprocurement regulations have beenprepared, and are expected to be enacted in December 2005. An IDF grant continues to support the government's reform efforts. 64. Bangladesh. The Public Procurement Reform Project made Bangladesh the regional pioneer inpublic procurement reform, and most o f the policy reform actions are completed or nearing completion. The Central Procurement Technical Unit, the nodal procurement policy body, has a fully functioning website [www.c~tu.aov.bd] and has commissioned a management information system (MIS), initially linked with four agencies, to track and monitor procurement performance. 65. Pakistan. At the federal government level in Pakistan, new procurement rules were adopted in 2004, but efforts to implement and disseminate the rules have largely been disappointing. Earlier in 2005, the RVP brought the inaction o f the federal government in this very important areato the attention ofthe Prime Minister's Advisor on Finance as a part of the portfolio review process. In addition, the Public Procurement Regulatory Authority received funds under the Public Sector Capacity Building Program to implement an Entity Improvement Plan intendedto lead to procurement reform training and development o f staff in that organization as well as in other government departments. A Public Financial Management Assessment (PFMA) was conducted inPunjab province inassociation with FM. The results ofthe assessmentwere sharedwiththe provincial government at a workshop, and served as an agenda for the reform work to be undertaken in that province. Procurement reform issues figured prominently as a cross-cutting issue in the third Punjab Education Development Policy Credit, and will also be included intwo other development policy loans (DPLs) under preparation for that province in the irrigation and municipal services. In addition, an IDF grant i s being prepared for the Government o f the North West Frontier Province to provide assistance for improvements and amendments in the Procurement Law adopted in that province. In the Province o f Sindh, where there has been a hiatus in the Bank's engagement with the provincial government on issues of governance reform, new credits being prepared in the Irrigation and Education portfolios present opportunities for advancing the procurement reformagenda. 66. Afghanistan. Afghanistan is the first country in the Region to adopt a Procurement Law. The Public Procurement Law o f Afghanistan was supported by a Bank-fundedproject, andwas approved and officially gazetted inOctober 2005. Interms of policy, the three main features of the law are: (a) the creation o f a Procurement Policy Unit and an Appeal Mechanism; (b) the introduction of a common organization o fthe procurement function inall 22 ministriesandgovernment departments; and (c) the introductiono fprocurement methods and procedures in line with international standards. The Procurement Policy Unit, located inthe Ministryof Finance, will leadefforts withrespectto implementation ofthe Law. Becauseof inadequate capacity in the central and subcentral public procuring entities, all procurement under donor funding and the national budget is carried out with the assistance of a central procurement facilitating agent funded under a Bank project. However, the Bank has designed a plan that will enable transfer of procurement management responsibilities to the procuring entities. An extensive procurement reform and capacity improvement strategy has been agreed with the Government and the process of selection o f a consultant for this assignment has been initiated. An assessment o f country procurement procedures, legal framework, and the performance of those responsible for applying these procedures has recently been completed as part o f the broader review of Afghanistan's public financial management (PFM). The draft PFM report, including a dedicated section on procurement, has beenshared with the Government and will be finalized shortly. 67. Maldives and Bhutan. No CPARs are envisaged for Maldives and Bhutan. However, the Royal Government o f Bhutan (RGOB) has asked for assistance for a coordinated donor approach toward universal reliance on country-owned systems. SAWS conducted an exploratory mission rather than a full assessment using specific benchmark indicators, to determine RGOB willingness to engage in a dialogue with the Bank over procurement reform, and, as an initial step, to provide a better understanding for the Region of the current state o f Bhutan's procurement system, with a view to gauging the usefulness of such an engagement. Procurement reforms inMaldives are being introducedthrough an IDF grant. In addition, an Operations Manual for the Tsunami Relief Trust Fund that is in line withBank Guidelineshas beenpreparedby the Government. 