THE PROGRAM Program for the Promotion of Sustainable Agricultural Production
I. Objective
1.01.—The general objective of the Program is to increase income and improve the quality of life of families of small and medium agricultural producers, by promoting the competitiveness of agricultural production systems on an economically and environmentally sustainable basis.
1.02.—The specific objectives of the Program are: (i) to increase the competitiveness of small and medium agricultural producers through technologies and activities that generate sustainable economic opportunities by increasing productivity and improving access to market opportunities; and (ii) to improve environmental management by small and medium agricultural producers through technical assistance and the recognition of external environmental benefits.
II. Description
2.01.—To achieve the objectives described in section I above, the Program includes the execution of the following three (3) components in accordance with the provisions of this Contract and the Program's Operative Regulations:
Component 1: Investments and technical assistance in sustainable agricultural production 2.02.—Under this component, Program resources shall finance local technical assistance and investment projects presented by organizations of small and medium agricultural producers. The producers shall contribute fifty percent (50%) of the cost of the technical assistance, and in addition, they must make the required investments with their own funds or through bank loans. For indigenous producer organizations, the co-financing of technical assistance shall be ten percent (10%).
2.03.—The introduction of new technologies in agricultural, livestock, agroforestry, and silvopastoral activities of high profitability and with proven experience in the country shall be promoted. The activities and varieties to be introduced rely to a great extent on the identification and development of market opportunities for crops suited to the climatic conditions in the different regions, the soil vocation, and the conditions of the hydrographic basins. All forms of production shall be combined with efficient soil and water conservation measures.
2.04.—As recognition of the environmental benefits generated by the Program, the Borrower shall offer as an incentive a minimum of twenty percent (20%) of the investment costs (excluding labor) of each farmer for all approved projects. For projects requiring greater investment in works specifically for environmental protection (gully control, among others), the cost of said works may be recognized, provided that the total of the recognitions does not exceed thirty percent (30%) of the farm's investments. In this way, projects with higher levels of investment in environmental works will receive a greater recognition of the total investment costs of each project.
2.05.—To facilitate the financing of the required investments, participating producers may take advantage of a line of credit from the Banco Nacional de Costa Rica, which will be created for this purpose and as a complement to this Program. The Banco Nacional de Costa Rica will grant medium- and long-term loans to producer associations and individual producers who require them to finance investment expenses and technical assistance, applying the market interest rate and current guarantee policies.
2.06.—Eligible for financing by the Program are those projects whose purpose is: (i) to solve productivity problems resulting from failures in the technology applied in the production systems; (ii) to adopt new production systems that respond to changes in the preferences of local or international markets; (iii) to introduce production systems that use the soil resource more efficiently and consequently release land surpluses that can be dedicated to forestry and conservation uses; (iv) to reduce the use of agrochemicals and improve land use through the application of technologies for efficient natural resource management; and (v) to generate greater added value to primary production, through product classification and certification activities, and for quality and conformity to market preferences.
2.07.—The productive projects proposed by producer organizations must yield substantially higher income than the systems they replace, must be environmentally feasible, and the technology to be applied in them must be available and have been previously validated under field conditions in Costa Rica. The environmental impacts and the improvement in natural resource management must be clearly positive and verifiable, and in accordance with national sustainable development strategies. There must be clearly identified marketing channels for the products, and markets capable of absorbing the planned production.
2.08.—Agro-enterprise projects may include small pre-investment studies and technical assistance on technological changes necessary to respond to opportunities and demands of the international market.
Component 2: Training and information 2.09.—This component has three objectives: (i) to strengthen the capacity of small and medium producer organizations, women agricultural producer organizations, and rural youth, so that these groups can operate in an entrepreneurial manner and gradually become independent from technical assistance by the government; (ii) to train the extension agents of the MAG, organizations of small and medium producers, and service providers (the latter for induction courses only) with the purpose that they meet the new demands of the organizations described above in non-traditional and competitiveness topics; and (iii) to adapt the Sistema de Información Agropecuaria Infoagro by interconnecting the central system with all the networks of the Agricultural Service Agencies, to offer producers the necessary information for their particular operations. These objectives shall be achieved through two (2) subcomponents: (a) training and (b) information.
(a) Training subcomponent 2.10.—This subcomponent has three lines of action: (i) training for producer organizations in entrepreneurial and technical topics; (ii) training for extension agents of the Agricultural Service Agencies (ASA); and (iii) induction courses for professionals who are potential service providers.
2.11.—Program resources shall finance: (i) workshops; (ii) seminars; (iii) meetings; (iv) field days; (v) technical observation tours; (vi) gatherings; (vii) workshops for analysis and evaluation of results; (viii) bulletins; (ix) radio programs; (x) videos; (xi) interviews and surveys; and (xii) method demonstrations and trials in Integrated Didactic Farms (FID) and on farmers' plots. Training in entrepreneurial topics shall be directed at members of small and medium agricultural producer organizations, whether or not they participate in Component 1. The trained producers shall subsequently act as trainers themselves within their organizations.
2.12.—The training will cover topics such as organic agriculture, use and conservation of soils and waters, considering territorial planning plans, municipal planning, and watershed use plans, where they exist, quality control, organization of group work, occupational health and safety. All training activities will emphasize the integration of women and young producers, as well as ethnic minority groups, for which differentiated training manuals will be developed by audience, considering special aspects of indigenous and Afro-Costa Ricans, and gender aspects. Producer organizations must provide an in-kind contribution of a minimum of ten percent (10%) of the cost of participation of their members in the training courses.
2.13.—Training for extensionists of the ASA will include topics on new technologies and competitiveness on the one hand, and on the other, topics that enable them to assist producer organizations in solving their problems. These topics include: (i) institutional service orientation, which will allow them to learn about the programs offered by other institutions in the sector and use this knowledge to direct the farmer to the best available source for their need; (ii) legal aspects; and (iii) competitiveness and marketing at the national and international level, information management, and new innovative production technologies.
2.14.—As theoretical/practical instruments for training and dissemination, it is planned to strengthen the FID, and use them in each region to demonstrate the advantages of: (i) alternative crops; (ii) conservationist agriculture; (iii) integrated production systems that contemplate the efficient use of energy, through the processing and utilization of waste; (iv) product processing; (v) linkage advances; and (vi) the application of environmentally appropriate technologies. Dissemination will also be carried out through support for congresses and events specific to the beneficiary organizations.
2.15.—Finally, it is planned to support activities and training and dissemination material aimed at rural youth and especially young producers, with an agribusiness focus.
(b) Information Subcomponent 2.16.—The objective of this subcomponent is to improve and adapt the Agricultural Information System (Infoagro).
2.17.—The Secretariat for Agricultural Sector Planning (SEPSA) is responsible for managing this system; however, it is currently being operated jointly with the National Production Council (CNP). By decision of the MAG, this system will be rehabilitated directly under the Directorate of SEPSA and will interconnect all the ASA so that the information can be disseminated at the farmer level. In this way, SEPSA will have the database required to carry out adequate monitoring of the Program as well as the pertinent studies of the sector as it is empowered to do.
2.18.—With the Program's resources, the acquisition of computers, modems, software, and the installation of sufficient telephone lines for the anticipated demand, and the contracting of consulting services in information systems and networks will be financed.
Component 3: Studies to support the competitiveness of the agricultural sector.
2.19.—This component aims to provide the MAG with the necessary instruments to develop its policy in the sector in the face of new competitiveness challenges, and to incentivize the development of agricultural activities within a framework of environmental sustainability.
2.20.—With the Program's resources, the contracting of consulting services will be financed to carry out studies in the following areas:
(i) baseline information and data study on the agricultural sector; (ii) competitiveness studies; (iii) studies on the System for Monitoring and Evaluation of environmental and social impacts of the Program and socioeconomic impacts for the sector; (iv) market studies on economic recognition for environmental benefits of the agricultural sector; and (v) studies of specific projects in areas of agricultural production, marketing, and agroindustry.
III. Program Cost and Financing Plan
3.01.—The estimated cost of the Program is the equivalent of seventeen million six hundred thousand dollars (US$17,600,000), according to the following distribution by investment categories and by sources of financing.
Program Cost (in thousands of US$)
| Budget Category | IDB | Local | Total | % |
|---|
| Administration, supervision and auditing | 1,800 | 300 | 2,100 | 12 |
| Components | 9,970 | 2,780 | 12,750 | 72 |
| 1. Technical assistance and investments | 6,300 | 2,500 | 8,800 | 50 |
| 2. Training and Information | 2,070 | 280 | 2,350 | 13 |
| 3. Studies | 1,600 | | 1,600 | 9 |
| Subtotal | 11,770 | 3,080 | 14,850 | 84 |
| Unallocated | 819 | | 819 | 5 |
| Contingencies | 635 | | 635 | |
| Escalation | 184 | | 184 | |
| Financial expenses | 1,811 | 120 | 1,931 | 11 |
| Interest | 1,667 | | 1,667 | |
| Credit Commission | | 120 | 120 | |
| F.I.V. 1% | 144 | | 144 | |
| Total | 14,400 | 3,200 | 17,600 | 100 |
| Percentage | 82% | 18% | 100% | |
IV. Bidding
4.01.—When the goods and services acquired or contracted for the Program, including those related to transportation and insurance, are financed totally or partially with foreign exchange from the Financing, the procedures and specific bidding documents or other forms of contracting must allow the free participation of suppliers of goods and services originating from Bank member countries. Consequently, in the cited procedures and specific bidding documents, no conditions shall be established that impede or restrict the offer of goods or the participation of contractors originating from those countries.
