PROCUREMENT STRATEGY AND PROCUREMENT PLAN (PS …

1 PROCUREMENT STRATEGY AND PROCUREMENT PLAN (PS-PP)APRIL PROCUREMENT STRATEGY3. PROCUREMENT PLAN PROCUREMENT STRATEGY (PS)PS is a structured analytical approach designed to support PROCUREMENT planning. Framework to research and analyze information and data to make decisions on what constitutes a fit for purpose PROCUREMENT the information to prepare the PROCUREMENT Plan and support the PAD PROCUREMENT StrategyProcurement STRATEGY (PS) & PROCUREMENT Plan(PP) is mandatory for some projects, and is subject to review of outcome of the analysis in the PS is: a)Requirements ( Specifications); b)Contract STRATEGY ; c)Selection Methods; d)Evaluation right choices in the PROCUREMENT STRATEGY and Plan will lead to Value for Money and Fitness for is the PS?5 PSis a Policyrequirement ThePSdescribeshowtheprojectprocurementac tivitiessupportthedevelopmentobjectiveso ftheproject ThescopeanddetailsofthePStakeintoaccount ,andareproportionalto,therelevantmarket, scale,risk,value,andcountrycircumstances Note on PROCUREMENT Planning and StrategyDecember is the PS?

2 Beneficiaries,withtheBank sassistance,preparea PSforeachprojectfinancedbyIDB TheBankreviewsthePSandapprovestheprocure mentplan Bydesigningtherightprocurementapproach,t hereismorelikelihoodoftherightbidderspar ticipating,betterbidsbeingreceived,andan overallincreasedchanceofachievingvaluefo rmoneyanddeliveryofprojectoutcomestotime , Note on PROCUREMENT Planning and StrategyDecember of the PSAssessmentsOperating EnvironmentBeneficiary capacity and track recordMarketProcurement ApproachType of requirementsMarket ApproachEvaluation CriteriaContract Management PlanContract TypeSelection of the PSTheProcurementStrategycoversthefollowi ngareas:Assessment of the operating context and its potential impact on the procurementAssessment of the implementing agency s capacity, resources and previous experience in procuring these types of activitiesAssessment of the adequacy, behavior and capabilities of the market to respond to the procurementJustification of the proposed PROCUREMENT arrangements based on market analysis, risk and operating context and the project s circumstancesIdentification of the specific project does a PS contain?

3 1. Project overview Project development objectives Results indicators High level statement of assessment Country - operational context political, economic and technological maturity Beneficiary - capability as client Marketplace - market related risk PROCUREMENT complexity specification, solutions, evaluation, coordination of multiple contracts3. Risk analysis Risks that can be mitigated through the PROCUREMENT STRATEGY 4. PROCUREMENT objectives Five key objectives that support delivery of the project development objectives 5. Recommended PROCUREMENT STRATEGY Description of the recommended STRATEGY and supporting rationale6. Activity components List of all contracts to be awarded and their scope in terms of value, duration and contract strategy7. Individual component STRATEGY Individual component STRATEGY for those largest components comprising 80% of overall project value : Five Key StepsProject Concept NoteEstablish Cross Functional TeamStep 1 -Analysis - Current ApproachStep 2 -Analysis MarketsStep 3 Organization s NeedsStep 4 - STRATEGY Option Generation and EvaluationStep 5 Completion of the PS for Preferred OptionDefining the Project PROCUREMENT STRATEGY for Development IDB & Beneficiary capability What are the Beneficiary s capabilities for PROCUREMENT and contract management and how can they strengthened Previous experience / track record in implementing similar projects / procurementsOperating environment What is the operating environment Governance, Economic, Sustainability, Technological, assessment What is the nature of the market and how will the best suppliers be motivated to bid How do other buyers achieve value for Approach Types of Requirements Conformance requirements Performance requirementsMarket Approach Local or international Open.