68. Capacity Building. In FY05, a Regional strategy paper on capacity building was prepared with the assistance o f a firm o f consultants funded through the DanishTrust Fund. The genesis of the paper were twin recognitions: (a) that procurement training programs currently supported by the Bank in SAR, as elsewhere, have failed to provide the full range o f capacities needed for the creation and development of efficient national procurement systems; and (b) that a fundamentally different approach to the key areas o f procurement reform and capacity building was required, emphasizing the shift from the transactional to the strategic, from the reactive to the proactive, from prescriptive compliance to sustainable reform, and from training based on Bank's Guidelinesto institution-buildingthat focuses on good procurement practices. The primary objectives o f the strategy were (a) to investigate the state of procurement reform in the Region with a view to confirming the perception articulated above and, where such perceptions were confirmed, (b) to identify and deliver an improved framework within which reformed procurement capacity building can take place. The initial survey was conducted inPakistanonly, and was limitedto four illustrative target entities from a rangeo f sectors andlevels o f government. The survey confirmedthat, at least inPakistan, procurement capacity buildingefforts were limitedto rule-basedtraining and did not address the practical needs o f procurement officers. The next step will be to conduct training inthe identifiedpilot entities and to measure the results. 69. Other Activities. Several training events were organized covering Bank procurement policies and procedures, new Bank Procurement Guidelines, Client Connection, and other 23 such initiatives of the Bank. These were attended by participants from government, project offices, and private sector enterprises. The Region conducted training that covered fiduciary issues in project launch and implementation. For example, the SAR Procurement Hub conducted a joint workshop, together with FM, in Bhutan, attended by some 50 RGOB officials. InNepal, a training program for 210 government officials was funded through the IDF grant for Public Procurement Reform. In Sri Lanka, as CPAR follow-up, the National Procurement Agency conducted training programs for about 95 officials of the Tender Board, Technical Evaluation Committee members, Secretaries of various line ministries, and some 50 MDB staff, including project directors o f AsDB, JBIC, and World Bank-financed projects. The programs were financed through an IDF grant for StrengtheningProcurement Capacity. In Sri Lanka, a workshop was held involving 30 staff from 13 universities across the country. In Bangladesh, the Central Procurement Technical Unit developed a critical mass o f about 30 national trainers, and provided training to over 550 government staff from 167 organizations during FY05. Also during FY05, Bank procurement staff provided training courses to about 300 staff from agencies of several Bank-financed projects and facilitated/conducted workshops for about 200 participants, mostly municipality chairpersons, officials o f line ministries, andmunicipal engineers. 70. Other SARPSInitiatives. Several other Regional efforts either fostered collaborative approaches or introducednew elements to projects. SWAPS. A number of SWAps were introduced in SAR. In India, the Sarva Shiksha Abhiyaan (education) program i s proceeding well, and three SWAps in the Health and one SWAP in the Rural Water sectors are under negotiation. A number of community-driven development (CDD) projects were successfully implementedin India and Sri Lanka. And SAR decided to include review on a sampling basis o f compliance with the agreed procurement procedures and physical verification o f assets in the Terms o f Reference (TOR) for independent project auditors. 0 Collaborative efforts. In view of the Bank's increasing involvement in infrastructure projects, particularly in the highways sector, a two-day workshop on procurement issues and capacity building o f implementing agencies across India was organized to foster collaborative efforts. Over 100 delegates from central government, state governments, and national/international contractors and consultants participated in the workshop. The Bank accepted key recommendations that emerged and implemented changes/modifications that resulted in greater competition and cost reductions. In line with workshop recommendations, procurement o f eight civil works packages related to the National Highways Authority o f India and valued over the equivalent of $50 million per contract, totaling $450-500 million, has been carried out in harmonization with other donors, such as AsDB. The awards could be finalized very quickly, saving substantial time and cost. As a follow-up to the workshop, SARPS is working to make the Dispute Review Boardmechanism more effective inIndia. Lotus Notes-basedProcurement Document TrackingSystem (PDTS). The SAR Procurement Hub in Delhi introduced a new PDTS to track the life cycle o f a 24 procurement document-from receipt in the Bank until response from the Bank. On the basis of its successful piloting with projects inthe Infrastructure portfolio inIndia and implementation inother lending operations inIndia, the PDTS will be implemented in other countries in the Region during Q2 of FY06, and subsequentlyinWashington. 