4.02.—When credit sources other than the Financing resources or those of the local counterpart are used, the Borrower may agree with the financier on the procedure to be followed for the procurement of goods and services. However, at the Bank's request, the Borrower must demonstrate the reasonableness of both the price agreed upon or paid for the procurement of said goods and services, and the financial conditions of the credits. The Borrower must also demonstrate that the quality of the goods satisfies the technical requirements of the Program.
V. Consulting Services
5.01.—In the selection and contracting of consulting services financed totally or partially with Financing resources: (a) the procedures agreed upon with the Bank must be applied, and (b) no provisions or stipulations may be established that restrict or impede the participation of consultants originating from Bank member countries.
5.02.—With respect to consulting services financed with local counterpart resources, the Bank reserves the right to review and approve, before the Borrower proceeds with the corresponding contracting, the names and background of the firms or individual consultants selected, the terms of reference, and the agreed-upon fees. This provision does not apply to contracts made with resources from supplier credits.
VI.—Maintenance 6.01.—The purpose of maintenance is to preserve the equipment included in the Program in the operating conditions in which they were at the time of their acquisition or installation, within a level compatible with the services they must provide.
6.02.—The annual maintenance plan must include: (a) the details of the organization responsible for maintenance, and the personnel in charge; (b) information regarding the resources that will be invested in maintenance during the current year and the amount of those that will be allocated in the budget for the following year; and (c) a report on the maintenance conditions, based on the sufficiency evaluation system established by the Borrower, through the Executing Agency.
VII.—Execution 7.01.—For the purposes of what is established in Section 3 of the introductory part of the Special Stipulations and in Clause 3.02 (i) of the same stipulations, the decision-making level will be represented by the National Directive Council (CND), which will have the responsibility of:
(i) establishing the Program's priorities; (ii) reviewing and adjusting the annual plans; (iii) approving the Program's Operational Regulations and future changes with the Bank's approval; (iv) reviewing the annual financial statements; (v) agreeing on the execution structure; and (vi) resolving any problem of magnitude that could arise during execution.
7.02.—The CND will be composed of: (i) the Minister or Vice Minister of Agriculture and Livestock; (ii) the Director of SEPSA who will act as Technical Secretary; (iii) the Director of the National Directorate of Agricultural Extension (DNEA); (iv) a representative of the Federations of Cantonal Agricultural Centers; (v) a representative of the National Chamber of Agriculture and Agroindustry; (vi) a representative of agricultural cooperatives designated by the Institute for Cooperative Development (INFOCOOP); and (vii) a representative of the Coordinating Body for Work with Rural Women.
7.03.—The executive and administrative level will be represented by the Program Coordinating Unit (UCP), which will depend hierarchically on the Minister of Agriculture. The function of the UCP is to ensure the coordination, administration, and execution of the Program. 7.04.—For the purposes of what is stipulated in Clause 3.02 (ii) of the Special Stipulations, the UCP will be composed of a Program Director and five (5) specialists in the areas of: technical assistance and production; socio-environmental; training, study monitoring, and program monitoring and evaluation. Of this personnel, the Director and the monitoring and evaluation specialist will be selected and contracted according to the Bank's policies and procedures in force on the matter. The other four (4) professionals will be designated by the MAG from its staff and will have the Bank's approval. In addition, the UCP will have an administrative assistant, an accountant, and administrative support staff (secretary and messenger).
7.05.—In particular, the UCP will be responsible for: (i) preparing the annual operational plans; (ii) preparing and submitting to the Bank the disbursement requests with the due justification of expenses; (iii) supervising the Specialized Administrative Agency (AEA) in the procurement of goods and services and contracting of consulting services for Components 2 and 3 of the Program; (iv) maintaining the accounting records and preparing the consolidated financial statements of the Program; (v) preparing the reports required by the Program including the report on the revolving fund; (vi) maintaining consolidated records of the Program as well as records showing in detail the transferred resources and the accountability of each participating entity; (vii) preparing or reviewing the terms of reference for the various consultancies, studies, and training events to be contracted by the AEA; (viii) reviewing the evaluations of the projects approved by the respective Joint Regional Committee (CRM) presented by the regional Agricultural Services Agencies (ASA) for Component 1; (ix) acting in coordination with the DNEA and SEPSA in the execution of the Program; (x) maintaining and updating, with the assistance of the ASA, the records of all technical assistance service providers that could participate in Component 1; (xi) with the assistance of the ASA, carrying out the campaign and selecting effective dissemination media according to the different audiences; and (xii); supervising the work of the ASA related to the Program at the regional level.
7.06.—The UCP will have a close connection with the DNEA for the purposes of the Program's operability and project execution, as well as with SEPSA which, in addition to acting as technical secretariat of the CND, will be responsible for the execution of the "Information" subcomponent of Component 2, described in paragraphs 2.16, 2.17, 2.18 and, according to its mandate as a MAG dependency, will be in charge of evaluating the results and impacts obtained from the Program and the agreed goals according to the Logical Framework. SEPSA will be responsible for approving the terms of reference to be prepared by the UCP for the contracting of the mid-term evaluation and final evaluation consultancies of the Program.
7.07.—The UCP will have the support of the AEA referred to in Clause 3.02 (v) of the Special Stipulations, which must, among other aspects: (i) be an entity accredited by the Comptroller General of the Republic to administer public funds; and (ii) have extensive experience in administering programs in the agricultural sector.
7.08.—The responsibilities of the AEA will be: (i) preparing the terms of reference and the documents for the bidding of goods and services and for the contracting of consulting services; (ii) maintaining specific and separate bank accounts for the use of the financing resources and the local counterpart; (iii) supervising the progress of the various consultancies and training in execution; (iv) making, with the prior approval of the UCP, all payments related to the execution of activities within Components 2 and 3 of the Program; (v) assisting the UCP in all pertinent matters within its competence; (vi) maintaining specific and detailed accounting records on the use of the financing resources and the local counterpart; (vii) maintaining the original supporting documentation for the eligible expenses of the Program; (viii) making all original documents and information related to the Program available to the Program's external auditors and providing all clarifications and explanations that are necessary; (ix) presenting the financial statements corresponding to the Program's resources duly audited by an independent auditing firm acceptable to the Bank.
7.09.—For the purposes of what is established in Clause 3.02 (iii) of the Special Stipulations, eight Joint Regional Committees (CRM) will be created, one per region, composed of the Regional Director and the Regional Extension Chief of the MAG; and one (1) representative of the beneficiary organizations in the region to review and approve the projects presented by the organizations through the ASA. To address projects where the members of the organizations wish to use the credit line of the Banco Nacional de Costa Rica, as indicated in paragraph 2.05 of this Annex A, two (2) technicians from said bank will be incorporated into the respective CRM. In these CRM, the projects previously developed with their technical, financial, and environmental feasibility, and reviewed by the ASA, will be presented for their evaluation and final approval.
7.10.—The Program's Operational Regulations referred to in Clause 3.02 (iv) of the Special Stipulations will establish norms and regulate the aspects related to the operational execution of the Program, including among other aspects the following: (i) Program beneficiaries; (ii) the eligibility criteria including the environmental aspects of the projects referred to in Clause 4.08 of the Special Stipulations; (iii) the selection criteria for applicable technologies; (iv) non-financed activities; (v) the method of project selection; (vi) the functions and responsibilities of the CDN, the UCP, the CRM, the ASA; (vii) the functions and responsibilities of the AEA; and (viii) the procurement and contracting procedures.
BIDDING PROCEDURE Program for the Promotion of Sustainable Agricultural Production
I. SCOPE OF APPLICATION
1.01.—Amount and types of entities. This procedure will be used by the Bidder¹ in all procurement of goods and execution of works for the Project². When the estimated value of said goods or works is equal to or exceeds the amounts established in the Special Stipulations of this Contract and provided that said entity belongs to the public sector, the procurement method to be used will be international public bidding. Said sector includes companies or other entities in which state participation exceeds 50% of their capital. The contracting 1. In this Procedure, the term "Bidder" means the entity responsible for carrying out the Project's bids, both for works and for goods and related services. This entity may correspond, depending on the case, to the Borrower, the Executing Agency, or certain official bodies or specialized agencies to which local legislation may entrust carrying out either all public sector bidding processes or only the selection and award stages. "Bidder" is the entity that submits the offer. Other synonymous terms are: offeror, applicant, supplier, proposer, contractor, etc. 2 "Project" means the Project or Program for which the Financing has been granted. of related services, such as goods transportation, insurance, installation and assembly of equipment, and initial operation and maintenance, is also governed by this Procedure and the same rules apply as for the procurement of goods³. The contracting of consulting services, on the other hand, is governed by different procedures.
1.02.—Local legislation. The Bidder may apply, in a supplementary manner, formal requirements or procedural details contemplated by local legislation and not included in this Procedure, provided that their application does not oppose the basic guarantees that bids must meet, nor the Bank's policies in this matter⁴.
