Enhancing Procurement Efficiency: Procurement Provisions and Practices: Consulting Services

1. Enhancing Procurement Efficiency: Procurement Provisions and Practices: Consulting Services -Shakti Prasad Shrestha March 21, 2018

2. Consulting Services (PPA-2b(e): “Consultancy Service” means any study, research, survey, design, drawing, supervision, training, testing, software development service or other intellectual or professional service of a similar nature 2

3. Consulting Services (Contd..) • “Consultant” means any entity or person that may provide or provides the Services to the Client under the Contract. • Intellectual and professional activities based on skill, expertise knowledge and experience to provide professional advice and technical assistance such as planning, design and implementation of projects etc. • Which does not have physical output. 3

4. Usefulness of Consulting Services • Provides access to latest technology and expertise of particular competence as and when required without hiring permanent staff, • Provides flexibility to organizations to adapt to changing conditions with less people employed, • Time bound results as per agreement. • Provides independent knowledge to the benefit of the PE, • Avoids conflict of interest, 4

5. Usefulness of Consulting Services (Contd..) • Provides transfer of knowledge, skill and technology to the executing agency, • Provides quality and cost effectiveness, • Support PE in the project implementation, 5

6. Conditions for Obtaining Consulting Services (PPA -29): • Consulting Services can be obtained in the following conditions: • If the work cannot be performed by the available manpower in the PE • PEmay engage consultants over defined periods of time to complement its in-house capabilities. • need of specialized professional and independent advice or • when the permanent hiring of professional staff is not justified, 6

7. Differences Between Goods/Works and Consulting Services: 7

8. Preparation for Procurement Proceedings: • Identify procurement requirements (From Units, Sections or Divisions –Service requirement, quality, quantity, time) (PPR-3a) • Collect market information about procurement contract in practice to resolve various technical matters and ascertain the availability of consultants of the type required and Consultant availability • Study procurement proceedings of consultancy service of similar nature that was procured in the previous year of the procuring entity (The experience of other public entity of hiring consultants can also be useful) 8

9. Preparation for Procurement Proceedings (Contd..): • 4. Ascertain the details, quantity and scope of procurement (Terms of Reference (ToR)) • 5. Divide the procurement into a more convenient group or including into package (Based on ToR, Individual or Firms, Similarity and Nature of Service etc.) • 6. Prepare Cost Estimate (PPA-5) • 7. Prepare the procurement plan (Master or Annual Procurement Plan, if necessary) (PPA-6) • 8. Identify financial source (Budget, Program and Accounting Code) (PPR-3h) 9

10. Preparation for Procurement Proceedings (Contd..): • 9. Select procurement/selection method /agreements: (Direct or RFP Method and Selection Methods, Contract Agreements) ( • 10. Prepare Procurement Document including EOI Document, EOI evaluation criteria and RFP, RFP evaluation criteria, • 11. Conduct Procurement Proceedings: Solicitation, Submission, Opening, Examination and Evaluation, Evaluation Reports, Selection, Negotiation, letter of Intent, Review (entity chief or Review Committee, if any), Invitation for Contract Agreement and Award of Contract) • 12. Contract Implementation and follow up 10

11. Preparation of Terms Of Reference (PPR- 69)

12. Consideration in ToR: • Should be adequate and clear for the understanding of the assignment and subsequently its correct execution. • Should explain the details necessary to carry out the assignment • The objective & scope of work should be realistic and consistent with the available budget and program • TOR should take into account the organization, technical expertise and the institutional strength of the Client 12

13. Consideration in ToR(Contd..): • (1) Background : • Introduction of the Procuring entity and objective detail, • Project history, location and rational of the assignment • Need of consultant, issues to be resolved , • Source of fund • The legal aspects of the entity, etc • (2)Objective of the Assignment : • Specify the objectives: feasibility studies; design of project; preparation of bidding documents; supervision of works; institutional strengthening etc 13

14. (3) Scope of the Service: • Main activities and their expected results, • Desired level of details (level of design, accuracy composition of cost estimates etc,), • Main issues to be addressed • Alternatives to be considered, • Surveys and investigations, 14

