procurement capacity assessment · 17. the ea procurement capacity assessment report, once...

Climate-Resilient Rice Commercialization Sector Development Program

PROCUREMENT CAPACITY ASSESSMENT

A. Introduction

1. ADB’s Project Administration Instructions (PAI 1.1 para. 10) require that project divisions and project processing missions assess the Executing Agency’s (EA) and the implementing agencies (IA) capacities to procure goods and works, and recruit consulting services as part of project / program preparation. 2. The purpose of the EA/IA capacity assessment is to:

(i) Identify levels of reputational risk to ADB and its Borrowers and put in place appropriate prior review and process thresholds to mitigate this risk balanced with the needs for operational efficiency.

(ii) Identify any implementation risks present in terms of procurement resources, structure and process and propose mitigating measures.

(iii) Build on the existing knowledge base for procurement capacity, legislative environment and processes.

B. Contents of the Capacity Assessment

3. The assessment contains three areas investigated.

(i) The assessment of the general procurement environment; (ii) A questionnaire to be completed by the EA; and (iii) The Procurement Capacity Assessment Report and Recommendations

4. Completed questionnaires for these are attached as Annexes 1 through 3 for each of the agencies assessed. C. Undertaking the Assessment

5. The assessment of the general procurement environment will be undertaken by COSO in consultation with Cambodia Resident Mission and updated on an annual basis. COSO shall make this available to each project processing missions upon request. In the event that one has not been prepared, COSO will prepare it in parallel with project processing completing it prior to circulation of the first draft of the RRP. 6. The questionnaire with guidance notes should be issued to the EA during project processing. The project officer may request that the PPTA consultants, if recruited, assist the EA in the completion of the questionnaire. The PPTA consultants will not assist ADB with the preparation of the Procurement Capacity Assessment Report. This is in part an assessment of ADB’s risks and therefore should not be outsourced. 7. Based upon the assessment of the general procurement environment and analysis of the EA’s and IA’s completed questionnaires, project processing staff shall prepare a Procurement Capacity Report and Recommendations and attach it as a supplementary appendix to the draft RRP. This supplementary document should be provided to COSO as a matter of course with the first draft RRP inviting interdepartmental comments. COSO will assist and provide comments on the Report prior to circulation of the first draft RRP if so requested.

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8. Refer to project administration instruction (PAI) 3.03 and 3.04 when setting the threshold for different modes of goods and works procurement. Consult with COSO when establishing the International Competitive Bidding (ICB) procurement threshold for goods and works procurement. The criteria and thresholds for selecting different consulting recruitment methods are provided in the PAI, in particular PAI 2.02E, and should be used unless there are reasons for not doing so, in which case consult with COSO. D. Institutions Investigated

1. Procurement Responsibilities of MEF

9. As EA, the Ministry of Economy and Finance (MEF) (assisted by a Program Management Office [PMO] and program implementation consultants [PIC]). While MEF will be responsible for the overall procurement of all contracts, its main responsibility relates to the recruitment of consulting services under Rice-SDP. These include the recruitment of PICs, of national consulting services (for the preparation of subproject feasibility studies, detailed designs, bidding document preparation and for supervision of construction), the recruitment of monitoring specialists to report on resettlement implementation progress, and the national entity to undertake the design and implementation of the pilot insurance scheme. In the case of the more technical requirements such as is the case of irrigation rehabilitation subprojects, the responsible national implementation offices (NIOs) will assist MEF in the request for proposals and in the evaluation of the proponents. 10. For the more technical goods and works contracts, the relevant IAs (assisted by the NIOs) will be responsible for the procurement of these contracts. The main procurement activities to be performed by MEF will be the advance action for the recruitment of PICs and for the procurement of vehicles and office equipment to ensure their timely arrival as soon as possible after loan effectiveness. At the request of MEF, most of the procurement of goods and works are to be carried out by the technical line agencies.

2. Procurement Responsibilities of MAFF

11. The Ministry of Agriculture Forestry and Fisheries (MAFF) will be responsible for procurement of all goods and works needed in the implementation of national initiatives proposed for implementation by MAFF under the Rice-SDP. These include (i) the establishment and equipping of the seeds laboratory within the General Directorate of Agriculture, (ii) materials and services needed for the development of extension material, (iii) soil testing associated with soil classification and mapping, (iv) agro-ecosystem analyses, (v) initiatives in capacity development directed at millers, and (vi) initiatives in building the financial management capacities of farmers. The production of seed material by CARDI and its multiplication to certified and commercial seed will be supervised by MAFF. The national NIO will also assume responsibility of the grain drying and storage equipment needed for the paddy and seed drying and storage facilities as part of the subprojects in participating provinces.

3. Procurement Responsibilities of MOWRAM

12. The Ministry of Water Resources and Meteorology (MOWRAM) will be responsible for the technical approval of irrigation system designs for subprojects. It will also assist MEF in the recruitment of irrigation subproject feasibility study consultants, detailed design engineers, bid document preparation and construction supervision engineering consultants. MOWRAM will

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procure works contractors to carry out the civil works programs associated with irrigation subprojects. It will supervise the activities of its provincial departments assisting with project implementation.

4. Procurement Responsibilities of MLMUPC

13. The Ministry of Land Management, Urban Planning and Construction (MLMUPC) will be responsible for the procurement of goods required in the implementation of the GIS element of Commune Land-use Planning activities. It is likely to be limited to computer equipment and software together with satellite images used in map preparation. MLMUPC will also be responsible for the procurement of works contracts for the construction of buildings associated with the paddy and seed drying and storage facilities as subprojects to be completed in the participating provinces.

