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World Bank's bid system failing developing countries

ICE news

THE ICE HAS criticised the World Bank for favouring lowest price bidders, warning that the approach could hamper development in low-income countries.

A report released before Christmas, Modifying infrastructure procurement to enhance social development, recommends that World Bank projects use local supplies and contractors to maximise social benefits.

The report claims that the problems lie within the World Bank's Country Procurement Assessment Reports, which include a set of required procurement practices.

One of these insists that the 'lowest evaluated qualified and responsive bidder' should win contracts.

The report was written by ICE contracts and disputes group manager John Hawkins and Engineers against Poverty programme officers Camilla Herd and Jill Wells.

'Contractors are in a competitive environment, ' said Hawkins.

'When Chinese contractors bid 60% of the price of anyone else, nobody can compete.

Clients and donors have to be able to take the lead.' Hawkins's team consulted contractors, governments and project workers in India, Nigeria, Indonesia and Kenya on their procurement processes when compiling the report.

Its conclusion was simple: keeping money locally makes the greatest impact.

However, the World Bank was robust in its defence of the practice of awarding contracts to the lowest bidder.

'Methods that increase subjective decision-making are open to greater abuse that can lead to corruption, ' a World Bank spokesperson told NCE.

But Hawkins said that new methods are emerging which would allow both transparency and a more targeted procurement policy.

'Developing countries are gradually getting there, trying to tackle corruption and set up methods that will work, ' he added.

He suggested the UK as a good example of where discarding the lowest-price-wins system has improved the quality of bids. 'The UK has moved away from lowest price and has benefited, ' said Hawkins.

The report's authors meet with World Bank officials later this month to discuss its findings, with the intention of influencing their strict procurement checklist.

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