Maharashtra Project on Climate Resilient Agriculture: Independent Post Procurement Audit Review of Contract's Under PoCRA (2021-22,2022-23)

Project ID: P160408

Project Title: Maharashtra Project on Climate Resilient Agriculture

Borrower Bid Reference: IN-MAHAPOCRA-324931-CS-LCS

Published Date: 15-Dec-2022

Details:

REQUEST FOR EXPRESSION OF INTEREST

(CONSULTING SERVICES- FIRMS SELECTION)

Background:

The Government of Maharashtra has received financing USD 420 million from the World Bank towards the cost of the Project on Climate Resilient Agriculture in Maharashtra (PoCRA). The project development objective is to enhance climate-resilience and profitability of smallholder farming systems in project districts of Maharashtra. The project aims to achieve the objective through promotion of climate resilient technologies and commodity value chain across approximately 4,000 drought-prone villages in 16 districts, namely, Jalgaon, Aurangabad, Jalna, Beed, Parbhani, Hingoli, Osmanabad, Latur, Nanded, Buldhana, Washim, Akola, Amravati, Yavatmal, Wardha and Nashik and approximately 1000 salinity affected villages in the basin of Purna river spread across Akola, Amravati, Buldhana and Jalgaon districts.

The project intends to apply part of the proceeds for consulting services for the consultancy services for Post Procurement Review of PoCRA for 2021-22, 2022-23 & 2023-24 from qualified consultants.

The consulting services requires carrying out Post Procurement Review Audit

• verify the procurement and contracting procedures and processes followed for the contracts in the representative sample, and, as appropriate, identify noncompliance with the Loan, Credit or Trust Fund Agreement, the Procurement Plan, Guidelines, etc;. and , inappropriate practices by the IA (Implementing Agencies) or other parties;
• verify the physical completion and existence of the goods and works which have been procured under the contracts;
• review and evaluate the contract management practices of the IA within the context of the representative sample of contracts;
• review and evaluate the record keeping and file management arrangements of the IA
• Recommend actions to correct the identified deficiencies.

The scope of Post Procurement Review Assignment:

To carry out Post Procurement Review audit of the project at various implementing levels as per the enclosed Terms of Reference and submit report to Project Management Unit.

An indicative Terms of Reference (ToR) for the consultancy is enclosed for improved understanding of the proposed assignment.

The period of the assignment is one year for the Procurement Audit of three years i.e 2021-22, 2022-23 & 2023-24.

The Project Director, PoCRA invites eligible “Consultancy Firms” to indicate their interest in providing the above-mentioned Services. Interested applicants should provide information demonstrating that they have the required qualifications and relevant experience to perform the Services.

The short-listing criteria are:

1. A firm of Chartered Accountants or any firm who has executed similar type of assignment and has required experience can apply. The firm shall have a standing of at least ten years in the profession. If CA firm, it should be empaneled with CAG.  (As per Annexure VI)
2. If CA firm, it should have at least five full time FCA partners/CA employees associated for continuous period of at least three years. If other firm should have at least 5 full time key personnel associated for continuous period of at least three years. (As per Annexure VI)
3. Availability of qualified manpower in regard to Post Procurement Review. (Requirements given in clause 11 of ToR. Qualification and Experience of Consultants for Post Procurement Review)(As per annexure VII)
4. The applicant should have executed at least three Post Procurement Review assignment of World Bank or externally aided projects during last 5 years. (As per Annexure VIII)
5. Average Annual Turnover of the consultant from audit/ consultancy services should be more than Rs. 1.25 Cr.  During the last 3 financial year (FY 2019-20, 2020-21 and 2021-22). (As per Annexure IX)

            The consultancy firms will be shortlisted according to Section VII Approved Selection Methods for consulting services, paragraph, 7.17 of the World Bank’s Procurement Regulation for IPF Borrowers, July 2016, revised November 2017 issued by World Bank.

The attention of interested Consultants is drawn to Section III, paragraphs, 3.14, 3.16, and 3.17 of the World Bank’s Procurement Regulation for IPF Borrowers, July 2016, revised November 2017 issued by World Bank, setting forth the World Bank’s policy on conflict of interest.