0 E-GP. SARPS is carrying out an "Electronic Government Procurement (e-GP) Readiness Assessment Study" and developing e-GP strategies and road-maps for e-GP implementation in SAR countries. The objectives o f this study are to determine the countries' level of readiness to make a transition to e-GP in a sustainable manner, and to develop an e-GP strategy and an implementation plan, recognizing the risks associated with the level of technological capacity, organization, and expertise within the public and private sectors in each country. Since the Bank is providing assistance toward e-Government projects in several countries, the proposed study would be necessary to form the basis for inclusion of e-procurement inthose more encompassing e-Government projects. The TOR for the assignment are being reviewed, and once finalized the process o f selection of consultant will be initiated. 0 BCSA. A Behavioral Change and Social Accountability (BCSA) component was designed and incorporated in the proposed Bangladesh PPRP I1to address areas such as compliance monitoring, further institutionalization of procurement capacity, and development of an e-procurement system, with behavioral change communication and social accountability to complement the reform effort and to improve the service delivery o f the government as a whole. The actual oversight/monitoring o f public procurement performance by selected civil society organizations/nongovernmentalorganizations (CSOs/NGOs) incollaboration with the government would be addressed through a concurrent study on "monitoring and evaluation." Work to improve access to information on procurement transactions is taking place. There appears to be a strong willingness to collaborate on the part o f officials, donors, NGOs, and project leaders. The upcoming election scheduled at end-2006 may provide opportunities for officials to signal their willingness to improve procurement and nongovernmental actors may have greater ability to have their voice heard. 7. LEGPR 71. InFY05, the LEGPR team, comprising the Chief Counsel, two Senior Counsel, and one Paralegal, deliveredan extensive program o f activities while continuing to provide legal advice on operational procurement issues to the procurement staff. LEGPR's contributions to policy activities included implementation o f the new Procurement Guidelines through, among other things, assistance in revising standard bidding documents and preparing simplified legal agreements incorporating these new guidelines, and work on the potential use of country systems in procurement. LEGPR participated actively in the working groups on public procurement of United Nations Commission on International Trade Law (UNCITRAL), the multilateral Heads o f Procurement, and working groups o f the IDB, EU, and OECD. LEGPR also offered direct support to public procurement institutional reforms, 25 reviewing procurement laws and regulations of partner countries, and assisting the Regions in their assessments (CPARs) of national procurement systems. In addition, it provided training to Bank staff and borrowers in legal, institutional, and commercial aspects of procurement. 72. Anticorruption Work. In its active role in anticorruption-related activities, LEGPR, along with LEGAD (the Legal VPU's Corporate Administration Practice Group), prepared the implementing documentation of the reform of the Bank's sanctions process following Board approval o f significant reforms to the existing process. It also continued to provide substantive and administrative support to the Sanctions Committee, as its Secretariat, in debarment proceedings against bidders, contractors, and consultants alleged to have engaged incorrupt or fraudulent activities inconnection with Bank-financedprojects. 8. OPCPR 73. As the Anchor for the procurement sector, OPCPR continued its central role in support o f the Procurement Sector Board and provided technical and capacity-building support to the Regions. To better focus on business demands and promote teamwork, OPCPR staff formed three working teams on Policies and Tools, Country Work, and Systems and Support. Each o f the three teams developed joint and individual work programs based on staff specialties, skills, and existing responsibilities and demand from Regions. 