5. Shopping by Provincial Governors Offices

14. The provincial implementation offices (PIOs) to be established within each participating province will be responsible for the procurement of small contracts for the supply of goods and equipment to operate the PIO. These offices will not be undertaking any national competitive bidding procurement and will be limited to the smaller simpler contracts as described. Furthermore, each PIO will be assisted with a full time national implementation specialist to assist in all implementation matters including procurement and financial management and reporting. E. Advance Contracting and Small Projects

15. ADB has approved advance contracting for the recruitment of PICs and of the essential vehicles and equipment needed to establish the implementation structures. No separate assessment is needed as the prior review process described in Appendix 1 of both the Procurement Guidelines and Consultants Guidelines and do not exceed the process thresholds set in the procurement plan agreed for Rice-SDP. F. Outputs of the EA Procurement Capacity Report and Recommendations

16. The EA Procurement Capacity Report and Recommendations sets project procurement thresholds that will be input into Section 1A of the Procurement Plan and ADB Prior and Post review requirements that will be input into Section 1B of the Procurement Plan. 17. The EA Procurement Capacity Assessment Report, once commented upon by COSO, shall be sent to the EA for review and confirmation at loan negotiations. 18. The Procurement Capacity Assessment will pay particular attention to design of a mechanism by which the Program Management Office (PMO) can monitor and ensure adequate procurement performance of the participating Implementing Agencies (IAs). Based on the assessments already carried out, the PMO will, with the help of the program implementation consultant, formulate and carry out a procurement training program that will improve the IAs’ capacity to procure works, goods, and services in a way that is consistent with ADB and Royal Government of Cambodia (RGC) regulations. The PMO will then monitor the procurement activities of the IAs and make sure that they adhere to these regulations. IAs will be required to report quarterly to the PMO on their procurement activities. The PMO will take any remedial actions required to improve procurement performance of IAs.

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Annex 1. General Procurement Environment Assessment

Risk Ratings Extremely High High Average Low

I. Specific Assessment and Ratings

Question Yes/No Narrative Explanation Risk

A. LEGAL AND REGULATORY FRAMEWORK

1. Is there a procurement law? Is there a single law governing procurement that is consistent with internationally accepted principles and practices; or is procurement governed through various laws, decrees etc.?

No Law being drafted (as of May 2011). However, very

detailed regulations in place which explains for

relatively “lower” risk assessment.

High

2. Does the procurement law have implementing regulations? Does the procurement law have implementing rules and regulations that support it by providing the details that are not normally found in a law? Are these clear, comprehensive and consolidated as a set of regulations that are available in a single and accessible place? Are these regularly updated?

Yes No Law but very clear and very detailed regulations in

place. Two distinct sets currently applying :

- state-funded procurement (included in and referred

to as “IRRPP – Implementing Rules & Regulations on

Public Procurement”), and

- externally-funded procurement (included in and

referred to as the “Procurement Manual”), largely

inspired on ADB/WB NCB templates and procedures.

Low

3. Are the procurement law and regulations clear and concise? If there is a single law that is easy to follow, then the risk is “low”. If the law is complex and difficult to follow, then the risk is “average”. If there is no single law, then the risk is “extremely high” or “high”.

Yes Low

4. What does the procurement law/regulation cover? If there is a single law, the risk will be “low” if it covers drafting and use of standard bidding documents, evaluation, contracting through to the management of contracts, including payment, warranty and defects liability periods. The less the procurement process is covered the higher the risk. If there is no single law, then the risk is “extremely high” or “high”.

IRRPP and Procurement Manual cover everything, from

SBDs for various types of procurement to principles,

procedures, templates for reporting and contract

management, etc.

Low

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5. Does the procurement law/regulation cover the procurement of consulting services? If there is a single procurement law that also covers consulting services, then the risk is “low”. If consulting services are not covered, or there is no law, then the risk is “extremely high” or “high”.

Yes Through regulations only Low

6. Does the procurement law/regulation differentiate between processes for goods, works and consulting services? If t h e r e is a single law that deals separately with consulting services, then the risk is “low”. If there is a single law that provides some differentiation, but the processes are similar, then the risk is “average”. If there is no single law, or it applies the same processes to consulting services as for goods and works, then the risk is “extremely high” or “high”.

Yes Through regulations only Low

7. Does the law/regulation require the advertisement of all procurement opportunities? A “low” risk may be indicated if advertisement is required for all procurements above $25,000. An “average” risk may be indicated if advertisement is required only for procurements above $100,000. A “high” risk may be indicated if advertisement is required for all procurements above a threshold that is higher than $100,000. An “extremely high” risk should be indicated if no advertisement is required.

Yes Low

8. Are contract awards advertised? The same thresholds as stated at A7 should be applied.

Yes On website – though not all EAs do so. Low

9. Are there restrictions on goods, works and services on the basis of origin? If there is no limitation, restriction and/or preference scheme, then the risk is “low”. If there are restrictions or a national preference scheme, then the risk is “average”. If procurement is solely limited to those of national origin, then the risk is “extremely high” or “high”.

No In Procurement Manual, regulations allow for donor-

imposed restrictions

Low

10. Does the procurement law or relevant legislation and regulation provide acceptable provisions for the participation of state-owned enterprises (SOEs)?

Yes But as applies to externally-funded procurement only. No

provisions to “load” SOE bids if they participate in open

bidding (SOEs not otherwise an issue in Cambodia at this

time)

Average

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If an exception is given to SOEs that are legally and financially autonomous and are not dependent agencies of the purchaser/employer, then the risk is “low”. Otherwise, the risk is “extremely high” or “high”.

11. Are there restrictions on the nationality of bidders and consulting firms to be invited? If there is no limitation, restriction and/or preference scheme, then the risk is “low”. If there are nationality restrictions or a national preference scheme, then the risk is “average”. If procurement is solely limited to national firms and individuals, then the risk is “extremely high” or “high”.

No Though in Procurement Manual, regulations allow for

donor- imposed restrictions

Low

12. Are foreign bidders and consultants forced to submit offers through or with local partners? If this is never required, then the risk is “low”. If this is required under certain circumstances, then the risk is “average”. If this is always required, then the risk is “extremely high” or “high”.

