STAFF INSTRUCTIONS

PROCUREMENT

GLOSSARY

ADB Asian Development Bank

ADF Asian Development Fund

APA alternative procurement arrangement

APN advance procurement notice

BER bid evaluation report

Borrower

includes agencies or entities that act for the borrower to carry out the project. It also includes recipients of grants for projects, under which the executing agency (EA) administers consulting services.

CD country director

CPS country partnership strategy

CSO civil society organizations

CSPRA country and sector/agency procurement risk assessments

DC direct contracting

DMC developing member country

EA executing agency, as identified in a financing agreement or TA agreement, which is responsible for the carrying out of a loan, grant or a TA grant-funded project. The term EA may be extended to include an implementing agency (IA) that the EA designates to implement the project and recruit consultants.

ePAF electronic procurement approval form

FA framework agreement

FAM facility administration manual

FCAS fragile and conflict-affected situations

FIDIC Federacion Internationale des Ingenieurs-Conseils (or International Federation of Consulting Engineers)

GN guidance note

GNI gross national income

IFB invitation for bids

JV joint venture

LCB limited competitive bidding

MDB multilateral development bank

MFF multitranche financing facility

MRM management review meeting

OAI Office of Anticorruption and Integrity

OCB open competitive bidding

OCO Office of Cofinancing Operations

OGC Office of the General Counsel

OIC officer-in-charge

GLOSSARY

PAM project administration manual

PASS procurement accreditation skills scheme

PAU project administration unit

PPFD Procurement, Portfolio and Financial Management Department

PPP public-private partnership

PPRA project procurement risk assessment

P-RAMP procurement risk assessment and management plan

PRS procurement review system

RFP request for proposals

The RFP is issued to shortlisted service providers in cases where evaluation considers quality of service together with financial offer. RFP might be suitable for cases where ADB or EA might consider award of the contract to provider exceeding minimum qualifying criteria. Not suitable for bidding in lots.

RFQ request for quotation

SBD standard bidding document

SD sector director

SI staff instruction

SPN special procurement notice

SRM staff review meeting

VPAC Vice-President, Administration and Corporate Management

TABLE OF CONTENTS

I. ADB’S PROCUREMENT FRAMEWORK ....................................................................... 1

A. Introduction ............................................................................................................ 1 B. Scope .................................................................................................................... 1 C. Principle-based Approach ...................................................................................... 2 D. Member Country Eligibility Policy and Requirements ............................................. 3 E. Integrity Violations ................................................................................................. 5 F. Conflict of Interest .................................................................................................. 5 G. Standard Procurement Documents and Guides ..................................................... 6

II. PROCUREMENT ACTIVITIES OVER THE PROJECT CYCLE ..................................... 6

III. PROCUREMENT METHODS AND ARRANGEMENTS ................................................. 7

A. Preparatory Work for Procurement ........................................................................ 7 B. Open Competitive Bidding (OCB) .......................................................................... 9 C. Other Methods of Procurement .............................................................................13

IV. BIDDING PROCEDURES AND STANDARD PROCUREMENT DOCUMENTS ...........21

V. PREPARATORY WORK FOR PROCUREMENT ..........................................................22

VI. STAFF RESPONSIBILITIES .........................................................................................27

A. Country Partnership Strategy ................................................................................27 B. Project Preparation ...............................................................................................27 C. Project Preparation/Fact-finding ............................................................................28 D. Project Implementation .........................................................................................28 E. Project Evaluation .................................................................................................31

VII. PROCUREMENT REVIEW SYSTEM (PRS) .................................................................31

VIII. OTHER PROCUREMENT MATTERS ...........................................................................32

A. Noncompliance in Procurement ............................................................................32 B. Bidding Related Complaints ..................................................................................32

APPENDIXES 1. List of Guidance Notes ............................................................................................... 33 2. General Responsibilities of ADB Staff ...................................................................... 34 3.1. Procurement Committee Workflow for Prior Review

Contracts $40 million or more ................................................................................... 43 A. Bidding Documents Review .............................................................................. 43 B. Bid Evaluation Report Review and Procurement Approval Form ....................... 44

3.2. Procurement Submission Workflow for Prior Review Contracts between $20 M to below $40 M ................................................................. 45 A. Bidding Documents Review .............................................................................. 45 B. Bid Evaluation Report Review and Procurement Approval Form ....................... 46

3.3. Procurement Submission Workflow for Prior Review Contracts <$20 M ........................................................................................................ 47 A. Bidding Documents Review .............................................................................. 47 B. Bid Evaluation Report Review and Procurement Approval Form ....................... 48

4. Procurement Complaints Management .................................................................... 49

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I. ADB’S PROCUREMENT FRAMEWORK

A. Introduction 1. The ADB’s new procurement framework consists of ADB Procurement Policy, Procurement Regulations for ADB Borrowers (the Regulations), Staff Instructions (SI),1 associated guidance notes (GN),2 standard bidding documents (SBD)3 and guides as described below.

(i) ADB Procurement Policy:4 Approved by ADB Board of Directors, the procurement

policy specifies ADB’s six core procurement principles and various considerations relevant to the principles and their implementation in ADB financed operations.

(ii) The Regulations: Approved by ADB Management, the Regulations describe the

arrangements that are available for borrowers5 to implement procurement in accordance with the procurement policy, the rules that must be followed and requirements for ADB’s procurement due diligence.

(iii) Approved by Procurement, Portfolio and Financial Management Department (PPFD), SI define roles and responsibilities of ADB staff in carrying out procurement oversight as well as the procurement decision authorities and service standards.

(iv) GNs: The Regulations are complemented by a set of GNs approved by PPFD that provide more details to ADB borrowers to assist them in implementing various procurement methods and modalities.

(v) SBD and Guides: SBD are recommended for use to ensure consistency and legal

certainty across the procurement process, guides provide further details on preparation of specific procurement documents and bid evaluation.

B. Scope 2. This SI is applicable for sovereign operations6 financed in whole or in part by way of an investment loan from ADB, ADB-financed grant, or funds administered by ADB for the procurement of goods, works, and nonconsulting services. These may be referred to by staff to understand the procurement–related work flow within ADB’s project cycle and related roles and responsibilities of ADB staff to ensure that procurement is carried out in accordance with ADB policies and procedures. This SI does not apply to ADB-administered technical assistance (TA)

1 For procedures to engage and supervise consulting firms and individual consultants under loans and grants please

refer to Staff Instruction on Borrower Administered Consulting Services. For procedures to engage and supervise consulting firms and individual consultants under ADB-administered TA projects please refer to Staff Instruction on ADB-administered Consulting Services. For procedures on procurement, contracting, and contract management of goods, works and nonconsulting services under TA refer to Staff Instruction on Procurement of Goods, Works and Nonconsulting Services under ADB-administered Technical Assistance.

2 List of guidance notes is in Appendix 1. 3 Includes prequalification and bidding documents. 4 See also ADB. Policy Paper on Improving ADB Performance through Procurement Reforms. 2017 5 The term “borrower” also includes grant recipients, and project executing and implementing agencies. 6 Sovereign operations refer to any financial assistance to a developing member country (DMC) or other financing

arrangement that is guaranteed by a DMC under terms that allow ADB, upon default by the guarantor, to accelerate, suspend, or cancel any other loan or guarantee between ADB and the related DMC.

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projects, results-based or policy-based loans,7 and procurement activities under alternative procurement arrangements (APA).8 The Project Administration Instructions continue to apply to procurement and recruitment of consulting services under the ADB Procurement Guidelines (2015, as amended from time to time) and ADB Consulting Guidelines (2013, as amended from time to time).

C. Principle-based Approach

3. Under the new procurement framework, a principle–based approach stipulated in the Regulations will permit increased flexibility and customization in carrying out ADB-financed or administered procurement. There will be increased rationalization of the procurement function with prior reviews targeted only for high risk procurement and post review (sampling) for all low risk procurement. Rigorous risk assessments will be undertaken in the early stages of project processing that will result in better designed projects. This will reduce processing time and administrative burdens for executing agencies (EA)9 and ADB during implementation while maintaining sound fiduciary oversight.

4. The new framework will provide ADB a better understanding of the maturity and capacity of the procurement systems of the developing member countries (DMCs) through more comprehensive procurement capacity assessments at country, sector and project levels. It will enhance project readiness and increase procurement quality through better prepared procurement plans, more robust contract management support, and greater engagement by ADB in building procurement capacities in DMCs. 5. ADB’s Procurement Policy sets out six core principles, which are:

i. Economy 6. The principle of economy means considering factors such as price, quality, and any nonprice attributes, as appropriate, without adversely affecting the viability of the project.

ii. Efficiency 7. The principle of efficiency ensures that procurement processes are proportional to the value and risks of the required outcome and underlying project activities, considering implementation capacity, time constraints, and cost-effectiveness.

iii. Fairness 8. The principle of fairness means:

(i) equal opportunity for and treatment of eligible bidders;

7 For procurement under results-based loans refer to Staff Guidance on Piloting Results-Based Lending for Programs.

For procurement under policy-based loans refer to OM Section D4/BP. 8 If the use of APA has been permitted under a particular project, a trust-and-verify procurement oversight approach

will be applied, whereby ADB may rely on oversight mechanisms of the borrower or those agreed in the applicable financing or other agreements. However, regardless of procurement arrangement, ADB’s Anticorruption Policy (1998, as amended to date) and ADB’s Integrity Principles and Guidelines (2015, as amended from time to time), will apply in all cases.

9 References in these Staff Instructions to “executing agency” also include “implementing agencies” responsible for implementation of ADB-financed projects or their components.

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(ii) equitable distribution of rights and obligations between borrowers and bidders; and (iii) credible mechanisms for addressing procurement-related complaints and

providing recourse. 9. ADB encourages open competition as the preferred procurement approach, whenever possible, to maximize fairness of the opportunity to bid.

iv. Transparency 10. The principle of transparency means ensuring, through appropriate documentation and review of activities in the procurement process, that:

(i) relevant procurement information is made publicly available to interested parties, in a consistent and timely manner, through readily accessible and widely available sources at no (or reasonable) cost;

(ii) appropriate reporting of procurement activity; and (iii) use of confidentiality provisions in contracts only where justified.

v. Quality

11. This principle requires that the procurement arrangements are structured to procure inputs and deliver outputs of appropriate standard in a timely and effective manner to achieve the project outcomes and development objectives, taking into account the context, risk, value, and complexity of procurement.

vi. Value for Money 12. This principle enables the borrower to obtain optimal benefits through effective, efficient, and economic use of resources by applying, as appropriate, the Core Procurement Principles and related considerations, which may include life-cycle costs and socioeconomic and environmental development objectives of the borrower. Price alone may not sufficiently represent value for money.

D. Member Country Eligibility Policy and Requirements

13. For any ADB-financed procurement transaction, Article 14 (ix) of the Charter gives two requirements for determining the “country” eligibility of participating suppliers/contractors, goods, and services:

• procurement is in member countries of ADB except in any case in which the Board of Directors determines otherwise; and

• goods and services are produced in and provided from ADB member countries except in any case in which the Board of Directors determines otherwise.10

10 A blanket waiver of such restrictions applies in certain cofinanced Asian Development Fund (ADF) operations. See

Operations Manual J3 (Procurement) for information on ADB member country procurement eligibility restrictions which may vary according to the funding source. See Operations Manual D2 for information on the blanket waiver.

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14. Procurement in member countries means the following:

• the supplier/contractor11 must be a national of a member country;

• the place of contract must be in a member country and performance by the supplier must occur in member countries; and

• the purchase price must be incurred in members’ currencies.

15. The supplier/contractor may be a person, corporation, or group of persons. Generally, nationality is determined by referring to the law of the member country in which a supplier/contractor claims nationality.

• For a natural person, nationality can usually be established by referring to the person's passport or any other legal test of nationality acceptable to ADB.

• For a corporation,12 generally only the place of its incorporation needs to be considered. Incorporation means establishing a corporation and is not to be confused with “registration,” which is sometimes required to permit a foreign company to conduct business.13 The nationality of the owners or shareholders of the corporation is irrelevant.14

• To be eligible, partnerships that are not incorporated and have individual members must be registered in a member country and have a substantial majority (not less than 60%) ownership by nationals of member countries.

• To be eligible, a joint venture that is not incorporated15 and does not have a legal personality independent of its members must be registered in a member country and consist of nationals (individuals, partnerships, or corporations) of member countries.

16. The second requirement of eligibility is that the goods and related services or works to be procured must be produced in and provided from member countries. This requirement is discussed in three typical contexts of procurement:

• goods and related services,

• works; and

• consulting services.

17. To be eligible, goods must have been mined, grown, or produced in a member country. That is, the goods should have come into existence in a member country in the form in which they are to be purchased. Goods are produced or deemed to come into existence when through

11 A supplier is a person, corporation, or group of persons contractually bound to supply the goods and related services

or works purchased but is not necessarily a manufacturer and may appoint an agent on its behalf. 12 Corporation refers to an entity having a legal personality of its own, independent of its members. In some countries,

corporation describes a company. 13 A company incorporated in Brazil may be registered in the Philippines to enable it to do business there, but it would

not be considered a national of the Philippines for the purposes of determining eligibility. A few member countries with a civil law background may prescribe that the location of the center of administration rather than incorporation determines the nationality of a corporation. France, Netherlands, and Spain among others have civil law systems, but not all countries believe that the central administration's location determines nationality.

14 For example, a corporation incorporated in the United States would be an eligible supplier even though it is a wholly owned subsidiary of a Mexican company.