4 Restricted or direct and Contract ManagementContract Type Lumpsum Performance based contractsContract Management Contract management plan Risk management, monitoring of costs, key performance indicators Milestones and deliverables Schedule of rates/ admeasurement Time and Outputs of the PS PROCUREMENT plan (the PS provides adequate justification for the selection methods in this output) Summary PS highlighting the PROCUREMENT arrangements for high risk activities (Disclosed in the Project Appraisal Document) Contract Management STRATEGY Presentation of PS Template STRATEGY TemplateSECTION 1. PROJECT OVERVIEWC ountry:Insert the Country of the ProjectRegion:Insert the Region of the ProjectSector:Insert Sectors Covered by the ProjectProject Name:Insert Project NameProject Number:Insert Project NumberTotal Financing:Add Total Financing AmountProject Description:Foreachcontract/sub-contract ,thereshouldbeashortdescriptionofwhatisr equiredfromtheFirm,Supplier,Contractor(i ncludingsub-Contractors) Development Indicators:Resultindicatorsshouldbe SMART indicators(Specific,Measurable,Attributa ble,Relevant,andTime-bound) PROCUREMENT Contract Summary:A summaryoftheproposedcontractswithinthePr ojectincludinga Requirements:A statementofanylegalorpolicyrequirementss uchastheapplicationofAlternativeProcurem entArrangements,useofStatedOwnedEnterpri sesforrestrictedcontractssuchasaerialmap ping, 2.

5 ASSESSMENT OF OPERATING AND BENEFICIARY CAPACITY2a. Operational ContextGovernance AspectsSummary of the Governance Aspects of the ProjectEconomic AspectsSummary of the Economic Aspects of the ProjectSustainability AspectsSummary of the Sustainability Aspects of the ProjectProcurement STRATEGY STRATEGY TemplateTechnological AspectsSummary of the Technological Aspects of the ProjectConclusions on Operational context to be addressed through the PROCUREMENT approach2b. Assessment of Beneficiary Capability and Project Implementation Unit (PIU)Continue on Next STRATEGY TemplateThissubsectionshoulddescribefeat uresofthePIUthatneedtobeaddressedtoensur ethatVfMisachieved. Thissubsectionshouldaddressthefollowingt opics, ; ; ,contractor/consultantselection,andcontr actaward; ; ; (previousexperience,availabilityofresour cesandtrackrecord)toundertakesuccessfulf itforpurposeprocurementplanning,procurem entprocess,bid/proposalevaluation,suppli erselectionandcontractaward; ,fromplanning,contractor/consultantselec tion,andcontractaward; ,criticalityofanduseofprofessionaladviso rssuchasconsultantstoaugmentBeneficiaryc apability; scapabilityassessment,a on Client Capability and PIU Assessment to be STRATEGY TemplateSECTION 3.

6 STAKEHOLDER ANALYSISI dentify the main stakeholders who have an interest or impact on the Project and whether their interest is one of responsibility, accountability, to be consulted or informed. The identified Stakeholders will need to be engaged to understand what objectives they have from the (Responsible, Accountable, Consulted, Informed)Stakeholder Objectives from the ProcurementStakeholder Management ApproachNameRole11 STRATEGY TemplateSECTION 4. PROCUREMENT RISK ASSESSMENTT hissubsectionanalysesandprioritizestheri sksidentifiedfromSection2thatrelatetothe OperationalContext, DescriptionAAOverall Risk Score (A*B)Description of Proposed MitigationRisk OwnerProcurement StageLikelihood RatingImpact STRATEGY TemplateSECTION 5. PROCUREMENT OBJECTIVESB ased upon the Strategic Analysis, Risk Assessment and Stakeholder Analysis, detail the key PROCUREMENT Objectives that if achieved will support the delivery of the Project s Development Objectives and achieve value for money.

7 The PROCUREMENT Objectives need to be SMART Specific, Measurable, Achievable, Realistic and Time-bound. The PROCUREMENT objectives should be tested with the identified Stakeholders to ensure agreement on the prioritized list of PROCUREMENT PROCUREMENT STRATEGY TemplateSECTION 6. MARKET RESEARCH AND ANALYSIST hissubsectionshouldidentifythespecificco ntractstobeprocuredandincludea marketanalysisofeachofthetargetmarketseg mentsthatisproportionalindetailtotherela tiveriskandvalueofthecontractwithinthePr ojectconductedthrougha SupplyPositioningModel. If differentmarketsfulfildifferentcontracts withintheProject, , , STRATEGY TemplateThissubsectionshouldaddressthefo llowingtopics, Identifytheriskandvaluethresholdsofthepr oject; (local,national,international),specializ ationordifferentiation; Natureandextentofcompetition,levelsofexp erience,capabilityandinnovation,external influencesandfactors,SupplierPreferencin g; Technology,newservices,ownershipstructur esandalliances,marketgrowth,newentrants; Sourcesofcostandvalue,coststability,pric ingstrategiesandmechanisms,costandfinanc ialbenchmarks; Procurements ofotherentitiesprocuringsimilarcontracts ,typicalcontractterms,commonissuesthatin hibitorcontributetoachievingvalueformo ney, ,BeneficiariesshoulddeveloparangeofProcu rementApproachOptionsanda STRATEGY TemplateSECTION 7.