No Low

13. Is there a domestic preference scheme? If there is no scheme, then the risk is “low”. If it is applied in limited circumstances, then the risk is “average”. If a domestic preference scheme is applied across the board, then the risk is “extremely high” or “high”.

No None other than as provided for in PM for WB- and ADB-

funded projects

Low

14. Is there a national standard mandated for the use for quality control purposes? If there are no mandated national standards or if these have direct and accessible international equivalents, then the risk is “low”. If there are mandated national standards that have no international equivalents, then the risk is “high”.

No High

15. Are any agencies or parts of public expenditure exempt from the procurement law/regulation? If yes, such as defense equipment, then the risk may range from “average” to “extremely high, depending on the extent of the exemption. For example, if an exemption is outright granted to medicines, text books or other similar commodities, then the risk is “extremely high”.

No None found in PM, IRRPP, or relevant sub-decrees Low

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16. Is the default method for procurement open competition? If yes, then the risk is “low”. If no, or if it is not clearly established, then the risk may be “extremely high” or “high”.

No Not explicitly stated, rather suggested Average

17. Is open competition easily avoided? If avoidance requires the approval of an oversight agency, then the risk is “low”. If open competition can be avoided by senior management decision, then the risk is “average”. If the procurement law/regulation allows the avoidance of open competition above a certain national threshold on the basis of circumstances that are not in response to natural disasters, i.e. simple urgency, then the risk is “extremely high” or “high”.

Yes The principle of procedures in place clearly favor open

competition, but many EAs de facto restrict competition

through various means, e.g. split packaging, unavailability

of BDs for purchase, etc.

High

18. Does the procurement law/regulation require pre- qualification? If it is only for complex or high value contracts, then the risk is “low”. If no pre-qualification is allowed, then the risk is “average”. If it applies to all contracts, then the risk is “high”.

No Only for complex packages – to be determined by Procuring

Entity in consultation with development partner

Low

19. Does the procurement law/regulation require the pre- registration of bidders? If no pre-registration is required, then the risk is “low”. If it is only required for special types of goods, such as medicines, then the risk is “average”. If yes, then the risk is “extremely high” or “high”.

Yes IRRPP require prior registration of bidder Average

20. Does the procurement law/regulation mandate the use of standard documents? If it does and there are documents for goods, works and consultants services, then the risk is “low”. If it is required just for only two of the three procurement types, then the risk is “average”. If it is required for only one of the procurement types, or it is required but no documents have yet been issued, then the risk is “high”. If standard documents are not required, then the risk is “extremely high”.

Yes Under both PM and IRRPP, SBDs were developed in

close consultation with WB and ADB

Low

21. Have these standard documents been approved for use on ADB projects? If yes, then the risk is “low”. If some, but not all, then the risk is “average”. If no, then the risk is “extremely high” or “high”

Yes Those in Procurement Manual Low

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22. Is there a national procurement manual or guide? If an omnibus procurement manual or guide exists, then the risk is “low”. If a manual exists, but it is out of date or is not widely used/distributed, then the risk is “average”. If there is no manual, then the risk is “extremely high” or “high”.

Yes Very detailed Low

B. INSTITITUIONAL FRAMEWORK

23. Which body oversees public procurement? If there is a regulatory body at an adequate level in government, and financing is secured by the legal/regulatory framework, then the risk is “low”. If the body is at an adequate level, but financing is subject to administrative decisions and can be changed easily, then the risk is “average”. If the level of the body is too low or financing is inadequate for proper discharge of its responsibilities, then the risk is “high”. If there is no body, or the body is too low with no independence to perform its obligations, then the risk is “extremely high”.

For state-funded procurement, Dept of Public Procurement

(DPP, under MEF)

For externally-funded procurement, the Dept of International Cooperation (DIC, under MEF) Dual-track system is an issue

Average

24. What powers does the oversight body have? The rating may range from “low” to extremely high”, depending on whether the body exercises all, some, a few or none of the following responsibilities: providing advice to contracting entities, drafting amendments to the legal/regulatory framework, monitoring public procurement, providing procurement information, managing statistical databases, reporting on procurement to other parts of government, developing/supporting the implementation of initiatives for improvements to the public procurement system, and providing implementation tools and documents to support capacity development.

DIC/DPP define thresholds for procurement method

and for review process

DIC/DPP can however require Procuring Entities to clarify/revise BDs and BERs

Both DIC and DPP also get directly involved in some transactions

Limited enforcement capacity - for example, where

seniority of procuring entity staff is higher than either

Heads of DIC/DPP

Average

25. Is there a nationwide procurement training plan? If procurement trainings are regularly implemented nationwide and needs are regularly assessed, then the risk is “low”. If there is an existing program, but it is insufficient to meet national needs, then the risk is “high”. If there is no formal training program, then the risk is “extremely high”. Consider also the existence of a helpdesk.

No High

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26. Is there a procurement accreditation or professionalization program? If there is an externally recognized program, then the risk is “low”. If it is a government sponsored program, then the risk is “average”. If there is no accreditation or professionalization program, then the risk is “high”.

No Generally very low level of capacity / professionalism High

27. Are major projects identified within agencies’ appropriations or budgets? If yes, then the risk is “low”. If no, but a system is in place for the ring-fencing of project funds, then the risk is average. If neither condition exists, then the risk is “high”.

Yes Low

28. Is the procurement cycle tied to an annual budgeting cycle, i.e. can procurement activity only commence once a budget is approved? If yes, and a medium-term expenditure framework is in place, then the risk is “low”. If an activity may start up to, but excluding contract award, then the risk is “average”. If the procurement cycle is not tied to an annual budget, then the risk is “extremely high” or “high”.

Yes Strictly tied to annual budget, no advance action

authorized outside ADB-funded projects

Average

29. Once an appropriation or budget is approved, will funds be placed with the agency or can the agency draw them down at will? If yes, then the risk is “low”. If now, such when additional bureaucratic controls are imposed (such as a cash release system), then the risk is “extremely high” or “high”.