(https://policies.worldbank.org/sites/ppf3/PPFDocuments/Forms/DispPage.aspx?docid=4005&ver=current )

Associations and joint ventures are not allowed for this assignment.

The consultant will be selected in accordance with the Least Cost Selection method (LCS) set out in the World Bank’s Procurement Regulation issued by World Bank.

Expressions of interest must be submitted through e-procurement portal www.mahatenders.gov.in as per schedule.

Interested applicants would be required to register on the e-procurement portal, which is free of cost, and would be responsible for ensuring that any addenda available on the portal is also downloaded and incorporated prior to the submission of Expression of Interest (EoI). For submission of EOI online at the portal indicated above, the applicant is also required to have a Digital Signature (DSC) from one of the Government of India authorized Certifying Authorities. The list of the authorized Certifying Authorities can be found from the link http://www.cca.gov.in.

               Sd/-   

Project Director, PoCRA                                       

Address:

Project Director,
Project on Climate Resilient Agriculture,

30 B, Arcade, World Trade Centre, Cuffe Parade,

Mumbai-400005

Email id: procurement.pmu@mahapocra.gov.in

FAX: 022-2216335

Appendix A – Terms of Reference

Terms of Reference for Conducting Independent Procurement Audit (Post) Reviews of Contracts Under Maharashtra Project on Climate Resilient Agriculture (Pocra)

1. Background:

The essence of the World Bank Post Procurement Review is to ensure that the Bank receives adequate, independent, and professional, audit assurance that the procurement procedures of World Bank are adhered ate all project implementation levels.

Based on the World Bank’s assessment of the procurement capacity, the contracts below a certain threshold are subject to post review. While the entire procurement process for all post review contracts is completed without the Bank’s prior review and clearance but all the contracts are required to  be procured as per the Bank’s Guidelines for Procurement under IBRD Loans and Credits and the Guidelines for Selection and Employment of Consultants by World Bank Borrowers (‘’Guidelines’’). It is mandated that:

1. the agreed procurement procedures must be followed as per the specific procurement arrangements in the Loan Agreement and relevant provisions of the Guidelines.
2. all documentation related to the contract must be retained by the procuring agency; and
3. the documentation must be readily accessible and made available upon request.

PoCRA project is being executed in selected 16 districts of the state. At each level, the institutional arrangement has been made to manage the project’s procurement-related aspects including goods, works, and consulting and other services. This procurement post review of the contracts is required at PMU, Districts/Sub-divisions/VCRMCs and Farmer Producer Organizations (FPO, FPC, Farmer Organization, SHG etc.)As per the list provided at Annexure-II. The procurement post review is to cover all accounting centers and confirm compliance of the procurement procedures of the project and effectiveness of internal control systems and recommend suitable mitigations measures to address systemic and specific issues.

2. Objectives of the assignment:            

The main objectives of the Consultant’s services are to:

1. Verify that the procurement procedures followed for contracts in the representative sample are carried out at Districts/Sub-divisions/VCRMCs and Farmer Producer Organizations (FPO, FPC, Farmer Organization, SHG etc.) are in compliance with the requirements of the legal agreement and PPSD.
2. Identify any noncompliance with the loan agreement, applicable procurement arrangements, Bank Guidelines, PPSD etc
3. Identify inappropriate practices by the accounting centers or other parties;
4. Check that the procurement arrangements agreed are in place.
5. Identify, review, evaluate and report any contract management issues  within the context of the representative sample of contracts
6. Verify and confirm physical completion and existence of the goods and works and, where applicable, non-consulting services resulting in a physical output, which have been procured under the contracts. Confirm technical compliance and physical completion for implemented contracts.
7. Check and confirm any systemic issue.
8. Identify and report any indications of possible Fraud and Corruption.
9. Recommend mitigation measures to correct the identified procurement deficiencies or deter future deficiencies.
10. Review and evaluate the record keeping and file management arrangements of the accounting centers. 
11.       

4. The fund flow for the project:

       The detail is attached in Annexure-I.

