36461 Consulting Services Manual 2006 A Comprehensive Guide to the Selection of Consultants Consulting Services Manual 2006 Consulting Services Manual 2006 A Comprehensive Guide to the Selection of Consultants THE WORLD BANK Washington, D.C. ©2006 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: feedback@worldbank.org All rights reserved 1 2 3 4 09 08 07 06 This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Exec- utive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: pubrights@worldbank.org. ISBN-10: 0-8213-6523-1 ISBN-13: 978-0-8213-6523-6 eISBN-10: 0-8213-6524-X eISBN-13: 978-0-8213-6524-3 DOI: 10.1596/978-0-8213-6523-6 Cover: Circle Graphics Library of Congress Cataloging-in-Publication Data Consulting services manual 2006: a comprehensive guide to the selection of consultants at the World Bank. p. cm. Includes bibliographical references and index. ISBN-13: 978-0-8213-6523-6 (pbk.) ISBN-10: 0-8213-6523-1 (pbk.) 1. Business consultants--Developing countries--Handbooks, manuals, etc. 2. Consulting engineers--Hand- books, manuals, etc. 3. Consultants--Handbooks, manuals, etc. 4. Economic assistance --Handbooks, manuals, etc. 5. Technical assistance--Handbooks, manuals, etc. 6. World Bank--Handbooks, manuals, etc HC69.C6C6555 2006 332.1'5320684--dc22 2006041017 Contents I N T R O D U C T I O N xi A B B R E V I A T I O N S A N D A C R O N Y M S xiii 1 Consulting Services 1 1.1 Background 1 1.2 Types of Consulting Services 1 1.3 The Quality of Consulting Services 2 Notes 4 2 Consultants 5 2.1 Main Considerations 5 2.2 Consulting Organizations 5 2.3 Particular Types of Consultant 7 3 General Policies and Principles in the Use of Consultants 9 3.1 Main Considerations in the Selection of Consultants 9 3.2 Eligibility 9 3.3 Use of National Consultants 10 3.4 Associations between Consultants 11 3.5 Property 13 3.6 Misprocurement 13 3.7 Handling of Complaints 13 3.8 Instructions to Consultants 13 3.9 Consultants Selected and Engaged by the Bank 14 Notes 15 4 Conflicts of Interest 16 4.1 Main Considerations 16 4.2 Bank Policy 16 4.3 Categories of Conflicts of Interest 16 4.4 Prevention of Conflicts of Interest 18 4.5 Utility Management Contracts 20 4.6 Consultants Engaged by the Bank 21 Notes 21 5 Fraud and Corruption 22 5.1 General Considerations 22 5.2 Most-Common Corrupt and Fraudulent Practices 22 5.3 Sources of Allegations 23 5.4 Investigations and Sanctions by the Bank 23 5.5 Prevention of Corrupt and Fraudulent Practices 23 Notes 26 v Consulting Services Manual 2006 6 Capacity Building, Transfer of Knowledge, and Training in Consultant Contract Assignments 27 6.1 Main Considerations 27 6.2 Objective and Guiding Principles 27 6.3 Responsibilities of the Borrower 28 6.4 Responsibilities of the Consultant 28 Notes 30 7 Financing Consulting Services 31 7.1 Introduction 31 7.2 Reimbursable Funds 31 7.3 Grants and Trust Funds 32 7.4 Disbursements and Suspension of Disbursements 32 7.5 Cofinancing of Consulting Services 35 Notes 33 8 The Role of the Bank 34 8.1 Main Considerations 34 8.2 Prior Review 34 8.3 Post Review 36 8.4 Assistance to Borrowers 36 Notes 36 9 The Selection Process and Selection Methods 37 9.1 Steps in the Selection Process 37 9.2 Main Considerations about Selection Procedures 37 9.3 Selection Methods 40 9.4 Selection of Particular Types of Consultant 44 9.5 Effectiveness and Efficiency of the Selection Process 46 Notes 46 10 Developing the Terms of Reference 48 10.1 Main Considerations 48 10.2 Drafting the Terms of Reference 48 10.3 Outline of the Terms of Reference 49 Notes 51 11 Estimating Costs and Setting the Budget 52 11.1 Main Considerations 52 11.2 Estimating Cost Components 52 11.3 When Estimating Cost Components Is Not Possible 55 Notes 55 12 Setting the Evaluation Criteria 56 12.1 Introduction 56 12.2 Types of Technical Proposal 56 12.3 Evaluation Criteria of Technical Proposals 57 12.4 Specific Experience (for the FTP only) 60 12.5 Methodology and Work Plan (for the FTP only) 60 12.6 Methodology and Work Plan (for the STP only) 61 vi CONTENTS Consulting Services Manual 2006 12.7 Key Professional Staff Qualifications and Competence for the Assignment (for both the FTP and STP) 62 12.8 Capacity-Building Program and Training (for the FTP only) 63 12.9 National Participation (for the FTP only) 64 12.10 The Point System 65 12.11 Evaluation Criteria and Subcriteria 66 Notes 66 13Advertising and Short List 67 13.1 Main Considerations 67 13.2 Advertising 67 13.3 Preparation of Short Lists 68 13.4 Associations between Consultants 69 13.5 Review and Approval of the Short List 69 Notes 69 14Request for Proposals 70 14.1 Introduction 70 14.2 Letter of Invitation 70 14.3 Instructions to Consultants 71 14.4 Technical Proposal Standard Forms 73 14.5 Financial Proposal Standard Forms 75 14.6 Standard Forms of Contract 75 Notes 75 15Types and Forms of Contract 76 15.1 Types of Consultant Contract 76 15.2 Selection of the Appropriate Contract Form 80 15.3 Bank Standard Contract Forms 80 Notes 80 16Preparation, Submission, and Evaluation of Proposals 81 16.1 Introduction 81 16.2 Preparation of Proposals 81 16.3 Evaluation Committee 81 16.4 Receipt and Opening of Proposals 84 16.5 Evaluation Procedure for Technical Proposals 84 16.6 Evaluation Procedure for Financial Proposals 86 16.7 Combined Quality and Cost Evaluation 87 16.8 Rejection of All Proposals 87 16.9 Role of the Bank in the Evaluation Process 88 Notes 88 17Evaluation Practices of Technical Proposals 89 17.1 Rating System 89 17.2 Specific Experience of Consultants Relevant to the Assignment (for the FTP only) 90 17.3 Adequacy of Proposed Methodology and Work Plan (for both the FTP and STP) 92 17.4 Qualifications and Competence of Proposed Key Staff (for both the FTP and STP) 95 17.5 Suitability of the Transfer-of-Knowledge (Capacity-Building) Program (for the FTP only) 97 17.6 Participation by National Consultants among Proposed Key Staff (for the FTP only) 98 Notes 98 CONTENTS vii Consulting Services Manual 2006 18 Negotiations and Award of Contract 99 18.1 Preparations for Negotiation 99 18.2 Items Subject to Negotiation 99 18.3 Outline of Negotiation Procedures 100 18.4 Limits of Negotiation 100 18.5 Negotiations of Technical Aspects 101 18.6 Negotiation of Financial Conditions 102 18.7 Negotiation of Contract Conditions 106 Notes 106 19 Supervising Consultants 107 19.1 Contract Effectiveness 107 19.2 Execution of the Assignment 107 19.3 Completing the Assignment 108 19.4 Bank Role in Supervision 108 20 Selection of Individual Consultants 110 20.1 Individual Consultants versus Consulting Firms 110 20.2 Selection of Individual Consultants 110 20.3 Hiring of Government Officials and Academics 111 20.4 Nepotism 111 Note 111 A P P E N D I X E S A1 Bank's Comments/No-Objection Forms 113 A1.1 Bank's Comments/No-Objection to Request for Proposals 114 A1.2 Bank's Comments/No-Objection to Technical Evaluation 115 A1.3 Bank's Comments/No-Objection to Contract Award 116 A2 Single-Source Selection Form 117 A2.1 Single-Source Selection Form 118 A2.2 Single-Source Selection--Example of Justifications 119 A3 Sample Work Schedule 121 A3.1 Assignment: Contract Design of a New Hospital 122 A4 Sample Staffing Schedule 123 A4.1 Sample Staffing Schedule 124 viii CONTENTS Consulting Services Manual 2006 A5 Cost Estimate Forms 125 A5.1 Cost Estimate 126 A5.2 Cost Estimate--Summary 127 A5.3 Cost Estimate--Staff Remuneration 128 A5.4 Cost Estimate--Reimbursables 129 A5.5 Cost Estimate--Office Costs 130 A5.6 Cost Estimate--Office Furniture and Equipment 131 A6 Form for Request for Expressions of Interest 133 A6.1 Consulting Services 134 A7 Examples of Evaluation of Proposals 135 A7.1 Project and Construction Management Services for a Water Supply System 136 A7.2 Technical Assistance Services for an Agricultural Development Program 137 A7.3 Technical Assistance Services for a Privatization Project 138 A8 Taxation of Consulting Services 149 A8.1 Taxation of Consulting Services 150 A9 The Design Contest 151 A9.1 The Design Contest Procedure 152 A9.2 The Request for Design Proposals 153 A10 Guidance Notes 157 A10.1 General 158 A10.2 Conflict of Interest Provision in Bank Guidelines and Level Playing Field 159 A10.3 Early Strategy Formulation Is Critical 160 A10.4 Dealing with the Selection of the Operator or Manager under the MC 161 A11 Statement of Integrity 163 A11.1 Statement of Integrity 164 A12 Procurement of Information and Communication Technology (ICT) 165 A12.1 Procurement of Information and Communication Technology (ICT) 166 A13 Consultant Performance Evaluation Form 167 A13.1 Consultant Performance Evaluation Form 168 A13.2 Consultant Performance Evaluation Checklist 169 R E F E R E N C E S 171 I N D E X 173 CONTENTS ix Consulting Services Manual 2006 F I G U R E S 1.1 Consulting Services Quality Cycle 3 9.1 The Steps of the Selection Process 38 9.2 Time Schedule of the Selection Process (Large Assignment with QCBS; Full Technical Proposal) 47 11.1 Estimating Cost and Budget 53 13.1 Steps in the Short-Listing Process 68 16.1 Preparation, Submission, and Evaluation of Proposals (QCBS Method) 82 17.1 Rating System 91 18.1 Negotiations (both Technical and Financial Proposals Received) 101 19.1 Supervising the Consultant 109 T A B L E S 1.1 Types of Consulting Services 2 3.1 Applicable Selection Procedures 15 4.1 Consultant Conflicts of Interest: Range of Possible Cases 19 12.1 Point Distribution of Evaluation Criteria for the FTP 58 12.2 Point Distribution of Evaluation Criteria for the STPT 59 12.3 Range of Percentage in Point Distribution of Key Professional Staff Qualifications and Competence Subcriteria 63 12.4 Distribution of Points between the Team Leader and Remaining Key Professional Staff 63 12.5 Distribution of Points between the Team Leader and Technical Disciplines 64 12.6 Allocation of Points to Main Criteria for the FTP 64 12.7 Allocation of Points to Main Criteria for the STP 65 12.8 Evaluation Criteria and Sample Subcriteria 65 15.1 Correlation between Type of Assignment, Selection Method, and Type of Contract 79 17.1 Recommended Grades and Percentage Rating for Specific Experience 91 17.2 Recommended Grades and Percentage Rating for Methodology and Work Plan 92 17.3 Recommended Grades and Percentage Rating for Qualifications and Competence of Key Staff 95 17.4 Recommended Grades and Percentage Rating for Suitability of the Transfer-of-Knowledge (Training) Program 97 18.1 Sample Payment Schedule 105 x CONTENTS Introduction Not everything that counts can be counted and not every- thing that can be counted counts. A . E I N S T E I N The World Bank (the Bank)1 finances consulting risk. Users of consulting services should always be assignments over a wide spectrum of sectors, from aware that the services given by professional consult- infrastructure and the environment to public sector ants represent a small proportion of the project cost reform and financial sector modernization, from and that most project failures or deficiencies hap- privatization to change management and system inte- pen or originate in the study-and-design phase or gration, from regulation to capacity building. When can be traced to faulty supervision during project engaging consultants financed by the Bank, Borrowers implementation. must follow procedures outlined in the applicable Guidelines: Selection and Employment of Consultants by Along with quality, a renewed demand for integrity World Bank Borrowers (Consultant Guidelines), as increasingly pervades all activities involving the public updated from time to time by the Bank.2 sector and its consultants. It has become obvious to all stakeholders that sustained investment in institutional Since it issued the first Handbook on Consulting Ser- reform and capacity building makes sense as long as the vices in 1985, the Bank has expanded the scope of its parties involved (which include consultants, suppliers, lending and technical assistance to Borrowers. As in contractors, public sector employees, and the political the past, consultants continue to be instrumental in sphere) abstain from corrupt practices. the successful preparation and implementation of Bank-assisted projects. Borrower requests from con- Governments, multilateral financial institutions, and sultants have gradually expanded from traditional donors have become increasingly aware that suitable design services of physical works to advisory services institutional design must take into account national in all fields encompassed by the comprehensive devel- circumstances, as well as the need for higher capacity opment approach that most Bank Borrowers have and accountability standards of public sector em- adopted. ployees responsible for conducting procurement, including professional consulting services. Although the quality of consulting services remains the key consideration in selecting consultants, the The adoption of results-oriented approaches to Bank places particular emphasis on the independence public sector activities and projects increases the of the consultants to ensure their objectivity and their use of professional skills in the public administration freedom from conflicts of interest. The cost of con- and brings renewed attention to the best-practice- sulting services remains a factor of selection to be used oriented use of consultants, which in turn highlights with measured prudence according to the features and the need for strengthening national consulting capac- complexity of the assignment, its potential down- ity in all professional fields. It is a desire of all govern- stream effects, and the Borrower's appreciation of ments to put in place procurement regulations that ensure the hiring of the most suitable consultants for their projects and at the same time help bring about 1. In this Manual, "the Bank" signifies the World Bank, in- the sustainable development of national consulting cluding the International Bank for Reconstruction and Development (IBRD) and the International Development capacities in all professional fields. Association (IDA). 2. Guidelines: Selection and Employment of Consultants by This new Consulting Services Manual (the Manual) World Bank Borrowers. World Bank, May 2004. takes all the above aspects into consideration, provid- xi Consulting Services Manual 2006 ing a more comprehensive guidance to Borrowers and terest, prevention of fraud and corruption, the trans- Bank staff on how to select and use consultants. fer of knowledge from consultants to Borrower staff, sources of financing available to Borrowers, the role of In recent years, the World Bank, together with the Borrowers in the process of consultant selection and Asian Development Bank, the European Bank for use of consulting services, and assistance provided by Reconstruction and Development (EBRD), the the Bank. Inter-American Development Bank (IDB), and the African Development Bank, put forward an ex- Chapter 9 introduces the process and the accepted tensive harmonization effort, with the aim to provide methods for selection of consultants, depending on Borrowers and consultants with a nearly common the nature of the assignment, its complexity, the size set of procedures for the selection of consultants. of the project, and its downstream effects. Because of this effort, in May 2004 a new, harmonized edition of the World Bank Standard Request for Pro- Chapters 10­11 and 13­15 give guidance on the posals (SRFP)3 was issued. This new edition of the preparation of the consultants' short list and the Manual takes into account the changes appearing in different sections that make up the Request for Pro- the May 2004 edition of the Guidelines and the harmo- posals. Chapter 12 illustrates the differences between nized SRFP, among which were the introduction of the the Full and the Simplified Technical Proposals and Simplified Technical Proposal for the selection of con- provides guidance on the selection of evaluation crite- sultants; the revised policies on conflict of interest and ria and subcriteria for both of them. Chapters 16­18 on fraud and corruption; the new, easy-to-use techni- give advice on the evaluation and selection of propos- cal and financial proposal submission forms; and the als and negotiation of contracts with consultants. harmonized versions of the time-based and lump-sum forms of contract. At the beginning of 2005, IADB Chapter 19 provides guidance on the supervision of adopted consultant guidelines that differ from the consultants' work until the assignment is completed. World Bank Guidelines and the SRFP only in the pro- visions related to consultant eligibility and to fraud and Finally, chapter 20 concludes with advice on the corruption. employment of individual consultants. This Manual provides detailed guidance to Borrowers, An overly restrictive or rigid interpretation of the Bank staff, and consultants on the application of Bank's Consultant Guidelines can lead to failure in mandatory provisions of the Consultant Guidelines, achieving an effective selection process; adoption of the SRFP, and related Bank policies, and it provides too lax or informal relationships between Borrower advice on the application of professional best practices and consultant may reduce transparency or compro- on aspects of a nonmandatory nature.4 In addition, mise propriety; and excessive weight assigned to price appendix 10 contains a Guidance Note that should be in the selection may affect the quality of the services considered mandatory. For more detailed assistance and put the entire project at risk. In light of the above, on consulting services matters, users of this Manual the Manual's chief intent is to help Borrowers make a may seek advice from the appropriate Bank procure- balanced and sensible use of the Guidelines and of the ment specialists; the Consulting Services Adviser; and harmonized SRFP, which, if properly applied, should the Legal Department, Procurement and Consultant help obtain the consulting services that best suit Bor- Services (LEGPR). rowers' needs. Chapters 1­8 provide an overview and information This 2006 edition of the Manual has been produced by on the different types of consulting services currently the Procurement Policy and Services Group (OPCPR) financed by the Bank, the main characteristics of con- under the responsibility of Gian Enrico Casartelli, sultants' organizations, and general Bank policy and Consulting Services Adviser, with the assistance of procedures for use of consultants. These chapters also many who share similar professional interests, both illustrate and explain Bank policies on conflict of in- inside the Bank and around the world. Consultants Franco de Siervo and Piero Ravetta provided extensive technical advice. Alfonso Sanchez, Robert Hunja, and 3. "Standard Request for Proposals--Selection of Consul- tants." World Bank, May 2004. Kjell Nordlander reviewed and commented on the 4. OP/BP 11, "Procurement under Bank-Financed Opera- text. Teia Thompson-Brown, Nancy Bikondo, and tions." World Bank, July 2001. Francis Speltz contributed to its editing. xii INTRODUCTION Abbreviations and Acronyms AMS Administrative Manual Statement BB Administrative Budget COI Conflict of Interest CP Commercial Practices CPAR Country Procurement Assessment Report CQS Selection Based on Consultant's Qualifications CSM Consulting Services Manual CTF Consultant Trust Fund CV Curriculum Vitae DC Design Contest dgMarketDevelopment Gateway Market EBRD European Bank for Reconstruction and Development EC Evaluation Committee ED Bank Executive Director EOI Expression of Interest ESMAP Energy Sector Management Assistance Program FBS Selection under a Fixed Budget FC Foreign Currency FIDIC Fédération Internationale des Ingénieurs Conseils (International Federation of Consulting Engineers) FTP Full Technical Proposal GCC General Conditions of Contract GEF Global Environment Facility GPN General Procurement Notice GPP Global Programs and Partnerships IDB Inter-American Development Bank IBRD International Bank for Reconstruction and Development ICT Information and Communication Technology IDA International Development Association INT Department of Institutional Integrity IPO Initial Public Offering ISO International Organization for Standardization IT Information Technology ITC Instructions To Consultants LC Local Currency LCS Least-Cost Selection LEGPR Legal Department, Procurement and Consultant Services Unit LOI Letter of Invitation MC Management Contract METAP Mediterranean Environment Technical Assistance Program NGO Nongovernmental Organization xiii Consulting Services Manual 2006 OPCPR Procurement Policy and Services Group OPRC Operational Procurement Review Committee PA Procurement Agent PAD Project Appraisal Document PHRD Policy and Human Resources Development PID Project Information Document PIU Project Implementation Unit PPF Project Preparation Facility QBS Quality-Based Selection QCBS Quality- and Cost-Based Selection QM Quality Management RFP Request for Proposals RPM Regional Procurement Manager SBD Standard Bidding Document SCC Special Conditions of Contract SOE Statement of Expenditures SRFP Standard Request for Proposals SSS Single-Source Selection STP Simplified Technical Proposal TAL Technical Assistance Loan TF Trust Fund TOR Terms of Reference UN United Nations UNDB United Nations Development Business UNDP United Nations Development Programme VAT Value Added Tax All dollar amounts are U.S. dollars unless otherwise indicated. xiv ABBREVIATIONS AND ACRONYMS C H A P T E R 1 Consulting Services 1.1 Background or affiliations that could lead them to bias their judg- ment and advice. "Consulting services" refers to services of a profes- sional nature provided by consultants using their skills to study, design, organize, and manage projects; advise Borrowers; and, when required, build their ca- 1.2 Types of Consulting Services pacity. Consultants offer Borrowers the possibility of For this Manual, one must distinguish between profes- a more effective and efficient allocation of their re- sional consulting services and other types of services in sources by providing specialized services for limited which the physical component of the activity is crucial, amounts of time without any obligation of permanent although the boundary between them blurs in some employment. cases. The latter often involve equipment-intensive as- ConsultingservicesengagedbyBorrowersinBank- signments using established technologies and method- funded projects encompass multiple activities and ologies that have measurable physical outputs--for disciplines, including the crafting of sector policies example, field investigations and surveys such as car- and institutional reforms, specialist advice and inte- tography, aerial surveys, satellite mapping, drilling, grated solutions, change management and financial computer services and installation of information sys- advisory services, planning and engineering studies, tems, and plant operation and maintenance. These and architectural design services. Consultants also services are procured under the Bank's guidelines for provide project supervision, social and environmen- procurement of goods and works, also called "Procure- tal assessments, technical assistance, and program ment Guidelines."1 implementation. Consulting services may vary from In some fields, such as information and com- simple routine tasks to highly specialized and complex munication technology (ICT), utility management, assignments. and complex plant operation, where the contracts Consulting services in Bank-funded projects include services of varying degrees of complexity as should satisfy the following requirements: well as hardware, an accurate analysis may be neces- · Meet high standards of quality sary to determine the predominant features of the as- · Be impartial (that is, delivered by a consultant act- signment and decide whether to award the contract ing independently from any affiliation, economic or following the Bank's Guidelines for the Selection and otherwise, that may lead to conflicts of interest) Employment of Consultants (hereafter, Consultant · Be proposed, awarded, administered, and executed Guidelines) or in accordance with the "Procurement according to the highest ethical standards Guidelines." The specialist in the field of the assign- ment and the relevant procurement specialist in the Impartiality, together with creativity, is the most Bank should be consulted if any uncertainty arises as important asset offered by consultants. It allows con- to which Guidelines are to be followed. sultants to study alternatives and recommend solu- Appendix 12 of this Manual provides guidance on tions, technologies, and products from a range of current Bank approaches and standard documents on possible suppliers and contractors in the best interest ICT procurement. of the Borrower. Consultant impartiality results from Current consulting services used in Bank projects the consultants' independence and freedom from ties may be grouped (see table 1.1). 