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Compliance alert: World Bank adopts more flexible and transparent procurement reforms

The World Bank’s board of executive directors Tuesday approved “a once-in-a-generation” reform package for procurement in projects financed by the Bank.

In the new Procurement Framework, the World Bank said its management “will examine options to  collect, and make available the beneficial ownership information for legal entities participating in Bank-financed procurements.”

In June, Transparency International-USA led a group of 107 organizations that asked the World Bank to collect and disclose the identity of all legal entity bidders on Bank-financed contracts.

The Bank’s procurement system affects a portfolio of about $42 billion in over 1,800 projects in 172 countries.

“A portfolio this size needs a modern and nimble procurement approach that gives our clients the best value for each dollar that we invest,” World Bank vice president Hartwig Schafer said.

The new Procurement Framework will go into effect in 2016. The Bank called it a once-in-a-generation reform. It said a one-size-fits-all approach is being replaced with a fit-for-purpose procurement philosophy.

“Value for money, sustainable development, and integrity are the vision of the new approach,” the Bank said.

The Bank’s management held 61 consultation meetings in 37 countries and sought public comment about procurement and how to reform it.

“For the first time,” it said Tuesday, “the World Bank will allow any contract award decisions to be based on criteria other than lowest price, including quality and sustainability.”

The Bank said a top priority is still integrity. And it promised faster procurement cycles.

Christopher Browne, the World Bank’s chief procurement officer, said: “The new Procurement Framework is central to the Bank’s development mission because it protects our investments and at the same time helps our clients deliver results in their development projects.”

The World Bank’s Phase II Procurement Framework is here (pdf).

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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1 Comment

  1. It is good initiative by WB to inject generational reforms in procurement process,and keeping the overall major objectives of Client Servicing,Integrity and Sustainability.Often times the procurement process becomes less than transparent,particularly when the Support Services and Software consulting is part of the procurement.Normaiising the competing bidders for like to like comparison,lack of technology tools and factoring the "reasonableness" of pricing are not
    considered.Hopefully the bank will do a far more professional and credible job now,particularly now that its dominance is under questioning in the developing nations.


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