1. PROCUREMENT PROVISION AND PRACTICE
CONSULTING SERVICES
Ajay Kumar Mull
10 April 2019

2. Session Coverage 1. Introduction 2. Selection Procedure
Method, Basis of selection (Open Competition)
3. Types of Consulting Contract
4. Short listing
Preparation of TOR, Cost Estimation, Preparation
of Request for EOI, Evaluation of EOI, Report
preparation
5. Request for Proposal
Preparation, Evaluation of Proposal, Preparation of
Evaluation Report
6. Contract Award
7. Contract Management

3. Public Procurement Public Procurement Act
Public Procurement Regulation
Donor Guidelines, if applicable

4. 1. INTRODUCTION

5. INTRODUCTION
Consultant Services means any activity of an intellectual nature that does not lead to a measurable physical output

6. Public Procurement
INTRODUCTION

7. Public Procurement
INTRODUCTION

8. Consultant Selection Basic Principles
INTRODUCTION
Consultant Selection
Basic Principles
Solve Specific Problem(s) i. e., Study, Design, Analysis, Supervision etc.
High Quality Services
Reasonable Cost
Economy and Efficiency
Equal Opportunity
Transparency

9. ;fj{hls vl/b P]gsf] k/fdz{ vl/b Joj:yf (Clause 29-PPA)
INTRODUCTION
;fj{hls vl/b P]gsf] k/fdz{ vl/b Joj:yf (Clause 29-PPA)
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v_ bft[kIf;Fusf] ;Ddmf}tf adf]lhd j}b]lzs >f]taf6 Joxf]l/g] ul/ k/fdz{bftfaf6 ;]jf k|fKt ug'{ kg]{ ePdf .

10. Differences Knowledge Based Shortlist Quality Major Factor
INTRODUCTION
Differences
Knowledge Based
Shortlist
Quality Major Factor
Terms of Reference
Two Stage Procedure
Goods and Works
Consulting Services
Product Based
Open Competition
Cost Major Factor
Detailed Specification
Single Stage Procedure

11. Differences Goods and Works No Negotiations Invitation for Bids
INTRODUCTION
Differences
Goods and Works
No Negotiations
Invitation for Bids
Public Bid Opening
Technical Proposal Opening Not Public ??
Financial (in 2 envelope)
Financial Proposal Opening Public
Bid and Performance Securities
Consulting Service
Limited Negotiations
Request for Proposals
Technical Proposal: Public Opening
Financial Proposal: Public Opening
No Securities ??????????

12. Steps in Procurement Preparation of Terms of Reference (TOR)
INTRODUCTION
Steps in Procurement
Preparation of Terms of Reference (TOR)
Preparation of Cost Estimate
Invitation of Expression of Interest (EOI)
Required for value of service >NRs.2 mill. as per PPA
International EOI for value of service >NRs.100 mill
Short listing of Consultants -3 to 6 firms (cl PPA)
Evaluation Criteria
Issuance of Request for Proposal to short listed consultants – Min 30 days (cl PPA) for >NRs. 2 million
Min 15 days (cl PPR) for <NRs. 2 million
Preparation of RFP & Submission of proposals
Opening of Proposals

13. Steps in Procurement ….contd
INTRODUCTION
Steps in Procurement ….contd
Evaluation of Technical & Financial Proposals
Negotiation with Selected Consultants
Award of Contract
Debriefing

14. 2. SELECTION PROCEDURE

15. Methods of Procurement
Selection Procedure
Methods of Procurement
Provision of Two Methods
Request for Proposal (RFP) – Open Competition
Direct Procurement - Negotiation

16. Basis of Selection under Open Competition
Selection Procedure
Quality And Cost Based Selection (QCBS) – Technical (Quality) /Financial (Cost) Proposal
Quality Based Selection (QBS) – Highest Quality of Technical Proposal
Fixed Budget Selection (FBS)- Quality Of Technical Proposal and Budget of Financial Proposal[SIMPLE ASSIGNMENT, WELL DEFINED TOR]
Least Cost Based Selection (LCBS)– Acceptable Quality Of Technical Proposal and Least Cost of Fin. Proposal [Standard or Routine Assignments (Auditing and design of non complex works), Contract Amount not Large, Threshold for Quality]
Expertise and Qualification Based Selection

