PROCUREMENT PLAN

Basic Data Project Name: Municipal Services Development Project Country: Executing Agency: Municipal Development Fund of Georgia Loan Amount: $ 40 Loan (Grant) Number: Date of First Procurement Plan: February 2008 Date of this Procurement Plan: April 28, 2011

A. Process Thresholds, Review and 18-Month Procurement Plan

1. Project Procurement Thresholds

1. Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to procurement of goods and works.

Procurement of Goods and Works

ICB for Works > $1,000,000 ICB for Goods > $500,000 NCB for Works < = $1,000,000 > $100,000 NCB for Goods < = $500,000 > $100,000 Shopping for Works < = $100,000 Shopping for Goods < = $100,000 Direct Contracting for Works < = $10,000 ICB = international competitive bidding, NCB = national competitive bidding.

2. ADB Prior or Post Review

2. Except as ADB may otherwise agree, the following prior or post review requirements apply to the various procurement and consultant recruitment methods used for the project.

Procurement Method Prior or Post Comments Procurement of Goods and Works ICB Works Prior ICB Goods Prior NCB Works Prior/Post Usage subject to review of the borrower’s public procurement laws and regulations. Prior review applies to the procurement of the first NCB contract by the PMU. If first contract procured satisfactorily, thereafter post review. NCB Goods Shopping for Works Post Shopping for Goods Post Direct Contracting for Works Post Direct Contracting for Goods Post

3. Goods and Works Contracts Estimated to Cost More Than $1 Million

3. The following table lists goods and works contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

Prequali fication Advertis Final Contract Final Contract Proc Contract No. General Description of ment Comments Value, GEL Value, USD Method Bidders date (Y/N)

P41198-NCB-1.11 - Rehabilitation of roads 1,686,991.00 1,022,418.79 NCB N 26-Jan-09 Dedoplistskaro - Rehabilitation of P41198-NCB-1.55 streets 1,720,039.00 1,042,447.88 NCB N 23-Mar-09 - Rehabilitation of Streets P41198-NCB-1.70 and crossings 1,992,847.00 1,207,786.06 NCB N 30-Oct-09 str and Tsurtaveli str 2,988,742.71 1,811,359.22 P41198-NCB-1.74 rehabilitation (Estimated Price) (Estimated Price) NCB N 15-Apr-11 ongoing Kazbegi - Rehabilitation of Sno- 2,292,050.54 1,389,121.54 P41198-ICB-1.01 -Juta rd (Estimated Price) (Estimated Price) ICB Y 15-Apr-11 ongoing - Rehabilitation of 5,599,896.00 3,393,876.36 P41198-ICB-1.02 Agmashenebeli str (Estimated Price) (Estimated Price) ICB Y 5-May-11 ongoing

4. Consulting Services Contracts Estimated to Cost More Than $100,000

4. The following table lists consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

Advertisement International or General Contract Recruitment Date National Description Value Method1 (quarter/year) Assignment Comments NA

5. Goods and Works Contracts Estimated to Cost Less than $1 Million and Consulting Services Contracts Less than $100,000

5. The following table groups smaller-value goods, works and consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

Prequal ification Advertis Final Contract Final Contract Proc Contract No. General Description of ment Comments Value, GEL Value, USD Method Bidders date (Y/N) - Rehabilitation of Water 18-Sep- P41198-NCB-1.01 Supply System 484,606.00 293,700.61 NCB N 08 Dedoplistskaro - Rehabilitation of P41198-NCB-1.02 Water Supply System 1,083,612.00 656,734.55 NCB N 24-Oct-08 Oni - Rehabilitation of Sevege 25-Nov- P41198-NCB-1.03 System 878,221.00 532,255.15 NCB N 08 - Rehabilitation of Water P41198-NCB-1.04 Supply System 462,671.00 280,406.67 NCB N 12-Jan-09 - Rehabilitation of Water P41198-NCB-1.05 Supply System 1,103,499.00 668,787.27 NCB N 26-Jan-09 - Rehabilitation of Water P41198-NCB-1.06 Supply System 1,187,533.00 719,716.97 NCB N 26-Jan-09 - Rehabilitation of roads of P41198-NCB-1.07 streets 910,566.00 551,858.18 NCB N 26-Jan-09 Khoni - Rehabilitation of Water P41198-NCB-1.08 Supply System 769,822.00 466,558.79 NCB N 26-Jan-09

