Procurement of Consulting Services

1. Procurement ofConsulting Services KB Thapa

2. Content • Consultants services (General) • Procurement Condition • Procurement Steps • PPA,PPR Procurement Provisions • Methods of Selection • Preparing EOI and RFP • Evaluation Proposals • Negotiations and Contract Award

3. Consultant Someone who borrows your watch , tells you the time and then charges you for the privilege. -Unknown

4. 1.Consultancy Services (General) • Intellectual and professional activities based on skill, expertise knowledge and experience, • 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

5. Consultancy Services/Advantages • Only expertise organization can afford the resources to adapt to the fast changing specialized technology • provides independent knowledge to the benefit of the project. Avoids conflict of interest • provides transfer of knowledge ,skill and technology to the executing agency • Frees line agencies from day to day functions of project implementation • Provides quality and cost effectiveness

6. Key Areas of Use of Consulting Services

7. Differences between Procurement of Goods/Works and Consultants services

8. Differences between Procurement of Goods/Works and Consultants services(contd.)

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10. 3.Procurement Steps In General involves the following steps: • Preparation of the Terms of Reference (TOR) –PPR Clause 69 • Preparation of Cost Estimates –PPR Clause 12 • Preparation of Shortlist of Consultants. through Standing List or open Expression of Interest Procedures –PPA 30. • Preparation and Issue of Request For Proposal (RFP) Document to Shortlisted Consultants - PPA 31;PPR 73 ;

11. 3.Procurement Steps In General involves the following steps: • Preparation & Submission of proposals • Receipt and Opening of Proposals- PPA Clause 32: PPR Clause 75 & 79 • Evaluation of Proposals -PPR Clause 76 & 80 • Negotiations (PPA Clause 37) and Award Of Contract (PPA Clause 38)

12. 3.1 Preparation of Terms of Reference TOR facilitates the Consultants to prepare their proposals and the Client in proposal evaluation, contract negotiations and execution of the assignment. The TOR should include: • Background, objective and Scope of the assignment, • Information regarding relevant prior studies if any, • Description of (if any) transfer of knowledge or skill • If training is a part of the assignment detail information on it, • Key personnel requirement , qualifications, roles and responsibilities and estimated inputs for the assignment.

13. 3.2 Preparation of Cost Estimate PPR provides standard format for preparation of cost estimate for consulting services on the basis of the following: • Norms if prepared by the related ministry; • Terms of Reference of the consulting assignment; • Actual cost of procurement of the same nature in the current year or in previous years, by the public entity or other public entities after applying price adjustment. • 208. The public entity should prepare the cost estimates under the following cost headings: • Remuneration of key and other staff required for the assignment; • Cost of travel, staff accommodation, office expenses, required goods, equipment and services , translation and printing of reports and other documents; • Cost of training, symposium or tours if the consultant is required to organize under the consulting services assignment.

14. 3.2 Preparation of Cost Estimate The cost estimates should be prepared under the following cost headings: • Remuneration of key and other staff required for the assignment; • Cost of travel, staff accommodation, office expenses, required goods, equipment and services , translation and printing of reports and other documents; • Cost of training, symposium or tours if the consultant is required to organize under the consulting services assignment.

15. 3.2 Preparation of Cost Estimate Approval of Cost Estimates: [PPR 14 (2)]

16. 4.Procurement Provisions (PPA & PPR) 4.1 a) Invitation of Open Expression of Interest (EOI) and Preparation of Shortlist of Consultant (PPA 30) • Procurement based on Open Expression of Interest(EOI) from Consultants for value of services in excess of Rs. 20 lakh. • International EOI for value of services >10 karod with approval of one level higher authority. • National level EOI for assignments > Rs.20 lakh up to Rs.10 karod b) Request for Invitation of Proposal from shortlisted consultants

