Procurement of Consultancy Services
Differences between
PROCUREMENT OF
GOODS & WORKS
SELECTION OF
CONSULTING SERVICES
 product based
 knowledge based
 open competition (advertise)
 expression of interest
followed by selective
competition (short list)
 price is major factor
 price is one of the factors
 detailed specifications
(bid documents)
 general work program (term
of reference)
 single envelope procedure
 two envelope procedure
 negotiations rare
 negotiation usual
 invitation for bids (IFB)
 request for proposals (RFP)
 bid and performance
securities
 no securities recommended
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Selection Methods available
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Quality and cost based selection
Quality based selection
Fixed Budget selection
Least Cost Selection
Selection based on Consultants’ Qualifications
Single Source Selection
What to include in the RFP?
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References, contact points and contract arrangements
Description and specification of services required
Instructions to Bidders (ITB) and Bid Data
Laws, Rules or Regulations under which Procurement is
undertaken
Selection criteria and the methodology of evaluation
Budget for FBS
Estimated budget or estimated no. of key staff or
inputs (NOT BOTH) for other methods
Any qualification criteria
Terms and types of contract
Evaluation Criteria
• Specific to each individual procurement
activity
• Some criteria are common to all procurement,
such as:
– technical competence / expertise;
– experience / track record;
– cost;
– quality / specification;
– compliance with requirements of the bid.
QCBS
• Most widely used or ‘default’ method
• When compromise between quality and cost
required
• When scope of the assignment could be
precisely defined and ToR is well specified and
clear
• Inputs and costs for staff time, etc could be
clearly estimated
Primary Criteria
• Relevant experience for the assignment;
• Quality of the methodology proposed;
• Minimum expected qualifications and experience
of the key staff proposed;
• Subject to the nature of the assignment, it may
also include provisions for training/capacity
building of local staff;
• Transfer of knowledge may be the main objective
of some assignments; in such cases, it should be
given a higher weight to reflect its importance.
Apportioning Weightage
• Depending on the requirements, assign
weightage for each criteria and sub-criteria
• Technical and Financial weightage to be
decided.
• All these to be declared in the RFP
Quality Based Selection - QBS
• Appropriate when complex or highly
specialised assignments
• Innovation and best practices in the field
required
• Long term impact – feasibility studies, design
of dams, etc
• Different ways of execution – policy, etc
• Normally not used for project-funded
procurement
Some aspects of QBS
• In RFP, estimated budget is not disclosed
• Either only technical proposals are invited or
tech. and financial proposals separately
• Only highest ranked technical proposal – open
the financial proposals
• Detailed financial proposal
• Negotiation
Fixed Budget Selection - FBS
• Used when the assignment is simple
• Tasks could be clearly defined
• Absolutely limited budget or no flexibility
available in resources
Some aspects of FBS
• The RFP must indicate the available budget and request the
consultants to provide their best technical and financial proposals in
separate sealed envelopes, within the stated budget.
• Terms of Reference have to be carefully prepared to ensure that the
budget and TOR are consistent and realistic
• Technical proposals will be evaluated and bidders who pass the
minimum technical score will be invited to a public opening of their
financial envelopes.
• Bidders whose technical proposals fail to meet the minimum
technical score will have their financial envelopes returned
unopened.
• Any financial proposals that exceed the indicated budget shall be
rejected.
• The Consultant who has submitted the highest ranked technical
proposal within the budget will be selected for award of contract.
Least Cost Selection - LCS
• Appropriate to use for small value services of a
routine nature such as audits, simple engineering
design or supervision where well-established
practices and professional standards exist.
• Technical proposals are examined to ensure
minimum qualification scoring
• Lowest price among qualified
• Has disadvantages
• If funds available, adopt QCBS
Selection based on Consultants’
Qualifications (CQS)
• This method may be appropriate for very small
assignments where the need for a full bid process
with submission and evaluation of detailed
competitive proposals is not justified.
• There is no formalised technical or financial
scoring announced and expressions of interest
and information on the consultants’ experience
and competence relevant to the assignment are
requested through an advertisement.
• Some criteria to be established so as to ensure
that the evaluation is as subjective as possible.
Some aspects - CQS
• basic data to establish the legal status and general experience
of the consultant
• any specific skills, knowledge or experience required for the
assignment;
• minimum expected qualifications and experience of the key
staff proposed.
• Points should be allocated - main difference is that they are
for internal use only.
• Most appropriate consultant will be asked to submit a
combined technical and financial proposal.
Single Source Selection - SSS
• lacks the benefit of competition in regard to
quality and cost
• is not transparent in selection, and may
encourage unacceptable practices.
• Single source selection should only be used in
exceptional circumstances and only with the
express agreement of IFAD.
In summary
Selection method
Use when looking for….
Restrictions for use
Criteria to disclose
Basis for award
QCBS
Quality and Cost balance
None
Technical and Financial
Highest combined score
QBS
Highest available quality at
any cost
Budgetary constraints
Technical only
Highest technical score
LCS
Competence at lowest
cost
None
Technical passmark
Lowest price meeting
technical threshold
FBS
Quality within a financial
limit
None
Available budget
Highest technical score
within budget
CQS
Skills, knowledge and
experience
Low value only
Skills, knowledge and
experience
Best qualified
SSS
Continuity/speed/ unique
skill, knowledge or
experience
Low value or exceptional
circumstances
N/A
Negotiation