X1` June 2015 – Number 146 Navigating through Fragility: Procurement Solutions for Iraqi Education textbook printing and delivery, under the Emergency Elisa Mosler, Nazaneen Ismail Ali, and Rachel Lipson1 Textbook Provision Project and school construction in the newly rehabilitated marshlands of Southern Introduction: While the Iraqi education system was Iraq under the Marshlands School Construction widely regarded as one of the best in the Middle East Project. By developing a unique strategy for and enjoyed near-universal primary enrollment until procurement that was responsive to local conditions, the 1980s, the next decade marked a serious the Bank was able to support the government in downturn in results. Beginning in the 1990s, the issuing printing contracts, secure book delivery education system in Iraq deteriorated sharply as two arrangements, and acquire the construction materials decades of conflict and economic sanctions took their and supplies needed to achieve the projects’ toll. The sector witnessed low primary and secondary development objectives. enrollment and attendance, outdated curriculum content, and deteriorating learning outcomes. Behind this was a collapse in public investment in education and a resulting standstill in policy and system development in the sector. After the 2003 regime change, the new government had many critical service delivery needs and was struggling to meet these. Among the most urgent were those in education. In order to get children back to school, the government needed large, fast, and quality investments in the education system. $100 million was allocated to the education sector under the World Bank Iraq Trust (ITF), set up jointly by the World Bank Group (WBG) and the United Nations Development Group (UNDG) to administer donor Iraqi marshlands areas in the 3 governorates of Basrah, Thi Qar and Missan. funding for Iraqi reconstruction. However, in order to implement these investments efficient and Portfolio implementation in a fragile and conflict- effective public contracting and purchasing processes affected state (FCS) like Iraq is not business as usual were needed. and calls for a delicate balance of realism, effective risk management, and flexibility. Given the This Quick Note summarizes how innovative insecurity and weakened capacity at the time, the approaches to procurement led to exemplary service Bank made sure that these concepts, along with a delivery results in Iraq’s education sector. The focus keen understanding of the market, were key tenets of is on two breakthrough achievements: large-scale its program. 1 supporting the MENA region. This note was prepared The authors are all members of the Public Integrity and Openness Department of the Governance Global Practice, under the guidance of and clearance by, Yolanda Tayler, Practice Manager. Bank procurement guidelines and the Iraq Master Emergency textbook provision project: Among Implementation Manual (MIM) were followed. others, an urgent reform in the post 2003 era was Second, a local Bank consultant based in Iraq assisted revisions to the country’s national curriculum. This in the supervision of the project and conducted spot required a set of primary and secondary school physical inspections. Bank staff from outside Iraq also textbooks to be updated, printed and delivered across closely supervised the procurement. Third, a the country. A grant of US$40 million was given to dedicated and qualified procurement manager was the Iraqi Ministry of Education (MOE) to finance the assigned to manage the project. Fourth, the project printing and distribution of approximately 69 million design was kept simple. And fifth, the team textbooks, benefitting 6 million students for the 2004- introduced flexibility in bidding documents to 2005 school year. encourage international and local bidders. Before the war, the Government of Iraq had used the In addition, to meet service delivery needs, the Bank same set of textbook printers and suppliers for helped the government introduce a number of decades without competitive methods to award important changes to the way that the Ministry of contracts. As a result, local printing houses Education (MOE) managed procurement. These dominated the textbook market with high prices, and changes would increase supplier competition, reduce unreliable delivery and quality. Moreover, given the supplier prices, and increase transparency while also ongoing emergency situation in the country, other building MOE capacity. The measures taken risks to procurement were identified throughout the included: project. For instance, Iraq does not have a real procurement law2 or, at the time, standard bidding  Opening the market to international competition: documentation. Both of these factors impacted Based on the assessment of the capacity of the efficiency and left space for potential corruption. 3 local printing industry to deliver large quantities Other risks included: of textbooks within a very short time-frame, the decision was made to use both International  The inability of Bank staff to supervise the Competitive Bidding (ICB) and National projects in the field due to the security situation; Competitive Bidding (NCB). The Bank used  The weak capacity of the project management regional newspaper advertisements (in team in procurement and management of large neighboring countries) and other methods to contracts; attract new suppliers to take part in the bidding  The high risk and weak control environment; process for text book printing. Procurement was  The low capacity of local companies to provide carefully packaged to encourage international as the needed supplies; well as local bids.  Lack of interest of international contracting  Use of stocks of paper procured by the previous companies to do business in the country because government: Without this, local printers could of security restrictions; not have received paper deliveries in time to meet  Major delays in implementation because of the printing and distribution deadlines for the 2004- lack of experience in procurement planning in the 2005 academic year. ministry;  Dividing printing contracts between those involving printing and distribution only (paper Faced with the time-sensitive task of reprinting supplied by MOE), and contracts requiring the millions of textbooks within a few months and in procurement of paper: The number of lots for fragile security conditions, an urgent intervention printing-only contracts was determined by the was needed. To address the identified risks, a number amount of paper available in Baghdad, and of measures were taken to facilitate effective adjusted at appraisal when evidence of more implementation. First, the team ensured that World paper came to light. 