15 It is not necessary to incorporate a joint venture in order to be eligible to participate in bidding. A group of firms with intent to form a joint venture may participate subject to certain requirements.

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manufacturing, processing, or substantial and major assembling of components, another commercially recognized product results that is substantially different from its components.16 18. The contractor must be eligible for works contracts in accordance with para. 8 works contracts include civil works, plant construction, and turnkey contracts. Labor, equipment, and materials for the works under the contract must be supplied from member countries. Sometimes the contractor is required to provide equipment and materials through subcontractors. These subcontractors must also separately meet the eligibility requirements.

19. The requirement of "production in member countries" for consulting services is satisfied if the services are supplied from member countries as follows:

• The services of an individual consultant are deemed supplied from the member country of which the consultant is a national.

• The services of a consulting firm generally consist of work at the home office of the firm and of fieldwork by a team of individuals assembled by the firm. The home office is to be in a member country under the nationality requirements (para. 8). Nationals of member countries provide the services. Where the consultant subcontracts out portions of the services or is required under the contract to purchase certain items of equipment, such subcontracts or equipment must also separately meet eligibility requirements.

20. If in doubt, staff should consult PPFD and the Office of the General Counsel (OGC) on any specific legal issues(s) relating to eligibility, including issues regarding nationality.

E. Integrity Violations

21. A supplier/contractor sanctioned or temporarily suspended by ADB in accordance with ADB’s Anticorruption Policy (1998, as amended to date)17 and Integrity Principles and Guidelines (2015, as amended from time to time)18 shall be ineligible to participate in or be awarded an ADB-administered contract or to benefit from an ADB-administered contract, financially or otherwise, during the period determined by ADB.

F. Conflict of Interest

22. ADB considers a conflict of interest to be a situation in which a party has interests that could improperly influence that party’s performance of official duties or responsibilities, contractual obligations, or compliance with applicable laws and regulation. A conflict of interest may not, in all cases, in and of itself, constitute a violation of ADB’s Anticorruption Guidelines, if appropriately addressed or mitigated. 23. ADB requires bidders to disclose all conflicts of interest during the bid submission. ADB will take appropriate actions to manage such conflicts of interest or may reject a proposal for

16 For example, where a computer is assembled or manufactured needs to be an eligible source, and not the source

of the computer’s components. 17 ADB. 2010. Anticorruption and Integrity. Manila. https://www.adb.org/sites/default/files/institutional-document/31317/anticorruption-integrity-policy-strategy.pdf 18 ADB. 2015. Integrity Principles and Guidelines (2015). Manila. https://www.adb.org/sites/default/files/institutional-document/32131/integrity-principles-guidelines.pdf

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award if it determines that a conflict of interest has flawed the integrity of any procurement process.

G. Standard Procurement Documents and Guides

24. ADB encourages to use the Standard Bidding Documents (SBDs) and respective User Guides covering preparation of procurement documents and procedures for bid evaluation to ensure consistency and legal certainty across the procurement process.19 These are available on ADB’s website, www.adb.org, and PPFD’s internal website, OpsPedia, as follows:

• Prequalification

• Goods

• Works (Large and Small Contracts)

• Plant: Design, Supply, Install

• Information Technology Products and Services

• Design-Build-Operate

• Consulting Services

• Guide on Bid Evaluation II. PROCUREMENT ACTIVITIES OVER THE PROJECT CYCLE 25. A typical project cycle involves five distinct stages as follows:

• country partnership strategy

• project concept and preparation

• project approval

• project implementation

• project evaluation

26. The related procurement tasks during the project cycle, except for the project approval stage, are as follows:

(i) Country Partnership Strategy

• Country and Sector/Agency Procurement Risk Assessment

• Development of a Procurement Risk Assessment and Management Plan

(ii) Project Concept and Preparation

• Project procurement classification

• Project procurement risk assessment

• Decision on the use of the EA’s e-Procurement system

• Review of the initial procurement plan

• Decisions on advance contracting and retroactive financing

19 If the use of APA has been permitted under a particular project, SBDs of another multilateral or bilateral agency or

organization involved in the project should be used to the extent possible. ADB’s SBDs could be used in cases where the organization, whose APA is being used, does not possess adequate SBDs that are fit-for-purpose for the contract in question.

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• Risk assessment and consideration of APA with the EA or other agency (e.g. multilateral development bank [MDB])

• Review of expressions of interests, requests for proposal and terms of references for initial consulting services packages

• Review of prequalification and bidding documents for initial packages

• Publishing of invitations for prequalification / bids for initial packages

(iii) Project Implementation

• Preparation of prequalification, bidding documents and requests for proposals (RFPs)

• Publishing of invitations for prequalification / bids / consulting services

• Prequalification of applications / evaluation of bids / consultants proposals

• Preparation of contract management plan(s)

• Contract award and signing

• Contract management

(iv) Project Evaluation

• Review of project completion report including, assessment of the procurement undertaken.

III. PROCUREMENT METHODS AND ARRANGEMENTS

A. Preparatory Work for Procurement 27. Standard Bidding Documents (SBD). ADB normally requires the use of appropriate SBDs under open competitive bidding (OCB), with the purpose of promoting economy and efficiency, consistency and legal certainty across the procurement process. Where no relevant SBD with appropriate conditions of contract has been issued by ADB, the borrower may use other internationally or nationally recognized standard conditions of contract and contract forms with proper justification, provided that they are consistent with the core procurement principles and their use is approved by PPFD and OGC. For different types of procurement contracts, the choice of appropriate SBDs may vary depending on the following factors: (i) nature, complexity and value of goods, works or services, (ii) applied bidding procedures, and (iii) application of alternate procurement arrangements. 28. When using OCB, the EA may use prequalification to assess the suitability of prospective bidders, i.e., applicants, to carry out a specific contract prior to being invited to submit bids (for further details staff should refer to the User’s Guide on Prequalification and the Guidance Note on Procurement – Prequalification). Prequalification is particularly advised for large or complex contracts as means to (i) test the supply market; (ii) provide a low cost of entry for bidders into the procurement process; (iii) encourage greater competition by ensuring that only qualified bidders are invited to submit bids before they invest resources in preparing complex technical and price proposals; and (iv) reduce the number of bids to be evaluated to a reasonable level by inviting bids only from qualified bidders. When prequalification is not used, the qualifications of bidders will be conducted during technical evaluation stage. 29. For contracts to be procured through OCB with international advertisement, SBDs in the English language shall be used. For contracts to be procured through OCB with national

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advertisement, national SBDs in the English language or local languages may be used with prior approval of PPFD. If national SBDs are in local languages, PPFD’s approval of the initial SBD template will be based on the review of the English translation provided by the EA. The cost of bidding documents remains an issue with some EAs, but the principle is that the documents should preferably be provided free to all potential bidders. Administrative costs such as printing, photocopying and delivery may be recovered through a reasonable fixed fee. If SBDs are distributed electronically, normally, all bidders should be provided open free-of-charge access to download SBDs from the borrower’s website. 30. Amendments of the prequalification or bidding documents. Under prior review contracts, if there is a need to issue addenda to the prequalification or bidding documents after they had been made available to potential applicants/bidders, such addenda shall be submitted to ADB for prior review and no objection and shall be communicated to all bidders in writing. As necessary, the project officer may consult with PPFD and OGC before issuing the no objection to the EA. If an electronic procurement system is used such addenda shall be made available to potential applicants/ bidders in electronic form in accordance with appropriate procedures. 31. Types of contracts. Generally, a contract is considered a goods contract when approximately 60% of the scope is for goods although it may include some works components such as sheds or minor structures. A works contract may also contain some equipment components. The dominant component of a contract determines its type and the bidding document to be used, but minor elements may require additional clauses or provisions in the bidding document such as in payment terms and special conditions of contract. The plant contract involves design, supply, and installation of a combination of equipment, machinery, and related works with supervision by the employer and payment by price schedules that are usually based on completing milestones. 32. For works contracts, ADB and other MDB are licensed by FIDIC20 to use only MDB Harmonized Edition (June 2010) conditions of contract, therefore, ADB may only promote them in its bidding documents. If approval is given to an EA by ADB to use other FIDIC contract conditions, the approval shall be on condition that the EA and the bidders shall secure their own licenses to use in their bid preparations and for the EA and the winning contractor for contract management. Under APA, the most appropriate and fit-for-purpose conditions of contract of the organization, whose APA is being used, are recommended to be included in the bidding documents. 33. Project division staff shall carefully examine the entire bidding documents, especially for contracts with estimated value below $20 million, and shall consult with PPFD and OGC as necessary. Project division staff shall carefully examine Section 6 since this is the primary point of interest for potential bidders and greatly affects the value for money of the contract. Project division staff shall ensure that the Specifications/Employer’s Requirements are appropriate for the contract, that no brand names or preferred items or tailor-fit specifications are included, and that there are no signs of EA preference, whether inadvertent or not, that may reduce competition. Project staff are expected to have the primary technical expertise for a particular contract and also bear primary responsibility for accuracy and appropriateness of information in Section 6. Staff should bear in mind that not only can improper specifications or employer’s requirements lead to inadequate proposals and high prices, they can indicate integrity violations as well.

20 Federacion Internationale des Ingenieurs-Conseils (or International Federation of Consulting Engineers).

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B. Open Competitive Bidding (OCB) 34. OCB is the preferred procurement method. It applies to the procurement of goods, works and nonconsulting and consulting services under ADB-financed contracts. For details refer to the Guidance Note on Procurement – Open Competitive Bidding. OCB permits open competition among all eligible bidders whether procurement contracts are advertised internationally or nationally or whether the procedures are based on the Regulations, on an approved national and/or EA procurement system, or on the rules of another MDB or agency under the mechanism of mutual reliance as part of APA. OCB shall generally include the six procurement stages namely:

• Preparation of bidding documents

• Notification and advertisement;

• Prequalification (when appropriate);

• Issuance of bidding documents;

• Bid submission and bid opening;

• Bid evaluation; and

• Contract award and signing

35. Notification and Advertisement. Notification and advertisement is the defining step in OCB that provides timely, adequate and accurate information allowing potential applicants to prepare and submit applications for prequalification and for potential bidders to prepare and submit bids. Advertising may be carried out internationally or nationally depending on the nature, size and value of procurement contracts as well as prevailing market conditions for the products or services in question and as provided in the procurement plan. For large or specialized contracts, regardless whether advertised internationally or nationally, advertisements may also be published in well-known technical magazines or trade publications, or in newspapers of wide international and national circulation.21 36. International Advertisement. Procurement contracts for international advertising shall be published:

• on the ADB website - www.adb.org;

• in a freely and publicly accessible website in English; and

• in a newspaper of national circulation (at least one English language newspaper, if available); or website in the borrower’s country.

37. National or Local Advertisement. Contracts that are not amenable to international competition, for example, due to their small values, are normally advertised at national level only (in a newspaper of national circulation or website in the borrower’s country) but may also be published on the ADB website at the EA’s request. Detailed instruction on OCB with national/local advertisement, i.e., requirements on bid securities, use of local language, transportation, insurance, use of local arbitration, shall be reflected in the project administration manual (PAM) and integrated in the procurement plan. 38. Requirements and Procedures. Any invitation for bids (IFB) should, to the extent possible, provide information to potential bidders on the scope of the contract to be awarded, the evaluation and qualification criteria and the relevant terms and conditions of contract. In case of procurement subject to prior review, a copy of the IFB for contracts valued at $1 million and above

21 Thresholds for small and large value contracts shall be determined during project procurement risk assessment and

based on that assessment the prior or post review (sampling) method shall be reflected in the procurement plan.

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shall be submitted by the EA to ADB22 for review. In case of procurement subject to post review (sampling), the EA should ensure that information in the IFB is consistent with the information in the bidding documents to be issued. If the EA wishes to publish the IFB on ADB website, it shall submit a copy of the IFB to ADB. The IFBs for contracts below $1 million are not required to be published on ADB website. 39. Bid Preparation. The bid preparation period, i.e., the period from the date of publication of the IFB to bid submission, shall be agreed with PPFD to allow bidders sufficient time to prepare and submit bids taking into account the complexity of the contract. The recommended minimum bid preparation period is 6 weeks for internationally advertised contracts and 4 weeks for nationally advertised contracts. Longer bid preparation periods may be allowed for complex packages to ensure competition and due consideration of quality of bids. The bid preparation period may also be reduced, with proper justification, for example in case of emergency situations, rebidding or when the borrower’s e-procurement system is used. 40. Bid Submission and Opening Procedures. The appropriate procedures acceptable to ADB shall be clearly spelt out in the bidding documents. Bids may be submitted as hard copies or through electronic means as defined in the bidding documents. 41. Bid Validity. Bidders are required to submit bids valid for a period specified in the bidding documents. The bid validity period should be sufficient to enable the borrower to complete the evaluation of bids, and where prior review is required, for ADB to review the recommendations for contract award. It should also allow sufficient time to obtain all necessary approvals and no-objections so that the contract can be awarded within that period. For single-stage one-envelope procedure, at least 90 calendar days from the bid submission date for goods and 120 calendar days from the bid submission date for works are recommended. More time may be allowed for bid evaluation under two-envelope and two-stage procedures. 42. Bid Security. In case of contracts for goods, works and nonconsulting services borrowers have the option of requiring a bid security. When used, the bid security shall be in the form and amount indicated in the bidding document. The bid security amount should normally not exceed 2% of the estimated cost of the package and the validity of the bid security should exceed the validity period of the bid. The required validity period of the bid security shall be specified in the bidding document. Bid security shall be returned to unsuccessful bidders once the contract has been signed with the winning bidder. Bid security shall be in one of the following forms or other form as agreed with ADB:

• An unconditional bank guarantee issued by a reputable bank in the format provided in the bidding document;23

• An irrevocable letter of credit;

• A cashier’s or certified check; or

• Swift Message in the form of MT 760.24

43. In place of bid security, the borrower may require bidders to sign a bid-securing declaration accepting that if they are in default with the conditions set forth in the bid-securing declaration,

22 The Procurement Specialist is responsible for review of IFBs while Procurement Support Unit under PPFD is

responsible for review and uploading of IFBs on ADB website. 23 If the institution issuing the bid security is located outside the country of the borrower, the borrower may also require

that it shall have a correspondent financial institution located in the country of the borrower to make it enforceable. 24 MT 760 is a type of swift message which is sent by the issuing bank to the advising bank when issuing a guarantee

or a standby letter of credit.

