# Presentation: 131014

## “Banking on Development” ConferenceAsian Development Bank

- Presented by:
**Frank Foster**
*Senior Commercial Officer*
*Advocacy Center Liaison Office to the ADB*
*U.S. Department of Commerce*

##   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

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

**History**

## 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 %

**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 %**

## 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?**

## 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**

## ADB Lending by Country in 2005

- Total Lending - $5.80 Billion*

***Based on 2005 ADB official figures**

## ADB Sectoral Lending in 2005

- Total Lending - $5.80 Billion*

***Based on 2005 ADB official figures**

##  2005 ADB Technical Assistance Grants by Sector (Includes Regional TA projects)

- Total TA Grants  US$ 198.8 Million*

***Based on 2005 ADB official figures**

## US Share of Combined Procurement *

***   Includes consulting and procurement of goods and services**
**** Over-all rank among 64 member countries**

|  | 01 October 2004-30 September 2005 |  |
| --- | --- | --- |
| CATEGORY | Amount (US$M) | Rank |
| Consulting Services | $ 43.06 | 3 |
| Procurement | $ 60.64 | 10 |
| Over-all Rank** | $103.70 | 9 |

## Summary of Overall Procurement* from Donor Members

**	****	****	****	****(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**

**Summary of Overall Procurement* from Donor Members**

**01 January 2000-30 September 2005**

***  Goods and related services and civil works and consulting services**

## US Contribution Vs. Procurement in US$ Billions(01 January 1967- 30 September 2005)

**U.S. **

**Contribution**

**$ 3.933 B**

**Procurement**

**$  5.689 B**

**Ratio:  $1.00 : $ 1.45**

**US Contribution Vs. Procurement ****in US$ Billions**(01 January 1967- 30 September 2005)

## Procurement Fundamentals...notes from the experts

## 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**

## 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)

## 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!

## Warnings from Mr. Procurement in Preparation of Bids

**Be Compliant!**
-   Read the bid documents!
-   Meet all terms/conditions, even if some appear 	irrelevant
-   Don’t 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

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

**Be Aware of **Bid Evaluation Criteria**!**
- Check factors beyond price (warranty, O&M 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!**

## 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**

## Mr. Procurement’s 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”
-   “Don’t make blind visits to the Bank” – plan 	and understand before you market!

## Mr. Procurement’s observations for Consultants (cont.)

- “Don’t be disappointed if not short-listed!” – 	offer to partner with other short-listed 	firms; build up a network and market 	beyond just the MDBs;consider JVs, 	consortia
- “After winning, perform to a high standard” – 	don’t spread yourself too thinly; build a 	strong relationship with the Executing 	Agency ... the ultimate client!

## Tips from those who have connected the dots successfully

- “Its one thing to know what to do.  It’s 	another thing to do it” – are you committed?
-  In the end “... it’s 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

## “TA business is challenging ... Bank officers want more than 	they need and ask for more than they’re paying for” – 	balancing commercial goals and client deliverables
MDBs are “document-focused” – meet the administrative 	challenges or you may not get paid

- MDBs are “document-focused” – meet the administrative 	challenges or you may not get paid

**Tips from those who have connected the dots successfully**

-    “The Q+CBS 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?

## “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 specialization—let the competition worry 	because you are there” – have a sectoral and 	country strategy ... bid where you want to be.

- “Stick to your specialization—let the competition worry 	because you are there” – have a sectoral and 	country strategy ... bid where you want to be.

**Tips from those who have connected the dots successfully**

-    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”.

## 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

## Important Contacts

**Name/Email:****	****Frank Foster, **_[frank.foster@mail.doc.gov](mailto:frank.foster@mail.doc.gov)_** **
**	****Cecile Santos, **_[cecile.santos@mail.doc.gov](mailto:cecile.santos@mail.doc.gov)_** **
**	****Kathleen dela Merced, **_[kathleen.delamerced@mail.doc.](mailto:kathleen.delamerced@mail.doc.gov)__[gov](mailto:kathleen.delamerced@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/](http://www.buyusa.gov/adb)__[adb](http://www.buyusa.gov/adb)_**	**_[www.adb.org](http://www.adb.org/)_

**Important Contacts**