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Tor New 1322966

  1. 1. NZAID Terms of Reference Guideline
  2. 2. Summary This tool was revised and approved by the Tools Steering Group on 19 March 08. Last updated 20/05/08. When to apply this document? This document is a guideline. NZAID Staff are expected to consult and apply this guideline when developing a Terms of Reference (TOR). Exceptions to this guideline must be discussed with your manager. What does this guideline cover? This guideline sets out general principles and good practice for the preparation of Terms of Reference (TOR). It describes the information required, outlines the process for developing TOR and identifies issues to be considered. For further guidance on specific assignments see: Developing Terms of Reference for Reviews and Evaluations Developing Terms of Reference for MSC and TA What will this guideline do? This guideline helps NZAID staff follow and promote sound principles for developing quality TOR, and ensuring good development outcomes. The context of each activity/assignment or task requires careful consideration of the scope, the level of detail. For further assistance, staff should discuss this with their Team Leader. Who is this guideline for? This guideline is for NZAID staff, our development partners and the contractors engaged to help us in our work. In developing TOR, the key role of NZAID staff is to ensure a high level of partner ownership while ensuring NZAID’s own policy, quality assurance, and accountability requirements are met. Guideline: Developing Terms of Reference Effective from 24 April 2008 DocsOpen tor-new-1322966 Page 2 of 17
  3. 3. Table of Contents Summary ......................................................................................................................... 2 What are TOR? ............................................................................................................... 4 Terms of Reference – standard format............................................................................ 5 Common requirements in TOR........................................................................................ 6 The process for developing TOR..................................................................................... 9 Annex 1: The TOR process ........................................................................................... 14 Annex 2: Some key points to consider when preparing TOR ........................................ 15 References .................................................................................................................... 17 Guideline: Developing Terms of Reference Effective from 24 April 2008 DocsOpen tor-new-1322966 Page 3 of 17
  4. 4. What are TOR? Terms of Reference (TOR) state clearly the requirements and expectations of a specific assignment or contract for services and outline how it is to be implemented. TOR are an extremely important tool for achieving effective and sustainable development outcomes. TOR define the scope of work to be undertaken at each stage of the Activity cycle and it is therefore critical that we get them right from the outset. It takes time to develop good quality TOR to reflect shared understanding of the context, the assignment objectives, the approach and the intended development outcome. Stakeholder engagement is essential in the development of this key document. The assignment may be undertaken by a contractor, NZAID staff, or a combined team involving development partners and other donors. NZAID may also be involved in developing TOR for Activities using our funding but which are to be led and/or managed by our partners. TOR are an essential component of contract for service documentation and provide a basis for assessing contractor performance. TOR can be developed at all stages of the Activity Cycle. Assignments can range from specific tasks (e.g. assessment of an Activity report) to multi-year management services consultancies. Although each TOR document is unique, there are a number of common elements in the information to be included and the process to be followed. NZAID is a New Zealand public sector agency and as such a number of procurement related requirements need to be followed in developing TOR. This guideline identifies when and how they should be applied. Guideline: Developing Terms of Reference Effective from 24 April 2008 DocsOpen tor-new-1322966 Page 4 of 17
