The World Bank Scaling up the Digital Procurement Application for CDD: SOL Project (P175988) REPORT NO.: RES54690 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SCALING UP THE DIGITAL PROCUREMENT APPLICATION FOR CDD: SOL PROJECT APPROVED ON NOVEMBER 1, 2021 TO STATE OF RIO GRANDE DO NORTE GOVERNANCE LATIN AMERICA AND CARIBBEAN Regional Vice President: Carlos Felipe Jaramillo Country Director: Johannes C.M. Zutt Global Director: Vinay Sharma Practice Manager/Manager: Diomedes Berroa Task Team Leader(s): Luciano Gutierres Wuerzius The World Bank Scaling up the Digital Procurement Application for CDD: SOL Project (P175988) ABBREVIATIONS AND ACRONYMS CDD Community-Driven Development CGE State Controller General’s Office CPF Country Partnership Framework EA Environmental Safeguards ESMF Environmental and Social Management Framework GP Global Partnership GRM Grievance Redress Mechanism GRS Grievance Redress Service IBRD International Bank for Reconstruction and Development IDA International Development Association IPSAS International Public Sector Accounting Standards IT Information Technology MROSC Civil Society Organizations’ Regulatory Framework MVP Minimum Viable Product NAS Nationally Agreed Standards PDO Project Development Objective PIU Project Implementation Unit PMIS Project Management Information System PPSD Project Procurement Strategy for Development RfQ Request for Quotations RN Rio Grande do Norte RPF Resettlement Policy Framework SEPLAN Secretariat of Planning and of Finance SIGEF Financial Management System – Sistema de Gestão Financeira SOL Online Bidding Solution – Solução Online de Licitação STEP Systematic Tracking of Exchanges in Procurement TCE State Court of Accounts TTL Task Team Leader WB World Bank The World Bank Scaling up the Digital Procurement Application for CDD: SOL Project (P175988) BASIC DATA Product Information Project ID Financing Instrument P175988 Investment Project Financing Environmental and Social Risk Classification (ESRC) Low Approval Date Current Closing Date 01-Nov-2021 31-Dec-2022 Organizations Borrower Responsible Agency State of Rio Grande do Norte Secretariat of Planning and Finance Financing (in USD Million) FIN_SUMM_PUB_TBL SUMMARY Total Project Cost 0 Total Financing 0 Financing Gap 0 DETAILS -NewFin3 Project Development Objective (PDO) Original PDO The Project Development Objective is to scale up the adoption of open source electronic procurement software by governments for CDD projects in Brazil and in other countries of the Latin America and the Caribbean region and to foster a collaborative community to maintain the software. OPS_TABLE_PDO_CURRENTPDO The World Bank Scaling up the Digital Procurement Application for CDD: SOL Project (P175988) Summary Status of Financing (US$, Millions) Net TF Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-B7220 01-Nov-2021 24-Nov-2021 23-Feb-2022 31-Dec-2022 .10 .03 .07 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. After the grant agreement was declared effective on February 23, 2022, internal government processes to create a budget line for the project delayed the start of the procurement activities by three months. An approved project budget line, finally created on May 12, 2022, was a legal prior condition to launching the selection process for the consultancy to do the software upgrades, and, therefore, the Request for Expressions of Interest was advertised only in June 2022. 2. Innovative aspects of the proposed solution, which includes the migration of the blockchain to LACCHAIN and its management, impose a few technical and managerial complexities that also contributed to the long process of identifying a qualified firm and negotiating the contract. A successful negotiation was only reached in November 2022, but additional internal bureaucracy pushed contract signature to December 21, 2022. The PIU expects to fast track contract execution without major interruptions over the next weeks. 3. This long timeline curtailed project implementation by approximately four months, which should be adequate for the technical work (coding and uploading the enhancements and translations to the central repository), but will eventually be short for (i) any eventual coding debugging that might be needed. 4. However, a proportional extension would allow for measuring the impact after the rollout of the enhancements and implementation of the customized version in the education sector in Rio Grande do Norte, benefitting approximately 600 schools. The selected education programs, the “Programa de Autogerenciamento das Unidades Escolares - PAGUE” (Schools’ Self-Management Program) and the “Programa de Autogerencamento das Diretorias Regionais – PAGD” (Regional Diretorate’s Self-Management Program) are Community Driven Development (CDD) programs fully funded by government resources that transfers approximately US$10 million annually to state schools. The choice of these particular CDD programs is justified by its scalability potential: all Brazilian states and municipalities, plus the federal government, finance similar programs – the federal government alone transfers approximately US$400 million annually to more than 121,000 schools in Brazil. A successful pilot under PAGUE and PAGD will also demonstrate that SOL can be implemented in other sectors beyond the original agriculture sector that was targeted when it was developed. The World Bank Scaling up the Digital Procurement Application for CDD: SOL Project (P175988) 5. The extension would also fit more adequately with the school calendar and the bulk of activities under both programs, allowing to use SOL in more procurement from more schools. II. DESCRIPTION OF PROPOSED CHANGES 6. The proposed change refers to the extension of the Closing Date, as defined in Section 3.02 to the Annex of the Agreement, by four months, from December 31, 2022 to April 30, 2023. This extension will also affect the implementation schedule, which is extended accordingly, and the disbursement projections, with full disbursement expected in 2023. 7. As far as fulfilling E&S requirements, it is observed that, although the Project will only now effectively start being implementation after the contract with the IT firm was signed, it was verified that the GRM is operational, as defined in the SEP, as well as the socio-environmental requirements, which were inserted in the bidding documents of the activities to be contracted, in accordance with the ESCP. III. SUMMARY OF CHANGES Changed Not Changed Loan Closing Date(s) ✔ Disbursement Estimates ✔ Implementation Schedule ✔ Implementing Agency ✔ Project's Development Objectives ✔ Results Framework ✔ Components and Cost ✔ Cancellations Proposed ✔ Additional Financing Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Change in Overall Risk Rating ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ The World Bank Scaling up the Digital Procurement Application for CDD: SOL Project (P175988) Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline TF Status Closing Closing(s) Closing for Withdrawal Applications TF-B7220 Effective 31-Dec-2022 30-Apr-2023 30-Aug-2023 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Expected Disbursements (In US$) Fiscal Year Annual Cumulative 2021 0.00 0.00 2022 32,233.46 32,233.46 2023 67,766.54 100,000.00 Note to Task Teams: End of system generated content, document is editable from here.