A comparative study of public procurement practices in Bangladesh with the procurement frameworks of multilateral development banks (MDBs) such as the World Bank

Abstract

The Public Procurement Framework of Bangladesh has been going on various modifications since its inception. The intention is to make public procurement fair, competitive, accountable and transparent as much as possible in the context of Bangladesh. On the other hand, the World Bank Procurement Regulation has also undergone significant changes from 2016 to integrate international best practices in procurement. This thesis intends to compare the two frameworks in terms of respective strength and weakness and points out areas, where PPR can be reformed in light of The World Bank standard. The comparative study indicates that the legal framework of Bangladesh contains a major deviation from one of the core principles that the procurement guidelines of the World Bank adhere to. The introduction of ± 10% rule in Open Tendering and ±5% rule in Limited Tendering represents unfair competition. Although these provisions were originally incorporated into the PPR to discourage abnormally low bids, which were often considered a reason for incomplete and inefficient contract execution, it turns out that those provisions are obstructing fair competition among bidders due to limited and uninventive participation. A case study of one of the World Bank funded projects of LGED called Program for Supporting Rural Bridges (SupRB) highlights that bidder quoting 10% less or above is not actually a hindrance to successful contract completion. Notably, almost 20% of contractors, even after bidding at abnormally low rates, were able to successfully complete the contracts under the project. Another finding is that the World Bank not only ensures incorporation of Environmental and Social Sustainability in addition to financial sustainability into the tender/contract documents but also emphasizes on maintaining a stringent KPI based monitoring system for the borrowers to ensure enforcement through compliance. The World Bank regulation promoted concepts like LCA/TCO or Value Engineering in addition to least cost, unlike PPR, where sole criteria for tender evaluation is centered towards least cost. The World Bank regulation is more accountable and transparent in the sense that it promotes Early Supplier Involvement, better debriefing and complaint management procedure. In PPR, transparency and accountability are also kept inherent within its procedures, however they are often accompanied by an intricate level of bureaucracy. The World Bank’s Procurement system is less bureaucratic as they have a few Standard formats of RFP and less variety in Procurement Methods as compared to PPR. The only downside the study reveals is that the World Bank Regulation sometimes lacks efficiency as it holds clearance procedures installed at every stage of procurement process especially under Prior Review category contracts. This is supported by the SupRB data where it can be seen that IPF funded service procurement takes up 10% time on an average than that of GoB funding packages. Another advantage that is associated with the PPR is that it was obviously established to address locally generated needs in localized context and hence is not so much suited to international procurement. Few recommendations have been suggested as well as a food for thought to the policy makers for reforming public procurement in Bangladesh in light of The World Bank's Procurement Framework. To name a few, imposition of ESHS Performance Security, introduction of Standstill Period after notification of combined evaluation scores, detection of abnormally low bids and transition to MEAT from LCT are noteworthy. Finally, the Government of Bangladesh should consider taking projects funded by the World Bank in combination of both traditional IPF financing, where the World Bank regulation applies only, and newly introduced PforR financing system, where country system can be applied, to utilize the strong areas of both regulations leading to a more sustainable approach of procurement.