5. Accounting Centers in the project at which procurement activities are carried out:

     The Consultants services for Post Procurement Review are required at PMU/ Districts/Sub-divisions/VCRMCs and Farmer Producer Organizations (FPO, FPC, Farmer Organization, SHG etc.), the list of which is attached as Annexure-II.

6.2 Scope of Post Procurement Review 

Status of Mitigation Actions

The review includes an update on the progress of implementation of the risk mitigation and corrective actions from the previous review, as identified in the PAD, previous reports and aide-mémoire. When corrective actions remain unfinished beyond their due date, the reviewer discusses whether the actions are still relevant and records any reasons why the actions were not implemented. When the measures were implemented, the reviewer assesses whether they effectively mitigated the identified risks.

PPR Reporting and Filing

Once the report is final, the APS/PAS (i) reports to the TTL the PPR ratings for the project, as input to the ISR, (ii) sends a copy of the PPR report to the APM, and (iii) files the PPR report, along with supervision results, in the Post Review module of the project portal. In filing the PPR, the APS/PAS updates the risk ratings on procurement and contract administration, and risk management measures.

The scope of the PPR for which the Consultants services are required encompasses the Accounting Centers as provided in Annexure II.

 PMU will provide the Consultant Contract list of all post-review contracts which are eligible for Bank-financing.

The Consultant is further directed to refer to the “Bank guidance on procurement post review, September 2016 ”, which is provided below to and made a part of these Terms of Reference (TOR) attached as Annexure VIII,  

Typically, the following documents are examined in conducting the PPR:

[a]         Invitation for bids, advertising procedures and bidding period

[b]         Bidding documents and addenda if any

[c]          Sale of bidding documents, pre-bid meeting (wherever applicable)

[d]         Receipt and opening of bids.

[e]         Bid evaluation and recommendation for award of the contract

[f]          Draft contract in the bidding documents versus the awarded contract

[g]          Timeliness of payment to contractors/suppliers/consultants

[h]         Projected versus actual completion schedule

[i]           Variation orders and time extensions

[j]           Acceptance or substantial completion certificate

The consultant will use PPR review module as mentioned below to carry out PPR.

Useful indicators to assess compliance with the agreed procurement procedures are summarized in the following matrix, which shall be augmented as necessary to capture the salient features of each project.  In addition, and as specified in the minutes on submission of inception report Bank shall be providing certain indicators for appropriate incorporation.

Physical Inspection. The physical inspection of goods and works and, where applicable, non-consulting services resulting in a physical output, is an indispensable part of the PPR. It should draw attention to missing, diverted or relocated assets procured through Bank financing.

The auditor will undertake physical verification of the assets (about 3% - 4% of the created assets created under the project through a random sampling process) of post review contracts and report the presence and condition of these assets. The Consultant is encouraged to illustrate his findings with photos of these assets. Any insurmountable impediments in gaining access for physical inspection should be detailed in the PPR.

The consultant should also review the inventory system, in order to ascertain whether or not each asset is properly accounted for in the asset accounting records and being used for the intended purpose under the project.

The draft PPR Report should include follow up on findings of previous PPR and retain recommended actions not yet implemented. 

Besides the above the Consultant shall also consider the following:

1)  Going beyond checking the box: reviewers may add any important observation even if it is not mandated in the PPR format

2)  Same issues appear year-after-year:  Please discuss with Implementing Units to find out whether adequate remedial actions were taken by the Implementing Units on finding of previous PPRs and record the same in detail.

3)   Quality of Physical inspection:  If there are subject experts in PPR team, they should be used for carrying physical inspections;

4)   Sample: High value contracts are to be given preference while proposing the sample for PPR

5)   Report of Auditors:  Please also look at major audit observations (in previous years financial audit report) as they may include observations on procurement process. This may be added in list of documents required as well as should be recorded in PPR report.

7. Coverage for the PPR:

 This procurement post review of the contracts is required at PMU, Districts/Sub-divisions/VCRMCs and Farmer Producer Organizations (FPO, FPC, Farmer Organization, SHG etc.) as per the list provided at Annexure-II. The PPR will be based on the Consultant’s review of a representative sample of contracts that are subject to post review at various levels. The Consultant will select at least 15% representative sample on a random basis from a verified list of post review contracts provided by SPMU. The Consultant may use the sampling methodology as set out in the Guidance Note.