1.03.—Diverse legal relationships. The legal relationships between the Bank and the Borrower are governed by this Contract. Said Contract also regulates important aspects of the procurement procedures. But since the legal relationships between the Bidder and the suppliers of works, goods, and related services are governed by the bidding documents and the respective supply contracts, no supplier or entity that is not a party to this Contract may derive rights or demand payments by reason of this Contract.
1.04.—Basic responsibilities. The responsibility for the execution and administration of the Project resides with the Borrower and, therefore, the Borrower is also responsible for the award and administration of the supply contracts, all without prejudice to the supervisory powers vested in the Bank.
II. GENERAL RULES
2.01.—Ethical levels. Both during the bidding process and during the execution stage of the corresponding contracts, the Bidder and the Bidders, as well as any other direct or indirect participant in the procurement processes governed by this Procedure, will maintain the highest ethical levels and will not participate in any type of corruption in relation to said processes.
2.02.—International public bidding. The international public bidding system must be used when the procurement of goods or the execution of works or related services is partially or totally financed with foreign exchange from the Financing and the estimated value of said goods or works is equal to or exceeds the amounts established in the Special Stipulations of this Contract.
2.03.—Unrestricted participation of bidders. When foreign exchange from the Financing is used, the procedures and the specific conditions of the bid will allow the free participation of offerors originating from the Bank's member countries⁵. Consequently, conditions that impede or restrict the offer of works, goods, and related services, including any mode of transportation, or the participation of offerors originating from those countries may not be established.
2.04.—Public bidding that may be restricted to the local scope. The procurement of goods or the execution of works that are financed entirely with local currency from the Financing or with local counterpart funds or with a combination of these two types of funds and whose amounts are equal to or exceed those indicated in the Special Stipulations of this Contract, must be carried out through public bidding, which may be restricted to the national scope.
2.05.—Other procedures for execution of works or procurement of goods. When the procurement of goods or the execution of works is financed exclusively with resources that do not come from the Financing or from the Borrower⁶, the Bidder may use procedures agreed upon with the supplier of those resources. However, the procedures must be compatible, to the Bank's satisfaction, with the Borrower's obligation to carry out the Project with due diligence and efficiency. Likewise, the goods and works to be acquired must: (a) be of satisfactory quality and conform to the technical requirements of the Project; (b) have been delivered or completed in a timely manner; and (c) have been acquired at market prices. The Bank may request that the Bidder inform it of the applicable procedure and the results obtained.
2.06.—Procedures applicable to offers for amounts below the limits established in the Special Stipulations.
(a) The procurement of goods or the execution of works for amounts lower than those indicated in the Special Stipulations will be governed, in principle, by the provisions of the respective local legislation. To the extent possible, the Bidder will establish procedures that allow the participation of several proponents, and will pay due attention to aspects of economy, efficiency, and price reasonableness. When foreign exchange from the Financing is used, the procedures employed must also allow the participation of offerors of goods or works from the Bank's member countries.
(b) When this Contract indicates that the supervision of certain procurement by the Bank will be carried out ex-post, that is, after the signing of the corresponding procurement contracts, the Bidder will promptly notify the Bank of each contract, sending it the basic data thereof, and will preserve, so that the Bank can carry out said supervision, the background of the procurement and especially the following documentation: (i) the corresponding bidding documents; (ii) the notices and letters relating to the publicity given to the bid; (iii) the reports that analyzed the offers and recommended the award; and (iv) the corresponding signed contracts. The Bidder also undertakes to present to the Bank any other additional information that it may require.
(c) Procurement supervised ex-post is also subject to the Bank's policies. The Bank reserves the right to (i) not finance or cancel the resources of those contracts whose prior procurement procedure was not in accordance with said policies; (ii) to require the reimbursement, with interest and commissions, of those resources already disbursed for the cited contracts; and (iii) to not recognize, as part of the local counterpart, those resources that the borrower had allocated for the cited contracts. The Bank also reserves the right to establish that for future contracts, supervision will be carried out ex-ante.
2.07.—Eligible participants and goods. The goods or works to be contracted for the Project and that are financed with Financing resources must originate from the Bank's member countries⁷.
To determine that origin, the following rules will be followed:
1. In the case of bids for works 2.08.—Criteria to establish nationality. Only firms or companies originating from one of the Bank's member countries may participate in bids for works. To determine the nationality of an offering firm, the Bidder must verify that:
(a) the firm is constituted and operating, in accordance with the legal provisions of the member country where the firm has its principal domicile; (b) the firm has the principal headquarters of its businesses in the territory of a member country; (c) more than 50% of the firm's capital is owned by one or more natural or legal persons from one or more member countries or by citizens or "bona fide" residents of those eligible countries; (d) the firm constitutes an integral part of the economy of the member country in which it is domiciled; (e) no arrangement exists by virtue of which a substantial part of the net profits or other tangible benefits of the firm are credited or paid to natural persons who are not citizens or "bona fide" residents of the member countries; or to legal persons who are not eligible in accordance with the nationality requirements of this paragraph; (f) when it involves a contract for the execution of works, at least 80% of the personnel that must provide services in the country where the work is carried out are citizens of a member country, whether the persons are employed directly by the contractor or by subcontractors. For the purposes of this computation, if it involves a firm from a country other than the construction site, the citizens or permanent residents of the country where the construction is carried out will not be taken into account; and (g) the above rules will apply to each of the members of a consortium (association of two or more firms) and to firms proposed to subcontract part of the work.
The requirements covered in this paragraph must be known by the interested parties. They must provide the Bidder with the pertinent information to determine their nationality, whether in the prequalification forms, the registration forms, or the bidding forms, as applicable.
2. In the case of bids for procurement of goods 2.09.—Criterion to establish the origin of goods. Only goods whose country of origin is a Bank member country may be acquired. The term "country of origin" means:
(a) that in which the material or equipment has been extracted, cultivated, produced, manufactured, or processed; or (b) that in which, as an effect of manufacturing, processing, or assembly, another commercially recognized article results that differs substantially in its basic characteristics from any of its imported components. The nationality or country of origin of the firm that produces, assembles, distributes, or sells the goods or equipment will not be relevant to determine their origin.
2.10.—National and regional preference margins for the case of bids for the procurement of goods. In the cases of international public bidding for procurement of goods, the Bidder may apply the following preference margins:
2.11. National preference margin. When suppliers from the Borrower's country participate in the bids, the Bidder may apply a national preference margin in favor of those suppliers. For this, it will use the following criteria:
(a) A good will be considered of local origin when the cost of local materials, labor, and services used in its manufacture represents no less than 40 percent of its total cost.
(b) When comparing local and foreign bids, the price proposed or offered for goods of national origin shall be the delivery price at the Project site, after deducting: (i) import duties paid on principal raw materials or manufactured components; and (ii) national sales, consumption, and value-added taxes incorporated into the cost of the good or goods being offered. The local bidder shall provide proof of the amounts to be deducted, in accordance with subparagraphs (i) and (ii) above. The price proposed or offered in the foreign bid shall be the CIF price, excluding import duties, consular fees, and port charges, to which shall be added the handling costs at the port and local transportation, from the port or border, to the project site in question.
(c) The conversion of currencies to establish price comparisons shall be based on the exchange rate applied by the Bank itself in this Contract.
(d) In awarding contracts, the Borrower (Licitante) may add a preference margin of 15% or the actual customs duty, whichever is less, to the CIF price of foreign bids expressed in the equivalent of its national currency.
2.12.—Regional preference margin.
(a) For the purposes of the Contract, the Bank recognizes the following subregional or regional integration agreements: (i) Central American Common Market; (ii) Caribbean Community; (iii) Andean Subregional Integration Agreement, and (iv) Latin American Integration Association. In cases where the borrower's country has subscribed to more than one integration agreement, the subregional preference margin or the regional margin may be applied, according to the country of origin of the good.
(b) When suppliers from a country other than that of the Borrower, which is a member of an integration agreement to which the Borrower's country is also a party, participate in a bidding process, said suppliers of goods shall be entitled to a regional preference margin that shall be recognized using the following criteria:
(i) A good shall be considered of regional origin when it originates from a country that is a member of an integration agreement to which the Borrower's country is a party and complies with the rules governing origin and other aspects related to the trade liberalization programs established by the respective agreements.
(ii) The local value added is not less than that stipulated for the national preference margin.
(iii) When comparing foreign bids, the Borrower (Licitante) may add to the price of bids for goods originating from countries that are not party to the respective integration agreement either a percentage of 15%, or the difference between the import duty applicable to those goods when they originate from countries that are not party to the integration agreement and that applicable to those goods when they come from countries that are party to the agreement, whichever is less.
2.13.—Association of local and foreign firms. The Bank encourages the participation of local suppliers and contractors in procurement processes, to foster the development of local industry. Local suppliers, manufacturers, and contractors may bid independently or in joint ventures (consorcios) with foreign firms, but it may not be established that the formation of joint ventures or any other type of association between local and foreign firms is mandatory, nor that mandatory participation percentages be established.
