68156 AFGHANISTAN COUNTRY PROCUREMENT ASSESSMENT: CONSULTING SERVICES June 2007 Procurement Services Unit South Asia Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. ABA Afghan Builders Association MoEW Ministry of Energy and Water ADB Asian Development Bank MoF Ministry of Finance AICC Afghanistan International Chamber of MoFA Ministry of Foreign Affairs Commerce MoLSA Ministry of Labor and Social Affairs AISA Afghanistan Investment Support MQS Minimum Qualifying Score Agency NGO Non-Governmental Organization ARDS Afghanistan Reconstruction and NO No Objection Development Services NSP National Solidarity Program ARDS PU Afghanistan Reconstruction and Development Services Procurement ODA Official Development Assistance Unit PA Public Administration ARTF Afghanistan Reconstruction Trust Fund PACBP Public Administration Capacity ASCE American Society of Civil Engineers Building Project Bank The World Bank PC Procurement Consultant CEU Contract Evaluation Unit PDT Peace Dividend Trust (NGO) CMO Contract Management Office PLO Procurement Liaison Officer CPIA Country Policy and Institutional PMU Project Management Unit Performance Assessment PPL Public Procurement Law CQS Selection Based on the Consultants’ PPU Procurement Policy Unit (within the Qualification MoF) CSC Civil Service Commission PR Rules of Procedure for Public DFID UK Department for International Procurement in Afghanistan Development PRR Priority Reform & Restructuring EC Evaluation Committee Framework EoI Expression of Interest PRP Procurement Reform Program EPAP Emergency Public Administration PU Procurement Unit (within ARDS) Project I and II (World Bank) QBS Quality-Based Selection FBS Fixed Budget Selection QCBS Quality- and Cost-Based Selection FTP Full Technical Proposal RFP Request for Proposals GDP Gross Domestic Product SPC Special Procurement Commission GoA Government of Afghanistan SRFP Standard Request for Proposal GTZ Gesellschaft fuer Technische SSS Single-Source Selection Zusammenarbeit (German Development STP Simplified Technical Proposal Agency) ToR Terms of Reference IDA International Development Association TSU Technical Support Unit IRS Internationally Recruited Staff TTL Bank Task Team Leader LCS Least Cost Selection UNDP UN Development Programme LICUS Low-Income Countries Under Stress Guidelines 2004 Bank Guidelines on the Selection LM Line Ministry and Employment of Consultants by LRS Locally Recruited Staff World Bank Borrowers MoE Ministry of Economy Vice President : Praful C. Patel Country Director : Alastair J. Mckechnie Sector Director : Barbara Kafka Sector Manager : Els Hinderdael-Forger Task Team Leader : Shawkat M.Quamrul Hasan PREFACE ...................................................................................................................................................................II EXECUTIVE SUMMARY ...................................................................................................................................... III INTRODUCTION .......................................................................................................................................................1 COUNTRY ECONOMIC BACKGROUND ........................................................................................................................1 PUBLIC AND PRIVATE SECTOR DEVELOPMENT ..........................................................................................................1 SECURITY SITUATION ................................................................................................................................................1 CONSULTING SERVICES IN AFGHANISTAN .................................................................................................................2 PAST DEVELOPMENTS AND TA IN THE AREA OF PUBLIC PROCUREMENT ..................................................................2 OBJECTIVES AND EXECUTION OF ASSESSMENT .........................................................................................................3 FINDINGS & RECOMMENDATIONS ....................................................................................................................4 BANK POLICY ON SELECTION OF CONSULTANTS .......................................................................................................4 The Bank’s Response to Crises, Emergencies and Fragile States .......................................................................4 Weighing QBS against QCBS ..............................................................................................................................5 GOA POLICY ON CONSULTANTS ................................................................................................................................5 LEGAL AND REGULATORY PROCUREMENT FRAMEWORK ..........................................................................................6 The New Public Procurement Law ......................................................................................................................6 Rules of Procedure for Public Procurement ........................................................................................................6 Recommendations to Improve the Legal and Regulatory Framework .................................................................8 AFGHAN INSTITUTIONAL FRAMEWORK & ORGANIZATION OF PROCUREMENT ..........................................................8 ARDS Procurement Unit ......................................................................................................................................8 Line Ministries .....................................................................................................................................................9 Procurement Policy Unit ................................................................................................................................... 10 Special Procurement Commission ..................................................................................................................... 10 Contract Management Office ............................................................................................................................. 10 Appeal and Complaint Mechanisms ................................................................................................................... 11 Professional Consulting Associations ................................................................................................................ 11 Recommendations to Improve the Institutional Framework .............................................................................. 11 AFGHAN PROCUREMENT PROCEDURES AND PRACTICES .......................................................................................... 11 Available Procurement Manuals or Guidelines ................................................................................................. 11 Availability of Standard Request for Proposals ................................................................................................. 11 Recommendations to Improve Procedures & Practices ..................................................................................... 11 BANK PROCUREMENT CAPACITY ............................................................................................................................. 11 PA PROCUREMENT CAPACITY ................................................................................................................................. 12 Procurement Capacity of PC within ARDS........................................................................................................ 12 Previous and Ongoing Capacity Building and Training .................................................................................... 12 Capacity within Line Ministries - Key Constraints and Challenges .................................................................. 13 Procurement Capacity in Provinces and Districts ............................................................................................. 13 CAPACITY-BUILDING APPROACH BY PACBP AND PRP .......................................................................................... 13 RISKS WITHIN CAPACITY-BUILDING APPROACH BY PACBP AND PRP .................................................................... 14 Efficient Selection of Consultants ...................................................................................................................... 14 Development of National Consultants................................................................................................................ 14 Capacity Building of the PA ............................................................................................................................... 15 Recommendations .............................................................................................................................................. 15 CORRUPTION AND INTEGRITY IN PROCUREMENT OF CONSULTANTS ........................................................................ 16 Steps to be taken by Government ....................................................................................................................... 17 Steps to be taken by the Donor Community ....................................................................................................... 17 PUBLIC SECTOR DEMAND FOR CONSULTING SERVICES ........................................................................................... 17 Domestically Funded Demand ........................................................................................................................... 17 Consulting Services Funded by the Bank ........................................................................................................... 18 INTERNATIONAL SUPPLY OF CONSULTING SERVICES .............................................................................................. 19 International Participation ................................................................................................................................ 19 Performance on Consulting Service Contracts .................................................................................................. 20 Remuneration Levels .......................................................................................................................................... 20 Recommendations .............................................................................................................................................. 20 DOMESTIC SUPPLY OF CONSULTING SERVICES ........................................................................................................ 21 The Local Consulting Sector .............................................................................................................................. 21 Main Areas of Expertise ..................................................................................................................................... 21 Performance on Public Contracts and Remuneration Levels ............................................................................ 22 Capacity Assessment of Afghan Consultancies .................................................................................................. 22 Developing Capacity of the Domestic Consulting Sector .................................................................................. 23 Overcoming the Information Gap on Consultants ............................................................................................. 24 Recommendations .............................................................................................................................................. 24 RISK ASSESSMENT ................................................................................................................................................... 25 ANNEX 1: LIST OF PERSONS MET ............................................................................................................................ 26 ANNEX 2: DETAILS OF GOA-FUNDED CONSULTING CONTRACTS SINCE DECEMBER 2004 ....................................... 29 ANNEX 3: BANK-FUNDED CONSULTING ASSIGNMENTS, 2003-2006 ........................................................................ 30 ANNEX 4: ASSESSMENT OF 10 BANK-FUNDED CONSULTING ASSIGNMENTS ON EOI & SUBMISSION RATES ............ 36 ANNEX 5: ASSESSMENT OF 12 BANK-FUNDED CONSULTING ASSIGNMENTS ON BILLING RATES ............................. 37 PREFACE This report was prepared by Martin Ehrenberg (Consultant, SARPS), who visited Kabul, Afghanistan from November 21 to December 3, 2006. It builds on the findings and recommendations arising from the 2005 World Bank assessment, Public Procurement for Development Effectiveness, prepared by Quamrul Hasan (SARPS) and Peter Trepte (Consultant SARPS), part of a larger Bank review of public finance in Afghanistan.1 During the mission, meetings were held with government agencies’ staff, international consultancies currently implementing donor-financed projects in Afghanistan, academic institutions, private sector firms (in particular Afghan consultancies), non-governmental organizations (NGOs), associations, and with the resident missions of the European Commission, GTZ, ADB, and DFID. The assessment involved extensive interactions with Government agencies, whose valuable cooperation was indispensable and also greatly beneficial. Deepal Fernando, Senior Procurement Specialist, and Nargis Hakimy, Program Assistant (Procurement) in the Bank’s Country Office, provided very valuable support, advice and background information. Mariam Sherman, Acting Country Manager in Afghanistan, offered advice and guidance in the country throughout the mission. The list of persons met may be found in Annex 1. This work was carried out with guidance and supervision from Gian Casartelli (OPCPR), who extensively reviewed the report and provided many recommendations, and Quamrul Hasan (SARPS). Overall leadership was provided by Els Hinderdael (Regional Procurement Manager, SARPS). Ludmilla Butenko (SAC01), Nancy Zhao (SAROQ), Paul Sisk (SARFM), Devesh Mishra (ECSPS), Joel A. Turkewitz (SARPS), and Nagaraju Duthaluri (SARPS) reviewed the report and provided insightful comments. 1 “Afghanistan – Managing Public Finances for Development�, Volume II: Improving Public Financial Management and Procurement, December 22, 2005, World Bank Report No. 34582-AF. AFGHANISTAN COUNTRY PROCUREMENT ASSESSMENT: CONSULTING SERVICES EXECUTIVE SUMMARY 1. Afghanistan is striving to emerge from a prolonged period of military occupation, wars and the Taliban rule. The country’s security situation remains critical, especially outside of Kabul, yet the economy is stable and continues to grow. In the reconstruction process the country is receiving extensive donor support. 2. Taking into consideration the World Bank’s country assistance strategy, this report examines whether Afghanistan’s Public Administration (PA) has access to the services it needs from international and national consultants under Bank and Afghan procurement rules. Both, the Bank’s selection procedures and the Government’s (GoA) policy, laws, rules of procedure, and practices are examined to determine whether they (1) lead to efficient consulting contract awards and (2) support the development of local consulting firms. The demand and supply of international and domestic consulting services are assessed. In addition, this assessment identifies the key constraints that hamper the evolution of the domestic consulting sector. 