P41198-NCB-1.09 - Rehabilitation of roads 744,286.00 451,082.42 NCB N 26-Jan-09 - Rehabilitation of Water P41198-NCB-1.10 Supply System 843,637.00 511,295.15 NCB N 26-Jan-09 Baghdati - Rehabilitation of Water P41198-NCB-1.12 Supply System 619,386.00 375,385.45 NCB N 29-Jan-09

P41198-NCB-1.13 - Rehabilitation of Roads 1,468,235.00 889,839.39 NCB N 9-Jan-09 Akhmeta - Rehabilitation of Water P41198-NCB-1.14 Supply System 1,349,182.00 817,686.06 NCB N 29-Jan-09 - Rehabilitation of Water P41198-NCB-1.15 Supply System 1,425,657.00 864,034.55 NCB N 30-Jan-09

P41198-NCB-1.16 - Rehabilitation of Roads 445,093.00 269,753.33 NCB N 3-Feb-09 - Rehabilitation of Water P41198-NCB-1.17 Supply System 855,040.00 518,206.06 NCB N 9-Feb-09

P41198-NCB-1.18 Lanchkhuti - Rehabilitation of Roads 1,033,910.00 626,612.12 NCB N 9-Feb-09 Chkhorotsku - Rehabilitation of P41198-NCB-1.19 Water Supply System 1,066,027.00 646,076.97 NCB N 9-Feb-09

P41198-NCB-1.20 - Rehabilitation of roads 1,377,078.00 834,592.73 NCB N 10-Apr-09 Ozurgeti - Rehabilitation of Water P41198-NCB-1.21 Supply System 703,639.00 426,447.88 NCB N 9-Feb-09 - Rehabilitation of Water P41198-NCB-1.22 Supply System+C53 838,443.00 508,147.27 NCB N 17-Feb-09 - Rehabilitation of P41198-NCB-1.23 Water Supply System 975,843.00 591,420.00 NCB N 14-Apr-09 Tsageri - Rehabilitation of bridge in P41198-NCB-1.24 vil. Lasurashi 1,115,814.00 676,250.91 NCB N 6-Mar-09 Dusheti - Rehabilitation of Water and P41198-NCB-1.25 Sewage Supply System 810,786.00 491,385.45 NCB N 10-Mar-09 Mtsketa - Rehabilitation of Roads P41198-NCB-1.26 Tsilkani Dzalisi+C55 717,109.00 434,611.52 NCB N 26-Mar-09 Mtsketa - Rehabilitation of Roads P41198-NCB-1.27 Tserovani inner 884,070.00 535,800.00 NCB N 4-May-09 P41198-NCB-1.28- - Rehabilitation of Water 1 Supply System 1,035,942.00 627,843.64 NCB N 23-Jun-09

P41198-NCB-1.29 Akhalkalaki - Rehabilitation of Roads 1,308,962.00 793,310.30 NCB N 14-Apr-09 P41198-NCB-1.30- - Rehabilitation of Water 1 Sewage System 602,299.00 365,029.70 NCB N 1-Sep-09 Poti - Rehabilitation of streets: P41198-NCB-1.31 Gorgasali, Vaja pshavela, Rukhadze 741,846.00 449,603.64 NCB N 24-Mar-09

P41198-NCB-1.32 Zugdidi - Rehabilitation of Roads 1,452,659.00 880,399.39 NCB N 1-Apr-09