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bidders will be suspended from being eligible for bidding in any contract with the borrower for certain period of time. The suspension period will be indicated in the Bid Data Sheet (BDS) and should be in the range of one to five years. 44. The bid security may be forfeited or the bidder may be suspended from being eligible for bidding in any contract with the borrower for specific period of time based on provisions of the bid-securing declaration in the following cases:

• if a bidder withdraws its bid during the period of bid validity specified by the bidder in the letter of bid, except as provided in the bidding documents; or

• if the successful bidder fails to: (i) sign the contract; (ii) furnish a performance security; (iii) accept the arithmetical correction of its bid; or (iv) furnish a domestic preference security, if so required.

45. Currency Provisions. Bidding documents shall indicate the currency or currencies in which bidders are to state their prices, the procedure for conversion of bid prices expressed in different currencies into a single currency for the purpose of comparing the bid prices, and the currencies in which the contract price will be paid. For internationally advertised OCB and limited competitive bidding (LCB), currencies are limited to three foreign currencies and the local currency. For nationally advertised OCB, LCB and request for quotation (RFQ), the default currency is the local currency for bidding and payment, however, with proper justification, for example when local currency exchange rate is subject to big fluctuation, borrowers may use foreign currency. 46. Payment of the contract price shall be made in the currency or currencies in which the bid price is expressed in the bid of the successful bidder. When the bid price is required to be stated in the local currency but the bidder has requested payment in foreign currencies expressed as a percentage of the bid price, the exchange rates to be used for purposes of payments shall be those specified by the bidder in the bid, so as to ensure that the value of the foreign currency portions of the bid is maintained without any loss or gain. 47. Bid Evaluation. Bid evaluation shall be conducted by the EA strictly in accordance with the evaluation and qualification criteria stated in the bidding documents. A Guide on Bid Evaluation is posted for ready reference on ADB’s website, www.adb.org. No changes to the bid evaluation criteria are permitted after the opening of bids. The evaluation and award should be completed within the initial period of bid validity. If it becomes necessary and is justified to extend the bid validity to account for changes in the evaluation and qualification criteria, the EA must request in writing an extension of bid validity from all bidders before the bid validity expiration date. Under the prior review, the EA should seek ADB’s prior approval for the first request for extension, if it is longer than four weeks, and for all subsequent requests for extension, irrespective of the period. 48. If bidders were requested to extend validity of their bids, they shall not be asked or permitted to change the price or other conditions of the bids but they will have the right to refuse to grant extension. If the bidding documents require a bid security or bid securing declaration, bidders may exercise their right to refuse to grant such an extension of bid validity without having their bid security forfeited or bid securing declaration executed. 49. Joint Venture (JV) Partners and Subcontractors. Partners in a JV are taken together as one bidder. In order to qualify for a contract, each JV partner needs to demonstrate compliance

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with eligibility requirements and must satisfy specific financial and technical requirements, provided that the JV in its totality meets all the financial and technical qualification requirements. Each JV partner shall be jointly and severally liable for the bid and the contract during its implementation. Subcontractors, on the other hand, take different forms depending on the stage of procurement and contract type. Subcontractors need to meet the following eligibility requirements.

• Under a works or plant contract, there may be subcontractors named by a bidder at the bidding process (or an applicant at prequalification process) to undertake part of the scope of work. Such a subcontractor named in the bid (or application) is considered a “specialist subcontractor” that the bidder (or applicant) needs in order to meet qualification requirements for key technical specialties or activities. Evidence of the subcontracting agreement shall be required from the bidder, if the key activity is to be undertaken by the “specialist subcontractor.” Under works contracts, “specialist subcontractors” cannot be replaced by bidders after bid submission. A “nominated subcontractor” is named by the employer in the bidding document to perform certain specific items in the scope of work and is normally excluded from the bid evaluation.

• Under a works, plant, or supply contract, there may be subcontractors that are appointed or named during contract implementation with selection and approval covered by the conditions of the contract.

• Under a plant or supply contract, subcontractors and manufacturers (other than the bidder) are named in the bid for major items of supply or services for which they need to meet minimum technical qualifications.

• Under a supply contract, manufacturers (other than the bidder) named in the bid for major items of supply or services are considered subcontractors, and they also need to meet minimum technical qualifications.

• Replacing named subcontractors during the bidding is governed by the bidding documents while replacing subcontractors appointed during contract implementation is governed by the contract.

50. Domestic Preference. A margin of preference may be granted for domestically manufactured goods and domestic contractors under OCB with international advertisement when provided in the financing agreement at the request of the borrower (the Guidance Note on Procurement - Domestic Preference). The margin of preference is applied during bid evaluation and is referred to as the domestic preference scheme. Applying the scheme is subject to certain eligibility requirements for the goods to be procured in supply contracts and for domestic contractors in works contracts. For civil work contracts, preference is extended only to domestic contractors in countries with an annual per capita gross national income (GNI) that is less than the limit set each year in the World Bank Operational Manual, Operational Policies available on OpsPedia. Note that even when provided in the financing agreement, borrowers may opt not to apply domestic preference scheme in a particular procurement exercise. Invitation for prequalification or bids shall clearly indicate the applicability of domestic preference and the methods for applying domestic preference shall be indicated in Section 3: Evaluation and Qualification Criteria of the bidding documents.

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51. Standstill Period. A standstill period is the period subsequent to notification of intention to award the contract within which any unsuccessful bidder can challenge the proposed award. If the standstill period applies, the bidding document will indicate the details of standstill provisions. The provision of the standstill period shall be decided at project procurement risk assessment stage and shall be approved by PPFD director. Typically, the standstill period shall be fourteen (14) calendar days unless the regulations of the borrower’s country requires a different period or when the standstill period may be extended in accordance with the provisions in the bidding document. The standstill period commences the day after the EA has transmitted to each bidder the Notification of Intention to Award the Contract. Where only one bid is submitted, or if this contract is in response to emergency situation recognized by ADB, the Standstill Period shall not apply even if it was specified under the bidding documents. 52. The EA shall, at the start of the standstill period, notify in writing each bidder who submitted a bid of its intention to award a contract to the successful bidder after the expiry of the Standstill Period. The notification shall be issued using the template provided in Section 9: Contract Forms of the bidding document. Bidders are provided 3 business days from their receipt of the notification of intent to award a contract to make a written request to the borrower for a debriefing. The borrower is required to debrief the bidder within 5 business days after receiving a debriefing request. Further details are provided in the Guidance Note on Procurement – Standstill Period. 53. Confidentiality. After the public opening of bids, information relating to the examination, clarification, and evaluation of bids and recommendations concerning awards shall not be disclosed to bidders or other persons not officially concerned with this process until the publication of contract award.

C. Other Methods of Procurement

54. In addition to OCB, depending on the context, other procurement methods are allowed. These are as follows: 55. Limited Competitive Bidding (LCB). LCB is essentially OCB by direct invitation without open advertisement. It may be an appropriate method of procurement for goods, works and services where (a) there is only a limited number of potential bidders, (b) the amount of the contract is not large enough to attract sufficient bidders through OCB, or (c) there are other exceptional reasons that may justify departure from open advertisement, such as emergency situations. Further, when rebidding is necessary, the EA may invite bids from all the bidders who purchased the bidding documents at the first instance or may invite bids only from the bidders who previously submitted the bids. Under LCB, borrowers shall seek bids from a list of potential bidders broad enough to assure competitive prices. Such list may comprise only national bidders, if they have capacity to deliver the goods, works or services in question. Domestic preference is not applicable under LCB. In all other respects, other than advertisement and preferences, OCB procedures shall apply, including the notifications and publication of award of contract. 56. The SBDs used for OCB may be used for LCB, but the IFB, instructions to bidders, and conditions of contract should be used with little modification. Contract packages proposed for LCB and provisions for prior or post review (sampling) will be detailed in the procurement plan. For LCB procurement, the EA:

• issues written IFB directly to all bidders deemed able to provide the goods/services or execute the works, providing clear technical specifications for the required goods, works or services and the terms and conditions of contract. Normally, a bid preparation

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period under LCB shall not be less than 4 weeks. A shorter period may be accepted with proper justification and concurrence of PPFD;

• adopts the procedures for public opening; and

• evaluates the bids using OCB procedures.

57. Requests for Quotations (RFQ). RFQ is a procurement method based on comparing price quotations obtained from several suppliers (in the case of goods), from several service providers (in the case of services), or from several contractors (in the case of civil works). RFQ is an appropriate method for procuring readily available goods, standard-specification commodities of small value, standard or routine services, or simple civil works of small value. RFQ shall indicate the description and quantity of the goods, a description of the services or specifications of works, as well as desired delivery (or completion) time and place. Quotations may be submitted by electronic means, letter, or facsimile. The evaluation of quotations shall follow the same principles as for open bidding. The terms of the accepted offer shall be incorporated in a purchase order or brief contract. Contract packages proposed for procurement following RFQ do not require advertising but shall be detailed in the procurement plan. 58. Framework Agreements (FA). FA means an agreement awarded pursuant to one of the methods set out in these Regulations between one or more contracting authorities and one or more contractors, suppliers, or service providers.25 The purpose of the agreement is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and, where appropriate, the quantity envisaged. The FA also sets out terms and conditions under which specific procurements or service provisions (“call-offs”) can be made throughout the term of the agreement. Further details are provided in the Guidance Note on Procurement – Framework Agreements. 59. Electronic Reverse Auction. An electronic reverse auction (e-auction) is a scheduled online event in which prequalified bidders bid against each other through the presentation of new prices, revised downwards. It is used for procurement of standardized products or services when the technical specifications or the requirements can be established with precision. The e-auction is a particular application of a request for quotations procedure in which all bidders that have been prequalified against the non-price evaluation criteria set out in the bidding documents are invited promptly after prequalification to participate in the online auction using, as of the specified date and time, the website identified in the invitation. The invitation shall also set out the automated evaluation method that will be used to rank bidders during the e-auction and any other relevant information on how the e-auction is to be conducted. Further details on electronic procurement are provided in the Guidance Note on Procurement – E-Procurement. 60. Direct Contracting (DC). DC is contracting without competition (also referred to as single source selection) and may be an appropriate method under special circumstances, such as the following:

(i) Additional items are required under an existing contract which was awarded in

accordance with competitive procedures. ADB shall be satisfied in such cases that no better offer is likely to be received, and that the price to be paid is not more than the original price. Usually, the repeat order shall occur within 18 months of the original order, with the additional quantities not normally exceeding 30% of the original quantities.

25 “Service provider” in the context of framework agreements includes consultants, unless otherwise indicated.

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(ii) Standardization of equipment or spare parts compatible with existing equipment may justify additional purchases from the original supplier. For such purchases to be justified, the original equipment shall be suitable, the number of new items shall generally be less than the existing number, the price shall be reasonable, and the advantages of another make or source of equipment shall have been considered and rejected on grounds acceptable to ADB.

(iii) The required equipment is proprietary and obtainable only from one source or, in

the case of consulting services, where only one firm is qualified or has experience of exceptional worth for the assignment.

(iv) The contractor responsible for a process design requires the purchase of critical

items from a particular supplier as a condition of a performance guarantee. (v) Where civil works or nonconsulting services26 are to be contracted and are a

natural extension of an earlier or ongoing job that was awarded following a competitive process,27 and it can be shown that the engagement of the same contractor will be more economical and will ensure compatibility of results in terms of quality of work.

(vi) For consulting services tasks that represent a natural continuation of previous work

carried out by the consultant firm and only where continuity for downstream work is essential (e.g., continuity in the technical approach, experience acquired, and continued professional liability of the same consultant) and presents a clear advantage over renewed competition.

(vii) For very small consultancy assignments.28 (viii) In exceptional cases, such as in response to natural disasters.29

61. Contract packages proposed for procurement following DC shall be detailed in the procurement plan and shall be subject to prior review. After the contract is signed, the borrower shall publish in an English language newspaper or in English on a publicly and freely accessible website the name of the provider of the goods, works, or services, and the price, duration, and summary scope of the contract. This publication may be done quarterly and in the format of a summarized table covering the previous period. 62. Force Account. This is where construction by the use of the borrower’s own personnel and equipment30 may be the only practical method for constructing some kinds of works. The use of force account may be justified where (a) quantities of work involved cannot be defined in

26 When continuity for downstream work is essential, the initial bidding documents shall outline this prospect. 27 If the initial assignment was not awarded on a competitive basis, or if the downstream assignment is substantially

larger in value, a competitive process acceptable to ADB shall normally be followed. 28 Dollar thresholds defining “very small” shall be determined in each case, with agreement of ADB and taking into

account the nature and complexity of the assignment, but shall generally not exceed $100,000. 29 Direct contracting with providers of goods, works, and services under existing loans or grants will be allowed for new

contracts, with rates negotiated around those in effect for the existing contract with adjustments as required for inflation and physical considerations. Providers of goods, works, and services competitively selected under similar projects financed by other donors will be considered for direct contracting for new ADB-financed contracts.

