Procurement in Projects Financed by Islamic Development Bank Country Procurement Workshop September 2015, Jakarta, Republic of Indonesia Project Procurement (PPR) Division Operations Policy And Services Department (OPSD)

03. Selection of Consultant Project Start-up Workshop

Selection Methods Project Procurement Division, OPSD 3 Republic of Indonesia, September 2015 Big and medium size assignments Quality and price factors are combined Minimum qualifying technical score is 75 to 80 points. The firms obtained highest combined technical and financial score selected for contract award Although the price is factor in overall selection but quality remains paramount for consideration Quality and Cost Base Selection (QCBS) Small assignments with standard or routine nature (standard accounting or financial audit, simple engineering, simple project supervision or inspection) Minimum qualifying technical score is 75 to 80 points. If a firm receives technical score below 10% of the highest technical score, its proposal shall be returned unopened Lowest Price selected for contract award Least Cost Selection (LCS)

Selection of Consultant – LCS & QCBS Project Procurement Division, OPSD 4 Republic of Indonesia, September 2015 TOR, cost estimate IDB NOLAdvertisement Short List, draft RFP IDB NOL (Short List, RFP) RFP sent to Short Listed Consultants Proposal Preparation (30 days) & submission Technical Evaluation Technical Evaluation Report (TER)* IDB NOL Financial Evaluation Consultant Evaluation Report* IDB NOL Contract negotiation Draft negotiated contract* IDB NOL Contract award 5 No Objection Letters (NOLs) required ± 6 months after advertisement LCS: Proposal with least price wins QCBS: Highest rank proposal in Combined evaluation wins LCS: Proposal with least price wins QCBS: Highest rank proposal in Combined evaluation wins

Terms of Reference (TOR) Project Procurement Division, OPSD 5 Republic of Indonesia, September 2015 Relevant background; The scope and objective of the project (description, phases, stages, downstream work); Type of services required; Implementation schedule and expected outputs (periodic reports, documents and end products); Training and transfer of technology (scope and nature); Method of remuneration for the services; Responsibilities of the project parties (Beneficiary, consultant and etc.); Appointment terms and conditions. For projects of simple or routine nature the TOR can be standard, but for complex projects the TOR should leave room for the consultants’ creativity

Preparation of Short List Expression of Interests (EOI) Advertisement – Request of ‘Expression of Interest’ (REOI) – use IsDB standard template Notifications to embassies, consulates, local representatives, chamber of commerce, associations, etc. (for international short list) EOI is not a ‘proposal’, scoring evaluation is discouraged, if used – requires extra due diligence Project Procurement Division, OPSD Republic of Indonesia, September

Preparation of Short List Short List Requirement 6 – 8 Consultants Geographical distribution, not more than two firms from any one Member Country (international short list ) Association / partnership: joint-venture, sub-consultant Prepare short list evaluation and recommendation report for Bank’s NOL Short list cannot be modified without Bank’s prior approval Project Procurement Division, OPSD Republic of Indonesia, September

Short List Evaluation Project Procurement Division, OPSD 8 Republic of Indonesia, September 2015 First Stage (not recommended to use scoring) Pass or Fail Meet minimum qualification & experience Result in a ‘long-list’ (‘pre-qualified’ firms) Second Stage (may use scoring) Strengths & Weaknesses of long-listed firms Short list 6 to 8 best ranked firms Keep one to two firms as reserve

Request for Proposal (RFP) Project Procurement Division, OPSD 9 Republic of Indonesia, September 2015 Simplified version of RFP for Complex Assignment (Bank’s standard template) Section 1 - Letter of Invitation Section 2 - Instruction to Consultants Section 3 - Technical Proposal - Standard Forms Section 4 - Financial Proposal - Standard Forms Section 5 - Terms of Reference Section 6 - Standard Form of Contract Document Simplified version of RFP for Complex Assignment (Bank’s standard template) Section 1 - Letter of Invitation Section 2 - Instruction to Consultants Section 3 - Technical Proposal - Standard Forms Section 4 - Financial Proposal - Standard Forms Section 5 - Terms of Reference Section 6 - Standard Form of Contract Document Section 2 & 6 shall not be changed or revised, Sections 1, 3, 4, 5 shall be customized as per the assignment,

Request for Proposal Project Procurement Division, OPSD 10 Republic of Indonesia, September 2015 Criteria and range of scores Main Experience5-10 points Methodology and Approach20-50 points Key staffs30-60 points Optional Transfer of knowledge0-10 points Participation by nationals0-10 points Total 100 points Passing Grade = points Criteria and range of scores Main Experience5-10 points Methodology and Approach20-50 points Key staffs30-60 points Optional Transfer of knowledge0-10 points Participation by nationals0-10 points Total 100 points Passing Grade = points