1 1 . 2 Types of Consulting Services Table 1.1 Types of Consulting Services Project services Preparation services Implementation services Advisory services Sector studies Tender documents Strategy and policy Master plans Procurement assistance Regulation Feasibility studies Construction supervision Institutional reform Design studies Project management Capacity building Specialist studies Integrated solutions Management and leadership Training Information technology 1.3 The Quality of As box 1 of figure 1.1 shows, government policies Consulting Services regarding professional consulting services as part of the knowledge economy may be formulated by a high- 1.3.1 The Consulting Services level advisory body (for example, a state council) com- Quality Cycle prising policy-making ministries such as planning, The primary objective of this Manual is to assist science and technology, and education. Policy making Borrowers in obtaining high-quality consulting serv- is fed and fine-tuned by the continuous dialog that ices that allow a more effective, efficient, and economic should be promoted between this advisory body and use of their resources. Through consulting services, the country's professional associations (box 3). Borrowers can adopt innovations and best practices The legislation on public sector procurement (that that add value to their activity and enhance growth and is, selection and employment) of consultants should welfare in their societies. result from the policy mentioned above, from evolving For a consulting organization to thrive, first at an best practices from the private sector, from inter- individual and subsequently at a firm level, it is neces- national lending institutions, and from countries with sary for the consultant to persuade the Borrower and well-established professional economies. society that high-quality consulting services are major Public sector demand for professional consulting factors in helping them achieve their objectives with services is primarily generated by technical ministry the best possible use of their resources. departments--naturalresources,infrastructure,energy, To help their countries achieve higher and sus- industry, finance, executing agencies, and so forth-- tainable socioeconomic growth, governments must that require specialized services of an intellectual nature adopt policies that raise the productivity of investment (box 4). through the adoption and dissemination of innovative The demand for services is conveyed to consult- processes and products. These policies would create a ants through requests for proposals (RFPs) for profes- suitable environment that encourages and sustains the sional assignments (box 5). RFPs should be structured creation and growth of independent consulting pro- and worded in accordance with the procurement fessions in the technical and managerial fields, as well regulations of the public sector institutions of the as sound demand for the services of such professions. country, or as agreed on with the funding agency, The role of the government in the professional knowl- such as those of the World Bank that are explained edge sector is particularly important for all developing later in this Manual. Shortlisted consultants compete countries(seefigure1.1,box2),particularlyininstances for the contract by offering services that meet or sur- where the private sector is not yet aware of the valu- pass the quality criteria set out in the Terms of Ref- able contributions that consultants can offer. Govern- erence (TOR). ment should assume this role also because in many If the RFP, including the contract conditions, is at- developing countries, public administrations are the tractive and the Borrower has a good reputation for most important clients of consultants in variety, com- valuing quality services and for treating consultants plexity, and number of problems faced. fairly, good consultants will be keen to respond to the 2 CONSULTING SERVICES Quality Management 1 . 3 . 2 Figure 1.1 Consulting Services Quality Cycle 1 Government Advisory Council: 13 12 Lessons Ministries of Science Culture of Quality Learned & Technology, Planning, Education 2 3 Coherent Dialogue on Quality 11 Increased Quality Policy and between Government & GPN Legislation Professional Associations 4 Technical Ministries 14 & Departments: Consultant 10 Natural Resources, Increased Improved Infrastructure, Experience & Investments Energy, Industry, Qualifications Finance, and Others 15 9 5 TOR and RFP, Professional Quality Aspects: including Development Innovativeness, Specifications Increases Quality of Efficiency, for Quality Consulting Services Impartiality, Sustainability 8 6 7 Professional Consultants Quality Management Consulting Services Borrower's call and serve to the best of their capacity Borrowers and the country will provide validation (see boxes 6­8 of figure 1.1, and para. 1.3.2). The many of, and consensus to, government policy on quality, quality aspects of services provided by consultants thereby stimulating, expanding, and deepening gov- (box 9) will eventually find their way into Borrowers' ernment demand for high-quality services. strategies, plans, decisions, and projects. Investments Based on the above-described quality cycle, de- will embody innovations and efficiencies derived veloped and developing countries achieve higher and from the consultant's advice (box 10) and will directly sustainable rates of growth. Bank policy on the selec- benefit the business of the Borrower, as well as the tion and use of consultants laid out in the Guidelines: well-being of the stakeholders in many different ways Selection and Employment of Consultants by World (box 11). Bank Borrowers and in the Bank's Standard Request The lessons learned by consultants and Borrowers for Proposals are designed to help set the quality cycle in their projects (box 12) will contribute to the culture in motion within Borrower countries and ensure its of quality in the country (box 13) and to the experi- sustainability. ence (that is, the knowledge capital) of the consultants themselves (boxes 14­15). This culture of quality will, 1.3.2 Quality Management in turn, sustain the dialog between the government and professional associations (box 3). At the same Quality management (QM), or quality assurance, time, benefits realized by high-quality services to designates all planning, preparation, work, checking, CONSULTING SERVICES 3 1 . 3 . 2 Quality Management and measuring activities necessary to achieve desired the effects of a possible lack of joint work experience standards of service. These activities should not be con- among the project team members. sidered additional or optional, but rather an integral The number of consulting firms of medium to part of doing the job properly. QM is based largely on large size working under a certified QM system is in- common sense and good business and management creasing in developing countries. Bank policy does not practices. ask Borrowers to require consultants to provide qual- The requirements of an effective QM system are ity certification in Bank-financed assignments. How- set out in, for example, the International Organization ever, because the presence of an effective QM system is for Standardization (ISO) 9000 standards, which de- beneficial for the assignment, a requirement to work fine the technical and administrative procedures and under an effective QM, even if not certified, should be systems that a well-run organization should use to provided for in the TOR for large or complex assign- provide a consistent standard of service and meet the ments (see para. 17.2.2). In such a case, consultants Borrower's needs. Evidence that a satisfactory QM should be asked to provide in their proposals either the system is in place is based on certification by an ac- Quality Plan they intend to adopt or simply a detailed credited independent body that confirms that an or- list of its contents. The proposed Quality Plan or its list ganization has a QM system that conforms to all of contents could be factored into the evaluation of established standards and is appropriate for the serv- proposals (see para. 17.3.2). Where proposals include ices it provides. only the detailed list of the Quality Plan, the winning Consulting organizations working according to a consultant will be required to prepare the Quality Plan QM system offer Borrowers a greater assurance that at the start of the assignment. the consultant will perform as required. More impor- tant, QM is an effective tool to identify defects and er- rors, as well as their origins and authors. Notes QM is also an effective tool for mitigating the neg- ative effects resulting from some consulting firms' ex- 1. Guidelines: Procurement under IBRD Loans and cessive hiring of technical and professional staff under IDA Credits. World Bank, May 2004. term contracts. Although the hiring of free-lancers re- 2. Quality Plan: the document defining the specific duces the firm's fixed costs, it can create a situation in quality practices, resources, and sequence of activi- which the key staff being used for a specific assignment ties relevant to a particular assignment (ISO 10005: predominantly comprise outside individuals possess- Qualitymanagement--Guidelinesforqualityplans). ing the required expertise but having no experience The Quality Plan tailors the specific assignment working as a team. When QM is applied to a specific to the standard QM procedures in place with the assignment through a Quality Plan,2 it helps neutralize consultant. 4 CONSULTING SERVICES C H A P T E R 2 Consultants 2.1 Main Considerations · for-profit corporations, · state-owned enterprises, and In this Manual, the term "consultant" or "consult- · foundations and nonprofit organizations. ants" refers to any organization or individual provid- ing professional consulting services to a Borrower (or client) under a contract funded by the Bank. This 2.2.1 Individual Professional Practices chapter describes the main characteristics of the most The individual professional practice (sole proprietor- common types of consultant organization engaged by ship) is the oldest, most common, and simplest form Borrowers in Bank-funded activities. of consultant organization. A sole proprietorship is a When hiring consultants through a competition, business entity owned and managed by a single pro- Borrowers should be aware of the distinction between fessional, can be organized rather informally, and is organizations whose core business is exclusively the relatively simple to manage and control. The prevalent provision of professional consulting services (that is, characteristic of a sole proprietorship is that the owner consulting firms) and other organizations with a dif- is inseparable from the business and is financially and ferent mission or core business and cost structure that legally responsible for it. occasionally provide consulting services and may en- An individual professional practice is a good or- joy subsidies and other privileges from third parties, ganizational format for an individual starting a pro- under varying degrees of independence. This distinc- fessional activity that will remain small, does not have tion is important because it can affect fairness of com- great exposure to liability, and does not justify the ex- petition, especially when price is a factor for selection. penses of incorporating and other recurring corporate The degree of independence of the consultants is also formalities. to be considered, because it constitutes an important indicator of the impartiality required of the consultants in delivering their services. These "other organizations" 2.2.2 General Partnerships may include state-owned organizations, universities, A general partnership is a traditional form of consult- research institutes, UN agencies, and nongovernmental ing firm in which two or more individuals practice organizations (NGOs) (para. 13.3.1). Consulting firms their profession as co-owners. Some consulting part- affiliated to these "other organizations," private or nerships have been in business for more than 150 years public, that because of their affiliation cannot be con- and may range in size from small firms with a few part- sidered fully independent, belong also this group. ners and associates to large partnerships with a staff of thousands. Because senior professionals employed in a private partnership may embody substantial knowl- 2.2 Consulting Organizations edge capital and often possess a long-term personal relationship with clients, it is relatively easy for them The most common arrangements under which consult- to resign and start a new firm. For this reason, key em- ants engaged in Bank projects are legally organized are ployees in these consulting firms are often offered a · individual professional practices, partnership in the firm. · general partnerships, Under this organizational model, partners share · limited-liability companies, the risk of managing and participating in the profits, 5 2 . 2 . 2 General Partnerships but they also share personal unlimited liability for the shareholders are not exclusively board members and losses and debts accrued by the business. Each partner officers. Capital needed for expanding corporate can take actions that legally bind the partnership even activities, such as the acquisition of other organiza- though not all partners are consulted. The partners tions, may be raised by selling shares and corporate share the profits of the firm, and the partnership pro- securities. tects itself against professional risks by seeking ade- In publicly held corporations, management has no quate professional liability insurance. control over the potential--and sometimes radical-- Management consultants and law firms often change in ownership that may result from share trad- operate as limited partnerships, with (a) general part- ing even when such changes affect the business, unless ners, who have all rights, duties, and obligations, as in the management owns a controlling fraction of the a general partnership, and (b) limited partners, whose company's shares. Moreover, key employees can use liability is limited to the amount they have initially the threat of resignation to obtain pay increases and contributed to the partnership, who generally do not other benefits at the expense of shareholders. Con- take part in the management of the partnership, and sequently, individuals who are not employed in the who may not contribute services to the partnership, company are often reluctant to own its shares. but only money or property. 2.2.5 State-Owned 2.2.3 Limited-Liability Companies Consulting Organizations Over the past few decades, consultants have been Some consulting organizations may be directly or in- increasingly incorporated as limited-liability private directly owned by, or affiliated with, the state and are companies because of the advantages to be gained government controlled. Examples of such organi- from operating as a company, rather than as a part- zations include offshoots of the public sector such as nership. Such organizations have two fundamental national electricity authorities, water and public trans- characteristics: they are legal entities that exist sepa- portation companies, and assorted ad hoc consulting rately from their members, and these members have arms of a government. These organizations can usually no personal liability for the firm's obligations, includ- call on a wide range of experts from within govern- ing debt and any negligent act of the company's staff ment staff to provide consulting services domestically or its shareholders. Most consulting engineering and and abroad. architectural firms are limited-liability companies. In former socialist economies, the government usually, though not exclusively, provides these organi- zations with subsidies or protection (or both), thus giv- 2.2.4 For-Profit Corporations ing them an unfair advantage when competing with Although partnerships have a tendency to become private and independent consultants. The subsidies can limited-liability companies, only a few of the latter be- range from free office space and technical facilities to a come for-profit corporations. These corporations are professional staff made available at nominal costs per- usually large consulting firms with stable income manently or when needed. These subsidies allow the flows and can therefore be organized as stock compa- state-owned consultants many sorts of unfair practices, nies, with shares held in part or wholly by the public such as predatory pricing, when competing against pri- and (in some instances) traded on stock exchanges. vate consultants. Liability of shareholders is limited to the amount of State-owned consulting organizations may also their investment in the company's stock. receive preferential treatment when allowed to com- There are two types of for-profit corporation. In pete against private consulting firms because some of a closely held corporation, a small number of share- their staff retain close ties with the public administra- holders own the corporation's shares. Share transfer tion to which they are affiliated and (by extension) also restrictions are likely, and the owners are usually the with the government. Under such circumstances, good board members, managers, and employees of the cor- private consulting firms are often intimidated and thus poration. In a publicly held corporation, in which avoid seeking participation. Furthermore, in countries shareholders are part of the general public, no share- where consulting is just emerging, good professionals transfer restrictions are usually provided. In addition, are too often discouraged from taking the risk of start- 6 CONSULTANTS Nongovernmental Organizations 2 . 3 . 4 ing their own independent consulting firms or even cases, they may operate an internal selection process decide to leave their profession. and arrange for one of their members, or an associa- To reduce or mitigate the effects of these poor tion of members, to express interest as a candidate for practices in Bank-funded projects, state-owned con- the competition. sulting organizations and design-and-research institutes are deemed ineligible to compete when the contracting 2.3.3 Universities and Research Institutes agency has a material tie or any other form of control over them. Universities provide a wide range of expertise and often compete for consulting services contracts. Hiring government-owned universities and research institutes 2.3 Particular Types of Consultant from the Borrower's country as consultants often raises the questions of eligibility mentioned in para. 3.2.3 of 2.3.1 UN Agencies this Manual. Universities and, to a lesser degree, re- UN agencies may be hired under Bank-funded proj- search institutes often do not meet the requirements ects to provide technical assistance and advice in pre- set out in para. 1.11 (b) of the Consultant Guidelines be- paring and implementing activities or projects. Their cause they are not legally or financially autonomous, participation may include professional services, rec- do not operate under commercial law, or are depend- ruitment of individual staff, execution of service con- ent agencies of the Borrower or Sub-Borrower. When tracts, administration of fellowships, management considering institutions in this category, the Borrower services (including procurement), and so forth. While should verify that the legal status of the organization UN agencies are frequently appointed on a single- allows it to enter into binding contractual agreements. source basis because of an emergency or because of Borrowers should also be aware that the teaching their unique knowledge and experience, there are in- and research priorities of academics from these insti- stances where Bank Borrowers invite them to compete tutions may conflict with the demanding commit- with other types of consultant. In a competitive selec- ments that complex consulting assignments impose on tion process for a Bank-funded assignment, UN agen- the experts. Furthermore, for the sake of fairness, when cies should not receive any preferential treatment comparing proposals from universities and research compared with other consultants, except for privileges institutes with those from independent consultants, and immunities and certain payment arrangements the proposed price of the services should not be used where acceptable to the Bank. These privileges, as well as a factor of selection, unless it can be clearly estab- as other advantages such as tax exemptions and spe- lished that the academics do not receive any subsidies cial payment provisions, shall be neutralized by adopt- from the organization to which they are affiliated. ing the selection method based only on quality (QBS). 2.3.4 Nongovernmental Organizations 2.3.2 Consulting Marketing Groups The Consultant Guidelines include nongovernmental Consulting firms may form marketing groups and en- organizations (NGOs) under the term "particular types trust them with promoting and marketing their serv- of consultant." NGOs are voluntary, nonprofit organ- ices internationally. These groups often receive their izations that can be uniquely qualified to assist in pre- government's backing to advance the potential of na- paring, managing, and implementing certain projects tional firms. Sometimes, the marketing groups also en- because of their involvement in complex social envi- gage experts from government departments. Some of ronments, knowledge of local issues and community these groups can compete for consulting contracts needs, and work approach based on participation and under the group name. The comparative advantage of (as with professional consultants) mutual trust. these organizations is their access to vast pools of ex- NGOs may include large, international nonprofit perts. The disadvantage is that the experts may have and welfare organizations that often possess impres- little experience with teamwork, limiting their suitabil- sive track records of work in development projects, ity for assignments requiring integrated efforts. These rigorous management systems, formal administrative groups often limit their work to marketing and identi- procedures, strong rosters of dedicated expert staff, fying assignments of interest to their affiliates; in some up-to-date knowledge infrastructures, and autonomous CONSULTANTS 7 2 . 3 . 