· World Bank Procurement in Investment Project Financing helps borrowers achieve sustainable development objectives through value-based, principled, and transparent procurement guidance and support.
· The World Bank Procurement Framework launched in 2016 promotes a strategic, fit-for-purpose approach to procurement that focuses on impact and overall value-for-money.
· In keeping with the value-focused approach, most World Bank-financed Procurement will require the use of Rated Criteria which will promote the inclusion of key quality and sustainability criteria rather than using just the lowest evaluated price for award decisions.
Since 2016, the World Bank’s Procurement Framework has encouraged the use of rated criteria to evaluate quality, sustainability, and innovative aspects of bids in decision making. A key objective of the framework was to enable Borrowers to adopt a more strategic approach to procurement, including the use of evaluation criteria that prioritizes fit-for-purpose solutions rather than the lowest-evaluated price. The Framework helped deliver significant benefits, as noted in the 5-year retrospective report.
Effective September 1, 2023, the World Bank will require the use of Rated Criteria as the default approach for most international procurements1. Using Rated Criteria more widely will increase Borrowers’ flexibility to procure works, goods and non-consulting services best suited to their specific situation and provide a more fit-for-purpose approach. Rated Criteria will also increase willingness of the best suppliers to bid and participate in Bank- financed projects—with the knowledge that their added value will be part of the evaluation, thereby increasing options, global competition, and likelihood for effective market solutions.
Going forward, a greater use of rated criteria will further contribute to successful contract outcomes and effective risk management, including managing issues around environmental, social, supply chain disruption, cybersecurity, and global health emergencies, etc. Rated criteria also contribute to combating bid rigging and reducing the risk of collusion in procurement processes. It will also help create new opportunities such as improving risk management, securing supply chains, and factoring climate impacts in award decisions.
Combined with price and life cycle cost formulas, rated criteria provide a truer assessment of value that focuses on quality, sustainability, and other key criteria. This approach helps create incentives for highly qualified bidders and allows them greater flexibility to provide tailored and innovative solutions.
For many of the reasons noted, there has been an increasing use of rated criteria in public procurement in Western Europe, North America, Japan, Singapore, Australasia, and other OECD members. For example, 62% of public procurements in the EU use rated criteria, while in some Member States the coverage is even higher (e.g., 90% in France). Several World Bank client countries also provide for the use of rated criteria in their procurement regulatory frameworks and in some other countries, modernizing their procurement laws to include this feature is underway.
The time is right to strengthen implementation of the value for money approaches on which the Bank’s Procurement Framework is predicated. “We look forward to advancing the use of rated criteria in procurement to help our borrowers get the best possible value for money as they leverage procurement to help meet their development goals,” remarked Ed Mountfield, Vice President, Operations Policy and Country Services (OPCS), World Bank. “This will further strengthen our commitment to sustainability and fit-for-purpose solutions to address global and local challenges.”
The new approach will be implemented in close collaboration with client countries, the private sector, international institutions, and development partners to maximize procurement impact for development. The Bank will continue to provide training and hands-on support to help ease the transition and enhance the strategic role of procurement as a key public policy and management tool to maximize scarce resources, deliver better value to beneficiaries and address today’s global challenges.
1 New International Procurements advertised on or after September 1, 2023 using a Bank Standard Procurement Document must use Rated Criteria. However, application of Rated Criteria will not be mandatory for:
- Off the shelf goods and educational materials
- Other exception cleared by the CPO on a fit-for-purpose basis