Best Practices

General Operational Policies*

International Competitive Bidding

Policy

The thresholds above which the Bank will require international competitive bidding for the procurement of goods, works, and services will be determined on a case-by-case basis by the Project Team and approved by the PROJECT TEAM LEADER, subject to clearance from the Procurement Unit. The thresholds may vary from country to country, sector to sector, and project to project (see OP-501).

The Bank will make international competitive bidding COMPULSORY for the procurement of goods, works, and services financed wholly or partially with the proceeds of Bank loans when the amount of the contract is over US$5 million in the case of works and services, and over US$350,000 for goods.

When foreign exchange from a Bank loan is used, the procurement procedures for goods and services must restrict participation to suppliers from member countries.

Objectives

The following principles governing international competitive bidding are intended to provide the public sector with assurances that Bank funding will be used efficiently and economically, and that the process will be transparent:

• COMPETITION: to ensure that the largest possible number of qualified suppliers take part so that borrowers obtain the best market terms.

• EQUALITY: to ensure that all participants will be treated equally, avoiding preferences and discrimination of any kind to the detriment of some and the benefit of others, thus making for effective competition.

• PUBLICITY: to ensure that all contractors have access to information and clarifications during the bidding process and when the bids are opened.

• DUE PROCESS: local legislation should provide procedures for the settlement of disputes and should permit bidders to lodge protests and to answer allegations.

Publicity

The Bank's publicity requirements for international competitive bidding are as follows:

• GENERAL PROCUREMENT NOTICE (GPN). The purpose is to notify interested parties well in advance regarding procurement opportunities for new projects financed by the Bank. The Bank will publish such notices on behalf of the borrower in the United Nations publication "Development Business".

• SPECIFIC PROCUREMENT NOTICES (SPNs). Will be published only in "Development Business". Project team leaders, in consultation with the borrowers, and subject to clearance from the Procurement Unit, may decide to have additional notices published in an international newspaper and/or a technical journal, depending on the nature and size of each project.

• BY WAY OF EXCEPTION, and for fully-justified reasons (for example natural disasters), project team leaders who determine, with clearance from the Procurement Unit, that "Development Business" is not an expedient vehicle in the case in question, may elect not to publish a notice therein. In such cases, the notice need only be published in a newspaper with wide international circulation and/or a technical journal.

• SPNs will be PUBLISHED NATIONALLY at least twice in one newspaper or once in two newspapers with wide international circulation.

Prequalification

The Bank requires prequalification for the procurement of goods and services in the case of large or complex works, in order to ensure that competent companies will take part. Prequalification will be based exclusively on the ability of the contractors to satisfactorily execute the works.

Bidding Documents

Borrowers use bidding documents to inform potential bidders about the requisites and conditions of a given call for bids. It is particularly important that such documents be clearly written, setting out the criteria for the evaluation and comparison of bids, the currency to be used, and the rules for currency translation.

Opening and Evaluation of Bids

Bids are to be submitted by the deadline in writing in sealed envelops and must be signed by the legal representatives of the bidders and comply with the requisites established in the bid documents.

Bids will be evaluated using rules established for that purpose, and a detailed report must be submitted to the Bank on the evaluation and comparison of the bids and the grounds for the recommendation as to the contract award.

The contract will be awarded, after Bank approval, to the bidder having submitted the lowest evaluated bid that conforms to the bidding documents and meets the requirements on financial capacity and responsibility.

Exceptions

International competitive bidding will not be required for instruments, equipment, specialized materials, books, and publications, for educational and science and technology projects, and applied research.

Procurement for Projects in Emergency Situations

For the procurement of works, goods and related services for projects in emergency situation, the Bank may authorize the Executing Agency to apply the simplified procedures described in Section GS-601 of the Procurement Manual.

Norms

The specific guidelines, criteria, and other considerations pertinent to the competitive bidding procedure are set out in the corresponding policy (see reference reference documents).

Prevailing Prevailing Reference Documents:
GP-118-11, March 1992
GP-118-20, September 1994
GP-118-23, January 1998
GP-92-15, december 1998

* The operational policies of the Inter-American Development Bank are intended to provide operational guidance to staff in assisting the Bank's borrowing member countries. Over the course of the Bank's more than 40 years of operations, the approach to developing operational policies has taken various forms, ranging from the preparation of detailed guidelines to broad statements of principle and intent. Many policies have not been updated since they were originally issued, and a few reflect emphases and approaches of earlier years which have been superseded by specific mandates of the Bank's Governors, the most recent being the Eighth Replenishment mandates of 1994. In accordance with the Bank's information disclosure policy, the Bank is making all of its operational policies available to the public through the Public Information Center. Users please note that the Bank's operational policies are under a process of continuous review. This review process includes preparation of best practice papers summarizing experience at the Bank and other similar institutions, and sector strategy papers.