For PPR of procurement carried out  below the sub-divisional level, the Consultant will go to at least 20% of the offices below the sub-district and at-least 5% of the VCRMCs .For PPR for the balance procurement carried out below sub division, documents of the contracts will be brought to the convenient sub division /district level office within the state.

8. Extent of the PPR:

The Bank expects the Consultant to apply his best professional practices and judgment in performing the PPR services. For further information, the “Bank Guidance on procurement post review September 2016” represents the Bank’s performance standard for PPRs.

For each project, the PMU will provide the Consultant, on request, the following documents:

• Names and addresses of IA’s and responsible officials and staff;
• Loan Agreement
• Contract list of all post-review contracts which are eligible for Bank-financing
• Project Appraisal Document (PAD)

The Consultant is further directed to refer to the “Bank guidance on procurement post review, September 2016 ”, which is attached to and made a part of these Terms of Reference (TOR),  

Sampling of Contracts

The PPR will be based on the Consultant’s review of a representative sample of contracts that are subject to post review under the Loan Agreement. The Consultant will select this representative sample on a random basis from the list of signed contracts (register) received from the Borrower, the disbursement reports, periodic procurement reports prepared by the Borrower, and any available payment records to ensure the completeness of the list, and then selects the sample of contracts to be reviewed.

• The selection of contracts for review is critical for the success of the PPR, as post-reviewed contracts provide evidence of the Borrower’s procurement performance.
• The sampling of contracts for a project is done through a combination of: (i) purposive sampling—that is, focusing on contracts with certain risk factors, such as:
  • contracts against which a complaint has been submitted;
  • Contracts for which rebidding/cancellation of the procurement took place.
  • Contracts with price modifications of 15% or more of the original contract price.
  • Contracts awarded without competition (direct procurement);

• Contracts with cost estimates below the Bank’s Prior Review thresholds, if the final price of the contract exceeds those thresholds.
• The balance of contracts on the register is stratified by procurement method or approach to the market, and the sample is drawn from each method to the extent possible. Selection also takes into consideration the contract size, with the higher-value contracts targeted for review. However, risky smaller contracts may also be part of the sample.

• For a project like PoCRA with a large number of contracts, the sample may be adjusted to include all types of procurement.
• Upon completion of the sample selection, the reviewer conducts the review.

Planning. Preparatory Activities

•            The reviewer checks the list of contracts to identify any patterns indicating risky activities – for example, splitting of contracts, repetitive contracts, orders of the same items from the same firms (except under framework agreements), or multiple contracts just below the Prior Review thresholds or other thresholds for competitive procurement. Contracts exhibiting such patterns may be added to the sample of contracts to be reviewed.

•            The reviewer also reviews the previous PPR and aide-mémoire to assess the issues raised in the last review and how they have been addressed, as well as any outstanding mitigation actions and other issues from implementation support and monitoring. The progress with pending actions is discussed with the Borrower as part of the review.

In line with the completion schedule agreed between the Consultant and the PMU, the Consultant should prepare a review schedule to be shared and agreed with the IA at the first work session. This will give early recognition to the availability of the IA’s staff who have been assigned to work with the Consultant; alternatively, the Consultant should advise the PD of any problems with the availability of the IA’s staff requiring their assistance.

The consultant will ensure that draft PPR report is sent to concern PMU within 2 weeks of completion of PPR.

Review of Contract Implementation

• In reviewing contract implementation, the reviewer checks whether the work was done according to the contract terms and specifications. The reviewer assesses whether the Borrower adequately checked the quality and quantity of work. The reviewer also checks the timeliness of contract performance and timeliness of payment. The objective of this assessment is to reach an opinion as to whether the services were rendered, goods supplied, and works completed according to the contract and that payments were completed on time and according to the contract. The review may include site visits, physical inspections or inventory checks carried out by a technical specialist.