  5. 5. Terms of Reference – standard format This section outlines the standard format expected for NZAID TOR. Title The title should be descriptive to people outside of NZAID and contain a “key word” to make a search easy electronically. Background (Why?) A concise and clear statement (1-2 pages) linking the assignment to NZAID’s goal of poverty elimination, NZAID and partner policy frameworks and the country/regional/sectoral strategy. The Background should include a brief history of the programme/activity including reference to any relevant reports/documentation; a summary of other related Activities and/or donor engagements; any issues or constraints; the rationale for undertaking the current assignment; as well as outlining Activity governance/management arrangements including the roles of the partner, post and any governance committee and/or reference group. Goal (What do we want to achieve?) A statement providing information on “the bigger picture,” linking the assignment to a development outcome, and describing the rationale for this. Objectives (What do we want to know/do?) Explains why we want to complete this assignment and how this will contribute to the goal. The objectives (3-4) focus on the issues and/or questions to be addressed in this assignment. Tasks (What do we need to know/do?) A number of clearly defined activities to ensure the objective can be achieved. These must include direction on analysis of mainstreamed and cross-cutting issues, and financial and cost- benefit analysis. Methodology (How?) Describes the approach, reporting relationships and processes required to complete the assignment. Team composition, skills and experience (Who?) Identifies the knowledge, skills, experience of individuals or teams. Outputs (What and When?) Assignment outputs reflect the tasks and time frames of the assignment. E.g. presentations, debriefing, facilitating meetings, written reports Guideline: Developing Terms of Reference Effective from 24 April 2008 DocsOpen tor-new-1322966 Page 5 of 17
  6. 6. Annexes Any additional information or documents Eg correspondence, reports Drafted by: Date: Advice received from: Date: Approved by: Date: Document #: Comments: Date: (eg: content advice comments) Common requirements in TOR TOR are developed for a range of different tasks. While most commonly they will guide assignments to be undertaken by contractors, they also will be required for assignments carried out by NZAID staff as well as for partner-led, NZAID-funded, Activities. This section of the Guideline identifies common requirements for NZAID TORs and the key steps the Agency expects to be followed in the development of TORs. Level of detail The level of detail and guidance in the TOR will depend on the scope of the assignment and the nature of the contract. It is important that lines of communication, expectations by all parties, and reporting relationships are clear. The TOR must be specific, focused, and agreed by all stakeholders before the assignment is initiated and any goods and/or services procured. NOTE: Contractors can only be held accountable for what they have been specifically asked to do – take time to ensure there are clear links between the goal, the objectives and the tasks. Approach/methodology Most TOR include some direction on the preferred approach or methodology expected, although there will be some exceptions such as for short, task-based assignments. Overly prescriptive direction on the approach to be followed may also not be appropriate where particularly technical, specialist expertise is being sought. In general, however, most TOR will need to ensure that those carrying out the desired tasks: • give effect to the overall NZAID goal of poverty elimination, • follow specific direction on the integration of mainstreamed and cross-cutting issues • use participatory approaches and build partner ownership for the Activity. If these principles and issues are not explicitly addressed in the TOR, those carrying out the assignment, particularly external contractors, may fail to adequately consider them and the desired development outcomes may be compromised. TOR must ensure that the outcomes sought have a clear poverty elimination focus and are achieved in ways that advance aid effectiveness according to the Paris Declaration on Aid Effectiveness. Guideline: Developing Terms of Reference Effective from 24 April 2008 DocsOpen tor-new-1322966 Page 6 of 17
  7. 7. The Screening Guide for Mainstreamed and Other Cross-cutting Issues should be used to guide decisions on the particular direction that the TOR should give to ensure that these issues 1 are appropriately considered. The Screening Guide contains specific questions on each of these issues. TOR should also direct attention to ‘value for money’ requiring appropriate financial and/or cost benefit analysis. The reporting relationship The TOR clarify who will manage the contractual and reporting relationships. TOR need to clarify the roles and responsibilities of the team or individual(s) carrying out the assignment, and to describe their reporting relationship with those managing any contracts. The TOR state when and how the assignment team will usually report - to the DPM (Wellington), the NZAID Manager (in-country), our partners and/or a coordinating committee/ steering group. TOR should include agreements regarding NZAID and partner commitments in support of this assignment like participation in field trips, or time frames for feedback on draft reports. NOTE: It is important not to make any informal commitment regarding contracts or time frames or outputs before the terms of reference are finalized and the preferred consultants identified. See Procurement, Contracting & Grant Funding Policy and