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Independent Development EvaluationAfrican Development BankAn IDEV Corporate EvaluationFrom experience to knowledge.From knowledge to action.From action to impactOperational ProcurementPolicies and Practicesof the African Development Bank:An Independent EvaluationSummary ReportAugust 2014
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Independent Development EvaluationAfrican Development BankAn IDEV Corporate EvaluationFrom experience to knowledge.From knowledge to action.From action to impactOperational ProcurementPolicies and Practicesof the African Development Bank:An Independent EvaluationSummary ReportAugust 2014
ACKNOWLEDGEMENTSThis report, prepared by the African Development Bank’s Independent Development Evaluation (IDEV), presents the findings and recommendations of theEvaluation of Efficiency and Effectiveness of the Bank’s Operational Procurement Policy and Practices.IDEV conducted the evaluation with consultancy assistance from the Centennial Group Holdings LLC, USA. The evaluation was managed byMadhusoodhanan Mampuzhasseril, Principal Evaluation Officer with the support of Akua Arthur-Kissi, Evaluation Officer. Samer Hachem, DivisionManager, IDEV2, provided guidance and oversight. The consultant team was led by Donald A. Strombom and Anil Sood. Peer-reviewers included Anjali Kumar, Lead Economist, Country, Corporate and Global Evaluations, World Bank (external), Foday Turay, Chief Evaluation Officer, and HerimandimbyRazafindramanana, Chief Evaluation Officer.The Reference Group for this evaluation provided insightful feedback at different stages of the evaluation including at Approach Paper, Interim Findingsand Draft Report. The Reference Group was composed of Ashraf Hussain Ayad, Chief Procurement Officer, Belgacem Bensassi, Chief Water andSanitation Engineer, Mahib Cisse, Chief Investment Officer, Abdourahmane Diaw, Chief Country Programme Officer, Sergent Fabrice, Chief Health Analyst,Henrik Franklin, Chief Quality Assurance Officer, Samba Kamara, Country Programme Officer, Patience Kuruneri, PECOD Member, and Babu Ram, ChiefPower Engineer.I would like to thank the IDEV team, the Consulting team, the Reference Group and the peer reviewers for their contributions, hard work and efforts incarrying out this evaluation. I would also like to thank our colleagues from Cameroon, Ethiopia, Liberia, Morocco and Mozambique Country Offices whofacilitated the missions in their respective countries, shared their views and provided valuable inputs that informed the evaluation report. I also would liketo acknowledge the valuable input and feedback provided by our colleagues from ORPF at different stages of this evaluation.I gratefully acknowledge the contribution of the Bank staff and external stakeholders who kindly responded to the online survey which provided part ofthe data and information base of the evaluation.Finally, I would also like to express my deep appreciation to the representatives of the Governments of Cameroon, Ethiopia, Liberia, Morocco andMozambique for taking the time from their busy schedules to meet with the evaluation team and share their perspectives on key evaluation issues.Rakesh NangiaEvaluator GeneralIndependent Development EvaluationAfrican Development BankQuestions on this report should be referred to Madhusoodhanan Mampuzhasseril, m.mampuzhasseril@afdb.org or Samer Hachem, Division Manager,s.hachem@afdb.org.