4 Nongovernmental Organizations capabilities to raise funds. At the local level, NGOs are sponsoring them, because this determines the degree of often community-based, grassroots organizations that independence--and hence of impartiality--that can be may be loosely structured, yet have strong ties and expected from them by the client. When these institu- in-depth knowledge of their communities. Partners of tions wish to be considered for Bank-funded assign- NGOs range from central governments and local com- ments, Borrowers must be aware of how the affiliation munities to churches, foundations, and international of these institutions may affect the impartiality of their financial institutions. advice for the specific assignment and for any other that NGOs frequently provide consulting services in may be generated from the initial one. Bank projects, undertaking the roles of project man- agers, community advisers, and providers of technical 2.3.6 Procurement Agents assistance. The Bank considers NGOs among its best and Inspection Agents partners in the social sector and in community-based projects, because NGOs generally have unparalleled Agents specializing in procurement sometimes pro- local knowledge and a close rapport with disadvan- vide assistance to Bank Borrowers who either lack the taged communities. Most international NGOs also institutional capacity to carry out procurement or are offer many years of experience in particular countries faced with emergency situations. Procurement agents and employ predominantly local staff. can either carry out the procurement on behalf of the Borrower or provide procurement advice and training to the Borrower's staff. In the first instance, the agents 2.3.5 Financial Institutions assume full responsibility in carrying out the procure- Investment and commercial banks, financial services ment process, including the decision to award pay- firms, and fund managers often provide Bank Bor- ments to suppliers and the follow-up of claims. For rowers with consulting services such as restructuring, these services, procurement agents are paid a percent- evaluation, and sale of assets; privatization; and various age of the value of the goods procured or a combina- other financial transactions. Large financial institutions tion of a percentage and a fixed fee. often have, as an integral part of their organization, Inspection agents specialize in inspecting goods well-established and experienced research departments. before shipment or upon arrival in the Borrower's Some of them have created separate groups or incor- country. They also certify that the goods fulfill the re- porated them as companies that market their services quired specifications of quality and quantity and are with varying degrees of independence. What makes all appropriately priced. Inspection agents receive a per- of these affiliates a particular type of consultant is the centage of the value of the goods inspected and certi- relationship that they maintain with the institution fied or a predetermined amount for each inspection. 8 CONSULTANTS C H A P T E R 3 General Policies and Principles in the Use of Consultants 3.1 Main Considerations in the and procedures that are likely to provide the best pos- Selection of Consultants sible balance between these principles, whereby the quality of the services remains the primary objective The Bank's fiduciary responsibility as laid out in its of any selection. Articles of Agreement requires the Bank to "ensure that The Loan Agreement governs the legal relationship the proceeds of any loan are used only for the purposes between the Borrower and the Bank. The rights and ob- for which the loan was granted, with due attention to ligations of the Borrower and the consultant are gov- considerations of economy and efficiency and without erned by the Request for Proposals (RFP) issued by the regard to political or other non-economic influences Borrower and by the contract signed by the Borrower or considerations."1 The procurement arrangements with the consultant, and not by the Consultant Guide- required under a specific Bank-funded project for at lines or the Loan Agreement. least an initial 18 months are set forth in the project The Borrower is responsible for selecting, eval- Procurement Plan. These arrangements include con- uating, awarding, and supervising the consultant sulting services contracts, proposed selection methods, under the assignment and for complying with the and Bank review procedures. rules laid down in the Procurement Plan. The Bank Bank policy on the selection of consultants, as in- reviews the hiring of consultants by the Borrower to dicated in the Consultant Guidelines, is guided by the verify that the selection process is carried out in ac- following principles: cordance with the provisions of the Guidelines, and · High quality of services it monitors the work of consultants during execu- · Efficiency and economy tion to make sure that it is being carried out according · Competition among qualified consultants from all to appropriate standards and is based on acceptable eligible countries data. · Participation of national consultants · Transparency 3.2 Eligibility In practice, each of these principles may be stressed more or less, depending on the circumstances 3.2.1 General of the Borrower, and to a certain extent they compete The term "eligibility" refers to the authorization to with each other. Increasing the quality of services may compete for a Bank-funded project. To foster compe- affect economy, or increasing transparency and com- tition, the Bank permits firms and individuals from all petition may require detailed and time-consuming countries to offer consulting services for Bank-financed procedures that can impact upon short-term process projects. efficiency and cost. Tension may develop between the Consultants may be ineligible and hence excluded two competing policies of hiring qualified consultants from participating in Bank-financed assignments in from all eligible countries on one hand and promot- the following circumstances (see para. 1.11 of the ing the development of national consultants on the Consultant Guidelines): other. Depending on the objectives and characteristics of the assignment, the Bank and the Borrower deter- · Legislation in the Borrower's country prohibits mine in the Procurement Plan the selection method commercial relations with the consultant's country 9 3 . 2 . 1 General of origin, and the Bank is satisfied that the exclusion curement Plan, with a full justification given. If the does not preclude effective competition. need arises to hire consultants from such institutions · By an act of compliance with a decision of the UN during the implementation of a project, Bank approval Security Council, the Borrower's country has im- should be obtained from the Regional Procurement posed economic sanctions against the consultant's Manager. country of origin. · The Bank has declared the consultant ineligible 3.2.4 Government Officials to take part in Bank-financed projects because of and Civil Servants fraudulent or corrupt practices on the part of the consultant. Government officials and civil servants may be hired under consulting contracts, either as individuals or as members of the team of a consulting firm, only if 3.2.2 State-Owned Consulting Organizations · they are on leave of absence without pay, · they are not being hired by the agency they were State-owned organizations, government-controlled working for immediately before taking leave, and agencies, and the like are eligible to take part in Bank- · theiremploymentwouldnotgiverisetoanyconflict financed consulting assignments in their country of of interest (COI) (see para. 1.9 of the Consultant origin only if they can establish that they (a) are legally Guidelines). and financially autonomous, (b) operate under com- mercial law, and (c) are not a dependent agency of the When the consultant nominates any govern- Borrower or Sub-Borrower (see para. 1.11 (b) of the ment official or civil servant as personnel in its tech- Consultant Guidelines). For example, under this pol- nical proposal, the consultant shall attach to its icy, the Bank does not finance a consulting contract proposal a written certification from the government between the government agency that oversees the or the employer of such personnel confirming that project implementation and a consultant that is owned he or she is on leave without pay from his or her of- by, or is under the administrative control of, that same ficial position and allowed to work full-time outside government agency. Government-owned agencies are of his or her previous official position (see para. 1.6.3 eligible to take part as consultants in Bank-financed of the Instructions to Consultants (ITC) attached to projects in other countries if they meet the eligibility the RFP). requirements listed under para. 3.2.1. 3.2.3 Universities and Research Institutes 3.3 Use of National Consultants These same principles (see paras. 3.2.1 and 3.2.2) The primary responsibility for the development of apply to universities and research institutes in the national consulting professions lies with the consult- Borrower's country, but they are applied more flexi- ants themselves and with the government policies on bly. Government-owned universities, research insti- the provision of consulting services and the use of na- tutes, and training institutions that do not meet the tional consultants. For projects to be successful, the criteria set forth under para. 3.2.2 above, may be hired participation of national consultants who have unique either directly or as subconsultants only when the serv- knowledge of the local context and its particular con- ices required are of a unique and exceptional nature; ditions is very often necessary. According to para. 2.7 when their participation is critical to project imple- of the Consultant Guidelines, national consultants in- mentation; and when no suitable alternatives are avail- clude all those consulting organizations that are regis- able, provided they are not under the Borrower's or tered or incorporated in the country of the Borrower Sub-Borrower's direct supervision or administrative independent from the nationality of their owners and control. of their professional staff. The Bank supports Borrower In a competitive selection process, they may take policies aiming to develop and strengthen the national part only as subconsultants. Their engagement should consulting professions in Borrower countries by pro- be agreed on by the Borrower and the Bank during moting the use of qualified national professionals as project preparation and indicated in the project Pro- consultants. 10 GENERAL POLICIES AND PRINCIPLES IN THE USE OF CONSULTANTS General 3 . 4 . 1 The Consultant Guidelines (paras. 2.6, 2.7, and An association of consultants can take either the 2.15) contain the following provisions to foster par- form of a joint venture or a subcontract (subconsul- ticipation of national consultants: tancy). Under a joint venture, all members, if awarded the contract, shall individually sign and be jointly and · At least one firm from a developing country should severally liable for the entire assignment. In some be included in the short list, unless no qualified countries, terms such as "consortium" and "associa- firms from developing countries are available. tion" are used as synonyms for "joint venture." If this · Short lists may comprise only consultants who are is the case, the Borrower and Bank staff must ensure nationals of the Borrower country when the esti- that the firms are jointly and severally liable for the as- mated cost of the assignment is small (below the ceil- signment. The firm providing the core expertise is ing[s] established in the Procurement Plan approved usually designated the leading firm in the joint ven- by the Bank), competition including foreign con- ture. Under this arrangement, each partner has to be sultants is prima facie unjustified (for example, be- reasonably qualified to take over the responsibilities cause the assignment is not suitably complex), or if and role of any of the partners in case one of them fails foreign consultants have not expressed interest and to perform or withdraws. The Borrower should retain a sufficient number of qualified national firms are the right to approve any change in the composition of available. However, if foreign firms express interest, the joint venture and the revised work plan proposed they shall also be considered for shortlisting. by the remaining partner(s). · Borrowers may encourage foreign consultants to If the structure of the consulting firms that wish associate with qualified national firms; the Con- to associate (diversity of size, purpose, and objectives) sultant Guidelines allow for up to 10 points out of does not naturally point to a joint venture, but their 100 to be allocated in the technical evaluation to collaboration appears advantageous, they can decide the participation of nationals. However, the Bank that one (the leading consultant) will subcontract does not accept as a condition for participation the work to the other firm(s). The Borrower expects the requirement of mandatory association with natio- leading consultant to play the main role in the provi- nal firms. sion of the services; however, the Bank does not es- tablish limits for the percentage of services that can be Country Procurement Assessment Reviews subcontracted or for the specific technical and man- (CPARs) for specific Borrower countries, prepared pe- agerial roles that may be assigned to the subconsul- riodically by the Bank, may include a component ded- tant. The consultant's own appreciation and need of icated to consultants, with special attention to issues the subconsultant's capabilities should determine the on the sustainable development of independent na- scope and size of the participation of subconsultants tional consulting professions, to identify and evaluate to be proposed to the Borrower under the assign- the capabilities, potential, and strengths of national ment. To limit the quality risks related to subcon- consultants. tracting, the Borrower may consider the homogeneity of the proposed work team when evaluating the "or- ganization and staffing" of technical proposals (see 3.4 Associations between para. 17.3.3). Consultants When expressing interest in Bank-funded as- signments, consultants shall indicate whether they 3.4.1 General are expressing such interest alone or in association Bank policy requires that consultants be free to asso- (for example, joint venture or subconsultancy). The ciate and complement their respective areas of expert- RFP will indicate whether shortlisted firms are al- ise; to increase the technical responsiveness of their lowed to associate among themselves, either as a proposals and make larger pools of experts available; joint venture or within a subconsultancy agreement. to provide better approaches and methodologies; and, Normally this is not allowed because it reduces com- in some cases, to offer lower prices. Consequently, the petition among an already restricted number of short- Bank does not accept mandatory associations with listed firms. national firms; however, Borrowers may encourage A shortlisted consultant must first obtain the association with them. approval of the Borrower if it wishes to enter into a GENERAL POLICIES AND PRINCIPLES IN THE USE OF CONSULTANTS 11 3 . 4 . 1 General joint venture with either a shortlisted or a nonshort- posal, but must have a letter of intent indicating their listed consultant. When several shortlisted firms ex- intent to form a joint venture if awarded the contract. press the intention to associate among themselves, thus reducing competition, the Borrower may, with 3.4.2 Specialized National Consultants the approval of the Bank, extend the time for sub- mitting proposals and invite additional consultants. In preparing their proposals, consultants are free to In case of association with nonshortlisted consult- choose their subconsultant(s), as well as distribute the ant(s), the shortlisted consultant shall be the lead tasks of the assignment between themselves and the consultant. subconsultants as they deem fit. Unlike joint ventures, A shortlisted firm shall submit only one proposal subconsultants do not need to be declared when the in the same selection process, either individually as a expression of interest is submitted. proponent or as a partner in a joint venture. No short- However, in some cases, only one qualified local listed firm can be a subconsultant while submitting a consulting firm may exist in a particular field. This is proposal individually or as partner in a joint venture often the case, for example, in countries with former in the same selection process. A shortlisted firm that state-directed economies in which state-owned con- takes part in more than one proposal will lead to the sulting firms have become independent. Some of disqualification of all the proposals in which the firm these firms specialize in only one discipline, and they participates. may be the only firm in the country with the mini- However, nonshortlisted consultants may take mum required qualifications and experience in a spe- part as subconsultants in more than one proposal. The cific sector. In these cases, a problem arises when there leading consultant will inquire with the subconsultant is a need for association between the local and foreign to see whether it is available on an exclusive basis; de- consultants. pending on the response, the leading consultant will Two options are acceptable to alleviate such decide the extent of the subconsultant's participation situations: in the preparation of the proposal. · Requirethenationalconsultingfirmtoofferitsser- Consultants who have established subsidiaries vices as subconsultant to all foreign firms, giving it with different juridical personalities in countries other complete discretion with regard to the sharing of than their country of origin can be included in the activities between foreign and local consultants and short list only once, either individually or in associa- to the price of subcontracted services. tion with those subsidiaries. · DefineintheTermsofReference(TOR)theservices When consulting firms offer services under the that will be carried out by the national consulting umbrella of a marketing group (see para. 2.3.2), the firm and require the firm to indicate its price for group may be shortlisted. The marketing group sub- these services before issuing the RFP to shortlisted mits a proposal in which it specifies the firm or firms consultants. The national consultant should then be that would be undertaking the assignment. In evalu- required to offer the same services as a nominated ating the proposal, the Borrower should consider only subconsultant and at the same price to all compet- the experience of those firms. The group signs the ing consultants. contract with the Borrower under the group name. The marketing group and a specific firm member of The first option gives flexibility to both foreign the group cannot compete separately for the same and national consultants to set up the most efficient assignment. arrangement, but the possibility remains that the na- Whenever there is only one qualified national firm tional consultant may unduly favor a particular foreign available for an assignment, the Borrower may select firm by offering it different services or more-favorable the firm as nominated subconsultant for all invited conditions. The second alternative requires additional consultants (see following para. 3.4.2). In this case, the effort by the Borrower in preparing the TOR and eli- Borrower should provide specific information relat- minates flexibility. Because the winning foreign con- ing to the firm in the letter of invitation. sultant will be responsible for the execution of the Firms entering into a joint venture are not re- assignment, it is the shortlisted consultants' duty to quired to provide their joint venture agreement when assess the capabilities of the national consultant before they submit their expressions of interest and the pro- presenting their proposals. Bank staff should assist 12 GENERAL POLICIES AND PRINCIPLES IN THE USE OF CONSULTANTS Instructions to Consultants 3 . 8 the Borrower in adopting the most appropriate proce- 3.7 Handling of Complaints dure in each individual case. The selected procedure must then be clearly set out in the RFP. After directing themselves to the Borrower and having received no satisfactory answer, consultants may de- cide to complain to the Bank about the proper appli- cation of selection methods and procedures adopted 3.5 Property by Borrowers.2 No discussion or correspondence with a consult- Contracts for consulting services usually state that all ant should take place during the selection process, documents prepared by the consultant shall become other than acknowledgment of receipt of the complaint and remain the property of the Borrower who hires itself. Bank staff receiving complaints and allegations the consultant. The consultant may retain a copy of must base their response, if any, on the information such documents and software. Any restrictions on the they obtain from the Borrower. future use of these documents and software by either If, in the judgment of the Bank, a complaint is jus- the Borrower or the consultant should be specified in tified, the Bank will ask or advise the Borrower to rem- the conditions of the contract. edy the situation or settle the complaint directly with the complainant. For contracts subject to prior re- view, the Bank shall examine the communication, in 3.6 Misprocurement consultation with the Borrower, and if it needs addi- tional information, shall request it from the Borrower. During its review of the selection process, the Bank may The Bank shall not enter into discussion or corre- discover that the Borrower has not selected or engaged spondence with any consultant during the selection the consultants in accordance with the procedures set and review process, until award of the contract is no- out in the Loan Agreement and further elaborated in tified. For post-review contracts, any complaint shall the Procurement Plan approved by the Bank. For be sent to the Borrower for due consideration and ap- example, the consultants may have insufficient qualifi- propriate action. The Borrower's response shall be re- cations, or the terms of the contract to be signed or al- viewed during subsequent supervision of the project ready signed are not satisfactory to the Bank. The Bank by the Bank staff. also may find that its "no objection" was given based on incomplete, inaccurate, or misleading information. In all these cases, the Bank will bring this to the atten- tion of the Borrower. The Bank will withhold or with- 3.8 Instructions to Consultants draw its "no objection" and request the Borrower to Dissemination of relevant information is the corner- amend the situation. If the Borrower fails to do so, the stone of a transparent and fair consultant selection Bank will declare misprocurement. process. Bank policy requires the Borrower to ensure When misprocurement is declared, barring ex- that all consultants have equal access to the same in- ceptional cases, the loan amount allocated for the con- formation so that interested consultants can make in- sulting contract, including the appropriate portion of formed decisions on how best to apply their efforts. the various physical and price contingencies, will be Consulting opportunities in Bank-financed proj- cancelled. If any amounts related to the misprocured ects are advertised as follows: contract have been withdrawn from the loan, the Bank will take appropriate action with the Borrower to re- · "General Procurement Notice (GPN)" for Bank cover amounts already disbursed. projects is published in United Nations Development The Borrower should be aware that if it arranges Business online (UNDB online) and in the Develop- for the financing of the misprocured assignment in ment Gateway Market (dgMarket). This announce- question from sources other than from funds made ment shall include a list of expected consulting available by the Bank, the consultants must possess assignments, with a description of the required con- the necessary technical quality to not adversely affect sulting services, the name of the Borrower agency, the Bank project. Selection of consultants must in no and the budgeted cost. way interfere with the satisfactory implementation of · Borrowers shall advertise a request for expressions the project with regard to cost, quality, and timing. of interest for each contract for consulting firms in GENERAL POLICIES AND PRINCIPLES IN THE USE OF CONSULTANTS 13 3 . 