Managing Consultants for further information. Timeframes TOR need to provide an allocation of time for specific tasks such as: • document reading and preparation • travel time • briefings at Post • consultation with stakeholders and organisations • report preparation • finalisation of a report following debriefing. Team composition, skills and experience Most TOR will include a section on team composition, skills and experience. The success of any assignment is often determined by the degree of ownership by key stakeholders and by engaging the appropriate contractor(s). During development of the TOR, it is important to consider: • the knowledge, skills, experience and personal attributes required • local expertise • team composition – gender, off-shore/local balance • the involvement of counterparts and/or in-country contractors • the need for a reference group. Guideline: Developing Terms of Reference Effective from 24 April 2008 DocsOpen tor-new-1322966 Page 7 of 17
  8. 8. The majority of assignments will require a team involving partner country participants to confirm and strengthen partner ownership and leadership. An increasing number of assignments will be partner led. The range of skills and experience required will depend on the nature of the assignment. Good local expertise is essential to support effective participatory processes. Sometimes it may be useful to set up a reference group to provide additional expertise. In these cases the role of the reference group and the relationship of the contractor need to be clearly specified in the TOR. The selection criteria for assignment team members should be specified in the TOR and could include: Attributes • understanding of NZAID’s goal, policies and operating principles • ability to work in a multidisciplinary team • commitment to participation of key stakeholders • understanding of and commitment to cross-cutting issues. Skills and experience • experience relevant to tasks • development knowledge and experience • country/regional experience. Activity planning and management skills • analytical and reporting skills • facilitation and negotiation skills • cross-cultural communication skills • institutional strengthening/capacity building skills • sector or technical expertise (specific to the assignment) • experience in evaluation, research and review. Team Leader selection • wide development experience and knowledge • strategic capability • previous team leadership experience • people management skills • demonstrable commitment to NZAID’s policies and principles. NOTE: During the development of the terms of reference, it is useful to record the date in the footer to ensure all stakeholders are working with the same version. Guideline: Developing Terms of Reference Effective from 24 April 2008 DocsOpen tor-new-1322966 Page 8 of 17
  9. 9. Reports The TOR should state clearly the expected length of the report (usually no more than 20 pages, excluding appendices) and the timeframes for drafting and finalising the final report. Written reports are expected to respond to all tasks identified in the TOR. The written report format might include: 1. Title Page (authors, date, activity, location). 2. Executive Summary (including background, key findings, methodology, recommendations). 3. Main body of the report (description of the background, the stakeholders, results of analyses, findings, the key issues, methodology (including who participated, how and at what stage), conclusions and recommendations. 4. Appendices, Glossary, acronyms, Terms of Reference, list of participants and sources of data, diagrams, drawings, photographs. See Structure of Review and Evaluation Reports. See Activity Reporting (in development) for guidance on report format and content. The process for developing TOR There are a number of steps required to initiate, develop and sign off TOR. See diagram in Annex one: The TOR process. 1. Identify the need A specific assignment may be initiated by any one of the key stakeholders. Prior to preparing detailed TOR it is important to discuss and reach agreement between key stakeholders on the need for the assignment and how best to meet stakeholder expectations. NZAID staff at post have a key role in managing these preliminary discussions with our partners. It takes considerable time to clarify and discuss expectations, priorities and the preferred approach before the detailed terms of reference are drafted on paper. These conversations are a critical part of the planning process and experience demonstrates that they have a significant impact on the successful outcomes of the assignment. 2. Initiate discussion with the Programme team At this planning stage, it is also useful to discuss some of the practical issues like: • context and clarity of roles: is the assignment partner- or NZAID-led? • the skills required to complete the assignment, • any contracting requirements • the selection process, • how any contracts will be managed, • the budget, • how the costs will be met, • what support is required to ensure the assignment is successful, Guideline: Developing Terms of Reference Effective from 24 April 2008 DocsOpen tor-new-1322966 Page 9 of 17
