1 88948 Europe and Central Asia Region Procurement Post Review Supervision Mission Report Post Review Conducted By Kashmira Daruwalla Sr. Proc. Specialist June 2, 2014 2 Procurement Post Review Supervision Mission Report Country: Kosovo Loan/Credit/TF No.: IDA-5005-0XK Project Name*: Agriculture and Rural Development (KARP) Project ID: P112526 Name of Implementing Agency: Ministry of Agriculture Forestry and Rural Development (MAFRD) TTL: Meeta Sehgal PS/PAS: Kashmira Daruwalla Post Review Conducted by*: Kashmira Daruwalla Date*: June 2, 2014 Date of Last Post Review: April 2, 2013 Number of Contracts Issued 4 since Last Post-Review*: Number of Contracts Reviewed*: 4 Total Value of Contracts Reviewed: Euro 68,896.00 (*… Information required together with Annex 1 when filing the PPR report in Operations Portal) 1. Executive Summary As part of the fiduciary responsibility of the World Bank, post-review was conducted in June 2014. The project became effective on May 3, 2012. The overall project risk for procurement was rated “high�. According to the PAD at least 20 percent of contracts are to be post- reviewed. Since project effectiveness, forty four contracts subject to post review have been signed. During this review period all 4 contracts signed were reviewed. The objective of the review was to verify the procurement and contracting procedures and processes followed by the project, and identify noncompliance with the agreed provisions of the legal agreement and applicable Guidelines, as well as to identify mitigating measures or remedies to correct procurement deficiencies and recommend them to the Borrower and its executing agency. The contracts under the post-review were found in full compliance with the procedures agreed with the Bank. The following positive observations were made: (i) filing well done and include all the documents duly signed; (ii) adequate competition ensured for the applicable procurement/selection method; (iii) most of the payments are made in a timely manner. 3 2. Discussion on the Selection of the Contract Samples to be Reviewed and List of Contracts Reviewed The following 4 contracts were reviewed: Shopping (Goods) – 2 contracts (Euro 3,705.00 and Euro 39,611.00) Individual Consultant – 1 contract (Euro 5,600) Firm (CQS) – 1contract (Euro 19,980.00) 3. Findings on the Review of Procurement Processes The contracts were found in full compliance with the procedures agreed with the Bank: (i) contracts were awarded to the lowest evaluated substantially responsive bidders; (ii) sufficient competition was ensured; (iii) all companies which submitted bids were informed about the outcome of the evaluation process. However, evaluation report for contract KARP-CS-14.1 was not in file only Minutes of negotiations was prepared. 4. Findings on the Review of Contract Administration Generally the payments are made timely, but some delays occur at MAFRD Finance Office who takes a while to process, especially for contract KARP-G-6.1. No delays in contract implementation have been registered. 5. Indication of Possible Governance Issues No fraud and corruption issues were identified. 6. Progress of Implementation of Recommendations in the Last Post Review The Bank noted an improvement in timely payments to the suppliers. The estimated costs were realistic and the contract amounts were close to the estimates. Adequate storage space was in place and contracts were signed by both parties before work was started. 4 7. Compliance& Performance Risk Rating and Recommendations (Required for online filing, risk rating of compliance & performance, and recommendations in the Post Review system in Operations Portal) Definitions of Post Review Compliance/Performance Risk Ratings: Borrower procurement processes, and/or contract administration are of highest quality, Low Compliance/ reliability, timeliness, and transparency, and required little or no corrective action Performance Risk needed by the Bank Borrower procurement processes, and/or contract administration are of generally good Moderate Compliance/ quality, reliability, timeliness, and transparency with minor corrective actions needed Performance Risk by the Bank Moderate shortcomings in Borrower procurement processes, and/or contract Substantial Compliance/ administration have limited or jeopardized the timely or efficient achievement of one Performance Risk or more major outputs, but resolution(s) is/are likely Significant shortcomings in Borrower procurement processes, and/or contract High Compliance/ administration have limited or jeopardized the timely or efficient achievement of one Performance Risk or more major outputs, and resolution is uncertain or unlikely Compliance1Risk  Low Moderate Substantial High Rating of (Indicators to consider: Procurement o Procurement Planning: Assessment of quality of, and adherence to, the Processes: procurement plan, including changes/updates if applicable o Publications: Assessment of quality of, and adherence to, advertising and contract award publication requirements for applicable contracts o Bidding: Assessment of quality of, and adherence to, requirements for bidding documents, including RFP's, LOI's, short lists, terms of reference, and other applicable documents o Evaluation: Assessment of quality of, and adherence to, bid evaluation requirements/criteria, including draft contracts, technical and financial evaluation reports, and bid amendments, if applicable o Awards: Assessment of quality of, and adherence to, contract award requirements, including amendments, variation orders, and extensions) Recommendations: Complete Bid Evaluation Reports even when hiring Individual Consultants must be prepared and available in the procurement folders for each contract. Performance2Risk Low Moderate Substantial High Rating of Contract (Indicators to consider: Administration: o Implementation: Assessment of quality of, and adherence to, contract implementation criteria, including results of physical inspections o Payments: Assessment of adherence to contract payment schedules, including timeliness of payments to contractors o Compliance: Assessment of adherence to all contractual compliance with agreed provisions; adherence to all related anti-corruption practices) 1 Compliance in accordance with the Legal Agreement, Procurement Guidelines and other agreed provisions 2 Performance of executing agency in implementing the contract 5 o Record-keeping: Availability, quality, security and completeness of contract records and files Recommendations: PIU to inform MAFRD finance department to process the invoices in a timely manner. 6 Proposed Revised Prior Review Thresholds Category Prior Review Thresholds in US$ (to be completed by PS/PAS if so required and updated in the Procurement Plan) Works - ICB ˃ US$ 1,000,000 (All Contracts) NCB ≤US$1,000,000 (First two contracts) Goods - ICB ˃ US$ 200,000 (All Contracts) NCB ≤US$200,000 (First two contracts) Consulting firms ˃ US$ 100,000 (All) (QCBS) Consulting firms (CQ)