8 Instructions to Consultants the national gazette, a national newspaper, or an upon the consultant's request, of receiving a debriefing electronic portal of free access. from the Borrower after the contract award, wherein · In addition, contracts expected to cost more than the consultant will be informed about the strengths and US$200,000 shall be advertised in UNDB online and weaknesses of its own proposal. in dgMarket. · Borrowers may also advertise requests for expres- sions of interest in an international newspaper or a technical magazine. 3.9 Consultants Selected · "Monthly Operational Summary" is issued by the and Engaged by the Bank Corporate Secretariat of the Bank and published by The Bank engages consultants (firms or individuals) UNDB. This publication contains a summary of all using its administrative budget (BB) and Consultant projects under consideration by the Bank. Trust Funds (CTFs). The CTFs are made available to · "ProjectInformationDocument(PID)"isavailable the Bank by donor country governments to fund con- to the public through the Bank's InfoShop. This sulting services from the donor's country to exclusively document includes a brief description of the nature support the Bank's own operational work, such as of the services, timing, estimated cost, and staff- project appraisal and monitoring, supervision, opera- months, and it allows consultants to establish the tions evaluation, and specific Bank studies to benefit degree of interest they may have in the assignments borrowing members. included in the project. A second category of trust funds, such as the Policy · "Project Appraisal Document (PAD)" is also avail- and Human Resources Development (PHRD) Fund, able through the InfoShop after approval by the is made available to the Bank by donors for use by board of directors of the Bank. It contains the pro- Borrowers to support the Borrower's project prepara- curement plan of the project, including the pro- tion and implementation activities, such as feasibility posed consulting assignments. studies or designs. Consultants from all Bank member The above sources of information are accessible countries can express interest for assignments under through the Bank or the UNDB Web site or from the these trust funds. The Bank normally expects Borrowers Bank's InfoShop. Although the Bank encourages con- to execute the contracts funded by these trust funds. sultants to direct requests for information on prospec- When a Borrower lacks the necessary institutional ca- tive assignments to Borrowers in the first instance, pability, managerial strength, or experience to execute consultants can also obtain the information from the the contracts financed under the trust fund, the Bank Bank. may agree to execute a trust fund­financed contract The RFP, and specifically its second section, In- on the Borrower's behalf, at the Borrower's expressed structions to Consultants (ITC), provides detailed request. information on the evaluation process, including eval- In all cases in which the Bank engages consultants uation criteria and their respective weights, the mini- (under its own budget or as executing agency under a mum qualifying mark, and the estimated number of trust fund [TF]), the policies and procedures that are professional staff-months required for the assignment to be followed by the Bank in engaging consultants are or the available budget. Shortlisted consultants are en- set out under Statement 15.00 of the Bank Admin- couraged to visit the Borrower implementing agency istrative Manual (AMS 15.00),3 which is tailored in to become familiar with local conditions and to obtain strict accordance with the Consultant Guidelines to be firsthand information on the assignment. During the used by Bank Borrowers. The only exception concerns proposal phase, shortlisted consultants are allowed CTFs, for which the applicable rules and procedures to seek clarifications of the RFP in writing. For large are laid out in the specific "Trust Fund Agreement" or complex assignments, the Bank encourages the between the Bank and the donor, which prevails over Borrower to hold a preproposal conference. The Con- AMS 15.00, but in general deviates from it only as far sultant Guidelines provide for the disclosure of the as the eligibility of consultants. Eligibility is restricted quality scores and, under certain selection methods, to consultants from the donor country and, in a lim- the public opening of financial proposals. ited extent, to consultants from the country of the For invited consultants who have not been se- beneficiary. Table 3.1 briefly describes the present lected, the Consultant Guidelines foresee the possibility, arrangements. 14 GENERAL POLICIES AND PRINCIPLES IN THE USE OF CONSULTANTS Notes Table 3.1 Applicable Selection Notes Procedures 1. Article III, Section 5(b), IBRD Articles of Agreement; Contract Applicable Article V, Section 1(g), IDA Articles of Agreement. execution Funding procedures 2. See appendix 3, paras. 11­14, of the Consultant Guidelines. Bank Bank AMS 15.00 3. AMS 15.00, "Selection and Use of Consultants by the Bank CTFs CTF Agreement World Bank for Operational Purposes," December and AMS 15.00 2002. Bank for TFs AMS 15.00 and Borrower TF Agreement Borrower TFs Consultant Guidelines GENERAL POLICIES AND PRINCIPLES IN THE USE OF CONSULTANTS 15 C H A P T E R 4 Conflicts of Interest 4.1 Main Considerations 4.3 Categories of Conflicts of Interest A consultant conflict of interest (COI) is a situation in which consultants provide, could provide, or could be The Consultant Guidelines identify four main cate- perceived as providing biased professional advice to a gories of conflict of interest that may bias the consult- Borrower to obtain from that Borrower or from oth- ants' advice and lead to their disqualification: ers an undue benefit for themselves or their affiliates. · Activities by the consultants and their affiliates that Although COI is an easily understood concept, to iden- conflict with their assignment for the Borrower tify and prevent it or address its consequences (that is, (para. 1.9 (a) of the Consultant Guidelines) the potential or actual prejudice to the Borrower's in- · Consulting assignments that, by their nature, are or terests) requires in practice the exercise of common may be in conflict with each other (para. 1.9 (b) of sense, sound judgment, and expertise. Conflicts of the Consultant Guidelines) interest must be avoided because they affect the con- · Relationships between the consultants and the sultants' impartiality and spoil the quality of their Borrower's staff (para. 1.9 (c) of the Consultant advice. Guidelines) · Consultantsservingdifferentclientswithconflicting interests on closely related assignments (paras. 1.9 4.2 Bank Policy and 1.9 (b) of the Consultant Guidelines) Paragraph 1.9 of the Consultant Guidelines requires consultants to provide "professional, objective, and 4.3.1 First Category of Conflict: impartial advice and at all times hold the Client's in- Conflicting Activities terests paramount, without any consideration for fu- The first category of a consultant's conflict of interest ture work, and that in providing advice they avoid (that is, conflicting activities) includes the following: conflicts with other assignments and their own cor- porate interests. Consultants shall not be hired for any (a) Downstream procurement of goods, works, and assignment that would be in conflict with their prior services, other than consulting services, related to or current obligations to other clients, or that may the consultants' professional assignment. place them in a position of being unable to carry out For example: the assignment in the best interest of the Borrower."1 Paragraph 1.10 of the Consultant Guidelines re- · While under contract on a consulting assign- quires that "consultants or their affiliates competing for ment for the preparation or implementation of a specific assignment do not derive a competitive ad- a project, consultants specify equipment or de- vantage from having provided consulting services re- sign works in such a way as to create favorable lated to the assignment in question. To that end, the competing conditions for themselves or their Borrower shall make available to all the shortlisted con- affiliates in the procurement process of such sultants together with the request for proposals all in- equipment or works. formation that would in that respect give a consultant a · While under contract on a specific assignment, competitive advantage over competing consultants." consultants are perceived to be suggesting or 16 Fourth Category of Conflict: Conflicting Clients 4 . 3 . 4 actually suggest to the Borrower that works or pared the Terms of Reference (TOR) under a equipment be obtained from their affiliates. prior assignment. · A financial consultant advising a client in a · Consultants intentionally prepare the initial leveraged buyout invests its own funds in the study such that the next phase assignment re- same project. quires skills that only they can provide and de- prive the Borrower of the benefits of competition. (b) Downstream provision of consulting services re- lated to works executed or equipment supplied by · While conducting an assignment, the consult- an affiliate of the consultants. ants create favorable conditions for being awarded an extension or a directly related as- For example: signment that is unnecessary for the client. · The consultants supervise the contract imple- mentation of works executed by a firm with 4.3.3 Third Category of Conflict: which they are affiliated. Conflicting Relationships · The consultants are called to certify the finan- cial statements of an affiliated firm or parent The third category of conflict (that is, relating to the company. consultant's relationship with the Borrower's staff) may be illustrated with the following examples: 4.3.2 Second Category of Conflict: · The consultant competing for an assignment has a Conflicting Assignments family or a business relation with a member of the client's staff involved in the selection process for The second category of conflict (that is, conflicting that assignment. assignments) includes the following: · A consultant nominates a client employee as key (a) Conflicting assignments by nature, in which the staff in its technical proposal. consultants could bias their advice to be consis- tent with findings of another of their assignments 4.3.4 Fourth Category of Conflict: or those of their affiliates. Conflicting Clients For example: The fourth category of conflict (that is, "conflicting · Consultants carry out the environmental audit clients") includes consultants working simultaneously of a project designed by them or their affiliates. for two or more clients whose interests are in conflict. · Accountants audit a client's financial state- ments and set up its accounting or financial in- For example: formation system. · Financial consultants work for the government in · An investment bank finances the buyer in a privatizing assets and for potential purchasers of the sales transaction after advising the seller on the same assets, or the financial consultants advise the same transaction. · AconsultantwhohasadvisedaBorroweronthe government on the sale of an asset and subsequently become an investor or an adviser of investors for privatization of a state-owned enterprise advises these same assets. the potential purchasers of such enterprise. · Consultants work for a public water authority and (b) Conflicting downstream assignments in which an electricity company, both of whom are compet- incumbent consultants create conditions under ing for the use of the same water resources. which they attain or are perceived to attain an undue advantage over other consultants who may The above-described COIs tend to become more apply for consideration in a downstream assign- problematic and complex for large, multifunctional ment, thus depriving the client of the benefits of consulting organizations that are likely to serve the full competition. same client with different types of service or that may have interests in common with third parties serving For example: the same client. These conflicting interests can be dif- · Consultants propose their services for, or ac- ficult to identify and control, especially when the cept, an assignment for which they have pre- client does not have previous experience in dealing CONFLICTS OF INTEREST 17 4 . 3 . 4 Fourth Category of Conflict: Conflicting Clients with them or when the consultant is not ready to be a case, the Borrower's invitation to submit expressions open about them. of interest should alert potential candidates of the im- Table 4.1 lists situations that may place consult- possibility of being appointed to both assignments. ants in a COI, the associated risks for the Borrower, Consultants could be asked to indicate their prefer- and the way the COI may be addressed. ence for either of the two assignments. 4.4.2 Terms of Reference 4.4 Prevention of Conflicts of Interest When preparing the Terms of Reference, the Borrower should carefully consider whether the assignment Independence is the condition that allows consultants could create a COI and address or correct situations to perform their assignment in an objective manner. such as those outlined under para. 4.3.2. An agreement The potential effects of consultants' COIs on Bank- may be entered into that defines a satisfactory com- funded projects must be addressed early and moni- promise (for example, a water authority and a power tored at every stage of the consultant selection process company may agree in a multipurpose project to share and contract execution. If it cannot make a fully in- the water from the same river for their respective uses formed decision about a consultant COI, the Borrower before the Terms of Reference are issued). In this man- should seek advice from the Bank, which also has an ner, the design consultants will know how much water interest in preserving the impartiality of consultants they have to allocate to each purpose. to achieve the highest possible project quality for its To prevent COIs from affecting the independence Borrowers. of the consultant's work and the quality of the down- To assess its materiality (that is, the relevance of stream competition, the consultant under assignment its consequences for the Borrower), a COI has to be should not be asked to prepare the TOR for the down- analyzed, taking into consideration the source, nature, stream assignment if the Borrower wishes to include and potential impact of a conflict and the circum- this consultant in the short list. stances under which it arises. The most common situations of COI in Bank- 4.4.3 Shortlisting funded consulting assignments and the related provi- sions for the avoidance or mitigation of COIs are When preparing the short list, Borrowers must review identified in para. 1.6 of the ITC and in the Standard the qualifications of each of the consultants, deter- Forms of Contract attached to the RFP. mine any conflict of interest that may afflict the con- Because the safeguards put in place by the Borrower sultant, and make an informed decision about its may not be sufficient to eliminate or acceptably mitigate eligibility for the short list. If a qualified consultant is the COI, consultants have an obligation to disclose any found conflicted, before deciding for its exclusion, the potential COIs that they consider could affect their serv- Borrower should thoroughly analyze the conflict, its ices (also see para. 1.6.2 of the ITC attached to the RFP). nature, and the possible extent of damage that this This is particularly important if the Borrower lacks the COI could do to the Borrower itself. At the same time, capacity to thoroughly assess consultant qualifications the qualified consultant, if it believes that it is or may and performance or if the Borrower's regulatory frame- be in a COI situation, has a duty to disclose the con- work about COIs is not sufficiently robust. flict and explain to the Borrower in a straightforward manner how it plans to deal with the COI. The final decision on whether to exclude or admit the consult- 4.4.1 Request for Expressions of Interest ant to the short list remains with the Borrower. In some situations, the Borrower can identify a po- A Borrower in doubt about the materiality of a tential COI very early and adopt appropriate safe- consultant COI should inform the Bank before asking guards. One example is when a Borrower intends to for its "no objection" to the RFP in which the short list appoint consultants for two related assignments: the is included. The Bank will provide or withhold its "no first is to carry out an evaluation of assets to be auc- objection" based on the rules explained in the Con- tioned to private investors while the second is to assist sultant Guidelines and of its experience in dealing with the Borrower with the auction of those assets. In such similar cases. 18 CONFLICTS OF INTEREST Table 4.1 Consultant Conflicts of Interest: Range of Possible Cases Is the consultant Risk for borrower: Category of conflict of interest Example allowed to take part? consultant may Mitigation of risk Supply of goods and works Equipment, computers No Favor its associates Disqualification of consultant whose specifications were and affiliates prepared by the consultants Continuation assignments Detailed design after Yes Influence TOR, bias feasibil- TOR of continuation drafted by feasibility study ity study recommendations third party who validates feasibility Conflicting assignments Environmental audit of No Apply partiality in assess- Disqualify the consultant consultants' project design ing its own designs by the same consultants Related assignment other Restructured study of a Yes (permissible upon Unduly influence TOR of Have third party draft TOR, or than continuation public asset after prepar- conditions) related assignment disqualify the consultant ing privatization plan Related assignment for Study of a project com- No (permissible upon Advice to client(s) may be Disqualify the consultant, or both competing clients peting with another conditions) biased clients agree on scope of work client's project Related unnecessary Study of superfluous No "Featherbedding" Disqualify the consultant assignments alternatives Unrelated useful assignments Study of future projects Yes n.a. n.a. Conflicting relationships A consultant's staff has a No (permissible upon Be unduly favored in the Exclude the client's staff from the family relationship with a conditions) proposal evaluation selection process, or disqualify client's staff involved in process the consultant the selection process CONFLICTS Conflicting relationships The consultant includes a No (permissible upon Be unduly favored in the The consultant shall attach to its client employee in its conditions) proposal evaluation proposal a client's certification technical proposal process stating that the involved client's employee is on leave without pay OF Note: n.a. = not applicable INTEREST 19 4 . 4 . 4 Single-Source Selection 4.4.4 Single-Source Selection should check for any new circumstances that could cre- ate downstream COIs. The most common COI during The Borrower may retain consultants on a single- this phase of a project stems from affiliates of the con- source basis when the conditions set forth in paras 3.10, sultant showing an interest in offering goods, works, or 3.11, and 3.12 of the Consultant Guidelines are met. To services (other than consulting services) related to the prevent a COI, the TOR of the continuation assign- services given by the consultant to the Borrower. ment shall not be prepared by the incumbent. When a substantive COI situation emerges (or is discovered) during execution of an assignment, the 4.4.5 Evaluation of Technical Proposals matter should be referred to the Bank to examine pos- sible corrective action. During the evaluation of technical proposals, the Borrower should ascertain that no new COI situations have arisen since the consultant was shortlisted (for ex- 4.4.8 A Special Case: ample, that staff proposed by the consultant does not Multifunctional Consultants include any Borrower's personnel or subconsultants COI tends to be a more complex issue for large multi- and others already under contract with the Borrower service consultants because those consultants offer in- for related services, works, or supplies). tegrated services that appear attractive to clients not If the Borrower identifies a COI at this stage, it only in economies of scope (that is, one consultant costs should determine whether the specific conflict is sub- less than two) but also in consistency of advice (that is, stantive and take action. This can be accomplished by one consultant is more likely to provide consistent ad- reducing the scope of work of the assignment, asking vice than two). These COIs can be difficult to identify the consultant to remove the conflict, or (if the COI and neutralize, but recent experience shows that they cannot be mitigated) by declaring the consultant not should neither be underestimated nor ignored. A strik- eligible for the assignment. If unable to make a fully ing example has been brought up by large consulting informed decision, the Borrower could seek advice organizations simultaneously offering management and from the Bank. auditing services and by the damaging consequences If a consultant has misled the Borrower by ne- that their COIs have caused to their clients, to the con- glecting to provide information or by denying the ex- sultants themselves, and to the public. istence of a major COI situation, the consultant's One precaution often adopted by multiservice proposal should be rejected, and the opportunity for consultants (that is, accountants and financial and further sanctioning by the Borrower and the Bank management consultants) to address a COI is the use could be considered. of "Chinese walls"2 to prevent interaction between parts of a firm or between affiliated firms. Although in 4.4.6 Contract Negotiations theory Chinese walls may reduce the risk of COIs, their use in Bank-financed projects is of little help be- Before completing the contract negotiation, the cause the Bank's current policies address conflicts of Borrower should review the draft contract to identify interest by reference to an existing company, not by COI situations that may not have been disclosed or may reference to a department or a business entity within have arisen after the proposal was submitted. For ex- that company. ample, in a change-of-ownership situation, a winning consultant could have been absorbed by a financial in- stitution interested in participating in the Borrower's project. In such a case, the Borrower would have to dis- 4.5 Utility Management Contracts regard proposals from that institution or disqualify the consultant or both (if it is found that the two had been Many borrowing countries, particularly economies in conniving at the expense of the Borrower). transition, are adopting a two-phase approach to pri- vatizing public utilities. In the first phase, they may invite private firms to compete for a management con- 4.4.7 Implementation of the Assignment tract (MC) wherein the firm will be selected in accor- During implementation of the assignment, while mon- dance with the Bank's Consultant Guidelines. In the itoring or reviewing a consultant's work, the Borrower second phase, which usually occurs a few years later, 20 CONFLICTS OF INTEREST Consultants Engaged by the Bank 4 . 