Yes At least as far as externally-funded procurement is

concerned. Unclear as far as state-funded procurement is

concerned.

Low

30. I s there a nationwide system for collecting and disseminating procurement information, including tender invitations, requests for proposals, and contract award information? If there is an integrated information system that provides up-to-date information and is easily accessible at no or minimum cost, then the risk is “low”. If there is such an integrated information system that covers majority of contracts, but access is limited, then the risk is “average”. If there is a system, but it only provides information on some of the contracts and is not easily accessible, then the risk is “high”. If there is no procurement information system, except for some individual agency systems, then the risk is “extremely high”.

No High

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31. When an agency is implementing a project using funds from the national budget, are there general experiences/ reports of funding delays that significantly hamper procurement? If no, then the risk is low. If yes, then the risk is “extremely high” or “high”.

Yes Frequent delays to access counterpart funds High

32. Is consolidated historical procurement data available to the public? If yes, then the risk is “low”. If the data is too much or too little, then the risk is “average”. If none, then the risk is “extremely high” or “high”.

No High

33. Does the law/regulation require the collection of nationwide statistics on procurement? If yes and statistics are actually collected, then the risk is “low”. If yes, but data is not collected or used, then the risk is “average”. If there is no requirement, then the risk is “extremely high” or “high”.

No High

C. PROCUREMENT MARKET AND OPERATIONS

34. Do formal mechanisms exist to encourage dialogue and partnerships between the government and the private sector, and are these well established in the procurement law/regulation? If such mechanisms exist, such as programs to build the capacity of private companies and small businesses to participate in public procurement, and these are effective, then the risk is “low”. If such mechanisms exist, but there is no proof of its effectiveness, then the risk is “average”. If no such mechanisms exist, then the risk is “extremely high” or “high”.

No Consultations have sometimes involved joint public-private

sector sessions, but not institutionalized enough that there

is an open flow of communication.

Average

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35. Are private sector institutions well organized and able to facilitate access to the market? If the private sector is competitive, well organized and able to participate in open competition, then the risk is “low”. If there is a reasonably well functioning private sector, but competition for large contracts is concentrated in a relatively small number of firms, then the risk is “average”. If the private sector is relatively weak and/or competition is limited owing to monopolistic or oligopolistic features in important segments of the market, then the risk is “high”. If the private sector is not well organized and lacks capacity and access to information for participation in the public procurement market, then the risk is “extremely high”.

No Little/no structures within industries/sectors Average

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36. Is there an alternative disputes resolution process independent of the government and courts? If there is an arbitration law with an independent process, then the risk is “low”. If there is no arbitration law, but the standard contracts use ICC or similar dispute resolution provisions, then the risk is “average”. If alternative dispute resolution is not practiced, or if arbitration is through the courts or can be overturned by the courts, then the risk is “extremely high” or “high”.

No Procurement Manual allows provisions re:

ICC/UNICTRAL. Under IRRPP, only recourse is

through Courts

High

D. INTEGRITY OF THE PROCUREMENT SYSTEM

37. Are there systematic procurement process audits? If yes, then the risk is “low”. If only financial audits are conducted, then the risk is “average”. If no systematic audits are conducted, then the risk is “extremely high” or “high”.

No Weak capacity of National Audit Authority Extremely high

38. Does the procurement law/regulation contain provisions for dealing with misconduct, such as fraud and corruption? A cross reference to an anti-corruption law will suffice. If yes, then the risk is “low”. If no, then the risk is “extremely high” or “high”.

Yes But poorly defined, and apparently not enforced.

Currently no cross-reference to anti-corruption law in regulations. None envisaged in the current draft Procurement Law.

High

39. Is fraud and corruption in procurement regarded as a criminal act, whereby the penalty includes imprisonment? If yes, then the risk is “low”. If no, then the risk is “extremely high” or “high”.

Yes But very low enforcement to-date. Impact of introduction of new Anti-Corruption Law at end 2010 yet to be confirmed

High

40. Have there been prosecutions for fraud and corruption? If there have been successful prosecutions for fraud and corruption, then the risk is “low”. If prosecutions seem to focus solely on low grade/junior staff, then the risk is “average”. If there is no evidence of any prosecution, then the risk is “extremely high” or “high”.

No None recorded Extremely high

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41. Does the legal/regulatory framework allow for sovereign immunity to agencies for claims against them? If plaintiffs can sue the government for contractual non- performance, then the risk is “low”. If they cannot, then the risk is “extremely high” or “high”.

No Low

42. Do the regulations allow for the debarment of firms and individuals? If there is a debarment process that is transparent and equitable, and undertaken by an independent oversight agency, then the risk is “low”. If there is a process and it is administered by a single agency, such as the Ministry of Finance, then the risk is “average”. If it is administered by the procuring agency, then the risk is “high”. If there is no debarment mechanism, then the risk is “extremely high”.

Yes But mechanisms poorly defined and enforcement not evidenced.

High

II. General Ratings

Criterion Risk

A. Legal and Regulatory Framework Average

B. Institutional Framework High

C. Procurement Market and Operations Average

D. Integrity of the Procurement System High

OVERALL RISK RATING High

Notes : The “dual track system” (donor-funded vs state-funded procurement) causes redundancies. Also, the impartiality of oversight agency (DPP or DIC) can be

questioned by other parties to procurement when that agency is also involved in individual procurement transactions, e.g. contract negotiations, identified

as contracting party, etc. Governance issues at stake.

Graft and collusion appear to be endemic in public procurement. While systems, rules and procedures are well designed, processing is in question, with

anecdotal evidence of EAs restricting access to BDs, bid rigging, collusion between bidders as much as between bidders and EAs, etc.

Enforcement of procurement rules and sanctions is problematic. No documented cases of sanctions taken again bidders/government officials involved in

fraudulent practices. Poor/inexistent procurement auditing. Poor capacity of national auditing authorities.

