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Tendering for World Bank and International Aid Funded Contracts

The funding of projects by the World Bank forms part of international aid. This funding is termed “IBRD Loans” or “IDA Credits”. However, the terms are so favourable to the borrowing country that they are often seen to be more akin to grants. Such funding is allocated to poorer, deserving countries to satisfy a clearly identified national need. There are some countries that are very dependent on World Bank funding for their development – e.g. Mozambique, Tanzania, the DRC and Zambia. On the other hand, countries like Botswana and South Africa receive very little World Bank funding, because they are seen as better off, with more capacity for sourcing internal investment. For different reasons, Zimbabwe gets very little funding from the aid agencies because the World Bank and other donor agencies disagree with Zimbabwe's economic policies.

The rules for procurement for work done using World Bank loans are described in two World Bank publications:

  • Guidelines - selection & employment of consultants by World Bank Borrowers (1997)
  • Guidelines – procurement under IBRD loans & IDA credits (1995).

Ostensibly, the World Bank procurement policy is focused on the most efficient use of its funding without favouring the citizens of the borrower country. World Bank officials have to ensure that the borrower country is not misusing the funds, and they have to prevent corrupt practices amongst the officials dealing with the project. This means that the borrower country's officials have to answer to World Bank officials at certain key points in the tender process, as well as later while the contract is being carried out.

In the adjudication of World Bank-funded projects, the two systems known as Quality & Cost Based Selection and International Competitive Bidding are seen to be the most desirable systems of deciding which bid should win the tender. Although the World Bank does try to encourage the borrower country's local consultants and contractors, its focus is on getting the best, most experienced experts to do the job. This is not to say that World Bank procurement does not permit any form of preference, but the limits of the preference for domestically manufactured goods are described under “Appendix 2: Domestic Preferences” in the Guidelines. In countries where consultants and contractors are highly suspicious of its government's normal adjudication process, World Bank tenders attract far greater interest from professionals than do the normal tenders published by the government. The World Bank guidelines ensure that the Request For Proposals is widely published in the local and international media, with sufficient time for the preparation of bids (i.e. a minimum of 6 weeks).

Other international aid agencies (e.g. EU, USAID, DANIDA, SIDA, DFID et al) have their own procurement policies governing the adjudication of tenders, but generally they favour International Competitive Bidding. However, some aid agencies require that the tendering consortium link up with a company based in the donor country. So it is advisable to read up on the funding agency's procurement policy before preparing the bid.

Tendering & Procurement

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