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SEMINAR on

SEMINAR on
"Capacity Building for effective use
of Consultants" CONSULTANCY DEVELOPMENT CENTRE
An Autonomous Institution of DSIR, Ministry of Science &
Technology, Govt. of India

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    effective use of consultant effective use of consultant Document Transcript

    • SEMINAR on"Capacity Building for effective use of Consultants" Organised by CONSULTANCY DEVELOPMENT CENTRE An Autonomous Institution of DSIR, Ministry of Science & Technology, Govt. of India
    • CONSULTANCY DEVELOPMENT CENTRE An Autonomous Institution DSIR, Ministry of Science & Technology, Govt. of India “Capacity Building for effective use of Consultants” PROGRAMME SCHEDULE (Tentative)0930 - 1100 SESSION - I Welcome l and Introduction About l Consultancy Development Centre Need l for engaging consultants1100 - 1130 Tea/ Coffee Break1130- 1300 SESSION - II Pre-qualification/Shortlisting of l Consultants (EOI) Proposal l Invitation (RFP)1300- 1400 Lunch1400- 1530 SESSION - III Evaluation l of Proposals Agreement l Between Client and Consultant1530 - 1600 Tea/ Coffee Break1600 - 1700 SESSION - IV Getting l Best out of Consultants
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    • READINGMATERIAL
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    • CONTENTSChapter Description Page No I Introduction 1-4 II Expression of Interest 5 -6 III Selection of Consultants 7 - 17 IV Other Methods of Selection 18 - 19 V Types of Contracts 20 - 21 VI Important Provisions in RFP/Contract 22 - 25 VII Selection of Individual Consultants 26 Appendix I 27 - 28 Appendix II 29 - 33
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    • Chapter – I Introduction1.1 Purpose1.1.1 The purpose of these Guidelines is to define the Government of India’sbroad policies and procedures for selection, contracting and monitoring ofconsultants and other professional services providers financed from Govt. ofIndia’s resources. Projects funded partially or in whole by loan/grant fromInternational organizations like International Bank for Reconstruction andDevelopment (IBRD), International Development Association (IDA) or grant fromthe Bank or trust funds would normally be governed by guidelines agreed to inthe respective loan/credit agreement with them.1.1.2 For the purpose of these Guidelines, the term consultant(s) includes a widevariety of private and public entities, including consulting firms, engineering firms,construction management firms, management firms, procurement agents,inspection agents, auditors, investment and merchant bankers, universities,research institutions, government agencies, non governmental organizations(NGOs) and individuals/experts. These organizations as consultants could beused for help in a wide range of activities – such as policy advice; institutionalreforms; management; engineering services; construction supervision/ projectmanagement; feasibility studies, financial services; privatization studies andprocedures, procurement services; social and environmental studies; andidentification and preparation of projects, development of Computer hardware/software services etc. to complement the capabilities of the Government Ministry/ department or other Government authorities( referred as “employer” hereafter).1.2 When and how to engage Consultant1.2.1 The specific purpose and the specific rules and procedures to be followedfor employing Consultants depend on the circumstances of the particular case.However, following main considerations would guide the need and the selectionprocess:- (a) Absence of required expertise in-house; (b) The need for high quality services; (c) The need for economy and efficiency; (d) The need to have qualified Consultants for providing the specific services; (e) The importance of transparency in the selection process; (f) The identification of scope of work and the time frame for which services are to be availed of.1.2.2 Engagement of Consultants / professional service providers in any officeof the Government of India will follow the guidelines for administrative andfinancial sanctions as laid down by the Government of India from time to time. 1
    • 1.2.3 Engagement of Officials of Government of India or Retired Officers eitherin their individual capacity or as a part of a Consultant’s team will be madekeeping in view the guidelines of the Government of India (Department ofPersonnel & Training) issued from time to time on this subject.1.3 Applicability of Guidelines1.3.1 These guidelines are applicable for selection of consultants by any Ministry/ department / organization of Government of India where the costs of theProject/Assignment are funded by the Government of India.1.3.2 The consulting services to which these Guidelines apply are of anintellectual and advisory nature. These Guidelines do not apply to other types ofservices in which the physical aspects of the activity predominate (for example,construction of works, manufacture of goods, operation and maintenance offacilities or plant).1.4 Consortium of ConsultantsConsultants may associate with each other to form a consortium to complementtheir respective areas of expertise, or for other reasons. Such an association maybe for the long term (independent of any particular assignment) or for a specificassignment. The consortium may take the form of a joint venture or of a subconsultancy. In case of a joint venture, all members of the joint venture shall signthe contract and shall be jointly and severally liable for the entire assignment.Even after the short list is finalized, and Request for Proposals (RFPs) areissued, any association in the form of joint venture or sub consultancy amongshort-listed firms shall be permissible. Under such circumstance, one of the short-listed consultants must become the lead member of the consortium and theEmployer shall only deal with the lead member for all the purposes.1. 5 Selection of Consultants1.5.1 For selection of the consultants, normally, the employer shall adopttwo stage procedure in terms of Rules 168 to 175 of General Financial Rules,2005. In the first stage, the employer shall identify the likely sources on the basisof formal or informal enquiries and by inviting Expression of Interest (EOI)through advertisement as per Rule 168 of GFRs. On the basis of responsesreceived, Consultants meeting the requirement will be short listed for furtherconsideration. In the second stage, the short-listed consultant will be invited tosubmit (Request for Proposals or RFP) their Technical and Financial Proposals.The consultant shall be selected based on evaluation of their Technical andFinancial bids, the details of which are provided in Chapter III.1.5.2 The selection of consultant shall follow any of the following methods; asconsidered appropriate:1. Quality and Cost Based Selection (QCBS): Under normal circumstances, thismethod of evaluation shall be used. 2