Submission Depending on the complexity of the assignment the period for submission shall be between days. Clarifications to RFP - in writing by facsimile or electronic mail. Response letter should be copied to all short listed consultants. With prior IDB concurrence deadline for proposals submission can be extended. Note: No bid security Receipt Delayed/Late proposals should be returned unopened. Opening Immediate opening of technical proposals Financial proposals remain sealed Proposal Submission, Receipt & Opening Project Procurement Division, OPSD 11 Republic of Indonesia, September 2015

Evaluation of Technical Proposal Steps Recommend to use rating approachProvide qualitative assessment to substantiate the scoresAvoid adding sub-criteria not included in RFP Exercise due diligence in giving ‘zero’, ‘perfect’ or ‘poor’ scores Use Standard Technical Evaluation Report Project Procurement Division, OPSD Republic of Indonesia, September

Inconsistent Scoring Scores are often broken down into nominal points Methodology50 points Excellent50 points Good40 points Satisfactory30 points Poor20 points Project Procurement Division, OPSD Republic of Indonesia, September

Inconsistent Scoring Scores are often broken down into nominal points Methodology50 points Excellent50 points Good40 points Satisfactory30 points 60% Poor20 points A ‘satisfactory’ evaluation normally passes minimum requirement, hence score allocation should be ≥ passing grade (70% or 35 points.) Project Procurement Division, OPSD Republic of Indonesia, September

Inconsistent Scoring Key Experts 1 Qualification10 points Ph.D.10 points Master5 points Bachelor0 points TOR requires at least a ‘Master’ degree Project Procurement Division, OPSD Republic of Indonesia, September

Inconsistent Scoring Key Experts 1 Qualification10 points Ph.D.10 points Master5 points 50% Bachelor0 points ‘Master’ degree is allocated 50% (‘not passed’) Project Procurement Division, OPSD Republic of Indonesia, September

Rating System Example 1 Methodology50 points Excellent100% Good90% Satisfactory70% Poor40% Project Procurement Division, OPSD Republic of Indonesia, September

Rating System Example 1 Methodology50 points Excellent100%50 points Good90%45 points Satisfactory70%35 points Poor40%20 points Each evaluator refers to each rating’s definition for scoring and prepares comment to substantiate the score (to be recorded in the report). Project Procurement Division, OPSD Republic of Indonesia, September

Rating System Define rating for each criteria and sub-criteria and allocate a percentage of maximum scores Rating definition corresponds to requirement in the TOR ‘Satisfactory’ rating receives ≥ passing grade (e.g. 70%) Well-defined rating ensures consistency and enhance technical evaluation process Project Procurement Division, OPSD Republic of Indonesia, September

Evaluation of Financial Proposal Steps Public opening of financial proposal Arithmetic correction (none for lump sum contract), exclude tax Ensure consistency with technical proposal: correction of quantity or price for missing item Use Standard Consultant Evaluation Report Project Procurement Division, OPSD Republic of Indonesia, September

Short List Typical Issues Less than 6 firms (low response) or weakly qualified firmsAdvertising: lacking, incomplete or unattractiveWeak evaluation criteria → weak or non-qualified firmsStringent evaluation → precludes strong firmsQuality of short list is critical to the selection process Project Procurement Division, OPSD Republic of Indonesia, September

Request for Proposal (RFP) Issues Vague, incomplete or inconsistent evaluation CriteriaFail to capture pertinent aspects of the TORPoorly defined & formulatedUnsuitable score allocationNot all criteria included in RFPGaps with requirement during short-listingWeak technical score & reduce firms participation Project Procurement Division, OPSD Republic of Indonesia, September

Maintaining Competition Issues Few Proposals ReceivedNo confirmation from short listed firms No ‘reserved’ firms Short list not ‘updated’ despites withdrawal of firms Project Procurement Division, OPSD Republic of Indonesia, September

Key Success Factors in Selection of Consultant Short List preparation and confirmation on participation Well-defined evaluation and scoring criteria, and its consistent application Qualitative assessments and remarks to substantiate technical scores Consistency-check between technical and financial proposals Project Procurement Division, OPSD Republic of Indonesia, September

Question and Answer Project Procurement Division, OPSD 25 Republic of Indonesia, September 2015

Thank You Project Procurement Division Operation Policy and Services Department prepared by Amirmehdi Asghari Senior Project Procurement Specialist معا ً نبني مستقبلا ً أفضل Together we build a better future Ensemble nous construisons un avenir meilleur 10 Project Procurement Division, OPSD Republic of Indonesia, September 2015