30 Any construction unit that is majority-owned by the government, and therefore deemed dependent, shall be considered a force account unit. Force account is otherwise known as direct labor, departmental forces, or direct work.

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advance, (b) works are small and scattered or in remote locations for which qualified construction firms are unlikely to bid at reasonable prices, (c) work is required to be carried out without disrupting ongoing operations, (d) risks of unavoidable work interruption are better borne by the borrower than by a contractor, or (e) there are emergencies needing prompt attention. 63. Procurement from Specialized Agencies. There may be situations in which procurement directly from specialized agencies,31 acting as suppliers, pursuant to their own procedures, provide the best value for money and may be the most appropriate way of procuring the following: (a) small quantities of off-the-shelf goods, primarily in the field of education and health; and (b) specialized products where the number of suppliers is limited such as for vaccines or drugs. 64. Procurement in Fragile Conflict-Affected and Emergency Situations (FCAS). In cases of FCAS32 where the borrower is deemed by ADB to have urgent need of assistance because of (a) emergency situations like a natural or human-made disaster or conflict, or (b) capacity constraints arising from fragility or specific vulnerabilities (including small states), ADB may accept the use of appropriate procurement arrangements in accordance with the relevant provisions of these Procurement Regulations or other suitable procedures that facilitate more responsive mobilization. The Guidance Note on Procurement – Fragile, Conflict-Affected and Emergency Situations provides additional details on handling procurement in such situations. 65. Procurement Agents. Where borrowers lack the necessary organization, resources, and experience, borrowers may wish to, or be required by ADB to employ, as their agent, a firm specializing in handling procurement. The agent shall follow all the procurement procedures provided for in the financing agreement and the Regulations. This also applies in cases where United Nations agencies act as procurement agents. Management contractors may be employed in a similar manner for a fee to contract for miscellaneous works involving reconstruction, repairs, rehabilitation, and new construction in emergency situations, or where large number of small contracts are involved.

66. Support to Government for Public-Private Partnerships. Where ADB provides financing support to a borrower in respect of a Public-Private Partnership (PPP), the procurement procedures to select the relevant contractor shall (a) be transparent and competitive; (b) include several stages to arrive at the optimal combination of criteria for the purpose of establishing the most economic and efficient proposal which provides value for money; (c) be compliant with ADB’s Core Procurement Principles; and (d) ensure an appropriate allocation of risk. ADB may, in exceptional circumstances, agree to finance a PPP arising from an unsolicited proposal provided that the process to assess and determine the best fitness for purpose and value for money approach to awarding the contract is clearly defined by the borrower and agreed with ADB. Further details are provided in the Guidance Note on Procurement – Public-Private Partnerships. 67. Procurement of High-Level Technology. The procurement of high-level technology involves proven or advanced new technology that improves the quality of the service delivered. The quality requirements of the infrastructure, equipment, or services to be procured are critical in such cases and may outweigh an evaluation of bids based exclusively on cost. For particularly

31 Specialized Agencies are legally independent international organizations with their own rules, membership, organs,

and financial resources that were brought into relationship with the United Nations through negotiated agreements. As described at United Nations System Chief Executives Board for Coordination. 2016. Directory of United Nations System Organizations. http://www.unsystem.org/members/specialized-agencies.

32 ADB. 2012. Working Differently in Fragile and Conflict-Affected Situations: The ADB Experience. Manila. https://www.adb.org/documents/workingdifferently-fragile-and-conflict-affected-situations-adb-experience

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complex or sophisticated infrastructure, equipment, or nonconsulting services, alternative methods of procurement, such as two-stage bidding or evaluation criteria which prioritize nonprice criteria, may be appropriate to provide optimal value for money and fitness for purpose. For consultancy services, this may be done through appropriate weighting of cost ratios under QCBS methods or other methods of evaluation. Further details are provided in the Guidance Note on Procurement – High Level Technology. 68. Performance-Based Procurement. Performance-based procurement33, also called output-based procurement, refers to competitive procurement processes resulting in a contractual relationship where payments are made for completion of specific or discrete performance-related outputs instead of payments being made based on inputs provided. The technical specifications define the desired result and those outputs or deliverables against which performance will be measured and payments will be made. Those outputs aim at satisfying a functional need in terms of quality, quantity, and reliability. Payment is made in accordance with the quantity of outputs delivered, subject to their delivery at the level of quality required. Reductions from payments (or retentions) may be made for lower quality outputs and, in certain cases, premiums may be paid for higher quality outputs. 69. The bidding documents do not normally prescribe the inputs or work methods for the contractor or service provider. The contractor or service provider is free to propose the most appropriate solution, based on a well-grounded understanding of the desired result, and shall demonstrate that the level of quality specified in the bidding documents will be achieved. Performance or output-based procurement can involve:

(i) the provision of services to be paid on the basis of outputs; (ii) design, supply, construction or rehabilitation, and commissioning of a facility to

be operated by the borrower; or (iii) design, supply, and construction (or rehabilitation) of a facility and provision of

services for its operation and maintenance for a defined period of years after its commissioning.

70. For the cases where design, supply, and/or construction are required, prequalification is normally required and the use of two-stage bidding typically applies. 71. Community Participation in Procurement. Where, in the interest of project sustainability, or to achieve certain specific social objectives of the project, it is desirable under selected project components to call for the participation of local communities and/or civil society organizations (CSOs) in the delivery of services, or increase the utilization of local know-how or materials, or employ labor intensive and other appropriate technologies, the procurement procedures, specifications, and contract packaging shall be suitably adapted to reflect these considerations provided these are efficient and result in value for money. The procedures proposed and the project components to be carried out by community participation shall be outlined in the financing agreement and further elaborated in the procurement plan. 72. Procurement under Loans Guaranteed by ADB. If subject to a sovereign guarantee, ADB guarantees the repayment of a loan made by another lender, the goods, works, and services financed by such a loan shall be procured in accordance with the following requirements:

33 The use of performance-based procurement in ADB-financed projects should be the result of the satisfactory

technical analysis of the different options available and should be either included in the relevant procurement plan or subject to prior no-objection by ADB.

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(i) Procurement will be implemented following the six core procurement principles,

namely, economy, efficiency, fairness, transparency, quality and value for money; (ii) The procedures to be used will fulfill the borrower’s obligations to cause the project

to be carried out diligently and efficiently and the goods, works or services to be procured are of satisfactory quality and compatible with the balance of the project, will be delivered or completed in a timely manner, and are priced so as not to affect adversely the economic and financial viability of the project; and

(iii) Borrowers and any other party to a financing agreement shall always act in accordance with the highest standard of ethics during any procurement process or activity and any use of funds, resources, assets, and authority, and shall be subject to ADB’s Anticorruption Policy (1998, as amended to date) and ADB’s Integrity Principles and Guidelines (2015, as amended from time to time).

73. Procurement in Loans to Financial Intermediaries. Where the financing provides funds to an intermediary institution the procurement is usually undertaken by the respective beneficiaries in accordance with private sector or commercial practices, which are acceptable to ADB. 74. Sanctioning by Member Countries. Staff may encounter the issue of national blacklisting during the preparation of a bidding document by an EA. Staff should ensure that any member country's own debarment procedures do not prevent EAs from treating prospective eligible bidders, consultants, contractors, and suppliers for ADB-financed contracts from all member countries fairly and in accordance with ADB procurement procedures. This applies equally to official national blacklisting as well as "unofficial" or informal blacklisting. Member countries sometimes establish national blacklisting procedures, often for fraud or corruption as the country may define them, but also for other reasons such as breaches of contract or poor performance. While ADB will support specific anticorruption efforts of member countries, national blacklisting generally will be considered for ADB-financed contracts only when the blacklisted companies and/or individuals are the same nationality as the EA. There may be limited circumstances in which national blacklisting may otherwise be accepted by ADB. If staff become aware of a national blacklist they should:

(i) determine the basis for it; (ii) advise the Office of Anticorruption and Integrity (OAI), PPFD and regional

department (RDs); and (iii) ensure the blacklist is not considered in any ADB-financed contracting or

procurement decisions, including prequalification unless endorsed by PPFD and OAI.

75. If staff learn that an EA determined that fraud or corruption occurred in ADB-financed procurement, ADB should accept that determination as long as staff are satisfied there was a sound basis for the decision and that the EA followed the ADB Procurement Regulations and the requirements of the relevant procurement plan and financing agreement. The disqualification may, however, apply only to the specific procurement. In those cases, staff should consult with OAI. Staff should also note that EAs may report an integrity violation occurred in ADB-financed procurement directly to OAI, without informing the concerned project officer.

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76. The above discussion refers to blacklisting for fraud and corruption. For sanctioning that relates to poor performance or nonperformance34 on a particular contract, the poor performance or nonperformance may be taken into account in determining the contractor’s qualifications (pre or post). In such cases, the project administration unit should assess the sanctioning in terms of qualification only and need not involve OAI. PPFD should be consulted as necessary. 77. If a sanctioning or blacklisting system is disclosed early during processing, staff may include it in the scope for the project procurement risk assessment or in the review of the local laws, rules, and regulations as part of the governance due diligence. A system that is objective, fair, and transparent, preferably using third party experts to assess technical issues, should be acceptable. If a national sanctioning system is found to be acceptable, the sanctioning by the system can be included as a qualification criterion in the bidding document for OCB with national advertisement. For OCB contracts with international advertisement inclusion of a qualification criterion based on a national blacklisting system will be considered on a case-by-case basis as part of the review of bidding documents and requires endorsement by PPFD. 78. Rejection of All Bids and Rebidding. Bidding documents usually provide that the EA may reject all bids. Rejection of all bids is justified when there is lack of effective competition, or bids are not substantially responsive or when bid prices are substantially higher than existing budget. Lack of competition shall not be determined solely on the basis of number of bidders. Even when only one bid is submitted, the bidding process may be considered valid, if the bid was satisfactorily advertised and prices are reasonable in comparison to market values. EAs may, after ADB’s prior approval, reject all bids. If all bids are rejected, the EA shall review the causes justifying the rejection and consider making revisions to the conditions of contract, design and specifications, scope of the contract, or a combination of these, before inviting new bids. 79. If the rejection is due to lack of competition, wider advertising shall be considered. If the rejection is due to most or all the bid being nonresponsive, the contract scope, contract packaging, qualification requirements or technical specifications may need to be revised, and new bids may be invited (i) through open advertisement, (ii) from the initial prequalified firms, or with the agreement of ADB (iii) from only those that submitted bids in the first instance. 80. When all bids have been rejected, a rebidding may be called by the borrower requesting for new bids from all who were supplied with bidding documents in the first instance. However, if there has been sufficient number of bids in the initial bidding, the borrower may consider inviting bids only from those who have previously submitted bids. Where all bid prices substantially exceed the cost estimates, the borrower may, instead of calling for new bids, and after consultation with ADB, negotiate with the lowest evaluated bidder for a reduction of bid price. If no satisfactory contract can be concluded and a rebidding is called, modification of the scope of the contract shall be considered. 81. ADB’s prior approval shall be obtained before rejecting all bids, soliciting new bids, or entering into negotiations with the lowest evaluated bidder. In case of post review (sampling), the

34 Nonperformance, as decided by the employer, shall include all contracts where (i) nonperformance was not

challenged by the contractor, including through referral to the dispute resolution mechanism under the respective contract; and (ii) contracts that were so challenged but fully settled against the contractor. Nonperformance shall not include contracts where the employer’s decision was overruled by the dispute resolution mechanism. Nonperformance must be based on all information on fully settled disputes or litigation, i.e. dispute or litigation that has been resolved in accordance with the dispute resolution mechanism under the respective contract and where all appeal instances available to the bidder have been exhausted.

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EA may reject all bids without seeking ADB’s prior approval provided the above guidance is followed. 82. Contract Management. Contract management is the monitoring and control of contractor‘s performance to ensure optimal outcomes from a contract. It includes establishing communication pathways and protocols, monitoring progress towards delivery of contract deliverables, managing payments, controlling variations, measuring contractor performance and closing out the contract. 83. Contract management needs to be considered early in the procurement process for it to be effective. It should be based on a risk assessment developed early on as part of project preparation. Such risk assessment will lay the foundation of a contract strategy. A contract management plan (CMP) may then be prepared and will define activities and responsibilities to monitor the contractor’s performance during contract implementation until contract closure. The CMP is required to be developed at the time of contract drafting, reviewed by the RD and completed prior to contract signature. The Guidance Note on Procurement – Contract Management provides operational level guidance for borrowers on how contract management should be applied in projects following the award of an ADB-financed contract for procurement of goods, works and services, including consulting services. 84. Procurement of Nonconsulting Services. Nonconsulting services is a separate category of services that borrowers can procure under their projects. They include (i) services, where physical aspects of the activity predominate, including among others, equipment maintenance and repair, IT implementation services, inter-island shipping, small-scale installation and maintenance services, physical support services, and surveys and field investigations; and (ii) services based on recognized standard offerings, including among others, standard audits, inspection, engineering and quantity surveys, quality assurance certification, vocational training, standardized household surveys, medical services, translation/interpretation services, editing/typesetting/proofreading, photography/videography, event management, organization and logistics of study tours, internet/telecommunication services, website maintenance, call center/help desk operations. 85. Nonconsulting services shall be included in the procurement plan. Review and approval of procurement documents for non-consulting services follows the processes described in Table 3: Procurement Action Responsibilities during Project Implementation. For more details such as procurement methods, bidding documents and sample contract forms please refer to the Guidance Note on Nonconsulting Services Administered by ADB Borrowers.35

35 For procurement, contracting, and contract management of goods, works and nonconsulting services under TA refer

to Staff Instruction on Procurement of Goods, Works and Nonconsulting Services under Asian Development Bank administered Technical Assistance.