6 bids are invited for a lease or concession contract, in- representing or advising bidders, firms, or entities that cluding the sale of assets. The participation of an MC are participating in Bank-financed contracts and that incumbent in bidding for a lease or concession con- have pending investigations on allegations of fraud and tract raises two issues: (a) the potential COI situation corruption or that have any other dispute with the Bank and (b) the competitive advantages gained by the MC (such as complaints on procurement), unless the Bank incumbent in the first phase. (A guidance note on explicitly consents. these issues is included in appendix 10 of this Manual.) Notes 4.6 Consultants Engaged by the Bank 1. See also para. 4.12 of the Consultant Guidelines: 4.12 Conflict of Interest. The consultant shall not re- The Bank often employs consultants (firms or indi- ceive any remuneration in connection with the as- viduals) to carry out specific assignments for its oper- signment except as provided in the contract. The ational work. To prevent consultants from using their consultant and its affiliates shall not engage in con- Bank employment to obtain additional work from the sulting or other activities that conflict with the in- Borrower, the Bank's standard contract for firms and terest of the client under the contract. The contract letters of appointment for individuals include clauses shall include provisions limiting future engagement on COI. These clauses preclude consultants from of the consultant for other services resulting from or seeking or accepting work from Borrowers directly directly related to the firm's consulting services in related to the original assignment within three years accordance with the requirements of paragraphs 1.9 (two for individuals) after termination of the Bank and 1.10 of the Guidelines. contract. 2. This system has two essential elements: Consultants previously retained by the Bank that · RestrictionoftheflowofBorrower'sconfidential are offered a consulting contract by the Borrower for a information from one part of the consulting firm closely related assignment before the time limits expire to another (for example, by adoption of "confi- must obtain the Bank's consent in writing to waive the dentiality guidelines") COI clause of their original contract. The Bank shall re- · Acceptance that decisions within the area bound view the request, taking into consideration the materi- by a Chinese wall must be taken in the interest of ality of the COI, the possibility of its mitigation, and the clients of that business area, regardless of the Bank policy in similar cases. The decision to grant a impact on clients in other business areas waiver is issued in writing by the designated Bank staff 3. It should be noted that while the Bank, in its client and cleared by the Regional Procurement Manager.3 capacity, may grant such a waiver, the same mech- Consultants who are working for, or have worked for, anism is not available when the client for both the the Bank in the past three years are prohibited from first and the second assignments is a Borrower. CONFLICTS OF INTEREST 21 C H A P T E R 5 Fraud and Corruption 5.1 General Considerations 5.2 Most-Common Corrupt and Fraudulent Practices The Bank considers corruption a barrier to develop- ment and is committed to ensure that all its projects Corruption may originate with the client or the con- are free of fraud and corruption. Bank policy also re- sultant. Fraud commonly originates from a deliberate quires that all parties involved in Bank-supported misrepresentation by the consultant of key aspects of activities maintain the highest standard of integrity its proposal or services given. The most common cor- throughout the process of hiring and employing rupt and fraudulent practices affecting the processes consultants. of selecting, engaging, and administering consultants Under this policy, the Bank's Consultant Guide- are listed in the following paragraphs. lines define corrupt and fraudulent practices as follows:1 5.2.1 Selection Stage · "Corrupt practice" means the offering, giving, re- During the selection stage, consultants may ceiving, or soliciting of, directly or indirectly, any- thing of value to influence the actions of a public · misrepresenttheirexperienceintheirexpressionsof official (including World Bank staff and employees interest to be shortlisted; of other organizations taking or reviewing procure- · bribe the client's officials to be shortlisted; ment decisions) in the selection process or in con- · collude with each other or with the client to tract execution. stifle competition (for example, manipulate the · "Fraudulentpractice"meansamisrepresentationor requirements of the RFP to exclude other qualified omission of facts to influence a selection process or consultants); the execution of a contract. · bribe the client's officials to obtain confidential · "Collusive practices" means a scheme or arrange- information or undue advantage in the evalua- ment between two or more consultants, with or tion process, such as obtaining the terms of refer- without the knowledge of the Borrower, designed to ence (TOR) in advance or favorable scores in the establish prices at artificial, noncompetitive levels. evaluation; · "Coercivepractice"meansharmingorthreateningto · exert undue pressure on members of the client's harm, directly or indirectly, persons or their property Evaluation Committee by, for example, exerting to influence their participation in a procurement political, diplomatic, and other coercive pressures; process or affect the execution of a contract. · misrepresent facts in technical proposals and falsify or forge documents submitted in support of their Corrupt and fraudulent practices can affect the proposals; actions of government officials charged with the short- · collude with the client to fraudulently change es- listing and selection of consultants and with the sential data of the financial proposal after bid sub- negotiation, award, and management of consulting mission; or contracts. Such practices may also affect the fulfill- · withhold information about material conflicts of ment of consultants' contractual obligations, as well as interest affecting their performance of the proposed their respect for the laws of the country. assignment and the client's interest. 22 Main Considerations 5 . 5 . 1 Experience shows that the client could · a losing proponent; · ask for bribes; · a consultant's disgruntled employee; · provide unequal access to information by, for ex- · a government employee, the press, an NGO, or the public; ample, withholding important information from · aninquirybytheBankinitiatedbyaBankreview;or certain consultants or by advertising inadequately; · ignore conflicts of interest affecting particular con- · procurement audits carried out by the Bank. sultants; · adopt selection methods that unduly favor certain consultants; 5.4 Investigations and · knowingly overlook a consultant's false statement, Sanctions by the Bank misrepresentation of experience, forged signatures, All allegations should be reported to the Department and so forth; of Institutional Integrity (INT). Sanctions are applied · hire consultants by the single-source selection me- to consultants when fraud and corruption have been thod (SSS), although competitive selection would seen to occur. Sanctions include the Bank's rejection be expected to elicit better results; or of the proposal of award, a public letter of reprimand, · violate the confidentiality of the selection process or a decision by the president of the Bank making the by, for example, disclosing the status of proposal consultant ineligible to take part in Bank-financed evaluation to a consultant or a third party. projects for a limited or unlimited period of time. The sanctions are imposed by a decision of the president 5.2.2 Implementation Stage of the Bank upon recommendation of the Sanction Committee of the World Bank.2 Consultants under To take advantage of an inexperienced Borrower or in sanction by the Bank are listed on the Bank's Web site, collusion with the Borrower itself, during the imple- which is accessible to both the public and Bank staff. mentation stage of the assignment, consultants may · seek unjustified contract extensions, addenda, or payments; 5.5 Prevention of Corrupt · make unjustified changes in the assigned team and Fraudulent Practices members; · overcharge the client (for example, in a time-based 5.5.1 Main Considerations contract, billing more staff-months than actually Bank strategy is also aimed at the prevention of cor- worked); rupt and fraudulent practices. To this end, during the · provide fewer services than agreed on under the project preparation stage, the Bank carries out an eval- contract without informing the client; uation of risks related to all aspects of the procurement · seekunjustifiedincreasesofconsultingstafftowork process and recommends a strategy and concrete mea- on the assignment; sures to reduce the occurrence of fraud and corruption · misrepresent work delays or the need for extension and mitigate their impact. of time; Fraud and corruption in Bank-financed projects · engage in unauthorized use of project property and can be discouraged by services by, for example, using the client's trans- portation and telecommunication facilities inap- · convincing Borrowers to adopt methods and pro- propriately; or cedures for consultant selection consistent with · alteraccountingrecordsoftheirassignmenttomis- professional best practices; appropriate project funds. · convincing consultants that behaving in a profes- sional and businesslike manner benefits their firm, their reputation, their client, and all other stake- 5.3 Sources of Allegations holders; and · ensuringthatconsultants'workiscloselymonitored Allegations of fraud and corruption may be based on, and that the agreed-on procedures are diligently or originate from applied throughout the course of the assignment. FRAUD AND CORRUPTION 23 5 . 5 . 1 Main Considerations Effective prevention of fraud and corruption re- · report, investigate, and sanction cases of attempted quires the commitment and the honest behavior of or actual corruption; the Borrowers and of all consultants involved. · set up a credible complaint management system; · disclose the results of the selection process to those 5.5.2 Role of the Borrower interested after the contract award; and · provide a debriefing to those consultants who re- During the selection phase, the Borrower should quest it after contract award. · allow sufficient time for the submission of expres- To safeguard against corruption during execution sions of interest3 and proposals by consultants; of the consulting assignment, the Borrower should · check on the credibility of the qualifications of a consultant whenever serious doubts arise; · appointcompetentandadequatelypaidsupervisory · shortlist only those consultants who are qualified staff with clear responsibilities; for the assignment; · adopt an enforceable code of conduct with proper · consider only consultants with a reputation of pro- sanctions; fessional integrity; · pay consultant's invoices promptly, holding back · rejectanddenounceattemptsatcorruptionbycon- only disputed amounts; sultants or their intermediaries; · adhere to the provisions of the contract; · ensurethatalldocumentsformingtheRFPareclear · seekBankapprovalifawaiverappearstobejustified; and unambiguous; · keep orderly records and accounts relating to the · clearly describe in the Data Sheet attached to the project and the consultant's contract; ITC of the RFP the selection criteria, subcriteria, · undertake periodic and final audits of technical, and relevant points; financial, and administrative records; · adoptthemostsuitableselectionmethodfortheas- · include sessions on integrity in the project launch workshop; signment; · appoint an Evaluation Committee of impartial and · establishareportingchannelforincidentsofalleged fraud and corruption; and competent officials; · ensure that the Evaluation Committee agrees on · ensure public oversight of the project. the definition of grades to be used for assessing the level of responsiveness of the technical proposals 5.5.3 Role of the Bank to the criteria and subcriteria set forth in the Data To control and manage the risk of fraud and corruption Sheet; · ensure that each evaluator first evaluates the pro- in Bank-financed consulting assignments, Bank staff (that is, task team leaders and procurement specialists posals independently from other evaluators and assigned to the project), anticipating the Borrowers' de- that evaluators discuss their scores before reaching cisions and before providing their "no objection," final decisions; · shield the evaluators from all illicit contacts and should assist Borrowers, particularly the less experi- enced, in preventing corruption and fraud by pointing pressures; · appoint an independent adviser to the Evaluation to potential risks at critical points of the selection pro- cess and suggest adequate preventive measures. Committee whenever it appears that the evaluation In particular, Bank staff should process is at risk; · appoint a negotiation committee with technical · adviseclientsonhowbesttoformashortlistofcon- and legal experience relevant to consulting assign- sultants, and thoroughly review said short list and ments; the RFP before providing the Bank "no objection"; · provide each negotiation committee member with · thoroughly review all selection decisions and con- clear procedures and objectives; tracts for award before providing the Bank's "no · instruct negotiators to aim for a fair and balanced objection"; contract; · adequately assess those contracts requiring post · prohibit evaluation and negotiation committee review; members from unofficial contacts with consultants; · examine all requests for contract extension; 24 FRAUD AND CORRUPTION Role of Professional Associations in Fighting Corruption 5 . 5 . 5 · denyunjustifiedwaiversoftheBank'sprocurement · act with competence and integrity and solely in the rules and procedures; interest of the Borrower; · review all contract amendments proposed by the · exercise impartial professional judgment; Borrower that are above the established threshold; · abstain and resist from entering into arrangements · make adequate arrangements for project super- with contractors, suppliers, and the Borrower that vision, especially when Borrower institutions are will conflict with their assignment; and weak; and · maintain proper administrative records. · report to the appointed Bank body all allegations of Improved selection methods and best-practice­ fraud and corruption. based procedures cannot prevent fraud and corrup- At the same time, Bank staff should not tion, but only make them more difficult. Ethical and professional behavior on the part of both consultants · offer suggestions on consultants to be longlisted or and Borrowers can stop corruption altogether. Both shortlisted unless the Borrower requests it in writ- sides must raise their awareness of the severe risks to ing (upon the Borrower's request, staff should pro- which institutions, consulting firms, public officers, vide the information according to formal Bank and consultant staff expose themselves and innocent procedures); others when engaging in corrupt practices. · make decisions on behalf of the Borrower; At the level of individual consulting firms, as well · neglect to perform their fiduciary responsibilities, as Borrowers, the main responsibility for preventing including failing to carry out prior and post and stopping corruption lies first and foremost with review; those who lead these organizations. Other steps in the · maintainunnecessarycontactswithconsultantsdur- right direction include improving corporate culture ing the selection process or during the implemen- and introducing internal controls, codes of conduct, tation of the assignment, except as permitted in the and structured systems to manage integrity. RFP or agreed on with the Borrower; and To foster honest professional behavior, consult- · acceptanygift,hospitality,orfavorfromconsultants. ants invited to submit proposals for any Bank-funded assignment could agree by signing a statement of in- 5.5.4 Role of the Consultants tegrity (joint or separate), and include it in their technical proposals as an attachment to the Sub- During the selection process, consultants should abide mission Form. (A possible model is provided in ap- by the law of the country where competition takes pendix 11.) place and by the instructions of the RFP. Weak en- forcement and lack of Borrower's capacity do not in any way excuse consultants from behaving in accor- 5.5.5 Role of Professional Associations dance with the code of ethics of their profession. in Fighting Corruption In particular, consultants must always observe the Professional associations have an important role to following: play in establishing standards and norms from the best · Submit proposals that reflect their true qualifica- practices that develop in their specific fields. Such tions and capabilities norms include the code of ethics that their members · Aim for fair contracts between them and the are called to observe in the execution of all their as- Borrower signments and whose application the professional as- · Abstain from offering or paying bribes sociations also have the task to supervise. The oversight · Reportanyactsofobservedcorruptionandextortion role of professional associations is particularly impor- · Abstain from colluding with other consultants or tant in those countries where the rule of law or its enforcement is weak or where clients, including Bank the Borrower to win the contract unfairly · Instructtheirintermediariestobehaveaccordingto Borrowers, have limited experience with the use of consulting professionals. all the above The Bank maintains close contact and consults During the execution of the assignment, consult- often with international professional associations ants must and directly supports their initiatives and policies to FRAUD AND CORRUPTION 25 5 . 5 . 5 Role of Professional Associations in Fighting Corruption maintain the highest standards of integrity among cedures for Dealing with Allegations against Bid- their members. ders, Suppliers, Contractors, or Consultants," dated January 5, 1998. Internal document of the World Bank. Notes 3. Para. 2.5 of the Consultant Guidelines. 1. Para. 1.22 of the Consultant Guidelines. 2. See Operational Memorandum, "Fraud and Cor- ruption under Bank-Financed Projects: Pro- 26 FRAUD AND CORRUPTION C H A P T E R Capacity Building, Transfer of Knowledge, and Training in Consultant Contract 6 Assignments If you give a man a fish, he will be hungry again tomorrow. If you teach him to fish, he'll never be hungry again. A N C I E N T P R O V E R B 6.1 Main Considerations the transfer of sets of instructions that can be con- densed in simple manuals, demonstrations, and tests. It is not uncommon for consultants to conceive bril- The different types of capacity-building program, liant plans that are handed over to the Borrower on the transfer of knowledge, or simply training will require assumption that it will implement them successfully. different scopes and depths of engagement from con- On the one hand, this is often done without the con- sultants, as well as staff time, effort, and duration. A sultant helping the Borrower understand what it re- complex program may require more time and staff re- ceives or gain the skills and capabilities necessary to sources on both sides to be really effective and meet ex- make correct use of the advice. On the other hand, pectations. A simple program may be limited in scope when employing consultant services, Borrowers in- and duration and easy to deliver. The type and com- creasingly wish to build their capacity for those services plexity of the program included in the consultant TOR to be used, mastered, or reproduced successfully. will also influence the choice of the consultant selection The quality of the "transfer-of-knowledge pro- method and contract type. gram," often also called the "capacity-building pro- At the other extreme, the capacity-building com- gram," is one of the criteria of selection listed in the ponent needs to be deep and wide for those assign- Data Sheet of the Bank SRFP. When preparing the RFP, ments that directly contribute to the effectiveness, the Borrower can assign to this criterion up to 10 points efficiency, and economy in which the Borrower organ- of the 100 available for the evaluation of the technical izes and executes its functions or delivers its output. proposal. The design of the capacity-building components of Not all assignments call for the same level of con- consulting assignments will depend on the above con- sultant assistance to the Borrower for capacity building. siderations, while their success depends on factors that Certain assignments may not require transfer of knowl- are either under the Borrower's or the consultant's con- edge at all, either because of their very particular nature trol and ultimately on their willingness to work to- or because the Borrower already has the knowledge or gether, for which they both are responsible. capacity related to the assignment. As professional spe- cialization and result orientation increase, Borrowers prefer to entrust to consultants the execution of those 6.2 Objective and chores that are not specific to the Borrowers' institu- Guiding Principles tional mission. What matters to Borrower managers is only to be made capable of integrating the consul- It is increasingly obvious to Borrowers, consultants, and tant's contribution in the most seamless manner into donors that for reforms and projects to be sustainable their tasks, processes, and products. In such cases, the and make a difference, they must be "client-owned" capacity-building component of the consultant as- and "results-oriented" as much as possible. Because signment may be completely nonexistent or reduced to capacity is at the core of the development paradigm, 27 6 . 2 Objective and Guiding Principles the consultant objective that used to be called "trans- Experience has also shown that the following con- fer of knowledge" has evolved into hands-on "capacity ditions generally make capacity development impos- building." For a capacity-building program to be sible: effective, it must be "locally owned" (that is, it must · Inappropriate institutional and organizational help empower the Borrower to make better use of the framework resources it already has--the skills, know-how, and en- · Corruption (political and administrative) and ergies that exist locally--but have not been tapped). nepotism Because capacity building is a process of change, the · Lack of effective stakeholders' voice and of institu- program must be "results-oriented," whereby the re- tional trust sults must be set in advance, measurable (as much as · Lack of human security and presence of armed possible), and suitable for feedback. conflict 6.3 Responsibilities of 6.4 Responsibilities of the Borrower the Consultant When preparing the TOR, the Borrower outlines the A well-chosen consultant helps the Borrower achieve objectives, scope, and (if possible) approach of the better results. It is therefore necessary that the con- consulting services for the capacity-building program. sultant seek sufficient information on the Borrower's If possible, the Borrowers should also provide an esti- vision and objectives to understand the Borrower's mate of the time and effort that the consultant should strengths and its capacity to produce and own results. dedicate to it, including a cost estimate. Because the A Borrower-suited and results-oriented approach consultant may be unfamiliar with the Borrower's in- to the capacity-building component of the assignment stitutional framework and organization, it is impor- requires the consultant to include the following three tant for the Borrower to be as specific as possible in activities in the work plan of its engagement: explaining what it expects from the consultant under the capacity-building program.1 1. Conducting a readiness assessment. This requires A section on capacity building in the TOR will discovering the inherent capacity in the Borrower help guide shortlisted consultants to explain better in organization to achieve new results. The consult- the capacity-building section of their proposals the ant must ask: What does the Borrower want to ac- services that they plan to provide to help the Borrower complish? What human resources are available to achieve sustainable capacity. the Borrower? What institutional framework and The committed Borrower must make available to incentive systems are in place that would drive the the capacity-building program (a) staff with adequate Borrower organization to tackle the change? What forces would impede the change? The consultant levels of readiness and of motivation, (b) a suitable must be expert in asking and answering these organization, and (c) sufficient physical facilities. If questions. the level of readiness or of prior experience of the Bor- 2. Designing the program for success. The capacity- rower staff is too low, the program has little chance building program must be focused on specific and of success. measurable goals. The size and scope of the program Experience has shown that for a capacity-building must be within reach of the Borrower's capacity for program to succeed, the following Borrower-con- achievement, yet sufficient to produce the result. trolled factors must be in place: The Borrower staff and the resources needed for the · Leadership commitment to capacity development execution of the program need be identified and · Visible management promotion and encourage- lined up. The Borrower must be educated about the ment rationale for the change. Risks need to be identified, · Management availability to organizational inno- and strategies for dealing with them created. vation 3. Providing implementation support. Consultant per- · Tangibleindividualandsystemicincentivesforstaff sonnel working on the assignment must be able to to sustain motivation play dual roles: on the one hand, they must be spe- · Quick wins that deepen commitment cialists in their specific field (for example, investiga- 28 CAPACITY BUILDING, TRANSFER OF KNOWLEDGE, AND TRAINING IN CONSULTANT CONTRACT ASSIGNMENTS Twinning Agreements 6 . 