III. INTERNATIONAL COMPETITIVE BIDDING (LICITACIÓN PÚBLICA INTERNACIONAL)
PUBLICITY General Procurement Notice 3.01.—General rule and special requirements. Unless the Bank agrees otherwise, the project shall require the publication of a General Procurement Notice “GPN” (Aviso General de Adquisiciones “AGA”). This notice shall have the purpose of notifying interested parties sufficiently in advance of the possible procurement of works, goods, or services that will take place on account of the project, as well as their approximate date, and shall include the following information:
(a) name of the country; (b) reference to the Inter-American Development Bank loan; (c) name of the project, loan amount, and its purpose; (d) brief description of each of the bidding processes or groups of bidding processes that would be carried out for the Project, with a tentative indication of the quarter or semester of each year in which they will take place; (e) brief description of the Bank's publicity policy for specific bidding processes, indicating the type of publication to be used and other sources of information (Embassies or others); and (f) name of the Borrower (Licitante), its postal address, telephone, and fax, where interested parties may obtain additional information.
3.02.—Method of publication. When the publication of the GPN has not been processed or completed prior to the signing of this Contract, the Bank shall be responsible for its publication, on behalf of the Borrower (Licitante), in the United Nations newspaper called “Development Business”. To this end, the Borrower (Licitante) shall send the text of the GPN to be published, following the requirements indicated in paragraph 3.01, for review and publication by the Bank, no later than 30 days after this Contract enters into force. Once the final text is agreed upon, the Bank shall be responsible for its publication, which may be done in any of the official languages of the Bank.
3.03.—Publicity requirements for specific bidding processes.
(a) Content of the notice for prequalification. The notice of prequalification or registration in the bidders' registry, as applicable, the text of which must have the prior approval of the Bank, shall include at least the following information:
(i) general description of the Project and of the work subject to bidding, its place of execution, and its main characteristics. In the case of a bidding for goods, their description and special characteristics, if any; (ii) the prequalification method proposed to be used; (iii) approximate dates on which invitations to bid shall be issued, proposals for the bidding shall be opened, the work subject to bidding shall commence, and its construction shall be completed; (iv) the fact that the project subject to bidding is partially financed by the Bank, and that the procurement of goods or the contracting of works with said Financing shall be subject to the provisions of this Contract; (v) the place, time, and date on which firms may withdraw the prequalification or registration forms, agreed between the Borrower (Licitante) and the Bank, as well as their cost; and (vi) the other requirements that interested parties must meet in order to qualify and subsequently be invited to or able to participate in the public bidding processes (licitaciones públicas).
(b) Content of bidding notices and invitations to submit proposals.
The calls for bids notices (anuncios de convocatoria a licitación) published in the press when prequalification has not been carried out, or the invitations to bid delivered or sent to prequalified firms, the texts of which must have the prior approval of the Bank, shall express at least the following:
(i) the description of the Project and the purpose of the bidding and the origin of the funds intended to finance the cost of the procurement or works; (ii) the fact that the project subject to bidding will be partially financed by the Bank, and that the procurement of goods or the contracting of works with said Financing shall be subject to the provisions of this Contract; (iii) the general description of the required equipment, machinery, and materials, as well as the work, with the volumes or quantities of work, its main parts, and the term for its execution.
(iv) the office or the place, day, and time where the bidding documents may be withdrawn, including the terms of reference (bases), plans, and specifications, as well as the draft contract intended to be signed; (v) the office where the proposals must be delivered and the authority that shall decide their approval and award; and (vi) the place, day, and time where the proposals will be opened in the presence of the bidders or their representatives.
(c) Publicity.
(i) Local publicity. Every bidding for goods, works, or related services shall include local publicity. Such publicity consists of the fact that the prequalification or registration notice, and the bidding notice when there is no restricted invitation to prequalified firms, shall be published at least twice in a widely circulated newspaper or, at the option of the Borrower (Licitante), once in two widely circulated newspapers.
(ii) International publicity. When biddings are held whose estimated value is equal to or exceeds the amounts established in the Special Stipulations (Estipulaciones Especiales) of this Contract, in addition to the local publicity referred to in subparagraph (i) above, the Borrower (Licitante) shall carry out international publicity. In these cases, the prequalification or registration notice and the bidding notice, when prequalification has not been carried out, shall be published in the United Nations newspaper “Development Business” and, if applicable, in any additional publicity medium indicated in the Special Stipulations (Estipulaciones Especiales).
BIDDING DOCUMENTS 3.04.—Bank approval. The bidding documents shall be approved by the Bank before being delivered to interested parties. These documents must also comply with the requirements established in paragraphs 3.05 to 3.16.
3.05.—Clarity, content, and price of the documents. The bidding documents prepared by the Borrower (Licitante) must be clear and coherent. They must carefully describe in all required detail the goods, works, or services to be provided; the inclusion of conditions or requirements that hinder the participation of qualified contractors must be avoided; and the criteria to be used in the evaluation and comparison of bids must be clearly indicated. The detail and complexity of the documents may vary according to the nature of the bidding, but generally these documents include: the invitation to bid; instructions to bidders; bid form; guarantee requirements; model contract; technical specifications; list of goods or quantities and, where applicable, price schedule. If a price is set for the bidding documents, it must reflect the cost of their reproduction and in no case be so high as to discourage competition.
3.06.—Free access to the bidding documents. The Borrower (Licitante) must be available, once the bidding documents have been withdrawn and until a reasonable time before the opening, to answer questions or provide clarifications to the bidders regarding the bidding documents. These inquiries shall be answered promptly by the Borrower (Licitante) and the respective clarifications must be made known to the other interested parties who have withdrawn the bidding documents and to the Bank. The names of the firms that requested clarifications shall not be disclosed.
3.07.—Quality standards. If the bidding documents mention quality standards to which the equipment or materials must conform, the specifications must indicate that goods meeting other recognized standards that ensure quality equal to or superior to the mentioned standards will also be acceptable.
3.08.—Specifications for equipment; trademarks. The specifications must not refer to trademarks, catalog numbers, or types of equipment from a specific manufacturer, unless it has been decided that it is necessary to do so to guarantee the inclusion of a specific essential design, or performance, construction, or manufacturing characteristic. In such a case, these references must be followed by the words “or equivalent”, together with the criteria to establish that equivalence. The specifications must allow bids for alternative equipment, items, or materials that have similar characteristics, provide equal service, and are of equal quality to that established in said specifications. In special cases and with the prior approval of the Bank, the specifications may require the supply of a specific brand item.
3.09.—Stipulations on currencies. The bidding documents must contain the following provisions regarding currencies:
(a) Currency of the bid. The bidding documents must establish that the supplier may express the bid price in its own currency or, at the supplier's option, in a single currency selected by the Borrower (Licitante) and indicated in the bidding documents, provided that it is widely used in international commerce. The supplier who expects to incur expenses in more than one currency and wishes to receive payments in the same currencies as its bid, must indicate and justify the portion of its bid price in each of the corresponding currencies. Alternatively, the supplier may express the total price of its bid in a single currency and indicate the percentages of the bid price that must be paid in other currencies and the exchange rates used in the calculations. The bidding documents must clearly indicate the rules and procedures for making the conversion.
(b) Currency for bid evaluation and comparison. The currency or currencies in which the Borrower (Licitante) would pay the price of the corresponding goods or works shall be converted to a single currency selected by it and identified in the bidding documents as the currency for comparing all proposals. The exchange rate to be used in said evaluation shall be the selling rate of the selected currency, published by an official source and applicable to similar transactions. The effective date for making the exchange rate conversion must be indicated in the bidding documents. Said date must not precede by more than 30 days the date established for the opening of bids.
(c) Currency to be used for payments. Generally, the currency of payment to contractors shall be the same currency or currencies used by the awardee in its bid. When payments must be made in both national currency and foreign currency, the bidding documents must stipulate that the amounts in each currency must be detailed and justified separately. When the price of a bid is set in a specific currency and the bidder has requested to also be paid in other currencies, indicating its needs for said currencies as percentages of its bid price, the exchange rates to be used for making said payments shall be those indicated by the bidder in its bid. This is intended to ensure that the value of the portions of its bid that were expressed in foreign currencies is maintained, avoiding losses or gains. It is the responsibility of the Borrower (Licitante) to clearly establish in the bidding documents and in the corresponding contract that the bidder must comply with the requirements described above, as well as that it may not obtain payment in a currency different from the one specified in the bidding terms and conditions, bid, and contract.
3.10.—Exchange risk. When payment to the contractor or supplier is based on the conversion of national currency or foreign currency, the exchange risk shall not be borne by the contractor or supplier.
3.11.—Bid security (Garantía de mantenimiento de oferta). The bid securities or guarantees (fianzas o garantías de mantenimiento de la oferta) shall not be for such high amounts, nor shall their validity be so prolonged, as to discourage the participation of responsible bidders. The awardee’s guarantee shall be returned once the contract is perfected and its performance bond or guarantee (fianza o garantía de ejecución de obras) is accepted. Those who placed second and third shall have theirs returned within a period not exceeding three months, counted from the award or upon perfection of the contract if that occurs before said period. To the other bidders, the guarantee shall be returned within five days following the award.
3.12.—Performance bond or guarantee (Fianza o garantía de ejecución). The specifications for construction works must require performance bonds or other guarantees that ensure the works will be carried out to completion. Their amount shall vary according to the type and magnitude of the works, but must be indicated in the bidding documents and be sufficient to give the Borrower (Licitante) adequate protection. The amount of the bond must ensure that, in the event of non-compliance by the contractor in the execution of the works, these shall be completed without cost increases. The validity of the bond or guarantee must exceed the term of the works contract, to cover a reasonable warranty period. If necessary, bonds or guarantees may be required for equipment supply contracts. These guarantees may consist of the retention of a percentage of the total payment during a trial period.