17. 4.Procurement Provisions (PPA & PPR) 4.2 Invitation of Proposal from Standing list ( 3- 6 ) up to Rs.20 lakh 4.3 Sealed Quotations for value of services up to Rs.20 lakh (notice of 15 days in National paper). 4.4 Direct Purchase • Assignments of value up to Rs.5 lakh • Written Quotation or Proposal from at least 3 consultants in the standing list of consultants for value of assignments > Rs.1 lakh

18. 4.Procurement Provisions(PPA & PPR) 4.5 Direct Negotiation • For required trainings, workshops and Seminars of value up to Rs 5 lakh by entity chief • Approval one level higher authority up to Rs 20 lakh value of the assignment (minimum 3 proposals) 4.6 Procurement through Design Competition Services generally that includes aesthetic component e.g. Architecture ,Urban Planning etc. Selection method Similar to Quality Based Selection.

19. 5. Methods of Selection As per PPA 31(4) • Quality- and Cost-Based Selection (QCBS) • Quality-Based Selection (QBS) • Fixed Budget Selection (FBS) • Least-Cost Selection (LCS) As per PPR 83 • Consultant’s Qualifications Selection(CQS)

20. 5.1Factors Affecting Choice of Selection Method • Technical complexity of the assignment • Size and value of the assignment • Whether the impact of poor performance by the consultant is high or low • Whether proposals are comparable (i.e., assignment can be carried out in different ways?) • Budget constraints

21. 4.2 Quality and Cost Based Selection (QCBS) Key Considerations • Appropriate when scope of work is well defined and TOR is well specified and clear • To ensure a combination of economy and quality - Weightage given to Quality: 70-90 - Weightage given to Cost : 10-30

22. 5.3 Quality Based Selection (QBS)Applicability • When complex and highly specialized consulting services are required. Defining precise TOR and inputs is difficult • Services can be performed in substantially different ways and hence cannot be easily compared • assignments where downstream impacts are so large that the quality of service is of overriding importance • Nature of work requires some flexibility in scope of work, TOR, duration of assignment for innovative solutions

23. 5.4 Fixed Budget Selection (FBS) Applicability: • for simple assignment within fixed budget and scope of work that can be precisely defined • Allows better quality proposals than under QCBS because the process maximizes the quality under a fixed budget.

24. 5.5 Least Cost Selection (LCS) Key Consideration Lowest Financial Proposal from firm whose technical proposal gets minimum qualifying score. Applicability Used for consulting services of a standard or routine nature with well established practices and standard (audits, valuation, simple engineering designs etc.)

25. 5.6 Selection Based on Consultant’s Qualifications (CQS) Applicability • Small assignment • Highly Specialized Expertise is required • Few consultants are qualified for the type of assignment • Preparation and evaluation of competitive proposal is not justified • Procurement period is short

26. Preparing Expression of Interest(EOI) Preparation of shortlist involves : • Preparation of EOI document based on Standard EOI Document issued by PPMO or as applicable for Donor financed projects, • Approval of the short listing criteria by the head of the department. • Publication of Notice for EOIs in daily newspaper of national circulation with submission period of not less than 15 days. • In case of international EOIs, the notice to be published in English language with submission period of at least 30 days.

27. Expression of Interest (EOI) • Notice may also be posted on the web sites of the PE, concerned ministry and the PPMO • EOIs to be evaluated on the basis of applicant’s qualification, experience and capability as per approved criteria and • 3 to 6 firms capable of providing the services shall be shortlisted by the PE. • The turnover criteria for evaluation should not be in excess 1.5 times the cost estimate of the assignment. • The approved shortlist criteria should not be changed after registration of EOI application.

28. Preparation of EOI document based on Standard EOI Document for the Selection of Consultants issued by the PPMO[1]. • Approval of the short listing criteria by the head of the department. Expression of Interest (EOI)

29. Request for Proposal (RFP) • Minimal changes to be made in the appropriate Standard RFP (SRFP) document issued by PPMO for preparation of the RFP document for the specific assignment. • RFP should provide clear information to the consultants to facilitate: • the consultants to prepare and submit responsive satisfactory proposals; • the Client to evaluate the proposals and award the contract; and • the Client and the Consultant to administer the contract during execution of the assignment.

