no slide title · lisbon, portugal march 2013 opportunities for private sector companies to do...

Lisbon, Portugal

March 2013

Opportunities for private sector companies to do business in Latin America and the Caribbean through

the Inter-American Development Bank’s (IDB)

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I. Procurement opportunities with IDB

II. IDB Procurement policies

III. Understanding the IDB Procedures

IV. Where to find information and documents

V. Understanding the responsibilities in the procurement process

Outline

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Outline

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Largest source of multilateral financing for Latin America and the Caribbean since 1959

26 Country offices in the region; 48 member countries worldwide

AAA/Aaa ratings by Standard & Poor’s and Moody’s

Inter-American Development Bank: the leading regional development bank

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by Region

Southern Cone 60%

Andean Countries 20%

CID* 14%

Caribbean 4%

Haiti 3%

IDB Business Opportunities: Overview by Region

Each year, the IDB Group approves about US$ 12b in operations

*Central American, Isthmus and Dominican Republic

Active Portfolio: 106 projects, worth $ 4 billion Pipeline: 77 projects, worth $ 6 billion

Active Portfolio Projects Worth (US$b)

Agriculture and rural development 44 2.4

Urban development and housing 53 3.2

Environment and natural disasters 30 1.3

Other 157 2.7

Active Portfolio: 83 projects, worth $ 7 billion Pipeline: 15 projects, worth $ 1.5 billion

Active Portfolio: 126 projects, worth $ 8.7 billion Pipeline: 35 projects, worth $ 3.6 billion

Active Portfolio: 108 projects, worth $ 11 billion Pipeline: 28 projects, worth $ 4 billion

Active Portfolio: 60 projects, worth $ 6 billion Pipeline: 17 projects, worth $ 0.7 billion

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Energy Social, Health and Education

More

Transportation

Modernization of the State

IDB financed projects: Overview by Sector

Water and Sanitation

Brazil - Rodoanel Mario Covas Project, Nothern Section

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Total (US$M)

Engineering and management 199

Civil works and supervision 2,388

Institutional strengthening 16

Socioenvironmental viability 410

• The program finances the construction of the 44-kilometer

North section of the Mario Covas highway in Sao Paulo,

Brazil

• IDB Contribution: US$ 1.2 billion

• Estimated Total Investment: US$ 3 billion

Nicaragua - National Program for Sustainable Electrification and Renewable Energy (PNESER)

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• The program finances new electricity service connections,

normalizes existing ones, and supports the construction of

214 kilometers of transmission lines that carry renewable

energy sources

• IDB Contribution: US$ 31 Million

• Estimated Total Investment: US$ 31.1 Million

Total (US$M)

Engineering, supervision, and

administration 1

Civil works 30.1

Costa Rica - Reventazon Hydroelectric Project

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• Strengthen the development of Costa Rica’s electricity

sector to help meet the country’s growing electricity

demand, increase competitiveness, and raise living

standards.

• The program co-finances the RHP, which will have a

capacity of 305 MW, including a 13.5 MV mini generating

plant at the base of the dam. It also strengthens Costa

Rica’s electric generation, transmission, and distribution

capacity


• Estimated Total Investment: US$ 291 Million

Total (US$M)

Engineering and administration

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Civil works 285

Colombia- Water Supply and Wastewater Management program in Rural Colombia

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Before

After

• The program finances the design, implementation,

operation, and management of water supply and

wastewater systems, providing close to 20,000

households with improved access to water supply or

wastewater systems

• Diminish the gap between the urban and rural zones,

giving priority to the communities seated in zones with

high levels of poverty and lack of basic necessities

• IDB Contribution: US$ 60 Million (100% project)

IDB (US$M)

Management and supervision 9

Civil works 49

Institutional strengthening and sustainable service

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Haiti: Caracol Industrial park: Infrastructure Program

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• The program helps finance the construction of a full service

industrial park on a 250-hectare site near the town of Caracol,

including factory buildings, internal roads, water storage tanks,

and waste water treatment plants

• IDB Contribution: US$ 55 billion

• Estimated Total Investment: US$ 100 million

Total (US$M)

Engineering, administration, audit, evaluation, and monitoring

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Civil works 92

Brazil: Expansion of Metro Line 5, Sao Paulo

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• The program finances the upgrading of existing trains, and the

design, implementation and supervision of new systems for

train operations, including telecommunications and power

supply

• The project for the expansion of line 5 is comprised of civil

works, systems and trains for the Largo Treze- Chácara Klabin

segment



Total (US$M)

Rolling equipment 22

Civil works 600

Institutional strengthening 1

Argentina: PROMEBA Urban Development

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• The program finances investments in water and sewage

networks, electricity, infrastructure, storm drains, gas

distribution, access roads, pedestrian networks,

community street furniture, green spaces, and

environmental mitigation works

• Contribute to the sustainable improvement of the habitat

of the families living in irregular neighborhoods with

severe deficiencies in public infrastructure, and do not

enjoy ownership of the properties in which they live.



