ISDB - Guidance Note - Procurement Planning And Strategy
This Guidance Note is intended to complement the Guidelines for Procurement of Goods and Worksand related services and for the Procurement of Consultant Services under Islamic Development BankFinancing, approved by the Board of Executive Directors (BED) of the Islamic Development Bank, andpublished on XXXXXX. This document may be used and reproduced for non‐commercial purposes. Anycommercial use, including without limitation reselling, charging to access, redistribute, or forderivative Works such as unofficial translations based on these documents is not allowed.For additional information on this document, please contact:Project Procurement (PPR)Office of the Vice‐President, Country ProgramsThe Islamic Development BankP.O. Box 5925, Jeddah 21432Kingdom of Saudi Arabiappr@isdb.orgwww.isdb.org
COMMON ABBREVIATIONS AND DEFINED TERMSCommon Abbreviations and Defined TermsCommon abbreviations and defined terms that are used in this Guidance Note. Defined terms arewritten using capital letters.Abbreviation / termFull terminology / definitionAnnexAn Annex to this Guidance NoteApplicantA Firm, Supplier, Contractor (including sub‐Contractors) orIndividual that submits an Application in response to aninvitation for Prequalification, Initial Selection or Shortlisting.BeneficiaryA Beneficiary is the recipient of IsDB Project Financing. Thisterm includes any entity involved in the implementation of anIsDB financed project on behalf of the Beneficiary.BidAn offer, by a Bidder, in response to a Request for Bids, toprovide the required Goods, and/or Works and/or relatedservices.BidderA Firm that submits a Bid for the provision of Goods, and/orWorks and/or related services.ConsultantA Consultant Firm or Individual Consultant that providesConsultant Services. A Consultant is independent of both theBeneficiary and IsDB.Consultant Service(s)A Consultant Firm or Individual Consultant that providesConsultant Services. A Consultant is independent of both theBeneficiary and IsDB.Fraud and CorruptionThe sanctionable practices of corruption, fraud, collusion,coercion or obstruction defined in IsDB’s Guidelines onCombatting Fraud and Corruption and in IsDB Group Anti‐Corruption Guidelines on Preventing and Combating Fraud andCorruption in IsDB Group‐Financed Projects.GoodsA category of procurement that includes, for example:consumables, equipment, machinery, vehicles commodities,raw materials or industrial Plant. The term may also includerelated services, such as: transportation, insurance,installation, commissioning, training or initial maintenance.Non‐consulting Services:Services which are not Consulting Services. Non‐consultingServices are normally Bid and contracted on the basis ofperformance of measurable outputs, and for whichperformance standards can be clearly identified andconsistently applied. Examples include: drilling, aerialphotography, satellite imagery, mapping, and similaroperations.PPPProject ProcurementGuidance Note on Procurement Planning and Strategy
COMMON ABBREVIATIONS AND DEFINED TERMSAbbreviation / termFull terminology / definitionPrequalificationThe shortlisting process, which can be used prior to invitingRequest for Bids in the procurement of Goods, Works andrelated services.Probity Assurance ProviderA third party that provides specialist probity services forconcurrent monitoring of the Procurement Process.ProcurementThe function of planning for, and sourcing Goods, Works, Non‐consulting Services, and/or Consulting Services to meetrequired objectives.Procurement DocumentsA generic term used in these Guidelines to cover allProcurement Documents issued by the Beneficiary. It includes:GPN, SPN, EOI, REOI, Prequalification document, RFB and RFP,including any addenda.Procurement ProcessThe whole Procurement lifecycle that starts with theidentification of a need and continues through planning,preparation of specifications/ requirements, budgetconsiderations, selection, contract award, and contractmanagement. It ends on the last day of the warranty period.Project Procurement GuidelinesCovers the Project Procurement Guidelines know as‘Guidelines for the procurement of Goods, Works and relatedservices under IsDB Project Financing, September 2018’ andGuidelines for the Procurement of Consultant Services underIsDB Project Financing, September 2018.ProposalAn offer, by a Proposer, in response to a Request for Proposalto provide the required Consultant Services.ProposerA Firm that submits a Proposal for the supply of the requiredConsultant Services.Rated CriteriaRated criteria is when price and technical factors are rated, thecontract price and the total combined score of the