Review of the Adequacy of Procurement Arrangements

• In conducting the review, the reviewer assesses whether the Borrower continues to comply with the agreed procurement arrangements and whether the arrangements are still adequate or timely and effective implementation of procurement.
• When the reviewer observes cases of potential noncompliance, he/she conducts further assessments, including discussions with project staff, to establish any underlying causes or system failures. This may require reviewing other reports, such as internal audit reports. For example, when several instances of non-compliance are observed, it could be as a result of bypassing a procurement approval committee in the Borrower’s agency—a system failure. For system failures, the PPR recommends corrective actions to strengthen the system.

• When mitigation or strengthening, actions are necessary, potential actions and their target dates to improve the chances of effective implementation to be included.

• . When recommendations from previous PPRs are still outstanding, the reviewer discusses the reasons, reflects them in the report, and considers them in developing any new actions.

Follow-Up Tasks:

At least, the major findings of the draft PPR Report should be shared with the Implementing Units as part of the dialogue between the Implementing Units. It will be essential to provide the Implementing Units with the opportunity to review the draft for factual errors and identified deviations that may, on further inspection, turn out to be incorrect. This feedback from the Implementing Units should be taken into account by the Consultant in the final PPR in a substantive manner and for the record. Setting a time limit for receiving this feedback from the Implementing Units may be necessary in some cases. If the Consultant discovers any evidence of fraudulent or corrupt practices by the Implementing Units within the context of his/ her PPR work, he/ she should gather and record the evidence that has come to his/ her attention and report it as part of the PPR summary of findings.

10.  Deliverables and time Schedule of  Procurement post review  Reports:

Post Review Reports

1. The Inception Report shall be submitted by the Consultant within 15 days of signing the contract. The Inception Report shall describe the Consultant’s review schedule, including his/ her mission to the IA’s and staffing arrangements. It shall also explain the methodology for sampling the contracts and for reviewing the corresponding information and documentation at the Implementing Units location and elsewhere, if necessary. The Project Director will review and clear the Consultant’s Inception Report and share it with his team, in order to coordinate their respective schedules.
2. Project PPR reports (Draft/Final): The Consultant will submit the draft PPR report to the Implementing Units within 3 weeks of completion of review. The draft report shall be submitted in the required format shown above and will be shared with the Implementing Units to obtain feedback. The Implementing Units shall provide comments within 3 weeks of submission of report and consultant will proceed with preparation of Final Report shall take into account the total feedback received on the Draft Report, especially, the Implementing Units comments. However, having exercised due diligence, the Consultant’s professional judgment shall prevail in preparing and presenting the Final PPR Report to PMU.

The indicative schedule for the assignment is given below:

11. Qualifications & Experience of Consultants for PPR:

The team Composition and Qualifications & Experience of Consultants for post procurement review is as follows:

12. Tenure:

1. The Consultant for post procurement review will be appointed for one year with following scope:

To complete the procurement post review for three years (2021-22, 2022-23 at a time) and year 2023-24 separately.

13. Support provided by PoCRA:

1. The consultant would be given access to all documents, correspondence, and any other information relating to the project and deemed necessary by the consultant (including all contract document, sub-project agreements, final audit reports submitted by the concerned units). The auditor should become familiar with the project, and with the relevant policies and guidelines of the World Bank (including those relating to disbursements, procurement and financial management and reporting).
2. The consultant would be provided copies of the Project Implementation Plan; Project Appraisal Document (PAD) of the World Bank; Development Credit Agreement, Procurement Manual, Annual Procurement Plan, Financial Management Manual and Annual Work Plans.
3. Adequate information, files, records regarding procurement will be made available.
4. Consultant will be provided with working space during audit in the respective offices.

ANNEXURE- I

Fund Flow System for the Project

ANNEXURE- II

DETAILS OF ACCOUNTING CENTRES

This is only indicative list and projects may be added or deleted during contract implementation

ANNEXURE- III

TIME SCHEDULE FOR SUBMISSION OF PPR REPORTS

ANNEXURE – IV

Expected Man Days Requirement

Annexure V

Details of Procurement Activities / Contracts under PoCRA

Note: Assignment numbers for the procurement year 2021-22 are as actual and for procurement year 2022-23 and 2023-24 (Sampling size is 10% higher than sampling size of 2021-22) exact number of contracts will be given at the time of review.

Number VCRMCs (Where Expenditure is more than INR 5000/-).