    • 2. Combined Quality Cum Cost Based System (CQCCBS): This method ofselection shall be used for highly technical projects where weightage needs to begiven to higher technical standards, while finalizing the prices, as per para 3.12below.3. Quality Based Selection (QBS): This method of selection may be used underthe following circumstances:(i) the outcome of the assignment will have high impact and hence it is essentialto engage most qualified consultant. Examples are national policy formulation;capacity building program etc.(ii) the assignment is very complex or highly specialized where it is difficult todefine scope of work with accuracy. Examples are country specific study; reformsrelated studies, high precision scientific work etc.4. Cost Based Selection (CBS): This method of selection may be used for theassignments of following nature: (i) assignment where any experiencedconsultant can deliver the services without requirement of specific expertise.Examples are traffic surveys, market surveys etc. and (ii) cost of which shall notexceed Rs. Ten lakh.1.5.3 Selection by direct negotiations: The selection by directnegotiations/nomination is permissible in terms of Rule 176 of General FinancialRules, 2005 under exceptional circumstance such as (a) for tasks that representa natural continuation of previous work carried out by the firm, (b) in case ofemergency situation, situation arising after natural disasters, situations wheretimely completion of the assignment is of utmost importance, (c) situations wherethe execution of assignment may involve use of proprietary techniques or onlyone consultant has requisite expertise. Such selection may normally berestricted to a financial ceiling of Rs. Ten lakh.1.6 Consultancy Evaluation Committee (CEC)For all cases having financial implications of more than Rs. Ten lakh, a CECcomprising of at least three members at appropriate level including FinancialAdviser or his representative and also a representative of the user shall beconstituted by the employer in order to carry out the consultant selectionprocedure. The CEC shall be responsible for all aspects and stages of theconsultant selection i.e. issuance of EOI, evaluation of EOI, short-listing ofconsultants, deciding Terms of Reference, issuance of RFP, evaluation oftechnical and financial proposals, negotiations and final selection of theconsultant. Even in case of selection of consultant by direct negotiations havingfinancial implication of more than Rs. 10 lakh, the CEC shall negotiate with theconsultant on technical and financial aspects.[Note: Separate committees may be constituted for separate assignments.]1.7 Consultancy Monitoring Committee (CMC)1.7.1 The employer shall constitute a CMC comprising at least three members atappropriate level, including user’s representative, after the selection procedure isover for monitoring the progress of the assignment. If considered appropriate, the 3
    • employer may select all or any of the members of CEC as members of CMC. TheCMC shall be responsible to monitor the progress of the assignment, to overseethat the assignment is carried out as per agreed TOR and contractual conditions,to assess the quality of the deliverables, to accept / reject any part of assignment,to levy appropriate liquidated damages or penalty if the assignment is not carriedout as per the contract and if the quality of services is found inferior and for anysuch deficiency related to the completion of the assignment.1.7.2 For the assignments which are very complex and/or are of highly technicalnature, the employer may decide to appoint another qualified consultant to assistthe CMC in carrying out its functions. However, the cost of such additionalconsultant shall not exceed five per cent [5 %] of the total cost of the assignmentmonitored.1.7.3 The employer may also include in CMC individual experts from Government/ private sector / educational / research institute or individual consultants. Cost ofsuch members, if any, shall be borne by the employer.1.8 Forms of Contracts1.8.1 Various forms of the contracts may be entered into by the Employer withthe consultant depending upon the nature of the assignment. Following arevarious forms of contracts: (i) Lump sum contract; (ii) Time based contracts; (iii) Success fee based contract; (iv) Percentage contract; (v) Indefinite delivery contract.1.8.2 The lump sum contract is the preferred form of contract and under normalcircumstances, the employer shall use this form of contract. The other forms ofcontract shall only be used under special circumstances, as specified in ChapterV. 4
    • Chapter-II Expression of Interest2.1 Invitation of Expression of InterestFor all consultancy contracts exceeding estimated cost of Rs. 50 lakh except incases of nomination or where direct negotiation is carried out, an advertisementcalled “invitation for Expression of Interest” (EOI) shall be released in at least oneNational Newspaper and the Ministry’s website for preparing the short list.Attention of known reputed consultants may also be separately drawn whereverpossible. Advertisement in newspapers may be brief and shall give reference todepartmental website. The advertisement must include, among other things, thelast date of submission of EOI, how to get copy of EOI document, contactinformation of the employer with name of contact person etc.2.2 EOI Document2.2.1 The Employer shall prepare an EOI document. The EOI document shall contain following information: (i) Invitation to EOI: It shall include a copy of the advertisement whereby consultants are invited to submit their EOI. (ii) Brief about objectives and scope of work : This may include brief description about objective of carrying out the assignment, broad scope of work and expected deliverables of the assignment. This may also include the place of execution of the assignment. (ii) Instructions to the Consultants: It may include instructions regarding nature of job; submission requirement; requirement of bid processing fees; if any; last date of submission; place of submission; and any related instruction; (iii) Pre-qualification Criteria; this may clearly lay down the pre- qualification criteria which shall be applied by the employer for short listing the consultants. (iv) Formats for submission. This section shall specify the format in which the consultants are expected to submit their EOI.2.2.2 The employer shall make available the copies of the EOI document to the interested consultants in hard copies as well as on its web site.2.3 Short List of Consultants2.3.1 The Employer shall evaluate the consultants for short listing, inter-alia, based on their past experience of handing similar types of projects, strength of their man power and financial strength of the firm.2.3.2 The employer may assign scores to the response of each consultant based on weightages assigned to each of the criteria in EOI. Normally, the following weightages may be used for such evaluation: 5