successfulBid/Proposal. Rated criteria may include but are not limited to:i) quality of methodology and work plan; ii) performance,capacity, or functionality features; and iii) sustainableprocurement.Standard Bidding Documents(SBDs)Standardized procurement documents issued by IsDB to beused by Beneficiaries for IsDB financed projects. These includeIsDB’s standard documents for, e.g.: GPN, SPN,Prequalification, LOI, RFB and RFP.Substantially Responsive BidA bid that is assessed to be complete and without majordeviations from the eligibility, technical and commercialrequirements in the Procurement Documents.Value for Money (VfM)VfM means obtaining the optimum benefits with the effective,efficient, fair and economic use of resources. This requires anevaluation of relevant costs and benefits, along with anassessment of risks, and non‐price attributes and/or life cycleGuidance Note on Procurement Planning and Strategy
COMMON ABBREVIATIONS AND DEFINED TERMSAbbreviation / termFull terminology / definitioncosts, as appropriate. The lowest price alone may notnecessarily represent VfM.WorksA category of procurement that refers to construction, repair,rehabilitation, demolition, restoration, maintenance of civilwork structures, and related services such as transportation,insurance, installation, commissioning, and training.Guidance Note on Procurement Planning and Strategy
Guidance Note on Procurement Planning and Strategy
CONTENTSContentsSection 1 ‐ Introduction . 11.1Overview . 11.2Background. 2Section 2 ‐ Procurement Planning & Strategy . 32.1Procurement Plans . 32.2Procurement Strategy . 3Section 3 ‐ Project Overview . 5Section 4 ‐ Assessment of Operating and Beneficiary Capacity . 74.1Operational Context . 74.2PESTLE Analysis . 84.3Assessment of Beneficiary Capability and Project Implementation Unit (PIU) . 84.4Previous Beneficiary and IsDB Experience of Similar Projects . 94.5SWOT Analysis . 10Section 5 ‐ Stakeholder Analysis . 135.1Overview . 135.2Stakeholder Identification . 135.3Stakeholders Interest and Objectives . 145.4Stakeholder Categorisation. . 155.5Stakeholder Management Approach . 15Section 6 ‐ Procurement Risk Assessment. 176.1Overview . 176.2Procurement Risk Analysis Approach . 18Section 7 ‐ Procurement Objectives . 237.1Overview . 237.2Drafting Procurement Objectives . 247.3RAQSCI Model . 247.4Supply Chain and Value Chain Analysis . 25Section 8 ‐ Market Research and Analysis . 278.1Overview . 278.2Supplier Positioning Matrix . 278.3Supplier Preferencing Matrix . 30Guidance Note on Procurement Planning and Strategy
CONTENTS8.4Types of Competition . 348.5Porter’s Five Forces . 358.6Procurement Approach . 378.7Specifications. 378.8Contract Strategy . 388.9Price Adjustments . 428.10 Form of Contract (Terms and Conditions) . 438.11 Selection Methods . 438.12 Evaluation Methods . 448.13 Contract Management . 458.14 Key Performance Indicators (KPIs) . 47Section 9 ‐ Procurement Options and Recommendations . 499.1Options Analysis . 499.2Analysis of each Procurement Approach . 509.3Procurement Approach Assessment . 50Annex I ‐ Example Procurement Plan . Error! Bookmark not defined.Annex II ‐ Procurement Options and Recommendations Template . 57Annex III ‐ Project Overview Template . 59Annex IV ‐ Procurement Strategy Template . 61Guidance Note on Procurement Planning and Strategy
SECTION 1 ‐ INTRODUCTIONSection 1 ‐ Introduction1.1 OverviewThis Guidance Note is intended to assist Beneficiaries by expanding on and explaining IsDB’s 2018Project Procurement Guidelines1.This note identifies additional information for the reader to consider when applying IsDB’sProject Procurement Guidelines when conducting procurement planning and strategydevelopment, when required by IsDB.A Procurement Plan must always be completed for each project under the project by theBeneficiary for all procurements under the project. In certain circumstances for high risk and/orhigh value projects/procurements IsDB may request that a Procurement Strategy be produced aswell as the mandatory Procurement Plan. When requested by IsDB to produce a ProcurementStrategy, the Beneficiary should follow this best practice guide and use the templates providedin Annexes I, II, and III.The purpose of this guidance is to provide a structured approach to the Procurement Planningstage of IsDB’s Procurement Cycle detailed below.Figure I – Procurement Cycle1https://www.isdb.org/procurement1Guidance Note on Procurement Planning and Strategy