3.13.—Criteria for bid evaluation. The award must be made to the most advantageous bid, which is the one that includes factors that, in addition to price, must be taken into account in the comparison of bids. This latter is the “bid evaluated as the lowest”. To select the bid evaluated as the lowest, the bidding documents must clearly establish what factors, in addition to price, must be taken into account in the evaluation and the value to be given to each factor. These factors should preferably be expressed in monetary terms or, at a minimum, be given a relative weighting in accordance with the criteria indicated in the bidding documents. Factors usually taken into account are, among others, transportation costs to the project site; the payment schedule; the delivery time for the works or goods; operating costs; efficiency and compatibility of the equipment; availability of maintenance service and spare parts; and the proposed construction methods. The relative weight assigned to these factors must reflect the costs and benefits that said factors will bring to the project. In the evaluation of proposals, factors not listed in the bidding documents may not be considered. The amount, if any, of the price adjustment included in the proposals must not be taken into account.
3.14.—Rectifiable errors or omissions (Errores u omisiones subsanables). The bidding documents must distinguish between rectifiable errors or omissions and those that are not, for both the prequalification stage and the bid submission stage. A Bidder must not be automatically disqualified for not having submitted complete information, whether due to involuntary omission or because the requirement was not clearly established in the bidding documents. Provided that they are errors or omissions of a rectifiable nature —generally omissions related to the verification of data or historical type information— the Borrower (Licitante) must allow, within a short period, the interested party to provide the missing information or correct the rectifiable error. However, there are certain types of basic errors or omissions that, due to their seriousness, are not traditionally considered rectifiable. Examples of these are not signing the bid or not submitting a specific guarantee. Finally, the correction of errors or omissions may not be used by the bidder to alter the substance of its bid or improve it.
3.15.—Rejection of bids. The bidding documents must state that the Borrower may reject all bids, according to the guidelines indicated in paragraph 3.43.
3.16.—Model contract. The model contract between the Borrower (Licitante) and the awardee must be appropriate for the type of bidding in question. The contract must be drafted with the aim of achieving an equitable distribution of the risks related to the respective operation, so that the most economical price and efficient execution of the operation can be obtained. Said contract must include general and special conditions (condiciones generales y especiales).
(a) General conditions of the contract (Condiciones generales del contrato). The contract must include general conditions that contain, among others, the general obligations of the contractor, provisions on bonds, indemnifications, and insurance, penalty clauses and bonuses, percentage of payment retention, termination, advances, form, and currency of payment. Where applicable, the general conditions must also include the duties and responsibilities of the consultant(s), modifications, additional items, and particular situations of the place where the works are carried out that may affect their construction. Special requirements relating to some frequent clauses of the general conditions of the contract are included:
(i) Expenses financed with Bank funds chargeable to the contract. The contract shall provide that the contractor or supplier shall not incur expenses for the purposes of the contract to be financed with Loan resources in the territory of a country that is not eligible for Project procurement.
(ii) Payments. The Borrower (Licitante) must carefully analyze any advance payment to the supplier or contractor for mobilization expenses that may be authorized once the contract is signed. Other advance payments that may be authorized, such as for materials to be delivered to the work site but not yet incorporated into the work, must be clearly provided for in the contract. Where applicable, the payments to be made for work performed or goods delivered must be indicated, to avoid excessively high bids resulting from the high cost of the contractor's or supplier's working capital. At the request of the Borrower (Licitante), the Bank may make disbursements for the procurement of construction goods and services financed against the Financing, by means of: (1) direct disbursements to the Borrower (Licitante) in the form of an advance or reimbursement of expenses; (2) disbursement to the suppliers of imported goods or to the contractors; and (3) an irrevocable agreement by the Bank to reimburse a commercial bank that has issued or confirmed a letter of credit to a supplier or contractor.
(iii) Price adjustment clauses. Where applicable, provisions may be included regarding adjustments (upward or downward) to the contract price in cases where changes occur resulting from inflation or deflation in the economy, affecting the main cost components of the contract, such as labor, materials, and equipment. The basis on which said adjustments will be made must be clearly indicated in the bidding documents and in the contract.
(iv) Retention percentages. Where applicable, the bidding documents and the contract may stipulate retentions of a certain percentage of the total price to guarantee compliance with the contractor's obligations, as well as the conditions for their return and final payment.
(v) Penalty and bonus clauses. The contract must include penalty clauses in the event that delays in the completion of the project result in additional expenses, loss of income, loss of production, or inconvenience for the Borrower. Likewise, the contract may stipulate the payment of a bonus to the contractor for completing the contract before the expected term or for exceeding the minimum performance criteria established in the contract.
(vi) Force majeure (Fuerza mayor). Among the general conditions of the contract, it is advisable to include clauses stipulating that the partial or total failure by one of the parties to fulfill its corresponding obligations according to the contract shall not be considered a breach of said obligations if it is due to a force majeure event (which must be defined in the general conditions of the contract).
(vii) Resolution of disagreements. It is advisable to include in the contract conditions, provisions relating to the applicable law and the forum for the resolution of disagreements.
(b) Special conditions of the contract (Condiciones especiales del contrato). The special conditions of the contract include the detailed description of the works to be constructed or the goods to be supplied; the source of financing; special requirements relating to matters such as currencies, payment, bonuses for early completion, and any modification that must be made in relation to the provisions of the general conditions.
Prequalification and registration of bidders 3.17.—Scope of application. General rule. The Borrower (Licitante) shall use, in biddings for the execution of works, the prequalification or registration of bidders system for large or complex civil works. The Borrower (Licitante) may also use prequalification or registration for the procurement of goods when it deems appropriate.
3.18.—Two-envelope system. Unless local legislation prohibits it, the Bank and the Borrower (Licitante) may agree, when circumstances exist that in the judgment of the parties make it advisable, to use the two-envelope procedure. This procedure must be clearly established in the bidding conditions (pliegos de condiciones) of the call.
Through this procedure:
(a) Each bidder shall submit, at the opening ceremony, two sealed envelopes, whose content shall be as follows:
(i) Envelope No. 1. Information on the financial, legal, and technical capacity of the firms. Said information shall refer to topics such as: financial solvency, capacity to contract, general and specific experience, key personnel and machinery available for the project, executed contracts, contracts in execution, and existing commitments and litigation.
(ii) Envelope No. 2. Bid proper with the respective price quotation.
(b) At the opening ceremony, which shall take place in a public ceremony on the scheduled day and time, Envelopes No. 1 shall be opened and it shall be verified whether the bidders have included the documents required by the terms of reference (bases). If these Envelopes do not contain the required documentation, this fact shall be recorded in the minutes of the session, along with the information that is missing or incomplete, and Envelopes No. 2 shall be returned to the respective bidders unopened. Once these procedures are completed, the first ceremony shall be considered concluded, with Envelopes No. 2 of the bidders who had submitted all the required information in Envelopes No. 1 remaining sealed.
(c) Based on this information, the prequalification of the bidders shall proceed, within the deadlines indicated in the terms of reference (bases).
(d) Once prequalification is concluded and approved by the Bank, the second public ceremony shall be held, which shall take place on the date, time, and place that were indicated with adequate advance notice. In it, Envelopes No. 2 of the firms that were not prequalified shall first be returned unopened. Then Envelopes No. 2 of the prequalified firms shall be opened, and the price of each bid shall be read aloud, recording the prices and most relevant details of the bids in the minutes.
(e) The final analysis of the proposals and the award shall be carried out within the deadlines fixed in the bidding conditions (pliegos) and once the Bank has given its conformity to the proceedings.
3.19.—Registration of bidders. The registration of bidders is a form of prequalification accepted by the Bank. To be acceptable, it is necessary that the registries: (a) be open permanently or that the opening, whether for updating data of registered firms or for incorporating new firms, takes place frequently; (b) be open on the occasion of biddings held for projects financed with Bank loans; and (c) not include requirements that hinder or prevent the participation of foreign firms or that violate the principle of equality of applicants.
3.20.—Deadline for carrying out prequalification. The Borrower (Licitante) must carry out prequalification within a timeframe that is in harmony with the investment schedule agreed between the Borrower (Licitante) and the Bank.
3.21.—Content of the prequalification or registration of bidders form. The prequalification or registration form, as the case may be, must contain, among others, the following information:
(a) Legal background regarding the incorporation, legal nature, and nationality of the bidding firm. A copy of the bylaws and respective constitutive documents shall be attached. The information regarding nationality must comply with what is indicated in paragraph 2.08; (b) technical background of the firm; (c) financial situation of the firm; (d) personnel and equipment available; (e) experience in the construction, manufacture, and installation of goods or works similar to those that constitute the object of the bidding; (f) any work being carried out by it or obligations already assumed by the company; (g) a certification that the company has sufficient personnel and equipment to satisfactorily carry out the works contemplated in the project, and an indication of the location of such personnel and equipment; and (h) a broad description of the systems the company would use in the execution of the work.