    • Sr. No. Criteria Weightage 1 Past Experience of The firm 60% • Number of years experience 20% • Past Experience of studies of similar 50% nature. • Past experience in carrying out 20% studies in related sectors. • Studies carried out in India. 10% 2 Experience of Key Personnel. 25% • Qualifications 30% • Relevant Experience 70% 3 Financial Strength of the Consultant. 15% • Turnover figure for Last three Years. 50% • Net Profit Figure for Last three years 50%2.3.3 The Employer shall short list all the consultants who secure the minimumrequired marks [normally 50%]. The minimum qualifying requirement shall bespecified in the EOI document.2.3.4 Alternatively, the employer may specify in the EOI document minimumqualifying requirement for each of the criteria i.e. minimum years of e•perience,minimum number of assignments e•ecuted, minimum turnover etc. Under suchcircumstances, the employer shall apply pass-fail test and short list all theconsultants who meet the minimum requirement as specified.2.3.5 The short lists shall normally comprise at least three firms.2.3.6 The short list may comprise only national consultants (firms registered orincorporated in the country), if the EOI document specifically states so.2.4 Cost Based Selection2.4.1 For small assignments, where the employer decides to select the consultantbased on CBS method, the consultant shall be selected following single stagebidding procedure. Under single stage bidding procedure, the employer shallinvite financial proposals along with the EOI in two separate envelopes.2.4.2 The financial proposals of all the consultants who have been short listed, asper clause 2.3 above, shall be opened in the presence of the short listedconsultants who choose to remain present. The consultant, who has submittedthe lowest financial bid, shall be selected as the L1 and shall be called for furthernegotiations. 6
    • Chapter -III SELECTION OF CONSULTANTS3.1 Once the short listing of consultants is completed, the employer shallstart the process of final selection of the consultant.The selection process generally includes the following steps: (a) preparation of Terms of Reference (TOR); (b) preparation of cost estimate and the budget; (c) preparation and issuance of the Request for Proposals (RFP); (d) pre-bid meeting; (e) receipt of proposals; (f) evaluation of technical proposals: consideration of quality; (g) public opening of financial proposals; (h) evaluation of financial proposal; (i) selection of the winning proposal; (j) negotiations with the selected consultant, if required (k) award of the contract to the selected firm.3.2 Terms of reference The Employer shall be responsible for preparing the TOR for the assignment. TOR shall be prepared by those who have sufficient knowledge and experience in the area of the assignment. If the required experience is not available in-house, the task of preparation of the TOR can also be assigned to experienced consultants. The TOR shall include: i) Purpose/ objective of the assignment; ii) Detailed scope of work; iii) Expected input of key professionals (number of experts, kind of expertise required); iv) Proposed schedule for completing the assignment; v) Reports/deliverables required from the consultant. vi) Background material, records of previous surveys etc. available and to be provided to the consultant vii) Facilities such as local conveyance, office space, secretarial assistance etc., which can be provided to the consultant viii) Procedure for review of the work of consultant after award of contract 7
    • The scope of the services described in the TOR shall be compatible with the available budget. TOR shall define clearly the objectives, goals, and scope of the assignment and provide background information (including a list of existing relevant studies and basic data) to facilitate the consultants’ preparation of their proposals. If transfer of knowledge or training is also an objective, it should be specifically outlined along with details of number of staff to be trained, and so forth, to enable consultants to estimate the required resources. TOR shall list the services and surveys necessary to carry out the assignment and the expected outputs (for example, reports, data, maps, surveys). However, TOR should not be too detailed and inflexible, so that competing consultants may propose their own methodology and staffing. Firms shall be encouraged to comment on the TOR in their proposals. The employer’s and consultants’ respective responsibilities should be clearly defined in the TOR.3.3 Cost Estimate (Budget) Preparation of a well-thought-through cost estimate is essential if realistic budgetary resources are to be earmarked. The cost estimate shall be based on the employer’s assessment of the resources needed to carry out the assignment: staff time, logistical support, and physical inputs (for example, vehicles, laboratory equipment). Costs shall be divided into two broad categories: (a) fee or remuneration (according to the type of contract used) and (b) reimbursable, and further divided into foreign (if applicable) and local currency payments. The cost of staff time shall be estimated on a realistic basis for the personnel, as applicable, by ascertaining the prevalent market conditions and consulting other organizations engaged in similar activities.3.4 Preparation and Issuance of the Request for Proposals (RFP)3.4.1 Request For Proposal (RFP) is the bidding document in which the technical and financial proposals from the consultants are obtained. It contains the following: (i) A letter of invitation (LOI) (ii) Instructions to consultants (ITC) (iii) Terms of Reference (TOR) (iv) List of key positions / professionals required for the assignment (v) Requirement of qualification and experience of the firm and of the key professional staff (vi) Criteria of bid evaluation and selection procedure (vii) Standard formats for technical proposal (viii) Standard formats for financial proposal (ix) Proposed form of contract 8
    • The employer shall use the applicable standard RFP with minimal changes as necessary to address project-specific issues. The employer may use an electronic system to distribute the RFP. If the RFP is distributed electronically, the electronic system shall be secured to avoid modifications to the RFP and shall not restrict the access of short listed consultants to the RFP. The RFP will be sent only to the short listed consultants.3.4.2 Letter of Invitation (LOI) The LOI shall state the intention of the employer to enter into a contract for the provision of consulting services, the details of the employer and the date, time, and address for submission of proposals.3.4.3 Instructions to Consultants (ITC)3.4.3.1 The ITC shall consist of two parts, (1) Standard information, and (2) Assignment specific information. The assignment specific information is added through “data sheet”. The ITC, therefore, contains all necessary information that would help the consultants prepare responsive proposals, and shall bring as much transparency as possible