P41198-NCB-1.33 - Rehabilitation of Roads 979,608.00 593,701.82 NCB N 4-May-09 Signagi - Rehabilitation of P41198-NCB-1.34 Rustaveli and Sikhashvili Streets 1,191,787.00 722,295.15 NCB N 2-Apr-09

P41198-NCB-1.36 - Rehabilitation of Roads 1,637,909.00 992,672.12 NCB N 21-Mar-09

P41198-NCB-1.37 - Rehabilitation of Roads 955,346.00 578,997.58 NCB N 21-Mar-09 Lagodekhi - Rehabilitation of Water P41198-NCB-1.38 Supply System 1,233,122.00 747,346.67 NCB N 1-Jul-09

P41198-NCB-1.39 - Rehabilitation of Roads 1,472,798.00 892,604.85 NCB N 2-Mar-09 Kareli - Rehabilitation of Breti Water P41198-NCB-1.40 Supply System 348,479.00 211,199.39 NCB N 2-Mar-09

P41198-NCB-1.41 Kareli - Rehabilitation of Roads 801,827.00 485,955.76 NCB N 2-Mar-09 Akhaltsikhe - Rehabilitation of Water P41198-NCB-1.42 Supply System 1,076,908.00 652,671.52 NCB N 2-Mar-09 Akhaltsikhe - Rehabilitation of Water P41198-NCB-1.43 supply of Vale 378,845.00 229,603.03 NCB N 2-Mar-09

P41198-NCB-1.44 Akhaltsikhe - Rehabilitation of Roads 1,264,801.00 766,546.06 NCB N 10-Mar-09 - Rehabilitation of Water P41198-NCB-1.45 Supply System 920,819.00 558,072.12 NCB N 31-Mar-09 - Rehabilitation of Water P41198-NCB-1.46 Supply System 1,063,961.00 644,824.85 NCB N 3-Apr-09 - Rehabilitation of Water Supply P41198-NCB-1.47 System 1,027,842.00 622,934.55 NCB N 6-Mar-09 Tetritskaro - Rehabilitation of P41198-NCB-1.48 Water Supply System 705,380.00 427,503.03 NCB N 2-May-09 - Rehabilitation of Water P41198-NCB-1.49 Supply System 532,652.00 322,819.39 NCB N 31-Mar-09 - Rehabilitation of P41198-NCB-1.50 Wastewater 535,485.00 324,536.36 NCB N 28-Jul-09 Kobuleti - Rehabilitation of Water P41198-NCB-1.51 supply of Ochkhamuri 1,065,498.00 645,756.36 NCB N 28-Jul-09 Khoni - Rehabilitation of roads vi. P41198-NCB-1.52 Gordi 721,569.00 437,314.55 NCB N 10-Mar-09 - Rehabilitation of Water P41198-NCB-1.53 Supply System 1,084,471.00 657,255.15 NCB N 2-Mar-09

P41198-NCB-1.54 - Rehabilitation of Streets 1,288,589.00 780,963.03 NCB N 23-Mar-09

P41198-NCB-1.56 - Rehabilitation of Streets 1,263,321.00 765,649.09 NCB N 26-Mar-09 Akhmeta villages: Kv. Alvani- P41198-NCB-1.57 Magraani road rehabilitaiton 664,082.00 402,473.94 NCB N 26-Mar-09 Signagi villages Nukriani-Magaro- P41198-NCB-1.58 Bodbe road rehabilitation 1,572,990.00 953,327.27 NCB N 26-Mar-09

P41198-NCB-1.59 Abasha - Rehabilitation of streets 545,460.00 330,581.82 NCB N 31-Mar-09

