Working with the IDB Group
Procurement Opportunities
IDB lending generates more than 12,000 contracts annually. There are two markets for business
opportunities. Procurement contracted directly with the IDB, mainly consulting services in support of
project preparation, accounts for less than 5 percent of the annual volume of procurement. By contrast,
procurement contracts with executing agencies in projects financed by the IDB for works,
goods and consulting services account for the remaining 95 percent. Only businesses and organizations
from IDB member countries are eligible to provide these goods and services for projects.
Responsibility for execution and administration of projects rests with the borrowers. This
includes the entire procurement process, from the preparation of bidding documents to the
award and management of contracts. The Bank oversees all aspects of procurement to ensure
that its rules and procedures are followed. When the Bank contracts consulting firms for projectrelated
activities (e.g., for project preparation or as part of a technical cooperation operation it
administers directly), the IDB’s procurement policies apply. The Bank’s procurement practices
reflect best practices used worldwide. With few exceptions, the IDB does not buy goods and services
for projects. However, the Bank does retain certain responsibilities, such as overseeing the
application of IDB procurement policies and procedures and reviewing the procurement process
to determine adherence to IDB procurement policies.
The Bank’s Board of Executive Directors approved new procurement policies in January 2005. The
policies are almost identical to those used by the World Bank, the basic difference being that eligibility
to bid and origin of goods are restricted to IDB member countries. The new rules apply to
all new projects and, at the request of borrowers, to existing projects.
Consulting Services
Bank-financed projects often require a wide range of consulting services. The procedures for
selecting consultants differ from those for procuring goods and works. For consultancies, the
emphasis is on technical competence/capacity and qualifications over price. There are several different selection methods for both consulting firms and individual consultants.
Invitations to submit a proposal are sent to a short list of consulting
firms. Consulting services are also required at each step in the project cycle,
as described below.
Three areas of particular interest to consultants are:
Technical Cooperation Grants. The IDB finances technical cooperation programs
to strengthen the institutional capacity of public agencies, transfer
knowledge, and carry out diagnostic, pre-investment and sector studies that
support project design and preparation in Latin America and the Caribbean.
The programs can be aimed at projects specific to a single country or for trade,
integration or regional initiatives.
Trust Funds. The IDB administers approximately 50 trust funds created by countries
and groups of countries. Most funds have been created to provide
resources for consulting services. The largest funds have been entrusted to the
Bank by Japan, Spain, the Republic of Korea, Italy, the Netherlands, Sweden,
Norway, Canada, France, Denmark and the United Kingdom. Trust funds finance
national or regional technical cooperation; in addition, five funds support the
Bank’s Social Entrepreneurship Program. Trust funds finance about half of the
Bank’s total nonreimbursable technical cooperation and provide essential support
for loan preparation, institutional strengthening, diagnostic studies of specific
sectors, testing of innovative approaches, and mainstreaming of emerging
lines of activity in the Bank and its borrowing member countries.
Cofinancing. Cofinancing is an arrangement in which resources from the IDB are
associated with funds provided by other sources outside the recipient country
for a specific lending program. Cofinancing helps complete financing plans for
large projects and mobilizes international support and concessional funding for
high-priority projects. Not only does cofinancing provide additional resources
for the Bank’s borrowers, but it also strengthens cooperation between the Bank,
borrowing member countries and donors operating in the region. For those interested
in doing business with the IDB, understanding the cofinancing environment
can help you prepare better proposals and bids, interact more effectively
with other agencies, and use your resources more efficiently.
For more information, please contact:
E-mail:fss@iadb.org
Tel.: (202) 623-3836
www.iadb.org/trustfunds and www.iadb.org/cofinancing
International Competitive Bidding
IDB loan contracts establish, on a case-by-case basis, thresholds for civil works, goods, and consulting
services, equal to or above which procurement has to be done through international competitive
bidding. This policy aims at promoting international competition. Procurement of goods
and works below these limits is governed by local legislation, provided that it is not in conflict with
IDB policies. For consulting services above these thresholds, Bank policies apply. Contracts for
goods and works are awarded to the bidder whose offer has been determined to be the lowest evaluated
bid, according to predetermined selection criteria, provided that the offer is substantially
responsive to the bidding documents. Contracts for consulting services are awarded to the firm or
individual with the best evaluated proposal, in accordance with the applicable selection method.