8 PROCUREMENT APPROACH OPTIONS AND RECOMMENDATIONSP leasedetailtheoptionsandtherecommendedpr ocurementarrangementforthecontractsdetai ledintheProjectdescriptionandthejustific ationfortherecommendedprocurementarrange mentsbasedontheanalysis. ThisSectionshouldbecompletedforeachcontr actrequired. Itemsareidentifiedinprevioussectionsofth eProcurementStrategyandshouldbeincluded. DescriptionContractCategory(Works,Goods, ConsultancyFirmsandIndividuals,andNon-Co nsultancyServices)Estimated CostContract STRATEGY TemplateSpecificationsConformance/Perfor manceContract and Build , Build, Operate and and Build Turnkey or Prime and EPCMP ricing and Costing based contracts of and PlusSupplier RelationshipAdversarial/CollaborativePri ce , Fixed of Contract (Terms and Conditions)Selection for Bids (RFB) for Proposals (RFP) for Quotations (RFQ) SelectionSelection Private Partnerships (PPP) Nations (UN) Driven STRATEGY TemplateEvaluation MethodsEvaluation Selection Cost Based Selection (QCBS) Budget Based Selection (FBS) Cost Based Selection (LCS) Based Selection (QBS) s Qualifications Based Selection (CQS) SelectionEvaluation of Bid CostsDomestic PreferenceYes/NoRated CriteriaList the type of Criteria to be used (Mandatory/Desired)

9 PROCUREMENT Plan PROCUREMENT plan and STRATEGY are fundamental prerequisites for project implementation success, the new guidelines provide separate provisions that introduce clarity and visibility in this sound PROCUREMENT plan will show how:Research and planning add value to sourcingEffective and efficient implementation supports results Collaborative cross-disciplinary teams/teamwork lead to strong solutionsGood governance and project management ensures delivery on time; budget and to specificationProfessionalism and ethics support due process , accountability and transparency A PROCUREMENT plan serves as a catalyst for realistic completion projections and swifter of planningPlanning is the programming of actions and operations to be carried out :In a precise fieldWith precise objectivesWith precise meansOver a duration (and stages) Planning leads to a plan responding in detail and feasible key operational aspects of the type WWWWHH.

10 PROCUREMENT StagesProcurementPlanningPlanNotificatio nPrequalification /ShortlistingEvaluationBid document preparationIssue bidsImplementationAward of of PROCUREMENT PlanningMaximise economy and efficiencyPromote competitionPromote the integrity and fairness of proceduresIncrease transparency and accountabilityIncrease public confidence in the proceduresFacilitate the promotion of local suppliers and economic of PROCUREMENT Planning Establishes direction and goalsIs a framework for monitoring and reviewProvides early adviceProvides the primary information for contract management Identifies the knowledge, skills and qualifications required PhasesPlanning PhasesUpdated Plan The plan must be updated annually for the subsequent 18 months Project PROCUREMENT Plan Prepared by the Beneficiary and approved by the Bank as part of the Financing Agreement. The plan should cover an 18 months PLAN PURPOSEVERSION #DATE: dd/mm/yyProcurement Plan - 1: Project InformationCountryName of BeneficiaryProject NameProject Pipeline NumberProject Code (After Approval)Date of Approval (tentative)Date of Signature (tentative)Date of Effectiveness (tentative)Amount IDB financingMode of FinancingExecuting AgencyExpected date of General PROCUREMENT NoticeProject Implementation PeriodPeriod covered by this plan (12 months from approval)After 12 months, PIAR to be carried out and PROCUREMENT Plan to be updated for remaining periodProject Components (as in RRP)Contract Package NoContract Package - Type and DescriptionBudget US$ PROCUREMENT Methods**Expected Date for AdvertisementRemarksSimplified PROCUREMENT PlanThe Initial PROCUREMENT PlanThe initial plan will contain the basic data.