74. Policies and Tools Team. This group supported the Procurement Sector Board and the procurement family in the rollout of the new Procurement Guidelines. The team delivered a significant work program in FY05, including updating existing SBDs to align them with the new Procurement Guidelines and translating existing SBDs into Spanish and French. A number of Guidance Notes on how to comply with revised Procurement Guidelines were issued, including ones on e-bidding requirements for MDB loans, grants, and credits; the use o f OBA schemes in infrastructure concessions; and a Technical Note on procurement o f HIV/AIDS products. The team helped develop new tools, such as a section for a Concepts and Proposals Note on output-based disbursements from the procurement standpoint, sample bidding documents for procurement o f performance-based management services for infrastructure services, and (iointly with other MDBs) master bidding documents for procurement o f plant design, supply, and installation. The team also revised the SBDs for Works and User's Guide per the harmonized master documents that had been approved earlier by the Heads o f Procurement o f the MDBs. 75. Country Work Team. This team continued its work to develop an enhancedapproach to improving public financial management through its participation in the internal World Bank Public Expenditure Working Group and the multidonor Public Expenditure and Financial Accountability (PEFA) Steering Committee. With the help of the team, an internationally accepted instrument for monitoring performance in public financial management (including procurement) was elaborated and tested. Team members participated in defining indicators for procurement performance, taking part in in-depth discussions with partner countries on the indicators and field testingthe indicators, as well as providing internal World Bank discussion and training sessions on their application. The resulting PEFA PFM Performance Indicators have beenwidely accepted by the international donor community and partner countries alike andhave begun to form the basis for the Bank's 26 work in this area. The team also provided support to Regional initiatives in improving country procurement systems. 76. System and Support Team. In line with the modernization and simplification agenda o f the Bank, the Systems and Support Team continued to support the design and implementation o f an operational framework to provide value-added tools and services to procurement operations. The Regional Systems Support Network (RSSN) i s the core o f this framework. The overarching goal of the network is to create a sustainable systems environment that provides partner countries and Bank staff with the necessaryonline tools to process and monitor procurement activities through a safe and efficient electronic environment. Since May 2005, the RSSN has been working with OPCPR on developing/enhancing procurement systems Bankwide. The RSSNis composed of Regional groups that, in coordination with OPCPR, are responsible for enhancing the Bank's project procurement function through the electronic integration o f procurement processes in Client Connection, Operations Portal, and other related systems. 77. Business Outreach. In FY05, the request for procurement seminars and briefings inside and outside the Bank has increased following the FY04 revision of the Procurement Guidelines and the trend toward use of country procurement systems. OPCPR has contributed to increasing the transparency of the Bank's procurement policy and guidelines inspecial discussions and seminars with representatives of governments, private businesses, ExecutiveDirectors' offices, and Bank staff. 111. PROCUREMENT SECTOR PERSPECTIVES 78. FY05 saw several significant achievements in procurement modernization and simplification, harmonization, specialized technical support (e-procurement, public procurement reform, performance-based procurement), and development and provision o f training seminars and workshops for internal and external clients. Areas o f OPCPR activity included support for the development and launch o f the Client Connection and Project Portal systems, the launch o f completely revamped internal and external websites, and the issuance in FY04 of revised Procurement and Consultant Guidelines, Standard Bidding Documents, and instructions on different procurement-related activities. A. Staffing and ProfessionalDevelopment 79. Senior Management has strongly supported and the Procurement Human Resources Committee has actively contributed to strengthening procurement capacity to carry out procurement responsibilities in operations effectively. In FY05, the recruitment of 17 procurement staff was processed for 13 country offices. O f the 17 newly hiredstaff, 11 were hired as Procurement Analysts and five as Procurement Specialists. There were 17 terminations o f procurement staff and four transfers within the Bank. Table 9 shows the staffing status inFY05. Table 9. Procurement Resources, End-June 2005 Cutegory AFR EAP ECA LCR MNA SAR INF" OPCPR Bankwide Washington- based staff RPA FTstaff 7 5 12 7 6 2 1 10 50 Procurement 4 0 3 3 2 1 0 1 15 I 27 ....................... analyst ..................................... ................ Procurement ** 4 3 4 0 1 0 0 1 13 ................................................................................................................................................................................................................................................. 15 8 19 10 ............................... ....................................... 1 ............................................... 78 Country office ..... ........................................................................................................................ 18 21 Procurement 8 5 5 6 0................... 