For more information, please contact:
E-mail:business@iadb.org
Tel.: (202) 623-1546
www.iadb.org/procurement
The Project Cycle
The Bank has a regular process for developing loans. Each phase of this project cycle offers
potential business opportunities. The earlier you engage in the process, the better equipped you
will be to take advantage of the opportunities at each subsequent phase of the cycle. It is important
to develop and follow a strategy and to identify opportunities at each distinct phase. While
there is considerable variation depending on the instrument/financial product, country and sector,
Bank projects typically are prepared and executed over a period of several years. Potential
suppliers of goods and services should be sure to track operations in which they have an interest
over the course of the life of the project. Note that consultants choosing to work in the project
development phase of the cycle may be precluded from working in the project’s execution phase.
The project cycle begins with Bank programming missions to borrowing
countries to review their development and investment programs. The remaining
steps in the project cycle include the following:
Identification. Governments present requests to the Bank to consider operations
for financing. Projects first appear in the Bank’s pipeline, and on its website,
with a preliminary identification of goods and services that may later be
procured. Some consulting work may be necessary at this stage.
Preparation. Borrowers define the scope of the project and determine its
components, costs and other issues. Engineering and design studies are carried
out, as well as environmental impact assessments (when required),
mainly by external consultants hired by the borrower.
Analysis. The IDB determines if the prospective borrower has the capacity to
carry out the project and whether the plans and estimates of its costs and sustainability
are adequate. It consults with affected communities on the project’s
potential social and environmental impact, costs and benefits. The
Bank may hire consultants to assist in this work. A detailed schedule (the
Procurement Plan) of goods, works and consulting services required is prepared.
At this stage, some advance procurement opportunities may be available.
Following project approval, the plan will be posted on the Bank’s
website and updated at regular intervals thereafter.
Negotiation and Approval. The borrower and the Bank determine the terms of
the project’s financing. Loans are approved by the IDB’s Board of Executive
Directors.
Execution and Supervision. Goods and equipment are purchased, civil works
carried out and consultants hired for studies, training and institutional
strengthening. Loan disbursements are made as expenses are incurred.
Contractors and suppliers should watch for specific calls for bids that appear
on the Bank’s website and in the local and/or international press, as well as in
the online publication UN Development Business. Consulting firms should
look for requests for expressions of interest in the same way.
Procurement Information
The executing agency is responsible for all procurement steps, including
advertising, prequalification, preparation of bidding documents, Requests
for Proposals, evaluation of bids and consulting services proposals, contract awards and contract administration. The IDB’s role is to make sure that
the borrower’s implementation of the procurement process is in accordance
with the Bank’s policies and procedures. It is important to remember that
the borrower is the primary source of information regarding all aspects of
the bidding process.
In addition to sending expressions of interest or seeking invitations to bid,
information on projects in preparation should be tracked. Descriptions of
projects in the pipeline provide background information that is critical to
being able to respond effectively to specific procurement and consulting
opportunities. Capsule descriptions of all projects in the IDB pipeline of
potential future operations may be found via the Project Procurement
Information portal on the Bank’s website (see section below on “Sources
of Information”). More extensive documentation regarding proposed
loans is also available (generally only in the language of the country in
which the project is to be carried out) via the Project Gateway portal on the IDB website.
General procurement notices must be published for all projects. They are
published once, within 30 days of approval of the loan by the Bank’s Board of
Executive Directors, in the United Nations periodical Development Business,
which is also available online, and immediately thereafter via the procurement
portal on the IDB website. Specific procurement
notices for bidding opportunities or requesting expressions of
interest subject to international competitive bidding are also published in
Development Business and on the IDB website. Specific procurement notices
for bidding opportunities and requests for expressions of interest subject to
national competitive bidding are published in newspapers with national circulation
in the borrowing country or in the official gazette (if available on the
Internet), or via an electronic portal with no access charge where the borrower
advertises all government business opportunities.
Would you like to be alerted when new procurement notices are posted
on the IDB website? If so sign up for RSS Procurement Notice Alert. You can select alerts for specific countries
and/or sectors, and each time a new procurement notice appears on
the IDB website, an RSS Alert will be sent to your e-mail address. |
Dispute Resolution
Bidders’ written objections to decisions taken by the borrower during the procurement
process can be presented at any stage to the agency in the borrowing
country that is conducting the procurement (the “executing agency”).
Since the primary legal relationship created with respect to a particular procurement
process is between the borrower and the contractor, the Bank
expects the parties to resolve any disputes that may arise between them. If the
Bank determines its procurement policies have not been adhered to, it will
declare a misprocurement and will withhold funds equivalent to the portion of
the loan allocated to the process that was declared misprocured. Decisions of
the Bank’s Procurement Committee, which meets to review protests first filed
with the executing agency and reviewed by the IDB’s Country Offices, are published
via the Project Procurement Information portal on the IDB website.
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