15. 4. Specific Job Responsibilities • List the exact deliverables of the consulting services, like: • Preparation of the report/s • Submit the design and survey results • Carryout the research • Design model • Policy Analysis • Supervision • Procurement services (bid document preparation, evaluation, training, contracts supervision/ administration etc) • Other specific jobs which match with the objectives and scope of services 15

16. (5) Previous study and the basic data • Availability of Previous study and the basic data concerning the assignment • Relevant Publications, • Research Studies, • Designs and drawings, • Reports related with the consulting service • Databases, and • Other relevant Information 16

17. (6) Transfer any knowledge or skill: • TOR should provide the specific details on requirements of services and ask consultant to propose their approach and methodology Trainings : Employees levels, Event, Number of Participants, Venues, type of trainings (Technical, Operational, Conceptual etc.) 17

18. (7) The Responsibilities (functions) and Qualifications of the Key Personnel: • National or International • The specific responsibilities of the Key Personnel such as The team leader, designer, programmer, Software engineer, network /database administrator and their number etc • The estimated time required for the work to be performed by them individually, the Person man-months, full or intermittent • Qualification and Experiences of each Personnel (Minimum and preferable) 18

19. ToR (Time and Facilities): (8) Time for completion: Need to mention the time for the completion of assignment by the consultant. (9) Facilities to the Consultant: • Description of information, reports, data's and facilities to be provided by the Client • Physical facilities that will be made available by the Client e.g.. Computers, software, office space, vehicles, internet service, equipment etc. • Staffs 19

20. (10) Reporting requirement: Details of the report, data, drawing and survey report etc. to be submitted by the consultant. • Specify the reporting requirement eg. Inception, Progress Reports, Interim Project reports ,Draft Project Report , Final Project Report ,Completion Report etc, • Their schedule and frequency where applicable • Format, number of copies, names of recipient of the reports etc Reporting requirement should be adequate to inform the client but should not be unnecessary reporting 20

21. 11. Institutional & Organization arrangement: • TOR should define the institutional arrangement for the assignment, • Indicate the role and responsibilities of all those involved in the organization, • Should define the hierarchy and level of authority of counterpart personnel , • Information on the level of experience of Client’s personnel who will be integrated in the consultant’s team. 21

22. 12. Selection Method: TOR should define the applicable selection method: • Indicate selection method, • Indicate applicable Rules, Regulations or Guidelines 22

23. Selection Method (Contd..): • SELECTION METHOD: • Quality and Cost Based Selection Method, • Quality Based Selection Method, • Fixed Budget Selection Method, • Least Cost Selection Method • Single source/Direct contracting 23

24. Cost Estimate of Consulting Service (PPR- 12) 24

25. Cost Estimate of Consultancy Service: • The TOR is the basis for preparation of the cost estimate. • Therefore, the accuracy of the estimate increases with the extent of service requirement details in the TOR • Currency of cost estimate 25

26. Cost Estimate of Consultancy Service (Contd..): • Cost Estimate of consultancy service is a must • For cost estimate following matters shall be taken into account:- • (a) The norms prepared by the PE, • (b) ToR of the concerned consultancy service, (c) Actual cost incurredon the procurement of the same nature made in the current or previous yearsby the concerned Public Entity or other Public Entity. • Cost estimate shall be prepared by adjusting price to the rate of previous years. 26

27. Cost Estimate: Component of costs: • Cost estimate shall include the following costs: • Remuneration: Key Professional and other manpower, • Reimbursable Expenses: Travel, residential for manpower, office expense, necessary goods, equipment and services expenses, report translation, printing expense etc • Provisional Sum: For training, seminar and travel, and equipment • Contingencies): Price adjustment and addition in the scope of work, if required 27

28. Reimbursable Expenses: • Travel and transportation (international & local) • Vehicles • Staff allowance (overseas allowance, per diem, subsistence allowance) • Communication: reasonable monthly allocation of local and international communication • Office/or rent , • Supplies, equipment • Insurance • Survey and investigations • Report and Printing 28

29. Provisional Sums & Contingencies: • Provisional Sum: • Training, Seminar Workshops etc. • Equipment / other Procurement needed to complete the works (Software + Hardware) • Contingences (Physical and price): Not more than 20 percent of the cost estimate? • Provisional Sum & Contingences are not competitive part. 29

