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Procurement and Small-scale Community Infrastructure

Display Date: 5/31/13
The Rural Development Project in the Solomon Islands, financed by the World Bank, AusAID, the EU and IFAD has included some 300 sub-projects where communities are responsible for procurement of materials and supervision of implementation of small scale infrastructure such as water supply systems, clinics and classrooms. While this arrangement has been quite good from the standpoint of ownership and empowerment, the procurement aspect has been quite heavy for the communities. There have been difficulties in the monitoring delivery of materials and redressing mistakes in orders and specifications. Accessing financial resources and operating accounts in the name of the communities has also been problematic as banks are generally located quite far from the communities themselves. The project and the communities also face difficulties in dealing with cost-overruns, determining who bears the responsibilities for over-runs, and certification of satisfactory completion when works turn out to be more complex or otherwise different than foreseen. We are about to design a second phase of the project and are interested in learning about how other projects have dealth with these or other problems. Does anyone have any advice for us?
Some projects in India and Bangladesh have similar small-scale works implemented by local communities. They general follow government cost norms, with oversight and monitoring from project staff.

If works are in scattered and remote locations, it may be difficult for project staff to monitor works and check that they are being done as per specification. One possible solution is to set up and train a community monitoring group who then provide some degree of basic oversight - such as checking the correct amount of cement is used when mixing concrete. But this group needs to be independent of those doing the work - which is easier when work is being done by a contractor rather than by the community.

Posted on 5/31/13 12:53 PM.

On the supervision, yes, we are with you, re monitoring by the community, and in a way we have cost norms in that project engineers work out the specfications and costs together with the communities, and they are expected to be able to fit within those. But inevitably, it seems, there are unforeseen elements that require changes when one goes from plan to implementation, or rather from specifications to actual works. Then what to do? Ask/wait for the community to kick in an additional contribution? (what we usually do) Provide them with a top up? (which is what we used to do, drawn from a "contingency" fund, but inevitably every project needed to access the full amount of contingencies) The additional back and forths require additional project staff inputs that are very costly and time consuming in the Solomon Islands. And, this also leads to further delays with respect to certified of completion and acquittals and delay of the overall project.

I forgot to mention that Dan Vadnjal, our former colleague who was on an earlier supervision for SIRDP has also written a blog on this issue, where Sheikh Mohsin added a few remarks. You can see it here.

Posted on 5/31/13 2:54 PM in reply to Edward Mallorie.

Procurement with community participation and "force account" method were being applied as an alternative method (beside competitive bidding) for several on-going IFAD-funded projects in Viet Nam (such us DBRP in Ben Tre and Cao Bang province, IMPP in Ha Tinh and Tra Vinh province) for implementation of community investment fund (CIF). CIF component is managed by commune people committee as "investment owner"

Procurement with community participation (and "force account" method) can be applied for small-scale civil works (such us cemented village roads, lined irrigation canals), using intensively un-skilled labor and simple techniques.

There are advantages of procurement with community participation/ force account: (i) saving time (and cost) for procurement process; (ii) promoting higher community participation, supervision and contribution (in term of labor, local material); (iii) improving ownership by community.

CDD approach and procurement with community development were also promoted in WB-funded projects in Viet Nam (Northern Mountainous Poverty Reduction Project, Phase 1 completed in 2007, and on-going phase 2), national target programmes such us New Rural Development Programme.

In general, procurement with community participation is an alternative method that should be considered to apply for decentralized management of CIF under development projects

Posted on 6/2/13 1:10 AM.

We may need to recognise that the estimate of the cost of works is only an initial estimate and a further stage of development may need to be funded. In Bangladesh it is difficult to come up with an accurate hydrological design of small (up to 1000 ha) drainage and flood control schemes. Doing the required mathematical modelling requires a major professional input and, even then, may not come up with the right answer. It has been suggested that development starts with some initial works (which are obviously needed), and then we observe how well these works, and make further investments to fine-tune the system.

Posted on 6/2/13 4:05 AM in reply to Chase Palmeri.