17. Factors Affecting Choice of Selection Method
Selection Procedure
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

18. QCBS v QBS and Flexible QCBS
Selection Procedure
QCBS v QBS and Flexible QCBS

19. 3. TYPES OF CONSULTING CONTRACT

20. Retainer and / or Contingency (Success) Fee Contract
Type of Contract
Types of Contract
Lump Sum Contract
Time Based Contract
Retainer and / or Contingency (Success) Fee Contract
Percentage Contract
Indefinite Delivery Contract
Schedule 5, (related to Clause 23 of PPR)

21. Type of Contract
Lump Sum Contract
Lump Sum Contracts are used for assignments in which the content and the duration of the work is clearly defined. Fixed sum payment is made upon delivery of outputs and within specified deadline. The main advantage of this type of contract is that it is easy to administer.
Examples
Feasibility Studies
Environment Studies
Detailed design of a standard structure
Project designs or detailed designs

22. Type of Contract
Time Based Contract
Used for assignments in which it is difficult to define the scope and the duration of the work as well as staff month required. Payment based on monthly rate plus reimbursable expenses using actual expenses or agreed upon unit prices. Contract provides for a maximum total payable amount that includes a contingency for unforeseen work and duration, price adjustments, etc.
Examples
Preparation of data
Design of complex structures such as dam, etc.
Management of complex institutions
Supervision of construction
Advisory services

23. Retainer and/or Contingency (Success) Fee Contract
Type of Contract
Retainer and/or Contingency (Success) Fee Contract
Used to remunerate Consultants or Banks on performance. The remuneration shall include the retainer fee and a success fee normally expressed as a percentage of the sale price of the assets.
Examples
Privatization (sale of publicly owned asset)
Merger of companies

24. Type of Contract
Percentage Contract
Related to the fee paid to the Consultant based upon the estimated or actual project construction cost or the cost of goods to be procured or inspected. Percent is based upon market norm or standard practice in the industry or estimated staff month cost for the services or through competitive bidding procedures.
Examples
Architectural Services
Engineering Services
Procurement Agencies
Inspection Agents

25. Indefinite Delivery Contract
Type of Contract
Indefinite Delivery Contract
Used for on-call specialized services to provide advice on a particular activity. The client and the firm agree upon the unit rates to be paid to the experts as and when the need arises, and payments are made on the basis of the time actually used.
Examples
Advisors for complex projects, e.g., dam panel Expert, Adjudicators
Technical Troubleshooting

26. 4. SHORTLISTING

27. Typical Terms of Reference
SHORTLISTING
Typical Terms of Reference
Project introduction and background information
Objective of the Consultancy Services
Scope of the work , expected output (compatible with the budget)
Duration of the Services
Reporting Requirement
Team Composition and qualification requirement (and any other requirement used for evaluation)
Provision of Consultant’s Facilities
Studies, reports ,data and facilities to be provided by the Client

28. Terms of Reference (TOR)
SHORTLISTING
Terms of Reference (TOR)
A comprehensive and clear TOR is important for the understanding of the assignment and its correct execution.
It reduces the risk of unnecessary extra work, delays, and additional expenses for the Client. In addition, it helps reduce the risk of ambiguities during the preparation of consultant proposals, contract negotiation, and execution of the services.
This Section should not be used to over-write provisions in ITC.

29. SHORTLISTING
Cost Estimate
TOR is the basis for preparation of the cost estimate. Accuracy of the estimate increases with the extent of service requirement details in the TOR
Cost estimate is the sum of the Remuneration of the consultant staffs, assignment related activities (surveys, investigations, equipments etc.) and other expenses (travel ,allowances, communication, office rent, report , taxes etc) for the performance of the services in the TOR
Cost Division
Remuneration
Reimbursable /Out of pocket Expenses
Provisional Sum
Contingency

30. Cost Estimate ….Contd. Cost Estimate basis:
SHORTLISTING
Cost Estimate ….Contd.
Cost Estimate basis:
Norms prepared by concerned Ministry, if any
Terms & conditions of the services
Previous estimates of similar assignments
Historical data on cost of similar assignments
Market rates for office supplies, equipments, communication, transportation etc.

