Project Procurement

Together we can Build a better Future

The Islamic Development Bank (IsDB) has a mandate to foster economic growth, sustainability and eradication of poverty forms its Member Country. It extends financing to Member Countries (MCs) for various developmental projects and programs which involves the procurement of goods, works, consultants and other related services.

The IsDB by its mandate is required to ensure that the proceeds of its financing are used only for the approved purposes, with due considerations of economy and efficiency and without any regard to political, monetary or non-monetary influences. Project procurement is the fiduciary responsibility of the Bank.

To ensure that financing is used and applied in ways that adequately secure the IsDB's mandate while maximizing the development impact, IsDB encourages and promotes sound, fair, transparent and performing procurement systems in MCs. IsDB believes that the existence of such systems in a country provides the best fiduciary assurance and effective and productive use of resources. In this respect, guidelines for the Procurement of Consultants, Goods, Works, and other related procedures were approved by the Board of Executive Directors (BED) of IsDB on September 02, 2018. New Guidelines are being implemented since April 2019. These guidelines assist the beneficiaries of IsDB financed projects to obtain maximum Value for Money (VfM) by achieving the optimal benefits with the resources utilized and also allows bidders to prepare Bids and execute contracts that meet the requirement of IsDB and the Beneficiary for high-quality Consultants, Goods, Works and related services.

The Bank adheres to the core procurement principles of economy, efficiency, fairness and effectiveness. These Principles are underpinned in procurement policies and procedures of the Bank. In supporting Beneficiaries in achieving sustainable development with integrity and transparency, encouragement is extended to develop procurement approaches that are Fit-for Purpose and reflect VfM through the application of IsDB's cores procurement principles, procedures and processes.

The IsDB by its mandate is required to ensure that the proceeds of its financing are used only for the approved purposes for which such financing was granted, with due attention to the considerations of economy and efficiency and without any regard to political, monetary or other non-economic influences.

Frequently Asked Questions

Procurement refers to the process of acquiring goods, works and services resulting in the award of contracts under which payments are made in the implementation of projects, in accordance with the governing Rules and Procedures and Guidelines of the donors, financing agency or agencies.

What is Procurement?

The Bank’s procurement policy is based mainly on five considerations, namely:

  • Need for economy and efficiency in project implementation;
  • Equal opportunity for all eligible suppliers and contractors from member countries to compete in the supply of goods and works services financed by the Bank;
  • Encouragement of the development and participation of contractors and suppliers from Member Countries, and
  • The importance of transparency, accountability, competency, and non-discrimination, in the procurement process; and
  • Combating fraud and corruption in the procurement process.


What are the Bank’s policies in Procurement?

Most of the procurement rules and guidelines for the Multilateral Development Banks (MDBs) can be found on their respective websites.

Where can anyone can find the procurement rules and guidelines governing the projects financed by IsDB?

The proceeds of financing shall be used for procurement of Goods and Works from the eligible member countries of IDB only. Bidders from Non - member countries offering goods and works are not eligible, even if they offer from an eligible country. All member countries of the Bank are eligible to participate in all the procurements.

What criterion is applied for eligibility and who is eligible to participate?

The different modes of procurement, which are generally used in the projects financed by IDB, are: International Competitive Bidding limited to Members Countries firms (ICB/MC), International Competitive Bidding (ICB), Limited International Bidding (LIB), National Competitive Bidding (NCB), International Shopping (ISH), National Shopping (NSH), Force Account and Direct Contracting. Every procurement mode differs and depends on the nature, type and complexity involved in different components of the Project.  Generally, IDB prefers International Competitive Bidding limited to Members Countries firms (ICB/MC) for the majority of its procurements, except in cases where the amounts are small and may not attract international competition from all Member Countries, in which case, the Bank recognizes that other modes of procurement may be more appropriate.

What different types or modes of procurements are commonly used in the projects financed by IsDB? Does the Bank always prefer ICB/MC?

The most common types of contracts under Bank financed projects are, Unit Price, Lump Sum or combinations thereof. In special cases, such as closely integrated manufacturing or works of special nature, the Bank may resort to Turnkey contracts under which, the design & engineering, supply, installation and construction of works will be procured under one single contract.

What type of contracts are commonly used under Bank’s financed projects?

The time and cost of winning a contract can vary a great deal. Specifically, the length of time depends on the mode of procurement. Furthermore, the likelihood that a firm will win a contract depends also on how competitive it is in a beneficiary member country.

How long does it normally take to a firm to win a Bank’s financed contract?

The term “mis-procurement” is used cases where the Goods, Works or Consulting Services, financed by the Bank are not procured in accordance with the Bank’s rules and procedures. Under these conditions, the Bank may resort to cancellation of that portion of financing allocated for the goods, works and services that have been mis-procured. In certain cases, the Bank may even cancel the total financing for the project, particularly if the major component of the project has been mis-procured, and the Beneficiary does not agree to re-tender in accordance with the Bank’s procurement procedures. In the New Guidelines, it is used Non-compliance more flexible term when the Beneficiary has not complied with the procurement requirements set out in the Financing agreement and/or IsDB Procurement Guidelines. 

What is mis-procurement?

Yes. The Bank recognises the formation of “joint-ventures” by companies in order to increase capacity for a specific supply of goods, provision of works or services. Furthermore, in order to encourage the development of domestic industry, suppliers and contractors in the Beneficiary’s country, are encouraged to participate in the procurement process. The local suppliers or contractors can bid either independently or in “joint-venture” with foreign firms, from member countries, in accordance with the conditions of the Bank’s Guidelines.

Does the Bank encourage "Joint Ventures" in the Procurement of Goods, Works and Consultancy Services?

Co-financing can either be parallel-financing or joint-financing. Where the Bank finances a project on a parallel basis, (which refers to several components or contracts) with other financiers, the Bank’s rules and procedures for procurement shall apply to its specific component or contract. If the Bank finances on a joint basis (single contract) with other financiers, other than the Beneficiary, usually it will require as a condition, that its rules and procedures will apply, unless a waiver is given by the Bank’s Board of Directors in favor of the Lead Financier procedures.

If a project is co-financed (parallel-financed or jointly- financed) with other financiers, which procedures and rules will apply for procurement?

The Bank expects that Staff of Beneficiaries and bidders, suppliers, contractors, consultants and concessionaires shall observe the highest standards of ethics during the procurement process. The Bank will conduct its own investigation, if it comes to know of any fraud or corruption cases during the procurement process. In the event that fraud or corruption is established, the Bank will then take some or all of the following actions:

  • Reject a proposal for award, if the award of contract was recommended by the Beneficiary;
  • Cancel the portion of the financing allocated for procurement of goods, works or consultancy services during the procurement process or during the execution of the project;
  • Declare the firm an ineligible supplier, either indefinitely or for a stated period of time to be awarded a Bank financed contract.



How does the Bank deal with cases of fraud or corruption in procurements under projects financed by Bank?

Contracts awarded on Goods, Works or Consultancy Services are published in the Bank’s Website along with its procurement business opportunities.

Where does IsDB publish its procurement business opportunities and contract awards information and if so, how does one access them?

Yes. The Bank has Standard Procurement Documents, eg for Pre-qualification and Bid Evaluation.

Are there any guidelines or publications available for IsDB financed projects on pre-qualification or Bid Evaluation?