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IV. BIDDING PROCEDURES AND STANDARD PROCUREMENT DOCUMENTS 86. There are five bidding procedures that are applicable under ADB-financed loans, grants and ADB-administered projects, namely, single-stage: one envelope; single-stage: two envelope; two-stage; two-stage: two envelope; and multi-stage.36 These bidding procedures could be used with prior prequalification of applicants or without prequalification. The following bidding procedures correspond to procurement of goods, works and plant contracts:

Goods

• single-stage: one envelope

• single-stage: two envelope Plant

• single-stage: one envelope

• single-stage: two envelope

• two-stage

• two-stage: two envelope

• multi-stage (trial version) Works-Large Contracts

• single-stage: one envelope following prequalification

• single-stage: one envelope without prequalification

• single-stage: two envelope Works-Small Contracts

• single-stage: one envelope

• single-stage: two envelope Information Technology Products and Services

• single-stage: one envelope

• single-stage: two envelope

• two stage Design-Build-Operate Contracts

• single-stage: two envelope following prequalification

• single-stage: two envelope without prequalification

36 For details refer the following link: https://www.adb.org/site/business-opportunities/operational-procurement/goods-services/bidding-procedures.

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V. PREPARATORY WORK FOR PROCUREMENT

87. Project Divisions and processing missions shall complete the following activities in relation to procurement prior to the commencement of loan and/ or grant negotiations:

(i) Recommend the Project Procurement Classification as Category A or B (Guidance Note on Procurement – Procurement Risk Framework);

(ii) Conduct the Project Procurement Risk Assessment (Guidance Note on Procurement – Strategic Procurement Planning and Guide on Assessing Procurement Risks and Determining Project Procurement Classification);

(iii) Recommend the use of the EA’s E-Procurement system (Guidance Note on e-Procurement)

(iv) Identify appropriate procurement arrangements, including APA, if applicable (Guidance Note on Procurement – Alternative Procurement Arrangements);

(v) Review the draft Procurement Plan for the entire project with specific details for at least the first 18 months of implementation (Guidance Note on Procurement – Strategic Procurement Planning); and

(vi) Review the draft Prequalification/Bidding Documents.

88. In addition to the above, country and sector/agency procurement risk assessments (CSPRA) shall be undertaken earlier during the preparation of the CPS. CSPRA and the project procurement risk assessment (PPRA) are undertaken during project processing by ADB to assess the market conditions and other relevant factors to confirm or establish various thresholds, especially for OCB with international and national advertisement, procurement review types, and select the most optimal procurement methods and bidding procedures. 89. At the concept stage, when information on specific characteristics of project implementation is limited, an initial project procurement classification is required to determine the nature and extent of project preparation and required due diligence from a procurement perspective. Projects are classified as either “Category A (High Risk)” or “Category B (Low Risk)” and PPFD must confirm the classification during interdepartmental circulation of the project concept paper. Procurement Category A projects will have direct operational support from PPFD to complete the project procurement risk assessment, assist with the preparation of prequalification and bidding documents, and project administration. 90. Based on an overall assessment, the recommended risk mitigation measures should be developed and included in the procurement risk assessment and management plan (P-RAMP) that shall be included in the PAM/facility administration manual (FAM). Such mitigation measures may include thorough engagement with the EA staff to familiarize them with ADB Procurement Policy, Regulations, Guidance Notes, Standard Bidding Documents, Bidding Procedures, and ADB’s review requirements. Alternately, consulting support could be provided through ADB’s technical assistance or under the loan/grant. Implementation of P-RAMP shall be reflected in project progress reports submitted by the EA to ADB. To obtain details on risk assessment procedures and project classification, refer to the Guidance Note on Procurement – Strategic Procurement Planning. 91. Procurement Plan. EAs are required to plan the procurement activities for the entire period of project implementation. In case, at the initial stages of project preparation complete details are not available, then the specific procurement details for the first 18 months should be included in the plan. The initial draft procurement plan to be incorporated in the PAM/FAM, shall

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be prepared in the Procurement Review System (PRS) and endorsed by procurement specialist prior to Quality Assurance Meeting.37 It shall also be agreed with the borrower, at the latest, during loan/grant negotiations. When advance contracting is proposed by the EA, the advance procurement activities shall be reflected in the procurement plan. Refer to the Guidance Note on Procurement – Strategic Procurement Planning for procedures and templates. 92. The procurement plan may be updated every 12 months or more frequently, if necessary. The update shall always include updated cost estimates. For a sector project, updating the procurement plan will provide the details as subprojects are approved. In practice, the annual update requirement is satisfied when the procurement plan is updated as a result of various changes to a project including sector projects, multitranche financing facilities (MFFs), and individual projects under MFFs such as the following:

(i) major and minor changes covered by PAI 5.02 in which minor changes include, but are not limited to: − changes in project costs estimates, − minor changes in scope, − changes in ADB review procedures;

(ii) reallocating loan and/or grant proceeds covered by PAI 5.03 that may result from or be related to changes in project scope, in which case approval procedures also follow PAI 5.02;

(iii) using loan and/or grant proceeds covered by PAI 5.04 (in conjunction with PAI 4.0

when a loan closing extension is involved as a result of a change in scope) to finance additional project requirements for goods or services, in which case approval procedures also follow PAI 5.02; and

(iv) changes in consultant selection methods covered by Part III of the Staff

Instructions on Borrower Administered Consulting Services. 93. In all cases, project divisions are responsible for transmitting the updated procurement plans to PPFD together with the approved memoranda on the changes. Any other changes that affect Part A of the procurement plan—process thresholds, review, and 18-month procurement plan—but are not covered by the above paragraph need to be referred to PPFD and endorsed by the concerned procurement specialist through PRS. 94. Review Types: The Guidance Note on Procurement – Strategic Procurement Planning provides methods to identify high-risk contracts and establish appropriate review types, i.e., prior review or post review (sampling) that shall be specified in the procurement plan. High-risk contracts are subject to ADB’s prior review38 before the publication of the IFB and issuance of bidding documents. The decision on using prior or post review (sampling) depends not on the method of procurement but on the procurement risk level. High-risk contracts that are subject to prior review usually present the following characteristics:

• High value, high impact contracts;

• Those using methods other than OCB, e.g., LCB or DC;

• Complex or innovative contracts, using two or multiple stages, procedures;

37 Management Review Meeting (MRM) or Staff Review Meeting, as appropriate. 38 ADB shall not carry out prior review of contracts under APA either with the EA or other agencies.

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• Contracts where quality considerations are paramount;

• Those procured by agencies with low capacity;

• Inter-dependent contracts which require EA’s coordination of different contractors in implementing several contracts at the same site or those contributing to common outcomes;

• In sectors where there is history of problems (processing times, implementation issues or non-compliance);

• Those where substantial integrity-related risks have been identified; and

• In markets with greater procurement risks.

95. The first draft bidding documents and draft IFB39 for each type of contracts for goods, works and nonconsulting services regardless of value shall be prior reviewed before the publication of the IFB and issuance of bidding documents. For subsequent low risk prior review contracts of similar type, the EA may, if agreed with ADB, proceed with publishing the IFB and issuance of the bidding documents to bidders together with submission of the same to ADB for parallel review, so that any deficiencies in the bidding documents could be corrected through addenda before the bid submission date. However, such approach is applicable to the EAs that have demonstrated adequate capacity and that are willing to proceed with issuance of the bidding documents at their own risk. 96. Procurement Arrangements. The procurement arrangements to be adopted for a project shall be indicated in the Procurement Plan. This shall include the procurement methods, contract packaging, types of contracts, bidding procedures, time frame for procurement processes and review provisions. While deciding on the procurement methods, the following aspects may be considered:

• Identification of the specific project needs;

• Assessment of the adequacy of the supply market, either globally or locally, depending on the procurement method;

• Assessment of the EA’s resources and procurement experience;

• Assessment of the EA’s procurement arrangements such as electronic procurement;40

• Analysis of the strengths and weaknesses of the procurement/ selection methods; and

• Justification of the proposed qualification and evaluation methods.

97. Among OCB contracts and packages, single-stage one-envelope bidding is usually adopted for straightforward goods and works procurement. Some DMCs prefer using single-stage two-envelope bidding mainly for undertaking technical evaluations without being influenced by the price. For large and complex works and plant contracts, two-stage bidding is most appropriate. When prequalification is also contemplated for large and complex contracts, it can be conducted as a separate prequalification of applicants prior to bidding or evaluation of bidders’ qualification as part of the technical evaluation of bids. For further details staff shall refer to the Guidance Note on Procurement – Strategic Procurement Planning. An assessment of the EA’s electronic procurement system shall be conducted as part of the project procurement risk assessment and decision on the use of e-procurement system shall be made. For further details on electronic procurement, staff shall refer to the Guidance Note on Procurement – E-Procurement.

39 Including the draft RFP. 40 See the Guidance Note on Procurement – E-Procurement.

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98. Alternative Procurement Arrangements (APA). ADB may agree to (a) apply the procurement rules and procedures of another multilateral or bilateral agency or organization involved in the project, and may agree to such a party taking a leading role in providing implementation support and monitoring project procurement activities; or (b) rely on the procurement rules and procedures applied by an agency or entity of the borrower accredited by ADB, provided that in each case such arrangements are (i) compatible with the value, risk, or complexity of the procurement; (ii) consistent with the Core Procurement Principles; and that (iii) unless waived, ADB’s member country eligibility restrictions set out in para. 1.14 continue to apply; and (iv) ADB’s Anticorruption Policy and Integrity Principles and Guidelines (both as amended from time to time) (hereafter ADB’s Anticorruption Guidelines) and contractual remedies in applicable financing agreements with the borrower continue to apply. For APAs, ADB shall be satisfied with the assessed fiduciary risks and the established mitigation measures. The procurement plan shall specify contracts to which APA will apply. For further details, staff shall refer to the Guidance Note on Procurement – Alternative Procurement Arrangements. 99. Changes in Procurement Arrangements. When a need arises to change the review type or method of procurement, the following procedures41 shall apply:

(i) ADB supports any proposal to adopt a more competitive procedure, for example, adopting OCB with international advertising instead of the existing OCB with national advertising, LCB, or DC.

(ii) In case of a proposal to adopt a lesser competitive procedure such as from existing OCB with international advertising procedure to OCB with national advertising, LCB, RFQ or DC, the following procedures shall apply:

(a) For packages estimated to cost below $20 million, approval shall be with the Sector / Country Director of the RD. OGC and PPFD may be consulted if appropriate.

(b) For packages estimated to cost $20 million and above, the Project Officer shall prepare a memo with justification and submit the proposal for approval by the Sector / Country Director of the RD and concerned Director of PPFD. OGC may be consulted, if appropriate.

(iii) Any change from OCB with international and national advertising to any other procedure shall be reported to the Board in the quarterly portfolio update.

(iv) If after Board approval of a project, the borrower or the EA requests to utilize a part of or the entire loan proceeds using APA, the project officer shall prepare a memo with justification and submit it through the Sector/Country Director for the consideration of the concerned DG, with the concurrence of OGC and the concerned PPFD Director. Such changes shall be reported to the Board in the quarterly portfolio update.

(v) All such changes indicated above shall be incorporated in the updated Procurement Plan and posted on the borrower’s/ ADB’s websites.

41 These procedures will not apply to contracts under APA. Such changes would be reviewed as part of the updating

of the procurement plans which would require ADB’s approval. ADB may carry out post audits in the case of APA with borrowers.

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100. Advance Contracting. Advance contracting normally refers to procuring goods and works up to the stage of ADB approval of the executing agency’s recommendation for awarding a contract before the effective date of the financing agreement or approval of technical assistance. Advance contracting may also include approval of the contract award for the procurement of goods, works and consulting and nonconsulting services. Advance contracting is considered a default action, as it significantly expedites project implementation. It needs to be discussed with the EA early on in project processing and the following points should be considered:

• the EA’s capacity to handle advance contracting;

• the stage of preparatory work for each project;

• any special technical features; and

• the implementation schedule. 101. The procurement procedures, including advertising, shall be acceptable to ADB in accordance with the Regulations for any contract subsequently awarded to be eligible for ADB financing. RDs shall ensure that the EAs comply with rules applicable to advance contracting and retroactive financing and shall advise the EAs that advance contracting and ADB’s approval of retroactive financing does not commit ADB to subsequently approve its financing. Further, if retroactive financing is considered necessary after loan approval, even if not included in the loan proposal, it would be permissible to retroactively finance eligible expenditures with the approval of the DG of the operational department. When advance contracting is confirmed, staff should advise the EA to:

• Seek ADB approval for the draft prequalification and bidding documents before they are issued, if practical;

• Follow requirements of public advertising;

• Note that advance contracting by the EA will not commit ADB to subsequently approve the project or to finance the procurement costs; and

102. Retroactive Financing. Retroactive financing refers to ADB approval to finance project expenditures incurred by the borrower prior to the effective date of the financing agreement. These expenditures cover only components identified during processing. The concerned Vice President approves in principle the use of retroactive financing. The amount of retroactive financing42 to be recommended (if any) is determined during project preparation in the context of efficiency, economy, urgency, and development impact. Consideration is given to the need for preparatory work, advance procurement of goods and works, and the most desirable timing for physical commencement of the project. The following should be considered by staff when recommending retroactive financing.