31. SHORTLISTING
EOI Notice
Provide enough information allowing Consultants to decide whether or not to prepare an expression of interest. Requested information should be the minimum required to judge a Consultant’s suitability and not so complex as to discourage Consultants from expressing interest.

32. EOI Notice Notice should include Name & address of client
SHORTLISTING
EOI Notice
Notice should include
Name & address of client
Project details & Fund source
Applicant firm’s details e.g., organization, personnel, lead partner in case of JV
Estimated time period for the services
List of documents to be submitted by the applicant
EOI preparation procedure, place & date of submission, contact address
Information that only short listed consultant will be eligible for submission of proposal

33. Shortlisting Minimum 15 days notice provided for responses.
Shortlisting from Standing List (as per PPR: EOI not required up to NRs 2 million)
Advertising for Expression of Interest (EOI)
Advertise in national newspaper, websites
Advertising for EOI
Minimum 15 days notice provided for responses.

34. Shortlisting …..Contd. SHORTLISTING EOI Evaluation Criteria
Score [Out of 100%]
A. Qualification
Qualification of Key Experts
[Client should insert in between: [30 % to 50 %]
Experience of Key Experts
B. Experience
General of consulting firm
[Client should insert in between: [40 % to 60 %]
Specific experience of consulting firm within last 7 years.
In case of person, specific experience of the person within last 4 years.
Similar Geographical experience of consulting firm
C. Capacity
Financial Capacity1
[Client should insert in between: [10 % to 20 %]
Infrastructure/equipment related to the proposed assignment2
1Average turnover required shall not exceed 150% of cost estimate
2This Evaluation criteria should be deleted if infrastructure/equipment are not the part of the proposed assignment.

35. 5. REQUEST FOR PROPOSAL

36. Request for Proposal Section 1: Letter of Invitation (LOI)
Section 2: Information to Consultants (ITC) (including the Data Sheet)
Section 3: Technical Proposal - Standard Forms
Section 4: Financial Proposal - Standard Forms
Section 5: Terms of Reference (TOR); and
Section 6: Standard Form of Contract (including General Conditions of Contract (GCC), Special Conditions of Contract (SCC), and Appendices) 36

37. Letter of Invitation (LOI)
REQUEST FOR PROPOSAL
Letter of Invitation (LOI)
Intention of the Client to enter into a contract for an assignment and informs the shortlisted consultants that they are invited to submit a proposal for the assignment. It provides basic information regarding:
Name of the Client and the sources of funds to finance the consulting services
Names of the short-listed consultants
Name of the consulting services assignment
Method of selection
The LOI also instructs consultant to indicate whether they intend to submit the proposal alone or in association 37

38. Information to Consultants (ITC)
REQUEST FOR PROPOSAL
Information to Consultants (ITC)
This Section provides information to help shortlisted consultants prepare their proposals.
This Section consists of two parts: “Information to Consultants” and “Data Sheet”.
ITC contains provisions that are to be used without modifications. 38

39. Information to Consultants (ITC)
REQUEST FOR PROPOSAL
Information to Consultants (ITC)
“Data Sheet” contains information specific to each selection and corresponds to the clauses in ITC that call for selection-specific information to be added.
Information is also provided on the submission, opening and evaluation of proposals, contract negotiation and award of contract. 39

40. Technical Proposal Evaluation Criteria
REQUEST FOR PROPOSAL
Technical Proposal Evaluation Criteria
In RFP, Evaluation CRITERIA is to be specified
Specific experience of the consultants related to the assignment [0-25]
Adequacy of the proposed work plan and methodology in responding to the Terms of Reference [ ]
Qualifications and competence of the key staff for the Assignment [ ]
Suitability of the transfer of knowledge program (training) [0 - 10]
Local participation [0 - 10]

41. Technical Proposal Evaluation Criteria
REQUEST FOR PROPOSAL
Technical Proposal Evaluation Criteria
All criteria are to be sub divided into 3 sub-criteria
Score needed to qualify in the Technical Proposal has to be specified in the RFP
The number of points to be given under each evaluation sub criteria for qualifications of Key staff are:
(i) General qualifications [ ]
(ii) Adequacy for the project [ ]
(iii) Experience in region & language (International Staff] Or Experience in similar terrain [National Staff] [ ]
Total Points: 100

