30 September 2015

World Bank overhauls its procurement processes

More than 5,000 people were consulted over three years to help finalise the World Bank’s new procurement strategy, a gargantuan task considering that the organisation has a budget of over $44 billion being spent in 178 countries. The new strategy, which was approved by the bank’s board in July, marks a complete break from the previous process established in the 1970s.

Whereas the previous procurement strategy was applied across the board in all project countries and focused on lowest cost only, the new strategy requires each project to develop its own strategy within the client country, allowing for rules that take into account factors such as value for money and sustainability. Bank staff will help in the creation of the strategies, which are intended to support the modernisation of public procurement around the world, particularly in developing countries.

Critics of the new plan assert that developing more complex procurement plans will lead to significantly increased costs. The World Bank has countered that the investment in the creation of individual procurement strategies will lead to a higher expense upfront, but will result in more efficient, and so lower cost, procurement in the future.

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