Comparative Practices in

International Procurement

Khalid Mahmood Lodhi

kmlodhi@yahoo.com
Scope of Today’s Discussion
 A Brief Comparative Overview of the
International Procurement régimes &
Best practices relating to:
• Contracting Authorities
• Types of contracts covered
• Methods of procurement
• Contract award procedures
• Post-award obligations/Notices
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International Legal Procurement Regimes

 Agreement on Government Procurement (GPA)

 EU Directives on Public Procurement

 UNCITRAL Model Law on Public Procurement

 MDBs’ Guidelines on Public Procurement

 Federal Acquisitions Regulations (FAR)

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Agreement on Government
Procurement (GPA)
• Tokyo Round of Trade Negotiations (1979)
• GPA signed in 1979 and enforced in 1981.
• Annex-4 to the WTO-Marrakech 15 April 94
• A “Plurilateral” Agreement
• USA, Canada, EU, Hong Kong, Japan, Korea,
Singapore, Switzerland, Norway, Israel
Netherlands, Switzerland, Liechtenstein,
Observers include: 23 countries
• Pakistan - neither a member nor an observer.
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European Community’s
Procurement Directives
 27 member European Union enterprises
• preventing discrimination
• Transparent but Restrictive Procedure
 EU Directive 2004/18/CE - Public
works, public supply & public service
contracts
 EU Directive 2004/17/CE - water,
energy, transport and postal services
sectors
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The United Nations Commission on International
Trade Law (UNCITRAL) on Procurement of
Goods, Construction and Services

• UN General Assembly on 17.12.1966

• For introducing PP laws, or reforming their
Proc systems
• promoting international competition in PP
markets
• achieving economy and efficiency in PP
• reducing corruption in countries
• soft globalization tool-trade harmonization

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Multilateral Development Banks (MDBs)
Like the World Bank & ADB
(Bank’s Guidelines)

 Procurement for works & Goods

 Selection and Employment of
Consultants
 Standard Bidding Documents (SBDs) on
Procurement of Works, Goods and
services
 FIDIC Standard Conditions of Contract &
Forms utilized by the Bank-Guidelines
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Procurement Entities Covered

 GPA: In Appendix I

• Annex 1 - central government entities.

• Annex 2 - sub-central government
entities.
• Annex 3 - all other entities that procure
as per GPA

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Procurement Entities Covered

 UNCITRAL:

• Federal government
• Sub-federal level
• Any other entity specifically in GPA

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 Procurement Entities Covered
(Continued...)

 World Bank:
1. Government /State as Contracting
Authority

2. Design Consultancy by Private Entity

3. Intermediary Development Finance

Companies
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 Procurement Entities Covered
(Continued...)

 EU Directive 2004/18/EC:
• State, Regional & Local Authorities
• Entities financed by the Government
• Entities controlled by the Government
• Private Entities subsidized by CAs
• Entities (including private entities) with
special or exclusive rights

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Types of contract covered
 GPA:
1. Purchase, lease, rental or hire-
purchase, or any combination of works,
goods and services

2. Not all government Procurements are

covered in GPA

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Types of contract covered

 UNCITRAL:

Any contract between the

procuring entity and a supplier or
contractor

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Types of contract covered (Cont…)

 EU Directive 2004/18/EC:
• Between one or more economic operators

• one or more Contracting Authorities

• for execution of works, supply of goods &

provision of services within the meaning of this
Directive

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World Bank: Types of Contracts covered

• International Competitive Bidding (ICB)

• Limited International Competitive
Bidding (LICB)
• National Competitive Bidding (NCB)
• Shopping (Small value under a
threshold)
• Direct Contracting (Single Source)
• Force Account (Direct Labour/Direct
Work/Departmental Forces)
World Bank: Types of Contracts covered

• Procurement from UN Agencies

• Procurement Agents (e.g., Management
Contractors)
• Inspection Agents (Pre-Shipment
Inspection Companies)
World Bank: Types of Contracts covered

• Procurement in Loans to Financial

Intermediaries (Re-lending)

• Procurement under Concessions

(BOO/BOT/BOOT)

• Performance Based Procurement (e.g.,

Services Maintenance Facility)
Provisions favouring domestic
providers/products etc.

 GPA:
1. Article V provided special
provisions for Developing
Countries
2. Least Developing Countries can
also negotiate favours before
accession

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Provisions favouring domestic
providers/products etc.