3. Suggestions are provided on what the GoA and the Bank could do to create an environment suitable for (1) qualified international consultants; and (2) the development of sustainable local consulting capacity necessary to help Afghanistan to implement its reform programs. SUMMARY OF MAIN FINDINGS 4. Apart from the security situation, the capacity to enforce legislative reforms and the effectiveness of the PA remain critical at all levels of government and also affect the selection and use of consulting services. The key challenges to an efficient selection of consultants are: 5. Limited access to qualified consultants: Based on an assessment of Bank-funded assignments from the years 2005 – 2007 the average number of proposals submitted per assignment by international consultants is only about 2.5, of which just 2.1 are awarded a score above the Minimum Qualifying Score (MQS). According to interviews conducted by the mission, international consultants do not have sufficient incentives for seeking assignments in the country. Many firms refrain from participating due to security concerns for their personnel. Lack of trust in the capacity of the PA also discourages their participation. The entry costs required to set up and conduct business in Afghanistan are very high. At present, those firms willing to work in Afghanistan are reluctant to send qualified and experienced staff to Afghanistan. As a consequence, the quality of the services obtained is often questionable. 6. A local consulting sector barely exists yet. Only a few local firms have evolved over the past five years. Their main constraints are lack of qualifications and experience and limited familiarity with procurement processes. As a result domestic firms, if they participate at all, frequently fail to meet qualification criteria set by the Bank or the GoA. Lack of trust in the fairness and the transparency of procurement handled by the PA also discourages their participation. Afghanistan CPA: Consulting Services Executive Summary page iv 7. Weak procurement capacity: Procurement staff has limited familiarity with basic principles of procurement and with the stages of the procurement process. In particular, the executing agencies have difficulty in (1) drafting ToR; (2) organizing and conducting evaluations; and (3) evaluating the quality of Expressions of Interest (EoIs) and proposals. Once the consulting firms are selected, supervision and management of the consultants are weak. 8. Weak English and IT skills: The low level or absence of English and IT skills is hindering capacity-building efforts. International and national procurement personnel are facing serious problems in interacting with local staff. The work of local translators sometimes creates confusion instead of facilitating communication. 9. GoA legal and regulatory framework: While the new Public Procurement Law (PPL) adopted in October 2005 has considerably improved the legal basis of public procurement, it lacks (1) the necessary foundation of a clearly stated policy on consultants; and (2) a chapter devoted solely to consultants’ selection. In addition, the Procurement Policy Unit drafted Rules of Procedure for Public Procurement in Afghanistan which became effective on April 12, 2007. While these procurement rules provide sound guidance through the process of consultants’ selection and contain appropriate provisions on enforcing transparency, fair competition and the administrative review of procurement proceedings, they still have several shortcomings concerning the procurement of consultants. For example, the rules lack (1) simplified procedures such as the use of Simplified Technical Proposals (STP); (2) provisions on the continuation of assignments subject to satisfactory performance of the incumbent; and (3) necessary details on the selection process such as the weight allocated to price under Quality- And Cost-Based Selection (QCBS) or indicative weights for evaluation criteria. In addition, their complex structure will make it difficult for PA staff to understand and apply the rules of procedure on procurement. Supporting documents such as the Standard RFP and procurement manuals are not yet available. THE BANK’S CURRENT STRATEGY 10. The ongoing four-year Bank-funded Public Administration Capacity Building Project (PACBP) that started in 2005 is addressing these key challenges through three main procurement subcomponents:  Subcomponent 1: Technical Assistance on procurement facilitation;  Subcomponent 2: Capacity building of Borrower’s procurement staff; and  Subcomponent 3: Legal and institutional framework development. Under subcomponent 1 the Afghan PA currently draws on advisory services of an international Procurement Consultant (PC) to facilitate and assist international and domestic procurement processes. Further support for capacity building (subcomponent 2) and for the completion of the legal and regulatory framework for procurement (subcomponent 3) is included in the Bank- funded Procurement Reform Program: Procurement Capacity Building and Legal & Institutional Framework Development (PRP) that started on 17 March 2007. KEY RISKS 11. This report finds three risks that might affect the strategy defined by PACBP and its related PRP, in the areas of consultant selection, development of national consultants, and capacity building for the PA. Afghanistan CPA: Consulting Services Executive Summary page v Efficient Selection of Consultants 12. Since it is a priority for reconstruction that the Afghan PA be reestablished, the Bank projects focus on building basic procurement capacity. The PACBP provides training to a limited number of key staff while the PRP includes a broad program for hundreds of trainees from all levels of government. However, due to PACBP’s limited outreach and PRP’s broad focus, training will only concentrate on basic subjects. In particular, PA staff will not receive training on consultant selection tasks, such as preparing ToR and assessing the quality of proposals. While specialized capacity building may be too much to expect at this stage, many parties interviewed expressed concerns about the credibility of the selection process given current deficiencies in the performance of these tasks. The same PA officials who have trouble drafting ToR then later are responsible for evaluating the proposals. Given this critical gap and the reluctance of consultants to seek assignments in Afghanistan, it is reasonable to conclude that the PA needs further support in evaluating proposals. Development of National Consultants 13. The PRP includes basic training courses for local firms which will focus on (1) creating awareness about the new Public Procurement Law; and (2) procurement procedures for goods, works and consulting services. However, the following issues also need to be addressed: (1) The GoA and Bank’s procurement procedures do not sufficiently take into account the technical and administrative weakness of the PA and the local consulting firms and apply complex standard procurement methods where simplified ones are needed. (2) Neither PA nor donors have adequate information on locally available expertise and are facing difficulty identifying the few available local resources. Capacity Building of the PA 14. While the PRP provides for a comprehensive capacity-building approach, its effectiveness may face serious challenges since interaction between international and national procurement staff is hindered by language barriers, unfamiliarity of nationals with IT systems and the lack of qualified translators. In addition, the training program could be compromised by the small number of local staff trainable in the complex procurement processes required by Bank or GoA regulations. Experienced PA staff is often poached by donor agencies and NGOs and the lack of qualified counterpart personnel in the Afghan PA often renders on the job training impossible. When counterpart staff is available low motivation due to low pay and limited opportunity for merit based promotion undermine the knowledge transfer. SUMMARY OF MAIN RECOMMENDATIONS Key Recommendations to the Government of Afghanistan R1: The GoA may consider developing a comprehensive policy paper on professional and expert consultants to meet the specific needs of the PA and to encourage the creation of local consulting firms. The 2005 Public Procurement Law only reflects basic policy principles for selection of consultants while the new ‘Rules of Procedures’ provide the principles and procedures of consulting services in details. The GoA should explore the possibility of improving the pertinent rules of procedures depending on the changes in the country circumstances. Once ministries have clearly defined their mandates and their respective functions, a review of the range of services that local consulting firms could provide to the PA Afghanistan CPA: Consulting Services Executive Summary page vi should be performed to decide which functions could be outsourced to local consultants. Drawing on experience with present Bank-funded public administration reform programs and its recommendations on HR planning and management, the policy should also address capacity building of PA staff through training and incentives. R2: The GoA should consider reviewing the procurement rules of procedure’s provisions on consultants’ selection in light of the special situation in Afghanistan. Since both the PA and local consulting sector are weak, the use of Simplified Technical Proposals (STP) should be considered for routine assignments designed to attract local attention. The regulation should also provide for the continuation of assignments subject to satisfactory performance and necessary details on the selection process such as the weight allocated to price under Quality- And Cost- Based Selection (QCBS) or indicative weights for evaluation criteria. The consultants implementing the PRP could provide advice on the revision of the procurement rules of procedure. R3: The PA is still a long way away from being able to efficiently select consultants. The GoA (with support from the Bank) should therefore consider assigning reputable consulting firms with strong procurement expertise in the field of the specific projects to the task of conducting proposal evaluations under major Bank-funded projects in close cooperation with the PA. The same consultants could also be entrusted with the quality and administrative control of the contracts and with building capacity. In particular, Bank-funded projects that cannot rely on the support of internationally staffed Project Management Units (PMUs) or Technical Support Units (TSUs) should benefit from this approach. For smaller Bank-funded projects, specialized individual consultants should be assigned to Evaluation Committees. R4: Since Afghan consultancies can best develop their capacity through associations with international firms, the Requests for Proposals (RFP) and the Terms of Reference (ToR) for internationally competed assignments funded by the GoA should clearly identify, whenever possible and feasible, those components that can be executed by local consultants. In case no competent Afghan consultancies exist, the tender documents should clearly require from international firms to transfer skills and know-how to local individual advisors. Once these individual consultants were involved in internationally executed projects and developed their capacity under the supervision of experienced international consultants, they would be in a position to establish their own consulting companies. R5: Since international consultants and PA staff are having difficulty interacting effectively, the GoA (with Bank support) may consider conducting a study on local translator training centers and implementing a training program for translators. It is also recommended to raise the level of English and IT skills of national procurement staff. Therefore, the GoA may consider developing and implementing training modules for procurement staff in the area of English, IT and computer skills. Key Recommendations to the Bank R6: For Bank-funded projects that are too small to justify the use of international consulting firms as under Recommendation 3 (R3), the Bank should encourage Bank staff to more actively support the weakest counterpart agencies. Bank specialists in the required areas should extensively review and also provide input to draft ToR regarding objectives, components, activities, milestones, and evaluation indicators. Common weaknesses in TA projects such as the fragmentation into small assignments of short duration, inadequate monitoring or the disregard Afghanistan CPA: Consulting Services Executive Summary page vii of local circumstances should be avoided by better procurement planning, and effective supervision. R7: Since continuity is essential for successful capacity building, but international participation is low and entry costs for international firms are very high in Afghanistan, the Bank should consider including a provision for continuation of work by the same consultant under Single-Source Selection (SSS) in the initial RFPs whenever justified by the characteristics and the circumstances of the projects. R8: Mirroring Recommendation 4 to the GoA (R4), the Bank should (1) provide incentives for local participation by encouraging international and local firms to form partnerships and associations whenever feasible; and (2) require from international firms to transfer skills and know-how to local individual advisors. R9: When drafting ToR, the security situation should be taken into account. Especially when the services are not related to capacity-building activities that need to take place locally, the ToR should provide for international consultants to perform services from outside the country to the greatest extent possible. R10: For consultants’ selections under Bank rules and conducted by the PA, the following precautions are recommended: (1) Quality-Based Selection (QBS) and Fixed Budget Selection (FBS) should be applied to standard assignments; (2) QCBS should only apply when clearly justified by the nature of the ToR; and (3) Simplified Technical Proposals (STPs) should be used as much as possible. Information on local consulting firms already made available by other stakeholders such as the NGO Peace Dividend Trust should be disseminated to the Bank’s staff and TTLs. Whenever possible and feasible local firms should be considered for small assignments generally procured under SSS. R11: To facilitate the preparation of projects and procurement plans, the Bank should consider requesting the Procurement Consultant to improve the quality of its monthly progress report by including data on the participation of international and national consulting firms such as (1) average number of EoI, size of shortlists, proposals submitted; (2) countries of origin of short- listed, responsive and winning firms and their categories (NGOs, consultancies, government agencies, etc.); (3) average billing rates; (4) number and nature of assignments for which the ToR require the participation of national firms; (5) nature of assignments limited to national participation; and (6) number and nature of assignments in which local firms are associated with international firms. Alternatively, the Procurement Consultant could be requested to prepare an annual report focusing on the points described above and complementing the monthly progress reports. R12: Finally, the Bank could also consider cooperating with two stakeholders already providing support and training to local consulting firms. The Bank’s PRP could (1) draw on the experience of the NGO Peace Dividend Trust on training courses in procurement for local companies; and (2) collaborate with the Engineering Capacity Building Project for local consulting engineering companies implemented by the American Society of Civil Engineers (ASCE). AFGHANISTAN COUNTRY PROCUREMENT ASSESSMENT: CONSULTING SERVICES Introduction Country Economic Background 1. Afghanistan is striving to emerge from a prolonged period of military occupation, wars and the Taliban rule and remains one of the world’s poorest countries with an estimated per capita GDP of only US$355 in 2006/07.2 The country’s security situation remains critical, especially outside of Kabul, yet in recent years the economy has continued to grow in this volatile political, economic and security environment. Real GDP for 2006/07 is estimated at US$8.88 billion and projected to grow by 11% in 2007/08 (excluding opium production). The macroeconomic environment has been stable and inflation returned to a moderate level in 2005/06 (approx. 