42. Technical Proposal – Standard Forms
REQUEST FOR PROPOSAL
Technical Proposal – Standard Forms
This Section includes the forms that are to be completed by the shortlisted consultants and submitted in accordance with the requirements of ITC. Following forms are included in Section 3:
3A Technical Proposal submission form.
3B Consultant’s references.
3C Comments and suggestions of consultants on the Terms of Reference and on data, services, and facilities to be provided by the Client.
3D Description of the methodology and work plan for performing the assignment.
3E Team composition and task assignments.
3F Format of curriculum vitae (CV) for proposed professional staff.
3G Time schedule for professional personnel.
3H Activity (work) schedule. 42

43. Financial Proposal – Standard Forms
REQUEST FOR PROPOSAL
Financial Proposal – Standard Forms
This Section includes the financial forms that are to be completed by the shortlisted consultants, including the consultant’s costing of its technical proposal, which are to be submitted in accordance with the requirements of ITC. Following forms are included in Section 4:
4A. Financial Proposal submission form.
4B. Summary of costs.
4C. Breakdown of price per activity.
4D. Breakdown of remuneration per activity.
4E. Reimbursable per activity.
4F. Miscellaneous expenses. 43

44. Standard form of Contract
REQUEST FOR PROPOSAL
Standard form of Contract
This Section includes standard contract forms for a Time-Based Contract/ Lump-Sum Contract.
It includes General Conditions of Contract (GCC) and Special Conditions of Contract (SCC).
The SCC include clauses specific to each contract to supplement the General Conditions. 44

45. Standard form of Contract
REQUEST FOR PROPOSAL
Standard form of Contract
The rights and obligations of the Client and the Consultant are governed by the Request for Proposals (RFP) issued by the Client and by the contract signed by the Client with the Consultant, and not by any other documents.
The standard ITC and the standard GCC in the Form of Contract should not be modified. Any changes required to be made in GCC are to be made through SCC. 45

46. Request for Proposal (RFP)
Response Period –
Minimum 15 days for estimate below NRs. 2 million;
Minimum 30 days for estimate above NRs. 2 million

47. Opening & Evaluation Opening of Technical Proposal
EVALUATION OF PROPOSAL
Opening & Evaluation
Opening of Technical Proposal
Evaluation of Technical Proposal
Opening of Financial Proposal (of firms qualified in Technical Proposal)
Evaluation of Financial Proposal

48. Opening Technical Proposal and Evaluation
EVALUATION OF PROPOSAL
Opening Technical Proposal and Evaluation
Public Opening of Technical Proposals
All firms submitting the proposal are invited
Only names of firms submitting the proposal announced,
All attendees including the bid opening committee members sign on the Price Envelopes,
Price Envelopes to be stored in safe custody
Technical Proposal Evaluation [based on criteria as stated in RFP]

49. Technical Proposal Evaluation Report
EVALUATION OF PROPOSAL
Technical Proposal Evaluation Report
Evaluation report, inter alia, to include relative strength and weaknesses of the proposals (PPR 77)
A Short Report Summarizing the Findings of the Technical Evaluation;
Technical Evaluation Report - Forms;
Technical Evaluation - Basic Data
Evaluation Summary
Individual Evaluations - Comparison
Minutes of the Public Opening of the Technical Proposals

50. EVALUATION OF FINANCIAL PROPOSALS
EVALUATION OF PROPOSAL
EVALUATION OF FINANCIAL PROPOSALS
Public Opening of Financial Proposal of Qualified Firms
For QBS opening only for highest or request to submit Financial proposal and evaluation
FP opening: Name of the Consultant, Score of TP, and Proposed Prices is read aloud and recorded.
Minutes shall be prepared by the Procuring Entity and shall be part of the procurement proceedings.