to the selection procedure by providing information on the evaluation process and by indicating the evaluation criteria and factors and their respective weights and the minimum passing quality score. The standard information include clauses relating to the procedure of bid submission, the procedure relating to pre-bid meeting, procedure for seeking clarifications etc. The assignment / job specific information will be prepared separately and it will include the date and time of bid submission, contact address, the qualification criteria, the method of selection, the evaluation process, the factors of evaluation and their respective weights etc.3.4.3.2 The ITC shall not indicate the budget (since cost is a selection criterion), but shall indicate the expected input of key professionals (staff time). Consultants, however, shall be free to prepare their own estimates of staff time necessary to carry out the assignment. The ITC shall specify the proposal validity period (normally 90-120 days).3.4.4 Standard formats for technical and financial proposals3.4.4.1 The standard formats for technical proposal include: 9
    • (i) Format for Letter of Proposal submission (ii) Format for Consultant’s organization and experience (iii) Format for Comments and suggestions on TOR (iv) Format for Approach and methodology (v) Format for Team Composition (vi) Format for Curriculum Vitae of key professionals (vii) Format for Staffing Schedule (viii) Format for Work Schedule (ix) Format for Comments / modifications suggested on draft contract. (x) Format for information regarding any conflicting activities and declaration thereof.3.4.4.2 The standard formats for financial proposal include: (i) A summary sheet of the cost estimate to be quoted by the consultant. (ii) Remuneration payable. (iii) Reimbursables.3.4.5 Proposed form of contract3.4.5.1 The contract includes accepted TOR methodology, general and specific conditions of contract, etc. wherever possible, the employer shall use the Standard Form of Contract.3.4.5.2 The general conditions of contract shall include all such conditions which are common in nature and not project specific. Such conditions include clauses pertaining to sub contracting, methods of payment, termination and extension of contracts, arbitration, variation in quantities, indemnity and insurance, force majeure, conflict of interest, compliance to local laws and taxes and duties etc.3.4.5.3 The project specific conditions include clauses relating to the assignment in hand. These clauses should be carefully developed to protect the interest of the employer.3.5 Pre-bid meeting In all cases of large value or complex assignments, a pre-bid meeting may be prescribed in the RFP. The date and time for such a meeting should normally be after 15 to 30 days of issue of RFP and should be specified in the RFP itself. During this meeting, the scope of assignment, responsibilities of either parties or other 10
    • details should be clearly explained to the prospective bidders so that there is no ambiguity later on at the time of submission of technical/financial bids. Where some significant changes are made in the terms/scope of RFP as a result of pre bid meeting or otherwise considered necessary by the employer, a formal Corrigendum to RFP may be issued, to all short listed consultants. In such cases, it should be ensured that after issue of Corrigendum, reasonable time (not less than 15 days) is available to the bidders to prepare/submit their bid. If required, the time for preparation and submission of bids may be extended, suitably.3.6 Receipt of proposal3.6.1 The employer should allow enough time to the short listed consultants to prepare their proposals. The time allowed shall depend on the assignment, but normally shall not be less than four weeks and more than three months. In cases, where participation of international consultants is contemplated, a period of not less than eight weeks should normally be allowed. If necessary, the Government Ministry / Department shall extend the deadline for submission of proposals. The technical and financial proposals shall be submitted at the same time. To safeguard the integrity of the process, the technical and financial proposals shall be submitted in separate sealed envelopes. The technical bids will be opened immediately after closing of receipt of technical bids by the Consultancy Evaluation Committee (CEC). The financial proposals shall remain sealed and shall be opened publicly only of those firms who have qualified technically. Any proposal received after the closing time for submission of proposals shall be returned unopened.3.6.2 Government Ministry / Departments may use electronic systems permitting consultants to submit proposals by electronic means, provided the Ministry/Department is satisfied with the adequacy of the system, including, inter alia, that the system is secure, maintains the confidentiality and authenticity of the proposals submitted, uses an electronic signature system or equivalent to keep consultants bound to their proposals and only allows proposals to be opened with due simultaneous electronic authorization of the consultant and the Government Ministry/ Department.3.6.3 Late Bids: Late bids that is bids received after the specified date and time of receipt shall not be considered and shall be returned unopened. 11
    • 3.7 Evaluation of Proposals: Consideration of responsiveness The evaluation of the proposals shall be carried out in two stages: At the first stage evaluation of technical proposals is taken up. Proposals without earnest money (bid security), bid processing fees, if specified, unsigned and incomplete ( i.e. when the required bid formats have not been submitted), not responding to the TOR fully and properly and those with lesser validity than that prescribed in the RFP will be summarily rejected as being non-responsive, before taking up the appraisal of the technical proposal for evaluation of quality. Evaluators of technical proposals shall not have access to the financial proposals until the technical evaluation is concluded. The envelope containing the financial proposal is not opened till the technical evaluation is complete. The financial proposal of only such bidders will be opened which obtain minimum qualifying marks / standards prescribed for the technical proposal. The evaluation shall be carried out in full conformity with the provisions of the RFP.3.8 Evaluation of the Quality3.8.1 The Employer shall evaluate each technical proposal (using the evaluation committee, CEC), taking into account criteria as prescribed in the RFP: (a) the consultant’s relevant experience for the assignment, (b) the quality of the methodology proposed, (c) the qualifications of the key staff proposed and (d) capability for transfer of knowledge. Each of the responsive technical proposal will be evaluated for the criteria prescribed in the RFP by awarding marks so as to make total maximum technical score as 100. The criteria and weightage to each criteria or sub-criteria would depend on the requirements of each case and may be fixed objectively. A model scheme of maximum marks is, however, proposed as under: Details Marks Max. 1. Experience of the firm 20 2. Methodology, work plan and understanding of TOR 25 3. Suitability of the Key personnel for the assignment 45 4. Capability for Transfer of knowledge/ training* 10 TOTAL 100 * If this criteria is not required, the marks can be adjusted against some other criteria. The weight given to the firm’s experience can be relatively modest, since this criterion has already been taken into account when short- listing the consultant. More weight shall be given to the methodology in the case of more complex assignments (for example, multidisciplinary feasibility or management studies). 12