4 . 3 tors, financial analysts, or engineers); on the other ity, the organizational arrangements, and expected hand, they must support the implementation of the results. capacity-building program. The role of implemen- · The consultant and its team should be fully inte- tation support embraces many aspects. Sometimes grated into the project or program team and given it means acting as an advocate for change and as specific duties and responsibilities. a planner in defining assignments (that is, as an · The consultant and Borrower staff should be of the organizer, a coach, and a counselor to the project same or similar professions to enable effective com- team). Good consultants often advise on ways to munication and transfer of knowledge. overcome obstacles and help coordinate different · Commitmenttotheprogramshouldbeencouraged strands of capacity-building activities. They can through monitoring and evaluation of progress stimulate motivation when energy flags or when di- based on simple and measurable indicators. The versions intrude. At the same time, they provide ex- Borrower or the consultant (or both) should pre- pert input as needed. pare evaluation reports. If the above activities are not part of the consultant plan of work or are underdeveloped, the consultant is 6.4.2 Stand-Alone Training not likely to be successful in helping the Borrower achieve the expected results. The most frequently used Bank-financed operations may include stand-alone implementation tools include on-the-job training, for- training (that is, a specific training component pro- mal stand-alone training for individuals, and twinning vided to alleviate identified weaknesses in the capabil- programs when organizations are involved. ities of the Borrower's staff, such as training Borrower personnel in the operation and management of infra- 6.4.1 On-the-Job Capacity Building structures and utilities). For the training to be effective, it has to match the level of knowledge and prior expe- Skills are learned on the job when the Borrower assigns rience of the trainees. personnel to the consultant to work as members of the Stand-alone training can take a variety of forms, consultant's team. Consultants hired for specific proj- including the following: ect preparation or supervision activities often integrate the Borrower's staff into their teams, retaining re- · TemporaryassignmentoftheBorrower'sstafftothe sponsibility for the quality of the output and sharing consultant's home office. These assignments should responsibility with the Borrower for the capacity- set out the specific responsibilities of such staff within building results achieved by its staff. the scope of the consultant's assignment. For capacity building to be effective, the follow- · Study tours. Tours can be a very useful way of learn- ing factors must be considered: ing, but to reduce the possibility of training programs · Theconsultantwillrespectthevaluesystemandfos- becoming "paid holidays" for trainees, mechanisms should be provided to limit unjustified absences or ter the self-confidence of Borrower staff with whom other abuses. it works, because these are at the root of capacity building and empowerment. · Formalshort-termcoursesandlong-termacademic · When adopting the capacity-building program, the courses. This type of training is administered by Borrower should allocate sufficient time and finan- educational organizations such as universities and cial resources to the program. professional schools. The involvement of consult- · The consultant's inputs must reflect the Borrower's ants in these cases is usually limited to identification priorities and (to the extent possible) be an integrated of the institution, planning of the study curricula, part of the Borrower's processes and systems. and administrative support to the training program. · TheTORandscopeofworkofthecapacity-building program should be clearly specified in the consul- 6.4.3 Twinning Agreements tant's contract and be commensurate with the level of experience of the counterpart and the training Twinning arrangements between an organization or goals to be achieved. entity in a Borrower country (recipient) and an entity · The scope of work should cover the trainees' in- involved in the same activities from a developed coun- volvement, their part-time or full-time availabil- try (supplier) are sometimes used to build capacity. CAPACITY BUILDING, TRANSFER OF KNOWLEDGE, AND TRAINING IN CONSULTANT CONTRACT ASSIGNMENTS 29 6 . 4 . 3 Twinning Agreements Twinning differs from normal consulting as- job and can be carried out locally or in the supplier's signments both in approach and in the nature of the country, usually available at various skill and technical services provided. The recipient agency learns by ob- levels. serving concrete examples and practical applications of For the selection of a twinning partner, given the principles and procedures that it will adopt for its own unique and complex characteristics of twins and of most operations. The supplier taps into a large reservoir of twinning arrangements, SSS or CQS (see chapter 9) operational experience and in-house resources to ad- may be the most appropriate methods of selection. dress the recipient problems in a manner rarely possi- Justification for the choice includes existing close affini- ble with traditional consultants. ties, relations, or strong cultural similarities of the twins Twinning can be deeper and broader in scope than in the type of institutional framework and organization, regular consulting services. The nature of twinning method of operation, and activity. Formal competitive implies a relationship of trust and a shared culture selection methods may in most instances be ill suited or between organizations that go beyond the normal misleading for the identification of a twinning partner. Borrower-consultant relationship. Before entering Twinning arrangement contracts can be prepared into a twinning agreement, the parties must be clear by adapting Bank standard consultant contracts to and sincere about the actual objectives of the agree- the specific case. Twinning contracts are generally ment: this may involve, for instance, the transfer or time-based, but can vary considerably, depending on sharing of managerial, financial, and technical skills to whether the organizations are public or private, utilities or with the recipient's organization, or perhaps even a or research institutions. Some organizations sign agree- merger of the two organizations. The TOR should ments that can lead to long-term cooperation, under clearly establish the objectives and scope of work of the which services are provided at or near cost. Other or- agreement, the activities to be executed, and the coop- ganizations provide a choice of administrative and cost eration arrangements needed to ensure the success of arrangements, depending on the nature of the task. the relationship. When twinning projects succeed and the initial con- Under twinning arrangements, capacity building tractual assignment is successfully completed, organi- or transfer of skills can be undertaken with flexibility in zations frequently maintain informal links with each a variety of ways. Specialists from the supplier twin may other, establishing long-term relationships with the po- work within the recipient's organization as advisers or tential for follow-up, including additional contracts. in-line positions for short- or long-term assignments or make periodic visits to the recipient twin according to an agreed-on schedule. The recipient's management Note and staff may also visit the supplier's offices and instal- lations. The training offered can be formal or on-the- 1. Para. 1.19 of the Consultant Guidelines. 30 CAPACITY BUILDING, TRANSFER OF KNOWLEDGE, AND TRAINING IN CONSULTANT CONTRACT ASSIGNMENTS C H A P T E R 7 Financing Consulting Services 7.1 Introduction Bank may be requested to establish a Project Prepa- ration Facility (PPF) to provide an advance against the Borrowers and the Bank often need to engage the serv- forthcoming loan. The establishment of the PPF re- ices of consultants before the approval of a loan and quires a formal application from the Borrower and ap- during project implementation. These services may in- proval from the Bank.2 A PPF is established only if there clude the usual ones under the Project Cycle,1 such as is a strong probability that a Bank loan will be provided feasibility studies, project design, and supervision, as for the project under consideration. If the loan is not well as consulting services related to adjustment lend- made, the Borrower and the Bank should make arrange- ing operations or self-standing assignments. Borrowers ments for the repayment of the advance. The PPF pri- should plan the nature, scope, and timing of the marily finances foreign exchange costs for studies and services needed; estimate their cost; and secure the designs. necessary financing. Common sources of financing for consulting services in Bank projects are discussed below. 7.2.3 Technical Assistance Loan (TAL) The Borrower may request the Bank to provide a 7.2 Reimbursable Funds Technical Assistance Loan (TAL) in fields ranging from the preparation of infrastructure to institutional Several options are available to Bank Borrowers to fi- development and capacity-building projects. TALs can nance consulting services with reimbursable funds. In also be used to fund consultant contracts to carry out all cases, consultants are selected and hired in accor- studies in sectors that have in the past received scarce dance with the Consultant Guidelines. or insufficient attention. The financial terms applica- ble to this type of loan are, in principle, similar to those for other lending instruments.3 7.2.1 IBRD Loans or IDA Credits IBRD loans and IDA credits are the main sources of 7.2.4 Advance Contracting with financing for consulting services by the Bank. The Retroactive Financing Borrower and the Bank may agree to finance consult- ing services needed under a project by including them In certain circumstances, the Bank and the Borrower in the Loan Agreement and in its Procurement Plan. may agree to advance contracting of consulting serv- Financing for consulting services directly related to a ices (that is, the Borrower contracts consultants before downstream or a complementary project can also be a loan is approved, with an understanding to subse- "piggybacked" (that is, the services can be funded quently finance the relevant services under the loan). under the loan for the upstream project). In such cases, the Borrower must hire the consultant in accordance with the Consultant Guidelines. Advance contracting is carried out by the Borrower, who bears 7.2.2 Project Preparation Facility (PPF) the risk without Bank commitment to approve the If a Borrower needs funding to hire consultants for loan.4 The expenditures related to the contract are studies and designs to complete the preparation of a reimbursed retroactively when the loan becomes ef- project and no other sources of funds are available, the fective. Only expenditures valued up to a specified 31 7 . 2 . 4 Advance Contracting with Retroactive Financing amount and incurred within 12 months before the ex- 7.3.3 Trust Funds That Support Specific pected date of loan signature are eligible for retroactive Bank Activities financing. These funds include the Consultant Trust Funds (CTFs), which are used to finance consulting services (mainly individual consultants) in Bank operational 7.3 Grants and Trust Funds work; research, program, and policy analysis; economic Borrowers sometimes prefer grants rather than loans to and sector work; and training. CTFs are tied to the fi- finance consulting services. The Bank has grant facili- nancing of individual experts or firms from the donor ties of its own, such as Institutional Development country and, up to 25 percent of the estimated contract Funds, and acts as a trustee to a large number of donors amount, of nationals from the beneficiary country. The under its Trust Fund Program. When beneficiaries use consultant selection is carried out in accordance with such facilities, the Bank requires adherence to the pro- the Bank's AMS 15.00, complemented by the provi- visions of the Consultant Guidelines, unless the Trust sions of the CTF agreement between the donor and the Fund Agreement varies from these provisions, in which Bank, which prevails over the Consultant Guidelines case the Trust Fund Agreement prevails. The types of and AMS 15.00 in case of discrepancies between the trust fund available to fund consulting services are listed documents. in the following paragraphs. Except for the funds under para. 7.3.3, all funds entrusted to the Bank are executed by the beneficiary 7.4 Disbursements and and are untied, and consultants are selected and em- Suspension of Disbursements ployed in accordance with the Consultant Guidelines. If the Bank executes trust fund activities on behalf of The responsibility for the implementation and, there- Borrowers, the Bank is responsible for hiring the con- fore, for the payment of consulting services under any sultants, and Bank internal procedures for hiring con- project rests solely with the Borrower. The Bank, on its sultants (that is, the Administrative Manual Statement part, is required to ensure that funds are paid from a No. 15.00 (AMS 15.00)) apply. Bank loan or credit only as expenditures are incurred and upon request from the Borrower. The Bank makes disbursements of the proceeds of 7.3.1 Global and Regional Trust Funds a loan or a grant for payments to consultants in one of Major donor-supported trust funds of this type in- the following ways: clude, for example, the Global Environmental Facility (a) The Bank directly pays the consultant based on an (GEF), which finances the hiring of consultants to invoice that has been approved by the Borrower. conduct research and studies on global environmen- (b) The Borrower pays the consultant directly. The tal issues such as biodiversity, global warming, and Bank then reimburses the Borrower upon pres- greenhouse effects; the Mediterranean Environment entation of a properly documented withdrawal Technical Assistance Program (METAP), which fi- application. nances environmental studies; and the Energy Sector (c) The Bank pays for expenditures against a World Management Assistance Program (ESMAP), which fi- Bank special commitment (unconditional agree- nances energy sector studies in Borrower countries. ment to reimburse) covering a commercial bank's letter of credit. This procedure is generally in- 7.3.2 Trust Funds That Support Specific appropriate for the payment of consulting serv- Recipient Activities ices, but it may be used in exceptional cases when the Borrower is incapacitated or is unable to fol- These funds are used to support consulting services low standard payment procedures. involving Borrower activities such as preinvestment and feasibility studies, capacity building, sector studies, The Loan Agreement and the disbursement letter and training programs. Trust funds of this type include, outline the procedures to be followed for the loan, in- for instance, Japan's Policy and Human Resources cluding retroactive financing provisions. The Bank Development (PHRD) Fund. normally finances the full amount of the foreign and 32 FINANCING CONSULTING SERVICES Cofinancing of Consulting Services 7 . 5 local cost of consultant service contracts, net of local in- with the procedures of the cofinance agreement, which direct taxes (as far as these can be identified). The tax could be the procedures of a bilateral or multilateral amounts payable under the contract should thus be donor cofinancing the project. The TOR of the con- clearly shown separately in the contract and are ex- sulting services need to be satisfactory to the Bank to cluded from reimbursement by the Bank. safeguard project quality for the Borrower. If joint fi- The Bank may suspend disbursements if the Bor- nancing, the Bank's Consultant Guidelines apply. rower fails to comply with its obligations under the Loan Agreement. Where possible, the Bank may give the Borrower a specified period of time to correct such Notes failure, and if the Borrower fails to do so, the Bank may cancel the loan. A complete description of the Bank's 1. For the Project Cycle, refer to Warren Baum, The disbursement procedures is provided in the Disburse- Project Cycle (World Bank, 1982) and The Task Man- ment Handbook.5 ager Handbook (World Bank, 1995a, Operation Policy Department, Operation Policy Group). 2. OP/BP 8.10, "Project Preparation Facility," World 7.5 Cofinancing of Bank, May 1994. Consulting Services 3. OP/BP 8.40, "Technical Assistance," World Bank, October 1994. A project may include cofinancing (either in parallel or 4. OP 12.10, "Retroactive Financing," World Bank, jointly) of consulting services by the Bank and a cofi- January 1995. nancier. If "parallel cofinancing" is adopted, the selec- 5. Disbursement Handbook, World Bank, 2nd ed., tion and use of consultants is carried out in accordance July 1992. FINANCING CONSULTING SERVICES 33 C H A P T E R 8 The Role of the Bank 8.1 Main Considerations All consultant contracts are subject to either the Bank's prior review or post review, as set forth in the In Bank-funded consulting assignments, the Borrower Procurement Plan (see appendix 1 of the Consultant is responsible for conducting the selection and engage- Guidelines). ment of the consultant. The Bank's role in the selection process is to review and provide its clearance--also called the "no objection"--of the RFP (including the short list), the evaluation of proposals, award recom- 8.2 Prior Review mendation, and contract to satisfy itself that the process The following steps or stages in the review process are is carried out in accordance with the agreed-on proce- subject to the Bank's prior review and "no objection": dures, as required in the Loan Agreement and further elaborated in the Procurement Plan. Bank staff may as- (a) Proposed assignment cost estimate, RFP, and short sist the Borrower during the process of selection and, list1 after contract award, may provide guidance to the Bor- (b) Technical evaluation report rower in addressing specific issues relating to the as- (c) Draft final contract, as negotiated and initialed signment, if so requested. Once Bank staff have reviewed the documents relating In assisting the Borrower, Bank staff should bear to each stage of the selection process and found them to in mind the following: be satisfactory, or suggested amendments have been ef- (a) The Borrower is responsible for the evaluation of fected, the Bank issues its "no objection." The task team proposals, selection, award, and execution of the leader and the procurement specialists assigned to the consultant's contract. project carry out the reviews. The Regional Procure- (b) The Bank's supervision of all the steps from prepa- ment Manager (RPM); the Procurement Policy and ration to implementation of the project should, as Services Group (OPCPR); or the Chief Counsel, Legal far as Bank-funded consulting assignments are Department, Procurement and Consultant Services concerned, be undertaken in accordance with the Unit (LEGPR), become involved as necessary (see Consultant Guidelines. OP/BP 11.002). If the Bank refuses to issue a "no objec- (c) Bank staff must refrain from participating in the tion" to a proposed contract award, but the Borrower decision-making processes involving the selec- decides to go ahead with the award, the Bank will de- tion and engagement of consultants, except in clare misprocurement, and its policy will be to cancel fulfilling the Bank's supervisory function as de- that portion of the loan allocated to the consulting serv- scribed above. In particular, Bank staff should not ices in question. Examples of Bank's "no objection" are given in appendix 1. · informally recommend consultants to the Bor- rower; 8.2.1 Short List and Request · take part in the evaluation of proposals; or for Proposals · putthemselvesinthepositionwheretheyare-- or could be perceived as being--party to, or In reviewing a proposed short list, the Bank will with- "arbitrators" of, any conflicts between consult- hold its "no objection" if it determines that the pro- ants and Borrowers. posed short list includes consultants who lack the 34 Modifications after Signing the Contract 8 . 2 . 4 qualifications to undertake the assignment. The "no Ultimately, the Bank may declare misprocure- objection" to the short list will also be denied if it in- ment if matters of contention cannot be resolved in a cludes consultants who are ineligible to take part in ac- reasonable period of time. cordance with the provisions on consultant ineligibility If the technical evaluation report recommends the spelled out in the Consultant Guidelines. Once the rejection of all proposals, the Borrower shall notify the Bank has issued its "no objection" to a short list, the Bank of the reasons for such rejection, but shall obtain Borrower cannot add or delete names without agree- the Bank's "no objection" before proceeding with the ment from the Bank. Normally, the Bank does not ac- rejection and the new selection process. This new cept the inclusion of additional firms on a short list that process may include a revised RFP, short list, and has already received the Bank's "no objection." budget. The revised documents shall require the Bank's The documents that constitute the RFP provide "no objection" before being issued. consultants with information relating to the assign- ment and instructions on what the Borrower expects of 8.2.3 The Contract consultants who accept the invitation to submit their proposals. If, in reviewing the RFP, the Bank deter- After contract negotiations and before the parties sign mines that the RFP documents do not provide ade- the contract, the final, initialed draft of the negotiated quate information or clear enough instructions to contract has to be forwarded to the Bank for its review enable consultants to submit responsive proposals, and "no objection." In reviewing the negotiated con- or are otherwise inconsistent with the Consultant tract, Bank staff should ensure that its provisions, the Guidelines, the Borrower will be asked to amend them scope of services, and the key experts are the same as as necessary. When conducting its review, Bank staff those in the RFP, and that: must also check that the criteria to be used for the eval- uation are appropriate for evaluating the consultants' (a) no modifications have been made to the contract technical proposals to be submitted. general conditions; and The RFP is issued to the invited consultants once (b) special conditions outlined in the contract are the Bank has given its "no objection" to the RFP, in- consistent with the requirements of the RFP (that cluding the short list and the cost estimate. is, they do not present material deviations or changes to the terms and conditions upon which proposals were invited). 