MISPROCUREMENT ON CDB-FINANCED PROJECTS

Misprocurement on CDB-financed projects occurs when a CDB-financed contract under that

project:

(a) has not been awarded in accordance with the agreed provisions of the Financing
Agreement (Loan Agreement or Grant Agreement) and as further elaborated in the
Procurement Plan approved for the project. The Procurement Plan shall include all
contracts for which the selection of firms and individuals is to take place within the first
18 months of project implementation;

(b) could not be awarded to a consultant, supplier or contractor otherwise determined to be

successful due to wilful dilatory conduct or other actions of the Recipient of CDB
Financing (Recipient) resulting in unjustifiable delays, loss of the successful
proposal/bid, or the Recipients wrongful rejection of any one or more proposals/bids; or

(c) involves the engagement of a representative of the Recipient, or a recipient of any part of
the proceeds of the financing, in fraud and corruption as per paragraph 1.23 (c) of the
Banks Guidelines for the Selection and Engagement of Consultants by Recipients of
CDB Financing or paragraph 1.15 (c) of the Banks Guidelines for Procurement (of
goods, works and non-consulting services).

In such cases, whether under prior (ante) or post (ex-ante) review, CDB will declare
misprocurement, and under CDBs policy it will normally cancel that portion of the financing allocated to
the goods, works or services that have been misprocured. CDB may, in addition, exercise other remedies
provided for under the Financing Agreement. Even once the contract is awarded after obtaining a no-
objection from CDB, CDB may still declare misprocurement and apply in full, its policies and remedies
regardless of whether or not the financing has been fully disbursed, if it concludes that the no-objection
was issued on the basis of incomplete, inaccurate, or misleading information furnished by the Recipient or
that the terms and conditions of the contract had been substantially modified without CDBs no-objection.

COMMON EXAMPLES OF MISPROCUREMENT

(a) Procurement of goods, works or services from non-eligible countries.

(b) Using the wrong funding sources to pay for goods, works or services.

(c) Mis-steps in the process of advanced contracting for goods, works or services prior to
approval of retroactive financing.

(d) Award of a contract, the terms and conditions of which have been substantially modified
without having first received CDBs no-objection to the modifications.