0 0 0 25 ................. Procurement 4 4 2 2 0 2 0 0 13 Procurement staff in Washington and 45 38 36 26 15 18 I 12 191 Procurement- accredited staff * MF-IBRD Telecom& Information. **The numbers do not include other ACS staff that provide procurementsupport to the ProcurementNetwork and the Regions. 80. Professional Development. The Professional Development Subcommittee of the Procurement Sector Board continued to implement the strategy in encouraging exchange o f staff within the Bank and between the Washington office and country offices. Among training activities conducted inFY05 were the following: 0 Core procurement courses. During FY05, besides the Regional procurement forum, a retreat, training courses, seminars, and workshops delivered to the Bank procurement staff as described inRegion-specific activities noted above, OPCRC organized 33 core procurement courses, with a total o f 93 training days. Courses included Basic Procurement, Advanced Procurement, Procurement o f Goods, Selection o f Consultants, Introduction to Client Connection Website, and 384 Certification. The training was collectively deliveredto 499 participants. 0 Training on specific topics. Various training activities were sponsored and facilitated by OPCPR in FY05 on specific topics including institutional procurement on consulting services, HIV/AIDS procurement, e-GP strategy and implementation, newbidding documents, integrated approachesto procurement o f health sector goods, and so forth. 81, Revisions/lMaintenance. To effectively reflect and implement new Procurement Guidelines, most procurement bidding documents (SBDs) were updated and translated, as discussed in the following paragraphs. Various related procurement policy and procedures were revised accordingly in FY05. The 2004 English edition of SBD, Prequalification Document (PQ), and RFP documents were partially updated. The remaining documents will be updated in FY06. Revision o f SBD for Works consistent with MDB-harmonized Master document was completed inFY05. 28 82. New Developments. Sample generic SBD and PQ documents and sector-specific technical notes for management contracts, Guidance Note for Structuring Output-Based Aid Schemes in infrastructure concessions, and Guidance Note to Government Staff, Bank Staff, and Staff of Other International Agencies conducting procurement o f HIV/AIDS products were completed, and training for their use was provided. Translations were undertaken of key documents, such as the Spanish and French versions of the updated 2004 English editions of SBD, PQ, and RFP. 83. Consulting Services Assessment (CSA). Country CSA is a new tool designed to complement or to form part o f the CPAR, which traditionally puts limited focus on procurement of professional consultants. The CSA assesses government performance in assessing and using high-quality professional consultants, and in creating sustainable conditions for professional national consulting businesses. Three CSAs were conducted, for Colombia, Pakistan, and Vietnam. The reports were well received by their users and the consultant communities o f the partner countries, andhave provenuseful where the consulting professions are having sustainability problems and the government i s dissatisfied with the quality o fthe services it receives. 84. Consulting Service Manual (CSM). The second edition of the Consulting Service Manual was completed and i s with the editor. It not only accommodates the new Consultant Guidelines, it also updates users on issues such as transparency, capacity building, conflicts o f interest, and so forth. 85. E-Bidding Requirementsfor MDB Loans, Grants, and Credits. This guidance note i s an update o f the previous Electronic Procurement Assessment Guide. Developedas ajoint effort with AsDB and IDB, the note provides a fully harmonized guide to assess electronic procurement systems o f borrowers for use under Bank-funded operations and defines a minimum set of requirements for the use of electronic means for competitive bidding, according to the Bank's revised Procurement Guidelines of May 2004. Following requests from several countries inECA, LCR, and SAR, the Bank i s inthe process of assessingthe e- procurement systems o f these countries on the basis o fthe new e-bidding guide. 86. Other E-Bidding Notes. Two more guidance notes with regard to electronic procurement are under preparation to define the requirements for electronic reverse auction systems and electronic purchasing (e-catalogues) systems that are adequate for Bank-funded procurement. The two guidance notes are another example o f thejoint harmonization efforts withAsDB and IDB. 87. Other Activities. OPCPR directed a Bankwide review o f experiences with procurement of anti-malaria drugs and commodities and provided technical support to the global study on emergingmanufacturers o f vaccines sponsored by the Bank on behalf o f the Global Alliance for Vaccines and Immunizations. C. TechnicalSupport 29 88. At the request of operations units and partner countries, and in collaboration with RPM offices, sectors, Networks, country offices, and other partners, OPCPR provided technical support and advice, including the following: Implementing Country Consulting ServiceAssessment. With support from the Regions, an OPCPR specialist traveled to country offices (notably Colombia, Pakistan, and Vietnam) to provide guidance on conducting a new assessment in area o f procurement. 