  10. 10. • how responsibility will be shared between post and Wellington, • managing risks, and • quality assurance. 3. Initiate discussion with all stakeholders These preliminary meetings can confirm some of the practical issues listed above and agree on: • assignment objectives and tasks • assignment outputs and milestones • contract management • reporting relationships • team composition 4. Seek advice from Team Leader, SAEG, Contracts During the drafting stage you are encouraged to seek advice from partners, SAEG advisors, programme team leaders, and contracts advisors. For workload planning and contract management advice, Wellington staff are advised to create a draft instruction in Koru during this preliminary planning stage. 5. Draft TOR Following these discussions, partners and/or NZAID can draft terms of reference for sign-off in Wellington. NZAID would encourage our partners to take the lead in developing the TOR and could support that process by sharing this guideline and adopting a participatory approach to the drafting task. Take time to work with all stakeholders and agree on the questions, the issues, and the intended outcomes. A simple, but effective check is to ask if the objectives are: • Specific • Measurable • Achievable • Results orientated • Time bound All TOR need to follow the standard format provided in this guideline. When using the Approved Contractor System, staff are required to follow the templates to complete Assignment specification and are encouraged to consider the wider issues and guidance provided in this NZAID tool. The draft terms of reference can be developed by either the partners and/or NZAID staff. NZAID encourages our partners to take the lead in developing the TOR and could support that process by sharing this guideline and adopting a participatory approach to the drafting task. All stakeholders are expected to actively engage in the drafting process through discussion, written feedback and drafting text. Investing time to address all issues, resolve concerns, and pay attention to detail will result in quality terms of reference and satisfactory outcomes. There are no effective short cuts. Guideline: Developing Terms of Reference Effective from 24 April 2008 DocsOpen tor-new-1322966 Page 10 of 17
  11. 11. Should the TOR specify that NZAID will purchase goods or services, the Mandatory Rules for Procurement by Departments, (Ministry of Economic Development, May 2006) apply. These rules require all NZAID procurement to: • enable open and effective competition, • encourage full and fair opportunity for potential suppliers, • recognize NZ’s international trade obligations and interests • result in best value for money. This requires ensuring that goods or services are specified: • in terms of performance and functional requirements, rather than design or descriptive characteristics • based on international standards, where applicable, or otherwise on national technical regulations, recognised national standards, or building codes • by using full titles and listing acronyms when they are unavoidable. Annex 2: Some key points to consider when preparing TOR identifies a number of common pitfalls in TOR drafting, including those relating to New Zealand public sector procurement rules. 6. Finalise TOR NOTE: It is advisable and courteous that final drafts of TOR are seen by the advisors involved in providing advice at step 4. All stakeholders need to agree on the TOR. In parallel with the development of selection criteria, the programme team should also have developed weightings to guide the selection process. These should be agreed by all stakeholders along with the TOR. The partner government/organisation needs to agree (preferably in writing) with the TOR before they are finalised and ready for Team Leader approval. This can take considerable time. NOTE: It is important to plan ahead, to allow adequate time and to maintain ongoing communication with all stakeholders at every stage of the process from developing terms of reference through to the conclusion of the assignment. 7. Seek Team Leader Approval All NZAID managed Terms of Reference are signed off in Wellington. The Team Leader is responsible for approving all TOR for their direct reports. If the Team Leader is preparing Terms of Reference then the Director is responsible for approving the TOR. 8. Seek Assistance from your Contracts Adviser If undertaking a tenders process, arrange a meeting with your Contracts Adviser. 9. Select Contractors Guideline: Developing Terms of Reference Effective from 24 April 2008 DocsOpen tor-new-1322966 Page 11 of 17