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Annex 2. Executing Agency Procurement Capacity Questionnaire

1. Procurement of goods, works and consulting services is usually a key element of project implementation which, when an agency has the capacity to undertake procurement efficiently and well, will contribute to the overall project objectives. Conversely, when procurement capacity is low, it will make achieving these objectives harder.

2. The primary purpose of this questionnaire is to assist ADB in assessing the procurement capacity of an Executing Agency (EA) that will utilize ADB funds. The output from completion of this questionnaire will be a set of specific recommendations prepared by ADB relating to the implementation of the project (which may take the form of support built into the project design) and wider recommendations that do not impact directly upon the project but may assist the EA and borrower in developing procurement capacity and therefore performance beyond the scope of the project.

3. The EA will be invited to review and comment upon the recommendations made and agreement between the EA, Borrower and ADB will be reached on implementing those recommendations relating to the implementation of the proposed Project.

4. The following pages form the questionnaire which is divided into the following parts:

Part A: General Agency Resource Assessment Part B: Agency Procurement Processes, Goods and Works Part C: Agency Procurement Processes Consulting Services Part D: Process Control and Oversight Part E: Record Keeping

5. If the EA will not be expected to procure goods, works or consulting services the corresponding element of the questionnaire can be left blank.

6. Efforts have been made to design the questionnaire so that simple factual answers may be given, the onus being on ADB to ask for more information if it requires it. It is acknowledged that not all of the questions will be relevant to all EAs. When a respondent (the person completing the questionnaire) regards a question as not relevant to the EA they should state “not applicable.”

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MEF (Executing Agency) Capacity Assessment Questionnaire

Description Response

Part A. General Agency Resource Assessment

A.1. Is there a procurement department? Yes

A.2. What procurement does it undertake? Supervises all public sector and development partner procurement for

the RGC

A.3. Are the staff provided with written job descriptions? Yes

A.4. How many years’ experience does the head of the procurement unit have in a direct procurement role?

More than 10

A.5. How many staff in the procurement department are: Procurement unit sits within the Department of Finance and Accounting where staff numbers are estimated at

about 20 in total.

Full Time? Estimated 10 full time

Part Time? Estimated 5 part time

Seconded? Estimated 5 on secondment

A.6. At what level does the department report (to the head of agency, deputy etc.)? Head of procurement department reports to HE Chan Sothy – Deputy

Secretary General for routine matters and HE Vongsey Visoth – Secretary General on more significant matters.1

A.7. Do the staff that will be involved with the procurement have English language skills sufficient to undertake international procurement?

Yes

A.8. Is the number and qualifications of the staff sufficient to undertake the additional procurement that will be required under the proposed project?

Yes – with the support of PMO staff and PICs

A.9. Does the unit have adequate facilities such as PCs, internet connections, photocopy facilities, printers etc. to undertake the expected procurement?

Yes

A.10. Is there a procurement training program? Yes

Part B. Agency Procurement Processes: Goods and Works n.a. - being handled by the

1 At the time of preparation of the assessment, the Executing Agency were not able to give a precise answer to questions A4-A6 and the responses have been estimated by

PPTA Consultants in discussion with ADB CARM.

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responsible implementing agency

B.1. Has the agency undertaken foreign assisted procurement of goods or works recently (last 12 months, or last 36 months)? (If yes funded by whom and name of the Project)

B.2. If the above is yes, what where the major challenges?

B.3. Is there a procurement process manual for goods and works?

B.4. If there is a manual is it up to date and does it cover foreign assisted procurement?

B.5. Is there a systematic process to identify procurement requirements (1 year or more)

B.6. Who drafts the specifications?

B.7. Who approves the specification?

B.8. Are there standard bidding documents in use and have they been approved for use on ADB funded projects?

B.9. Who drafts the bidding documents?

B.10. Who manages the sale of the document?

B.11. Are all queries from bidders replied to in writing?

B.12. Is there a minimum period for preparation of bids and if yes how long?

B.13. Does the bidding document state the date and time of opening and how close is it to the deadline for submission?

B.14. Is the opening public?

B.15. Can late bids be accepted?

B.16. Can bids be rejected at bid opening?

B.17. Are minutes taken?

B.18. Who may have a copy of the minutes?

B.19. Are the minutes free of charge?

B.20. Who undertakes the evaluation (individual(s), permanent committee, ad-hoc committee)?

B.21. What are the qualifications of the evaluators in respect to procurement and the goods and works under evaluation?

B.22. Is the decision of the evaluators final or is the evaluation subject to additional approvals?

B.23. Using at least three real examples how long between the issue of the invitation for bids and contact effectiveness?

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B.24. Are there processes in place for the collection and clearance of cargo through points of entry?

B.25. Are there established goods receiving procedures?

B.26. Are all goods received recorded as assets or inventory in a register or similar?

B.27. Is the agency/procurement department familiar with letters of credit?

B.28. Does the procurement department register and track warranty and latent defects liability periods?

Part C. Agency Procurement Processes: Consulting Services Relevant

C.1. Has the agency undertaken foreign assisted procurement of consulting services recently (last 12 months, or last 36 months)?

Yes

C.2. If the above is yes what where the major challenges? No difficulties

C.3. Is there a procurement process manual for consulting services procurement? Yes

C.4. Is the manual up to date and does it cover foreign assisted projects? Yes

C.5. Who identifies the need for consulting services requirements? Designed by PPTA consultant

C.6. Who drafts the ToRs? PPTA consultant

C.7. Do the ToRs follow a standard format such as background, tasks, inputs, objectives and outputs?

Yes

C.8. Who prepares the request for proposals? PPTA consultant

C.9. Are assignments advertised and expressions of interest called for? Will be

C.10. Is a consultants’ selection committee formed with appropriate individuals in terms of procurement and technical expertise?

Will be

C.11. What criteria are used to evaluate EOIs? Criteria developed in the RFP

C.12. Historically what is the most common method used (QCBS, QBS etc.) QCBS

C.13. Do firms have to pay for the proposal document? No

C.14. Do the evaluative criteria follow a pre-determined structure and is it detailed in the RFP?

