Consultancy Services K.N. Venkata Raman Procurement Consultant, World Bank

Consultancy Services KTPP Act and Rules issued in 2000 did not include procurement of consultancy services; KTPP Rules were amended in September 2003 to include consultancy services; A new chapter VII A and Rules 28B to 28K have been added.

Consultancy Services - Definitions ‘Consultancy services’ includes activities such as policy advices, institutional reforms, management, engineering services, construction supervision, financial services,investment and merchant banking services,social and environmental studies, identification, preparation and implementation of projects to complement GOK capabilities; ‘Consultants’ means individuals, firms or organizations engaged in providing consultancy services; ‘Client’ means procurement entity engaging the consultants; ‘Party’ includes the Client and consultants

Consultancy Services-Selection Methods Following methods of selection shall be adopted as found appropriate: –Quality and cost based selection (QCBS); –Least cost selection (LCS); –Single source selection (SSS)

Consultancy Services – Selection Method - QCBS Based on both quality and cost; Technical and financial proposals are received in separate envelopes; Technical proposals are opened first and evaluated as per criteria given in RFP; Financial proposals of those who have scored more than the qualifying score are opened and evaluated; Prepare combined evaluation of technical and financial prposals by weighting as prescribed in RFP; Consultant obtaining the combined highest score is invited for negotiations (staff rates and other unit rates are not negotiated )

Consultancy Services-Selection Method - LCS Appropriate for assignments of standard or routine nature; Technical and financial proposals are received in separate envelopes; Technical proposals are opened first and evaluated as per criteria given in RFP; Financial proposals of those who have scored more than the qualifying score are opened and evaluated; Consultant with the lowest evaluated price is selected.

Consultancy Services – Selection Method - SSS Client selects a specific consultant and requests to submit technical and financial proposals; Acceptable only in exceptional cases, where it offers clear advantages over competition; Value limited to Rs.5 lakhs for firms and Rs.1 lakh for individuals.

Steps in selection process Prepare TOR; Prepare cost estimates; Advertise to invite expression of interest (mandatory if cost is more than Rs.20 laks); Prepare short-list; Prepare and issue RFP; Receive proposals from consultants; Evaluate technical proposals; Evaluate financial proposals; Combined evaluation and select the winning proposal (QCBS); Negotiate and sign contract

Consultancy contracts Main considerations: –Nature and degree of the definition of the assignment; –The distribution of risks between the Client and Consultant; –The level of contract supervision the client will be able to provide

Lump sum (Firm Fixed Price) Contracts Used for assignments in which the content and length of services and required output of consultant are clearly defined; Consultant can generally control the scope of work and duration of services; Contract payments are linked to clearly specified outputs.

Time-Based contracts Consultant provides services on a time basis; Consultant’s remuneration is based on agreed unit rates for consultant staff multiplied by the actual time spent by staff in executing the assignment; Reimbursable expenses using actual expenses and agreed unit rates

Percentage contracts Consultants are paid on agreed percentage of the actual project cost; Example Architectural services, supervision of construction etc.

Request for Proposals (RFP) docuements Standard RFP documents issued by GOK to be used; Instructions to Consultants (ITC), Formats for submission of Proposals and General Conditions of Contract (GCC) to be used without change; Data sheet and Special Conditions of Contract (SCC) could be used to reflect local conditions and characteristics of assignment.

Individual consultants versus Consulting Firms Individual consultants are employed on assignments for which: –Experience and qualifications of individual must be dominant; –No support from an organization is needed for the individual; –Team work or multidisciplinary approach is not necessary. General Rule, if three or more individuals are needed for an assignment, it is often better to hire a firm to ensure cohesiveness as well as back up.