  12. 12. 10. Negotiate contract and finalise TOR Amendment of TORs used in supplier selection processes should be avoided. This is because not all tenderers have had the opportunity to bid against the amended TOR, undermining the principles of fairness in the process so re-tendering could be required. However, if during negotiations, minor variations to the TOR (or work plan) are suggested that will better achieve the objectives of the assignment these may be incorporated into the TOR (or ideally the work plan). Any amendments to TOR must be agreed (by all stakeholders) in writing and MSG advised. The amended TOR must be dated and approved by the same Team Leader, attached to the Koru workflow, and printed for file. It is important that any amendments are agreed prior to finalising the contract to avoid unnecessary variations and ensure better understanding and focus with the contractor. 11. Draft Contract and agree milestones At this stage you will be required to agree milestones and confirm time frames. Milestones can be any of the assignment outputs. The outputs may include any of the following: • meetings with key stakeholders • feedback to key stakeholders e.g. through a workshop or meeting prior to completion • draft and/or final report • workshops • manuals • draft TORs • strategy documents • draft agreements between stakeholders • debriefing NZAID and key stakeholders • presentation of key findings to stakeholders. 12. Finalise Contract 13. Brief contractor A detailed briefing ensures shared understanding of objectives, methodology and intended outcomes. The location of this briefing — in Wellington or at post — will depend upon particular programme management arrangements. Care should be taken to include key staff in both locations in briefing arrangements. During the briefing it is important to ensure that non-NZAID assignment team members, particularly contractors, are made fully aware of: • NZAID’s goal, operating principles , and all relevant policies and strategies, particularly those that are mainstreamed or cross-cutting • NZAID Activity Cycle Management Guideline and other relevant tools • how NZAID works (e.g. NZAID structure, roles and relationships; expectations of the nature and amount of contact with the Post while in-country), Guideline: Developing Terms of Reference Effective from 24 April 2008 DocsOpen tor-new-1322966 Page 12 of 17
  13. 13. • who they should talk to if they have any problems, • key people we expect them to meet, • information on the political situation, and any sensitive issues. Note: If the assignment involves field travel, it is helpful ensure that the Post has briefing notes to ensure a consistent message, Briefings should outline the expectations of NZAID and partner for each of the key stages in the assignment: 1. Gathering information - Briefings with relevant NZAID staff (Wellington or Post) and others e.g. technical advisers or the Management Services Contractor (MSC)) prior to commencing work. - Review of documentation. Partner country and NZAID policies, country strategy paper, partner government development plans, other donor Activity documentation where appropriate. - Meetings with key stakeholders e.g. partner government officials, beneficiary communities - both women and men, NGOs including women’s organisations, other donors. - Field visits. 2. Analysing information 3. Presenting information for discussion and feedback 4. Finalising report/findings NOTE: In general it is good practice to have the assignment team present initial findings to key stakeholders whilst they are in-country. If this proves difficult, an alternative is to ensure the team leader returns to discuss the final draft report with key stakeholders. 14. Commence assignment Guideline: Developing Terms of Reference Effective from 24 April 2008 DocsOpen tor-new-1322966 Page 13 of 17
  14. 14. Annex 1: The TOR process Figure 1: Key steps in the NZAID TOR process TOR | Terms of Reference Process INITIATOR OF TOR APPROVER OF TOR DPM / DPO (Wgtn) Contracts Team | CT Team Leader | Wgtn Manager NZAID Manager/DPC (Post) 1. Identification of need 2. Initial discussion with manager 3. Stakeholder discussion between initiator, wgtn/post staff, relevant partner organisation to agree objectives & outcomes 4. Seek advice (if required) from sector/technical manager, advisors and Contracts Team Check back with 5. Draft TOR Check back with advisors advisors Check back with Check back with advisors advisors 6. Finalise TOR (After agreement with all stakeholders) 7. Manager approves TOR 8. Seek assistance from your contracts advisor 9. Select contractor(s) 10. Negotiate Contract and 11. Draft contract and agree finalise TOR milestones (if required) 13. Brief contractor(s) 12. Finalise contract 14. Commence assignment Guideline: Developing Terms of Reference Effective from 24 April 2008 DocsOpen tor-new-1322966 Page 14 of 17