• It is approved in principle at the Management Review Meeting (MRM), is justified in the RRP, and is subject to final action on the RRP and is reported on www.adb.org.

• Borrowers are advised that approval at the MRM does not commit ADB to finance the project.

• It is limited to a percentage of the loan amount as described in the relevant Operations Manual section.

42 The conditions of retroactive financing are described in OM H4.

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• Note that ADB will not finance expenditures paid by the borrower prior to loan or grant effectiveness even if advance contracting is confirmed unless retroactive financing has been finally approved by ADB.

103. Retroactive financing is approved for a specific project; therefore, specific approval is required for subsequent tranches under an MFF.

104. Joint and Parallel Cofinancing. The ADB Charter encourages cofinancing;43 project preparatory activities should consider whether this funding source, particularly official cofinancing, will be utilized for a project as the procurement timetable and therefore that the procurement plan will be affected. In general, the procedures outlined in the guidelines will apply to all contracts for goods and works financed in whole or in part by ADB. The Office of Cofinancing Operations (OCO) is the focal point for official cofinancing. Cofinancing, whether joint or parallel,44 will need to be presented in the RRP, and while the cofinancing documents or agreements will describe in detail the specific procurement review and approval procedures to be adopted, the timing of procurement packages indicated in the procurement plan should consider specific agreed procedures. VI. STAFF RESPONSIBILITIES 105. The general responsibilities of ADB departments and staff in undertaking procurement oversight are provided in Appendix 2. The following sections provide specific responsibilities of ADB staff during different stages of the project cycle.

A. Country Partnership Strategy

106. As part of the CPS preparation two specific procurement related outputs, namely, the CSPRA and P-RAMP are prepared. Responsibility for this assessment and associated mitigation plans rests with PPFD. Detailed information is provided in the Guidance Note on Procurement – Procurement Risk Framework.

B. Project Preparation

107. During this stage, the RD’s shall prepare the project concept paper (PCP). This paper shall include a section on procurement arrangements which shall be reviewed by the Procurement Specialist. In addition, the project processing team and the Procurement Specialist shall determine the project procurement classification, whether A (High Risk) or B (Low Risk). In parallel, the EA should prepare the initial draft procurement plan45 and the first set of prequalification/bidding documents. The P-RAMP shall also be prepared. Responsibility for this assessment and associated mitigation plan rests with PPFD. For further details staff shall refer to the Guidance Note on Procurement – Strategic Procurement Planning. The applicable procurement actions at this stage are provided in Table 1.

43 See Operations Manual Section E1 Financing Partnerships (Jan. 2013). 44 For the definitions of joint and parallel financing, see Appendix 1, Operations Manual Section E1/OP (Jan. 2013). 45 Refer to paragraph 70 above.

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Table 1: Procurement Actions during Project Preparation

No Task Responsible Reviewer

1 Project Concept Paper RD PPFD to review procurement arrangement sections and project procurement classification

2 Request for APA EA Inter-departmental

3 Request for Retroactive Financing

EA RD

4 Agency/Project Procurement Risk Assessment as part of Strategic Procurement Planning

RD PPFD

5 Procurement Plan (initial draft), if required for advance contracting

EA RD/PPFD Procurement Specialist endorses in PRS

6 First Set of Prequalification/Bidding Documents

EA Parallel review by RD/PPFD/OGC

APA – alternative procurement arrangement; EA – executing agency; OGC – Office of General Counsel; PPFD – Procurement, Portfolio and Financial Management department; PRS – procurement review system; RD – regional department.

C. Project Preparation/Fact-finding

108. At this stage the draft RRP and the PAM/FAM will be reviewed by PPFD to confirm appropriateness of procurement arrangements included in the RRP, the PAM/FAM, and the updated procurement plan as indicated in Table 2.

Table 2: Preparation of RRP and Related Procurement Actions

No. Task Responsible Reviewer

1 RRP RD Inter-departmental, PPFD to review Procurement Arrangements, Risk Mitigation Matrix and Financial Management Provisions

2 Project/ Facility Administration Manual

EA/RD PPFD to review relevant procurement sections

3 Procurement Plan (revised draft)

EA RD/PPFD; PPFD Procurement Specialist to endorse in PRS

4 Advance Procurement Notice (APN)

EA RD/PPFD

5 Posting on EA websites/ADBBO

EA/PPFD

ADBBO – Asian Development Bank Business Opportunities; EA – executing agency; PPFD – Procurement, Portfolio and Financial Management department; PRS – procurement review system; RD – regional departments.

D. Project Implementation

109. At this stage the main procurement activities are implemented. All parties, namely, the borrower/EA, RD, OGC, and PPFD must undertake their tasks in a professional manner with

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timely responses and interventions. The responsibility for the implementation of the project, and therefore for the procurement actions and administration of the contracts under the project, rests with the borrower. ADB, for its part, has the obligation to ensure that the proceeds of its financing are used with due attention to considerations of the core procurement principles which are economy, efficiency, fairness, transparency, quality, and value for money. The EA must have in place a fully equipped project management team with experienced and qualified staff, supplemented, if required, by design and supervision consultants. The appropriate delineation of authority to execute the project within the EA’s organization should be well defined. 110. The various procurement related tasks and responsibilities during project implementation46 under prior review arrangements are in Table 3.

Table 3: Procurement Action Responsibilities During Project Implementation

No. Task Responsible Reviewer

Prior Review

1 Invitation for Bids/ Prequalification

EA RD/PPFD

2 Advertising on Newspaper or Posting on Websites

EA

3 Posting on ADBBO PPFD

4 PQ and Bidding Documents: $40 million and above

EA RD (with offline clearance by PASS accredited staff) /OGC/PPFD - in parallel PFP staff may consult with the PC Secretary for quality review

5 PQ and Bidding Documents: $20 million to $40 million

EA RD/PPFD Procurement Specialist – in parallel

6 PQ and Bidding Documents: up to $20 million

EA RD (with offline clearance by PASS accredited staff)47/PPFD Procurement Specialist may be consulted

7 Evaluation Reports: $40 million and above

EA RD/OGC/PPFD in parallel PFP staff should consult PC Secretary for quality review

8 Evaluation Reports: $20 to $40 million

EA RD/PPFD in parallel

9 Evaluation Reports: up to $20 million

EA RD (with offline clearance by PASS accredited staff)

10 Bid Validity and Bid Security Extension

EA RD, in consultation with PPFD, if necessary

11 Contract Management Plan EA RD/PPFD procurement specialist may be consulted

12 Signed Contract EA RD (Note: contract value and terms and conditions should be the same as approved by ADB)

46 ADB will not carry out prior reviews in the case of APA with EAs or other agencies (e.g., MDBs) nor would ADB

approve modifications or terminations of contracts under APA. 47 PASS is the Procurement Accreditation Skills Scheme administered by PPFD.

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Contract Effectiveness

13 ADB’s standard contract form includes specific conditions that shall be fulfilled before the contract can be declared effective. Needs careful review and monitoring.

EA RD

Contract Modifications under Prior Review

14 a. Extension of time not involving extension of LCD b. Material extension of time involving extension of LCD c. Modify terms and conditions without a corresponding change in the original contract amount, and if the change in the contract amount is up to 15% of the original contract amount d. Modify or waive terms and conditions by issuing a contract variation or contract addendum (with a corresponding increase in original contract amount, but excluding increases due to the application of price adjustment clause specified in the contract)

• When combined cost increase is more than 15% of original contract amount but less than $40 million in aggregate.

• When combined cost increase is more than 15% of original contract amount and more than $40 million in aggregate.

EA

EA

EA

EA

EA

RD RD RD Consultation with PPFD, if required, and OGC, if changes are proposed in the GCC/SCC/PCC RD/PPFD OGC/OAI, if required RD/PPFD/OGC/OAI

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Contract Termination under Prior Review

15 a. When contract price is $40 million or more b. When contract price is $20 million to $40 million c. When contract price up to $20 million

EA

EA

EA

RD/PPFD/GC PFP staff should consult PC Secretary RD/PPFD OGC may be consulted RD PPFD/OGC may be consulted

Post Review (Sampling)

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Contracts that are not subject to ADB prior review shall be subject to post review using a sampling methodology by ADB that is summarized in the project procurement plan. Project officer should be responsible for approval of the post review (sampling) report. Further details are provided in the Procurement Regulations for ADB Borrowers, Appendix 6, paragraphs 10 to 14 and the Guidance Note on Procurement - Procurement Reviews.

ADBBO – Asian Development Bank Business Opportunities; EA – executing agency; GCC - General Conditions of Contract; LCD – loan closing date; OAI – Office of Anticorruption and Integrity; OGC – Office of General Counsel; PASS – Procurement Accreditation Skills Scheme; PC – Procurement Committee; PS - Procurement Secretariat; PQ – Prequalification; PCC – Particular Conditions of Contract; PFP – Procurement Division; PPFD – Procurement, Portfolio and Financial Management department; PRS – procurement review system; RD – regional department; SCC - Special Conditions of Contract.

E. Project Evaluation

111. On completion of the project, the concerned Sector Division shall prepare a Project Completion Report (PCR) as per the approved format. The PCR describes, among others, how efficiently goods, works and services were procured, whether the contracts were completed in a timely manner with the required quality, and recommends improvements to be made in the procurement processes in new projects in the same sector with the same EA.

VII. PROCUREMENT REVIEW SYSTEM (PRS) 112. An end-to-end online system to record, review, monitor and report all procurement activities by EAs under ADB-financed/administered loans and grants has been developed by ADB and is called PRS. The online creation and approval of the initial procurement plan shall also initialize the procurement monitoring under PRS. It is mandatory to use the PRS in the preparation and updates of all procurement plans consistent with ADB prescribed templates. Detailed instructions for preparing and updating procurement plans are in the PRS Quick Reference Guides and the Guidance Note on Procurement – Strategic Procurement Planning. 113. All operations department staff responsible for processing and administration of projects, Procurement Specialists, and Project Counsel must ensure complete familiarity with PRS and the electronic Procurement Approval Form (e-PAF) available in OpsPedia, which is used for approval of (i) prequalification evaluation, (ii) technical evaluation, (iii) financial evaluation and award of contract, (iv) contract modification, and (v) contract termination. It provides a summary of the procurement transaction, e.g., project number, contract package number, estimated value, procurement method, bidding procedure, number of applicants/bidders, and the EA

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recommendation. The review and approval of all procurement transactions, including procurement notices, with estimated value of $1 million and above shall be done in PRS. Service standards should be maintained to efficiently respond to the EAs in a timely manner. Procurement processing and review flow charts and service standards for RD, OGC, PPFD staff are provided in Appendix 3.

VIII. OTHER PROCUREMENT MATTERS 114. The following paragraphs provide staff with a brief on other procurement related matters that are typically encountered during project implementation. The information herein is for reference and more details are provided in the appropriate Guidance Notes.

A. Noncompliance in Procurement 115. Procurement noncompliance relates to situations where the borrower involved in the procurement process fails to follow applicable provisions of the Regulations or, when applicable, the alternative procurement arrangements agreed between or among ADB and other development partners and/or the relevant borrower. In such instances, the procedures indicated in the Guidance Note on Procurement – Noncompliance in Procurement shall be adopted.

B. Bidding Related Complaints 116. Under ADB Regulations procurement-related complaints brought to the attention of the borrower or ADB must be addressed objectively and in a timely manner, with transparency and fairness. The provisions herein only apply to the treatment of complaints under ADB-financed or ADB-administered bidding process. Detailed procedures for handling bidding-related complaints by ADB staff are in Appendix 4. The Guidance Note on Procurement – Bidding-Related Complaints provide details on submitting, reviewing, and handling such complaints in the procurement process.

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Appendix 1: List of Guidance Notes https://www.adb.org/business/main

1. Value for Money 2. Procurement Risk Framework 3. Strategic Procurement Planning 4. Procurement Review 5. Alternative Procurement Arrangements 6. Open Competitive Bidding 7. Price Adjustment 8. Abnormally Low Bids 9. Domestic Preference 10. Prequalification 11. Subcontracting 12. Consulting Services Administered by ADB Borrowers 13. Nonconsulting Services Administered by ADB Borrowers 14. High Level Technology 15. Quality 16. Bidding-Related Complaints 17. Noncompliance in Procurement 18. Standstill Period 19. State-Owned Enterprises 20. E-Procurement 21. Framework Agreements for Consulting Services 22. Public-Private Partnerships 23. Contract Management 24. Fragile, Conflict-Affected and Emergency Situations

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Appendix 2: General Responsibilities of ADB Staff

1. Regional Departments (RDs)

Country/Sector Director

Country/Sector Directors are responsible for managing all procurement for projects delegated to them, including providing guidance to their staff, capacity building of staff, ensuring funds availability, reviewing all contracts with value up to $20 million, ensuring timely response and resolution of procurement complaints, issuing approval letters to EAs recommendations, issuing non-compliance letters, and maintaining a policy dialogue with government in the area of public procurement.