2 3 Iraq’s vulnerability to corruption is demonstrated by the CPA Order 87, imposed by the transitional authority, is not generally regarded as applicable and is for the most part ignored country’s poor rankings in Transparency International’s by practitioners. Corruption Perception Index, the lowest of all countries in the region June 2015 · Number 146 2  Strengthening MOE capacity: Frequent training, The Bank focused on supporting the government in skills transfer and on–the-job handholding was introducing procurement processes that would provided to the project team and MOE staff on rapidly implement a school construction project and procurement and project management both also helped build capacity of local MOE staff. The before and during project implementation. following methods and strategies were critical to the project’s success: These actions had significant effects, most notably:  Encouraging local involvement: Provisions that  Lower Prices: The use of ICB attracted encouraged the hiring of local companies and international firms (mainly Jordanian and labor were part of the project bidding documents. Lebanese), and brought millions in cost savings This was key to the project’s success, as it ensured through lower unit costs. In the first round of local and community buy-in. procurements, the unit costs of textbooks printed  Decentralizing Authority: The central through the NCB contracts were higher than the government authorized the local municipality to unit costs obtained through ICB. As a result, the manage the procurement process by introducing MOE used ICB for the second round and Iraqi decentralized bidding. This allowed companies still won contracts, as they lowered simultaneous contracting locally and in Baghdad; prices to match international bidders. e.g. issuing bidding documents, bid submission,  Standardized procedures and bidding and bid opening. Having this occur at the local documents: The project’s focus on capacity level was very important in encouraging building led the MOE to standardize procedures participation by local construction companies. and bidding documents for procurement of  Strengthening local MOE capacity: Training and textbooks to improve national procurement skills transfer took place to increase project practices, and produce its own standard bidding management and stakeholder engagement documents including conditions of contracts. capabilities.  Utilizing civil society and local NGOs for site Marshlands school construction project: Starting in improvement small works: these actors were 1991, the then Iraqi government drained the southern contracted to find local stakeholders to assist in Iraqi marshland areas of Basrah, Thi Qar and Missan, school site selection, construction monitoring a wetland ecosystem covering some 20,000 square and building maintenance. kilometers. The draining was intended to drive out indigenous communities and ensure that opposition The focus on local engagement increased community militias did not take refuge in the marshlands. ownership for the project, enabling smooth delivery. Thousands of people were forced to abandon their It also boosted local employment as locals carried out homes and livelihoods and were displaced to other works and other activities thereby strengthening areas of Iraq and Iranian refugee camps. local SMEs who participated in government contracts for the first time. Capacity building measures enabled The marshlands have since been rehabilitated and are local MOE staff to drive activities such as site now protected zones. Some 36 communities have selection and project management. As a result of resettled and the government has had to urgently these measures, the MOE also innovated in its provide them with social services, including primary performance indicators, for example, including education. Contract management and procurement enrollment by gender for the first time. capacity in the local MOE governorate staff was predictably low and hampered by a fragile security The project successfully adapted procurement to the situation. Given the importance of quickly stabilizing local market by changing procurement packages to of resettled communities, the MOE sought Bank numerous smaller-value contracts; encouraging local support to construct the schools. US$6 million was labor, and removing constraints such as bid allocated from the Iraq Trust Fund to the MOE for the guarantees and stringent financial requirements to construction of 36 new schools in the three encourage participation by local firms. marshlands governorates in a 12-month period. Tangible results: Emergency textbook provision: The project’s main success factors were its simple design, June 2015 · Number 146 3 capacity-building focus and multi sectoral Conclusion: Many MENA countries have relied on management using both operational and technical uncompetitive and inefficient procurement strategies advisors. Furthermore, the integration of project for many years. Iraq’s education sector was a good management measures guaranteed PMT stability example – outdated and opaque procurement despite ongoing changes to the MOE. This was key to procedures were inflating costs, slowing delivery delivery success. times, and hampering effective service delivery. Yet,  The project achieved its main objective and the World Bank’s experience in Iraq shows that closed on time. Experience has shown the value adopting different approaches can deliver rapid of early and visible impact, and the importance of results that help thousands of citizens to meet their resuming normal schooling operations to focus everyday needs, even under very challenging and on wider systemic issues. unstable conditions.  The objective of the project was the printing of about 69 million textbooks for the 2004-2005 These projects demonstrated that there are long-term school year. The project exceeded this objective - positive spillovers effects from the use of 80.25 million textbooks were printed and procurement systems and practices introduced distributed on time. through World Bank projects. For instance, the PMTs  Approximately US$9 million of savings were in Iraq have cited positive impacts from the use of the made from competitive bidding for the 2004-2005 Master Implementation Manual (MIM) on Iraqi school year. These savings were used to print government procedures, including, among other additional textbooks for the next school year. useful features, guidance on good practices for  The government standardized bidding financial management and procurement, a documents and contract conditions for textbook breakdown of the procurement process (with purchases. detailed step-by-step guidance), standard bidding documents for procurement, model forms of contract, Marshlands school construction: The project’s strong and general conditions of contract. In addition, the focus on capacity building for local MOE staff and Government has itself developed, with Bank support, community consultations was key to success. This general Standard Bidding Documents (SBD) and latter emphasis was especially crucial, reducing local Specialized sector SBDs (based on MIM’s bidding concerns, building ownership and facilitating timely documents) for education and other sectors, and a implementation. National Implementation Manual, again based on the MIM, for use in government-financed projects.  30 primary schools were built without major cost or time overruns; Finally, in both projects, the Iraqi MOE at the local  5,400 local students benefitted; and national levels considerably strengthened their  53% increase in school-age girls’ school capacity in a number of crucial procurement areas. enrollment; This increase in national capacity was crucial because  Involvement of civil society in site improvement it improved the long-term prospects for sustainability small works for school sites. of these projects and for future successes in the Iraqi education sector. The success of these projects helped establish the Bank’s credibility in Iraq, setting the stage for World Bank support to the education sector. They also helped to set good precedents. This was the first World Bank project in Iraq since the 1970s, and a model for subsequent Bank-funded projects in terms of implementation arrangements. It also represented the first public bid opening in Iraq, and the first time the Ministry of Education managed its own procurement. June 2015 · Number 146 4