Yes

C.15. Are pre-proposal visits and meetings arranged? No

C.16. Are minutes prepared and circulated after pre-proposal meetings? No

C.17. To whom are minutes distributed? n.a.

C.18. Are all queries from consultants answered to in writing? Yes - to all short listed

C.19. Are the financial and technical proposals in separate envelopes? Yes

18


C.20. Are proposal securities required? No

C.21. Are technical proposals opened in public? Yes

C.22. Do the financial proposals remain sealed until technical evaluation is completed? Yes

C.23. Are minutes of technical opening distributed? No

C.24. Who determines the final technical ranking and how? MEF following the recommendations of the Bid Evaluation Committee

C.25. Are the technical scores published and sent to all firms? Read out at opening of financial proposal to which bidders are invited to

attend

C.26. Is the financial proposal opening public? Yes

C.27. Are there minutes taken and distributed of financial proposal opening? Minutes are recorded

C.28. How is the financial evaluation completed? Assessed by the bid evaluation committee

C.29. Are face to face contract negotiations held? With the winning proponent where convenient

C.30. How long after financial evaluation is the selected firm to negotiate? Usually 6 weeks

C.31. What is the usual basis for negotiation? Standard contractual arrangements

C.32. Are minutes of negotiation taken and signed? Minutes are recoded and signed by both RGC and successful proponent

C.33. How long after negotiations until the contract is signed? Usually within one month

C.34. Are advance payments made? Provided for in the contract for consulting services

C.35. Is there an evaluation system for measuring the outputs of consultants? Whilst contract is an input based contract, performance criteria are

included in the contract

Part D. Process Oversight and Control

D.1. Is there a standard statement of ethics and are those involved in procurement required to formally commit to it?

Not formal commitment - but guidelines are expected to be followed

D.2. Are those involved with procurement required to declare any potential conflict of interest and remove themselves from the procurement process?

Yes

D.3. Is the commencement of procurement dependent on external approvals (formal or de-facto) outside of the budgeting process?

No - execution can proceed after signing of the loan and grant agreements for the Rice-SDP - cleared for advance action

19


D.4. Who approves procurement transactions and do they have procurement experience and qualifications?

MEF is ultimately responsible for approving procurement actions. They

are well experienced in this area.

D.5. Which of the following actions require approval outside of the procurement unit or a permanent evaluation committee and who grants the approval?

Bidding document, invitation to pre-qualify or request for proposal MEF approval needed

Advertisement of an invitation for bids, pre-qualification or call for expressions of interest MEF approval needed

Evaluation reports MEF approval needed

Notice of award MEF ratification needed

Invitation to consultants to negotiate MEF approval needed

Contracts MEF approval needed

D.6. Is contractual performance systematically monitored and reported upon? Yes

D.7. Does the agency monitor and track its contractual payment obligations? Yes

D.8. On average how long is it between receiving a firm’s invoice and making payment? Varies considerably depending on state of completion of contract obligations but

can be delayed for up to two months

D.9. What is the standard period for payment included in contracts? 30 days

D.10. When payment is made late are the beneficiaries paid interest? No

D.11. Are payments authorized by the same individuals empowered to approve invitation documents, evaluations and contracts?

No

D.12. Is there a written auditable trail of procurement decisions attributable to individuals and committees?

Yes

D.13. Are procurement decisions and disputes supported by written narratives such as minutes of evaluation, minutes of negotiation, notices of default/withheld payment?

Yes

D.14. Is there a formal non-judicial mechanism for dealing with complaints? Yes

D.15. Is a complaints resolution mechanism described in national procurement documents?

Yes

Part E. Record Keeping

E.1. Is there a referencing system for procurement files? Yes

E.2. Are original contracts secured in a fire and theft proof location? Yes

E.3. Are copies of bids or proposals retained with the evaluation? No

E.4. Are copies of the original advertisements retained with the pre-contract papers? Yes

20


E.5. Is there a single contract file with a copy of the contract and all subsequent contractual correspondence?

Yes

E.6. Are copies of invoices included with contract papers? Yes

E.7. For what period are records kept? 7 years

21

MAFF (Implementing Agency) Capacity Assessment Questionnaire


Part A: General Agency Resource Assessment


A.2. What procurement does it undertake? Publicly financed procurement – project procurement usually handled by an

implementation unit established for the project



More than 10-years’ experience

A.5. How many staff in the procurement department are: Procurement Unit sits within the Department of Finance and Accounting.

Procurement is approved by Pre-qualification Evaluation and Award

Committee (PEAC)

Full Time? 5

Part Time? nil

Seconded? 2

A.6. At what level does the department report (to the head of agency, deputy etc.)? Head of procurement unit reports to the Director of the Department of Finance

and Accounting and reports annually to MEF


Yes


Incremental staff will be needed to carry out procurement duties


Yes - provided from the Rice-SDP

A.10. Is there a procurement training program? Yes – standard training to be provided by ADB in country

Part B: Agency Procurement Processes: Goods and Works

22



Yes

B.2. If the above is yes, what where the major challenges? Only with lack of familiarity with changing procedures

B.3. Is there a procurement process manual for goods and works? Yes

B.4. If there is a manual is it up to date and does it cover foreign assisted procurement? Yes

B.5. Is there a systematic process to identify procurement requirements (1 year or more) Yes

B.6. Who drafts the specifications? National design consultants together with the PICs

B.7. Who approves the specifications? MAFF


Yes

B.9. Who drafts the bidding documents? National design consultants together with the PICs

B.10. Who manages the sale of the document? MAFF - NIO

B.11. Are all queries from bidders replied to in writing? Yes

B.12. Is there a minimum period for preparation of bids and if yes how long? n.a.


