AFRICAN DEVELOPMEN BANK AFRICAN DEVELOPMENT FUND ANNUAL PROCUREMENT REPORT 2007 Procurement and Financial Management Unit – ORPU March 2008 AFRICAN DEVELOPMENT BANK AFRICAN DEVELOPMENT FUND TABLE OF CONTENTS SUMMARY AND CONCLUSIONS ........................................................................................................1 1. INTRODUCTION ......................................................................................3 2. METHODOLOGY .......................................................................................4 3. PROCUREMENT PERFORMANCE STATISTICS FOR 2007 ...................................................5 3.1. Contract Size ........................................................................................................................5 3.2. Contract Distribution between Regional and Non-Regional Firms ....................................11 3.3. Trend of Bank Disbursements from 1997 to 2007 .............................................................14 4. CHARACTERISTICS OF THE PROCUREMENT PROCESS ..................................................15 4.1. Introduction ........................................................................................................................15 4.2. Procurement Methods ........................................................................................................15 4.3. Bid Participation ................................................................................................................18 4.4. Awardees’ Nationality ........................................................................................................24 5. OTHER PROCUREMENT ASPECTS ......................................................................................30 5.1. Contract Financing .............................................................................................................30 5.2. Procurement Documents Processing Time-frame .............................................................31 5.3. Claims ................................................................................................................................33 5.4. Procurement Review Committee (PRC) ............................................................................34 5.4. Contract Amendments .......................................................................................................34 ANNEXES ............................................................................................................................................37 ANNEX 1 Substantiation of Sampling ANNEX 2 Awardees’ Nationality (1389 contracts approved in 2007) .................................................38 ANNEX 3 Good Contracts Awardees’ Nationality (of the 1389 contracts approved in 2007) ............40 ANNEX 4 Works Contracts Awardees’ Nationality (of the 1389 contracts approved in 2007) ............42 ANNEX 5 Services Contracts Awardees’s Nationality (of the 1389 contracts approved in 2007) ......43 ANNEX 6 Awardees’ Nationality of International Competitive Bidding (ICB) (Contract amounts higher or equal to UA 50,000) .......................................................................................................45 ANNEX 7 Nominative List of the Awardees of the 1389 contracts approved in 2007 ........................46 ANNEX 8 List of Amendments signed in 2007 .................................................................................101 AFRICAN DEVELOPMENT BANK AFRICAN DEVELOPMENT FUND SUMMARY AND CONCLUSIONS 1. This document is the thirteenth ORPU report of the Bank’s monitoring of procurements by regional borrower member countries for Bank Group-financed projects. The information it contains comes primarily from contracts recorded in the Bank’s SAP-PMS (Project Management System). Chapters 1 and 2 of the Report present the context and method of analysis, while chapter 3 reviews the 1,389 contracts approved by the Bank Group in 2007. Chapter 4 is based on a sample of 844 contracts with a unit value higher than UA 50,000, the cumulative value of which amounts to 98% of the total value of contracts approved in 2007. It should be noted that, since 1997, contracts of a total individual value in excess of UA 50,000 accounted for at least 98% of the annual total contract value. This chapter focuses on the procurement process, the procurement methods actually used, and the bidder participation levels. Chapter 5 considers contract financing, i.e. the time required by the procurement process, the complaints and the contract amendments. 2. In comparing the basic principles of the Bank’s procurement of goods, works and consultancy services on the one hand, with the procurement activities in the borrowing countries and their monitoring by the Operations departments on the other hand, as presented in this report, the following major comments could be made: i) Economy and Efficiency: The various measures taken for reasons of economy and efficiency continue to produce positive results. The measures include, in particular, intensifying the distribution of the standard bidding documents, in both printed and electronic versions available on the Bank’s website, the application of Presidential Instruction PI No. 02/98 on Procedures for the Review of Procurement Documents, the participation of procurement experts in missions to launch new projects, as well as in the supervision and mid-term review missions, in addition to the regular organization of procurement seminars in regional member countries and for Bank staff. In 2007, ORPU organized 14 national workshops in regional member countries on project implementation and procurement management not only for project officers but also for staff of executing agencies. This figure was 11 in 2006. Furthermore, 9 training workshops on procurement were organized in Tunis by ORPU and CHRM for Bank staff (8 workshops had been organized in 2006). ii) Equal Access to Contracts for all Eligible Bidders: Firms of 60 countries (as against 62 in 2006) were awarded 1,389 contracts financed by the Bank Group. Moreover, firms of 62 member countries (43 regional and 19 non-regional) took part in the procurement process, which led to the award of 844 contracts of individual values above UA 50,000 in 2007. The Bank continued to organize opportunity seminars for firms of member countries with a view to disseminating information on consultancy services and the supply of goods and works for contracts financed by the Bank in member countries. In 2007, ORPU organized 12 seminars in RMCs on business opportunities (BOS) as against 9 in 2006. Many participants took part in these seminars both in regional and non-regional member countries. This very clearly illustrates the growing interest of the consultants, contractors and suppliers of member countries in Bank activities. iii) Participation of Regional Contractors and Suppliers: Firms and suppliers registered in regional member countries won 86% of the overall total number of contracts and 52% of the total value of contracts approved in 2007. The corresponding figures for 2006 were respectively 85% and 51%. Generally 2007 Annual Procurement Report Page 1 A AFRICAN DEVELOPMENT BANK AFRICAN DEVELOPMENT FUND speaking, the firms of regional member countries won more contracts than those of non-regional member countries, often on their own territory (particularly in the case of supplies and works, following local competitive bidding or local shopping). However, statistics show that regional firms won mainly contracts for small or average amounts, whereas the more substantial contracts went to non-regional firms. On the other hand, several international firms have set up offices in the local African environment, and their operations are considered as regional operations. iv) Transparency: In 2007, the Bank registered 15 complaints. Most of them were deemed inadmissible, and were rejected; they concerned cases of unjustified accusations. The Borrower was requested to investigate the others and to provide the plaintiffs with the appropriate answers. No case was followed up or submitted to the Procurement Review Committee (PRC). It should be recalled that between 2002 and 2007, the Committee received no admissible complaint. 3. Concerning the time-frame for processing procurement documents, the review focused on a sample of 190 documents in 2007 as against 211 in 2006. There is a significant reduction in the average processing time for documents relating to the procurement of goods and works; the time has reduced from 18.3 months in 2006 to 15.7 months in 2007. The same applies to the average processing time for documents relating to the procurement of consultancy, down from 14.5 months in 2006 to 13.1 months in 2007. As a result of the measures taken by the Bank, the number of training workshops on project implementation increased between 2005 and 2007, and those for the training of Bank staff also increased over the same period. These measures also concern assistance to the countries in question for procurement capacity building, including joint World Bank and ADB preparation of CPARs or Country Procurement Assessment Reports, as well as the harmonization of procurement documents in multilateral development aid institutions. The overriding goal remains the proposal to decentralize and delegate authority to regional offices so as to involve borrowers in the decision– making process. Finally, in collaboration with the International Harmonization Programme, the Bank started in 2005 to revise its rules