30. Request for Expression of Interest (REOI) (PPA-30 & PPR- 70) 30

31. Short List to be Prepared through REOI(PPA- 30.3): • International level EOI is invited in the following circumstances: • If the threshold of NRs. 10 crore generally exceeds (PPR- 70.2), • If the consultancy service is not available under competitive price from more than one consultant within Nepal, • If no proposal has been submitted in response to invitation to national level proposal, and the service has to be procured from foreign consultant, • If it is necessary to obtain services from International consultant in accordance with an agreement with the donor 31

32. Short List to be Prepared through REOI(Contd..): • Public Entity shall have to seek the approval from one level higher authority to invite an international level EOI. • For Procuring Consulting Service more than NRs. 20,00,000.00 public notice for EOI in national newspaper and online REOI is required. • For EOI, minimum 15 days notice is required, • For Procuring Consulting Service more than NRs. 20,00,000.00 and upto NRs. 10,00,00,000.00, EOI shall be asked only from national consultants 32

33. EOI Evaluation Criteria is to prepared before publishing EOI Notice: • Legal eligibility- Firm Registration, VAT/PAN Registration, Tax clearance- must • Qualification and Experience of Key Experts – [30 to 50% marks] • General & Specific and Similar Geographical experience of Consulting Firm – [40 to 60% marks] • Financial Capacity & Infrastructure/equipment related to the proposed assignment – [10 to 20% marks] • Note: Approved EOI evaluation criteria shall not be changed once EOIs are opened. 33

34. EOI Notice: • Standard EOI Document to be used • Name of the PE • Description of proposed assignment • Source of Funding • Organization, Qualification and Experience of Consulting Firm • In case of JV, name of lead partner and name of other partners • Qualification and experience of Key experts • Selection Method • EOI Submission Date and opening Date • EOI submission modality • Contact Address 34

35. Short Listing: • PE shall have to select a consultant capable of providing such consultancy service • While selecting an international level consultant, firm or company from various country, backgrounds and having a local agent have to be selected. • Shortlisting based on pre-disclosed criteria • Three to Six firms are to be shortlisted • If not three firms are not shortlisted re-invitation for EOI needed • Renowned consultant who has not submitted EOI may be included in the short list by contacting them) 35

36. Short Listing: • If at least three consultants fail to be shortlisted even after publishing a notice for the second time, the short list may be prepared only the consultants to the extent selected. • PE shall have to provide information of the shortlist to all the firms who have submitted EOI. 36

37. Request for Proposal (RFP) 37

38. Request for Proposal : • Standard RFP Document to be used • To be sent to the shortlisted consulting firms • Before sending RFP, RFP evaluation criteria to be prepared and approved 38

39. Evaluation criteria for RFP : 39

40. Request for Proposal (Contd..) : • Instruction to Consultants • Separate envelope for Technical and Financial Proposal, should be enclosed in outer envelope • Weightage for Technical and Financial Proposal • Terms of Reference • RFP Evaluation criteria 40

41. Request for Proposal (Contd..) : • Pre-proposal meeting, clarification and Addendum • Proposal submission place, time and date • Proposal validity period • Selection method • Opening of technical and Financial Proposal • Review Procedures • Terms and conditions of the Contract 41

42. Request for Proposal (Contd..) : • Pre-proposal meeting • Proposal submission place, time and date • Proposal validity period • Selection method • Terms and conditions of the Contract 42

43. Request for Proposal (Contd..) : • Opening of technical Proposal • Evaluation of technical proposal • RFP Evaluation Report • Approval on the evaluation Technical Proposal • Invitation for Financial Proposal opening to the successful consultants • Opening of Financial Proposal 43

44. Request for Proposal (Contd..) : • Evaluation of Financial Proposal • Combined Evaluation • Selection of Consulting firm • Approval on the evaluation Technical Proposal • Invitation for contract negotiation • Letter of Intent, Review procedure 44

45. Request for Proposal (Contd..) : • Approval • Letter of award • Signing of contract • Contract implementation 45

46. Thank You