Yes

B.14. Is the opening public? Yes

B.15. Can late bids be accepted? No

B.16. Can bids be rejected at bid opening? Yes

B.17. Are minutes taken? Yes

B.18. Who may have a copy of the minutes? MAFF, MEF, ADB

B.19. Are the minutes free of charge? Yes


Individually appointed technical bid evaluation committee


Varies on the technical area


Subject to ratification by MAFF and MEF

23



6 months


Yes

B.25. Are there established goods receiving procedures? Yes

B.26. Are all goods received recorded as assets or inventory in a register or similar? Yes

B.27. Is the agency/procurement department familiar with letters of credit? No


Yes

Part C: Agency Procurement Processes: Consulting Services n.a. consulting services to be

recruited by MEF


C.2. If the above is yes what where the major challenges?

C.3. Is there a procurement process manual for consulting services procurement?

C.4. Is the manual up to date and does it cover foreign assisted projects?

C.5. Who identifies the need for consulting services requirements?

C.6. Who drafts the ToRs?


C.8. Who prepares the request for proposals?

C.9. Are assignments advertised and expressions of interest called for?


C.11. What criteria are used to evaluate EOIs?

C.12. Historically what is the most common method used (QCBS, QBS etc.)

C.13. Do firms have to pay for the proposal document?


C.15. Are pre-proposal visits and meetings arranged?

C.16. Are minutes prepared and circulated after pre-proposal meetings?

C.17. To who are minutes distributed?

C.18. Are all queries from consultants answered to in writing?

24


C.19. Are the financial and technical proposals in separate envelopes?

C.20. Are proposal securities required?

C.21. Are technical proposals opened in public?

C.22. Do the financial proposals remain sealed until technical evaluation is completed?

C.23. Are minutes of technical opening distributed?

C.24. Who determines the final technical ranking and how?

C.25. Are the technical scores published and sent to all firms?

C.26. Is the financial proposal opening public?

C.27. Are there minutes taken and distributed of financial proposal opening?

C.28. How is the financial evaluation completed?

C.29. Are face to face contract negotiations held?

C.30. How long after financial evaluation is the selected firm to negotiate?

C.31. What is the usual basis for negotiation?

C.32. Are minutes of negotiation taken and signed?

C.33. How long after negotiations until the contract is signed?

C.34. Are advance payments made?

C.35. Is there an evaluation system for measuring the outputs of consultants?

Part D: Process Oversight and Control




Yes


Yes


MAFF then MEF is ultimately responsible for approving procurement

actions.


Bidding document, invitation to pre-qualify or request for proposal MAFF approval needed

Advertisement of an invitation for bids, pre-qualification or call for expressions of interest MAFF approval needed

Evaluation reports MAFF approval needed

25



Invitation to consultants to negotiate MAFF approval needed

Contracts MAFF approval needed








No


Yes


Yes



Yes

Part E Record Keeping



E.3. Are copies of bids or proposals retained with the evaluation? No - separate



Yes



26

MOWRAM (Implementing Agency) Capacity Assessment Questionnaire











Committee (PEAC)

Full Time? 6

Part Time? nil

Seconded? 6




Yes





A.10. Is there a procurement training program? Yes - standard training to be provided by ADB in country


27



Yes

B.2. If the above is yes, what where the major challenges? Objective assessment of proposals - difficulties in bid evaluation





B.7. Who approves the specifications? MOWRAM


Yes


B.10. Who manages the sale of the document? MOWRAM - NIO




Yes





B.18. Who may have a copy of the minutes? MOWRAM, MEF, ADB







Subject to ratification by MOWRAM and MEF

28



6 months


Yes





Yes

Part C: Agency Procurement Processes: Consulting Services

n.a. consulting services to be recruited by MEF although technical

support will be provided by MOWRAM/NIO

















29

























Yes


Yes


MOWRAM then MEF is ultimately responsible for approving procurement

actions.


Bidding document, invitation to pre-qualify or request for proposal MOWRAM approval needed

30


Advertisement of an invitation for bids, pre-qualification or call for expressions of interest MOWRAM approval needed

Evaluation reports MOWRAM approval needed


Invitation to consultants to negotiate MOWRAM approval needed

Contracts MOWRAM approval needed








No


Yes


Yes



Yes







Yes



31

MLMUPC (Implementing Agency) Capacity Assessment Questionnaire











Committee (PEAC)

Full Time? 7

Part Time? nil

Seconded? 7




Yes





A.10. Is there a procurement training program? Yes - standard training to be provided by ADB in country


32



Yes

B.2. If the above is yes, what where the major challenges? Objective assessment of proposals - difficulties in bid evaluation





B.7. Who approves the specifications? MLMUPC


Yes


B.10. Who manages the sale of the document? MLMUPC - NIO




Yes





B.18. Who may have a copy of the minutes? MLMUPC, MEF, ADB







Subject to ratification by MLMUPC and MEF

33



6 months


Yes





Yes

Part C: Agency Procurement Processes: Consulting Services n.a. consulting services to be

recruited by MEF



















34























Yes


Yes


MLMUPC then MEF is ultimately responsible for approving procurement

actions.


Bidding document, invitation to pre-qualify or request for proposal MLMUPC approval needed

Advertisement of an invitation for bids, pre-qualification or call for expressions of interest MLMUPC approval needed

Evaluation reports MLMUPC approval needed

35



Invitation to consultants to negotiate MLMUPC approval needed

Contracts MLMUPC approval needed








No


Yes


Yes



Yes







Yes



36

ANNEX 3. PROCUREMENT CAPACITY ASSESSMENT REPORT AND RECOMMENDATIONS

Proposed Project Name Kingdom of Cambodia: Climate Resilient Rice Commercialization Sector Development Program

Proposed Loan Amount $60.0 million Proposed Grant Amount $19.6 million

Executing Agency: Ministry of Economy and Finance

Source of Funding: ADB / Royal Government of Cambodia / PPCR / GAFSP

Assessor: PPTA Consultant Date : November 2012

Expected Procurement

The Project involves a broad range of procurement of contracts for each subproject covering consulting services, goods and works. For goods and works contracts, the main procurement method for works will be ICB and NCB; while shopping will be applied for minor good items. For consulting services for loan implementation, QCBS (80:20) will be adopted.

