Banking on Development Conference Asian Development Bank

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Banking on Development ConferenceAsian
Development Bank
Presented by Frank Foster Senior Commercial
Officer Advocacy Center Liaison Office to the
ADB U.S. Department of Commerce
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History

• Established in 1966
• Headquarters in Manila, Philippines
• Original Membership 31
• Current Membership 64
• 41 Developing Countries
• 23 Developed Countries
• 46 Regional Members
• 18 Non-Regional Members

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Largest Shareholders

• 1. Japan 15.7
• 2. USA 15.7
• 3. China, Peoples Rep. of 6.5
• 4. India 6.4
• 5. Australia 5.8
• 6. Indonesia 5.5
• 7. Canada 5.3
• 8. Korea, Rep. of 5.1
• 9. Germany 4.4
• 10. Malaysia 2.7

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Advocacy Center Liaison Office to the Asian
Development Bank (AC ADB)

• Regional market generated from ADB grants
  lending
• 38 countries
• Many active sectors
• Consulting, professional services procurement
  
• Greatest challenge STRATEGIC FOCUS
• How do we add value?

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ADB Main Activities Provider of Business
Opportunities

• Two Main Activities
• Lending (Public Private Co-financing)
• Technical Assistance (Grants)
• Provide Business Opportunities For
• Suppliers of Goods and Equipment
• Contractors
• Consultants

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ADB Lending by Country in 2005
Total Lending - 5.80 Billion
Based on 2005 ADB official figures
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ADB Sectoral Lending in 2005
Total Lending - 5.80 Billion
Based on 2005 ADB official figures
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2005 ADB Technical Assistance Grants by Sector
(Includes Regional TA projects)
Total TA Grants US 198.8 Million
Based on 2005 ADB official figures
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US Share of Combined Procurement
Includes consulting and procurement of goods
and services Over-all rank among 64 member
countries
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Summary of Overall Procurement from Donor
Members
01 January 2000-30 September 2005
Donor Members Amount Rank (US
million) United States 1,173.05 1 Japan
923.70 2 Australia 416.54
3 United Kingdom 397.25 4 Germany
392.45 5
Goods and related services and civil works and
consulting services
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US Contribution Vs. Procurement in US
Billions(01 January 1967- 30 September 2005)
Comparison Between U.S. Contribution and
Procurement (including project and sector loans)
Ratio 1.00 1.45
U.S.
Procurement
Contribution
5.689 B
3.933 B
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Procurement Fundamentals...notes from the
experts
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Question Who are the experts?

• Answer The men women that do the work
• Those who write the rules
• Those who enforce the rules
• Those who follow the rules successfully

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Current Trends in Procurement Guidelines

• Concerted effort to STREAMLINE procedures

• More delegated authority to MDB departments
  and borrowers
• Raising International Competitive Bidding
  thresholds
• Harmonization among the MDBs (policies,
  procedures, documents)
• Deemphasis of prequalification shorter bid
  periods advance procurement

• Sanctions vs. bid/performance security
• More flexible procurement in emergency
  lending (tsunami
• earthquake)
• Greater innovation use of new technologies
  (electronic procurement performance-based
  contracting)

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Current Trends in Procurement Guidelines (cont.)

• Good Governance and ANTICORRUPTION
• (high standards transparency)

• Build procurement capacity among MDB member
  countries (training country procurement
  assessment reviews certifications)
• Greater efficiency and lower cost (life
  cycle costs environmentally safe)

• Agreement among MDBs and borrowers on what
  constitutes FRAUD CORRUPTION
• Sunshine Accountability no excuses!

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Warnings from Mr. Procurement in Preparation of
Bids

• Be Compliant!
• Read the bid documents!
• Meet all terms/conditions, even if some appear
  irrelevant
• Dont add conditions of your own

• Get Official Clarification!
• If provisions are unclear or unacceptable,
  contact EA and copy MDB
• Do it before the bid deadline

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Warnings from Mr. Procurement in Preparation of
Bids (cont.)

• Be Aware of Bid Evaluation Criteria!
• Check factors beyond price (warranty, OM costs,
  delivery period)
• Be clear about Alternative Commercial/Technical
  Proposals
• If allowed, submit it in addition to basic
  compliant proposal
• Generally, must win bid before Alternative Bid
  will be considered 
• Be on Time!

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Warnings from Mr. Procurement in Preparation of
Bids (cont.)

• At Public Opening of Bids, ensure that
• All prices are read aloud
• Any discounts are read aloud
• Presence amount of bid security is read aloud
• No envelope remains unopened
• All of the above is correctly and officially
  recorded
• The official record is signed by all bidders
  present and the buyer

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Mr. Procurements observations for Consultants

• Winners pay attention to Banks policy
  papers know what the Bank wants!
• Look to the longer term Country Strategy
  Program provides a good picture of the future
  and what the Bank will need build your team
  to meet the need 

• If invited to submit a proposal, compose the
  team first, then write methodology 
• Dont make blind visits to the Bank plan
  and understand before you market!

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Mr. Procurements observations for Consultants
(cont.)

• Dont be disappointed if not short-listed!
  offer to partner with other short-listed firms
  build up a network and market beyond just the
  MDBsconsider JVs, consortia
• After winning, perform to a high standard
  dont spread yourself too thinly build a
  strong relationship with the Executing Agency
  the ultimate client!

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Tips from those who have connected the dots
successfully

• Its one thing to know what to do. Its another
  thing to do it are you committed?
• In the end its all personal 
• Success or failure of a project lies with
  individuals so the Bank wants to know WHO
  WILL BE DOING THE WORK? 

• The Banks serve DEVELOPING countries there
  will be problems. Can your team overcome
  them? 
• Firms must go beyond electronic expression of
  interest visit the Bank and EA

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Tips from those who have connected the dots
successfully

• TA business is challenging Bank officers want
  more than they need and ask for more than
  theyre paying for balancing commercial goals
  and client deliverables
• MDBs are document-focused meet the
  administrative challenges or you may not get paid

• The QCBS evaluations are squeezing the
  margins DMCs are driving more intense
  competition.
• Over past decade, a shift in MDB project
  execution from hard science to soft sciences
  environmental protection, social displacement,
  gender issues, disease transmission/prevention
  do you need to find partners?

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Tips from those who have connected the dots
successfully

• Local vested interests may be contrary to goals
  of an MDB-funded project can your team
  understand, respond to and help manage
  criticism?
• Stick to your specializationlet the competition
  worry because you are there have a sectoral
  and country strategy bid where you want to be.

• Incorporated locally in a DMC market? That
  entity may bid and employ a majority local team
  that is price competitive.
• Local engineering centers built on the backs
  of projects can be retained for outsourcing
  for other projects in the region to reduce
  costs.

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Good News

• Value in discipline that MDBs bring to projects
  accountability, responsibility, transparency
  MDB rules prevail over domestic
• ADB website is great use it well and often
• ADB is more transparent than the IaDB, the AfDB
  or the World Bank (duck to avoid flying objects)
• ADB seeks value for its borrowers US firms
  know how to deliver it

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Important Contacts
Advocacy Center Liaison Office to the
ADB Name/Email Frank Foster, frank.foster_at_mail.d
oc.gov Cecile Santos, cecile.santos_at_mail.doc.gov
Kathleen dela Merced, kathleen.delamerced_at_mail.
doc.gov Address American Business Center 25th
Floor, Ayala Life - FGU Center 6811 Ayala
Avenue, Makati City 1226, Metro Manila Tel.
(63-2) 887-1345 887-1346 Fax
63-2-887-1164 Websites www.buyusa.gov/adb www.ad
b.org