SECTION 1 ‐ INTRODUCTION1.2 BackgroundThe Procurement Plan and Procurement Strategy, when required, are documents that theBeneficiary prepares as part of the Project preparation process.A Procurement Plan must always be completed for the project by the Beneficiary for allprocurements. In certain circumstances and for high risk and high value projects IsDB mayrequest that a Procurement Strategy should be produced as well as the Procurement Plan. Whenrequested by IsDB to produce a Procurement strategy the Beneficiary should follow this bestpractice guide and use the templates included.The Procurement Plan must be reviewed by IsDB as part of Project appraisal and agreementshould be reached with the Beneficiary on the Procurement Plan no later than the completion ofloan negotiations.If a Procurement Strategy is required to be developed by IsDB it is not required to be cleared butshould be shared with IsDB for reference. Also, as part of Project preparation, a ProcurementPlan is prepared based on the analysis in the Procurement Strategy and is subject to no‐objectionby IsDB.In situations of urgent need of assistance because of a natural or man‐made disaster or conflictsrecognized by IsDB, the Beneficiary should only prepare a high‐level, summary Procurement Plan,as soon as practicably possible.For projects that are financed in whole or in part by an IsDB loan or grant the Procurement Planis specifically referred to in the financing agreement between IsDB and the Beneficiary. TheBeneficiary may not begin the procurement process without IsDB’s no‐objection if the relevantcontract is not included in the procurement plan endorsed by IsDB. The completed ProcurementPlan is based on the analysis conducted when completing the Procurement Strategy whenrequired and is inputted into the Procurement Plan to facilitate IsDB’s oversight of theBeneficiary’s procurement contracts, through Bidding up to contract award.2Guidance Note on Procurement Planning and Strategy
SECTION 2 ‐ PROCUREMENT PLANNING AND STRATEGYSection 2 ‐ Procurement Planning & Strategy2.1 Procurement PlansThe Beneficiary is required to prepare during the early stages of project processing or soon afterthe framing of the project concept note (PCN) for the planned procurement a finalizedProcurement Plan.The Procurement Plan needs to cover the first eighteen (18) months of project implementation,and it should be updated periodically at reasonable intervals through the procurement andproject cycle.The finalized Procurement Plan and a summary of the Procurement Strategy, if required, willbecome part of the Project Appraisal Document (PAD) and shall be reviewed in detail by theBeneficiary at the project start up workshop to facilitate smooth and timely projectimplementation.The Procurement Plan will at a minimum detail the Goods and Works packages including therequirements, cost estimates, indicative disbursement, implementation schedules, Prior andPost Review approaches, related thresholds, nature and extent of IsDB monitoring andsupervision, and other relevant factors. Cases such as, for new Beneficiaries or in situationswhere the Beneficiary’s implementation capacity is limited, or where abbreviated Prior Reviewsor Post Reviews are envisaged, IsDB may decide to assess the capacity of the Beneficiary toimplement the Procurement Plan and undertake capacity and/or risk assessments.In emergency situations, if it is not possible for the Beneficiary and IsDB to complete theProcurement Plan for the procurement in a project, such completion may be deferred to theimplementation phase of the project.The Procurement Plan should be posted on Beneficiary project related website and the IsDBwebsite as soon as possible, but in all events after Finance Agreement effectiveness, along withany material updates thereto as and when circumstances require.The Procurement Plan, approved by IsDB during loan negotiations, is incorporated by referencein the Financing Agreement, making it legally binding.2.2 Procurement StrategyWhen requested by IsDB for high risk and/or high value procurements the Beneficiary is requiredto develop a Procurement Strategy Document.The Procurement Strategy addresses how procurement activities will support the developmentobjectives of the project and deliver the best Value for Money (VfM). The Procurement Strategyhelps Beneficiaries by using different procurement and management tools to provide adequatejustification for the selected selection methods in the Procurement Plan. The level of detail andanalysis in the Procurement Strategy shall be proportional to the risk, value and complexity ofthe procurement as agreed with IsDB.3Guidance Note on Procurement Planning and Strategy
