Selection of Consultant

Nazaneen I. AliSr. Procurement Specialist

2

Main characteristics of QCBS Both quality & cost aspects taken into account Allows to determine the right weight to be given to quality vs. cost: 70% <T < 90% 30% > F > 10% N = T x N(tech) + F x N(fin) If F > 30% cost will prevail on quality Rejection of technical proposal if N(tech) < min. technical score

required (generally not less than 75%) QCBS not suitable for:

Complex or highly specialized assignments where ToR cannot be defined precisely & where innovation is expected OR high downstream impact OR assignment that could be carried out in different ways ( QBS)

Simple assignments Small assignments

3

Process: Selection of consultants (QCBS)

Prepare Terms of Reference (ToR) & budget

Advertise: “Request

for Expression of interest”

Evaluate “Expressio

ns of interest”

& establish a short list

Issue a “Request for Proposals”

(RFP) to short listed firms

Receipt of proposals & opening of “Technical Proposals”

Technical

Evaluation Report

Public Opening

of Financial Proposal

s

Evaluation of Financial Proposals

Preparation of the combined technical

and financial evaluation report

Negotiations of the contract

Award to the selected firm.

EOI & Short List Preparation

RFP Preparation

Receipt of Proposals

Evaluation of Tech Proposals

PUBLIC OPENING-Financial Evaluation

Award Recommendation

NEGOTIATIONS

Contract Signature

Contract ClosingCONSULTANTS timeline, not in scale

Start process -GPN

EN

Contract Implementation

5

Selection of Consultants - Process Preparation of the Short List

Request for Proposals

Receipt and Evaluation of Proposals

Negotiation and Award of Contract

Required Approvals

Selection StepsAdvertisementReceipt of applicationsEvaluation of applications/short-list

preparation (6 firms)Request for ProposalsSubmission of proposals/opening of technical

proposalsEvaluation of technical proposalsOpening of financial proposals and

consolidated evaluationContract award (following negotiation)

Short list preparationSolicitation of expressions of interest through

advertisement

Short List prepared of 6 candidates (firms alone or in association) which are the best qualified (on basis of their experience)

Short list of 6 candidates (firms alone or in association) which are qualified (on basis of their experience)

Request for Proposals RFP must include:

a) Letter of Invitation

b) Instructions to Consultants

c) Terms of Reference

d) Draft contract

e) Standard Forms for the proposal

Standard RFP available for all selection modes

Information to Consultants

• Shall contain necessary information to prepare responsive proposals

• Render selection process transparent (list evaluation criteria and respective weights and minimum acceptable quality score)

• Expected key staff inputs (not budget since cost is one of the selection criteria)

• Proposed validity time (60 - 90 days)

Terms of ReferenceCONTENTS

Background information Review of Previous Work Statement of Objectives Scope of Work needed Key Experts Positions and Minimal

Requirements (optional) Scheduling and Relationship to other Work Data and Reports available Inputs provided by Client Expected Outputs by Consultant

TOR not to be too detailed or inflexible thereby allowing consultants to propose own methodology and staffing

Receipt and Evaluation of Proposals

Preparation time: 45 to 60 days

Selection based on technical quality with price consideration

Proposal submitted in two envelopes (technical proposal and price proposal)

Opening of technical proposals only (price proposals kept sealed)

Evaluation of ProposalsEvaluation of technical proposals by an

evaluation committee

3-6 competent and independent members, (with no conflicts of interest)

Criteria for technical evaluation

Relevant experience of candidate in the field of the assignment (optional 0-10 pts)

Quality of the methodology proposed (20-50 pts)

Qualification of key staff proposed (30-60 pts)Quality of transfer of knowledge (optional 0-

10 pts)Participation by Nationals (optional 0-10 pts)Max. Possible: 100 pts

Technical Evaluation (cont’d)

Reject non-responsive proposals or those scoring below quality threshold established in RFP

Evaluation report of Quality of Proposals: establishes relative ranking of proposals and explains weaknesses/strengths (Individual Marks sheets to be attached)