Project Officer Project Officer communicates ADB’s position to the EA after consultation with and clearance from the appropriate. They have the primary overall responsibility to ensure that procurement is carried out according to ADB policies and procedures. They are, inter alia, responsible for:

(a) ensuring that a designated Procurement Specialist48 is included in the project team from the early project preparation stages;

(b) managing and coordinating all procurement work during the whole project cycle;

(c) keeping line directors informed of progress or issues adversely affecting procurement in the projects under their responsibility;

(d) ensuring that there are adequate resources earmarked for tasks such as procurement post reviews and field supervision missions;

(e) reviewing or arranging for a technical expert to review the technical aspects of the project and its related contracts, including but not limited to TOR, technical evaluation criteria, technical specifications and design, bills of quantities, etc.;

(f) monitoring the execution and regular (at least annual) updating of the procurement plans, and ensuring proper publication, including updates;

(g) ensuring the timely publication of the Advance Procurement Notices (APNs) and Specific Procurement Notices (SPNs);

(h) monitoring contract management issues and conducting physical inspection;

(i) reviewing of contract management plans.

48 If appropriate, a national procurement officer from respective resident mission may be included in the team instead

of procurement specialist.

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2. PPFD

Division Director of PPFD

Division Directors of PPFD advise regional management on the application of procurement policy and how to address systemic operational issues across sectors/sub-sectors in their regions. They oversee the organization and delivery of procurement services at the regional level, establish appropriate fiduciary and quality controls to ensure consistent application of procurement policies in making procurement decisions. Their responsibilities include:

(a) ensuring that each project is assigned a Procurement Specialist;

(b) reviewing draft procurement sections in project documents (procurement risk assessments, procurement arrangements, and procurement plans, as required);

(c) setting up adequate arrangements to provide quality assurance and monitor procurement work in respective countries, identifying any procurement-related issues affecting project performance and proposing adequate solutions for addressing procurement challenges in the regions;

(d) reviewing all contracts with value of $20 million and above; ensuring timely response and resolution of procurement complaints;

(e) acting as focal point/ spokesperson on general procurement issues with borrowers and external constituencies;

(f) providing quality assurance on procurement diagnostic at the country level, and following up on reforms in the country procurement systems and capacity development actions;

(g) hiring and mentoring procurement staff, and assisting procurement staff in their career development, including on-the-job training;

(h) contributing to the design of professional and operational training and development activities in procurement; overseeing delivery of training to the borrowers’ staff and outreach to the private sector in the region;

(i) overseeing the procurement accreditation process in their regions; and

(j) leading procurement initiatives at the regional level to establish a framework for knowledge dissemination and/or development of knowledge products, including tools and methodologies.

Procurement Specialist

Procurement Specialists are the project team members who are accountable for all procurement activities related to the preparation and supervision of the project they are assigned to during the entire project cycle. They are responsible for:

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(a) providing quality professional inputs to the procurement activities mandated by the preparation and implementation of ADB-financed projects;

(b) providing inputs, as necessary, to procurement-related sections of the project documents, loan agreements, minutes of the negotiations, aide memoires, follow up letters to the EAs, etc.;

(c) advising the Project Officer on procurement and capacity building work, handling procurement complaints (including recording them in the complaints database);

(d) participating in loan fact-finding missions, loan negotiations, and in project preparation and supervision missions, as required;

(e) conduct agency/project procurement risk assessments and contribute to preparation of initial draft procurement plants;

(f) participate in capacity building activities and procurement related workshops with project stakeholders;

(g) carrying out procurement-related prior and post reviews (sampling), and monitoring contract management, as applicable;

(h) obtaining clearances on procurement-related issues from the Division Director of PPFD and other procurement authorities within ADB;

(i) liaising with OAI with regard to red flags or investigations, and OGC regarding any legal issues;

(j) keeping the Project Officer and the Country/Sector Division Director informed of any issues related to procurement that may arise in the operations assigned to them; and

(k) conducting outreach activities for the community of bidders and consultants.

In addition, Procurement Specialists are also responsible for contributing to the evaluation of the EA’s national procurement systems, including risk assessments and proposals for improvements to strengthen its capacity and the legal and institutional frameworks.

3. Procurement Committee

The table below identifies the responsibilities and accountabilities of the Procurement Committee.

Procurement Committee

A. Introduction

1. ADB project divisions, namely sector divisions, resident missions, and regional offices, that are implementing projects, are primarily responsible for monitoring and verifying EA’s procurement actions and ensuring that approved procurement procedures have been applied properly. The delegation of authority for procurement to ADB regional and resident missions is established in their respective operating

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guidelines. The procurement committee is established to ensure consistent and correct application of procurement practices, generally for contracts valued at $40 million or more. B. Composition of the Procurement Committee 2. The procurement committee members are the following:

• Director General of PPFD, Chair

• Assistant General Counsel, concerned Member

• Director, Sector Division/ Country Director, concerned Member

3. In the absence of the Director General of PPFD, the Deputy Director

General of PPFD will chair the Procurement Committee. In the

absence of both the Director General and the Deputy Director General

of PPFD, Director of PFP1 or PFP2 which is not responsible for the

region for the concerned procurement will chair the Procurement

Committee. If all three are absent, the assistant general counsel

concerned will chair the Procurement Committee, in which case PPFD

will be represented by a senior staff member.

4. The Director General of PPFD will appoint a lead or principal procurement specialist to serve as the permanent secretary of the procurement committee. In the absence of the permanent secretary, the Director General may designate an acting secretary. C. Matters for Procurement Committee Consideration 5. The following matters are submitted to the procurement committee for decisions on whether or not to concur with EA’s recommendations:

• a proposal or decision to prequalify applicants for contracts estimated at $40 million or more;

• approval of an EA’s evaluation report on technical proposals in two-stage or two-envelope bidding procedures if the estimated contract value is $40 million or more;

• a proposal or decision to allow price negotiations, award, rebid or terminate a contract valued at $40 million or more;

• a proposal or decision to cancel bidding, including declaring noncompliance, for a contract valued at $40 million or more;

• a case where the proposed action of a borrower or EA conflicts with normal ADB requirements as specified in the financing agreement, procurement plan, the ADB Procurement Policy, or the Procurement Regulations except changes in the method of procurement or which the procedures indicated in the Staff Instructions on Procurement are to be followed;

• a proposal or decision that changes the essential terms and conditions that formed the basis of a decision, including declaring noncompliance, taken previously by the procurement committee (on either a no-objection basis or a formal meeting) in the same case;

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• a proposed contract modification to a works, goods, or plant contract that when combined with prior contract modifications would increase the original contract amount by more than 15% and at least $40 million in the aggregate (changes in the contract price brought about by applying the price adjustment mechanism specified in the contract are not considered contract modifications);

• any procurement matter that a RD deems complicated or has issues requiring broader discussion, irrespective of value; and

• any procurement matter that may be referred to the procurement committee by Management.

6. Note: if in a package with several lots the estimated value of at least one lot is $40 million and above, the entire package shall be submitted for approval by the procurement committee, except for cases where Director of PFP1 or PFP2 makes a decision that contracts below $40 million under that package should be co-approved by sector/country director and Director of PFP1 or PFP2.

7. For the above cases where prior review is prescribed, recommendations are to be submitted for approval prior to taking the decision (for example, a recommendation to award a contract must be approved by the procurement committee before the notification of contract award is issued). Where post review (sampling) is applied, contracts are to be submitted to the procurement committee prior to processing for disbursement or for retroactive review even if the EA has already approved awards and signed contracts.

D. Submissions

8. Submission procedures and instructions are provided in the PRS under “myadb.adb.org/self service”.

9. The procurement committee makes a decision on whether or not to concur with the EA’s recommendation stated in the bid evaluation report (BER) and in the electronic procurement approval form (ePAF) posted in OpsPedia. The project division or resident mission concerned will prepare a detailed and self-contained submission to enable the committee to make a fully informed decision. The EA’s BER and ePAF shall be uploaded in PRS. Reviewing staff are responsible for ensuring that all facts, issues, representations, and recommendations regarding the particular procurement are accurately and completely reflected and discussed. The members of the procurement committee are entitled to rely on the completeness and accuracy of the submission in providing their recommendations and/or decisions.

a. Submissions on a No-Objection Basis

10. All matters to be considered by the procurement committee are normally acted upon on a no-objection basis if the recommendations of the project division, procurement specialist, and project counsel are

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in agreement. The recommendation of the borrower or EA must be appended together with the written comments on the proposals of the borrower or EA from the project division, procurement specialist, and project counsel. Copies of representations received are also to be attached and addressed in the governance section of the ePAF. The originating project division will circulate the final no-objection ePAF to all members in the following order:

• Secretary of the Procurement Committee

• Director, project division/resident mission concerned,

• Director, procurement division

• Assistant General Counsel concerned, and

• Director General, PPFD

11. After receiving the submission, any committee member may request that the case be formally discussed at a meeting.

b. Submissions Requiring a Meeting of the Procurement Committee

12. Normally, a meeting would be held to consider (i) a proposal that seeks to vary the essential terms and conditions that formed the basis of a decision taken previously (on either a no-objection basis or in a formal meeting) in the same case; (ii) any procurement matter that is complicated or has issues requiring broader discussion as might be requested by the project division, the project counsel, or the procurement specialist; or (iii) any procurement matter referred to the procurement committee by Management.

c. Submissions Involving Contract Modifications

13. Procurement committee approval shall be required for any proposal to modify a works, goods, or plant contract such that when combined with prior contract modifications would increase the original contract amount by more than 15% and by at least $40 million in the aggregate. Approval may be sought either on a no-objection basis or through a formal meeting following the relevant procedures outlined in the Procurement Staff Instructions.

14. Staff should ensure that sufficient funds are available to finance the contract modification and consult with the Controller’s Department (CTL) as needed. Consultations with OAI prior to seeking approval is required if the contractor or supplier appears on the sanction list. After the procurement committee approves a contract modification in accordance with para. 13, a subsequent modification affecting the contract amount will require ADB project division approval but shall revert to the procurement committee when a proposed new modification involves an aggregate additional 15% of the contract amount and increases the value to $40 million or more in the aggregate over the previously approved amount. After approval of the contract modification, the project division will update the EA’s contract record (or the procurement contract update sheet) by entering the revised

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data into the Loan and Grant Financial Information System (LFIS/GFIS). The reason for the contract modification and data such as the original contract amount and completion date should also be indicated in the updated EA’s contract record for future reference. Any extension of time should also be reflected in the EA’s contract record.

E. Meetings

15. The secretary of the procurement committee will recommend to the chair that a meeting be convened, after receipt from the Project Division of (i) a draft e-PAF and (ii) a request for a meeting of the procurement committee. Normally, at least 2 working days are required for the members to study the submission before a meeting. 16. All members are to be present at meetings. If a member is unable to attend, the officer-in-charge (OIC) shall be the representative. If the OIC is also unavailable, a representative is to be designated in writing by the member or by the head of the department or office concerned to whom all responsibility and authority of the absent member is to be delegated. 17. The chair may permit other ADB staff or an external highly qualified technical consultant to be present at a meeting if the staff/consultant can provide expert advice on the case to be considered. External experts shall brief the committee but may not be present during the case deliberations. The deliberations and decisions taken during the meeting shall be recorded in the minutes of the meeting to be shared with all procurement committee departments.

18. The originating project division will circulate the final no-objection ePAF to all members in the following order:

• Secretary of the Procurement Committee

• Director, project division/resident mission concerned,

• Director, procurement division

• Assistant General Counsel concerned, and

• Director General, PPFD

F. Procurement Committee Decisions

19. The procurement committee renders decisions unanimously. Without unanimity, the chair will refer the matter to the head of the originating department or office to resolve the differences and reach a unanimous decision. If a unanimous decision is still not reached, the head of the originating department or office will refer the case to the vice-president concerned for a decision. The decision thus taken is final. Deliberations of the procurement committee remain confidential even after award of contract.

20. The project division director or concerned resident mission country director will be responsible for implementing the decision taken.

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G. Special Review Procedure

21. A special review of a procurement committee decision on a contract award proposed by the EA will be conducted as an exceptional case when all of the following are met:

• the decision of the committee conflicts with the proposal or decision of the borrower or EA in determining the lowest evaluated, substantially responsive bid entitled to award of contract;

• the matter remains unresolved for more than 4 months after the committee decision;

• the estimated value of the contract exceeds $40 million and the contract involves a major project component; and

• a special review has been requested by the borrower through the operations vice-president concerned.

22. Upon the request by the operations vice-president concerned for a special review, the Vice-President, Administration and Corporate Management (VPAC) shall create and chair a special review committee with four members, namely:

• Director General, PPFD;

• General Counsel;

• Director General of the RD concerned; and

• Senior staff member appointed by VPAC

23. The review committee chaired by VPAC determines its own procedures in each case. The committee’s decision is final.

H. Correspondence with Board Members and Bidders

24. When the approval of contract award (prior or post review (sampling)) lies with the project division,

• correspondence from Board members or bidders is replied to by the director general, project division director, or country director;

• the reply is sent after consulting PPFD and OGC, if necessary;

• representations from the Board should be coursed through Office of the Secretary to the project division; and

• the response, also through the Office of the Secretary, briefly explains the status of issues raised.

25. When the approval of contract award (prior or post review) is taken by the procurement committee,

• the project division responds to issues that have not reached the procurement committee after clearance by PPFD and OGC; and

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• the procurement committee chair responds to issues that have reached the committee if necessary after consulting the project division and OGC.