SECTION 2 ‐ PROCUREMENT PLANNING AND STRATEGYThe Beneficiary prepares the Procurement Strategy if required by IsDB during projectpreparation, and IsDB reviews the Procurement Strategy and agrees to the Procurement Plan, byno objection before the completion of the negotiation with the Beneficiary.The Procurement Strategy covers the following areas: Identification of the specific project needs; Assessment of the operating context and its potential impact on the procurement; Assessment of the implementing agency’s capacity, resources and previous experience inprocuring these types of activities; Assessment of the adequacy, behaviour and capabilities of the market to respond to theprocurement; and Justification of the proposed procurement arrangements based on market analysis, riskand operating context and the project’s circumstances.The Beneficiary may prepare a high level, simplified Procurement Strategy in situations of urgentneed of assistance because of a natural or man‐made disaster or conflicts recognized by IsDB,provided that the simplified procurement arrangements in the Procurement Strategy areconsistent with IsDB’s Core Procurement Principles.The following Sections of this Guidance Note explain in detail how to complete a ProcurementStrategy using the templates provided in the Annexes. It also provides best practice managementtools and techniques needed to assess the market, suppliers and risks.4Guidance Note on Procurement Planning and Strategy
SECTION 3 ‐ PROJECT OVERVIEWSection 3 ‐ Project OverviewThe first step of completing a Procurement Strategy Document as detailed below and using thetemplate provided in Annex IV is to briefly summarize the Project in terms of the scale andrequirements. This information can be obtained from the Project Concept Note.The Project overview should include the following information about the project and should bedetailed in Section 1 of the template in Annex III.Country:Insert the Country of the ProjectRegion:Insert the Region of the ProjectSector:Insert Sectors Covered by the ProjectProject Name:Insert Project NameProject Number:Insert Project NumberTotal Financing:Add Total Financing AmountProject Description:For each contract/sub‐contract, there should be a shortdescription of what is required from the Firm, Supplier,Contractor (including sub‐Contractors) or Individualincluding the cost estimate.Project Development Objectives:The Project Development Objectives should be consistentwith the Project Development Objectives identified in theProject Concept Note.Result Indicators:Result indicators should be “SMART” indicators (Specific,Measurable, Attributable, Relevant, and Time‐bound)and linked to Project outcomes. Each ProjectDevelopment Objectives should be measured by one ormore outcome indicators.Proposed Procurement Summary:A summary of the proposed contracts within the Projectincluding a Supply Positioning model for identifiedcontracts.Legal/Policy Requirements:A statement of any legal or policy requirements such ts, use of Stated Owned Enterprises forrestricted contracts such as aerial mapping, and anypolicy requirements.Template I – Project Overview5Guidance Note on Procurement Planning and Strategy
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SECTION 4 ‐ ASSESSMENT OF OPERATING AND BENIFICIARY CAPACITYSection 4 ‐ Assessment of Operating and Beneficiary CapacityThe second step of completing the Procurement Strategy Document as detailed and using thetemplate in Annex IV is the Assessment of the Operating and Beneficiary Capacity to deliver theproject and the stated development objectives. This information should be summarised inSection 2 of the template.4.1 Operational ContextThe Procurement Strategy should analyse and take into consideration the operational contextfactors that may affect the procurement approach, the motivation of Bidders or Proposers toparticipate, and the success of any subsequent contracts. Most of this information is availablethrough research and analysis undertaken by IsDB and presented in the Project PreparationDocuments for the Project and in other similar Projects. This should include:A. Governance Aspects:o Fragile or conflict‐affected situations that may raise security concerns; stateinvolvement in the specific economic sector (such as state‐owned enterprisesreceiving government subsidies), legislative processes that may regulate themarket/Bidders/Proposers; the overall legal framework, and disaster oremergency situations.B. Economic Aspects:o A small economy that may result in a lack of competition or difficulty attractinginternational Bidders or Proposers, high inflation that may require the use ofmotivated to participate, any domestic preference that may motivate localbusinesses, but endanger international competition, track record of on‐timepayment, and exchange rate volatility.C. Sustainability Aspects:o Sustainable procurement requirements, such as use of governmentenvironmental standards (e.g. energy/water efficiency targets), social impactsassociated with working in sensitive environments; importing of labour and labourstandards.D. Technological Aspects:o Speed of technological change; need for information transfer and security so thereis not a continued dependency on the Bidders or Proposer, internet access andrestrictions, cell phone access and coverage, opportunity for, and dependency on,the use of technology for Project delivery.7Guidance Note on Procurement Planning and Strategy