8.2.2 Proposal Evaluation If any material changes were made concerning, for On completion of the technical evaluation, the Bor- example, the scope of services, contract amount, liabil- rower prepares a technical evaluation report and sub- ity, or conflict-of-interest provisions of the contract, the mits it to the Bank for its review and "no objection." The Borrower has to provide justification for such changes Bank may also ask to receive copies of the proposals. In and obtain the Bank's clearance before they are effected. reviewing the evaluation report, Bank staff should check Once the final contract is signed and before sub- that no errors or improprieties leading to questionable mitting the first application for disbursement under the outcomes were made during the evaluation on the part contract, the Borrower shall send the Bank a copy of the of the Borrower's Evaluation Committee. signed act. Before giving its "no objection," the Bank may (a) seek clarifications on the technical or financial 8.2.4 Modifications after Signing evaluation reports (or both) from the Borrower; the Contract (b) require the Borrower to review certain aspects of the evaluation that appear unclear or questionable; After the contract is signed, any substantial modifica- (c) request the reevaluation of the proposals; and/or tion, extension, or amendment proposed and agreed (d) proceed with its own evaluation (for instance, on between the Borrower and the consultant must be using an independent consultant) if it detects reviewed and cleared by the Bank before it is made.3 If, major flaws in the Borrower evaluation or re- for example, during an assignment, the consultant and ceives a justified complaint from a consultant to the Borrower agree that because of unforeseen events, which the Borrower has not provided an adequate there is a need to increase the contractual amount by explanation. more than 15 percent initially, and by any percentage THE ROLE OF THE BANK 35 8 . 2 . 4 Modifications after Signing the Contract subsequently, in each case the Borrower must provide 8.4 Assistance to Borrowers the Bank with a detailed justification and obtain the Bank's clearance before proceeding with amending Bank staff, in particular the task team leader, are fre- the contract. The Bank will not provide its clearance quently asked to provide guidance in the selection (that is, "no objection") if it determines that the pro- process. In addition to their review function and upon posed modifications would be inconsistent with the Borrower's request, Bank staff shall assist Borrowers Consultant Guidelines and the Loan Agreement. during the preparation of the various documents con- stituting the RFP, specifically the TOR, choice of selec- tion method, determination of selection procedures, and the type of contract to be used. In providing its as- 8.3 Post Review sistance, Bank staff must not unduly influence the Borrower's decisions and must ensure that the choice For contracts not subject to prior review, the Borrower of consultants to be shortlisted remains exclusively shall retain all documentation about each contract, in- the Borrower's prerogative. cluding the signed contract original, the evaluation report, and the recommendation for award, for re- view by the Bank or its consultants. The Borrower Notes shall send such documentation to the Bank, upon re- quest. The Bank may declare misprocurement if it 1. To provide a single "no objection" for the RFP and determines that the contract was not awarded in ac- the short list simplifies the process; however, in cordance with the agreed-on procedures (as reflected practice, separate "no objections" are often issued. in the Loan Agreement and the Procurement Plan) 2. OP/BP 11.00, "Procurement under Bank-Financed or that the contract itself is not consistent with such Operations," World Bank, July 2001. procedures. 3. Appendix 1, para. 3, of the Consultant Guidelines. 36 THE ROLE OF THE BANK C H A P T E R 9 The Selection Process and Selection Methods 9.1 Steps in the Selection (h) Opening and evaluation of financial proposals-- Process cost evaluation (i) Combined quality and cost evaluation to select When in need of specialized professional and inde- the winning proposal (under QCBS) pendent advice or when the permanent hiring of pro- (j) Negotiations and signing of the contract between fessional staff is not justified, a Borrower may engage the Borrower and the consultants consultants over defined periods of time to comple- ment its in-house capabilities. Each step is discussed in various chapters of this Once a project or a program is identified, the Manual. Figure 9.1 contains a flow chart outlining the Borrower and the Bank agree on the nature and scope steps for each of the selection methods included in the of the consulting services needed for preparing the Consultant Guidelines. It also indicates the various project and for assisting the Borrower supervising its points at which the Bank's "no objection" is required implementation. The number and the scope of the con- when the contract is subject to prior review (see chap- sulting services assignments needed will depend largely ter 8). (Numbers that appear at the side of the differ- on the level and quality of prior preparation work, the ent boxes of the flow chart and the selection method level of institutional readiness, and the strength and acronyms refer to the specific chapters or paragraphs technical knowledge of the Borrower for undertaking of this Manual that deal with that particular subject.) the project. Bank staff may also help the Borrower plan the sequence and the contents of the different consult- ing assignments, adopt the most appropriate methods 9.2 Main Considerations about for selecting consultants, and correctly apply the rele- Selection Procedures vant procedures. Before issuance of any specific RFP under the project, this shall be sent to the Bank for its Bank policy requires that consultants be selected fol- review and clearance.1 lowing competitive processes based on evaluation and Depending on the selection method adopted, the comparison of technical and financial proposals, or (in process carried out by the Borrower includes the fol- some cases) only of technical proposals, submitted by lowing steps: shortlisted consultants (see para. 13.1). The selection methods described in the Consultant Guidelines have (a) Preparation of the TOR of the assignment been devised to achieve the objectives of quality, effi- (b) Preparation of the cost estimate or budget of the ciency and economy, fairness, and transparency and to assignment (c) Public invitation of consultants' expressions of in- foster the participation of national consultants. terest (EOIs) (d) Shortlisting of consultants 9.2.1 Quality, Efficiency, and Economy (e) Preparation and issuance of the RFP to shortlisted consultants The quality of consulting services, comprising techni- (f) Preparation and submission of proposals by con- cal quality and impartiality, is the main objective of sultants any selection process under Bank policy. Quality of (g) Evaluation of technical proposals--quality evalu- services is driven by the need to provide for the best ation possible use of Borrowers' resources and Bank funds. 37 9.2.1 38 Figure 9.1 The Steps of the Selection Process Finalize T O R 10 THE Quality, SELECTION Finalize Cost Estimate 11 and Budget < USD 100,000 < USD 200,000 Efficiency, QBS 9.3.2 QCBS 9.3.1 SSS 9.3.6 LCS 9.3.4 CQS 9.3.5 FBS 9.3.3 PROCESS Call for Call for Call for 13.2 13.2 13.2 Expressions of Interest Expressions of Interest Expressions of Interest and Economy AND Prepare Shortlist 13.3 Prepare Shortlist 13.3 Prepare Shortlist 13.3 Prepare Shortlist 13.3 SELECTION Define Eval. Criteria & Define Eval. Criteria & Define Eval. Criteria & 12 12 12 Min. Qualif. Mark Min. Qualif. Mark Min. Qualif. Mark Prepare RFP 14 Prepare RFP 14 Prepare RFP 14 Prepare RFP 14 METHODS Bank's No-Objection Bank's No-Objection Bank's No-Objection Bank's No-Objection Send RFP to the Send RFP 14 Send RFP 14 Send RFP 14 Send RFP 14 14 Selected Consultant Prepare & Submit Tech. Prepare & Submit Tech. Prepare & Submit Prepare & Submit Tech. Prepare & Submit Tech. 16.2 16.2 16.2 16.2 16.2 & Finan. Proposals & Finan. Proposals Technical Proposal & Finan. Proposals & Finan. Proposals Evaluate 16 Evaluate 16 Evaluate 16 Technical Proposals 17 Technical Proposals 17 Technical Proposals 17 Bank's No-Objection Bank's No-Objection Bank's No-Objection Public Opening of Public Opening of Finan. Public Opening of Finan. Proposals Proposals; Calculate Finan. Proposals if Score 16.6 if Score of Tech. QBS Corrected Price; Reject FBS of Tech. Proposals > MTS 16.6 16.7 Proposals > MTS Perform Proposals Whose Corrected Calcuate Corrected Combined Eval. Price Exceeds Budget Price Negotiate with Highest Negotiate with Highest Submit Financial Negotiate with Lowest Negotiate 18 18 18 18 18 Scoring Proposal Ranking Tech. Proposal Proposal & Negotiate Corrected Price Proposal Bank's No-Objection Bank's No-Objection Bank's No-Objection Bank's No-Objection Bank's No-Objection Contract Award 18 Start the Assignment 19.1 Participation of National Consultants 9 . 2 . 4 Consultants provide Borrowers with the best possible and instructions contained in the RFP. Borrowers advice, by translating creativity and knowledge ad- should distribute the questions received, along with vances into innovative, efficient, and cost-effective their written responses, to all shortlisted consultants services. Consultants must select from their available without disclosing the source of the questions. Expe- professional staff those best suited for the success of rience shows that often consultants do not review the their assignment and adopt efficient team organiza- RFP in sufficient detail, particularly the Instructions tion and work plans to balance the quality and the cost to Consultants and the proposed Form of Contract. of their services. Although this may lead to misinterpretations and mis- takes, consultants tend not to ask for clarifications be- cause they fear that they may disclose significant aspects 9.2.2 Fair Competition of their proposal, even if the Borrower circulates ques- Once the Borrower and the Bank have agreed on a se- tions and answers anonymously. For these reasons, it lection method and on the specific provisions of the is good practice for the Borrower, for complex assign- procedures to be included in the RFP--such as evalu- ments, to hold a preproposal conference where con- ation subcriteria and related weights, scoring method- sultants are encouraged to ask for clarifications on the ology, and weighting of technical versus price scores-- RFP. Minutes of the meeting are then sent to all short- the evaluation must be carried out strictly in accor- listed consultants. If, because of the conference, the dance with them. RFP needs to be amended, the Borrower should send For each selection method, the procedure set out the amendments to all shortlisted consultants and ex- in the RFP should be fair; that is, it should not tend the submission deadline, if necessary. A credible selection process must also be confi- · provide unfair advantages to any particular con- dential. Its integrity would become questionable if sultants or consultants or unauthorized others were given access · makeonerousdemandsonconsultants,suchasdeny- to confidential information related to the selection ing sufficient time to prepare proposals or requesting process itself. Except as otherwise permitted under the unduly large proposals and drawn out proposal va- Consultant Guidelines, no information relating to the lidity periods. evaluation of proposals and recommendation of award Competition should take place for any assignment should be disclosed to the consultants or other persons whenever it can add value to the outcome of the selec- not officially involved in the process until the success- tion process, and all eligible consultants should be al- ful consultant is informed of the award of contract. lowed to have their EOIs considered. If this is not the However, once the winning firm is notified of the case, as it may be under particular circumstances, the award of contract, any other firm participating in the Borrower will proceed to hire the consultant already selection process may ask for, and shall receive from identified, whose qualifications for the assignment can- the Borrower, an explanation as to why its proposal not demonstrably be matched. was not ranked first. 9.2.3 Transparency 9.2.4 Participation of National Consultants How the result of the process is perceived to have been reached is as important as the result itself. A transpar- Experience shows that the participation of national ent selection process increases the quality of competi- consultants is very valuable and increasingly needed tion by creating an environment of trust between the because more and more Bank-funded projects require parties involved, reducing perceived and actual busi- thorough and in-depth knowledge of the local condi- ness risks for consultants, and minimizing the occur- tions to be successful. The Bank encourages the par- rence of complaints and claims. Transparency dispels ticipation of national consultants from borrowing the suspicion of unfairness in the selection process. countries by requiring that the short list comprise at RFP documents should be clear so that invited least one firm from a developing country (unless qual- consultants understand them correctly. During the ified firms from developing countries are not identi- preparation of their proposals, consultants may ask the fied) and by including a specific selection criterion for Borrower in writing to clarify any of the information the participation of national consultants from the THE SELECTION PROCESS AND SELECTION METHODS 39 9 . 2 . 4 Participation of National Consultants Borrower's country in the RFP. In certain circum- · the Borrower and the consultants can estimate with stances, Borrowers may further encourage the use of reasonable precision the staff time, the assignment national consultants by preparing short lists entirely duration, and the other inputs and costs required of or mainly comprising national consultants (also see the consultants; para. 12.9 of the Manual). · the risk of undesired downstream impacts is quan- tifiable and manageable; and · the capacity-building program is not too ambitious and easy to estimate in duration and staff time effort. 9.3 Selection Methods QCBS is appropriate for assignments such as the Seven methods for the selection of consultants are pro- following: vided under the Bank's Consultant Guidelines. They in- · Feasibilitystudiesanddesignswhereintheprojectis clude the following methods: simple and well defined, known technical solutions · Quality- and Cost-Based Selection (QCBS) are being considered, and the evaluation of the im- · Quality-Based Selection (QBS) pacts from the services or from design mistakes are · Selection under a Fixed Budget (FBS) not substantial and not difficult to estimate · Least-Cost Selection (LCS) · Preparation of bidding documents and detailed · SelectionBasedonConsultant'sQualifications(CQS) designs · Single-Source Selection (SSS) · Supervision of the construction of works and in- · Commercial Practices (CP) stallation of equipment · Technical, financial, or administrative services of a The choice of the appropriate method will depend noncomplex nature to Borrower agencies on the nature, size, and complexity of the assign- · Procurement and inspection services ment; the likely downstream impact of the assign- ment; and technical and financial considerations. In To increase the likelihood of receiving responsive addition, the particular circumstances or preferences proposals, the RFP under QCBS shall indicate the level of the Borrower, such as its own degree of quality risk of key staff inputs (in staff time) estimated by the Bor- aversion, should be considered. Borrowers with quality rower to carry out the assignment or the estimated cost risk aversion tend to adopt selection methods that pro- of the services, but not both. However, consultants shall mote quality (for example, QBS over QCBS, and QCBS be free to determine their own estimates of staff time to over LCS). It is therefore necessary to carefully define carry out the assignment and to offer the corresponding the assignment, particularly the scope and possible con- cost in their proposals. sequences of the services, the nature of the project, and Under QCBS, the technical and financial propos- the Borrower characteristics, before deciding on the ap- als are submitted simultaneously in separate, sealed propriate selection method. envelopes (two-envelope system). Proposals received after the submission deadline should be rejected. Evaluation of proposals is carried out in two stages: 9.3.1 Quality- and quality and cost. The technical envelopes are opened by Cost-Based Selection a committee of officials of the Borrower immediately after the closing time for submission; the financial pro- Quality- and Cost-Based Selection (QCBS) is a method posal envelopes remain sealed and are deposited with a based on the quality of the proposals and the cost of the reputable public auditor until the technical evaluation services offered. It is the method most frequently used and the evaluation report are completed (and cleared to select consultants under Bank-funded assignments. by the Bank, if required) and the technical scores are Because under QCBS the cost of the proposed disclosed publicly (also see paras. 16.6 and 16.7). The services is a factor of selection, this method is appro- financial envelopes of those consultants who submitted priate when responsive technical proposals over the minimum · the type of service required is common and not too qualifying mark are opened in the presence of the con- complex; sultants or their representatives wishing to attend. · the scope of work of the assignment can be precisely Following the evaluation of the financial proposals (see defined and the TOR are clear and well specified; para. 16.6), the scores of the technical and financial 40 THE SELECTION PROCESS AND SELECTION METHODS Quality-Based Selection 9 . 3 . 2 proposals are combined according to the weights in- lar physical, environmental, social, or political cir- dicated in the Data Sheet. The consultant obtaining cumstances of the project and of the Borrower; the highest combined score is proposed for award and · the assignment itself can be carried out in substan- invited for negotiations. Because price is a factor of tially different ways such that cost proposals may selection, staff rates and other unit rates shall not be not be easily or necessarily comparable; negotiated (see chapter 18). · theintroductionofcostasafactorofselectionmakes QCBS allows the Borrower to select a preferred competition unfair; or trade-off between cost and quality and to benefit from · theneedexistsforanextensiveandcomplexcapacity- price competition, even if only to a limited extent. building program. Nevertheless, the Borrower should always keep in mind QBS should be adopted for assignments such as that the achieved cost savings may represent an in- the following: significant portion of the project life cost. Transparency is increased under QCBS with a public opening of the · Complex sector and multidisciplinary studies of a financial proposals. Another advantage is the possi- complex nature bility that contract negotiations will be easier because · Important and far-reaching strategy studies of the limited scope for financial negotiations. · Complex master plans, prefeasibility and feasibility studies, or design of large and complex projects The main disadvantage of QCBS is its rigidity. · Assignmentsinwhichconsultantorganizationswith Because with QCBS consultants are required to different cost structures (for example, traditional compete based on price in addition to quality, bar- consultants, nongovernmental organizations, or UN ring exceptional reasons, discussion of the proposed agencies) are required to compete remuneration rates for staff-months and for re- imbursable expenses during contract negotiations is In some cases, the choice between QBS and QCBS not permitted, even if those costs turn out to be above may be difficult. In situations of strong uncertainty or the Borrower's expectations and budget. risk for the project, QBS should be adopted, because QCBS may be inappropriately used for complex quality is the key element. or specialized assignments in which the scope of work A possibility under QBS is for the Borrower to re- is not precisely defined and staff-months are difficult quest submission of only the technical proposals first. to estimate. Because price is a factor of selection under After receiving the Bank's "no objection" to the tech- QCBS, when this occurs, competitors tend to propose nical evaluation report, the consultant with the highest- more-conventional approaches and tested method- ranking technical proposal is invited to present the ologies to keep the cost of their services low. This financial proposal. However, the Borrower may ask may ultimately affect the quality of the project, espe- that the financial proposals be submitted at the same cially if the downstream impacts are complex, large, time as the technical proposals, but in separate en- or unknown. velopes (two-envelope system). In this case, the fi- nancial proposals should be kept unopened until the Bank's "no objection" to the technical evaluation (if 9.3.2 Quality-Based Selection required) is received. Only the financial proposal of the Quality-Based Selection (QBS) is based on the evalua- first-ranked consultant is opened; the others are re- tion of the proposal quality without any initial consid- turned unopened after negotiations with the winning eration for cost. The consultant that submitted the firm are concluded. The RFP shall provide either the highest-ranked technical proposal is then invited to key staff-months estimated by the Borrower or the negotiate its financial proposal and the contract. estimated cost of the services, but not both. The staff QBS is appropriate when effort indicated by the consultants or the proposed cost may differ considerably from the Borrower's es- · thedownstreamimpactoftheassignmentcanbeso timates, depending on the particular methodology large that the quality of the services is of overriding adopted by the consultant. Such differences shall not importance for the success of the project as a whole; constitute a reason for rejection. · the scope of work, the duration of the assignment, Because the TOR of assignments under QBS are and the TOR require a degree of flexibility because of generally more complex and less defined than under the novelty or complexity of the assignment, the need QCBS, contract negotiations with the winning con- to select among innovative solutions, or the particu- sultants may be lengthy and complicated. For large THE SELECTION PROCESS AND SELECTION METHODS 41 9 . 3 . 