Procurement Best Practice

7/29/2019 Procurement Best Practice

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PROCUREMENT BEST PRACTICE

& the Millennium Development Goals

FIDIC/GAMA CONFERENCE

Durban, 16 March, 2009

Enrico VinkFIDIC Managing Director.


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Overview

Who is FIDIC?

The MDGs Status Report

The links to FIDIC and its members

Key issues impacting on MDG progress

Conclusion


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FIDIC Today

FIDIC 1913 3 Member Associations

FIDIC 2009 - 81 Member Associations.

FIDIC Members represent some 45,000 firms and

some 2 million professionals in the consultingengineering business.

FIDIC speaks with ONE voice. It represents ALL theprivate sector consulting engineers (approx 3m)


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FIDIC Objectives

What FIDIC Does?- represent globally the consulting

engineering industry

What FIDIC offers?- best business practice and tools to

promote a sustainable industry:documents, guides, training etc

What are FIDIC Principles?- quality, integrity and sustainability


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Global Infrastructure Market

Annual investment in construction - $5,100 billion

Average impact on GDP 9%

Significant Economic Value implied

Annual consultant fees - $310 billion

Annual Investment by MDBs - $80 billion?

(ODA Spending - $105 billion)


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The Millenium Development Goals

1. Eradicate extreme poverty & hunger

2. Achieve universal primary education

3. Promote gender equality & empower women

4. Reduce child mortality

5. Improve maternal health

6. Combat HIV/Aids, Maleria & other diseases

7. Ensure Environmental Sustainability

8. Develop a global partnership for development


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The MDG Scorecard Mixed Results

1. Poverty & hunger:

1 billion less than $1/day (down 20%)

800 million under nourished Mixed results since 1990, but also some successes

2. Primary education

Enrolments up 8%, but 115 million children no schooling

3. Gender equality

Slow progress in many countries (only 3% improvement)

Politics and Societal changes

4. Child mortality Good progress, but 11 million under 5 die each year


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The MDG Scorecard

5. Maternal health

Some progress, but 200 million unsafe

High risk of death during child birth6. HIV/Aids, Maleria etc

Still major problem - 20 million deaths

Huge impacts on economic growth

Maleria affects 350-500 million people

7. Environmental Sustainability

Deforestation, urbanisation, water, fisheries etc still

significant problem. The carbon trade scandal.8. Global partnerships

Governments, private sector, NGOs, Civil Society


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The Millenium Development Goals - Upsides

Agricultural training for self sufficiency

Better irrigation schemes

Expanded transport infrastructure

Water supplies improved

Power supplies increased

Waster water treatment enhanced

Institutional reforms

Integrity, transparency

More health/education facilities


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The Millenium Development Goals - Upsides

Numerous reports on Infrastructure & MDGs

1. http://www.oecd.org/dataoecd/22/31/36567911.pdf

2. http://www.new-rules.org/docs/epiam/lofgren-bonilla.ppt

3. http://pse.litbang.deptan.go.id/ind/pdffiles/Thestudyofeffieciency.pdf

4. http://www.unece.org/commission/MDGs/Brochure_MDG_E.pdf

5. http://businessfightspoverty.ning.com/group/mdgsatthemidpoint/forum/topics/2014886:Topic:10751

Message clear development needs goodinfrastructure!!


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The Millenium Development Goals - Downsides

Natural Disasters floods, droughts etc

Politics

Corruption (see also politics)

Lack of Infrastructure

Global versus local Poor policies and procedures

Lack of support

Inappropriate support Weak procurement


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Procurement Issues

Price dominated ie competition at all cost encourages corner cutting.

Influenced by political and economic factors.

Huge negative impact of corruption

Lack of focus on core objectives end users ,andsuitability of outcomes (life cycle issues,MDGs)


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Fair Procurement & FIDIC

Quality paramount

Capacity Building priority

Sustainability

Integrity

IFIs important


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Project Scope

Investment priorities

Political & legalconsiderations - MDGs,

Intl Conventions etc

Sustainability Issues:social, environmental,economic, cultural


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Quality Tools

Quality Management System

Guide

ISO9001:2000 interpretation

guide

Training kit

Business practice guides

Quality of Construction

Quality Based Selection

Forum

Quality Management Forum


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Sustainability Tools

Environment Management Systems

Industry resource kit

Urban resource kit

Project Sustainability Management

Guide

Business practice

Guide

Strategy

Sector report


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PSM Methodology

Anchored in core indicator list arising fromUNCSD/Agenda 21/Millennium Development Goals

Process for transparently customizing to projectneeds

Includes

Client-specific objectives/commitments

Stakeholder involvement

Equator principles/IFI Safeguard Principles/financing

issues Local Agenda 21 activities/MDG priorities


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PSM Uniqueness

Covers all kinds of projects

Compatible with GRI, other sustainability systems,client policies

Selection of performance targets for every issueranging from compliance to SD

Continuous improvement focus


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Integrity Tools

Business Integrity Management

System

Guide

Training kit

Business practice

Code of Ethics

Policies

- Conflict of Interest- Anticorruption

Model Representative Agreement


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Integrity Tools

FIDIC Policy 0 tolerance

Products BIMs, GPIMs

Influence IFIs, others

MAs and firms


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Business Integrity Management System (BIMs)

Compatible with most global conventions.

Based on Quality Management System.

Can be Third Party Audited

Encourages Training & Education

Being implemented, but


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Other FIDIC Tools

HIV/AIDs policy 2004: http://www1.fidic.org/about/statement19.asp

FIDIC Contracts and Agreements

Defining Services of Consultants

Risk Management Guides

Capacity Building programmes

81 Voices worldwide


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Conclusions

Procurement:

- Governments and clients need good advice on: Investment options and scope

Politicial, economic and social priorities

Procurement options

Contract options

Integrity

- what are the real issues and their impact?- how to tackle the root causes?

Sustainability

- what is it, and how can it be defined?- where and when to discuss? By whom?

- national law/conventions/procurement/contracts?


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Conclusions

Consulting Engineers: Talk to ALL stakeholders Offer real solutions Humanise what you do and spread the word

Associations- Raise profile- Promote the industry- Seek to influence decision makers

Funders- Utilise more the skills of the consulting sector

- Support and encourage capacity building- Promote best practice procurement


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FIDIC contacts

International Federation of Consulting Engineers

President: John Boyd, Canada

President-Elect Gregs Thomopulos, USA

Treasurer Adam Thornton, NZ

Secretariat World Trade Center 2

Geneva Airport

Box 311

CH-1215 Geneva 15Switzerland

Tel: +41 22 799 49 00

Fax: +41 22 799 49 01

[email protected]

www.fidic.org

Managing Director Enrico Vink

General Manager Peter Boswell

Thank you

Documents

Procurement Best Practice