Adopting community procurement in Smallholder Entrepreneurship Development Programme (SPEnDP) in Sri Lanka by several Entrepreneur Groups (community groups) with a sound procedure that is acceptable to IFAD in line with the procurement guidelines is a far-reaching step forward that Sri Lankan programme, SPEnDP has taken. Currently the procurement includes livestock, building materials for mushroom and livestock sheds, various inputs for IGA etc for a total sum of Rs 5.105 million in 2012 by 127 beneficiaries. The average value of procurement is Rs 40,200 ($42) per item. The process has contributed in empowering the EG members, particularly those in the procurement committee, in bulk procurement of community needs, identifying markets, price analysis in selection, quality analysis, and even bargaining the deals. Through the process the community has gained confidence of those who have experienced the process.
The process include training the community to basic procedure of bidding taking few quotations of items, prices checking for competitiveness, quality comparison and finally offering the bid. The programme staff had to support the community initially to identify markets depending on the product that is procured. This step needs substantial amount of handholding. Even with this support the quotations that are collected by the community was not competitive once the programme checks on that. This with evidence makes the community aware that the market exploration is quite a significant effort in community procurement process.
The following are the main challenges: (i) training the community to maintain accounts and manage financing until payments are made etc; (ii) comparative analysis when there is technical specification involved (better to avoid such until the community is properly trained; (iii) managing bank transactions when the rural bank branches have limited reach; (iv) maintaining procurement log for the project supervision; (v) stock maintaining; and (vi) delivery maintaining.
It is very important and essential that training to mitigate these risks should be included in the design; programme staff get closely involved in at least 1st 3 procurement deals; and train leaders to handle it and then gradually up-scaled. This approach, i.e making groups, getting leaders to get hands on experiences and then gradually replicate it would be an approach that SPEnDP sees viable.

Posted on 6/2/13 6:02 AM.

Unless the design specifications of water supply systems, clinics and classrooms are standardised (say, two or three options) and these standardised designs are approved by the respective Ministries the issues you are facing in Solomon Islands would seem likely to persist. The way we ended up being able to deal with quite a few similar issues in West Africa was by using informal channels and professional networks of people who are fond of CDD and of promoting it. In particular, the most useful resource persons turned out to be technical staff working for deconcentrated technical line agencies at local government level (e.g. irrigation engineers), who originally come from one of the villages being supported, and who did not mind putting in extra hours of voluntary work to help solve the problems at hand. We could locate them through the councillors who the villages elect in order to represent them on the municipal councils. Moreover we located notables in town such as university professors who also come from the villages in question, to act as neutral conflict resolvers, as they have a lot of credibility and their wisdom is widely respected. Ultimately, it was possible to work with the contract monitoring teams (these are villagers who have been trained by the projects on procurement, technical issues related to small-scale infrastructure, costing, etc.; to avoid conflicts of interest or collusion or other unwelcome practices, they are not the same people who serve on the village development committees which are in charge of the other aspects of community-based procurement of goods and services) to understand the technicalities of the cost overruns and to make sure that satisfactory solutions can be found. In more than one case, the cost overrun was split between the contractor (who admitted their shortcomings and being partially at fault) and the communities who did put in a bit of extra labour and materials. Networking between communities also proved a great way to share concerns and ways to address them; village development committees in some countries set up a federation which became the first entry point for the government administration, projects, etc., and a vehicle for discussing common problems (like we do on this blog). Arguably the single most important issue was transparency about what was going on, encouraging the communities to adopt a maximum of measures to ensure transparency, but finding their own locally acceptable and locally effective ways, de-emphasising written communication of figures and other information given the high illiteracy rates prevailing in the communities. Another important step was to separate the commissioning, planning, financing, producing, and delivering of the goods and services procured by the communities, as per “good practice” and to ensure the “good governance” of local service delivery. It was important to explain that this would, amongst other things, make “corner-cutting” by contractors very difficult and although it makes the process lengthier, it is a worthwhile investment of the villagers’ time (and indeed many of the villagers trained in community-based procurement, participatory rapid appraisal, etc., were later elected by their fellow villagers to become municipal councillors. I do not know what the decentralisation process looks like in the Solomon Islands, but this kind of support to a broader agenda of “bottom-up” governance seems worthwhile pursuing…

Posted on 6/7/13 3:44 PM.


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