5%). Public and Private Sector Development 2. Starting in 2002, the GoA has introduced a number of structural reforms. A new Income Tax Law, a revised Customs Code, a modern Public Finance and Expenditure Management Law, a strengthened Procurement Law, Rules of Procedure for Public Procurement, a new Civil Service Law, and a revised Law on Foreign and Domestic Investment are in place. Fiduciary standards have been strengthened and administrative reforms have been undertaken. The GoA is committed to fiscal discipline but fiscal sustainability remains a challenge. In 2004/05, total public expenditures amounted to US$3.4 billion, of which only US$0.9 billion was implemented by the GoA. Revenue mobilization remains low at 5.5 percent of GDP in 2005/06, one of the lowest ratios in the world, and domestic revenues cover only half of total operating expenditures in the Government’s core budget. Almost all public sector consulting services contracts are externally funded. Continued progress in reform of Afghanistan’s Public Administration (PA) and the rule of law are critical for progress, but PA capacity is still very limited. 3. Achievements in private sector development include the establishment of the Afghanistan Investment Support Agency (AISA) as a one-stop shop to register firms,3 approval of a Banking law, licensing of more than a dozen commercial banks, and creation of an Industrial Park Authority. Security Situation 4. Apart from challenges of education, health, and infrastructure, the lack of security is the main obstacle to Afghanistan's reconstruction program. The country has not yet fully emerged from its state of conflict and the security situation in the country has deteriorated since April 2004. Even major NGOs are reluctant to send their national staff to the provinces where conflict is ongoing. International experts avoid travel within the country, and when they do, they either keep a low profile or hire extensive and costly security support. As a result, studies and reports 2 See Bank document “Interim Strategy Note Islamic Republic of Afghanistan for the Period FY07-FY08� (February 2007), p. 6, Table 1: Macroeconomic Indicators. 3 Afghanistan is ranked 17 out of 175 countries for ease in starting a business according to the Bank’s Doing Business Report 2007. Afghanistan CPA: Consulting Services Main Report page 2 of 37 are frequently based on old data since visiting missions in dangerous provinces are rarely feasible. Compared to the provinces where the conflict is ongoing the security situation in Kabul is relatively stable. However, attacks on international staff, threat warnings, and seizure of explosives are common. Risks related to security lead to a low level of interest from potential bidders, higher costs and/or delays in assignment execution. The security situation is not likely to change in the medium term and will limit operational activities while requiring substantial security expenses. Consulting Services in Afghanistan 5. Traditionally, most technical departments of the PA covered in-house their limited needs for planning, research, studies, designs, and supervision services. However, nearly 30 years of unrest reduced Afghanistan to political and economic ruin. The process of political reconstruction following the end of the Taliban regime in 2001 has had barely any significant impact on the creation of a domestic consulting service sector as yet. 6. One of the most dramatic consequences of decades of turmoil was the loss of knowledge capital as the majority of skilled labor left the country. Young and qualified professionals, mainly educated in Pakistan, prefer to pursue careers outside Afghanistan. The risky operating environment in Afghanistan is also reducing the incentive for qualified foreign consultants to undertake assignments in the country. 7. While extensive donor support could encourage local consultancies to emerge, the exodus of local capacity is still seriously hampering their development. The lack of basic professional management, English language and IT skills prevents domestic firms from emerging and participating in development projects. At present the local consultancy market is very small. The domestic supply of consulting services is discussed in detail below (paras. 69 ff). Past Developments and TA in the Area of Public Procurement 8. Steps to improve the Afghan procurement environment were initiated under the First and Second Emergency Public Administration Projects (EPAP I and II) funded by the Bank starting in 2002. Under the Procurement Strengthening Component of the EPAP I, the Government appointed a consulting firm as the PA’s central Procurement Consultant (PC) responsible for handling procurement operations under IDA and other donor-funded aid within the Procurement Unit (PU) of the Afghanistan Reconstruction and Development Services (ARDS).4 The purpose was to put in place emergency procurement capacity and to facilitate rapid and transparent utilization of donor resources for reconstruction. 9. A progress review conducted in January 2004 identified key constraints in achieving EPAP I and EPAP II’s objectives and recommended further actions to be addressed by the Bank- funded Public Administration Capacity Building Project (PACBP), being implemented May 2005 – June 2009. Additional consulting services to be provided under the procurement component of PACBP were approved in 2004 and can be grouped into three main categories:  Procurement services (subcomponent 1);  Technical assistance on capacity building (subcomponent 2); and  Legal and regulatory framework development (subcomponent 3). 4 The PC provided procurement services to the Afghan Assistance Coordination Authority (AACA) until the AACA was dissolved in September 2003 and the AACA unit responsible for procurement was renamed ARDS. Afghanistan CPA: Consulting Services Main Report page 3 of 37 The procurement support services (subcomponent 1) are provided by the PC (currently RITES Ltd. from India) within ARDS.5 This assignment includes capacity building of local procurement counterpart staff to be trained as Procurement Liaison Officers (PLOs). 10. Based on recommendations of the 2005 Bank assessment, Public Procurement for Development Effectiveness,6 the following tasks were accomplished:  A Procurement Policy Unit (PPU) within the Ministry of Finance (MoF) was established in August 2006; and  Rules of Procedure for Public Procurement to implement the new Public Procurement Law (PPL) were prepared by the PPU and became effective on April 12, 2007. 11. The international consulting firm responsible for implementing the most recent relevant assignment, the Procurement Reform Program: Procurement Capacity Building and Legal & Institutional Framework Development (PRP), commenced work on March 17, 2007.7 The objectives of this assignment cover the subcomponents 2 (capacity building) and 3 (legal and regulatory framework development) of PACBP and are:  To develop local procurement capacity within Line Ministries (LMs) and to enable them to progressively carry out procurement;  To train the PA and as far as practicable the private sector in procurement procedures and practices under the new Public Procurement Law (PPL); and  To develop procedures under the national law and to provide further support to the PPU. Objectives and Execution of Assessment 12. Taking into consideration the Bank’s country assistance strategy, this report examines whether Afghanistan’s PA has access to the services it needs from international and national consultants under Bank and Afghan procurement regulations. It is based on a mission that visited Afghanistan from November 21 to December 3, 2006; due to the security situation in Afghanistan and travel restrictions, the mission was limited to Kabul. The mission met with government agencies’ staff, international consultancies currently implementing donor-financed projects in Afghanistan, academic institutions, the private sector firms (in particular Afghan consultancies), non-governmental organizations (NGOs), associations, and with the resident missions of the European Commission, GTZ, ADB, and DFID (the list of persons met is attached to the report as Annex 1). 13. The report investigates both the capacity and competence of the purchaser (PA) and also the ability of suppliers (consulting firms) to provide the required services. The Bank’s selection procedures and the Government’s (GoA) policy, laws, rules of procedure, and practices are 5 Crown Agents from UK performed the role of the Procurement Consultant (PC) from August 2002 until August 2004. The consulting service contract with their successor RITES from India was signed in September 2004. 6 Part II (p. 52 – 79, prepared by Quamrul Hasan, SARPS, and Peter Trepte, Consultant) of Volume II: “Improving Public Financial Management and Procurement�, World Bank Report No. 34582-AF: “Afghanistan – Managing Public Finances for Development (In Five Volumes)�, December 22, 2005. 7 Charles Kendell & Partners Ltd./UK in association with the International Development Law Organization/Italy (IDLO) and the Chartered Institute of Purchasing and Supply/UK (CIPS). Afghanistan CPA: Consulting Services Main Report page 4 of 37 examined to determine whether they (1) lead to efficient consulting contract awards8 and (2) support the development of local consulting firms. The demand and the supply of international and domestic consulting services are assessed. In addition, this assessment identifies the risks concerning the current Bank capacity-building strategy and the key constraints that hamper the evolution of the domestic consulting sector. 14. Suggestions are provided on what the GoA and the Bank could do to create an environment suitable for (1) qualified international consultants and (2) the development of sustainable local consulting capacity necessary to help Afghanistan to implement its reform programs. Findings & Recommendations Bank Policy on Selection of Consultants The Bank’s Response to Crises, Emergencies and Fragile States 15. Bank Task Team Leaders (TTLs) interviewed for this report stressed the need to flexibly apply the 2004 Bank Guidelines on Selection and Employment of Consultants in Afghanistan due to the weak national institutions and the high risk of conflict. However, neither the Bank’s approach to Low-Income Countries Under Stress (LICUS), of which Afghanistan is a severe case, nor its response to crises or emergencies allow for disregarding the Guidelines. The Bank’s approach to LICUS only suggests outsourcing procurement functions in post-conflict environments.9 The Bank’s rapid response to crises and emergencies is designed to facilitate the Bank’s rapid response to emergencies and is limited to the immediate aftermath until regular procurement procedures can be used without comprising the timely delivery of assistance.10 16. Nonetheless, the Bank’s procurement tools to cope with crises and post-conflict countries have been useful in assessing the main obstacles to efficient consultants’ selection in Afghanistan and providing recommendations for this report. The Bank’s response to crises and emergencies suggests the following procurement-related activities: (1) increased flexibility in the use of simplified procurement methods; (2) outsourcing of procurement and the ability to draw on pre-qualified procurement and project management agents through sole-source (SSS) or qualification-based (CQS) selection; (3) sole sourcing of consulting firms already working in the area and which have a proven track record for the provision of technical assistance; (4) extension 8 “Efficient contract awards� result from the consideration of the Bank’s main policy principles defined in Art 1.4 of the 2004 Bank Guidelines when selecting consultants: (1) high-quality services; (2) economy and efficiency; (3) equal opportunities for all qualified consultants; (4) the development and use of national consultants; and (5) transparency. 9 Low-Income Countries Under Stress (LICUS) cover a spectrum of fragility, including countries with deteriorating governance, those in prolonged political crisis, post-conflict transition countries and those in gradual but still fragile reform processes. See “Low-Income Countries Under Stress Update�, OPCS, World Bank, December 19, 2005. LICUS are identified by weak Country Policy and Institutional Performance Assessment (CPIA) ratings. “Severe� LICUS, as Afghanistan, score lowest within this grouping. 10 The Bank policy on rapid response to crises and emergencies policy is not intended to address economic or social impacts associated with prolonged poor performance by a country. It replaced the policy on emergency recovery assistance in March 2007. See Bank document R2007-0010 of January 17, 2007 (revised March 2007), “Toward a New Framework for Rapid Response to Crises and Emergencies�, its Supplemental Note (R2007-0010/1), and its Annex C (Draft OP/BP 8.00, “Rapid Response to Crisis and Emergencies� applicable to emergency operations submitted for approval after March 1, 2007). Afghanistan CPA: Consulting Services Main Report page 5 of 37 of contracts issued under existing projects for similar activities through increase in their corresponding contract amounts; and (5) encouraging Bank teams working on emergency operations to actively support counterpart agencies at various stages of the procurement process, including preparation of ToR, RFP, and drafting of shortlists. Weighing QBS against QCBS 17. The use of Quality- and Cost-Based Selection (QCBS) has recently been questioned by many Bank TTLs in view of the high deviations in proposal prices observed in consultants’ selections. As a result, quality becomes less decisive since price turns out to be the overriding selection factor in many cases. This may lead to poor proposals gaining the highest overall score and thus to poor quality services. The prudent use of Quality-Based Selection (QBS) could reduce this risk by placing the main focus on quality. The benefits of using QBS should particularly be considered for major capacity-building or management/procurement agent services, which generally have a strong impact on the development of the PA and the implementation of projects. GoA Policy on Consultants 18. The GoA has not yet developed a specific policy on consultants, which could form the basis for a legal and regulatory framework that effectively addresses the needs of the PA and the consulting firms. The 2005 Public Procurement Law only reflects basic policy principles for selection of consultants while the new ‘Rules of Procedures’ (see paras. 22) provide the procedures of consulting services in details. However, a review has not been conducted yet covering  The range of services that domestic consulting firms could provide to the PA;  The domestic consulting sector, its characteristics, and its capacity to implement assignments funded by the GoA; or  The quality of services that consultants have already provided to the public sector. To date, no consultant association has been formed in Afghanistan that could participate in a public sector dialogue on policy and contribute views on regulatory issues. Considering the weakness of the few existing consulting companies, it is presently too early to establish a consulting association in Afghanistan. Recommendation: 19. Once ministries have clearly defined their mandates and their respective functions, a review of the range of services that local consulting firms could provide to the PA should be performed to decide which functions could be outsourced to local consultants. The GoA may then wish to consider drafting a strategy/policy paper on professional and expert consultants in the medium term to meet the specific needs of the PA and to encourage the creation of local consulting firms. The policy on consultants could cover the following areas:  Outsourcing: Relying on present public sector reforms, the policy should indicate areas and functions for which the GoA will require the support of professional and expert consultants;  Management & Capacity Development: Drawing on experience with present public administration reform programs and its recommendations on common Afghanistan CPA: Consulting Services Main Report page 6 of 37 functions like HR planning and management, the policy should address capacity building of the PA through training and incentives;  Enabling Environment & Policy Dialogue: The policy should foresee means for an institutionalized public-private dialogue. This dialogue should explore opportunities for developing a favorable fiscal and employment policy for consulting firms. Legal and Regulatory Procurement Framework The New Public Procurement Law 20. The new Public Procurement Law (PPL) prepared by the Procurement Unit (PU) of ARDS and enacted in October 2005 has considerably improved the legal basis for public procurement. Considering the need for reforms, the new law is certainly to be considered a major achievement. A proposed amendment to the PPL recently has been referred to Parliament after approval by the Cabinet extending the timeframe where interim procurement arrangements shall apply.11 21. However, it is recommended that the following shortcomings be addressed in future amendments. (1) The new PPL lacks the necessary foundation of a comprehensive policy on consultants’ procurement (see previous section); (2) The PPL lacks a well-defined and user-friendly chapter on consultants’ selection; (3) The Dari language version PPL that was approved is reported to be inconsistent with the original English version from which it was translated. Rules of Procedure for Public Procurement 22. The PPL’s complexity and its lack of a chapter devoted to consultants’ procurement will make it difficult to apply under the present situation in Afghanistan. Therefore, regulations or rules of procedure on procurement compliant with international best practice and addressing the needs of both the GoA and the domestic consulting sector are fundamental for effectively implementing the PPL. In accordance with Art. 106(1) PPL the Procurement Policy Unit (PPU) developed Rules of Procedure for Public Procurement in Afghanistan which became effective on April 12, 2007.12 These procurement rules (PR) provide sound guidance through the process of consultants’ selection and contain appropriate provisions on enforcing transparency, fair competition and the administrative review of procurement proceedings.13 However, since the 11 The amendment concerns Art 104 (a) and (b) PPL. The extended timeframe for interim procurement arrangements are “three� and “five� years instead of “one“ and “two� years respectively. 