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    • PRESENTATIONS
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    • SESSION - I
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    • Consultancy Development Centre ABOUT CDC• Consultancy Development Centre set up in Jan.1986 as a non-profit registered society, supported by Deptt. of Scientific and Industrial Research (DSIR), Ministry of Science & Technology• Main objective – Promotion and Development of Consultancy Profession in the country 1
    • ACTIVITIES OF CDC • EDUCATION • DATABASE • CAPACITY BUILDING • SELECTION OF CONSULTANTS • CONSULTANCY BUSINESS PROMOTION • PROJECTS AND STUDY ASSIGNMENTS PUBLICATIONS • TECHNICAL CONSULTANCY DEVELOPMENT PROGRAMME FOR ASIA AND THE PACIFIC (TCDPAP) Recent Projects?NATIONAL DISASTER MANAGEMENTAUTHORITY, MINISTRY OF HOME AFFAIRS– Selection of Consultant for ? National Cyclone Risk Mitigation Project (NCRMP) ? National Earthquake Risk Mitigation Project (NERMP) ? National Flood Risk Mitigation Project (NFRMP) ? Empanelment of Media Agencies ? the Problem of Flooding and Erosion Studies for Along River Ganga 2
    • Recent Projects? BUREAU OF INVESTIGATION (CBI)CENTRAL ? Modernization of Central Forensic Science Laboratory (CFSL) ? Computerization of CBI? GOAGOVT. OF ? Consultant for Preparation of DPR for Selection of 2011 National Games? RESEARCH DEVELOPMENTNATIONALCORPORATION ? Study on Organizational Review and HR Strategies for NRDC Recent ProjectsMINISTRY OF FOOD PROCESSING INDUSTRIES ? in setting up of National Institute of Food Facilitation Technology, Entrepreneurship and Management (NIFTEM)DEPARTMENT OF ATOMIC ENERGY ? Services for Preparation of Detailed Consultancy Project Report (DPR) for Programme on Safe Drinking WaterMinistry of Steel (Orissa Mineral Development Corporation) ? agency for installation of 2 MTPA Selection of Pellestisation Plant with Ore Beneficiation facilities at OMDC, Thakurani 3
    • Recent ProjectsMINISTRY OF CULTURE ?Impact Assessment on the Scheme on “ Support for Setting up of Multi-Purpose Cultural Complexes” ? Consultant for Implementation of Selection of Financial Assistance Schemes of the Ministry of CultureMINISTRY OF POWER ?Empanelment of Consultants/Consultancy agencies for Preparation of DPR’s, for village electrifications through decentralized Distributed Generation (DDG) under the Rajiv Gandhi Grameen Vidyutikaran Yojna (RGGVY) ? of National Quality Monitors (Tier- Engagement III) of QCM of the RGGVY Scheme Recent Projects Ministry of Overseas Indian Affairs ? in Setting up of Overseas Workers Facilitation Resource Centre MINISTRY OF INFORMATION & BROADCASTING (I&B) ? Host Broadcaster for the 2010 Selection of Commonwealth Games to be held at Delhi ? an agency for Event Management Selection of ? an entity for provision and Selection of operation of booking-cum-information office. ? Agency for setting up Selection of International Broadcasting Centre. 4
    • Why and When to hire a Consultant• When you want to do something for the first time• When the organization tried to do something but did not succeed.• When you Lack Competence:• When it is a one time activity :• When there is Urgency or lack of time:• When you have lack of Resources• When organization needs a spokesperson:• When organization wishes to establish credibilityWhy and When to hire a Consultant • For Branding • Requirement of Funding agency • When you want to do something different • When wanting maximum efficiency and economy • When one of the objectives is to seek transfer of Knowledge and skills: • When you are looking for dedicated help: • When you do not wish to take risk: • When you do not have access to the right information 5
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    • SESSION - II
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    • PRE-QUALIFICATION/ SHORT LISTING OF CONSULTANTS?Stages of Selection of Consultant?Pre-Qualification Process• Setting Eligibility Criteria• Advertisement• EOI Document• Receipt & Evaluation of EOIs• Preparation of Shortlist of Consultants 7
    • STAGES OF SELECTION OF CONSULTANT?Pre-qualification/ shortlisting of consultants(EOI)? of Terms of Reference (TOR)Preparation? Proposal (RFP) and Invitation ofRequest forProposals?Pre-bid meeting? of ProposalsEvaluation • Evaluation of Quality/ Technical • Evaluation of Cost?Negotiations? – Client AgreementConsultant?Award of Contract 8
    • PRE-QUALIFICATION PROCESSSETTING ELIGIBILITY CRITERIA?Client prepares a criteria for shortlisting ofconsultants? broadly based on :Criteria is • Past experience of Consultant • Experience of Key Personnel • Financial strength of Consultant? to this other criteria such as qualityIn additionsystem, infrastructure available etc. may bebuilt in above broad criteria?The weightage given to each of criteria maydiffer from Client to Client and also on type ofassignment 9
    • SETTING ELIGIBILITY CRITERIAA broad? criteria given below for shortlisting S.no Criteria Weightage 1. Past Experience of the firm 60 Marks • Number of years experience 20% • Past experience of assignment of 50% similar nature • Past experience in carrying out 20% assignment in related sectors • Assignments carried out in India 10% 2. Experience of Key Personnel 25 Marks • Qualifications 30% • Relevant Experience 70% 3. Financial Strength of the Consultant 15 Marks • Turnover figure for the last three years 50% • Net profit figure for the last three years 50% SETTING ELIGIBILITY CRITERIA? a minimum threshold (normally 50Client keepsmarks) for short-listing?Alternatively client may specify in EOI documentminimum requirements for each criteria • Minimum years of experience • Minimum no. of assignments executed • Minimum turnover etcAll firms meeting minimum criteria are shortlisted?Alternatively client prepares a shortlist ofconsultants?A shortlist normally consists of 5-7 firmsconsidered most qualified and suitable for proposalinvitation 10
