After half a century of more or less unchanged procurement procedures, the World Bank is suddenly stepping up to the plate when it comes to promoting sophisticated, modern procurement policy and tactics — for both itself and nations around the globe.
Late last month the World Bank’s board of executive directors voted in favor of the new procurement directive, set to take effect next year. According to reports, the World Bank’s venture aims to “better respond to the needs of client countries, while preserving robust procurement standards throughout bank-supported projects.”
What’s more, the organization said the updates would replace the former framework, described as a “one-size-fits-all” program that has been intact since the 1960s. The most recent data says the World Bank oversees hundreds of government projects across 172 nations, with contracts valued at about $42 billion.
“A portfolio this size needs a modern and nimble procurement approach that gives our clients the best value for each dollar that we invest,” said World Bank Vice President for Operations Policy and Country Services Hartwig Schafer, according to Supply Management reports.
Planning for the new procurement framework reportedly took three years, but following the wait, the World Bank launched its modernization with a bang. At the end of spring, the organization rolled out a new procurement mobile app for Apple iPads in an effort to heighten transparency about where procurement dollars are being funneled and which suppliers are receiving those funds.
An announcement by the organization in April said that a key driver behind the new mobile app is the effort to aid governments’ use of Big Data to modernize their own procurement systems. “Open Data is transforming the way we access and use information,” said World Bank Group Senior Operations Officer Marcelo Donolo in a statement. “The Procurement App is a good example of how machine-readable data can be used to inform in a way that is immediate, accurate and easy to understand.”
The app allows users to access visualizations and breakdowns of swaths of procurement data and to organize that information by client country, supplier country, fiscal year and economic sector. The World Bank says the information can also be shared through social media, links or email, part of the organization’s additional goal of making this data publicly available and easy to access.
The mobile app was only the beginning to the World Bank’s procurement upgrade. Only weeks ago, the bank approved sweeping changes to the framework that organizes and guides the way the World Bank carries out procurement with member nations. The new Procurement Policy reportedly aims to nix the one-size-fits-all approach to the 172 nations working with the World Bank to finance government procurement initiatives.
According to Supply Management, the new framework means contracts can be awarded to suppliers based on factors other than just price, including sustainability or quality of their services. The World Bank also said the overhaul allows for a faster review process of contracts and provides smaller or less-developed countries with “hands-on help” in the procurement process when projects are financed from the bank.
Further, the organization said it will be working to strengthen support to member nations that seek to develop their own modern, efficient procurement systems.
“The new procurement framework is central to the bank’s development mission because it protects our investments and at the same time helps our clients deliver results in their development projects,” said World Bank Chief Procurement Officer Christopher Browne, according to Supply Management.
According to analysts, it is likely to take years for the new framework to enter into full effect, though reports in The National Law Review said the effects of the new procurement plan could be felt within just a few months.
The World Bank will also have to work to address several concerns that come with new procurement technology. For example, the bank said that some organizations “pointed out that the new methods in the procurement process can mean more risk, so they see a wider role for third parties in monitoring transparency.”
Further, the organization said it recognizes that some nations with lower procurement capacity will not be able to use upgraded procurement methods from the World Bank without proper training and implantation, especially for small and medium-sized enterprises.
Finally, with a new focus on meeting the unique needs of each country in facilitating procurement, the World Bank will have significant hurdles ahead. “Providing hands-on expanded implementation support is a significant shift in the nature of the bank’s engagement,” it said, “and could result in greater legal, financial, operational and reputational risks for the bank.” The organization acknowledged that, considering the “litigious nature of public procurement,” it will likely be forced to take part in legal proceedings in the near future due to its decision to step out of the confined role of a mere financier to procurement activity.
But the World Bank is reportedly willing to take these risks, declaring them to be justified thanks to the ability of a more hands-on approach to procurement activity to encourage the strengthening of government procurement procedures and the ability for more businesses to partake in potential projects.
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