Assessment of the National Environment The Law on Procurement has recently been upgraded and guidelines for procurement published in May 2012 that are comprehensive and accepted by international development partners.

The use of ICB and NCB on ADB financed projects are subject to clarification to the contract amounts as subproject goods and works contracts as they are likely to exceed the upper limit for NCB procedures. It is estimated that 30% of irrigation rehabilitation will involve ICB and all the drying equipment for paddy and seed oriented subprojects. These limits have already been defined and included under Schedule 4 of previous ADB Loan/Grant Agreements with Cambodia.

No national standard mandated for use for quality control purposes.

No procurement accreditation program currently exists in Cambodia.

General Agency Resource Assessment Procurement will be managed by the PMO and NIOs at national level to carry out national procurement while PIOs to be established at provincial governors’ offices to administer subproject supervision and other local procurement involving the following;

Three staff in the Phnom Penh based PMO to oversee national procurement and contract management;

Consultants will be recruited to prepare and implement the project procurement plan and PMO staff will update these within the PAM as required or at least on an annual basis.

Each IA has technical section with staff experienced in design and construction of works as well as in procurement of goods and works; and

The engagement of program implementation consultant to assist in procuring the goods and works under the proposed Project is in line with ADB requirements.

Agency Procurement Processes: Goods and Works

The grant implementation consultant and/or private consultants engaged accordingly will prepare the design, specifications, and technical part of bid documents on behalf of IA under contract. These will be reviewed by the PICs and the responsible technical agency concerned.

The PMO/NIOs will analyze bids and present the information to a “Bid Evaluation Committee” for consideration. The committee is composed of the client’s representatives and experts external to the organization.

Responses to the questionnaire show a systematic procedure in inviting bids, bids evaluation, and contract award.

The IAs will recruit a construction supervision company to supervise the works on site and

37

check for progress and works quality.

Agency Procurement Processes: Consulting Services One or more consultancy packages financed under the Rice-SDP will be let to assist the EA and IAs in project implementation. The selection of the program implementation consultants will be by QCBS (80:20) method. The EA has considerable experience in procurement of consultants and also the PPTA has identified the scope of services required from the program implementation consultant.

Process Control and Oversight From responses to the questionnaire it appears that adequate controls are in place:

Separate agencies are involved in approving bid documents, tender evaluation etc.

Contractual performance is consistently monitored and reported upon.

There are procedures for dealing with invoicing, payment and non-payment.

Hence the additional process controls required will be ADB interventions to ensure compliance with ADB procurement principles by means of review of procurement documents and bid evaluation reports through ADB’s “Prior Review” or “Post Review.”

Record Keeping and Audit

A reasonable record system is adopted for safekeeping of the original contract, copies of bids and evaluation, and contract administration papers.

Summary Assessment and Recommendations

The EA (MEF) has already undertaken an ADB project loan/grant on a similar agriculture and natural resource and productivity enhancement projects particularly focusing round the Tonle Sap, covering small to medium scaled infrastructure and has acquired considerable experience in procurement of consultancy services, goods and works. Further, the PMO, and NIO staff have adequate technical skills to undertake procurement of consultancy services, and the procurement of goods and works. The procurement to be carried out by the PIOs is limited to shopping where the complexity of bidding procedures can easily be informed. There are also established arrangements for handling the various stages of procurement from preparation of bid documents, tender invitation, bid evaluation, contract award, to construction supervision and contract performance monitoring. Checking and control of procurement processes are also in place.

This is not the first experience with sector modality project or program financed by ADB for the three IAs although certain infrastructure works (drying and storage facilities) will be constructed for the first time. For this reason the engagement of a team of international and domestic implementation consultants to build project management capacity including procurement capability during the project implementation stage is recommended. The consultants will review the detail design, specifications, O&M requirements, bid document contractual conditions, and the bid evaluation report, including addressing ADB’s comments on relevant documents.

Specific Recommendations, Project Implementation

Capacity Constraint Recommended Action Responsibility and Comment

IAs are unfamiliar with ADB procurement requirements as detailed in ADB Procurement Guidelines (February 2007, as

ADB specialists to conduct seminars to PMO and NBIOs on procurement and disbursements requirements

ADB / Phnom Penh PMO

38

ADB = Asian Development Bank, EA = executing agency, IA = implementing agency, ICB = international competitive bidding, NCB = national competitive bidding, O&M = operations and maintenance, PIO = provincial implementation offices, PMO = program management office, PPTA = project preparatory technical assistance, QCBS = quality- and cost-based selection, TA = technical assistance, TOR = terms of reference. Note: The assessment and general recommendations concerning the national procurement environment are based on separate findings of COSO of the ADB.

amended from time to time) and payment procedures in accordance with ADB’s Loan Disbursement Handbook.

and procedures.

Program implementation consultants to provide on-the-job training during bid document preparation (technical and financial aspects) and bid evaluation, and in addressing ADB’s comments.

ADB to require: (i) Prior Review: all ICB contracts; first NCB contract (works), first NCB contract (goods),first recruitment of consulting services; (ii) Post Review: all shopping (goods and works).

General Recommendations, EA Capacity


MEF is ADB’s contact point on the Borrower’s side. The constraint is that some provincial PIOs are located remotely from the PMO.

An efficient communication and information exchange mechanism will be developed as agreed with the EA to streamline communications to ensure effective and efficient implementation. Procurement will be limited to relatively simple contracts in the provinces.

EA, PMO and NIOs and subproject PIOs

General Recommendations: National Procurement Environment


Lack of familiarity with recent changes to ADB’s procurement guidelines given the likelihood of new staff being appointed to these positions.

Further capacity building of procurement staff.

ADB/ start-up consultants have been extended from the PPTA to assist in early startup activities.

procurement capacity assessment · 17. the ea procurement capacity assessment report, once...

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