The Asian Development Bank (ADB) has introduced a merit points criteria to enhance its procurement system for major projects in the Pacific.
ADB’s Director General for the Pacific Department, Emma Veve told PACNEWS the merit points criteria are now built into all of the Bank’s procurement processes across the Pacific.
“Last year all of the contracts valued above USD$10 million are using the merit points. Companies are not only assessed on their bid price but a set of criteria – things like, is the company in a joint venture with a local firm, is it building labour skills in country and other things, Veve told PACNEWS in Milan at the ADB’s Annual Meeting last week.
A merit points procurement system uses a scoring system to evaluate bids or proposals, assigning points based on various criteria. This system helps organisations select the most suitable supplier by considering factors beyond just the price
“Typically, we are putting 70 recent weighting on the merit points and 30 percent on the finance. It’s a real effort to get good quality companies in the Pacific and ensure we have more bidders.
“We have some nice data that shows projects given out last year. There were more Indian companies bidding for work in the Pacific which have been unheard before. We are seeing Fijian companies bidding for work across the Pacific. Since its new here in the Pacific, we are also monitoring to ensure the balance is right and doesn’t push the prices up, according to Veve.
The new merit system provides a structured and transparent way to evaluate bids, reducing the risk of subjective bids. It allows organisation to consider a wider range of factors beyond just the price.
Last year was a great year for the ADB with US$1.9 billion new financing disbursed to Pacific Developing Member Countries.
“That includes co-financing that our partners brought into our projects. So, 2024 has been our strongest year ever. Of that US$1.4 billion, USD$450 million was for climate financing, which is a third of what we approved last year.
Reflecting on the last four years of the Pacific Approach, the ADB’s engagement strategy for the Pacific, Veve was optimistic of greater success in implementing its current USD$3.9 billion portfolio for the Pacific.
“We have 98 projects on-going in the Pacific and only three or four percent are at risk, which is super good. If we look at the wider Asia Pacific region, the risk level is around seven or eight percent. For us it is showing that the effort that we put in on project readiness, of oversight approval, of more local people on the ground to get involved in the project is showing that things are changing and getting better, Veve told PACNEWS.
However, the evaluation outcomes of the project when its finished is showing that it’s slower.
“The level of improvement is lagging because we are still finishing projects that might have been designed seven to ten years ago that didn’t benefit from what the new requirements for projects now. But in terms of specific results, evaluation results have been improving but it’s still a long way to go. We certainly want to see the health of project flow into the health of the outcomes of the project.
The new head of the ADB’s Pacific Department assured that apart from the merit point criteria, the multilateral development bank also aligns itself with the Pacific Islands Forum Quality Infrastructure Principles.
“It speaks to all the kinds of stuff we’re doing involving local firms, building local capacity, being environmentally sustainable, having good labour standards, etc. All things we want to see in our projects that governments sign with the contractors to deliver the projects. We’ve put a lot of effort both into the procurement side to bring in a larger number of bidders from more places – to ensure there’s more choices and competition created.
“It’s been difficult to attract a lot of bidders to the Pacific. Bigger Pacific countries have some construction type companies of their own and they also benefit from working alongside big international firms, before going off to take projects of their own, said Veve.
The new merit point criteria is designed to help organisations make informed decisions about which supplier will deliver the best value for money. It can also help identify suppliers who are more likely to deliver on their promises and meet the projects requirements.
