World Bank overhauls procurement processes behind £26 billion spend

Will Green is news editor of Supply Management
19 December 2013

The World Bank is overhauling procurement processes that were established in the 1970s to become more strategic and cut costs.

CPO Christopher Browne told SM this involved a shift from “one-size-fits-all” to a “more tailored” approach.

The bank has a procurement spend of £26 billion a year and deals with 168 countries with vastly different needs and capabilities, ranging from war-torn states such as Afghanistan to fast-growing developing nations like China. Projects range from small social projects, such as supporting women’s access to justice in Yemen, to building a new underground train system in China.

The bank itself does not do any procurement on behalf of borrower countries, but they must use its set of guidelines and its standard bid documents, and the bank oversees the process.

“In a nutshell, that is the conundrum of procurement in the World Bank. I can’t think of another organisation that has to deal with all these variables,” said Browne.

He said traditionally the bank had dealt with this problem with a universal, standardised approach, which was reassuring for suppliers in the 1970s that were “more reticent about working in different parts of the world”.

“The approach to deal with diversity historically has been through consistency and standardisation,” he said. “From a business perspective, if you are bidding for a World Bank contract you know exactly how the system works no matter where you are in the world. That was the logic.”

But Browne now wants to cut unnecessary red tape so “we can release time from compliance activities to support more strategic and complex projects”.

“The traditional approach of managing diversity through consistency isn’t really working in today’s globalised environment,” he said.

Browne said this involved tailoring processes to suit the level of risk of a particular project. “One country needs 100 signatures to get a contract approved,” he said.

Cutting project timelines and costs and finding economies of scale are among the goals of the work, which will replace the single procurement blueprint with a number of different models suitable for different situations. “I think there is cost we can take out of the system,” he said.

Browne, who is leading the reform programme, sought the views of 2,000 people in 100 countries before presenting proposals to the bank’s board, which gave the go-ahead to the reforms in November.

Further work will take place, but Browne hopes to have the changes in place from 2015.

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