 UNCITRAL:
• Contracts restricted to national firms
• preferences to national firms
in

evaluating bids where permitted by law,

subject to rules on transparency

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Provisions favouring domestic
providers (Cont…)
World Bank:

• Domestic Preference …. 7.5 - 15%

• International Competitive Bidding (ICB)

• supply of goods contracts

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Provisions favouring domestic
providers (Cont…)

 EU Directive 2004/18/EC:

Generally prohibited under the EU

Treaties and the directives (although
subject to exceptions e.g. military
equipment)
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GPA: The "usual" award procedure

Tendering procedures:
• Open
• Selective
• limited
Under open procedures - tender
In selective tendering list of qualified
suppliers published once a year

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UNCITRAL:
The "usual" award procedure (Cont…)

For Goods, construction & Services,

Open tendering procedure

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The "usual" award procedure (Cont…)

 EU Directive 2004/18/EC:

General rule:

EU C.As shall award public

contracts by applying the open or
restricted procedure.
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The "usual" award procedure (Cont…)

 World Bank:

Mostly open and competitive procedures

except for Direct Contracting where
Single Source is a limitation

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Grounds for using Competitive award
procedures other than Competitive Tendering

 GPA:
• Limited tendering procedures
• absence of tenders
• selective tender
• collusion - strongly anticipated
• supply only by a particular supplier
• extreme urgency
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Grounds for using competitive award
procedures other than open tendering/open
solicitation of proposals (Cont….)

 UNCITRAL:
• limited providers - highly complex specs
• development of prototype products
• national defence and security
• failure of previous open tendering procedures
• urgency

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Grounds for using competitive award
procedures other than open tendering/open
solicitation of proposals (Cont….)

 EU Directive 2004/18/EC:
Competitive Dialogue (Complex Contracts):

• Specifications cannot be set (services only)

• Overall pricing not possible (civil/Services)

• Prototype development

• Failure of previous open tendering

• restricted procedures where negotiations are
conducted with all qualified bidders.

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Grounds for using competitive award
procedures other than open tendering/open
solicitation of proposals (Cont….)

 World Bank:

• Shopping (Small value under a threshold)

• Direct Contracting (Single Source)

• Force Account (Dept Forces/Existing Skill)

• Procurement from UN Agencies -
Inaccessible areas

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Methods of advertising specific contracts
in competitive procurement procedures

 GPA:

Entities shall publish a notice in the

appropriate publication listed in
Appendix II

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Methods of advertising specific contracts
in competitive procurement procedures

 UNCITRAL:
• For open & two stage tendering:
notice in the relevant official publication

• International contracts:
notice in relevant international publication
of wide circulation

• For restricted tendering:

notice in the relevant official publication 
Methods of advertising specific contracts
in competitive procurement procedures
(UNCITRAL) Cont…

• For request for proposals (RFP):

notice in relevant international
publication of wide circulation
• For competitive negotiations:
Request for Quotations (RFQ), and direct
solicitation for procurement of services
no advertisement required.
Methods of advertising specific contracts
in competitive procurement procedures
(Cont…)

 EU Directive 2004/18/EC:

• Notice of the specific contract:

OJEC
• Notice of qualification system:
OJEC

• Advertisement through a GIN:

OJEC
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Methods of advertising specific contracts
in competitive procurement procedures
(Cont…)

 World Bank:
• UN Development Business Online (UNDB
online)-a UN publication
www.devbusiness.com

• Development Gateway’s dgMarket

(Electronic portal of Development
Gateway Foundation, USA)
www.dgmarket.com
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Criteria for selecting between
tenders/proposals
Award of Contracts
 GPA:
• Tender conforming to essential requirements
of the B/Documents
• Abnormally low price, but still capable of
fulfilling contract terms
• Tender is either the lowest tender, or

• If non-price factors-most advantageous.

     
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Criteria for selecting between
tenders/proposals (Cont…)

 UNCITRAL:
a) Goods and construction-Lowest price

b) Non-Price factors are operation,

maintenance and repair costs;
delivery/completion time; functional
characteristics; terms of payment and
guarantees; any preferences to be given
for domestic industry

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Criteria for selecting between
tenders/proposals (Cont…)
 EU Directive 2004/18/EC:

(a) Price
(b)Most Economically Advantageous Tender
• technical merit
• aesthetic & functional characteristics
• environmental characteristics
• after‑sales service
• technical assistance
• Running cost
• delivery date/delivery period
• period of completion.

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Criteria for selecting between
tenders/proposals (Cont…)

 World Bank:
1. Lowest Evaluated Responsive Bidder

2. If prior mechanism given in the SBDs -

WB favours most economically
advantageous Bid to be evaluated as the
lowest bid.

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.

Thankyou
Q&A