3.22.—Time period for submitting the forms. Interested parties shall have a period of at least 45 calendar days, counted from the last publication of the notice, to submit the prequalification or registration form. This period may be reduced to 30 days when the bidding is restricted to the national level.
Selection of those prequalified 3.23.—Qualified firms. Only firms that demonstrate, in accordance with the requirements established in the bidding or registration documents, the technical, financial, legal, and administrative capacity to carry out the works may be prequalified or registered in the list of proponents. Forms that present defects of form or obvious errors may be admitted and their correction requested, following the principles indicated in paragraph 3.14.
3.24.—Technical report. The Borrower shall prepare a technical report on the firms that submitted applications, indicating which have been prequalified or duly qualified on the registry and which have not, and providing the reasons for this. The report shall be sent to the Bank as soon as possible for the Bank to express its agreement or reservations on the matter.
3.25.—Notification of results. Once the Bank approves the technical report, the results shall be notified simultaneously to all participating firms.
3.26.—Subsequent disqualifications. Once a firm has been prequalified, it may not be disqualified for the corresponding bidding process, unless the prequalification or registration was based on incorrect information submitted by the firm, or supervening circumstances have occurred after the date of prequalification or registration that justify such a decision.
3.27.—Validity of the qualification. After a period of one year has elapsed since a prequalification or registration was carried out without a call for bids having been made, the Borrower shall issue a new call for prequalification or registration, to admit new proponents and so that the firms already prequalified or registered may update their original information. The new call must meet the requirements established in this Procedure.
3.28.—Lack of proponents.
(a) In the event that fewer than two proponents are prequalified or registered in the first call, a second call shall be made following the same procedure as for the first, unless the Bank authorizes a private bidding process under the terms set forth in the following subparagraph, or to directly select the contractor.
(b) If, after the second call, two or more firms are not prequalified, the prequalification may be declared void and, with the prior approval of the Bank, a private bidding process may be carried out, inviting at least three firms, including the prequalified firm, if any.
3.29.—Prequalification for multiple bidding processes.
(a) The Borrower may agree with the Bank to conduct a single contractor prequalification for several bidding processes, when it foresees that, within a short period of time, it must conduct several bidding processes for the construction of a set of works of the same nature that, due to their geographic location or other factors acceptable to the Bank, cannot be carried out through a single bidding process.
(b) The contractors thus prequalified may participate, if so established in the bidding terms, in one or more of the scheduled bidding processes. The Borrower may require, in each call for bids, that proponents update background information that may have changed since the time of prequalification and, in particular, a demonstration that each contractor's execution capacity continues to meet that required by the bidding terms.
© The validity of prequalifications for a set of bidding processes shall not exceed one year.
BIDDING Call for bids 3.30.—When prequalification has been carried out. If prequalification has been carried out, the Borrower shall only send or deliver invitations to submit proposals to the firms that were prequalified. Before sending or delivering such invitations, the Borrower shall submit to the Bank, for its agreement, the text of the invitation and, if it has not already done so, the bidding documents. At this stage, the publication of notices is no longer necessary.
3.31.—When prequalification has not been carried out. If prequalification has not been carried out, the provisions set forth in paragraph 3.03 shall be followed for the call for bids regarding publicity. As for the capacity of the proponents to carry out the work or provide the goods in question, the bidding documents shall clearly indicate the minimum requirements that such proponents must meet. To this end, the documents shall include a questionnaire, with content similar to the form indicated in paragraph 3.21 of this Chapter, to be completed by the interested parties and submitted together with their respective proposals.
Time periods for submitting proposals 3.32.—Standard time period. For the submission of proposals in international public bidding, a period of at least 45 calendar days must be established, counted from the date of the last publication of the bidding notice or from the date on which the bidding documents were made available to potential bidders, whichever is later.
3.33.—Time period for large or complex civil works. When dealing with large or complex civil works, proponents must have a minimum period of 90 calendar days to prepare their proposals.
3.34.—Time period for national bidding. When the bidding is confined to the national level, the Borrower may reduce the period for submitting proposals to 30 calendar days.
3.35.—Confidentiality that must be maintained regarding certain documents. The officials responsible for receiving the envelopes containing the prequalification form or the proposal must verify that they are properly sealed. These envelopes shall be kept in a secure place until the date set for their opening. Once opened, no photocopies shall be made of the documents contained in the envelopes. Unless the law provides otherwise, after the public opening and reading of the proposal price and before the announcement of the award, information may only be provided concerning the examination, tabulation, clarification, and evaluation of the proposals, or concerning the recommendations regarding the award thereof, to officials of the Borrower who are officially involved with the bidding process in question.
3.36.—Modification or extension of the bidding documents. Any modification or extension of the bidding terms and specifications or of the date for submitting proposals must have the prior agreement of the Bank and be communicated to all interested parties who have withdrawn the bidding documents. In the event that, in the judgment of the Borrower or the Bank, the modification or extension is substantial, at least 30 calendar days must elapse between the communication to interested parties and the date of the opening of proposals.
3.37.—Inquiries should not modify the bidding documents. Inquiries directed to the Borrower by interested parties regarding the interpretation of the bidding documents may not be used to modify or extend the bidding terms and specifications. The inquiries and their responses shall have no suspensive effect on the deadline for submitting proposals.
3.38.—Single proposal. When only a single proposal is submitted in a bidding process, the Borrower may not award the contract, unless the Bank has given its prior consent.
3.39.—Opening of proposals. Proposals must be submitted in writing and in sealed envelopes. They must be signed by the legal representatives of the bidders and meet the requirements established in the bidding documents. They shall be opened in public on the scheduled day and at the scheduled time. Representatives of the bidders and of the Bank may attend the opening event and examine the proposals. Proposals received after the date and time set for their submission shall be returned unopened. The names of the bidders, the price of each proposal, and the term and amount of the guarantees shall be read aloud, as well as any substantial modification that was submitted separately, within the deadline, but after the submission of the main proposal. Minutes shall be drawn up of everything that transpired, which shall be signed by the representative of the Borrower and by the bidders present who wish to do so.
3.40.—Clarification of proposals. The Borrower may request clarifications from the bidders regarding their proposals. The clarifications requested and those given may neither alter the essence of the proposal or its price, nor violate the principle of equality among bidders.
Analysis and comparison of proposals 3.41.—Purpose. When analyzing and comparing the proposals, it shall be determined whether they comply with the terms and conditions stipulated in the bidding documents, and the value of each proposal shall be established for the purpose of selecting the awardee.
3.42.—Evaluation of proposals. The provisions of paragraph 3.13 shall be taken into account in the evaluation of the proposals.
3.43.—Rejection of proposals. Proposals that do not substantially conform to the bidding terms or that contain errors or omissions that are not remediable, according to the criteria established in paragraph 3.14, shall be rejected without proceeding to the evaluation stage. The Borrower, after consulting with the Bank, may also reject all proposals when none of them conform to the bidding documents, or when it is evident that there has been a lack of competition or collusion. Proposals should not be rejected and a new bidding process called solely for reasons of price, when the price is only slightly higher than the estimated cost calculations. However, the Borrowers may, after consulting with the Bank, reject all proposals if those with the lowest evaluated price are considerably higher than the official budget. In these cases, new proposals must be requested at least from all those who were initially invited to submit proposals, and a sufficient period must be granted for their submission. Individual proposals may be rejected when they are so much lower than the official budget that it may reasonably be anticipated that the Bidder will not be able to complete the works or provide the goods within the scheduled time and for the price offered.
3.44.—Proposal evaluation report. The Borrower must prepare a detailed report on the analysis and comparison of the proposals, setting forth the precise reasons on which the selection of the proposal evaluated as the lowest is based. Said report shall be submitted for the consideration of the Bank before the contract is awarded. If the Bank determines that the draft award does not conform to the provisions of this Procedure, it shall immediately inform the Borrower of its determination, indicating the reasons for it. Unless the objections raised by the Bank can be resolved, the contract shall not be eligible for financing by the Bank. The Bank may cancel the amount of Financing that, in its opinion, corresponds to expenses declared ineligible.
Award of the bid 3.45.—Bank's agreement. The bid shall be awarded to the bidder whose proposal has been evaluated as the lowest and conforms to the bidding documents, once the Bank has approved the draft notification of the award.
3.46.—Notification of the award and signing of the contract.
The Borrower shall notify all proponents of the award decision, at the address they have designated, within the three business days following the award. Once said notification has occurred, the Borrower may no longer award to another bidder or declare the bidding void, except in cases of fraud or other illegal acts, or when facts come to its knowledge that were unknown to it at the time of prequalification and that could affect the awardee's capacity to fulfill the contract. It shall send, within a short period, a copy of the draft contract it proposes to sign with the awardee to the Bank for approval. The contract that is signed may not modify the awardee's proposal or the terms and conditions stipulated in the bidding documents. Once the Bank approves the draft contract, it shall proceed to its signing and the Borrower shall send a copy of the signed contract to the Bank as soon as possible. Within the same period established for signing the contract, the awardee shall deliver the corresponding performance guarantee (garantía de ejecución) to the Borrower.
3.47.—Modification of the award. If for any reason the awardee fails to sign the contract or fails to provide the corresponding performance guarantee within the period set for that purpose, the Borrower may, without calling for new bids, award it to the other proponents in the order in which their proposals were evaluated.