    • SETTING ELIGIBILITY CRITERIA?Diligent review of following key aspects isproposed for such shortlist • Qualification in field • Technical and Managerial capability • Core business and duration • Qualification of key staff • Performance record • Administrative and financial strength ADVERTISEMENT?Main objective is to inform eligible Consultantsabout consulting opportunity?Expression of Interest (EOI) throughadvertisement may be invited as per Rule 168of GFRs 2005? transparency, enhances competitionPromotesand wider participation?To get EOI, Client lists all assignments ingeneral Procurement Notice?It shall define broad scope of work and natureof consultancy services required 11
    • ADVERTISEMENT? requested from ConsultantsInformationmust be minimum and not complex todiscourage them?Time (normally not less than 30Sufficientdays) for response? indicate how to obtain EOI It shall alsoDocument. Client shall make available thecopies of EOI document to interestedconsultants in hard copies as well as on itswebsite. EOI DOCUMENTClient prepares an EOI Documentcontaining following information : • Invitation to EOI • Brief about objectives and scope of work • Instruction to the Consultants • Pre-qualification/ Shortlisting Criteria • Formats for Submission 12
    • RECEIPT & EVALUATION OF EOIs?EOIs received by Client as per last dateof submission and in required format areconsidered for evaluation? evaluated using short listingAll EOIs arecriteria. The shortlisting criteria isspecified in the EOI documentPREPARATION OF SHORTLIST OF CONSULTANTS?Client shortlist all the Consultants who secureminimum required marks (normally 50)?The minimum qualifying requirement shall bespecified in EOI document? Client may also prepare short list ofAlternatelyConsultants as follows : • Preparation of preliminary list of consultants, from various sources, claiming expertise in field • Detailed examination of experience and capability of firms in preliminary list • Shortlist Consultants (normally 5-7) considered most qualified and suitable to receive invitation for proposal 13
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    • PROPOSAL INVITATION PROPOSAL INVITATION? of TORPreparation? of cost estimate and thePreparationbudget? Proposal (RFP)Request for • Concept • Need & Advantages • Structure? RFPDeveloping?ProposalsReceipt of 15
    • PREPARATION OF TOR? and BackgroundIntroduction • Basic Data to Facilitate Bidders in Preparation of Proposals? of the AssignmentObjectives?Detailed Scope of Work?Kind of Expertise Required?Proposed Schedule for Completing the Assignment?Deliverables? material available and to be providedBackgroundby the client? be provided to the consultantFacilities to? for review of work of consultant afterProcedureaward of contract PREPARATION OF COST ESTIMATES AND BUDGET?Cost estimate is needed to earmark realisticbudgetary resources? is function of –Cost estimate • Staff time • Logistical and physical inputs?Cost estimate comprises fee/ remunerationand reimbursable and is further divided intofollowing as applicable • Local currency payment • Foreign currency payment 16
    • PREPARATION OF COST ESTIMATES AND BUDGET?Cost of staff time is estimated based onprevailing market conditions as well asconsulting other organisations engaged insimilar activities. REQUEST FOR PROPOSAL?A Document Requesting Submission ofProposals by consultants to provide servicesrequired by a client.? Objective Method to Select anUsed as anAgency Generally for a Professional Service?RFP is a Decision Making Tool for award ofcontract 17
    • NEED AND ADVANTAGES?Requirement is not a Standard “Off theShelf” Item or no Clear Standards orSpecifications Available to Use?to Seek ClarificationsNecessary?Consideration in Determining Award OtherThan Price?To Base Award on a Comparative Evaluationof Differing Price, Quality and ContractualFactors in Order to Determine the MostAdvantageous offering STRUCTURE OF RFP?Letter of Invitation (LOI)? to Consultants (ITC)Instructions?Terms of Reference (TOR)? professionalsList of key?Qualification and experience requirement of firmand key professionals?Standard formats for Technical Proposal?Standard formats for Financial Proposal?Proposed Form of Contract? bid evaluation and selection procedureCriteria of 18
    • DEVELOPING RFP ? Steps Preliminary • Identify Requirements • Define Specific Needs • Prioritize Needs ? Scope of Work • Most Important and Backbone of RFP • Compatible with Available Budget • List Services Necessary for the Assignment • Define Responsibilities of Both Client and ConsultantINSTRUCTIONS TO CONSULTANTS (ITC)?Part – 1 : General Information?Data SheetPart – II : Part – 1 General Information?Brief Description of the Assignment, Location? of Association of Consultants and SubEligibilityConsultants?Clarifications and Amendments of RFP? InterestConflict of • Conflicting Activities • Conflicting Assignments • Conflicting Relationships 19
    • ?Proposal Validity? of ProposalPreparation • English Language Unless Specified • Material Deficiencies may lead to Rejection • Technical Proposal – Letter for Proposal Submission along with Documentary Evidence in Respect of Eligibility Criteria – Consultant’s Organization and Experience – Comments and Suggestions on TOR – Approach and Methodology – Team Composition – CVs of Team Members – Staffing Schedule – Work Schedule – Comments/Modifications on Draft Contract – Information Regarding Conflicting Activities • Financial Proposal?Taxes?Currency?EMD?Bid Processing Fees? Receipt and Opening of ProposalsSubmission,?EvaluationProposals • Evaluation of Technical Proposals • Opening and Evaluation of Financial Proposals?Negotiations • Technical Negotiations • Financial Negotiations • Availability of Professional Staff/Experts 20
    • ?ContractAward of?Confidentiality Part –II Data Sheet?Assignment Specific Instructions to theConsultants for Preparation and Submission ofProposal? IncludesInformation • Representative of Client • Details of Pre-bid Meeting • Date, time and Venue of Submission of Proposals• Inputs and Facilities to be Provided by the Client• Period and Method of seeking clarifications• Formats of Technical Proposals• Number of Copies of Technical Proposal• Method of Selection• Procedure for Evaluation along with Evaluation Criteria – Past Experience – Methodology, Work Plan and Understanding of TOR – Suitability of Key Personnel• Venue for Negotiations• Date of Commencement of the Assignment 21
    • RECEIPT OF PROPOSALS? for Submission of ProposalsEnough Time?Pre-Bid Meeting (Normally to be held 15 to30 days after issue of RFP and must bespecified in RFP)?Clarifications in Writing to all Short-listedFirms? and Financial Proposals to beTechnicalSubmitted at Same Time 22
    • SESSION - III X
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    • PROPOSALS EVALUATION?of evaluation is to ensureObjectivefair and transparent method ofselection in the best interest ofproject? of proposals received isEvaluationdone in two stages (depending onmethod of evaluation) Technical Evaluation/ Quality Evaluation Financial Evaluation 23