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Appendix 3–1a: Procurement Committee Workflow for Prior Review

Contracts $40 million or more49

Part 1: Bidding Documents Review50

49 See, also, Guidance Note on Open Competitive Bidding. 50 Bidding documents review process should be done in PRS. Includes prequalification process. Service standards

for complex and non-standard bidding documents and contracts are not subject to the five-day review period.

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Appendix 3–1b: Procurement Committee Workflow for Prior Review Contracts $40 million or more

Part 2: Bid Evaluation Report Review and

Procurement Approval Form (PAF)51

51 Bid evaluation report and procurement approval form review and approval process should be done in PRS.

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Appendix 3–2a: Procurement Submission Workflow for Prior Review Contracts between $20 M to below $40 M52

Part 1: Bidding Documents Review53

52 See, also, Guidance Note on Open Competitive Bidding. 53 Bidding documents review workflow includes for pre-qualification and the review process should be done in PRS.

Service standards for complex and non-standard bidding documents and contracts are not subject to the five-day review period.

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Appendix 3–2b: Procurement Submission Workflow for Prior Review Contracts between $20 M to below $40 M

Part 2: Bid Evaluation Report Review and

Procurement Approval Form (PAF)54

54 Bid evaluation report and procurement approval form review and approval process should be done in PRS.

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Appendix 3–3a: Procurement Submission Workflow for Prior Review Contracts <$20 M55

Part 1: Bidding Documents Review56

55 See, also, Guidance Note on Open Competitive Bidding. 56 See, also, Guidance Note on Open Competitive Bidding. Bidding documents review workflow includes for pre-

qualification and the review process should be done in PRS. Service standards for complex and non-standard bidding documents and contracts are not subject to the five-day review period.

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Appendix 3–3b: Procurement Submission Workflow for Prior Review Contracts <$20 M57

Part 2: Bid Evaluation Report Review and

Procurement Approval Form (PAF)58

57 See, also, Guidance Note on Open Competitive Bidding. 58 Bid evaluation report and procurement approval form review and approval process should be done in PRS and this

workflow includes the prequalification review and selection process.

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Appendix 4: Procurement Complaints Management

A. Introduction

1. Asian Development Bank’s (ADB) Procurement Policy allows any person, especially bidders, to send complaints to ADB. Complaints may be formal through regular channels of communication such as letters, emails, faxes, or through ADB’s website at https://www.adb.org/forms/complaints, or anonymous. All complaints have to be recorded, reviewed and addressed. The following sections describe the actions to be taken by ADB staff while handling complaints addressed to ADB. For more details see the Guidance Note on Procurement – Bidding-Related Complaints.

B. Receipt of Complaints

2. A Central Electronic Procurement Complaints Registry (CEPCR) has been established and managed by the Procurement Support Unit (PSU) of PPFD. The PSU shall maintain the registry to track receipt and resolution of all complaints received by ADB and generate annual reports for PPFD Management. The PSU shall be responsible for receiving all procurement related complaints, distribution of such complaints to concerned staff, and monitor the review and resolution of the complaints. Any staff receiving complaints from any person should forward the same to the PSU and concerned PAU Head.

3. The PSU shall first record all the information provided in the complaint, including anonymous complaints, into CEPCR and within one working day forward the complaint to concerned staff listed below:

(i) In case the contract estimated cost is below $40 million, forward the complaint to:

• Project Officer, and/or

• Concerned PAU Head

(ii) In case the contract estimated cost is $40 million or more, or those submitted to the Procurement Committee, regard less of value, forward the complaint to:

• Project Officer

• Concerned PAU Head

• Concerned Procurement Specialist

• Concerned Counsel, and

• Procurement Committee Secretary

4. All such actions shall be uploaded in CEPCR.

C. Initial Action by Staff

5. The Project Officer shall, within one working day of receipt of complaint, take the following actions:

• Send an acknowledgement receipt to the complainant, if contact details are available;

• Notify OAI on a confidential basis, if complaint also alleges integrity violation;59

• Forward complaint to EA, with the concurrence of the PAU Head, provided identity of the complainant is kept confidential when either the complainant has made such a

59 Notification to OAI is not conditioned to an obligation to copy another department within ADB and such action can be

undertaken at any time.

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request or allegations involve integrity violations or procedural non-compliances by the EA/IA.

D. Roles and Responsibilities of Staff under Prior Review for Goods and Works Packages

(a) Below $20 million

(i) For complaints received before application/bid submission deadline:

• Project Officer and the EA discuss steps, if any, that must be taken to satisfactorily address the complaint.

• Project Officer shall submit proposal for complaint resolution to the PAU Head within 5 working days of receipt of complaint by Project Officer.

• PAU Head shall review the proposal submitted by the Project Officer and within 2 working days submit the same with recommendations to the Project Unit Director.

• Project Unit Director shall approve the proposed complaint resolution within 2 working days of receipt of the Project Officer’s proposal and recommendations of the PAU Head.

• Project Unit Director shall promptly communicate the approved complaint resolution to the EA/IA and ensure that the EA takes appropriate action prior to expiration of the submission deadline and notifies ADB of the same.

• Project Officer shall forward the final complaint resolution with appropriate supporting documents to: − PSU, and − OAI, if the complaint also alleges integrity violation.

• Subsequently, the Project Officer shall record the complaint and its resolution in the ePAF when the ePAF is submitted for approval.

(ii) For complaints received after application/bid submission and before notification of prequalification/bidding results:

• Project Officer shall incorporate the complaint together with the EA’s response to the same and document in the “Procurement Governance and Integrity” section of the ePAF whether the complaint has been satisfactorily addressed. If necessary, consultations with PPFD, OGC and OAI should be done and recorded accordingly in the ePAF. PAU Head shall endorse the evaluation report including any complaint issues in the ePAF.

• Project Unit Director shall approve the recommendation in the evaluation report including the complaint resolution through the ePAF.

• Project Unit Director shall promptly communicate ADB’s approval of the EA’s evaluation.

• Project Officer shall forward the ePAF to: − PSU, and − OAI, if the complaint also alleges integrity violation.

(iii) For complaints received after notification of prequalification/bidding results but within the Standstill Period:

• Project Officer, within 5 working days of receipt of a complaint, shall propose through a memo endorsed by the PAU Head, to the Project Unit

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Director (i) whether and how ADB should conduct debriefing if the complaint is determined not to have merit, or (ii) appropriate remedy in accordance with ADB Procurement Policy, if complaint is determined to have merit. If necessary, Project Officer may consult PPFD.

• Project Unit Director shall approve the recommendation by the Project Officer, endorsed by the PAU Head, within 2 working days of its receipt.

• Project Unit Director shall promptly communicate the decision to the EA for necessary action. Project Officer shall forward the final complaint resolution decision with appropriate supporting documents to:

− PSU, and − OAI, if complaint also alleges integrity violation.

(iv) For integrity related complaints received even after the expiry of the Standstill Period:

• Forward to OAI on a confidential basis.

(b) Between $20 million to below $40 million

(i) For complaints received before application/ bid submission deadline:

• Project Officer, following consultation with Procurement Specialist, PPFD, shall discuss with the EA/IA steps, if any, that must be taken by the EA to satisfactorily address the complaint.

• Project Officer shall submit proposal for complaint resolution to the PAU Head within 5 working days of receipt of complaint by Project Officer.

• PAU Head shall review the proposal submitted by the Project Officer and within 2 working days submit the same with recommendations to the Project Unit Director.

• Project Unit Director shall approve the proposed complaint resolution within 2 working days of receipt of the Project Officer’s proposal and recommendations of the PAU Head.

• Project Unit Director shall promptly communicate the approved complaint resolution to EA and ensure that such EA takes appropriate action prior to expiration of submission deadline and notifies ADB of the same.

• Project Officer forwards final complaint resolution with appropriate supporting documentation to: − PSU, and − OAI, if complaint also alleges integrity violation.

• Subsequently, the Project Officer shall record the complaint and its resolution in the ePAF when the ePAF is submitted for approval.

(ii) For complaints received after application/bid submission and before

notification of prequalification /bidding results:

• Project Officer shall incorporate the complaint together with EA’s response to the same and document in "Procurement Governance and Integrity" section of the ePAF whether complaint has been satisfactorily addressed. The PAU Head shall also endorse in the ePAF, the evaluation report including any complaint issues.

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• Project Unit Director and concerned PFP Director shall approve the recommendation in the evaluation report and the proposed complaint resolution through the ePAF.

• Project Unit Director shall promptly communicate ADB’s approval of EA/s evaluation and complaint resolution to the EA.

• Project Officer shall forward the approved ePAF to: − PSU, and − OAI, if complaint also alleges integrity violation

(iii) For complaints received after notification of prequalification/bidding results but within the Standstill Period:

• Project Officer shall, within 5 working days of receipt of complaint following consultation with PPFD, propose through a memo endorsed by the PAU Head to the Project Unit Director and the concerned PFP Director (i) whether and how ADB should conduct debriefing if complaint is determined not to have merit or (ii) appropriate remedy in accordance with ADB Procurement Guidelines if complaint is determined to have merit.

• Project Unit Director and concerned PFP Director shall jointly approve the recommendation by the Project Officer within 2 working days of its receipt.

• Project Unit Director shall promptly communicate the decision to the EA for necessary action.

• Project Officer shall forward the final complaint resolution with appropriate supporting documentation to: − PSU, and − OAI, if complaint also alleges integrity violation

(iv) For integrity related complaints received even after the expiry of the Standstill Period:

• Forward to OAI on a confidential basis.

(c) Contracts with estimated cost of $40 million and above, or those submitted for approval by the Procurement Committee regardless of value

(i) For complaints received before application/bid submission deadline:

• Project Officer, following consultations with the PAU Head, PC Secretary, Procurement Specialist and Counsel, shall discuss with the EA what steps, if any, must be taken by EA/IA to satisfactorily address the complaint.

• Project Officer must submit the proposal for complaint resolution to Project Unit Director within 5 working days of receipt of complaint by Project Officer.

• Project Unit Director shall approve the proposed complaint resolution within 2 working days of receipt of Project Officer’s proposal.

• Project Unit Director shall promptly communicate the approved complaint resolution to the EA and ensure that the EA takes appropriate action prior to expiration of submission deadline and notifies ADB of the same.

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• Project Officer shall forward the final complaint resolution with appropriate supporting documents to: − PSU, and − OAI, if complaint also alleges integrity violation

• Subsequently, the Project Officer shall record the complaint and its resolution in the ePAF when the ePAF is submitted for approval.

(ii) For complaints received after application/bid submission and before

notification of prequalification /bidding results:

• Project Officer, the PAU Head, Procurement Specialist, Counsel and PC Secretary shall jointly ensure that the evaluation report incorporates the complaint together with EA’s response to the same and document in "Procurement Governance and Integrity" section of ePAF whether the complaint has been satisfactorily addressed.

• Procurement Committee approves the recommendation in the evaluation report and the complaint resolution through ePAF.

• Project Unit Director shall promptly communicate ADB’s approval of EA’s evaluation.

• Project Officer forwards approved ePAF to: − PSU, and − OAI, if complaint also alleges integrity violation

(iii) For complaints received after notification of prequalification/bidding results but within the Standstill Period:

• Within 5 working days of receipt of complaint, the PC Secretary, following consultations with concerned Project Officer, PAU Head, Procurement Specialist and Counsel, shall propose, through a memo, to the Chair of the Procurement Committee, with a copy to the other Procurement Committee Members, (i) whether and how ADB should conduct debriefing if complaint is determined not to have merit, or (ii) appropriate remedy in accordance with ADB Procurement Policy.

• Project Unit Director shall promptly communicate the decision to the EA, for necessary action.

• PC Secretary shall forward the final complaint resolution with appropriate supporting documents to: − PC Members − PFP Director − PAU Head − Project Officer − Procurement Specialist − Project Counsel − PSU, and − OAI, if complaint also alleges integrity violation

(iv) For integrity related complaints received even after the expiry of the Standstill Period:

• Forward to OAI on a confidential basis.

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E. Roles and Responsibilities of Staff under Post Review (Sampling) for Goods and Works Packages

• Project Officer shall conduct post review promptly following notification of contract award and indicate in the Post Review (Sampling) Report the risk rating applied to (i) compliance, and (ii) performance criteria and recommend mitigation measures.

• In case of any complaint received either by the EA or ADB, the Project Officer shall indicate (i) whether and how ADB should conduct debriefing if complaint is determined not to have merit, or (ii) appropriate remedy in accordance with ADB Procurement Policy if complaint is determined to have merit.

• Project Unit Director shall approve the recommendation by the Project Officer, endorsed by the PAU Head within 2 working days of its receipt.

• Project Unit Director shall promptly communicate the decision to the EA for necessary action.

• Project Officer shall forward the final complaint resolution with appropriate supporting documents to: − PSU, and − OAI, if complaint also alleges integrity violation.

F. Complaints Received by the Borrower/EA 6. The EA should promptly advise ADB if it has received any procurement related complaint or representations. All such cases must be addressed objectively and in a timely manner, with transparency and fairness. On receipt of such information, the Project Officer should consult with staff, as appropriate, and provide professional guidance to the EA.

7. Complaints may be regard provisions in the bidding documents, against another bidder, or against the EA. In all instances, the EA must provide ADB with the details including any proposed resolution. To ensure that the EA timely informs ADB about the complaints received, a suitable provision may be included in the procurement section of the PAM/FAM.