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Annual Procurement Review ANNUAL PROCUREMENT REVIEW 2012 Prepared by The Procurement Department April 2013 Executive summary This report, prepared by the Procurement Department (PD), reviews public sector procurement contracts signed in 2012, funded and/or administered by the Bank and procured by the Bank’s clients. A separate section (2.10) is covering the procurement activities of the Nuclear Safety Department (NSD). A total of 207 (excluding NSD contracts) contracts were signed by Bank clients in 2012. The total value of these contracts amounted to € 1.276 billion for which EBRD’s own financing totalled €761 million. In comparison with 2011, this represents a decrease in terms of the number of signed contracts (by 5 per cent) and a decrease of the total signed contract value (of 22 per cent). The largest contract was the construction of motorway section Demir Kapija-Smokvica in FYR Macedonia. This works contract was signed with a value of €210 million for which EBRD provided financing of €81 million (39 per cent of the total contract value). Public sector contracts awarded through open tendering represent 86 per cent of the number of and 95 per cent of the total contract value (excluding consultancy services contracts and contracts subject to alternative procurement procedures). These high numbers indicate that the strong emphasis of the PP&R on open tendering continued to be respected in 2012. A total of 615 tenders from 45 countries were received during 2012, which is a decrease in participation (24 per cent) compared with the 805 tenders received in 2011. There was an average of 3.5 tenders per contract procured (compared with 4.3 in 2011) using open tendering procedures. Entities from France were the most successful in winning loan funded consultancy services contracts at 56 per cent of the overall consultancy services contract value. Entities from Kazakhstan have been most successful for goods contracts; winning (54 per cent) of all goods contracts in terms of value. Entities from Slovenia have been the most successful at 35 per cent in winning supply and installation contracts. Lastly, entities from Bosnia and Herzegovina were most successful for works contracts with 21 per cent of the value of all works contracts signed during 2012. During 2012, 43 contracts amounting to a total value of €71.7 million were placed under the projects financed by the Nuclear Safety Funds. This represents a decrease compared to 2011 of 19 per cent in the number of contracts and of 34 per cent in value. PD handled 23 procurement complaints and four concerns for Bank financed or administered contracts during the course of 2012, as compared to the 11 procurement complaints and one concern in 2011. This represents an unusually high number of procurement complaints. However, an increase in complaints has also been observed by other MDBs suggesting that this can to some extent be explained by the current economic climate which leads to more aggressive competition. It should be noted that the statistic is very much influenced by the types of projects and contracts financed by the Bank i.e. typically a high number of smaller works contracts normally lead to predominantly local participation and therefore success. Last year activities show a stable high number of contracts with a slight drop in the total value which may be due to the Bank’s shift of activities towards early transition countries; resulting in a drop in the number of contracts in EU countries except for Romania. As a result the emerging trend appears to be a larger number of smaller contracts. As before the highest number of contracts is in the MEI sector and the largest value in the transport sector which is explained by the nature of their projects. There is a continuous high level of participation from tenderers from different regions in the world with a high level of success by tenderers from countries of operations. This can to a large extent be attributed to successful transition of local economies towards operating in a competitive market environment. Procurement Department activities Support to Banking teams and NSD is the main priority for PD and is significant in terms of the use of PD’s resources. In addition to assisting the project teams in their due diligence and monitoring procurement arrangements for Bank administered projects PD’s staff undertook 19 missions directly relating to operational procurement support to the Banking teams. PD delivered procurement seminars and took part in procurement related meetings directly with clients when requested by the Banking teams. In 2012 the Procurement Department (PD) and Office of the Chief Economist (OCE) prepared a guidance note – “Procurement and Transition in Public Sector Projects”. The note sets out guiding principles for how EBRD’s Procurement Policy and Rules may be integrated and recognised as part of OCE’s assessment and monitoring of transition impact deriving from the Bank’s investment projects. In 2012, the Bank signed a Memorandum of Cooperation with the Government of Serbia, paving the way for further policy dialogue with the Serbian Authorities. The dialogue focuses on the modernisation of the Serbian public procurement legal framework and practices. The signing of the Memorandum of Cooperation followed PD’s participation in the revision process of the new procurement law in Serbia. PD together with the University of Tor Vergata (Rome) developed a pilot international (English language) version of its Master Degree in Procurement Management specifically tailored towards key procurement officials from the Bank’s countries of operations. PD obtained funding from the Central European Initiative, the Italian Trust Fund and the Special Shareholders fund for up to 15 suitably qualified and eligible students. Abbreviations CRA Contract Review and Awards System CSU Consultancy Services Unit (now known as the Technical Cooperation Team FIDIC International Federation of Consulting Engineers HOP Heads of Procurement LTP Legal Transition Programme LTT Legal Transition Team MEI Municipal and Environmental Infrastructure NSD Nuclear Safety Department OCE Office of the Chief Economist OCCO Office of the Chief Compliance Officer OGC Office of the General Counsel PD Procurement Department PCC Procurement Complaints Committee PP&R Procurement Policies and Rules RO Regional Offices SPS Senior Procurement Specialist STD Standard Tender Document TC Technical Cooperation MDB Multilateral Development Bank WB World Bank Table of Contents 1. Introduction ................................................................................................................ 2 2. Analysis of public sector procurement data ............................................................ 3 2.1 Volume and nature of contracts ............................................................................... 3 2.2 Analysis by sector ....................................................................................................... 5 2.3 Analysis by country of operations ............................................................................ 7 2.4 Analysis by type of contract ...................................................................................... 9 2.5 Listing of contracts by country of operation ........................................................... 10 2.6 Analysis of contract award by country of origin of the tenderers ....................... 10 2.7 Contract award process ........................................................................................... 10 2.8 Level of participation ............................................................................................... 12 2.9 Public sector procurement under sub-sovereign projects ................................... 16 2.10 Nuclear Safety Department ............................................................................. 16 3. Compliance and integrity ........................................................................................ 19 3.1 Complaints and concerns ........................................................................................ 19 3.2 Prohibited practices ................................................................................................ 28 3.3 Independent procurement reviews ......................................................................... 28 Annexes: 1) Listing of Contracts by Country of Operations (Value in €) 1a) Listing of signed Contracts by Country of Operation (€ Value) – Level of Bank Financing 1b) Listing of signed Contracts by Country of Operation (€ Value) Bank administered grants 2) Awards by Country of Origin of the Tenderers (Value in €) 3) Awards by Country of Origin of the Tenderers (Number) 4) Awards by Country of Origin of the Tenderers (Value in € by Contract Type) 5) Awards by Country of Origin of the Tenderers (Value in € by Procurement Method) 6) Contracts Awarded by Country of Origin of the Tenderers 7) Distribution of Tenders Submitted by Country of Operations and by Business Sector 8) Distribution of Tenders Submitted by Country of Origin of the Tenderers and by Country of Operations 9) Distribution of Tenders Submitted by Country of Origin of the Tenderers and by Business Sector 10) Contracts for Nuclear Safety Managed Funds Annual Procurement Review 2012 1. Introduction This report, prepared by the Procurement Department (PD), reviews public sector procurement contracts signed in 2012, funded and/or administered by the Bank and procured by the Bank’s clients. A separate section (2.10)
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