51. Financial Proposal Evaluation
EVALUATION OF PROPOSAL
Financial Proposal Evaluation
Check consistency between FP and TP
TP prevails over FP
Conduct arithmetic check
Check whether FP includes cost of all items of the corresponding Technical Proposals. If not, cost them and add their cost to the initial price (for evaluation purpose only)

52. EVALUATION OF FINANCIAL PROPOSALS
EVALUATION OF PROPOSAL
EVALUATION OF FINANCIAL PROPOSALS
Completeness (as per technical proposal)
Costs include: Taxes liability, Reimbursable costs (Travel, Translation, Printing, Secretarial, etc).
Computational Errors
Conversion to Single Currency
In QCBS the Lowest Evaluated Cost is given a Financial Score of 100 and Score of others calculated as Inversely Proportional to their Prices.

53. Quality and Cost Based Selection (QCBS)
EVALUATION OF PROPOSAL
Quality and Cost Based Selection (QCBS)
Proposal Evaluation in Two Stages
Technical- Quality and Technical aspect
Financial
Financial Proposal is Not Opened until Technical Evaluation is Completed
Weightage depends upon the Necessity and Nature of Works. Technical Proposal weightage from 70 – 90 and Financial Proposal weightage from 10 – 30.

54. Quality and Cost Based Selection (QCBS)
EVALUATION OF PROPOSAL
Quality and Cost Based Selection (QCBS)
Technical and financial proposal submitted at same time
Technical proposal evaluation - qualifying score as specified
Opening of technical proposals
Public opening of financial proposals of qualifying firms
Combine technical and financial scores to give overall ranking
Negotiate with highest ranked firm
Default selection method
80:20 ruling

55. Evaluation of Financial Proposal Scoring
EVALUATION OF PROPOSAL
Evaluation of Financial Proposal Scoring
Lowest priced proposal given maximum financial score of 100 points
Other financial proposals' scores using the formula Score = (lowest price/price of P) x 100
[where P is the price of another proposal]

56. Overall Ranking Quality and Cost Based Selection (QCBS) – 80:20
EVALUATION OF PROPOSAL
Quality and Cost Based Selection (QCBS) – 80:20
Total score = 80% technical + 20% financial

57. COMBINED TECHNICAL & FINANCIAL SCORE: Example QCBS
* LP = Lowest Price
FP = Firm’s Price

58. Quality Based Selection
EVALUATION OF PROPOSAL
Quality Based Selection
Works that can be Performed in Different Ways where Cost of all Competitive Proposals cannot be Compared
TP Evaluation Procedure similar to QCBS
Specify the Pass Marks of Quality Services (in the RFP)
Declare Technical marks secured by all (passed) consultants and open the Financial Proposal of consultants securing the highest marks in TP (If TP and FP requested at the same time)

59. Quality Based Selection
EVALUATION OF PROPOSAL
Quality Based Selection
Request for Financial Proposal and invitation for negotiation regarding technical matters and Price Proposals (If FP not requested with TP)
If negotiation fails notice of termination should be given to the consultant and the next high ranking consultants will be invited for negotiation. Continue negotiation in order until the agreement is reached

60. Fixed Budget Selection
EVALUATION OF PROPOSAL
Fixed Budget Selection
Evaluation of Technical Proposals
Reject all Financial Proposal that Exceed the Budget
Invite the Highest Technically Ranked Consultant Within the Budget for Negotiations on Technical Proposal to conclude a Satisfactory Contract
No Negotiations on Unit Rates or Prices
Sign the Contract, if NOT succeed then terminate the Negotiation AND Select the NEXT in order

61. Least Cost Selection Evaluation Procedures similar to QCBS
EVALUATION OF PROPOSAL
Least Cost Selection
Evaluation Procedures similar to QCBS
Selection of Firm with Lowest Cost, amongst those meeting Minimum Technical Criteria
Invite the above firm for Technical and Cost Clarifications and Negotiations with a view to conclude Contract

62. Financial Evaluation Report
EVALUATION OF PROPOSAL
Financial Evaluation Report
A Short Report Summarizing the Findings of the Financial Evaluation;
Financial Evaluation - Basic Data
Financial Evaluation Report - Forms;
QCBS - Combined Technical/Financial Evaluation - Award Recommendation
QBS - Highest Scorer in Technical Evaluation - Award Recommendation
Fixed-Budget (within budget)- Award Recommendation
Least-Cost Selection (lowest cost among qualified firm) - Award Recommendation
Minutes of the Public Opening of the Financial Proposals