Total

(US$M)

Infrastructure, facilities and sanitation 340

Support for independent initiatives and prevention activities

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Strengthening of management capacity 10

Administration: includes audits and evaluations 17

Argentina: Program To Support a Policy on Improving Equity in Education – Promedu II

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• The program finances the improvement of the

education system and expansion of the education

infrastructure, including construction of 255

preschools, 45 primary schools and 110

secondary schools

• Reduce the gap in educational opportunities of

children and young adults from different income

strata.



Total (US$M)

Improvement in education system performance

222

Civil works 325

Belize: Sustainable Tourism Program

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• The program finances studies, designs and

investments in civil works and equipment to support

the restoration of existing tourism facilities, design of

a master plan to develop the industry, and a

marketing strategy



Total (US$M)

Administration, supervision and evaluation

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Civil works 14

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Each year, IDB financed operations generate 20,000 to 30,000 contracts, worth US$ 3-4 billion.

Consulting represents about 26,000 contracts, worth US$ 1 billion.

Goods and Works represents about 4,000 contracts, worth US$ 3 billion.

70% of the business opportunities are internationally published.

Information based on contract award statistics and procurement plan estimations

IDB financed contracts: Key Figures

Procurement and Consulting Opportunities through IDB-Financed Public Sector Projects

• For about 95% of the opportunities under IDB-financed, public sector projects executed in Latin America and the Caribbean (e.g., road construction, policy reform, provision of computers, etc.), government agencies:

– act as executing agencies;

– they are responsible for selecting and contracting providers of goods, works, and services from the private sector.

• This process is known as project procurement.

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Business opportunities at IDB

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Procurement contracts with Executing Agencies in projects financed by IDB

• Goods and works

• Consulting services

Procurement contracts with IDB • Feasibility and design studies as part of project

preparation

• Consulting services

95%

5%

The active portfolio concentrates on infrastructure and environment sector programs

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Approvals by Sector, 2012 Infrastructure and Environment, 2012

The active portfolio concentrates on infrastructure and environment sector programs (ii)

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Approvals by sector group, 2012, US$ millions

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Outline

IDB Procurement Policies

• The current policies were adopted in January 2005 and updated on April 19 2011

– Policies for the Procurement of Goods and Works Financed by the Inter-American Development Bank (current versions GN-2349-7 and GN-2349-9)

– Policies for the Selection and Contracting of Consultants Financed by the Inter-American Development Bank (current versions GN-2350-7 and GN-2350-9)

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• They are harmonized among MDBs

• Bank’s procurement practices reflect best practices used worldwide.

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Basic differences with other MDB: eligibility restricted to member countries

• Eligibility – nationality of private entities/individuals must be from IDB member countries

• Origin of goods and related services – must originate from IDB member countries

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Procurement and Consulting Opportunities through IDB-Financed Public Sector Projects are an important step in the internationalization of SMEs

• Characteristics of IDB’s Procurement and Consulting Opportunities:

– Competition

– Transparency in the selection process

– Equality

– Due process

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Outline

Execution and Supervision Programming Preparation Approval

COUNTRY STRATEGY PROJECT PIPELINE

PROJECT DOCUMENTS

PROCUREMENT PLAN

SPECIFIC PROCUREMENT NOTES

CONTRACT AWARD

3-6 months 4-8 years

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Resources

http://www.iadb.org/en/about-us/country-strategies,7809.html

http://www.iadb.org/en/projects/advanced-project-search,1301.html



http://www5.iadb.org/idbppi/aspx/ppProcurement.aspx?planguage=ENGLISH




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Public Bidding for Consulting Services Procedures

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Public Bidding for Works and Goods Procedures

Consulting Services: Proposal Preparation Time

• Days from publication of Specific Procurement Notice (SPN) to deadline for submission of proposals

– Request for Expressions of Interest 14 days

– Request for Proposal (shortlist: 6 firms) 4 weeks

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Goods and Works: Bid Preparation Time

• Days from publication of Specific Procurement Notice (SPN) to deadline for submission of bids

– Bids

• Goods 6 weeks

• ƒ Small Works 6 weeks

• ƒ Major Works 12 weeks

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Consulting Services: Selection Characteristics

• Emphasis on technical competence/capacity and qualifications over price

• Invitations are sent to a Short List of pre-selected Consulting Firms (6)

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Consulting Services: Who is Awarded the Contract?

• The Consulting Firm with the best evaluated proposal depending on the selection method.