Opening of Price ProposalsAfter completion of technical evaluationOpening of the price proposals of those

candidates who passed technical evaluation

Evaluation of Price ProposalsVerification of responsiveness to RFPVerification of conformity with Technical

ProposalComputation errors to be corrected, if anyTreatment of taxes and dutiesPrice Score of 100 points max. (inverse

proportion formulae)

Consolidated EvaluationFormula combining Technical and Financial

Scores :Final Score= a* Nt+ b* Nf

a: weight of Technical quality (0.8)

b: weight of price (0.2)

Negotiation and Award of ContractInvitation of top ranked candidate to

negotiate a contractNegotiation sequence

Final TOR (without substantially changing original TOR)

Comments made by ConsultantsWork ProgramStaffing proposed

Final TOR and agreed methodology to be incorporated in “Description of Services” which becomes part of the Contract

NegotiationPrice Negotiation usually restricted to

treatment of taxes

Possibly, terms of payment, price adjustment formula

20

Main Types of ContractsL

um

p S

um

C

on

tract

• Content & duration of assignment defined

• Payments linked to outputs

• Easy to administer

Tim

e-b

ase

d

con

tract

• Scope & length of services hard to define

• Services related to activities by others for which completion date may vary

• Hard to assess the input of consultants to reach objective of assignment

• Payment on agreed hourly/daily/monthly rate for staff+ reimbursable expenses (actual or agreed rate)

• Max. amount of contract• Need close contract

monitoring

EVALUATION OF THE QUALITY

By committee of 3 or more specialists

SPECIFIC EXPERIENCE OF FIRMS ( 5 - 10 points)

Relevant assignment, similar size, complexity, technology, environment

METHODOLOGY (20 - 50 points)

Schedules, responsiveness to TOR, logistics, backstopping, innovativeness, level of detail

QUALIFICATION OF KEY STAFF (30 - 60 points)

Team composition, professional qualifications/experience, suitability, local knowledge, language, training, permanent staff

TRANSFER OF KNOWLEDGE (0 - 10 points)

EXTENT OF PARTICIPATION BY NATIONALS AMONGST KEY STAFF (0 - 10 points)

EVALUATIONOF THE QUALITY (cont.)

Interviews for team leader/key staff may be conducted

Reject non-responsive proposals or those scoring below quality threshold established in RFP

Evaluation report of Quality of Proposals: establishes relative ranking of proposals and explains weaknesses/strengths (Relative Marks sheets to be kept until project completion and its audit)

EVALUATION OF COSTUpon receipt of Bank’s no-objection to Quality

Evaluation:

Return unopened the financial envelopes of non-responsive consultants and those scoring below

threshold

Notify consultants that scored above threshold of date and time set for opening of financial

envelopes (not before 2 weeks from notification)

Announce name of consultant, quality score and offered price and prepare minutes of public opening

Correct arithmetic errors, convert to single currency as per RFP

EVALUATION OF COST (cont.)

For evaluation purposes cost excludes local taxes but includes reimbursables, etc.

A direct proportional or other methodology (as established by RFP) may be followed to allocate marks for the cost element

Proposal with highest total score is selected and invited for negotiations

The weight for cost is allocated depending on complexity of assignment but normally between 10 and 20 (not to exceed 30)

Evaluation process to be confidential

TECHNICAL EVALUATIONSUMMARY EVALUATION SHEET (Example)

Firm I Firm II Firm III

Item WTa

Pointsb*

Ratinga x b

Pointsc

Ratinga x c

Pointsd*

Ratinga x d

1. Experience2. Methodology3. Key Staff Team leader Economist Engineer Fin. Analyst Management

exp.4. Skills Transfer

0.100.30

0.200.100.100.050.05

0.10

8070

7560807060

50

821

15683.53

5

9075

7065706070

60

922.5

146.5733.5

6

7590

8060806080

70

7.527

166834

7

TOTAL* out of 100

1 69.5 71.5 78.5

EVALUATION REPORT (Example)Combined Technical Scores and Price

(Summary)

Firm TechnicalEvaluat.Points

X 90%(a)

Price(CU)

PricePoints *

X 10%(b)

TotalScore(a) + (b)

ABCD

92908578

82.8081.0076.5070.20

9000800073007000

77.7887.5095.89100.00

7.788.759.5910.00

90.5889.7586.0980.20

** If price of B is 7000 CU then the score is:

B** 90 81.00 7000 100.00 10.00 91.00

*LP x 100/ FP FP = Firm’s Price CU= Currency LP= Lowest Price

SAMPLE BREAKDOWN OF MONTHLY RATES *

(Based on Audited Statements)

Name Positi

on Basic salary

Social Charges

Over-head

Sub-total

Fee Allowance Total Fee

Multiplier **

……. …….

