Risks & challenges of international procurement: a study on international competitive bidding for procurement of road roller under Khulna division rural infrastructure development project

Abstract

Public Procurement has become an important element, objective and function of any development project or activities as well as of any government organization. Risk assessment and management is a very important element to ensure successful performance of any type of procurement. Between the two types of procurements, various types of risks and uncertain events are associated with International Procurement. Before undertaking ICB, procuring entities should consider the terms and conditions with the possibilities of risks and identify the ways to meet the upcoming challenges to successfully implement international procurement. Comparing to NCB, there are various different rules and procedures that are to be maintained such as application of appropriate Incoterm, opening of LC, Pre shipment inspection, selection of appropriate C&F agent, payment of CD VAT etc. Incoterm is the key player to assign the risk owner of the international procurement. Based on the case study the risks and challenges that were associated with the procurement are developing a widely acceptable technical specification, possibilities of currency rate fluctuation, checking accuracy of documents submitted by bidders, availability of necessary shipping documents and fund for payment of CD VAT on time etc. Providing trainings to the stakeholders, developing technical specification with help of expert team, keeping important market data would facilitate to overcome any kind of challenges and risks in International Procurement. Based on the case study and analyzing the result, it could be determined that the procuring entity of KDRIDP achieved competitive advantage with cost and quality benefit performing the international procurement.