63. Expertise and Qualification Based Selection
EVALUATION OF PROPOSAL
Expertise and Qualification Based Selection
Highly specialized expertise is required for the assignment;
Recruitment time is critical and the assignment is, typically, short term;
Few consultants are qualified; and
The preparation and evaluation of competitive proposal is not justified.
PPR Clause 83

64. 6. CONTRACT AWARD

65. Negotiation/Award Negotiation with Selected Consultants:
CONTRACT AWARD
Negotiation/Award
Negotiation with Selected Consultants:
Negotiations on TOR, Scope of Proposed Services, Deliverables, Progress Reports, Facilities by the PE and also in Financial Proposal (Reimbursements etc.) as specified in procedure
No Negotiations on Financial Proposal (Remuneration) if Selection Procedure is Based on Cost/Budget and under QCBS.
Award of Contract: To successful Consultants in the Negotiation and it should be Notified to All the Shortlisted Consultants. In the absence of challenge by any other Consultants Within 7 Days of that Notice the Contract shall be awarded to the Successful Consultants.
Clause 38 of the PPA

66. CONTRACT AWARD
NEGOTIATIONS
Final ToR and Agreed Methodology shall become part of the contract.
If negotiation fails invite the next ranked firm for negotiation.
Once negotiation is commenced with the next ranked it can not go back to the previous firm.
After successful negotiations and contract it shall be notified to other Firms which were unsuccessful.

67. CONTRACT AWARD
Blacklisting
If the consulting firm that has been selected does not sign the contract, it will be blacklisted (cl. 63.1(b) PPA)

68. Professional Liability Insurance
CONTRACT AWARD
Professional Liability Insurance
The successful consultant is required to provide Professional Liability Insurance within 1 month of contract signing. Failure to provide will result in termination of the contract and blacklisting (cl. 81.7/8 PPR)

69. 7. CONTRACT MANAGEMENT

70. CONTRACT PROVISIONS
Amendment Procedure: Procedure for modification of the services
Staff substitutions -Conditions, Approval of substituted staff and payment.
Consultant’s Authority - Supervision of works, counterpart personnel

71. CONTRACT PROVISIONS
Client’s Contribution - Staff, office space, vehicles or Consultants to make own arrangements.
Price Adjustment – In Contracts for more than 18 months with Adjustment formula for foreign and or local inflation

72. CONTRACT PROVISIONS Payment Procedures
Ceiling amounts, Foreign and local
Currency of Payment
Payment Schedule
Remuneration and Reimbursable
Valuation of currencies
Compensation for Delayed Payments
Advance Payment and Bank Security

73. CONTRACT PROVISIONS Extension of Time Force Majeure Breach of Contract
Reasonable measures to minimize the consequences of any event of Force Majeure by either party

74. CONTRACT PROVISIONS Modification or Variation Nature
on terms and conditions of this Contract
on the scope of the Services
Procedure
Written agreement between the Parties
With due consideration to proposal for modification or variation made by the other Party.

75. Steps for QCBS Selection
Invitation for Expression of Interest (EOI)
Completion or Termination of Contract
Planning, Estimating, Preparation of EOI notice, TOR, RFP and Approval
Contract Implementation Start
EOI Evaluation and Short listing of Firms
Issuance of Request For Proposal (RFP) and Pre-bid meeting
Award of Contract
Negotiation with Highest Ranked Firm and follow till successful negotiation
Submission & Opening of Proposal
Opening and Evaluation of Financial Proposal
Combined Evaluation for Highest Ranked Firm
Evaluation of Technical Proposal

76. General Steps for QBS Selection
Planning, Estimating, Preparation of EOI notice, TOR, RFP and Approval
Invitation for Expression of Interest (EOI)
Completion or Termination of Contract
EOI Evaluation and Short listing of Firms
Contract Implementation Start
Issuance of Request For Proposal (RFP) and Pre-bid meeting
Award of Contract
Submission & Opening of Proposal
Ask Financial Proposal from the Highest Ranked Firm or Open the Financial Proposal of Highest Ranked Firm .
Negotiate the Contractual and Financial Terms
If not successful
follow with Next Ranked Firms till successful Negotiation
Evaluation of Technical Proposal

77. THANK YOU
ANY Further QUERIES ?