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Procurement Methods

Plain-language definitions of every Procurement Methods term that shows up in government tender work.


Procurement Methods

Advance Contracting

A World Bank and MDB mechanism that allows a borrowing government to begin procurement steps, including advertising, bidding, and evaluation, before the loan financing that will fund the contract is formally approved.

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Procurement Methods

Borrower-Executed Procurement

The model used in most MDB-financed projects where the borrowing country's implementing agency runs the procurement process while the bank sets the rules and reviews key decisions.

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Procurement MethodsCDD

Community-Driven Development (CDD) Procurement

A World Bank and MDB approach where project-affected communities directly manage small-scale procurement for local infrastructure and services, using simplified procedures appropriate to community capacity rather than standard government procurement rules.

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Procurement MethodsCDD

Community-Driven Development (CDD) Procurement

A World Bank procurement approach where local communities directly manage and procure small-scale goods, works, and services for their own development projects rather than using a central government implementing agency.

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Procurement MethodsCQS

Consultants' Qualifications Selection (CQS)

A simplified consulting-selection method used by development banks for small or routine assignments, awarding directly to the best-qualified firm without a competitive proposal process.

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Procurement Methods

Direct Contracting

A single-source procurement method under MDB-financed projects where a contract is awarded to one supplier without competition, permitted only in narrowly defined circumstances with explicit justification.

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Procurement Methods

Electronic Reverse Auction

An online competitive event where pre-qualified suppliers submit successively lower price bids within a defined time window, with the buyer awarding to the lowest qualifying offer at close.

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Procurement Methods

Emergency Procurement

An expedited MDB and UN procurement process triggered by a declared emergency, natural disaster, or crisis that allows abbreviated competition timelines and direct contracting where normal competitive methods would cause harmful delays.

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Procurement MethodsFBS

Fixed-Budget Selection (FBS)

A consulting-selection method used by development banks where the budget is disclosed in the Request for Proposals and the contract goes to the technically highest-scoring firm that stays within that budget.

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Procurement Methods

Force Account

A method under MDB-financed projects where works are carried out directly by the borrower's own staff and equipment rather than through a competitively awarded contract with an external contractor.

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Procurement Methods

Framework Agreement (International)

A standing arrangement between a buyer and one or more suppliers that sets pre-agreed terms and prices for repeated purchases over a defined period, avoiding a fresh competitive process each time.

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Procurement Methods

Framework Agreement (International)

A standing arrangement between a buyer and one or more pre-qualified suppliers that sets agreed terms and prices for repeated purchases over a defined period, avoiding a full tender process each time goods or services are needed.

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Procurement MethodsICB

International Competitive Bidding (ICB)

The open, internationally advertised procurement method that multilateral development banks use for their largest contracts to attract qualified bidders worldwide.

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Procurement Methods

International Shopping

A simplified MDB procurement method for small-value goods that solicits price quotations from suppliers in at least two different countries, combining speed with a minimal level of international competition.

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Procurement MethodsJV

Joint Venture (JV) in Procurement

A formal partnership in which two or more firms combine their resources, qualifications, and legal standing to bid jointly on an international contract that neither could win alone.

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Procurement MethodsJV

Joint Venture (JV) in Procurement

A contractual arrangement where two or more companies form a combined legal entity to bid jointly on a procurement contract, pooling capabilities, experience, and financial capacity to meet eligibility thresholds neither could satisfy alone.

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Procurement MethodsLCS

Least-Cost Selection (LCS)

A consulting-selection method used by development banks for standard, well-defined assignments where all technically qualified firms compete on price and the lowest financial offer wins.

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Procurement MethodsLIB

Limited International Bidding (LIB)

A restricted form of international competitive bidding where the borrowing agency directly invites a small number of qualified suppliers from eligible countries instead of publishing an open notice.

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Lot-Based Bidding

A procurement approach that divides a large contract into separately priced and awarded segments called lots, enabling multiple suppliers to compete and win portions of the overall requirement.

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Margin of Preference

A price adjustment applied during bid evaluation under MDB procurement rules that artificially reduces the evaluated price of eligible domestic bids, giving local suppliers a defined competitive advantage over foreign competitors.

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Procurement MethodsNCB

National Competitive Bidding (NCB)

The domestically advertised procurement method that development banks allow for smaller contracts where international bidders are unlikely to compete.

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Procurement Methods

National Shopping

A simplified MDB procurement method for small-value goods and minor works that collects price quotations exclusively from domestic suppliers in the borrowing country.

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Negotiated Procurement

A procurement process in which the buyer engages directly with one or more suppliers in structured price and terms negotiations rather than relying solely on sealed competitive bids to determine the award.

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Procurement MethodsOCB

Open Competitive Bidding (OCB)

The Asian Development Bank's default procurement method for goods, works, and services that replaced the older ICB/NCB distinction with a single open, internationally advertised competition.

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Performance-Based Procurement

A contracting approach where payment to the supplier is tied to the achievement of defined output or outcome results rather than to the inputs, activities, or hours delivered, shifting performance risk from buyer to supplier.

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Prequalification

A screening stage before bidding on large works or goods contracts, where the buyer confirms which firms have the capacity and track record to deliver before they bid.

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Prior Review

The World Bank's mandatory pre-approval process for high-value contracts, under which the bank examines each stage of a procurement before the implementing agency may proceed.

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Procurement MethodsQCBS

Quality and Cost-Based Selection (QCBS)

The most common selection method for consulting services, scoring technical quality and price together using a published weighting to pick the best overall proposal.

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Procurement MethodsQBS

Quality-Based Selection (QBS)

A consultant selection method that ranks firms on technical quality alone, then negotiates price with the top-ranked firm, used where expertise outweighs cost.

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Procurement Methods

Retroactive Financing

An MDB mechanism that reimburses a borrower for eligible project expenditures already paid before the loan agreement became effective, provided the prior procurement fully complied with MDB rules.

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Sealed Bid

A bid submitted in a closed, tamper-evident package that prevents the buyer or other bidders from seeing its contents until all bids are simultaneously opened at a publicly announced time and place.

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Procurement Methods

Shopping (Procurement Method)

A simplified competitive method used by MDBs for small-value purchases of goods or works, requiring price quotations from at least three suppliers without a formal tender process.

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Procurement Methods

Shopping (Procurement Method)

A simplified MDB procurement method for low-value goods and works that requires price quotations from at least three suppliers, with no formal bidding documents or bid security.

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Procurement Methods

Slice and Package

A procurement structuring strategy that groups related works or goods into packages sized to attract the widest competitive field, balancing efficiency of large packages against accessibility for smaller contractors.

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Subcontracting in MDB Projects

The practice by which a prime contractor on an MDB-financed contract engages specialist firms to perform defined portions of the work, subject to MDB rules on approval thresholds, eligibility, and disclosure.

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Procurement Methods

Two-Envelope System

A bid submission format where the technical proposal and the financial proposal are sealed in separate envelopes so the evaluator scores technical quality before seeing any prices, preventing financial information from influencing technical assessment.

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Two-Stage Bidding

A competitive procurement process for complex goods or works where technical proposals are solicited and refined in a first stage before final priced bids are invited in a second stage, allowing specifications to be clarified before financial commitment.

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Procurement Methods

UN Agencies as Procurement Agents

The arrangement by which a UN agency such as UNOPS, UNICEF, or UNDP procures goods, works, or services on behalf of a client government or another organisation, using the UN's procurement procedures and contractual authority.

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