SECTION 4 ‐ ASSESSMENT OF OPERATING AND BENIFICIARY CAPACITY4.2 PESTLE AnalysisA PESTLE (Political, Economic, Social, Technology, Legislative and Environment) analysis is a usefultool for supporting this assessment. The diagram in the following figure illustrates some of thepoints to be considered in undertaking the Operational Context assessment using a PESTLE.Figure II – PESTLE AnalysisThe PESTLE analysis helps to provide a lot of information, so it is important to consider what thefindings mean for the procurement approach. The priority is to identify factors that could impactthe procurement approach both positively and negatively, while drawing conclusions from thisinformation to inform the procurement approach that is being designed and detailed in theProcurement Strategy.The PESTLE is particularly helpful at identifying risks, which should be considered as part ofProcurement Risk Management Plan in Section V of this Guidance Note.4.3 Assessment of Beneficiary Capability and Project Implementation Unit (PIU)The objective of the Assessment of Beneficiary Capability and Project Implementation Unit (PIU)is to identify any known factors, both enablers and constraints, which may have an impact onboth the delivery of the Project and the procurement approach being developed. This assessment8Guidance Note on Procurement Planning and Strategy
SECTION 4 ‐ ASSESSMENT OF OPERATING AND BENIFICIARY CAPACITYis independent of the assessment that IsDB undertakes on the Beneficiary’s capability in the PAD.It should also help identify any targeted early interventions such as training or enhanced supportthat the Beneficiary may benefit from, whether from IsDB, or other sources.The Beneficiary should consider the following factors in assessing their capability and resourceneeds to plan and design the procurement approach and the subsequent implementation:A. Previous experience/track record (good and bad)Projects/procurements and implementing IsDB Projects;inimplementingsimilarB. Contract Management capacity and capability to follow through on commitments madeduring the procurement process and contained in the contract award;C. Track‐record and market reputation for making contractual payments on‐time;D. Complaints Management and dispute resolution systems that are credible, independent,and engender trust in all parties, through prompt/fair dealing of complaints;E. Procurement capacity (previous experience, technical capability in designing andpreparing specifications and bidding documents, experience in supervision ofconstruction contracts (if applicable), testing of procured items, availability of resourcesand track record) to undertake successful fit for purpose procurement planning,procurement process, bid/proposal evaluation, supplier selection, and contract award;F. Reliance on, criticality of, and use of professional advisors such as consultants to augmentBeneficiary capability;G. Project implementation arrangements;H. Administrative arrangements, including delegated authority levels to facilitate timelydecision making;I. Inspection arrangements;J. Contract packaging;K. Lessons learned from the implementation of other similar Projects;L. Reliance on, criticality of, and use of professional advisors such as consultants to augmentBeneficiary capability;M. Experience using Alternative Procurement Arrangements; andN. The need for hands‐on‐support to undertake a fit for purpose procurement, fromplanning, contractor/consultant selection, and contract award.4.4 Previous Beneficiary and IsDB Experience of Similar ProjectsThe Beneficiary should work with IsDB to understand how Projects of a similar nature have beendelivered in the past. This analysis should focus on what went well and why, and what did not gowell and could have been improved.Areas to be considered as part of this assessment include: What was the marketplace?9Guidance Note on Procurement Planning and Strategy