0 Health sector procurement. OPCPR provided expert advice to Regional staff and implementing agencies o f some two dozen countries in all six Regions on issues related to health procurement. This work ranged from participation in project appraisal missions, capacity assessments, and annual performance reviews, to directing discussions with donor agencies under pooling arrangements. As regards pharmaceuticals procurement, technical support was provided to nearly two dozen countries inthe Africa, South Asia, and East Asia and Pacific Regions, inthe form of participationinmissions, provision of advice, and desk review of documents. E-GP. Increasingly, e-GP has beena substantial component of CPARs, not only in EAP, LCR, and SAR, but also in ECA, on the basis of the new procurement directives o f the European Commission, which require an appropriate legal framework supporting the application o f online pubic procurement systems. In Romania, for example, the Bank conducted an extensive e-GP review as part o f the Joint Procurement Assessment with the European Commission. Incountries such as Armenia, China, and Vietnam, IDF grants have helped assess the current situation in terms of online public procurement, devise a strategic e-GP implementation plan, and undertake actions with regard to e-GP legislation, capacity building, and application development. Inaddition to IDF grants, ICT/e- Development projects offer the opportunity ofproviding e-GP support as a project component (including Armenia, Indonesia, Sri Lanka, Ukraine, andVietnam). 89. Clearances. InFY05, hundredso f clearances were provided for the selection and use o f consultants at the request o f non-Regional units (for example, the HD Network), and presentations on the related procurement policy and procedures were provided at request o f the central or sector units. D. Harmonization with Multilaterals 90. InFY05, the Procurement Network actively pursued collaboration andharmonization with globalpartners, as outlinedinthis section. 91. OECD-DAC and World Bank Joint Roundtable. Activities initiated in 2003 in cooperation with the OECD-DAC and other partner organizations and developing countries culminated in the completion of a good practice paper that incorporated work on capacity development, mainstreaming o f procurement, and development of tools for benchmarking procurement systems and monitoring and evaluation o f performance. The work was 30 delivered in the final Roundtable meeting held in Johannesburg, South Africa, inNovember 2004. Participants committed themselvesto using the good practice tools and informationto further the development o f public procurement systems. At the Second High-Level Forum on Harmonization, Alignment, and Results held in Paris in March 2005, donors and international organizations committed to the development of targets that would support development effectiveness and increase harmonization and results. The Paris Declaration recognized the importance o f the procurement work undertakenby the Roundtable initiative and developed two performance targets for procurement systems and for increased donor reliance on the use o f country systems as performance improves. The procurement targets are linked to public financial management targets in the Paris Declaration. Inaddition, the Procurement Sector inthe Bank has taken the tools from the Roundtable initiative and i s in the process o f developing the procedures for moving towards implementation and use o f these tools at the country level. 92. OECD-DACJoint Venturefor Procurement. The Bank will continue to participate with the OECD-DAC under a newly created Joint Venture for Procurement. The Bank will co-chair this Joint Venture and will work together withthe Joint Venture for Public Financial Management to implement the Paris Declaration. The FY06 work program for the Joint Venture for Procurement is under development but includesRegional workshops to introduce the effective use of performance measurement and monitoring tools and to share good practice experiences with regard to effective procurement reform. The participation o f countries and organizations in the Joint Venture for Procurement will expand to include all those signing the Paris Declaration. A key element in the Joint Venture's proposed work program includes the development o f an assessmentguide that will provide for greater clarity and consistency in the application of performance measurement and benchmarking of country systems. This new assessment guide will respond to some of the concerns that have been raised regarding the Bank's internal proposals for assessing and increasing reliance on country systems, as well as address issues related to the two procurement related targets that are part of the Paris Declaration which relate to tracking procurement reform progress in client countries andthe responseby donors to increase reliance on better performing systems. 