Bidding declared void 3.48.—Report for the Bank. In any case where, for justified reasons, the Borrower proposes to declare the bidding void, it shall require the prior favorable opinion of the Bank, to which end it shall send a complete report including the reasons and elements of judgment that served as the basis for proposing this measure.
3.49.—Effects of the declaration. Once the bidding is declared void, the Borrower must call for a second bidding process, following the same provisions of this Procedure. If the second bidding process is declared void, the Borrower and the Bank shall agree on the procedure to be followed for the purchase or contract in question.
IV. DUE PROCESS
4.01.—Appeals. The regulations applicable to bidding processes governed by this Procedure must ensure the legal protection of the bidders and allow for the filing of the appeals that are necessary to make such protection effective.
4.02.—Filing of protests. The Borrower may not impose conditions that prevent, hinder, or increase the cost of filing protests by firms participating in bidding processes for the acquisition of goods or execution of works with Project resources. 4.03.—Communication of protests. The Borrower undertakes to communicate to the Bank, as soon as possible, any protest or claim it receives in writing from the participating firms, as well as the responses it has given to said protests or claims.
V. NON-COMPLIANCE WITH THIS PROCEDURE
5.01.—Consequences of non-compliance. The Bank reserves the right to refrain from financing any acquisition of goods and services or contracting of works when, in its judgment, the provisions set forth in this Procedure have not been observed in the corresponding bidding process.
PROCEDURE FOR THE SELECTION AND CONTRACTING OF CONSULTING FIRMS OR INDIVIDUAL EXPERTS Program for the Promotion of Sustainable Agricultural Production In the selection and contracting of consulting firms, specialized institutions, or individual necessary for the execution of the Project, the following shall apply:
I. DEFINITIONS
The following definitions are established:
1.01.—A consulting firm (firma consultora) is any legally constituted association, mainly composed of professional personnel, that offers consulting services, advisory services, 1.02.—A specialized institution (institución especializada) is any non-profit organization, such as universities, foundations, autonomous or semi-autonomous bodies, or international organizations, that offers consulting services. For the purposes of this Annex, the same rules applicable to consulting firms shall apply to specialized institutions.
1.03.—An individual expert (experto individual) is any professional or technician specialized in a science, art, or trade.
1.04.—Contracting entity (entidad contratante) means the competent body to carry out the contracting of the Consultants. This entity may be, as the case may be, the Borrower, the Executing Agencies (Organismos Ejecutores), the Beneficiaries (Beneficiarios), the Intermediary Financial Institutions (Instituciones Financieras Intermediarias), or another indicated in the respective contract or agreement.
1.05.—The terms Contract or Agreement are used indistinctly to designate the legal instrument of which this Annex forms a part. 1.06.—“Project” means indistinctly the Project or Program covered by the Contract.
1.07.—“Financing” refers to the resources that, under the title of “Contribution”, “Credit”, or any other, are allocated to Loan operations, Technical Cooperation, Small Projects, etc.
II. ETHICAL STANDARDS AND INCOMPATIBILITIES
2.01.—Both during the contracting process and during the execution stage of the corresponding contracts, direct or indirect participants in competitions governed by this procedure shall maintain the highest ethical standards and shall not participate in any type of corruption in relation to said processes.
2.02.—Bank resources may not be used to contract Individual Experts from the Borrower's country if they: (a) belong to the permanent or temporary staff of the institution receiving the Financing or that is a beneficiary of the services of said Individual Experts; or (b) have belonged to any of the aforementioned institutions, within the six months prior to one of the following dates: (i) the date of submission of the Financing application; or (ii) the date of selection of the Individual Expert. The Bank may reduce this period upon reasonable request from the Contracting Entity. Notwithstanding the periods, ties, or relationships described above, the Bank may also take into account other situations for the purpose of determining the existence of a conflict of interest and, therefore, declare the incompatibility of the Individual Expert.
2.03.—Bank resources may not be used to contract Consulting Firms from the Borrower's country if the partners, associates, directors, and other technical or professional personnel of said Consulting Firms: (a) belong to the permanent or temporary staff of the institution receiving the Financing or that is a beneficiary of the services of said Consultants; or (b) have belonged to any of the aforementioned institutions, within the six months prior to one of the following dates: (i) the date of submission of the Financing application; or (ii) the date of initiation of the prequalification or selection process of the Consulting Firm. The Bank may reduce this period upon reasonable request from the Contracting Entity. Notwithstanding the periods, ties, or relationships described above, the Bank may also take into account other situations for the purpose of determining the existence of a conflict of interest and, therefore, declare the incompatibility of the Consulting Firm.
2.04.—A fully qualified consulting firm that is an affiliate or subsidiary of a construction contractor, an equipment supplier, or a holding company, shall only be considered acceptable if it agrees in writing to limit its functions to professional consulting services and accepts, in the contract it signs, that the firm and its associates may not participate in the construction of the project, in the supply of materials and equipment for the same, or in carrying out activities of a financial nature related to the Project.
III. ELIGIBILITY AND NATIONALITY
REQUIREMENTS 3.01.—In applying the procedures established in this Annex, the Contracting Entity may not introduce provisions or conditions that restrict or prevent the participation of Consultants originating from member countries of the Bank or from donor countries of the FOMIN and from regional developing member countries of the Bank, when the consulting services are financed wholly or partially with resources from the FOMIN.
3.02.—Only Consultants who are nationals of member countries of the Bank or of donor countries of the FOMIN and of regional developing member countries of the Bank may be contracted, when the consulting services are financed wholly or partially with resources from the FOMIN. To determine the nationality of a consulting firm, the following criteria shall be taken into account:
(a) The country in which the consulting firm is duly incorporated or legally organized.
(b) The country in which the consulting firm has established its principal place of business.
© The nationality of the firm or the citizenship or "bona fide" residence of the individuals who hold ownership in the consulting firm, with the right to participate in a percentage of 50% or more of its profits, as established through certification issued by a duly authorized official of the consulting firm.
(d) The existence of agreements by virtue of which a substantial part of the firm's profits or tangible benefits are destined to firms or persons of a specific nationality.
(e) The determination by the Bank that the consulting firm:
(i) constitutes an integral part of a country's economy, a fact that shall be verified by the "bona fide" residence in that country of a substantial part of its executive, technical, and professional personnel; and (ii) has in the country the operational equipment or other elements necessary to carry out the services to be contracted.
3.03.—The nationality requirements demanded by the Bank shall be applicable to firms proposed to provide a part of the required services, by virtue of an association or subcontract with a qualified consulting firm.
3.04.—To establish the nationality of an expert, the provisions of their passport or other official identity document shall apply. The Bank, however, may admit exceptions to this rule in those cases where the expert, not being eligible by reason of nationality: (a) has an established domicile in a member country of the Bank where they can work, in a category different from that of an international official, and has declared that they have no intention of returning to their country of origin in the immediate future; or (b) has established their permanent domicile in an eligible country where they have resided for at least 5 years.
IV. PROFESSIONAL QUALIFICATIONS
4.01.—The analysis of the professional qualifications of a consulting firm shall take into account: (a) the experience of the firm and its management personnel in providing consulting services in projects or programs of comparable dimension, complexity, and technical specialty to those intended to be executed; (b) the assigned number of professionally qualified personnel; © its experience both in the region and in other countries; (d) knowledge of the language; (e) financial capacity; (f) current workload; (g) the capacity to organize a sufficient number of personnel to carry out the work within the scheduled period; (h) good ethical and professional reputation; and (i) the absence of any tie or relationship that could give rise to a conflict of interest.
V. SELECTION AND CONTRACTING PROCEDURES
A. Selection and contracting of consulting firms 5.01.—In the selection and contracting of consulting firms:
(a) Before initiating the selection process and once the local approvals that may be required have been obtained, the Contracting Entity must submit the following requirements for the contracting of firms for the Bank's approval:
(i) The procedure to be used in the selection and contracting of the firm, which includes:
(A) The functions to be performed by the personnel of the Contracting Entity or the Selection Committee (Comité de Selección) designated to:
1. Review and approve documents; 2. Select a short list of firms; 3. Rank the firms on the short list in order of merit; and 4. Approve the selected firm.
The Contracting Entity shall inform the Bank of the names and positions of the persons it designates to participate in the prequalification and selection processes of said Consultants.
(B) The scoring system to be used to prequalify the firms. Said system shall include at least the following factors:
1. General background of the firm; 2. Similar works carried out; 3. Previous 4. Command of the language; and 5. Use of local consultants.
© The scoring system to be used for the selection of the firms. Said system shall include at least the following factors:
1. Qualification and experience of the personnel to be assigned; 2. Methodology for carrying out the evaluation, when applicable; 3. Proposed execution plan; 4. Execution schedule; 5. Command of the language; and 6. Management support systems to guarantee quality control during the execution of the consultancy, such as regular reports, budget controls, etc.
(D) A specific reference to the local laws, tax requirements, and procedures that may be pertinent for the selection and contracting of the consulting firm.