  15. 15. Annex 2: Some key points to consider when preparing TOR Good TOR are essential to ensure that providers, NZAID and our partners are clear about the requirements of an assignment, particularly when TOR define contractual agreements. Problems may arise if the following issues are not adequately covered: Clarity of purpose The assignment team should be able to read the TOR and readily understand the required outcomes without needing to interpret or seek further advice to resolve ambiguous or unclear meaning. TOR must clearly define the outputs that are required, by when, by what methods, and to what standard. If contracting is involved, this will also include the price for which outputs are required. Unclear or ambiguous expression of TOR requirements, particularly for contractors, is likely to result in a different understanding of the assignment and risk not achieving the desired outcomes. Clarity of tasking Incomplete or unclear TOR are likely to cause delays in starting the assignment, particularly for TORs involving contracting or other forms of procurement. These will require additional discussions, negotiations and re-writing the TOR before the procurement process can begin. Ambiguous TOR for RFTs can also result in proposals that do not address NZAID’s needs, leading to the possibility of having to re-tender. Delays in establishing a contract can have financial implications as well as impact upon operations. Scoping the assignment Poorly scoped and written TOR may result in a service provider underestimating the work required. Subsequent discovery that the work is more complex and challenging than expected creates risk that the provider will not be able to deliver work on time, or that LOVs will need to be prepared to extend contracts. Delivery delays can have serious flow-on effects for programme delivery and partnerships. Delays can also have financial implications — funding allocated for an assignment or consequent work, in one financial year cannot always be carried to the next if the assignment has not be undertaken. Poor TOR can therefore impact on budgets for the next financial year. Determining the appropriate level of direction TOR which are overly prescriptive, either in terms of specifics of outputs, or how work should be undertaken, increase the risk of disputes, failure to achieve desired outcomes, and potentially limit innovation and competition. NZAID expects all its assignments to be carried out according to our operating principles and policies. Some of this will require reference in the ‘methodology’ section of the TOR. However some procurements will relate to very technical areas of speciality. Under these circumstances, while there are occasions where it is appropriate to prescribe specific methodology, recognised good practice is to specify required outcomes only. Guideline: Developing Terms of Reference Effective from 24 April 2008 DocsOpen tor-new-1322966 Page 15 of 17
  16. 16. The importance of milestones and clear payment schedules In many cases NZAID links scheduled payments to delivery of milestone achievements. These must be clearly specified, either in the TOR or accompanying payment schedule. Vague milestones make it difficult to track progress on contracts, and increase the risk that NZAID will pay providers for carrying out substandard work, or even for work which has not occurred. TOR guidance to contractor selection Poor TOR for contracting can result in difficulty in the contractor selection process, because information required for assessment and scoring may not be present or clear in the proposals or tenders received. There are legal risks in these situations. Tendering often involves a lot of unpaid work for contractors and they expect a fair, transparent, and efficient process from us. Unsuccessful tenderers for contracts frequently seek justification when their proposals are not accepted, and they have rights of appeal through legal process if they conclude that fair process was not followed during selection. NZAID must be able to demonstrate that an objective assessment was conducted when tenders were selected. Poor quality TOR can hinder this process. Implications of New Zealand public sector procurement rules The NZAID Procurement Policy sets out the expectations for all NZAID procurement (establish link). In respect of TOR, those being managed by NZAID should not: • create unnecessary obstacles to international trade or domestic supply (such as referring to a particular specific origin, producer or supplier) • require trade mark or trade name, patent, design or type, unless there is no other sufficiently precise or intelligible way of describing the procurement requirements unless, in such cases, words such as “or equivalent” are included in the tender documentation; • seek or accept advice to be used in the preparation or adoption of any TOR for a particular procurement from a person that may have an interest in that procurement, if to do so would prejudice fair competition • use jargon – appropriate suppliers may be turned-off by its use • be overly prescriptive or, equally, unfocused as they may limit the number of suppliers able to comply. Guideline: Developing Terms of Reference Effective from 24 April 2008 DocsOpen tor-new-1322966 Page 16 of 17
  17. 17. References Acknowledgements This guideline draws on the guidelines of a number of other agencies, in particular: AUSAID Activity Management Guidelines, EC Project Cycle Management Guidelines and DFID Tools for Development. Endnotes 1 Human rights, gender, environment, preventing conflict and building peace, and HIV/AIDS Guideline: Developing Terms of Reference Effective from 24 April 2008 DocsOpen tor-new-1322966 Page 17 of 17