SECTION 4 ‐ ASSESSMENT OF OPERATING AND BENIFICIARY CAPACITY Which Firms, Suppliers, Contractors (including sub‐Contractors) or Individuals submitteda Bid or Proposal, and which declined and why? Was the Project delivered to time, cost, and quality? Were there any complaints or disputes and what was the cause? Overall were there good marketplace and supplier participation levels and why? What type of specification was used, did it deliver the right result and are there anyelements of that specification that may be relevant to this Project/procurement? What type of procurement approach was used, did it deliver the right result, and are thereany elements of the specification that may be relevant to this contract? What was the approach to contract management and how effective was this at keepingthe Project and Firm, Supplier, Contractor (including sub‐Contractors) or Individual underthe right level of control?4.5 SWOT AnalysisAnother management tool that can be used to help the Beneficiary assess the operating andBeneficiary capacity is a SWOT analysis. SWOT stands for strengths, weaknesses, opportunitiesand threats. Strengths and weaknesses are an analysis of the internal influences on aBeneficiary’s organization, over which the Beneficiary has an element of control. Opportunitiesand threats are an analysis of external influences on a Beneficiary’s organization, which theBeneficiary tends to have less control.When using a SWOT analysis, the objective is to help Beneficiary’s develop a full awareness of allthe factors, positive and negative, that may affect the delivery of the procurement and theProject. It assists with the identification of the procurement approach that will best deliver theprocurement approach and the Project development WeaknessesOpportunitiesThreatsStrengths and weaknessesare generally internal to anorganisationOpportunities and threatsare generally externalFigure III – SWOT Analysis10Guidance Note on Procurement Planning and Strategy
SECTION 4 ‐ ASSESSMENT OF OPERATING AND BENIFICIARY CAPACITYStrengths What advantages does your organisation have? What does your organisation do better thananyone else? What resources does your organisation haveaccess to? What do stakeholders see as your organisationsstrengths?Opportunities Where can you find good opportunities? Useful opportunities can come from such thingsas:o Changes in te
Strategy, the Beneficiary should follow this best practice guide and use the templates provided in Annexes I, II, and III. The purpose of this guidance is to provide a structured approach to the Procurement Planning stage of IsDB's Procurement Cycle detailed below. Figure I - Procurement Cycle
Procurement Procedures Procurement 2.4 Procurement authority 38 2.5 Modification of individual procurement authority 38 2.5.1 Delegation of procurement authority 38 2.5.2 Delegation of procurement authority to UNFPA officers at headquarters 38 2.5.3 Delegation of procurement authority to field office managers 41
Strategic Procurement for Innovation Vassilis Tsanidis Dr.Jur f. National Expert on Innovation Procurement in the EU A. STRATEGIC PROCUREMENT –2 Innovation Procurement Green/Circular Procurement Social Procurement . 10-11-2020 2 EU Public Procurement Directives (2014/24 , 2014/25)
in the MCC Procurement Guidance Note: MCA Non-PPG Covered (NPC) Purchases that are covered by guidance provided by the Procurement Operations Manual (POM) and Procurement . 1 The MCC Program Procurement Guidelines are based upon the World Bank’s Guidelines: Procurement Under IBRD Loans and IDA Credits and it has been adapted to reflect MCC .
The Chartered Institute of Procurement and Supply (CIPS) defines e‐Procurement as The purpose of this Guidance Note is to describe how e‐Procurement may be used in projects financed in whole or in part by IsDB and to guide Bene
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the decisions made during the procurement process. Improvement in the quality of procurement decision-making and support may Increase Efficiency and educe Procurement Timer Allow quality to be planned early in the procurement cycle, ensuring a fit-for-purpose procurement process and reducing the likelihood of project delays. reduce risk
Procurement For GoJ purposes, Public Sector Procurement is the acquisition of goods, services and works, by any method, using public funds, and executed by the Procuring Entity or on its behalf. Procurement Contract A contract between the Procuring Entity and a Broker/Insure resulting from procurement proceedings. Procurement Officer A person with the authority to conduct procurement .
The standards are neither curriculum nor instructional practices. While the Arizona English Language Arts Standards may be used as the basis for curriculum, they are not a curriculum. Therefore, identifying the sequence of instruction at each grade - what will be taught and for how long- requires concerted effort and attention at the local level. Curricular tools, including textbooks, are .