12 The PPU had originally drafted regulations on public procurement. However, the Afghan Ministry of Justice decided that this document was mostly procedural in nature and did not have to be submitted to the GoA for approval. Therefore, the regulation was renamed rules of procedure, approved by the Ministry of Finance and issued by the PPU in accordance to Article 106(1) PPL. 13 See for example Articles 157 PR (Records) and 81 PR (Publication of Notices) on transparency, Article 162 PR on declarations on conflicts of interest, Article 164 PR on post-employment restrictions on public officials, Article 165 PR on avoidance of conflict of interests in consulting services, or Articles 170 ff PR on the administrative review. Afghanistan CPA: Consulting Services Main Report page 7 of 37 consulting firm responsible for implementing the PRP will no longer provide support to the PPU in improving the PR,14 some of the remaining shortcomings of the PR are summarized here. (1) User-friendly Chapter on Consultants’ Selection: The PR lack user-friendly provisions on the selection of consultants that will allow the PA to apply the national law on procurement correctly. While the PR distinguish between non- consultancy services and consultants’ services they do not provide clear guidance on these two procedures. Several provisions concerning the selection of consultants can be found only when referring to other chapters of the procurement rules.15 (2) Definition of Consultants and Mixed Shortlists: The PR neither define the term consultants16 nor do they mandate that the shortlist shall only comprise consultants of the same category, similar capacity, and business objectives. Thus, a management consulting firm might find itself in the position that it has to compete against a non-profit organization. If a mixed shortlist is unavoidable under the circumstances, QBS instead of QCBS should be applicable. In addition, the PR should define the terms professional and expert consultants. (3) Simplified Technical Proposals (STP): The PR provide for Quality- and Cost- Based Selection (QCBS), Quality-Based Selection (QBS), Fixed-Budget Selection (FBS), Least-Cost Selection (LCS)17 and Single-Source Selection (SSS)18 but lack specific rules for small assignments designed to attract the attention of local consultancies. Presently even for small assignments standard procedures apply while simplified procedures could be a major incentive for increased participation of evolving Afghan consultancies. Considering the widespread corruption stakeholders do not advocate the use of Selection Based on the Consultants’ Qualification (CQS). However, an alternative solution would be the use of Simplified Technical Proposals (STP) for routine assignments with insignificant downstream impacts.19 Considering the limited capacity of domestic procurement staff and the local consulting sector discussed below,20 the use of STPs could help to (1) improve the selection of consultants; and (2) encourage participation of local consulting firms. 14 Originally it was foreseen that the consulting firm implementing the PRP would have been responsible for drafting (to the extent required) and modifying the existing rules on procurement and assisting the GoA towards its finalization. However, amendments to the ToR for the PRP resulted in the deletion of this specific objective. 15 For example, Article 80(1) PR simply states that procuring entities shall ensure that they have complied with all relevant requirements of Chapter II while this chapter also refers to the procurement of goods and (non-consultancy) services. Furthermore, the provision listing all available methods for consultants’ selection (Article 84(2) PR) lacks a clear reference to SSS regulated in Articles 27(1), 29 and 114ff PR. 16 Article 3(7) PR only defines consultants’ services as “activities of a professional, intellectual and advisory nature that do not lead to a measurable physical output� but does not refer to different categories of consultants such as consulting firms, NGOs, auditors, UN agencies, universities, or research institutions. 17 See Article 84(2) PR. 18 See Articles 27(1), 29 and 114ff PR. 19 For details see Section 2 (Instructions to Consultants) of the May 2004 edition of the Bank Standard RFP (SRFP). According to best practice STP should be used when the following conditions are met: (a) the assignment is unlikely to have significant downstream effects; (b) the assignment is of routine nature and the ToR already define in detail the objectives, tasks, and required outputs; (c) the consultants’ previous work experience has been sufficiently evaluated during shortlisting; and (d) capacity building is not a specific component of the assignment. 20 See PA Procurement Capacity, paras. 40 ff and The Local Consulting Sector, paras. 69 ff. Afghanistan CPA: Consulting Services Main Report page 8 of 37 (4) Quality-Based Selection (QBS): QBS should be made mandatory for complex and specialized assignments with high downstream effects, and assignments that can be carried out in substantially different ways. Currently, Article 84 (4) PR only states that QBS may be used for these types of assignments, thus leaving room for the inappropriate use of QCBS. (5) Continuation of Consulting Assignments: The PR lack a provision for awarding a consultant an assignment that is a continuation of the initial contract subject to its satisfactory performance in the previous assignment. (6) Disclosure of Staff Months or Estimated Costs: According to best practice the RFP should disclose either the estimated staff months or the cost estimate (not both) whenever available to allow for comparable proposals. (7) Weight Allocated to Price under QCBS: The weight allocated to price under QCBS should be addressed within the PR. (8) Indicative Weights for Evaluation Criteria: The PR should provide for indicative weights to be used for the evaluation criteria. It is recommended to add them to the evaluation criteria defined in Article 96(3) PR. Recommendations to Improve the Legal and Regulatory Framework 23. While a revision of the PPL would depend on the policy on consultants to be elaborated in the medium-term, the GoA should consider adjusting the PR by addressing the eight shortcomings just listed. As originally foreseen, the consultants implementing the PRP could provide advice on the revision of the PR. Afghan Institutional Framework & Organization of Procurement ARDS Procurement Unit 24. The assignment of the Procurement Consultant (PC) within the PU of ARDS has two major objectives: (1) Procurement facilitation for all goods, works & services under operations financed directly by IDA, by the IDA-administered Afghanistan Reconstruction Trust Fund (ARTF), by budgetary expenditures from domestic resources 21 as well as, to the extent feasible, by EU, ADB and other donors; and (2) Capacity Building and training for ARDS key staff on procurement-related matters. Under supervision of ARDS the PC is assisting the Line Ministries (LMs) in procuring consultancy services starting with the issuing of Expressions of Interest (EoI) and shortlisting of consulting firms, through preparation of RFPs, receipt and opening of proposals, assistance in evaluation of proposals, obtaining World Bank’s clearance, and issue of notification of awards. 25. Procurement for contracts using donor funds are usually subject to the rules of the respective donor organizations. However, the PC is increasingly conducting procurement for 21 Excluding any procurement related to police, military or paramilitary. Afghanistan CPA: Consulting Services Main Report page 9 of 37 projects financed by the GoA22 (either own resources or budget-support proceedings) subject to domestic procurement rules. 26. The table below presents the procurement of consulting services contracts assisted by the PC from 15 August 2002 until 31 March 07:23 Selection Method No. of Contracts Value US$M % Contracts % Value QCBS 49 109.50 40.5% 44.6% QBS 8 13.21 6.6% 5.4% CQS 12 9.54 9.9% 3.9% SSS 52 113.19 43.0% 46.1% Total 121 245.44 100% 100% Due to the need for emergency responses a high number of consulting contracts has been awarded under SSS. However, 43 contracts were sole-sourced from August 2002 to November 2004. Only 9 contracts have been awarded under SSS since December 2004. The Bank’s Department of Institutional Integrity (INT) has reviewed all cases facilitated by the PC, but its report has not been finalized yet. Line Ministries 27. One of the key constraints identified in former reviews was that there is no consistency in the organizational structures of the Line Ministries (LMs) with regard to the procurement functions and processes. Despite the procurement structure foreseen by the new PPL, the various LM seem to have adopted different models of organizing procurement. Some ministries have procurement departments, while in others procurement is conducted through service or planning departments. According to the interviews procurement officers in LMs are sometimes not involved in procurement processes. The reasons for disregarding available procurement personnel seem to be: (1) Lack of trust in the capacity of the procurement personnel; (2) Lack of management, English and IT skills of procurement personnel and a history of frequent delays and non-performance of procurement personnel; (3) Lack of communication between trained procurement staff and senior officials and consequently no awareness that qualified procurement personnel might be available; and (4) Desire to retain control over the procurement process without interference of procurement personnel. 28. In some LMs (e.g. the Ministry of Rural Rehabilitation and Development) management and procurement consultants are responsible for all matters regarding the procurement of services and the implementation of Bank projects. Other LMs (e.g. the Ministry of Urban Development), with Bank or donor support, have created Project Management Units (PMUs) and Technical Support Units (TSUs) and are drawing on the services of international personnel 22 Procurement of goods, works or services of a value exceeding US$200,000 is to be handled exclusively by the PU of ARDS. 23 Prior to appointment of the current PC (RITES Ltd.), Crown Agents from UK were providing similar services to ARDS. The table presents all procured consultancy contracts facilitated by both RITES and Crown Agents. Afghanistan CPA: Consulting Services Main Report page 10 of 37 specialized in budgeting, finance management and procurement. International procurement advisors within PMUs are assigned to handle the procurement, to closely cooperate with local staff and to build capacity within the respective LM by constant on-the-job training. Ministries which currently have no PMU or TSU generally demand further support and expatriate staff specialized in procurement for building capacity in their counterpart procurement teams. 29. The clarification and strengthening of procurement functions within the LM are to be addressed by the PRP. The procurement processes will be reorganized to follow institutional arrangements defined in the new PPL by  Identifying 9 key spending ministries to be integrated into the Priority Reform & Restructuring (PRR) framework devised by the Civil Service Commission (CSC);24  Assisting identified ministries to prepare applications for obtaining PRR status that will result in increased equipment and higher salaries in those ministries and will encourage adherence to the institutional structures foreseen by the new PPL;  Providing procurement training to staff in key ministries. Procurement Policy Unit 30. The PRP will further support the Procurement Policy Unit (PPU) within the MoF by drafting its rules of procedure, thus enabling the PPU to become a key player in the formulation of future policies, legislation and procurement rules and to execute its functions according to Article 94 of the PPL. These functions include monitoring procurement proceedings to ascertain efficiency and compliance with the law, the collection of data or reports and the review of procurement records and files, and proposing improvements in procurement practices. Currently, one international advisor (since August 2006) and 4 national staff (since September 2006) are running the PPU and consultancy support is expected to be phased out by PACBP credit closing (June 30, 2009). Special Procurement Commission 31. The Special Procurement Commission (SPC) within the Office of the President provided for in Article 91 of the PPL grants approvals for all contract awards exceeding the levels of first grade award authorities.25 Its rules for procedure (Transaction of Business Rules for SPC) were drafted by the PPU and approved on March 31, 2007. The PRP will provide further assistance to the SPC. Contract Management Office 32. According to Article 69 of the PPL, a Contract Management Office (CMO) has been established within the MoF. It serves as the Secretariat to the SPC. According to Article 183 PR the CMO has the overall responsibility for planning and executing the work of SPC as well as record keeping. 