P41198-NCB-1.60 Terjola road 1,605,926.00 973,288.48 NCB N 31-Mar-09

P41198-NCB-1.61 road 1,619,218.00 981,344.24 NCB N 31-Mar-09

P41198-NCB-1.62 Chiatura road 1,569,211.00 951,036.97 NCB N 4-Apr-09

P41198-NCB-1.63 road 1,572,771.00 953,194.55 NCB N 31-Mar-09

P41198-NCB-1.64 WS and WSS 948,014.00 574,553.94 NCB N 3-Apr-09

P41198-NCB-1.65 Senaki - Streets 911,992.00 552,722.42 NCB N 8-Apr-09 Dusheti - Rehabilitation of water and P41198-NCB-1.66 waste water system in Jinvali 1,040,933.00 630,868.48 NCB N 24-Jul-09 Gurjaani - Rehabilitation of Kachreti P41198-NCB-1.67 road 704,506.00 426,973.33 NCB N 2-Jul-09

P41198-NCB-1.68 - Rehabilitation of WSS 1,029,945.00 624,209.09 NCB N 3-Jul-09 31-Aug- P41198-NCB-1.69 Rustavi Tbilisi str and Paliashvili str 1,166,474.00 706,953.94 NCB N 09 Dusheti - Rehabilitation of chargali rd 1,599,863.83 969,614.44 P41198-NCB-1.71 Dusheti ds (estimated price) (estimated price) NCB N 15-Apr-11 ongoing Ozurgeti - Dvabzu-Bakhvi 0km-5km 1,238,550.49 750,636.66 P41198-NCB-1.72 road rehabilitation (estimated price) (estimated price) NCB N 15-Apr-11 ongoing Martvili - Rehabilitation of Balda 1,122,439.60 680,266.42 P41198-NCB-1.73 Skurda WS (estimated price) (estimated price) NCB N 19-Apr-11 ongoing

B. Indicative List of Packages Required Under the Project

6. The following table provides an indicative list of all procurement (goods, works and consulting services) over the life of the project. Contracts financed by the Borrower and others should also be indicated, with an appropriate notation in the comments section.

Estimated Value Estimated Domestic General (cumulative), Number of Procurement Preference Description USD Contracts Method Applicable1 Comments

Goods NA NA

Works 4,363,636.36 2 ICB NA 47,525,114.84 73 NCB NA

Estimated General Estimated Value Number of Recruitment Description (cumulative) Contracts Method2 Type of Proposal3 Comments

Consulting NA Services

C. National Competitive Bidding

1. General

7. The procedures to be followed for national competitive bidding shall be those set forth in the Law of Georgia on State Procurement January 1, 2006 with the clarifications and modifications described in the following paragraphs required for compliance with the provisions of the ADB's Procurement Guidelines.

2. Eligibility

8. The eligibility of bidders shall be as defined under section I of ADB's Procurement Guidelines, published by ADB; accordingly, no bidder or potential bidder should be declared ineligible to ADB-financed contracts for other reasons than the ones provided by section I of ADB’s Guidelines. Bidders must be nationals of member countries of ADB, and offered goods and services must be produced in and supplied from member countries of ADB.

3. Prequalification

9. Normally, post-qualification shall be used unless explicitly provided for in the loan agreement/procurement plan. Irrespective of whether post qualification or prequalification is used, eligible bidders (both national and foreign) shall be allowed to participate.

4. Registration and Licensing

(i) Bidding shall not be restricted to pre-registered/licensed firms.

(ii) Where registration or licensing is required, bidders (i) shall be allowed a reasonable time to complete the registration or licensing process; and (ii) shall not be denied registration/licensing for reasons unrelated to their capability and resources to successfully perform the contract, which shall be verified through post-qualification.

(iii) Foreign bidders shall not be precluded from bidding. If a registration or licensing process is required, a foreign bidder declared the lowest evaluated bidder shall be given a reasonable opportunity to register or to obtain a license without unreasonable cost and additional requirements.

5. Bidding Period

10. The minimum bidding period is twenty-eight (28) days prior to the deadline for the submission of bids.

6. Bidding Documents

11. Procuring entities should use standard bidding documents for the procurement of goods, works and services acceptable to ADB.