    • ?Responsiveness of proposals is donethrough checks such as • Submission of EMD • Bid Processing Fee, if specified, in RFP • Technical and Financial proposals submitted in different sealed covers • Proposal signed and complete in all respects as per RFP Requirement (Mainly Bid Formats) • Response to TOR fully and properly • Validity of proposals as specified in RFP?Non-Responsive proposals will besummarily rejected?Financial proposals of only qualifiedbidders, i.e. those who obtainminimum qualifying marks forTechnical Proposal in fullconformity with RFPProvisions/Specified Criteria, shallbe opened 24
    • Client shall do Technical (Quality) evaluation based on following broad parameters• Consultant’s Relevant Experience• Methodology, Work Plan and TOR Understanding• Qualification of Key Staff Proposed and their suitability• Capability for Transfer of Knowledge/ Training (if required)The criterion shall be marked on 1-100 points.Following broad criterion is normally used CRITERIA WEIGHTAGE Consultant’s Specific 20 Points Experience Methodology and Work 25 Points Programme Adequacy of Key 45 Points Personnel Capability for Transfer of 10 Points Knowledge/ Training Total 100 Points 25
    • ? to different parameters variesWeightageaccording to complexity of assignment? for experience can be relativelyWeightagemodest as this criterion already consideredin short listing / Pre-qualification stage(EOI)?Methodology and evaluation of keypersonnel is given more weightage in case ofcomplex assignments ? and work plan is main Methodology component of Technical Proposal and divided into following sub criteria (weightage is assigned based on type of assignment) • Technical Approach and Methodology • Work Plan • Organization and Staffing 26
    • ?of key personnel determine theAdequacyquality of performance. Evaluation ofkey personnel is done based on followingsub-criteria (weightage to differentparameters is assigned based on type ofassignment)• General Qualifications• Adequacy for Assignment• Experience in the Region and Language?Subsequently Client shall preparean evaluation report of “Quality” ofproposals. All proposals which failto score minimum Technical scoreare straightway rejected? qualifying marks will be Minimumindicated in the RFP?can be ranked in terms of ProposalsTechnical score obtained 27
    • ?Alternatively simplified procedure forevaluation of quality is used where hightechnical score (60% and above) notrequired and high level of expertise is notrequired? minimum criteria is fixed forUnder thisparameters such as• Experience including no. of assignments handled in similar area• Turn over and other financial parameters, if required • Minimum educational qualification of each of the key professionals • Minimum requirement of experience in area similar to the proposed assignment? meeting minimum criteriaAll firmsso prescribed will stand technicallyqualified for consideration of theirfinancial bids. 28
    • ?On completion of Technical evaluationall bidders who do not meet minimummarks or otherwise considered non-responsive are intimated? Technically qualified areAll biddersintimated along with date and time foropening of Financial Proposals?Non-responsive bidders are alsoinformed indicating that their financialproposals will be returned unopenedafter completing the selection process? Proposals of TechnicallyFinancialqualified bidders are opened publicly andTechnical score and price quoted bybidders are announced?Client prepares minutes of publicopening for records? proposals are checked forFinancialarithmetical errors and for comparisonpurpose cost is converted to singlecurrency as per provisions spelt out inRFP 29
    • ? Cost evaluation shall include all taxes and duties for which client makes payment and other reimbursable expenses ? financial proposals may Conditional be considered as non-responsive financial proposal ? Methodology described in RFP is used for allocating marks?Total score shall be obtained byweighting quality and cost scores andadding them?weighting for quality and costProposedshall be specified in RFP?Recommended evaluation criteria forcombined quality and cost is presented?Firm obtaining highest score is invitedfor negotiation 30
    • ?Various methods for selection are: • Quality and Cost Based Selection (QCBS) • Combined Quality cum Cost Based Selection (CQCCBS) • Quality Based Selection (QBS) • Cost Based Selection (CBS) • Selection by Direct NegotiationsQUALITY & COST BASED SELECTION?Under normal circumstances thismethod shall be used?Also known as Least Cost Selection(LCS)?Under method proposals are invited intwo envelope system? proposals are evaluated andTechnicalthose meeting minimum qualifyingmarks are considered technicallyqualified. 31
    • QUALITY & COST BASED SELECTION? proposalsFinancial of technicallyqualified consultants are opened andevaluated?The least cost proposal will be ranked asL-1and next higher will be ranked as L-2,L-3, etc. or so on? with lowest price be selectedConsultantfor award of contract/ invited fornegotiation COMBINED QUALITY CUM COST BASED SYSTEM? takes into consideration quality ofThis methodproposal an cost of services?Relative weight to be given to quality and costshall be determined depending on nature ofassignment?Relative weight (e.g. 80:20 i.e. 80 for technicaland 20 for financial) need to be defined in theRFP? used for highly technical projectsIt shall bewhere weightage needs to be given to highertechnical standards while finalizing the prices 32
    • QUALITY BASED SELECTION?Method may be used under followingcircumstances • Outcome of the assignments will have high impact and therefore essential to engage the most qualified consultant e.g National Policy Formulation, capacity building programmes, etc. • Assignment is very complex or highly specialized where it is difficult to define scope with accuracy e.g. country specific study, reforms related studies, high precision scientific work, etc. QUALITY BASED SELECTION?The consultant who has secured firstrank in technical evaluation shall becalled for further negotiation afteropening and evaluations of its financialproposals. 33
    • COST BASED SELECTION?Method may be used for followingtypes of assignments • Assignments where any experienced consultant can deliver the services without requirement of specific expertise e.g. traffic surveys, market surveys, etc. • Cost of which shall not exceed Rs. 10 Lakhs? shall be selected followingConsultantsingle stage bidding procedure COST BASED SELECTION • Under single stage bidding procedure client invites financial proposals alongwith EOI in two separate envelopes • Financial proposals of those who are shortlisted based on EOI evaluation are opened in presence of bidders • Proposal submitted with lowest financial bid shall be selected as L1 and called for further negotiations. 34