ContentsAcknowledgementsAbbreviations and AcronymsExecutive SummaryManagement ResponseIntroductioniiv1714Purpose, Objectives and ScopeLimitationsProcurement Overview 2007–2013141517Policy Evolution17Procurement Patterns and Trends17Procurement Performance: Findings25Pillar IPolicy25Pillar IIOrganisation and Capacity28Pillar IIIOperations32Pillar IVTransparency and Integrity40Pillar VCapacity Building45Conclusions and RecommendationsAnnexes4953
ContentsList of figuresFigure 2Figure 3Figure 4Figure 5Figure 6Contract awards (2003 – 2013)Shares of goods, works, and consulting services contract awards in value (%)Lapse of time for ICB procurement (days)Contract awards by supplier country in 2013 - Top 20 by value (million US )Share of regional vs. non-regional contract awards in value (%)1920202122List of tablesTable 1Table 2Table 3Table 4Table 5Table 6Table 7Elapsed limit for goods and works under ICB and NCBAssessment of Pillar I – PolicyAssessment of Pillar II – OrganisationCommon problems found in case study countriesAssessment of Pillar III – OperationsAssessment of Pillar IV – Transparency and IntegrityAssessment of Pillar V – Capacity Building21273233404447List of boxesBox 1Processing a typical AfDB works contract with a ministry in LiberiaBox 2Selection of procurement methods – Cameroon experienceBox 3 Mozambique – integrity and auditPerceptions of corruption types (percentage of respondents)Box 4Role of Civil Society Organisations (CSOs)Box 5Capacity building – EthiopiaBox 6Bank initiatives in procurement reforms2942434546
Abbreviations and AcronymsvAbbreviations and AcronymsAfrican Development BankCSOCivil society organisationCSPCountry Strategy PaperORPF Procurement and Fiduciary ServicesDepartmentPARProject Appraisal ReportPCRProject Completion Reportthe OECD)PEProcuring entityDelegation of Authority MatrixPIUProject Implementation UnitIACD Integrity and Anti-Corruption DepartmentPMSProcurement Management SystemICBPPCC Public Procurement ConcessionsDAC Development Assistance Committee (ofDAMInternational competitive biddingIDEV Independent Development EvaluationCommission (of Liberia)PPPRProject Post-Procurement ReviewPPRPPublic Procurement Reform ProjectRMCRegional Member CountryTMTask managerSystemsTRATemporary Relocation AgencyMDBsMultilateral development banksUAUnit of AccountNCBNational competitive biddingVfMValue for moneyOECDOrganisation for Economic Cooperationand Development(function of the AfDB)IEG Independent Evaluation Group (of theWorld Bank Group)IFIInternational financial institutionMAPS Methodology for Assessing ProcurementAn IDEV Corporate EvaluationAfDB
Photo : Madhusoodhanan Mampuzhasseril
Executive Summary1Executive SummaryIntroductionFindingsIndependent Development Evaluation (IDEV) atthe African Development Bank (AfDB) conductedan evaluation of the efficiency and effectivenessof procurement performance in AfDB operationsduring 2007–13. The evaluation aimed toexamine (i) how well the Bank’s procurementperformance met its mandated fiduciaryprinciples of economic, efficient and appropriateuse of its funds while preventing corruption;(ii) how effectively it has helped its membercountries build sound and well-functioningnational procurement systems; and (iii) how wellits procurement policies and procedures werecoordinated with and contributed to the Bank’soverall development assistance programmes andobjectives.Summary ratings for the five Evaluation Pillars are:Overall ratingSatisfactoryModerately satisfactoryModerately satisfactoryModerately satisfactoryModerately unsatisfactoryPolicy was perceived most favourably, an outcomethat may surprise some. The various sourcesof evidence indicate that the Bank’s rules andprocedures provide a sound framework for fair andrelatively corruption-free competition for contracts.Government procurement entities and privateindustry, however, find them complicated. Policiesdo not reflect the latest evolution related to value formoney, green procurement, and gender. The overallrating for policy is satisfactory, but this is temperedin practice by the finding that the application of thesepolicies does not reach the same standard as thepolicy framework.Organisation and capacity3 found strong support fordecentralisation and placing the Bank’s procurementexperts into field offices where they can workbetter and more closely with procuring entities. Thepotential benefits of this change have not yet beenfully realised, partly because not all of the relevanttask managers (TM) and staff have been moved.The more serious problem is that the Delegation ofAuthority Matrix (DAM) requires too much referral ofdecisions to Headquarters and is not entirely clearabout allocating responsibilities.An IDEV Corporate EvaluationAn online survey and interviews of Bank staffmembers and stakeholders, visits to fiveRegional Member Countries (RMCs) (Cameroon,Ethiopia, Liberia, Morocco, and Mozambique)and desk reviews of procurement policy, strategyand relevant documents from the Bank andcomparator organisations provided the basisfor the evaluation. Information was gatheredand analysed according to five procurementsystem pillars: policy, organisation, operations,transparency and integrity, and capacity building.Procurement data came from the Bank’sinformation systems, supervision and projectcompletion reports, Annual Procurement Reports,and related sources. Information from all of thesesources was considered to arrive at ratings1 foreach of the pillars on the basis of key questionsposed in the Evaluation Inception Report.2Evaluation pillarPolicyOrganisationOperationsTransparency and IntegrityCapacity Building