24 It was envisaged that the PRP would concentrate on the full capacity development of 6 Line Ministries and 6 Provincial Offices. However, required linkages with the provincial procurement entities are still missing. Therefore the consultant implementing the PRP will undertake capacity development of 9 LMs. 25 See Annex A to the new PPL for details on thresholds for award authorities. Afghanistan CPA: Consulting Services Main Report page 11 of 37 Appeal and Complaint Mechanisms 33. The PPU has finalized the design and implementation of an independent complaints review mechanism and the respective rules of procedure in accordance to Article 86 of the PPL. Articles 170 ff PR adequately provide for the administrative review of procurement proceedings challenged by a bidding firm. The PRP consultants will be responsible for providing further support and for conducting training for committee members. Professional Consulting Associations 34. To date, there are no consulting associations in Afghanistan that could play a role in monitoring professional standards, representing the sector in the public-policy dialogue with the GoA, and in promoting the role of independent consultants in the Afghan economy. The capacity of the few existing local firms is still too limited. Therefore, steps towards the establishment of a consulting association in Afghanistan should be postponed until the local consulting sector has developed more capacity. Recommendations to Improve the Institutional Framework 35. It is recommended that results of the PRP and INT’s review of all procurement cases on consulting services facilitated by the PC within ARDS be monitored. Afghan Procurement Procedures and Practices Available Procurement Manuals or Guidelines 36. There is an immediate need for an interpretative Manual on the Selection of Consultants. While the rules of procedure on procurement cover the general steps of the selection process, they lack clear guidance on specific points such as the definition of evaluation criteria, the composition of the evaluation committee and the evaluation process. Currently, no comprehensive manuals exist on the selection of consultants (such as a Good Procurement Manual or Consultant Services Manual). While ARDS has prepared a Quality Manual, it focuses only on Bank rules and lacks guidance on many specific issues such as shortlisting, defining evaluation criteria, and the evaluation process. Comprehensive application manuals will be developed under the PRP. Availability of Standard Request for Proposals 37. The Standard Request for Proposals (RFP) will be developed under the PRP. Recommendations to Improve Procedures & Practices 38. The consulting firm responsible for elaborating manuals and the Standard RFP should rely to the extent possible on the recommendations and advice laid down in the Bank Consulting Services Manual (2006). Since the PPL and the rules of procedure on procurement are inspired by Bank rules, many practices suggested by the Consulting Services Manual will prove very helpful in the Afghan context. Bank Procurement Capacity 39. According to TTLs interviewed the procurement capacity of the Bank has considerably improved since a senior procurement specialist joined the Bank office in Kabul in June 2006.26 26 The Bank’s organizational capacity in Afghanistan is considerably higher than in other fragile states (13 IRS and 59 LRS in Sept. 06 compared to an average of 3 IRS and 15 LRS in other fragile states). See Bank document Afghanistan CPA: Consulting Services Main Report page 12 of 37 PA Procurement Capacity 40. There is a widespread recognition that lack of capacity is probably the greatest constraint (apart from security concerns) to achieving results in Afghanistan. Procurement Capacity of PC within ARDS 41. Many TTLs interviewed expressed concern about the capacity of the PC handling procurement for the Bank and the GoA (see ARDS PU, paras. 24 ff). They concede that many delays are caused by time-consuming Afghan decision-making processes. However, Bank TTLs specifically feel that the PC lacks capacity to ensure the professional evaluation of proposals. Therefore, TTLs stress the need to contract in additional capacity for major Bank-funded projects and refer to successes gained by outsourcing the procurement services and the project oversight to international consultants independent from the PC (as practiced, for example, under the Bank- funded National Emergency Employment Program and the Emergency National Solidarity Project). Previous and Ongoing Capacity Building and Training 42. Under EPAP I and II the PC undertook training of between 110 and 150 procurement staff from various LM. However, the training was based mostly on Bank procurement rules and national legislation that was then superseded by the PPL. Not all stages of the training course were completed as planned due to lack of resources and other pressing priorities. Training on the provisions of the new PPL is foreseen under the PRP. 43. Ten Procurement Liaison Officers (PLO) were selected under EPAP II and PACBP for intensive procurement training and attended a course at the Administrative Staff College of India in Hyderabad. The training began in January 2004 and the PLOs were intended to provide core procurement capacity and to assist the LMs in building their own capacity. The plan was to retain the PLOs within ARDS first and to subsequently place them in the procurement units to be set up in the LMs pursuant to the new PPL. However, according to the most recent information, five of the ten PLOs left ARDS to pursue better paid careers. ARDS’s loss will have a negative impact on the capacity-building programs within the LMs. Since the PLOs were intended to be transferred into at least six to nine key spending LMs specifically supported under the upcoming PRP, their loss might delay achievements under the new project. 44. Further training provided by the PC under PACBP included:  Staff of three LM (Ministry of Energy and Water, Ministry of Defense and Ministry of Mines) received a one-month training program on the new PPL and related procurement procedures;  Two procurement officers of Ministry of Agriculture and Irrigation are currently receiving on-the-job training; and  Training for other LM (4 staff members per ministry) commenced at end of November 2006. In addition, the GoA decided to transfer responsibility for consultant selection and administration to the LMs so that they can develop further capacity through increased involvement in the procurement processes. SecM2007-0018, “Strengthening the World Bank Rapid Response and Long-Term Engagement in Fragile States�, for details on the three-tiered approach for strengthening the Bank’s staffing and organizational support. Afghanistan CPA: Consulting Services Main Report page 13 of 37 Capacity within Line Ministries - Key Constraints and Challenges 45. Three key issues were identified by the mission consultations and by the PC in its March 07 Progress Report: (1) Weak PA capacity:  Lack of procurement capacity of LM officials;  Weak capacity of LM procurement consultants;  Inefficient internal procedures (for example, a requirement to obtain a No Objection (NO) from domestic higher award authorities after having obtained NO from donor agency);  Lack of capacity to conduct evaluations and assess the quality of EoI and proposals (see Efficient Selection of Consultants, para. 49). (2) Lack of understanding of procurement principles and rules, lack of compliance and accountability at decision-making level. (3) Lack of adequate IT infrastructure within LMs. The level of capacity varies, with higher capacity in the few LM that can draw on the assistance of PMUs or TSUs, and lower capacity in LMs that do not have access to international advice. Concerns about the capacity of local staff dealing with procurement were expressed by all TTLs interviewed. Almost constant assistance by expatriate staff is deemed necessary for delegating parts of the procurement processes to local counterparts. 46. In addition, TTLs and international consultants interviewed referred to lack of capacity in the PA for managing and supervising consulting assignments. The PA and consultants often seem to disagree on payment terms and on the interpretation of tasks defined in the Service Contracts. Procurement Capacity in Provinces and Districts 47. No data on procurement in the provinces and districts was obtained by the mission. However, according to interviews with NGOs implementing the NSP, regional procurement entities are facing the same problems as the national authorities. Capacity-Building Approach by PACBP and PRP 48. In addition to training of key procurement staff provided by PACBP mentioned in the previous section, the PRP will build capacity by:  Developing a nationwide procurement capacity-building strategy for central, provincial and municipal governments;  Identifying key ministries and provinces to be supported under the new project;  Planning the transfer of procurement capacity and responsibility to LM according to a set of milestones;  Organizing workshops for the dissemination of the new PPL;  Assessing the procurement training needs of the procuring entities (LMs, provinces, districts);  Developing appropriate selection criteria for trainees; Afghanistan CPA: Consulting Services Main Report page 14 of 37  Developing methodologies for implementation of a broad training program to train hundreds of trainees of all levels of government;  Conducting a survey to identify a future procurement training centre for the country. Risks within Capacity-building Approach by PACBP and PRP Efficient Selection of Consultants 49. Since it is a priority for reconstruction that the Afghan PA be reestablished, the Bank projects focus on building basic procurement capacity. The PACBP provides training to a limited number of key staff while the PRP includes a broad program for hundreds of trainees from all levels of government. However, due to PACBP’s limited outreach and PRP’s broad focus training will only concentrate on basic subjects. In particular, PA staff will not receive training on consultant selection tasks such as preparing ToR and assessing the quality of proposals. While specialized capacity building may be too much to expect at this stage, many parties interviewed expressed concerns about the credibility of the selection process given current deficiencies in the performance of these tasks. These concerns relate to three stages of consultant selection in particular: (1) Preparing the ToR and the RFP: According to TTLs interviewed LM staff lack experience in designing projects along with the capacity to deliver and define the technical inputs necessary for the preparation of ToRs. Most ToRs are drafted by technical advisors funded by donors. (2) Compiling shortlists: According to the interviews many Evaluation Committees (EC) lack the capacity to adequately examine EoIs, assess the experience and capacities of candidates and compile shortlists. (3) Evaluating submitted proposals: International consultants and donor representatives specifically question the capacity of local evaluators to adequately evaluate the quality of complex proposals. The stakeholders interviewed also raise doubts about the outcome of the evaluations of standard assignments since many EC seem to lack specialists in the disciplines of these assignments. The same PA officials who have trouble drafting ToR are then later responsible for evaluating the proposals. 50. These concerns are a key challenge to attracting qualified international firms and achieving value for money in the selection of consultants. Combined with concerns about a poor command of English and corruption, the lack of trust in the qualifications of evaluators discourages qualified consultants from seeking assignments in Afghanistan (see para. 65 for participation rates). Development of National Consultants 51. The PRP includes only basic training courses for local firms that which will focus on (1) creating awareness about the new Public Procurement Law; and (2) training on procurement procedures for goods, works and consulting services. The Bank program does not provide assistance on revising the rules of procedure on procurement although a tailor-made solution is needed to address the weakness of the local consulting firms (see paras. 22 no 3 and 83 for details and recommendations). Afghanistan CPA: Consulting Services Main Report page 15 of 37 52. Moreover, neither PA nor donors have adequate information on the available local expertise and are facing difficulty to identify the few available local resources (see paras 82 ff). Capacity Building of the PA 53. According to the interviews the collaboration between expatriates and local procurement personnel often fails and training turns out to be fruitless because of insurmountable communication barriers. International consultants frequently reported that international and national procurement personnel have serious problems interacting effectively. The work of local translators, generally domestic PA staff members who are not fully qualified translators, sometimes creates more confusion and misunderstanding instead of facilitating communication. In addition, expatriates reported that the level of IT skills of their local counterparts is very low and that they are forced to allocate extensive periods of time to simple on-the-job IT training. 54. Based on the numerous interviews conducted in the course of the mission, four constraints could hamper the current capacity-building strategy and the shift of responsibilities to the local counterpart procurement personnel: (1) Lack of effective interaction between international and national procurement staff due to language barriers; (2) Lack of qualified translators to facilitate effective communication between expatriates and local counterparts; (3) Lack of correct translations of procurement documents originally prepared in English; and (4) Very weak IT capacity of national procurement staff. In addition, the training program could be compromised by the limited availability of local staff trainable in complex procurement processes as required by the Bank or the GoA. Experienced PA staff is often poached by donor agencies and NGOs and the lack of qualified counterpart personnel in the Afghan PA often renders on the job training impossible. When counterpart staff is available low motivation due to low pay and limited opportunity for merit based promotion undermine the knowledge transfer. Recommendations 55. While most issues are already addressed by the upcoming PRP, the GoA and the Bank may consider the following approaches to address remaining risks within the capacity-building approach of the PACBP and PRP. (1) Professional evaluations of proposals are fundamental for achieving value for money and attracting qualified international consultants. The GoA (with support from the Bank) should therefore consider assigning reputable consulting firms with strong procurement expertise in the field of the specific projects to the task of conducting proposal evaluations under major Bank-funded projects in close cooperation with the PA. The same consultants could also be entrusted with the quality and administrative control of the contracts and building capacity. In particular, Bank-funded projects that cannot rely on the support of internationally staffed Project Management Units (PMUs) or Technical Support Units (TSUs) should benefit from this approach. (2) For Bank-funded projects that are too small to justify the use of international consulting firms to handle proposal evaluation and contract management, the Afghanistan CPA: Consulting Services Main Report page 16 of 37 Bank should encourage Bank staff to actively support counterpart agencies at defining the technical input for ToR. Bank specialists in the required areas of expertise should extensively review and also provide input to draft ToR regarding objectives, components, activities, milestones, and evaluation indicators. Common weaknesses in TA projects such as the fragmentation into small assignments of short duration, inadequate monitoring or the disregard of local circumstances should be avoided by better procurement planning and effective supervision. Furthermore, consultants with expertise in the required fields should be assigned to Evaluation Committees. (3) The GoA (with support from the Bank) may wish to consider addressing the lack of qualified translators by designing and implementing a training program at a selected training institute for future translators. (4) In addition, the GoA may consider developing and implementing training modules for the procurement staff in the area of English, IT and computer skills. Recommendations for the development of the local consulting sector are provided in para. 83. Corruption and Integrity in Procurement of Consultants 56. All persons interviewed at international and domestic consulting firms complained about nepotism and corruption. Most of the local consultants interviewed consider it useless to apply for GoA-funded projects without having a special relationship with the government officials and decision-makers involved. Corruption is especially threatening to international firms or Afghans returning from overseas who do not have powerful patrons or fully understand how the local system works. 57. According to the interviewees negative public perceptions of widespread corruption at all levels of GoA have increased,27 threatening to undermine or even reverse the GoA’s and international community’s efforts to build functioning institutions able to attract qualified consultants. Allegations mainly concern the selection of individual consultants:  High-level officials interfere with selection processes;  Shortlists are manipulated or limited to pre-selected candidates with good relations to powerful patrons;  Evaluation criteria are changed or disregarded after submission of CVs (requiring doctoral degrees when originally a master’s would have been sufficient);  Information is leaked to preferred candidates; and  Job vacancies are not correctly advertised. 