……. ……

2000

3000

1500

1500

2000

2000

5500

6500

1000

1000

1000

…

7500

7500

3.75

2.50

* In local or Foreign Currency Unit ** Multiplier = Total Fee/ Basic Salary

SAMPLE SOCIAL COSTS

COST % of Basic

Salary Vacations (15 days) Sick Leave (10 days) Maternity Leave Social Security Pension Plan Insurance

Medical Accident Life

6.6 4.4 3.0 20.0 15.0 4.3 2.0 2.9

TOTAL

58.2

NOT INCLUDED Non-billable time Thirteenth month

SAMPLE OVERHEAD - (Business Costs of Firm)

COSTS % of

Basic Salary

Office rent/amortization Office Utilities Administrative salaries * Non-billable salaries * Printing and reproduction Computer costs Transport Donations Business development Depreciation Auditing Insurance Communications Interest Taxes Personnel development

16 8 16 15 4 8 6 1 17 7 2 7 12 3 2 4

TOTAL * Includes social charges

128

Case Study: Tied Scores The Borrower sends an evaluation report to the Bank indicating that two firms, A and B, are tied at 81 points each, following a technical and financial evaluation. The Bank insists that the evaluation be refined, using decimal points, to identify the winner. It carries out its own evaluation which includes correcting small computational errors and using two decimal points. The above is summarized in the following table:

Firm A Firm B Remarks Technical Scores

83.3

76.0

Firm A presents a substantially superior proposal

Financial Proposals $903,516 $639,240 Final Scores

Borrower 81 81 Borrower proposes selection of Firm A

Using two decimal points

80.62 80.97 Firm B is ranked No. 1 using decimal points

Ranking 2 1

The Borrower reacts as follows: “You advised us to redo the technical evaluation of firms A and B by adding decimal points, so as to be able to reach a final decision.

However, we still think that, in the case Firms A and B achieve the same final scores (81 points here), the decision should not be made by refining the scores using decimal points, which would be artificial.  

If we make a decision using decimal points, Firm B, which is ranked second technically by a substantial margin (76.0 points versus 83.3 points for Firm A ), wins the bidding. We think, however , that Firm’s B proposal does not provide enough quality assurances. We think that Firm B’s score was overestimated due to the inexperience of the members of the evaluation committee. The difference in price proposals of both proposals is not due to a difference in the unit costs proposed by both consultants, but to differences in input (working hours). As a result Firm B is ranked number one finally. We fear that this bid could result in a poor performance and work quality and, as a result, force us to extend the contract. Considering the above, we prefer that the evaluation be carried out without using any decimal points, which will result in the firms achieving a tied score of 81 points for both firms; and we propose to select Firm A which presents the higher technical score (although more expensive but exceeding only marginally the estimated budget for this assignment). We regret to inform you that if we do not reach an agreement with this present case, the project authority intends to proceed with the cancellation of the selection process. This will have a substantial negative impact on the project which is closing soon and badly needs this information technology support.” Questions: (i) Did the Bank react correctly? (ii) Can the Bank accept the Borrower’s proposal?

Case Study: Proposing an Additional Element After the technical evaluation under Quality and Cost Based Selection, Firm A scored 86 points and Firm B scored 82 points on their respective proposals. In the financial proposal, Firm A requested Euro1.2 million and Firm B requested Euro1.7 million to do the proposed work. Because Firm B additionally proposed a training program in its technical proposal, the Borrower adds Euro 0.2 million to the proposal of Firm A and starts negotiations. Firm B protests to the Bank. Question: What should the Bank do?

Thank you