• Six selection methods:

– Quality & Cost Based Selection (QCBS)

– Quality Based Selection (QBS)

– Least Cost Based Selection (LCBS)

– Fixed Budget Based Selection (FBBS)

– Selection Based on Qualifications (CQS)

– Single Source Selection (SSS) (non competitive)

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Goods and Works: Who is Awarded the Contract?

• The Bidder whose bid has been determined to have

– the lowest evaluated bid price and

– is substantially responsive to the bidding

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Outline

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www.iadb.org

for Country Strategies and Project Pipeline

www.devbusiness.com (UN Development Business online)

for Notifications for large amount procurement

US $550/ year

Procurement Plans Specific Procurement Notices RSS Notifications Procurement Policies Standard Bidding Documents Information on Contract Awards

www.iadb.org/procurement

for Specific Information:

Free

Where can you find information?

http://www.iadb.org/

http://www.devbusiness.com/

http://www.iadb.org/procurement

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Where can you find information? Website: www.iadb.org/procurement

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Where can you find information? General Procurement Notices (GPN)

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General Procurement Notice (GPN) Aviso General de Adquisiciones (AGA)

• Published once within 30 days of a project’s approval by the Bank’s Board of Executive Directors:

United Nations periodical “Development Business” (online)

IDB’s webpage immediately thereafter (within 24 hours): www.iadb.org/procurement

Project advertising


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Where can you find information? Specific Procurement Notices

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Specific Procurement Notice (SPN) Aviso específico de Adquisiciones (AEA)

• Required for International Competitive Bidding (ICB)- published:

On “United Nations Development Business” (electronic issue); and

On IDB’s website : http://www.iadb.org/procurement;

• Required for National Competitive Bidding (NCB)- published:

On the borrower’s free website for procurement opportunities; or

In a local newspaper of wide circulation in the borrower’s country

Competitive Bidding Advertising


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Where can you find information? e-Sourcing

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Where can you find information? Contract Information

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Real Simple Syndication

Where can you find information? Alerts


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Outline

Business Community screens and identifies opportunities, submits proposal, signs contracts with Borrower and executes the contract

Borrowers / Executing Agency execute operations and is responsible for: Planning Evaluation Contract Award Contract Administration

IDB finances project and oversees compliance with procurement policies (ex-ante or ex-post) IDB has NO contractual relationship

with business community


Bidding Documents Contract

Roles & Responsibilities related to Procurement

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Procurement Financed by IDB: Bank Responsibilities

• Oversees the application of IDB procurement policies and procedures

• Reviews the procurement process ex-ante or ex-post (based on evaluation of institutional capacity) to determine adherence to IDB procurement policies

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Project Executing Agency’s Responsibilities

• Issue clear and balanced bidding documents *

• Provide sufficient time for bidders to prepare bids

• Provide timely responses to bidders’ questions

• Evaluate bids based only on criteria established in bidding documents

• Award the procurement contract

• Communicate results to all parties at the same time

• Address complaints promptly and fairly

* Most of them already standardized

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Bidder’s Responsibilities

• Carefully analyze ALL requirements of the bidding documents or request for proposal documents

• Strictly comply with the instructions and specifications terms of reference in the bidding/request for proposals documents

• Require clarifications to documents in writing

• Review bid/proposal for compliance with the requirements before submitting

• Submit bid/proposal with enough time to arrive before deadline

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Procurement Process: Right to Complain

• Bidders/Consulting Firms may submit a complaint in writing at any stage of the procurement process

• Procurement process is not suspended when complaint is submitted

• Contracting Agency resolves the complaint

• If Bank determines that its procurement policies have not been adhered to, Bank declares misprocurement

– Bank cancels portion of the loan allocated to the process that was declared misprocured.

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Key success factors

Have a long-term perspective

Be Systematic in screening information

Be Strategic:

Assess Market

Assess Competition

Select Objectives

Be Persistent

Contact executing agency when facing difficulties

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Tips

• Familiarize yourself with IDB Procurement Policies and Procedures and Standard Procurement Documents

• Check the Procurement Portal of the IDB web site http://www.iadb.org/procurement to learn about:

– Projects Pipeline

– Follow up on Projects in Execution

• Consider associating in a consortium or joint venture with a local firm

• Learn local business practices

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Questions?

Thanks!

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http://www.iadb.org

The Inter-American Development Bank Discussion Papers and Presentations are documents prepared by both Bank and non-Bank

personnel as supporting materials for events and are often produced on an expedited publication schedule without formal editing or

review. The information and opinions presented in these publications are entirely those of the author(s), and no endorsement by the

Inter-American Development Bank, its Board of Executive Directors, or the countries they represent is expressed or implied.

This presentation may be reproduced with prior written consent of the author.

http://www.iadb.org/

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Inter-American Development Bank/ www.iadb.org