58. The new PPL addresses the need for transparency and accountability under a separate special chapter (Chapter X). In addition, the rules of procedure for public procurement contain appropriate provisions on enforcing transparency, fair competition and the administrative review 27 The 2005 Transparency International Corruption Index ranks Afghanistan 117 th placing it among the world’s most corrupt countries. Afghanistan CPA: Consulting Services Main Report page 17 of 37 of procurement proceedings.28 Article 108 of these recently enacted rules also effectively regulates the selection of individual consultants. 59. The Bank’s Anti-Corruption Study (P101117) has recommended the following steps: Steps to be taken by Government  Clarify administrative mandates and provide political support and resources accordingly, with consideration of a small number of quick win or high profile measures to demonstrate the GoA’s commitment to addressing the problem of corruption in Afghanistan.  Accelerate efforts to reduce vulnerabilities to corruption in management of budget funds and strengthen internal and external audit of public funds.  Improve transparency and effectiveness of merit-based recruitment processes and monitor progress.  Initiate work toward developing and implementing an anti-corruption strategy, with technical support from the international community. Steps to be taken by the Donor Community  Provide technical assistance on anti-corruption policies and programs;  Renew the international community’s efforts on transparency (through regular public disclosure of financial reports, audits, and contract awards).  In close collaboration with GoA, engage in rapid analysis of key Government sectors, functions, processes and managerial responsibilities to identify points of vulnerability to corruption and make recommendations for improvements.  Initiate analytical work on corruption to expand and strengthen the information base for effective anti-corruption policies and programs.  Start incorporating an anti-corruption dimension into key development projects and programs. 60. Considering the low level of capacity of PA officials and the lack of user-friendly rules of procedure and manuals, it is not surprising that corruption remains a key issue. The GoA and the Bank should ensure professional evaluations by outsourcing this task to international consulting firms at least for major Bank-funded projects (see para. 55). In addition, the low procurement capacity of the PA could be addressed by simplifying the tender process. The use of Simplified Technical Proposals (STP) for routine assignments could help to increase transparency in the evaluations of proposals (see para. 22 for details and recommendations). Public Sector Demand for Consulting Services Domestically Funded Demand 61. This section concentrates on the national budget available for procuring consulting services. There are also local budgets available at the municipal level, and municipalities can 28 See for example Articles 157 PR (Records) and 81 PR (Publication of Notices) on transparency, Article 162 PR on declarations on conflicts of interest, Article 164 PR on post-employment restrictions on public officials, Article 165 PR on avoidance of conflict of interests in consulting services, or Articles 170 ff PR on the administrative review. Afghanistan CPA: Consulting Services Main Report page 18 of 37 exercise some degree of fiscal autonomy. Revenues collected at the local level are mainly used to fund municipal expenditures. 62. Since 2001 the focus has been on reconstruction, delivery of basic services and the development of infrastructure. In addition, revenue mobilization in Afghanistan is still among the lowest in the world and covers only 9% of total public expenditure. Therefore, only a small percentage of national funds are spent on consulting services. The lack of trust in the capacity of the domestic consulting sector further undermines efforts to successfully procure more consulting services. 63. According to data provided by ARDS the GoA spent approx. US$130,900,000 for contracts on goods, works and consulting services since 2004.29 Ten out of 49 contracts (8.6% of total amount for goods, works and consulting services funded by GoA) concerned the provision of consulting services. Seven consultancy contracts were awarded to international firms; 3 to NGOs. No data is available on domestic consulting firms or subcontractors that may have been associated with the implementation of the assignments. The data is summarized in the table below, with details provided in Annex 2. Consultancy Contracts Funded by GoA30 Selection Method Scope of Services Value US$ Winning Firm Origin QBS Design of Building 500,000 Japan QCBS Survey 450,000 Pakistan QCBS Feasibility Study 751,239 Iran QCBS Feasibility Study 2,321,560 India QCBS Feasibility Study 2,132,010 India QCBS Feasibility Study 2,210,000 India QCBS National Skills Development 1,558,972 International NGO QCBS National Skills Development 963,574 International NGO QCBS National Skills Development 242,690 Local NGO QCBS Design of Building 134,938 Pakistan Total GoA Funding for Consulting Services: 11,264,983 Consulting Services Funded by the Bank 64. Since April 2002, the Bank has committed over US$1.28 billion for 25 development and emergency reconstruction projects and two budget support operations in Afghanistan.31 This support comprises US$849.8 million in grants and US$436.4 million in interest-free credits. Two budget support operations, emergency public works, infrastructure reconstruction, and education rehabilitation projects have so far been completed. Of the US$1.28 billion the World Bank has 29 The data provided by ARDS mainly concerns contracts above a value of US$200,000. 30 Awarded since December 2004 and facilitated through the PC within ARDS. 31 The Afghanistan Reconstruction Trust Fund (ARTF), administered by the World Bank on behalf of 25 donors and managed in conjunction with ADB, Islamic Development Bank, United Nations Assistance Mission for Afghanistan, and UNDP, remains the main mechanism for providing coordinated funding support to Afghanistan’s recurrent budget and investments in line with agreed budget priorities of the GoA. As of October 22, 2006, 25 donors had pledged US$1.66 billion to ARTF, of which US$1.45 billion have been received. Afghanistan CPA: Consulting Services Main Report page 19 of 37 committed to Afghanistan, approx. US$175.8 million (14%) were allocated to 63 consulting service assignments which can be grouped by sector as shown in the table below, with details provided in Annex 3. World Bank Funded Consulting Assignments (Signed Contracts from 29 May 2003 until 01 March 06) Sector No of Contracts % Agriculture 1 1.5 % Education 3 4.8 % Energy 3 4.8 % Health 12 19.0 % Public Administration and Law 8 12.7 % SWAps (NSP) 27 42.9 % Transport 4 6.3 % Water & Sanitation 5 7.9 % Total 63 100 % The consulting contracts were awarded as follows: World Bank Funded Consulting Assignments (Signed Contracts from 29 May 2003 until 01 March 06) Category of Consultant No of Contracts % NGOs 38 60 % International Consulting Firms 22 35 % National Consulting Firms 1 2% Other 2 3% Total 63 100 % International Supply of Consulting Services International Participation 65. Participation rates of international consultants are low. Based on an assessment of 10 Bank-funded assignments from 2005 to 2007 the average number of international proposals submitted per assignment was only 2.5. On average just 2.1 proposals scored above the Minimum Qualifying Score (MQS). These outcomes are summarized in the table below, with details in Annex 4. EoI Size of Proposals Proposals Participation Rates Received Shortlist Submitted Above MQS Average 8.4 4.5 2.5 2.1 66. According to the international consultants interviewed the reasons for low participation are: (1) The security situation; Afghanistan CPA: Consulting Services Main Report page 20 of 37 (2) Low PA capacity to evaluate consultants’ qualifications and lacking transparency of selection processes; and (3) Low PA capacity to adequately supervise and to pay international consultants fairly and timely. In addition, international consultants stressed the high costs required to set up and conduct business in Afghanistan (security, electricity, safe housing for employees, identifying reliable local partners or suppliers, etc.). The entry costs are considered to be extremely high. Once established, firms tend to apply for other opportunities again. However, according to the interviews the willingness of firms to operate in Afghanistan is mainly linked to the availability of bilateral contracts and not to Bank-funded assignments which are merely seen as an addition to the core business. International consultants interviewed point out that the incentives for seeking Bank-funded assignments are missing. Excessive demands from the PA, its lacking appreciation of consulting services, and delayed payments are among the many issues that discourage qualified consultants. Performance on Consulting Service Contracts 67. PA and donor officials generally consider the performance of international consulting firms as merely satisfactory under the present circumstances and have observed that firms generally refrain from sending experienced and qualified staff to Afghanistan. Assignments focusing on capacity building implemented by international firms are generally rates as less than satisfactory. However, officials admit that contract durations of 2 to 3 years make it difficult to carry out comprehensive capacity-building contracts. In addition, the lack of trainable local staff challenges any training program. Remuneration Levels 68. Based on a sample of 12 Bank-funded contracts international firms from Part 1 countries demand a median fee of $23,000 for key team members for operating in Afghanistan as outlined in the following table, with details in Annex 5 on the 12 assessed contracts. WB-funded Consulting Contracts (excluding NGOs): Monthly Billing Rates Billing rates Team Leader Key Staff Nationals Average $24,900 $18,750 $3,700 Median $23,550 $18,550 $2,900 Median (Part 1 country firms): $29,050 $23,000 Median (Part 2 country firms): $13,500 $10,500 Recommendations (1) Since continuity is deemed essential for successful capacity building, but international participation is low and entry costs for international firms are very high, the Bank should consider including a provision for continuation of work by the same consultant under SSS in the initial RFPs whenever feasible. (2) When drafting ToR, the security situation should be taken into account. Especially when the services are not related to capacity-building activities that need to take place locally, the ToR should provide for international consultants to perform services from outside the country to the greatest extent possible. Afghanistan CPA: Consulting Services Main Report page 21 of 37 Domestic Supply of Consulting Services The Local Consulting Sector 69. While contractors and suppliers of varying capacity seem to provide a sound local source for implementing smaller contracts, the situation appears much less advanced in the area of consulting firms. However, a full assessment is hindered by lack of information. While various LMs have registered local firms, this information mainly serves to disseminate procurement opportunities to potential local consulting service providers. It does not provide indications on the actual expertise available or the previous performance of firms. The same problem applies to the company registration scheme run by the Afghan Investment Support Agency (AISA). 70. ARDS is registering firms and requires them to provide information about their main areas of interest. However, no information from ARDS could be obtained during the mission. 71. While it is far from being exhaustive, an immediately available source of information on the local consulting sector is the Afghanistan Procurement Directory (www. procurementdirectory.af) launched by the Canadian NGO Peace Dividend Trust (PDT) in September 2006. This directory currently lists 14 local consulting firms, of which 6 have previous experience with donors and 10 can rely on either permanent or temporary international staff. 72. Based on site visits to a number of local companies’ offices and information provided by PDT, the local consulting sector can be further divided into three categories: (1) Kabul-based consulting firms owned and managed by foreigners with a proven track record of professional experience in the country (mainly studies and research), drawing on international and local staff and relying on a strong clientele from the Afghan private sector (e.g. the national telecoms); approx. 2 out of 14 companies listed under the Afghanistan Procurement Directory are in this category. (2) Domestic firms owned and run by local professionals mainly educated in Pakistan and fluent in English with a limited number of international staff (mainly temporary) on their payroll that occasionally have won small donor-funded consulting contracts. (3) Purely domestic consulting firms, with a limited number of local staff and no international staff, that have no experience in providing consultancy services to public sector clients. Firms belonging to categories 2 and 3 are generally involved in many areas of business other than consulting. According to interviews these types of firms are currently trying to win consultancy contracts funded by the GoA or the international donor community, but mainly must engage in construction and supply activities (e.g. the import of cars). Main Areas of Expertise 73. According to the information gained during interviews at local companies and through the assessment of firms’ webpages and data provided by the local consulting companies under the Afghanistan Procurement Directory the main areas of local expertise are: Afghanistan CPA: Consulting Services Main Report page 22 of 37 Areas of Expertise of Afghan Consulting Companies Listed under the Afghanistan Procurement Directory No of companies listed: 14 100 % Capacity & institution building, training 2 14 % Monitoring & evaluation 1 7% Community & social services 1 7% Research & surveys 4 29 % Business support services 5 36 % Public relations & advertising 7 50 % IT services 3 21 % Project support services 2 14 % This table should be seen as mere indication of the range of services domestic consulting firms could provide to the Afghan PA. It is not uncommon that webpages, company flyers or brochures list vast areas of expertise while it turned out in interviews that the companies had yet to provide consultancy services to a public client. Performance on Public Contracts and Remuneration Levels 74. No data was available on the quality of local consultancy services provided to the Afghan PA or donors. 75. According to the assessment of Bank-funded contracts for Afghan consultants nominated by international firms, a median monthly billing rate of about US$2,900 applies (see Remuneration Levels, para. 68). According to TTLs interviewed the fees of individual local freelance consultants are generally higher (about $3,500 to 4,500) since the Bank has to compete with other donors for the few experts available. Capacity Assessment of Afghan Consultancies 76. The capacity of local consulting firms remains very weak. The few profitable domestic firms operating from Kabul are developing skills by on-the-job training, in-house courses held by international consultants and twinning (i.e. one international and one local staff are implementing the same task). One of the biggest challenges is availability of qualified local professionals since the private sector can rely neither on functioning advanced education systems nor on institutions where experience can be gained. 77. NGOs implementing nationwide projects on behalf of the donor community are contributing to the development of local capacity by in-house training courses in English language and IT skills and by delegating project components to be implemented in the provinces to local personnel. 