12. The term “services” above are applicable to the following: (a) related services (for supply of goods and works) such as transportation, insurance, installation, commissioning, training and initial maintenance, and (b) other services such as drilling, mapping, and similar operations. 7. Preferences 13. No domestic preference shall be given for domestic bidders and for domestically manufactured goods.

8. Advertising

14. Invitations to bid shall be advertised in at least one widely circulated national daily newspaper or freely accessible, nationally-known website allowing a minimum of twenty- eight (28) days for the preparation and submission of bids.

15. Bidding of NCB contracts estimated at US$500,000 equivalent or more for goods and related services or US$1,000,000 equivalent or more for civil works shall be advertised on ADB’s website via the posting of the Procurement Plan.

9. Bid Security 16. Where required, bid security shall be in the form of a bank guarantee from a reputable bank.

10. Bid Opening and Bid Evaluation

(i) Bids shall be opened in public.

(ii) Evaluation of bids shall be made in strict adherence to the criteria declared in the bidding documents and contracts shall be awarded to the lowest evaluated bidder who meets the qualifying criteria stated in the bid documents.

(iii) Bidders shall not be eliminated from detailed evaluation on the basis of minor, non-substantial deviations.

(iv) No bidder shall be rejected on the basis of a comparison with the employer's estimate and budget ceiling without ADB’s prior concurrence.

(v) A contract shall be awarded to the technically responsive bid that offers the lowest evaluated price and no negotiations shall be permitted.

(vi) Price verification shall not be applied.

11. Rejection of All Bids and Rebidding

17. Bids shall not be rejected and new bids solicited without ADB’s prior concurrence.

12. Participation by Government-owned enterprises

18. Government-owned enterprises in Georgia shall be eligible to participate as bidders only if they can establish that they are legally and financially autonomous, operate under commercial law and are not a dependent agency of the contracting authority. Furthermore, they will be subject to the same bid and performance security requirements as other bidders.

13. Right to Inspect/Audit

19. A provision shall be included in all NCB works and goods contracts financed by ADB requiring suppliers and contractors to permit ADB to inspect their accounts and records and other documents relating to the bid submission and the performance of the contract, and to have them audited by auditors appointed by ADB.

14. Fraud and corruption

(i) The Borrower shall reject a proposal for award if it determines that the bidder recommended for award has, directly or through an agent, engaged in corrupt, fraudulent, collusive, or coercive practices in competing for the contract in question.

(ii) ADB will declare a firm or individual ineligible, either indefinitely or for a stated period, to be awarded a contract financed by ADB, if it at any time determines that the firm or individual has, directly or through an agent, engaged in corrupt, fraudulent, collusive, coercive or obstructive practices in competing for, or in executing, an ADB-financed contract.

20. For purposes of the provisions in (a) and (b) above, the definitions of the terms “fraudulent practice”, “corrupt practice”, “collusive practice”, and “coercive practice” are the definitions given in ADB’s Procurement Guidelines.

15. Conflict of Interest

21. ADB’s rule in respect of “Conflict of Interest” as stipulated in ADB’s Standard Bidding Documents for Procurement of Goods, Civil Works, and Plant-Design, Supply and Install shall be applicable.

16. Disclosure of Decision on Contract Awards

22. At the same time that notification on award of contract is given to the successful bidder, the results of bid evaluation shall be published in a local newspaper, or a well-known freely accessible website identifying the bid and lot numbers and providing information on (i) name of each Bidder who submitted a Bid, (ii) bid prices as read out at bid opening; (iii) name of bidders whose bids were rejected and the reasons for their rejection, and (iv) name of the winning Bidder, and the price it offered, as well as duration and summary scope of the contract awarded. The executing agency/implementing agency/contracting authority shall respond in writing to unsuccessful bidders who seek explanations on the grounds on which their bids are not selected.