93. Master Bidding Documents (MBDs). In FY05, the Procurement Sector Board continued to play a leading role in working with regional development banks, the private sector, and other partners. MBDs of Goods and Works, Prequalification, and Request for Proposals were discussed, compiled, and published. OPCPR provided key professional support inthese accomplishments. The Bank has already initiated development of MBD o f Procurement o f Plant-Design, Supply, and Installation and Procurement o f Small Works in collaboration with the regional development banks. 94. Harmonized General Conditions of Contractfor Works. On March 11,2005, James W. Adams, Vice-president OPCS, and Richard A. Kell, President of the International Federation o f Consulting Engineers (FIDIC), signed an agreement that gives the Bank and its borrowers a nonexclusive license for the reproductionand translation o f harmonized general conditions of contract contained inthe Bank's Standard Bidding Documents for Procurement o f Works. 31 95. Dialogue and Partnerships on Consulting Services. In FY05, there was continued dialogue with the professional consultant community and the various MBDs on consultant policy issues. In addition, the Biennial Meeting of International Lending Agencies and Consulting Industry (BIMILACI) was organized. OPCPR's lead procurement specialist also attendedthe FIDIC annual meeting to present a paper on CSA methodology. 96. Sustainable Procurement. Partnerships with peer institutions continued in FY05, including the completion o f a successful pilot training environmentally and socially responsible procurement (ESRP) in Ghana in partnershipwith UnitedNations Environment Programme (UNEP) and Inter-Agency Procurement Services Office (IAPSO). Follow-up to this pilot includes converting the training modules into an e-learning version so that the information will be readily available to interested staff and clients around the globe. Other harmonization efforts included participation in the annual MDB sustainable procurement working group, whose membership includesAsDB, IDB, UNagencies, andNGOs. 97. Electronic Government Procurement (e-GP). Under the leadership of the Heads of Procurement (HOP), the MDBs' e-GP Working Group continued to harmonize its approach to the application o f technology in the area of public procurement, and its work drew innew participation from the African Development Bank, the Nordic Development Fund, the European Bank for Reconstruction and Development, and the European Commission. The Working Group also officially launched the joint e-GP website www.mdb-eap.org. This electronic portal i s supported by five multilateral development institutions and presents a knowledge-sharing platform with the objective of assisting developing countries to design and implement e-GP programs. The website includes an e-GP toolkit with a set o f notes on how to review a country's e-GP environment, develop an appropriate e-GP implementation strategy, and use appropriate standards and technology. An interactive database on e-GP practices adopted by governments worldwide and an online discussion forum complement the joint online knowledge base. Additional programs of e-GP harmonization include the joint assessment o f e-GP country systems in ECA (with the EC), LCR (with IDB), and SAR (with AsDB) and a series of e-GP learning events (e.g., the Third International Conference on Electronic Government Procurement, held in the Philippines in October 2004 and the International e-GP Conference, heldinIndiainMarch2005). 98. Health Sector Goods Procurement. As noted earlier, OPCPR directed the development o f training material related to the newly published Technical Guide for the procurement o f medicines and related supplies for treatment and prevention of HIV/AIDS. In FY05, six specialized training courses were delivered in AFR, LCR, and MNA, in partnership with the World Bank Institute, World Health Organization, Global Fundto Fight AIDS, TB and Malaria, UN agencies, French Technical Cooperation, Management Science for Health, and the Clinton Foundation, among others. Inaddition, the annual delivery o f the Health Sector Goods Procurement course took place in the International Training Center of the International Labor Organization inTurin, Italy. 32 E. InstitutionalInitiatives 99. From risk models to capacity building and sustainable procurement, from tracking tools to websites, the Procurement family was active in FY05 in fostering a range of critical institutional initiatives. 