(E) If the cost of the services is estimated to exceed the sum of two hundred thousand United States dollars (US$200,000) or its equivalent, calculated in accordance with the provisions of the "exchange rate" clause of this Contract or Agreement, the selection and contracting must be announced in the "Development Business" of the United Nations and in the national press. These announcements must indicate the intention to hire professional consulting services and provide a brief description of the services required. They must, in turn, invite interested firms and consortia to submit detailed information regarding their technical capacity, previous experience in similar work, etc., within a period of 30 days counted from the date of publication. The respective clippings specifying the date and the name of the publication in which they appeared shall be sent to the Bank; (ii) The terms of reference, specifications, describing the work to be performed by the firm and an estimate of its cost; and (iii) A list of not less than three, nor more than six firms that will be invited to submit proposals.
(b) Once the Bank has approved the above requirements, the pre-selected firms shall be invited to submit proposals in accordance with the approved procedures and terms of reference. These firms shall be informed of the selection procedures and the adopted evaluation criteria, as well as the applicable local laws, tax requirements, and the names of the other companies invited to submit proposals.
© In the invitation to submit proposals, one of the two following procedures shall be used:
(i) The single sealed envelope procedure, which shall include only the technical proposal, without reference to price. The Contracting Entity shall analyze the proposals received and rank them in order of merit. If the complexity of the case so requires, the Contracting Entity may, with the prior authorization of the Bank and at its own expense, use consulting services to review the proposals and qualify them in order of merit. Once the order of merit of the firms has been established, the one ranked first shall be invited to negotiate a contract.
During the negotiations, the terms of reference must be reviewed to ensure full agreement with the company; the contractual and legal requirements shall also be examined and, finally, the detailed costs shall be prepared. If an agreement on the terms of the contract is not reached with the firm, it shall be notified in writing that its proposal has been rejected, and negotiations shall be initiated with the firm ranked second, and so on successively until a satisfactory agreement is reached; and (ii) The two sealed envelope procedure. The first envelope shall include the technical proposal without costs, and the second, the proposed cost for the services.
The Contracting Entity shall analyze the technical proposal and establish the order of merit. Contract negotiations shall begin with the firm that submitted the best technical proposal. The second envelope submitted by said firm shall be opened in the presence of one or more of its representatives and shall be used in the contract negotiations. All the second envelopes submitted by the other companies shall remain sealed, and if an agreement is reached with the first firm, they shall be returned unopened. If an agreement on the terms of the contract is not reached with the first firm, it shall be notified of its rejection in writing, and negotiations shall be initiated with the second firm, and so on successively until an agreement is reached.
(d) If no agreement is reached on detailed costs or fees, or if in the judgment of the Contracting Entity such costs or fees prove inadequate or excessive, that shall be sufficient cause to reject a proposal and initiate negotiations with the next-ranked firm in order of merit. If a firm is rejected, it shall not be invited again for new negotiations for the same contract.
(e) Before initiating negotiations, the Contracting Entity shall provide the Bank, for its non-objection, a copy of the report summarizing the evaluation of the technical proposals submitted by the firms on the short list referred to in Section 5.01(a)(iii) of this Anexo.
(f) The Contracting Entity, once it has obtained any local approvals that may be required, shall submit for the Bank’s approval the final draft of the contract negotiated with the consulting firm before its execution. After execution, a faithful copy of the signed text of the contract shall be sent to the Bank as soon as possible.
(g) When this Contract indicates that the Bank’s supervision of certain contracting of consulting firms or individual experts shall be carried out on an ex-post basis, that is after the contracting of the respective consultancy, the Contracting Entity shall promptly notify the Bank of each contracting, sending it the basic details thereof, and shall keep, so that the Bank may carry out such supervision, the records of the respective contracting and especially the following documentation:
(i) the procedure used for the contracting of the firms or experts, including, where applicable, the criteria for prequalifying and for selecting; (ii) the name of the selected consultants; (iii) the technical reports that recommended the prequalification and the contracting in question; and (iv) the corresponding signed consultancy contract. The Contracting Entity shall provide the Bank any other additional information it may require.
- h)Unless the parties agree otherwise, even if the supervision of a given contract is carried out on an ex-post basis, the Contracting Entity shall always send for the Bank’s conformity on an ex-ante basis: (i) the corresponding terms of reference; and (ii) the names of the firms comprising the short list.
(i) Before initiating the first contracting of a consulting firm or an individual expert, the supervision of which is to be carried out on an ex-post basis, the Contracting Entity shall have sent for the Bank’s conformity the procedures it proposes to use for the contracting of consulting firms and for that of individual experts, including, where applicable, the criteria for prequalifying and for selecting.
(j) Contracting of firms or individual experts supervised by the Bank on an ex-post basis are also subject to the Bank’s policies. The Bank reserves the right:
(i) not to finance or to cancel the resources of those contracts whose procedures have not conformed to said policies; (ii) to require the reimbursement, with interest and commissions, of those resources already disbursed for the aforementioned contracts; and (iii) not to recognize as local counterpart funds those that have been allocated to such contracts. The Bank further reserves the right to establish that, for future contracting, supervision shall be carried out on an ex-ante basis.
B. Selection and contracting of individual experts 5.02.—In the case of selection and contracting of individual experts:
(a) Before initiating the selection process and once it has obtained any local approvals that may be required, the Contracting Entity shall submit for the Bank’s approval the following contracting requirements for individual experts:
(i) The selection procedure; (ii) The terms of reference, specifications, and schedule regarding the services to be provided; (iii) The names of the tentatively selected experts, indicating their nationality and domicile, background, professional experience, and language skills; and (iv) The model contract to be used with the experts.
(b) Once the competent national authority and the Bank have approved the above requirements, the Contracting Entity shall proceed to contract the experts. The contract to be signed with each of them shall conform to the model contract agreed upon by the Bank and said competent authority. Once the contract is signed, the Contracting Entity shall send the Bank, as soon as possible, a copy thereof.
(c) When this Contract indicates that the contracting of certain individual experts shall be supervised by the Bank on an ex-post basis, the provisions of subparagraphs (g), (h), (i), and (j) of paragraph 5.01 of this Anexo shall apply to such contracting.
5.03.—Notwithstanding the provisions of paragraphs 5.01 and 5.02 above, and at the request of the Contracting Entity, the Bank may assist in the selection of the Consultants, as well as in the preparation of the respective contracts. It is understood, however, that the final negotiation of the contracts and their execution, on terms and conditions acceptable to the Bank, shall correspond exclusively to the Contracting Entity without the Bank assuming any responsibility whatsoever in this regard.
VI. CURRENCIES OF PAYMENT TO CONSULTANTS
6.01.—The contracts signed with the Consultants shall establish the following modalities regarding the currencies of payment, on the understanding that, with respect to the exchange rate, the rule established in this Contract or Convenio to that effect shall apply:
(a) Payments to consulting firms: The contracts signed with consulting firms shall reflect one of the following modalities, as applicable:
(i) If the consulting firm is domiciled in the country where the services are to be provided, its remuneration shall be paid exclusively in the currency of that country, with the exception of expenses incurred in foreign currency for payment of external travel or per diems abroad, which shall be reimbursed in United States dollars or the equivalent in other currencies that are part of the Financing; (ii) If the consulting firm is not domiciled in the country where the services are to be provided, the maximum possible percentage of its remuneration shall be paid in the currency of that country, and the remainder in United States dollars, or the equivalent in other currencies that are part of the Financing, on the understanding that the item corresponding to per diems shall be paid in the currency of the country or countries in which the respective services are to be provided. Should the percentage to be paid in the currency of the country where the service is to be provided be less than 30% of the total remuneration of the consulting firm, the competent national authority shall submit to the Bank for review and comment a complete and detailed justification of the proposed remuneration; and (iii) In the case of a consortium composed of firms domiciled in the country where the services are to be provided and firms not domiciled therein, the portion of the remuneration corresponding to each of the consortium members shall be paid in accordance with the rules set forth in subparagraphs (i) and (ii) above.
(b) Payments to individual experts:
(i) If the expert is domiciled in the country where they will provide their services, their remuneration shall be paid exclusively in the currency of said country; (ii) If the expert is not domiciled in the country where they will provide their services and the term of their contract is less than six months, their remuneration and per diems shall be paid in United States dollars; (iii) If the expert is not domiciled in the country where they will provide their services and the term of their contract is six months or longer, their remuneration and workplace adjustments shall be paid as follows: (1) 40% in the currency of said country; and (2) 60% in United States dollars.
Per diems, installation allowance, relocation allowance, and fee retentions, where applicable, shall also be paid in United States dollars; and (iv) Payment for lump-sum services, including fees, travel, and per diems, may be made in United States dollars.
VII. RECOMMENDATIONS OF THE CONSULTANTS
7.01.—It is established that the opinions and recommendations of the Consultants do not bind the Contracting Entity, nor other local entities, nor the Bank, all of which reserve the right to formulate any observations or qualifications they deem appropriate in that regard.
VIII. SCOPE OF THE BANK'S COMMITMENT
8.01.—It is established that the Bank assumes no commitment whatsoever to finance, wholly or partially, any program or project that might, directly or indirectly, result from the services provided by the Consultants.
IX. SPECIAL CONDITIONS
9.01.—The final payment agreed upon in the contract shall be subject to acceptance of the Consultants’ final report by the Contracting Entity or other competent local authority and by the Bank. Said final payment shall constitute at least 10% of the total amount of the sum agreed upon in the contract for fees.”