78. According to the interviews conducted the major key constraints faced by the domestic consulting firms are:  Lack of qualified local staff due to the new nature of assignments, higher quality standards, and the weak and poorly funded Afghan tertiary education system;  Weak management, English and IT skills; Afghanistan CPA: Consulting Services Main Report page 23 of 37  Competition for experts with donors and international consultants implementing projects in Afghanistan;  Limited public demand and scarce financial resources;  Lack of developed banking system; many local consultants face serious difficulty to obtain bank guarantees. These problems are reflected in the poor track record of local consultants in winning contracts from donors or the GoA. Other specific reasons for lack of success in public procurement opportunities are:  Limited familiarity with public procurement, procurement procedures and documents, partly due to lack of English skills;  Lack of experience in preparing compliant technical and financial proposals;  Failure to meet qualification requirements for proposed staff (for example, the post requires a postgraduate degree despite the fact that there are no post-graduate programs in Afghanistan, or qualified but young experts have too few years to meet the requirement on minimum professional experience); and  Lack of trust in the fairness and transparency of procurement processes handled by the GoA and therefore limited participation. 79. Once local firms were awarded contracts they face further problems since they lack experience in project implementation under GoA or Bank rules (firms may switch key staff without being aware that this requires a No Objection and have trouble preparing invoices according to required standards). Developing Capacity of the Domestic Consulting Sector 80. While most of the constraints faced by the consulting sector can only be addressed in the long-term, the exclusion of domestic consultancies from the development process can be addressed, at least in part for simple assignments, through training courses or workshops. The upcoming PRP will include basic procurement training for local firms, conducting seminars (at least twice a year) on the new PPL and structured training programs (four times a year) on procurement procedures for contracts funded by the GoA and the donor community. However, workshops and training courses do not focusing solely on consulting firms, but will also address contractors and suppliers. In addition, the current lack of procurement manuals will hinder the preparation and implementation of training materials and programs. 81. Therefore, the consultant responsible for the PRP could benefit from the experience of two ongoing local training programs. The NGO Peace Dividend Trust (PDT) procurement training courses focus on the major weaknesses of local firms in following procurement procedures.32 While PDT has only offered a first training session for the construction sector in May 2006, it plans to conduct a series of workshops on procurement for consulting services. The American Society of Civil Engineers (ASCE) is about to start the Engineering Capacity Building Project for local consulting engineering companies.33 Training will cover a broad range of topics 32 Contact: Mrs Shirine Bakhat-Pont, Country Director Kabul Office, Peace Divident Trust Markeplace Project; www.peacedividendmarketplace.org ; email: pont@peacedividendtrust.org 33 Contact: Mr Michael G. Goode, Director Grants & Contracts, American Society of Civil Engineers (ASCE); www.asce.org ; email: mgoode@asce.org Afghanistan CPA: Consulting Services Main Report page 24 of 37 such as management, project management, and procurement. A collaboration between the PRP and the ASCE project could achieve synergies. Overcoming the Information Gap on Consultants 82. The monthly Progress Reports submitted by the Procurement Consultant to the Bank do not enable a reviewer to extract information necessary to assess the quality of the selection process. In particular, it lacks information on the nature of assignments and the extent of international and national participation (average billing rates, participation rates from international and national firms, and nature of assignments attracting national firms). Precise data would enable TTLs and PA staff to better plan assignments and selection parameters. 83. Moreover, many representatives of the PA or the donor community interviewed are unaware that at least some capable local firms exist in Afghanistan. Only a few persons representing the public sector were able to name or recommend one local consultancy. As a result, local firms are generally not taken into account when firms are selected under SSS for special or urgent assignments.34 Information tools like the Afghanistan Procurement Directory could help to minimize the information gap (see para. 71). Recommendations (1) Since Afghan consultancies can best develop their capacities through associations with international firms, the Requests for Proposals (RFP) and the Terms of Reference (ToR) for internationally competed assignments funded by the GoA and the Bank should clearly identify, whenever possible and feasible, those components that can be executed by local consultants. In case no competent Afghan consultancies exist, the tender documents should clearly require from international firms to transfer skills and know-how to local individual advisors. Once these individual consultants were involved in internationally executed projects and developed their capacity under the supervision of experienced international consultants, they would be in a position to establish their own consulting companies. (2) For routine assignments limited to national consultants, the Bank and the GoA should consider the use of Simplified Technical Proposals (STP). Quality-Based Selection (QBS) and Fixed-Budget Selection (FBS) should apply to standard assignments and Quality- and Cost-based Selection (QCBS) only when clearly justified by the nature of the ToR. This should encourage local consultants to seek participation. Information gained should be disseminated to the Bank’s TTLs (for example, concerning the research tool Afghanistan Procurement Directory). Whenever possible and feasible local firms should be considered for small assignments generally procured under SSS. (3) To facilitate the preparation of projects and procurement plans, the Bank should consider requesting the PC to improve its monthly progress report. It should include data on the participation of international and national consulting firms such as (1) average number of EoI, size of shortlists, proposals submitted; (2) countries of origin of shortlisted, responsive and winning firms and their 34 For example, under the Afghanistan Public Administration Reform Project (P100960) the selection of a US firm for a survey on public opinion and expectations on the GoA was cleared although local capacity in the area of surveys is good. Afghanistan CPA: Consulting Services Main Report page 25 of 37 categories (NGOs, consultancies, government agencies); (3) average billing rates; (4) number and nature of assignments for which the ToRs require the participation of national firms; (5) nature of assignments limited to national participation; and (6) number and nature of assignments in which local firms are associated with international firms. Alternatively, the Procurement Consultant could be requested to prepare an annual report focusing on the points described above and complementing the monthly progress reports. (4) The Bank could also consider cooperating with two stakeholders currently providing support and training to local consulting firms. The Bank’s PRP could (1) draw on the experience of the NGO Peace Dividend Trust on training courses on procurement for local companies; and (2) collaborate with the Engineering Capacity Building Project for local consulting engineering companies implemented by the American Society of Civil Engineers (ASCE). Risk Assessment 84. A detailed risk analysis could not be carried out. However, the interviews with stakeholders indicate the following key risks:  Security Risks – Lack of security is the number one challenge in Afghanistan's development environment. The critical security situation will not change in the short term and will limit operational activities. Only national firms and local staff will be available to implement projects for reasonable fees in the remote provinces where conflict is ongoing or likely to erupt again.  Technical and Economic Risks – The quality of consulting services has a direct impact on the Afghan economy. Lack of quality services leads to questionable results, increases project costs and causes delays. Considering the current weak capacity of the local consulting sector and the increased fees for international consultants willing to work in the daunting environment of Afghanistan, the costs to the Afghan economy are likely to be alarmingly high.  Professional and Business Risks – The challenging operating environment, the weak educational system, and lack of prospects for young professionals lead to a constant drain of knowledgeable people. The loss of intellectual capital is one of the most serious risks for the slowly evolving domestic consulting sector.  Regulatory Risks – The lack of provisions specifically tailored to support the weak local consulting firms and the PA’s low capacity to efficiently award contracts have a serious impact on the local consulting sector and make it costly and risky for consultants to tender and to implement consultancy projects for the GoA. Afghanistan CPA: Consulting Services Annex 1: List of Persons Met page 26 of 37 Organization Name Position Government of Afghanistan Ministry of Finance, Office of Mr. Raj KAMAL Advisor to the Deputy Minister of the Deputy Minister of Finance, Finance, Procurement Policy Unit Head of PPU Independent Administrative Mr. Mirza ABDULLAHI Director, Public Administrative Reform Reform & Civil Service Implementation – Civil Service Commission Management Ministry of Urban Development Mr. Al-Haj Wahid Abdul AHAD Advisor to MoUD and PMU Team Leader Kabul Urban Development Project (KURP) Ministry of Public Works Mr. G.R. SINGAL Advisor to the MoPW Donor Agencies European Commission Mr. Jens ENGELHARDT Deputy Head of Section Contracts & Delegation to Afghanistan Finance European Commission Mrs. Sandrine PETRONI Economic and Trade Advisor Delegation to Afghanistan ADB Mr. Brian FAWCETT Country Director Afghanistan Resident Mission ADB Mr. Robert Gordon RINKER Senior Project Management Specialist DFID Mr. John GORDON Deputy Head DFID Afghanistan GTZ International Services Mrs. Marita DIEHLING Program Manager NSP GTZ International Services Mr. Aziz Ahmad SARHADI Head of Administration Consultants / NGOs RITES Ltd. Mr. Virender Kumar GARG Team Leader & Program Manager, Afghanistan Reconstruction and Development Services (ARDS) Peace Dividend Trust Mrs. Hedvig Christine Project Director - BOSERUP Afghan Procurement Directory Peace Dividend Trust Mrs. Sylvie M. GAROIA Trainer (Procurement courses for SME) SMEC Intern. PTY. Ltd. Mr. David LORD Team Leader World Bank – Kabul Urban Development Project (KURP) Bearing Point Mr. Kelvin POWER Chief of Party & Financial Management Consultant - Emergency Public Administration Project Landell Mills Ltd. Mr. Jan van AGTHOVEN Institutional; Development Specialist – Preparing the ADB Commercial Agriculture Development Project Rodeco Consulting GmbH Mr. Hans HUSSELMANN Team Leader Afghanistan CPA: Consulting Services Annex 1: List of Persons Met page 27 of 37 GTZ -Water Sector Reform Project Ministry of Energy and Water Rodeco Consulting GmbH Mr. Mike O’LEARY Team Leader GTZ -Institutional Strengthening & Organizational Development of Water Utilities - Ministry of Energy and Water CIPE - Center for International Mr. Tim BISPEE Deputy Chief of Party Private Enterprise Individual Mr. Gil M. SORIA Consultant (ADB) – Project Implementation and Procurement Specialist, Ministry of Energy and Water Sheladia Inc. Mr. Mir HASHIMI Acting Team Leader (ADB Pul-e-Khumri- Balkh Road Project) Sheladia Inc. Mr. Paul J. GUNARATNAM Project Manager / Socioeconomist Scanagri / Terrainstitute Dr. Stefan SCHUETTE Team Leader, Capacity Building for Land Policy and Administration Reform (ADB), Ministry of Agriculture and Irrigation ACTED – Agency for Technical Mrs. Ziggy GAREWAL Country Director Afghanistan Cooperation and Development DED – Deutscher Mrs. Kerstin LEPPER Project Manager Entwicklungsdienst Individual Mr. Malcolm TOLAND Advisor to the Ministry of Commerce, Technical Assistance & Capacity Building in the Ministry of Commerce Project Hope Worldwide Mr. Daniel R. ALLISON Country Director Hope Worldwide CNFA (Citizens Network for Mr. Gerald TURNBULL, PhD Country Director Foreign Affairs) CNFA Afghanistan (Afghanistan Agriculture Development Project, AADP, funded by USDA) Individual Mr. Bradley DOLLIS Technical Advisor – Administration, Ministry of Finance ARD Inc. Dr. Lewis RASMUSSEN Senior Technical Advisor – USAID Afghanistan Local Governance and Community Development Project Afghan Consulting Firms AICB – Afghan Innovative Mr. Jan NAZARI Vice President Consulting Bureau Afghan Bena Group Mr. Jamshid IBRAHIMI CEO NBCC – Nawee Bakhter Mr. Engineer Nazir AHMAD Director Construction Co. Ltd. Trust Project and Design Co. Mr. Abdul MUSA Director Kabul Group Consulting Firm Mr. Sayed Javed ANDISH Managing Director ALTAI Consulting Mr. Eric DAVIN Partner Academic Institutions Afghanistan CPA: Consulting Services Annex 1: List of Persons Met page 28 of 37 Kabul University Prof. Abdul KABIR KARIMI Lecturer, Faculty of Economics Kabul University Mr. Ahmad Jawed SHUAIBI Lecturer, Faculty of Economics Other Afghanistan International Mr. Atiqullah M. NUSRAT Membership Director Chamber of Commerce ABA – Afghan Builders Mr. Naeem YASSIN President Association ASCE – American Society of Mr. Michael R. SANIO Director International Alliances Civil Engineers BRAC Afghanistan Bank Mr. Shawkat HOSSAIN COO & Senior Vice President World Bank Task Team Leaders and Staff Mrs. Nancy ZHAO Operations Advisor (SAROQ) Mr. William BYRD Advisor (SASPR); TTL – Anti-Corruption Study Mr. Paul Edwin SISK Senior Financial Management Specialist (SARFM); TTL – Public Administration Capacity Building Project Mrs. Susanne HOLSTE Senior Transport Specialist (SASEI); TTL – National Emergency Rural Access Project, Emergency National Solidarity Program Mr. Mitsuyoshi ASADA Senior Transport Specialist (SASEI); TTL – Emergency Transport Rehabilitation Project Mrs. Scherezad LATIF Education Specialist (SASHD); TTL – Strategic Higher Education TA Project, Strengthening Higher Education Program Mrs. Sorarya GOGA Senior Urban Development Specialist (SASEI); TTL – Kabul Urban Reconstruction Project Mrs. Julia M. FRASER Senior Financial Analyst (SASEI); TTL – Second Emergency Power Rehabilitation Project Mr. Nigel COULSON Senior Public Sector Specialist (SASPR) Mr. Deepal FERNANDO Senior Procurement Specialist (SARPS) Mrs. Sima KANAAN Senior Operations Officer (OPCFS) Mrs. Patricia MACGOWAN Senior Procurement Specialist (LCSPT) Mrs. Irina LUCA Lead Procurement Specialist (AFTPC) Mr. Frederick KRANZ Consultant (MNAPR) Mr. Nagaraju DUTHALURI Procurement Specialist (Consultant SARPS) Mr. Habibullah WAJDI Education Specialist (SASHD) Mr. Nargis HAKIMY Program Assistant – Procurement (SARPS) Afghanistan CPA: Consulting Services Annex 2: GoA Consulting Contracts page 29 of 37 (Facilitated through PC within ARDS) ARDS Funding Amount in Year of No Mode Scope of Contract Name of Winner Ref Agency US$ Award 1 MoFA/555 QBS Design of Japan Embassy Building GoA 500,000 PDS, Japan 12/2006 2 AISA/281 QCBS Survey of Industrial Parks GoA 450,000 NESPAK, Pakistan 03/2005 Feasibility Study of Gambiri Irrigation Toossab Consulting 3 MoEW/279 QCBS GoA 751,239 08/2006 Project Engineers, Iran Feasibility Study of Farah Rud Irrigation 4 MoEW/283 QCBS GoA 2,321,560 CES, India et al. 08/2006 and Hydro Power Feasibility Study of Small & Medium 5 MoEW/354 QCBS GoA 2,132,010 CES, India et al. 11/2006 Dams Feasibility Study for Kelaghai Dam 6 MoEW/305 QCBS GoA 2,210,000 CES, India et al. 12/2006 Project Consultancy Services for the National MoLSA/445 International Rescue 7 QCBS Skills Development & Market Linkages GoA 1,558,972 12/2006 con1 Committee (Intern. NGO) Program Consultancy Services for the National MoLSA/445 Solidarity Afghanistan 8 QCBS Skills Development & Market Linkages GoA 963,574 12/2006 con1 Belgium (Intern. NGO) Program Consultancy Services for the National MoLSA/445 Sanayee Development 9 QCBS Skills Development & Market Linkages GoA 242,690 12/2006 con2 Foundation (Local NGO) Program Engineering Associate, 10 MoFA/440 QCBS Design of Embassy Building GoA 134,938 12/2006 Pakistan (1) Consulting services contracts funded by GoA: US$11,264,983 8.6 % (2) All contracts funded by GoA (goods, works, and consulting services): US$130,877,432 100 % Afghanistan CPA: Consulting Services Annex 3: Bank-funded Consulting Assignments page 30 of 37 (Signed Contracts from 29 May 2003 until 01 March 06) Contract Signing Country of No Project Name Contract Description Amount in Company Date Origin US$ Kabul Urban Consultants for Municipal Finance Support for $299,000 01-Mar-2006 Infrastructure India 1 Reconstruction Project Kabul Municipality Professional Enterprises (IPE) Kabul Urban Technical Support Unit Assistance to MUDH $2,705,000 04-Feb-2006 SMEC Australia 2 Reconstruction Project for KURP Implementation Emergency Transport Design and Construction Supervision for the $750,000 01-Jan-2006 SMEC Australia 3 Rehabilitation Project Rehabilitation of Taloqan-Faizabad Road - PHASE 2 Emergency Irrigation Feasibility Study for Lower Kokcha Irrigation $2,203,000 22-Dec-2005 Fichtner Germany 4 Rehabilitation Project and Hydropower Project Emergency Power Technical Assistance for Recruiting and $10,677,000 25-Oct-2005 MVV Consulting Germany 5 Rehabilitation Project Commercialization of DABM Public Admin Capacity Government Financial Management Project - $640,000 05-Sep-2005 ABU Consult Germany 6 Building Project System Study Public Admin Capacity Consultancy Services to Support Treasury $6,851,000 20-Jul-2005 Bearing Point US 7 Building Project Operations within the MoF, Line Ministries & Provincial Administrations Emergency National Contract for the External Mid-Term $459,000 20-Jul-2005 University of York UK 8 Solidarity Project Evaluation of NSP ARTF - Feasibility Rehabilitation of Baghdara Hydro Power Plant $4,100,000 07-Jun-2005 Fichtner Germany 9 Studies Facility 10 Public Admin Capacity Consultancy Services to Support Audit $1,809,000 15-May-2005 Deloitte Touch India Afghanistan CPA: Consulting Services Annex 3: Bank-Funded Consulting Assignments page 31 of 37 Building Project Operations & Capacity Building of CAO Tohmatsu Health Sector Hiring of Consultant for CMW Training $357,000 02-May-2005 Health Net International Emergency Program in Panjshar and Kapisa International NGO 11 Reconstruction & Development Project Emergency Power Design and Supervision of Rehab. & $1,340,000 2-May-2005 SMEC Australia 12 Rehabilitation Project Expansion of Urban Distribution Networks ARTF - Afghanistan - Continuation of Consulting Services for Re- $3,200,000 29-Apr-2005 Beller Kocks Consult Germany Short-Term Urban establishment & Operation of Water Supply & 13 Water Supply and Sanitation Services in Provincial Towns Sanitation Project Health Sector Hiring of Consultant for CMW Training $633,000 20-Apr-2005 International Medical International Emergency Program in Parwan Corps. NGO 14 Reconstruction & Development Project Health Sector Hiring of Consultant for CMW Training $473,000 20-Apr-2005 BRAC Regional NGO Emergency Program in Parwan, Panjshar and Kapisa 15 Reconstruction & Development Project Emergency National Facilitation of NSP in 72 Villages in Laja $302,000 17-Apr-2005 People in Need (PIN) International 16 Solidarity Project Mangal District of Paktia Province NGO ARTF - Feasibility Amendment 2 for Consultancy Services $880,000 02-Oct-2004 Beller Kocks Consult Germany 17 Studies Facility Public Admin Capacity Procurement of Facilitation Services for $4,280,000 30-Sep-2004 Rites India 18 Building Project ARDS Emergency National Assessment of Year 1 Performance of NSP $324,000 09-Aug-2004 Altai Consulting Afghanistan 19 Solidarity Project Facilitating Partners ARTF - Feasibility Program Implementation Support Unit for $2,315,000 15-Jul-2004 Decon Germany 20 Studies Facility MWP 21 Emergency Public n.a. $1,700,000 08-Jul-2004 The British Council UK Administration Project Afghanistan CPA: Consulting Services Annex 3: Bank-Funded Consulting Assignments page 32 of 37 II ARTF - Civil Service Afghan Expatriate Services $5,000,000 08-Jul-2004 International International 22 Capacity Building Organization for NGO Migration (IOM) Emergency Public Consultancy Services to Manage Public $2,563,000 03-Jul-2004 The Services Group US 23 Administration Project Administrative Reform (TSG) II Emergency National Facilitation of National Solidarity Program in $1,076,000 27-May-2004 German Aggro International 24 Solidarity Project the District of Balhkab in Sar-E-Pul Province Action NGO Health Sector Performance Based Partnership Agreement $3,748,000 13-May-2004 Aide Medicale International Emergency between TISA and AMI for Delivering BPHS Internationale NGO 25 Reconstruction & in 3 Districts of Badghis Province Development Project Emergency Hiring of Consultancy Services for Sanitation $1,300,000 27-Feb-2004 Gauff Ingenieure Germany 26 Infrastructure Improvements in Kabul under EIRP Reconstruction Project Health Sector Performance Based Partnership Agreement $8,384,000 26-Feb-2004 BRAC Regional NGO Emergency between TISA and BRAC/BDF for Delivering 27 Reconstruction & BPHS in Balkh Province Development Project Health Sector Performance Based Partnership Agreement $4,293,000 26-Feb-2004 Swedish Committee Local NGO Emergency between TISA and SCA for Delivering BPHS for Afghanistan 28 Reconstruction & in 3 Districts of Badghis Province Development Project Health Sector Performance Based Partnership Agreement $4,129,000 26-Feb-2004 IBN Sina Regional NGO Emergency with IBN Sina for Delivering BPHS in Sari 29 Reconstruction & Pul Province Development Project Emergency National Facilitation of NSP in Jawand and AB- $1,673,000 24-Feb-2004 BRAC Regional NGO 30 Solidarity Project Kameray Districts in Badghis Province 31 Emergency National Facilitation of National Solidarity Program by $1,628,000 17-Feb-2004 MADERA International Afghanistan CPA: Consulting Services Annex 3: Bank-Funded Consulting Assignments page 33 of 37 Solidarity Project Madera in 4 Districts in Nuristan and NGO Laghman Provinces Health Sector Performance Based Partnership Agreement $1,469,000 08-Feb-2004 BRAC Regional NGO Emergency between TISA and BRAC for Delivering 32 Reconstruction & BPHS in 3 Districts of Badghis Province Development Project Health Sector Consultancy Services for Third Party $3,859,000 03-Feb-2004 John Hopkins US Emergency Evaluation of MoH Programs University 33 Reconstruction & Development Project Emergency National NSP Facilitating Partner $1,297,000 21-Nov-2003 Oxfam International 34 Solidarity Project NGO Emergency Education Facilitation Agency for Community Grant for $2,265,000 17-Nov-2003 BRAC Regional NGO 35 Rehabilitation and School development in Parwan and Kapisa Development Project Provinces Health Sector Consultancy Services under PPH in Nimroz $1,691,000 30-Oct-2003 COOPI International Emergency Province NGO 36 Reconstruction & Development Project Health Sector Consultancy Services under PPH in Farah $5,381,000 28-Oct-2003 CHA Regional NGO Emergency Province 37 Reconstruction & Development Project Health Sector Consultancy Services under PPH in Hilmand $7,919,000 25-Oct-2003 IBN Sina Regional NGO Emergency Province 38 Reconstruction & Development Project Emergency National Facilitation of National Solidarity Program in $902,000 27-Sep-2003 Ockenden International 39 Solidarity Project Selected Districts/Provinces International NGO Emergency National NSP - Oversight Consultant $24,322,000 08-Sep-2003 GTZ Germany 40 Solidarity Project Afghanistan CPA: Consulting Services Annex 3: Bank-Funded Consulting Assignments page 34 of 37 Emergency Transport Design and Construction Supervision for the $750,000 28-Aug-2003 SMEC Australia 41 Rehabilitation Project Rehabilitation of Taloqan-Faizabad Road Emergency Education Bamiyan Province - Facilitation for $2,420,000 24-Jul-2003 CARE International International 42 Rehabilitation and Community Grant for School Development NGO Development Project Emergency Education Logar Province - Facilitation for Community $2,286,000 24-Jul-2003 CARE International International 43 Rehabilitation and Grant for School Development NGO Development Project Emergency National Facilitation of National Solidarity Program in $652,000 25-Jun-2003 ActionAid International 44 Solidarity Project Samangan & Jawzjan Provinces - Darra-I Suf NGO et al. Emergency National Facilitation of National Solidarity Program in $2,807,000 25-Jun-2003 AfghanAid British NGO 45 Solidarity Project Samangan & Ghor Provinces - Hazrati Sultan et.al Emergency National Facilitation of National Solidarity Program in $4,912,000 25-Jun-2003 Aga Khan International 46 Solidarity Project Badakshan & Baghlan Provinces - Shignan et Development NGO al. Network Emergency National Facilitation of National Solidarity Program in $745,000 25-Jun-2003 AREA n.a. 47 Solidarity Project Selected Provinces Emergency National Facilitation of National Solidarity Program in $3,726,000 25-Jun-2003 ACTED International 48 Solidarity Project Faryab, Baghlan, Kunduz & Takhar Provinces NGO - Almar et al. Emergency National Facilitation of National Solidarity Program in $4,845,000 25-Jun-2003 BRAC Regional NGO 49 Solidarity Project Nangarhar, Partiak & Heland Provinces - Rodat et al. Emergency National Facilitation of National Solidarity Program in $2,982,000 25-Jun-2003 CARE International International 50 Solidarity Project Ghazni & Paktia Provinces - Malistan et al. NGO Emergency National Facilitation of National Solidarity Program in $933,000 25-Jun-2003 CHA Local NGO 51 Solidarity Project Alkh Province - Dawlatabad et al. 52 Emergency National Facilitation of National Solidarity Program in $739,000 25-Jun-2003 CONCERN International Afghanistan CPA: Consulting Services Annex 3: Bank-Funded Consulting Assignments page 35 of 37 Solidarity Project Selected Districts/Provinces NGO Emergency National Facilitation of National Solidarity Program in $2,396,000 25-Jun-2003 DACAAR International 53 Solidarity Project Laghman & Badghis Provinces - Alingar et al. NGO Emergency National Facilitation of National Solidarity Program in $1,194,000 25-Jun-2003 German Aggro International 54 Solidarity Project Sar-I-Sul Province - Sayyad etal. Action NGO Emergency National Facilitation of National Solidarity Program in $1,539,000 25-Jun-2003 Ghazi Rural Support Local NGO 55 Solidarity Project Kunduz Province - Qalayi et al. Program (GRSP) Emergency National Facilitation of National Solidarity Program in $4,289,000 25-Jun-2003 International Rescue International 56 Solidarity Project Logar & Khost Provinces - Mohammad Agha Committee (IRC) NGO et al. Emergency National Facilitation of National Solidarity Program in $265,000 25-Jun-2003 Islamic Relief International 57 Solidarity Project Kunar Province - Serkani et al. Agency (ISRA) NGO Emergency National Facilitation of National Solidarity Program in $984,000 25-Jun-2003 Swedish Committee Local NGO 58 Solidarity Project Wardak Province - Markaz-I Behsud et al. for Afghanistan Emergency National Facilitation of National Solidarity Program in $1,848,000 25-Jun-2003 Sanayee Local NGO 59 Solidarity Project Kabul Province - Bagrami et al. Development Foundation (SDF) Emergency National Facilitation of NSP in Kabul Provinces - $1,475,000 17-Jun-2003 Afghan Development Afghanistan 60 Solidarity Project Shahjoy, Arghandab & Qalat Districts Association (ADA) Emergency National Facilitation of National Solidarity Program in $527,000 16-Jun-2003 GOAL International 61 Solidarity Project Selected Districts/Provinces NGO Emergency Transport Consultancy Services for the Supervision of $1,650,000 02-Jun-2003 Louis Berger Group US 62 Rehabilitation Project the Construction of the Doshi to Shrikhan Bandar Road Emergency Re-establishment of Water Supply and $2,700,000 29-May-2003 Beller Kocks Consult Germany 63 Infrastructure Sanitation services in Selected Provincial Reconstruction Project Towns Total (approx.): US$175,860,000 Afghanistan CPA: Consulting Services Annex 4: Assessment of 10 Bank-funded Consulting Assignments page 36 of 37 No of EoI Size of Proposals Proposals Project Assignment Received Shortlist Submitted above MQS Health Sector Emergency Performance-based Partnership Agreements to Deliver Basic Reconstruction and Package of Health Services to Nimroz Province 5 5 3 2 Development Project Emergency Power Supervisory Engineering Services for Rehabilitation of Naghlu 6 6 1 1 Rehabilitation Project Hydropower Plant Public Administration and Procurement Support Reform Project - Procurement Capacity Capacity Building Project Building and Legal and Institutional Framework Development 19 3 2 2 for Procurement in Afghanistan Emergency Power Consultant Services for Legal Technical Assistance to the Rehabilitation Project MoEW to negotiate Power Purchase Agreements for Imports 5 5 2 2 from Neighboring Countries Kabul Urban Preparation of Development Plan for Kabul 8 5 3 2 Reconstruction Project First Emergency Power Consultant Services for Reactive Power Compensation for the 9 3 3 2 Rehabilitation Project North-Eastern Transmission System Public Administration and Consultancy Services to Support Treasury Operations within 12 6 3 3 Capacity Building Project MoF, Line Ministries and Provincial Administrations Kabul Urban Preparation of Development Plans for Kandahar and Herat 4 3 2 2 Reconstruction Project Public Administration and Consulting Services to Support Audit Operations and Capacity 12 6 3 2 Capacity Building Project Building with the Control and Audit Office (CAO) Kabul Urban Preparation of Development Plan for Mazar-i-Sharif and 4 3 3 3 Reconstruction Project Jalalabad AVERAGE: 8.4 4.5 2.5 2.1 Afghanistan CPA: Consulting Services Annex 5: Assessment of 12 Bank-funded Consulting Assignments Billing Rates page 37 of 37 WB-funded Consulting Contracts (excluding NGOs): Monthly Billing Rates Selection Firm Contract Team Key Contract National Method from Date Leader Staff (1) PRP - Procurement Reform Support Project: Procurement Capacity Building QCBS UK 02/07 $24,000 $23,000 $4,000 and Legal & Institutional Framework Development (under PACBP) (2) Supervisory Engineering Services for Rehabilitation of Naghlu Hydro Power QCBS Germany 09/06 $31,000 $25,200 ./. Plant (under Emergency Power Rehabilitation Project) (3) Consultancy Services for Improving Air Traffic Management System of QBS France 04/06 $33,800 23,000 ./. Afghanistan Airspace (under Emergency Transport Rehabilitation Project) (4) Consultancy Services as Technical Support Unit to the PMU in the MoUDH QCBS Australia 04/06 $23,100 $17,800 $2,500 (under Kabul Urban Reconstruction Project) (5) Government Financial Management and Administration Project – System QCBS Germany 09/05 $49,500 $31,000 $2,200 Study (under PACBP) (6) Consultancy Services to Support Treasury Operations within the MoF, Line QCBS US 07/05 $35,700 $26,600 $2,700 Ministries & Provincial Administrations (under PACBP) (7) Feasibility Study for Baghdara Hydropower Project (under ARTF Feasibility QCBS Germany 06/05 $27,100 $18,100 $2,900 Study Facility Project) (8) Consultancy Contract for the Design and Construction Supervision for Rehabilitation of Taloqan to Faizabad Road (under Emergency Transport QCBS Australia 08/03 $22,000 $19,000 ./. Rehabilitation Project) (9) Consultancy Services to Support the Audit Operations and Capacity QCBS India 05/05 $18,000 $11,000 $7,000 Building of CAO (under PACBP) (10) Procurement Strengthening and Support for ARDS (under EPAP II) QCBS India 09/04 $15,000 $13,000 $4,500 (11) Consultancy for Engineering Services for the Procurement and Installation of OPGW and Associated Equipments for 220K Transmission Line from Kabul SSS India 06/06 $12,000 $10,000 to Pul-I-Khumri (under Emergency Transport Rehabilitation Project) (12) Consultant Services for Reactive Power Control for the North-Eastern QCBS India 06/06 $7,500 $7,500 Transmission System (under Emergency Transport Rehabilitation Project) Average $24,900 $18,750 $3,700 Median $23,550 $18,550 $2,900 Median (Part 1 country firms): $29,050 $23,000 Median (Part 2 country firms): $13,500 $10,500