100. Increasing the Use of Country Systemsfor Procurement. Subsequent to the March 8, 2005 informal Board discussions on a paper on Increasing the Use ofCountry Systems in Proc~rement,~ the paper was submitted for internal and external consultation. The paper provides the rationale for greater use o f country procurement systems in the context o f the procurement sector strategy, identifying the main issues in moving to broaden the use o f country procurement system for international competitive biddingand international selection of consultants, and discusses how Management proposes to address these issues. The consultations involved extensive dialogue with Executive Directors andposting o f the paper on the Bank's website from April 4 to July 29, 2005, for external consultations. Inaddition, the Bank participated in roundtables and/or conferences in Washington (two meetings), Berlin (two meetings), Frankfurt, London (two meetings), Paris, Copenhagen, and Amsterdam to discuss this proposal. Many comments on the paper have been received. The paper underscores that the baseline for acceptable country system standards i s that definedin the Bank's procurement policy and proposes a framework for piloting the use of country systems in Bank-supported projects. Management is inthe process o f revising the proposal to take account o f the comments received and i s also reaching out to key stakeholders to ensure that there is a common understanding o f Management's proposal. As this process i s still very much underway, it i s not possible to be overly specific on when the revised document will be presented to the Board for further discussion. 101. Sustainable Procurement (SP). The SP initiative consists of a key partnership between Operations and Corporate sustainable procurement. The Operations and Corporate programs coordinate to ensure that the Bank applies SP principles to its own work before it attempts to extend them to our project lending. Last year's accomplishments for project lending include revised bidding documents specific to Pest Management, new socially responsible clauses on harmful child labor and forced labor in our bidding documents for Works, and relevant draft guidance notes (Including Environmental Aspects in Procurement Processes; Including Accessibility in Infrastructure; Pest Management) and discussion papers (National Experiences with Green Procurement; Eco-labeling Standards and Their Relevancefor WB Borrowers; Improving Working and Living Conditions in Construction). FYOG's approved work program is focused on finalizing the draft guidance notes, developing Green Building (in partnership with the Infrastructure Network) and Universal Design Guidelines (in partnership with the General Services Department and the Infrastructure Network), inputs to CPARs, and finalizing and mainstreaming last year's piloted ESRP training into e-learning modules. 102. RetrospectiveReport on CapacityBuilding in Procurement. A retrospective study is under way to examine all the instruments that finance capacity building inprocurement, to assess impact. Increasing the Use of County Systems in Procurement (R2004-0204), November 8,2004. 33 103. Client Connection and Procurement Tracking Tool. In September 2003, the Bank launched the Client Connection website, making available to country clients a powerful tool for project implementation and transparency. Client Connection i s another milestone in the Bank's efforts to move information closer to clients and it represents another output of the simplification of business processes by providing clients access to information related to all of their loans, credits, grants, and trust funds through the use o f a password-protected website. By registering for Client Connection, staff in project implementing agencies can submit procurement documents electronically and inreal-time to the Bank for review (each document submitted through Client Connection i s automatically filed in IRIS in the appropriate project folder). Project implementing agency staff can also submit procurement notices for publishing inUNDevelopment Business and indgMarket. Furthermore, they can view on-line the financial informationrelated to their projects. Inturn, Bank staff can issue no-objectionshnterim responses to clients through the Operations Portal. This functionality allows Bank clients and staff to accurately track the status o f procurement actions subject to the Bank's prior review. Informationon training and guidance materials have beenplaced on Client Connection for use by project implementing agencies and on the internal procurement website for use by Bank staff. Individual "Country Office Champions" for Client Connection have been assigned to promote the website and register the clients. Inaddition, Procurement Champions have recently been assigned to ensure that clients are aware o f the procurement functionality and the benefits it brings, that they have adequate training, and that their views and suggestions for improvement are heard by the Client Connection management team. 104. Information Dissemination. OPCPR's web team has updated the unit's web presence both internally and externally, including adding the new Regional Systems Support Network information, the French- and Spanish-languagenew and revised bidding documents, and information on procurement arrangements in SWAps; and condensing and harmonizing guidance on the preparation o f the procurement plan, contract award, and procurement notice submission.