30. Request for Proposal (RFP) The RFP is issued to all shortlisted firms & it includes: • Letter of Invitation • Instructions to Consultants • Data Sheet • Technical Proposal- standard Forms • Financial Proposal- Standard Forms • Terms of Reference (TOR) • Standard Forms of Contract

31. RFP Evaluation Criteria • Purpose of Evaluation Criteria • Fixes measures for evaluation of proposal • Basis for Committee members to evaluate the proposals so should not be ambiguous. • Should facilitate evaluation • Ensures fixed selection criteria that will not be influenced by the proposals received • Ensuresshort listed consultants that the evaluation process is fair.

32. RFP Evaluation Criteria (PPR 71) • Marking Weightage for evaluation of proposals • Technical Proposal : 80 • Financial Proposal : 20 • Mark Distribution Technical proposal ( 100) • Firm’s Specific Experience : 0 to 25 % • Methodology : 20 to 35% • Key Personnel : 30 to 60% • Transfer of knowledge : 0 to 10% • Participation by nationals : 0 to 10% • Sub criteria's essential only and generally three. • Pass Marks to be mentioned

33. RFP Standard Forms of Contract • Lump Sum Contracts • Time Based Contracts • Performance Based Fee Paying Contracts Agreement based on the condition that the consultant shall provide his services agreed in the contract when called for as required • Percentage Contracts - inspection of goods, architect's services, supervision or monitoring service • Indefinite Delivery Contracts - when specific work load unknown but services are required

34. Evaluation of Technical Proposals • Independent evaluation by each committee member as per approved evaluation criteria given in RFP . Scores to be averaged. • Committee members to hold meetings to develop common understanding provision of the criteria and interpretation information given in proposals • Technical proposals containing financial information shall be declared nonresponsive & rejected • A proposal shall be rejected if it fails to achieve the overall minimum technical score specified in the RFP

35. Evaluation of Financial Proposals • The evaluation committee will evaluate the financial proposals and the lowest Financial proposal (Fm) will be given a financial score (Fs) of 100 points . • Financial score (Sf ) of other proposals is determined as per the Formula given in RFP on the basis of the financial proposal (F) of the firm : Sf = 100 ×Fm/F

36. Combined Technical and Financial Evaluation • Combined score shall be obtained by weighting the Technical and Financial scores and adding them. The weightings for quality and cost shall be as specified in the RFP. (generally 80:20) • The firm obtaining the highest total score shall be invited for negotiations.

37. Combined Technical and Financial Evaluation

38. Approval of Proposals Approval of Cost Estimates: [PPR 81ka(1)

39. Contract Negotiations • Invitation • Invite the first-ranked to negotiate a contract. • propose a schedule and agenda • ask the consultant to confirm the availability of all the nominated team members • summarize any issues identified during the evaluation that require clarification, any deficiencies to be corrected, any team members to be replaced etc • If delay in negotiations is expected request to extend the validity of its proposal for a reasonable time until negotiations can be held.

40. Contract Negotiations • Agenda • Opening remarks /opportunity to consultant also • Submission of Letter of Authorization by Consultant • Scope of Work/TOR • Work plan, Personnel Schedule, proper phasing • Personnel, non availability to be resolved • Counterpart staff and facilities • Equipment what by whom • Financial terms and conditions • Consultant’s contract • Record, Review and sign Minutes by all and, • Draft Contract by consultant

41. Award of Contract • Proposal is accepted if the negotiation is successful • Notice of Intention of Acceptance is issued to the successful and other qualified firms • If no complaint received within 7 days, the selected proposal be accepted and contract is signed.

42. Any Questions?