2Procurement Evaluation: Evaluation of Efficiency and Effectiveness of the African Development Bank’s Operational Procurement Policies and Practices –Summary Evaluation ReportAppropriate levels of authority have not beendelegated to field office procurement staff.Country Managers are given responsibilities thatwould be better allocated to sector managers.TMs are not always prepared to handle their firstline procurement responsibilities. Procurementspecialists are so occupied with contract transactionreviews that they have little time for other importantaspects such as project procurement planning andcontract implementation management. Organisationis rated as moderately satisfactory.The Bank’s rules and procedures work especially wellin Operations within the traditional sectors of lendingfor infrastructure: power, transport, and water supplyand sanitation. Sectors such as education, health,and projects that involve community developmentexperience more difficulties. Evolving practices andlimited experience with private sector operations didnot permit conclusions about their effectiveness.Implementing organisations experience manydifficulties with the inflexible ways that Bank rules areapplied, the complex review and approval processes,and the long delays. At the nexus of these concerns,the choice of bidding method between national andinternational competitive bidding, and the use of prioror post review, both depending on thresholds set bythe Bank, are major influences. Also, the work onimproving procurement management and reportingsystems is lagging behind the need. Overall, theoperations pillar is rated moderately satisfactory.The Bank is seen as a strong force in combatingfraud and corruption. It has taken important stepsto strengthen its capabilities in this area, but mostof this work is too recent to have had an impactduring the evaluation period. If there is a problemin the transparency and integrity area, it is that theBank’s record appears to be too good and not inline with overall perceptions and known incidentsin the region. Very few complaints are received,investigative procedures are long, and scarcelyany violations or sanctionable actions have beenreported. Overall, Transparency and Integrity israted moderately satisfactory, but more convincingevidence is needed to support the apparently nearlyperfect safeguards against fraud and corruption inBank-financed operations.Procurement capacity building in RMCs is an areathat requires greater emphasis. The Bank hasformulated an ambitious Capacity DevelopmentStrategy4 that includes the introduction of fiduciaryclinics, a very good initiative, but the lack of incountry institutional capacity is such a widespreadproblem that much more remains to be done. TheBank’s initiatives in country- and regional-levelprocurement reforms have produced only moderateresults. Fragile states have particularly acute needsthat are not effectively addressed. Performance ofCapacity Building during the evaluation period israted as moderately unsatisfactory.The main finding emerging from the evaluationis that the Bank’s implementation performancelags far behind its policy setting. Many of theshortcomings noted are the subject of recentdecisions and actions that are now in process, buthave not yet had time to be fully implemented orreflected in results. The fact remains, however,that although most aspects of procurementperformance were found to be at least moderatelysatisfactory, the overall results are well below thestandards the Bank should set and meet as Africa’spremier development institution.This evaluation report covers many specificaspects relating to performance efficiency andeffectiveness: local industry participation, processtimelines, review procedures, value for money(VfM), and others. The importance of VfM meritsone inescapable conclusion: the Bank and itsmembers and stakeholders urgently need to agreeon what indicators are needed and work togetherto establish and maintain reliable databases formeasuring results.
Executive Summary(a) Based on the findings of the analysis, it isrecommended that the Bank take the followingsteps to remedy perceived shortcomings andto improve future procurement performance.The recommended actions are interconnectedand should be implemented as an integratedpackage.(b) Adapt policies to reflect the latest thinkingwith respect to VfM, green procurement, andthe Bank’s strategic emphases (for example,on inclusion and gender); allow the use of newmethods that are appropriate for the changingnature of op
Abbreviations and Acronyms v An IDEV Corporate Evaluation Abbreviations and Acronyms AfDB African Development Bank CSO Civil society organisation CSP Country Strategy Paper DACDevelopment Assistance Committee (of the OECD) DAM Delegation of Authority Matrix IACDIntegrity and Anti-Corruption Department ICB International competitive bidding IDEVIndependent Development Evaluation
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