    • SELECTION BY DIRECT NEGOTIATIONS? by direct negotiating/Selectionnominations is permissible in termsof Rule 176 of General FinancialRules 2005 under exceptioncircumstances • Tasks represent a natural continuation of previous work carried out by the firm • Cases of emergency situation where timely completion of assignments is of utmost importance such as situation arising after natural disasters. SELECTION BY DIRECT NEGOTIATIONS• Situations where the execution of assignment may involve use of proprietary techniques or only one consultant has requisite expertise• The such assignments may normally be restricted to a financial ceiling of Rs. 10 Lakhs.• Method is also known as Single Source Selection (SSS) 35
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    • CLIENT CONSULTANT AGREEMENT CLIENT CONSULTANT AGREEMENT?Negotiations?Types of Consulting Contracts?Standard Form of Contract • Form of Contract • General Conditions • Special Conditions • Appendices – Description of Services – Reporting Requirements – Staffing Schedule – Cost Estimates – Duties of Consultant and Client 37
    • NEGOTIATIONS? Negotiations shall include:Technical • Discussions of TOR • Methodology and staffing • Special conditions of contract? not alter the original TOR or terms of contractThis should? TOR and agreed methodology will formThe final“Description of Services” of contract.?negotiations shall only be carried out if some costs/Financialcost elements quoted are not found to be reasonable.?No financial negotiation should result into increase infinancial cost as originally quoted by the consultant?In case negotiations with selected consultants fail the clientshall cancel the bidding procedure and re-invite the bids. TYPES OF CONTRACTS ? (Firm Fixed Price) Contract Lumpsum • Used for assignments in which content, duration and output of consultants are clearly defined • Widely used for planning and feasibility studies, environmental studies, detailed design etc. • Payments are linked to outputs (deliverables) such as reports, drawings, bills of quantities, etc. 38
    • ? ContractTime Based • Used when difficult to define scope and length of services • Widely used for complex studies, supervision of construction, advisory services or most training assignments • Payments are made on agreed hourly, daily, weekly or monthly rates for staff plus reimbursable • The rates for staff include salary, social costs, overhead, fee (or profit) and where appropriate special allowances • Contract shall include maximum amount of payments to be made to consultant? ContractPercentage • Directly relate fees paid to consultant to the estimated or actual project construction cost or the cost of the goods procured or inspected • Commonly used for Architectural services. Also used for procurement and inspection services 39
    • ? and/orRetainer contingency (success) feecontract • Widely used when Consultants are preparing companies for sales or mergers of firms • Remuneration of Consultant includes a retainer and a success fee, later normally a percentage of sale price of assets 40
    • ? delivery contract (Price Agreement)Indefinite • Used when client needs specialized services to provide advice on a particular activity, extent and timing cannot be defined in advance • Commonly used to retain ‘Advisers’ for implementation of complex projects, Experts for dispute resolution, procurement advice, O&M and so on • Client and Consultant agree on unit rate and Consultant is paid on basis of time actually used • Consultant is selected based on unit rate quoted by them for providing services GENERAL CONDITIONS OF CONTRACT ? General Provisions • Relationship Between Parties • Law Governing Contract • Notices • Location • Authority of Leader • Authorized Representative • Taxes and Duties • Fraud and Corruption • Measures to be Taken by the Client • Commission and Fees 41
    • GENERAL CONDITIONS OF CONTRACT ?Commencement, Completion, Modification and Termination of Contract • Effectiveness of Contract • Expiration of Contract • Modifications or Variations • Force Majeure • Suspension • Termination – By Client – By Consultant – Cessation of Rights and Obligations – Cessation of Services – Payment upon Termination GENERAL CONDITIONS OF CONTRACT ? of the Consultant Obligations • Standard of Performance • Conflict of Interests • Confidentiality • Insurance • Accounting, Inspection and Auditing • Actions Requiring Prior Approval • Reporting Obligations • Documents Property of Client • Equipment, Material Provided by either Party 42
    • GENERAL CONDITIONS OF CONTRACT ? of the Client Obligations • Assistance and Exemptions • Change in Applicable Law Relating to Taxes and Duties • Services and Facilities ? the Consultant Payment to ? Good Faith Fairness and ? of Disputes Settlement ? Damages Liquidated SPECIAL CONDITIONS OF CONTRACT?General Conditions of Contract Generally notto be Modified? Special Conditions will be Used toClauses inModify General Conditions 43
    • APPENDICES? of ServicesDescription • Final Terms of Reference Worked out by the Client and the Consultant during Technical Negotiations and include – Dates for completion of various tasks – Place of performance of different tasks/activities – Approval of deliverables?RequirementsReporting • Format, Frequency, contents of reports and responsible persons?Staffing Schedule?Cost of Services • Negotiated Final Prices?Duties of Client • List of Services • Facilities • Property to be made available to the Consultant 44
    • SESSION - IV
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    • WHAT HELPS IN GETTING BEST OUT OF CONSULTANT • Be truthful, approachable and supportive to the consultant • Do not be defensive, secretive and protect information from consultant. • Do not be afraid of providing too much information to consultant • Select consultant for his competence to deliver as per project objectives • Designate a contact person as nodal officer to interface with consultant. • Trust your consultant and have faith in him. • Provide written information and communicate in writing.WHAT HELPS IN GETTING BEST OUT OF CONSULTANT• Clarify your expectations, deliverables and outcome right in the beginning.• Honestly communicate to the consultant if you have difficulty in meeting his expectations• Involve all stakeholders in defining the scope of work and deliverables.• Draft an agreement that is fair and just to both parties.• Do not harass the consultant in release of payments• Respect the consultant as an expert.• Do not treat consultant as a contractor• Be a good listener. Respect the opinion of the consultant. 45
    • WHAT HELPS IN GETTING BEST OUT OF CONSULTANT• Clarity on IPR ownership in the contract.• Avoid litigation and use alternative dispute resolution mechanism e.g. Conciliation and Arbitration.• Have unambiguous payment terms to avoid conflict later• Indemnify the project• Let everyone in the organization know about the objectives of the project and the consultant. FACULTY Dr. Sunil Abrol abrol@cdc.org.in S.K. Lalwani sklalwani@cdc.org.in 46
    • CONSULTANCY DEVELOPMENT CENTRE Core-IV B, 2nd Floor, India Habitat Centre Lodhi Road, New Delhi - 110003 INDIA Tel. : +91-11-2460 2601/2915/1533 Fax : +91-11-2460 2602 Website : www.cdc.org.in