2 Quality-Based Selection assignments, the Borrower may decide to hire an inde- · the time and staff-month effort required from the pendent adviser to assist in the most critical aspects of consultants can be assessed with precision; and the technical evaluation (for example, discussion of the · capacity building is limited to a simple transfer of plan of work, staff rates and reimbursable expenses, and knowledge that can be very easily estimated. the definition of the consultants'staff-months). Occasionally, the Bank funds projects, such as hos- To reduce the financial risk for consultants and pitals, schools and colleges, and research centers, that avoid receiving unacceptable technical proposals (or have an aesthetic component that has to be taken into none at all), FBS must be used only for well-defined and account when the consultant or architect firm is se- simple assignments. FBS is frequently used by Bank lected. Design Contest (DC) is a selection method with Borrowers when there is a lack of flexibility in the al- procedures very similar to those of QBS, under which a location of funds, and by the Bank itself when funding Borrower invites consultants to present a plan or design is available only in fixed amounts from preestablished for a project based on a concept or criteria provided by allocations such as trust funds. the Borrower. The winner is selected by an Evaluation Typical assignments awarded under FBS include Committee based on the quality of the presentation. the following: The procedure may also provide the winner with an · Studies and surveys of limited scope award. DC procedures are a tool for selecting the best · Not-too-complex prefeasibility studies and reviews available architects, engineers, and planners for projects of existing feasibility studies with important aesthetic contents. · Reviews of existing technical designs and bidding The following consulting assignments for major documents projects can be awarded through DC: · Projectidentificationactivitiesforwhichthelevelof · Railway stations, ports, and airport terminals detail can be matched with the available funds · Publicbuildingssuchashospitals,theaters,concert Under FBS, consultants are requested to submit halls, university campuses, art and sports centers, their technical and financial proposals in separate en- exposition and fair complexes, and government velopes. Technical proposals are evaluated first, using buildings the same procedures followed for both QCBS and QBS, · Rehabilitation of large, obsolete, or abandoned and then the financial envelopes are opened in public. structures and areas to create multipurpose centers Because the Lump-Sum Form of Contract is often used for public use for assignments awarded under FBS, no corrections Appendix 9 of this Manual provides a description may be made to the financial proposals. Activities and of the peculiarities of a DC and lists the modifications items described in the technical proposals but not needed to adapt the Bank SRFP to a DC. priced, or quantified differently in the financial pro- posal from the technical proposal, shall be assumed to 9.3.3 Selection under a Fixed Budget be included in the prices of other activities or items. Proposals that exceed the indicated budget are dis- Selection under a Fixed Budget (FBS) is based on the carded. The consultant who has submitted the high- disclosure in the RFP of the available budget to invited est-ranked technical proposal among the remaining consultants and selecting the consultant with the high- proposals is selected. est-ranking technical proposal within that budget. Because the budget is fixed, the consultant's TOR Because consultants are subject to a cost constraint, cannot change substantially, and technical negotiations they must adapt the scope and quality of their services cover only minor aspects. Financial negotiations will to that budget. The Borrower must therefore ensure not include discussion of remuneration rates and of that the budget is (as much as possible) compatible other unit rates, but only of minor rearrangements of with the TOR and that consultants will be able to per- activities and staff for compatibility with the work plan form the tasks within the budget. and clarification of any tax liability. FBS is appropriate only when FBS allows Borrowers to plan a budget early on, · the budget cannot be exceeded; rather than waiting for the uncertain outcome of nego- · the objective and the TOR, including the scope of tiations. Furthermore, it allows Borrowers to receive work, are very precisely defined; better-quality proposals than under QCBS, because it is 42 THE SELECTION PROCESS AND SELECTION METHODS Selection Based on Consultant's Qualifications 9 . 3 . 5 easier for consultants to maximize quality under a fixed the final output are negligible. For example, modern budget than under simultaneous quality and cost com- broadband telecommunications and the Internet allow petition. FBS also requires a shorter time than QBS for accountants in geographically remote locations to com- negotiations. FBS is convenient for consultants because pete for standard accounting services to be produced at the preestablished budget allows them to determine in low cost. advance whether they are interested in competing for Because quality is set as the minimum qualifying the proposed assignment and to develop the best pro- mark, the Borrower should set a mark that is higher posal consistent with that budget. than usual (for example, 75 or 80 percent) to ensure More so than with QBS and QCBS, FBS requires quality and avoid the risk of selecting low-cost pro- the TOR to be consistent with the established budget posals of poor or marginally acceptable quality. This and to contain a well-specified scope of work for con- method may be abused by tampering with the techni- sultants to present clear and responsive proposals. The cal evaluation to select a specific consultant by pushing main risk of using the FBS is underbudgeting the TOR its proposal above the minimum mark and by actually and, in doing so, discourage good consultants from selecting based on its cost only. participating, and then receiving poor performances from the awarded consultant. 9.3.5 Selection Based on Consultant's Qualifications 9.3.4 Least-Cost Selection The Selection Based on Consultant's Qualifications Under Least-Cost Selection (LCS), a minimum quali- (CQS) method applies to small assignments for which fying mark for quality is established and indicated in the cost of a full-fledged selection process would not be the RFP. Shortlisted consultants must submit their pro- justified. Under CQS, the Borrower first requests ex- posals in two envelopes. The technical proposals are pressions of interest and qualified information relating opened first and evaluated. Proposals scoring less than to the experience and competence of the consultants the minimum technical qualifying mark are rejected, relevant to the assignment. The Borrower evaluates the and the financial envelopes of the rest are opened in information, establishes a short list, and then selects the public. Activities and items described in the technical firm with the best qualifications and references among proposals but not priced, or quantified differently in those who confirm to be willing to submit a proposal if the financial proposal from the technical proposal, selected. The selected firm is sent the RFP (including shall be assumed to be included in the prices of other the TOR), asked to submit technical and financial pro- activities or items. The consultant with the lowest price posals, and invited to negotiate the contract if the tech- is selected. nical proposal proves acceptable. The LCS method is appropriate only for small The CQS method can substantially reduce the assignments of a standard or routine nature wherein process cost for the Borrower and the consultants, as the intellectual component is minor, well-established well as the time needed to hire a consultant. This selec- practices and standards exist, and from which a well- tion method is particularly suitable when the past qual- defined outcome that can be executed at different costs ifications and experience of the consultant are crucial is expected, as in the following examples: to the choice while the technical proposal itself is not likely to reveal much additional or decisive informa- · Standard accounting or simple audits tion on the suitability of the consultant for the pro- · Engineering designs or supervision of very simple posed assignment. projects CQS may be considered for assignments such as · Repetitive operations, maintenance work, and rou- the following: tine inspections · Simple surveys · Evaluation studies at critical decision points in the project cycle (review of alternative solutions with LCS shall not be used as a substitute for QCBS. large downstream effects) Borrowers may adopt this selection method when they · Executive assessments of strategies and programs wish to capture cost reductions from simple tech- · High level, short-term, expert advice nologies or new methods for which quality risks for · Participation in project review panels THE SELECTION PROCESS AND SELECTION METHODS 43 9 . 3 . 6 Single-Source Selection 9.3.6 Single-Source Selection under tied financing or reserved procurement, or the downstream assignment is substantially larger in Single-Source Selection (SSS) is to be considered value than the initial one. In these cases, a competi- when competition appears unlikely to add significant tive process acceptable to the Bank should be adopted, value to the choice of the consultant. Under this elec- and normally the incumbent consultant should not be tion method, the Borrower requests that an already- excluded from consideration if it expresses interest, un- identified candidate prepare technical and financial less its previous performance has been unsatisfactory. proposals, which are then negotiated. Because there is The Bank makes exceptions to this rule only in special no competition, this method is acceptable to the Bank cases and if a new competitive process is not practical. only in exceptional cases and should be adopted only (Appendix 2 provides the form used by Bank staff to re- when it offers obvious advantages over a competitive quest management approval on the adoption of SSS.) method. This is the case when · the assignment represents a natural or direct con- 9.3.7 Commercial Practices tinuation of a previous one awarded competitively In some cases, the Bank provides a loan to a public and the performance of the incumbent consultant sector financial intermediary that finances private en- has been good or excellent; terprises or state-owned autonomous commercial en- · the consultant's prompt availability is essential terprises. Such Sub-Borrowers may follow established (for instance, in emergency operations following a private sector commercial practices to hire consult- natural disaster, a financial crisis, and so forth); ants. These practices should respect Bank principles · the contract is very small in value; or for the selection of consultants in a form acceptable to · only one consulting organization has the qualifi- the Bank. However, the Bank recommends that con- cations or experience required to carry out the sideration also be given to using one of the competi- assignment. tive methods described in the previous paragraphs, If continuity of work by the incumbent for a down- particularly for large assignments. stream assignment is essential to the project and is in the interest of the Borrower, the RFP for the original as- signment should indicate this possibility (para. 3.11 of the Consultant Guidelines). Good or excellent perform- 9.4 Selection of Particular Types ance in the first assignment has to be a precondition of Consultant for contract continuation. In these cases, the Borrower 9.4.1 UN Agencies as Consultants should weigh the importance of continuing with the same technical approach, the experience acquired, and UN agencies (also see para. 2.3.1) may be hired as con- the continued professional liability of the incumbent sultants under Bank financing when they are qualified against the benefits of competition, such as fresh tech- to provide technical assistance and advice in their area nical approaches and competitive remuneration rates. of expertise (for example, a sector study carried out by In these cases, consideration of the time and cost of a the World Health Organization). The privileges, im- competitive round has to be fully accounted for, be- munities, and exemptions enjoyed by UN agencies cause it may weigh considerably on the Borrower's while under contract with Bank Borrowers2 give them decision. a cost advantage when competing with private con- Once the Bank agrees to an SSS for a continua- sultants. Because this cost advantage is in general diffi- tion, the Borrower should ask the consultant to pre- cult to quantify, Borrowers shall adopt QBS (or FBS) pare technical and financial proposals based on the as the method of selection to neutralize any preferen- TOR prepared by the Borrower or by an independent tial treatment. Some special UN agencies have a policy expert with no relation to the incumbent. This is the of not competing against private firms or consultants basis for negotiating a continuation contract. for contracts. Such agencies may be hired on an SSS Normally, the Bank will not agree to award a con- basis in Bank-funded operations if the required crite- tinuation contract on an SSS basis if the initial assign- ria are met, as established in the Consultant Guidelines, ment was not awarded competitively, it was awarded para. 3.10. 44 THE SELECTION PROCESS AND SELECTION METHODS Financial Institutions 9 . 4 . 5 9.4.2 Nongovernmental Organizations vide advice, or a combination of both (see also para. 2.3.6). Nongovernmental organizations (NGOs) (see also When PAs are specifically used as "agents" han- para. 2.3.4) may be included in a consultant short list dling the procurement of specific items and generally if they express interest, if the Borrower and the Bank working from their own offices, they are paid a per- find their qualifications satisfactory. centage (either fixed or inversely proportional) of the Short lists for assignments typically attributed to value of the procurements handled or a combination of NGOs because they, for example, emphasize experi- a percentage and a fixed fee. In such cases, they are se- ence in community participation and in-depth local lected under QCBS, with cost being given a weight of knowledge may comprise NGOs entirely. In this case, up to 50 percent. If the weight of the cost element QCBS should be followed, and the evaluation criteria adopted were as high as 50 percent, financial consider- of proposals should reflect the NGO-unique qualifi- ations would dominate the selection, creating the risk cations, such as the following: of an unacceptably lower service quality. In such cases, · History of work with grassroots communities and it is essential to ensure that the quality threshold in the evidence of satisfactory performance evaluation is set sufficiently high. · Familiarity with participatory development ap- When PAs provide only advisory services for pro- proaches and low-cost technologies curement or act as "agents" for a whole project in a spe- · Experienced staff conversant with the cultural and cific office for a project, they are usually paid based on socioeconomic dimensions of beneficiaries the staff-months of effort provided, and they shall be · Committed leadership and adequate management selected following the appropriate procedures for other · Capacity to co-opt beneficiary participation consulting assignments using QCBS and time-based Borrowers may select NGOs using SSS, provided contracts, as specified in the Guidelines. the criteria outlined in paragraph 3.10 of the Consultant Guidelines are fulfilled (also see para. 9.3.6 of this 9.4.4 Inspection Agents Manual). For example, SSS may be adopted to hire a local NGO for a very small assignment in a remote area Borrowers may hire inspection agents to inspect and where only one NGO is available and competition is certify goods before shipment or on arrival in the impractical. On the other hand, if the short list com- Borrower country. The inspection by such agents usu- prises both NGOs and consulting firms (see para. 2.1 ally covers the quality and quantity of the goods con- and para. 13.3.1), selection should be based on QBS or cerned and the reasonableness of the price. Inspection FBS because the cost structure of NGOs and consulting agents are selected using QCBS, with cost being allo- firms are different, and therefore cost items may not be cated a weight of up to 50 percent. Payment is usually comparable. based on a percentage of the value of goods inspected The Bank's standard documents for the selection and certified. and use of consultants--the Consultant Guidelines, the SRFP (including the standard contract), and the 9.4.5 Financial Institutions Sample Evaluation Report--should be used. In some instances, the Bank enters into grant Borrowers may hire financial institutions (also see agreements with international NGOs when the Bank para. 2.3.5) to implement two main types of assign- and the Borrower government have agreed that it is ment: (a) in the preparation of studies and financial the most efficient way to manage and implement a consulting or (b) as advisers on privatization involving project. Provisions for such agreements recognize the the sale of assets. In the first case, the advisers can be se- special nature and role of NGOs, including their ca- lected under any of the methods described in this chap- pability to raise funds. In these cases, the selection and ter (that is, whichever is considered most suitable, hiring must follow Bank procedures. depending on the scope of work of the assignment). In the second case, QCBS shall be adopted, whereby the RFP specifies technical evaluation criteria similar to 9.4.3 Procurement Agents those relevant to standard consulting assignments. Procurement agents (PAs) may be hired by the Bor- The financial proposal would include two distinct rower to assist in carrying out procurement, to pro- forms of remuneration: (a) a lump-sum retainer fee to THE SELECTION PROCESS AND SELECTION METHODS 45 9 . 4 . 5 Financial Institutions reimburse the consultants for services made available quested to provide a Full Technical Proposal (FTP). For and (b) a success fee, which is either fixed or preferably the purposes of this figure, it has been assumed that the expressed as a percentage of the value of the privatiza- issuance of each Bank "no objection" would take two tion transaction. Depending on the type of sale (such as weeks. This period of time, as well as the duration indi- auction or initial public offering [IPO]) and the cir- cated for the other activities in Figure 9.2, may vary sig- cumstances of the Borrower, the RFP specifies the rel- nificantly in practice, depending on the characteristics ative weights assigned in the financial evaluation to the of the assignment and the Borrower's capacity for con- retainer and to the success fee, respectively. ducting the selection process smoothly and to the satis- In some cases, the Borrower offers a fixed retainer faction of all participants. fee, and the consultants must compete only on the suc- Borrowers are always advised to delegate the se- cess fee as a percentage of the value of the privatization lection process to those among their staff who have transaction. For combined evaluations of quality and the following capabilities needed to drive the process: cost (notably for large contracts), cost may be given a · Professional experience in the field of the consultant weight higher than recommended for standard assign- assignment: this capability allows them to establish ments (such as 30 percent), or the selection may be relatively quickly whether and to what degree a pro- based on cost alone for those who secure a minimum ponent appears to be suitable for executing the passing mark for the technical proposal. services. These are mainly staff covering senior pro- The RFP shall specify clearly how proposals will fessional or managerial positions directly related to be presented and how they will be compared. the project and to the consultants' assignment and Success fees are most appropriate when it is rela- having direct access to the Borrower. tively easy to measure results in meeting the Borrower's · Experience with the selection methods and engage- objective (successful sale of assets) and when the suc- ment procedures: this capability is acquired through cess is at least partly related to the efforts of the con- exercise in application of procedures under the vari- sultants involved. Therefore, success fees are more ous selection methods, in comparing selection out- likely to be adopted at the transaction stage, because by comes, and in actually employing consultants. that time the Borrower's objective is to maximize rev- · Reputation of integrity: if the members of the enue. Success fees should not be introduced before the Evaluation Committee lack this quality, the time broad structure of sector reform has been determined. needed for completing the selection can be slowed down intentionally for many reasons. Evaluators 9.4.6 Auditors must enjoy the trust of the Borrower's upper man- agement and be kept free from any external pressure Auditors should be selected under QCBS, with cost as trying to delay or derail the due selection process. a substantial selection factor, or, if appropriate, LCS Should the Borrower need to gain the capacity to may be adopted. For very small assignments, CQS conduct selection processes with all necessary skills, it may also be used. should engage the services of an impartial expert who assists the Evaluation Committee over the duration of the selection process or reviews the process before 9.5 Effectiveness and Efficiency sending the technical evaluation report to the Bor- of the Selection Process rower's decision-making authority and to the Bank for its "no objection." The main drawbacks of competitive selection methods are their complexity, the time and costs involved in the preparation, and the evaluation of proposals. To man- Notes age the selection process well, it is important to plan each stage of the process, to establish realistic deadlines, 1. Appendix 1, paragraph 2 (a) of the Consultant and to stick to the timetable. Figure 9.2 shows a typical Guidelines. time schedule of the selection process for a large as- 2. "Standard Form of Agreement between a Bank signment using QCBS, wherein consultants are re- Borrower and a UN Agency," World Bank. 46 THE SELECTION PROCESS AND SELECTION METHODS Financial Institutions 9 . 4 . 5 Figure 9.2 Time Schedule of the Selection Process (Large Assignment with QCBS; Full Technical Proposal) Duration (months) Activities 1 2 3 4 5 6 7 8 9 10 Finalize TOR & Budget Prepare Request for Expressions of Interest Advertising Receive Expressions of Interest Prepare Short List Define Evaluation Criteria & Minimum Tech. Score Prepare RFP Receive Bank's No-Objection on RFP, and Short List Send LOI and RFP to Shortlisted Firms Preparation of Proposals by the Consultants Receive Technical & Financial Proposals Evaluate Technical Proposals Receive Bank's No-Objection on Tech. Evaluation Public Opening of Financial Proposals Combined Evaluation and Final Score Notification to the Selected Consultant Contract Negotiations with Selected Firm Receive Bank's No-Objection on Contract Award Contract Signature Start of Assignment's Activities THE SELECTION PROCESS AND SELECTION METHODS 47 C H A P T E R 10 Developing the Terms of Reference 10.1 Main Considerations itself as a consultant for the resulting assignment (para. 4.3.2 [b]). The key document in the RFP is the Terms of Reference (TOR). It explains the objectives of the assignment, scope of work, activities, tasks to be performed, respec- 10.2 Drafting the Terms tive responsibilities of the Borrower and the consultant, of Reference expected results, and deliverables of the assignment. A comprehensive and clear TOR is important for the un- The following considerations should guide prepara- derstanding of the assignment and its correct execu- tion of the TOR: tion. It reduces the risk of unnecessary extra work, · The TOR should contain sufficient background in- delays, and additional expenses for the Borrower. In ad- formation on both the assignment and the project dition, it helps reduce the risk of ambiguities during the to enable invited consultants to present responsive preparation of consultant proposals, contract negotia- proposals. tion, and execution of the services. · The scope of work should be consistent with the Drafting the TOR requires expertise in the field of available staff-month estimate or the estimated cost the assignment, as well as familiarity with the project of the services (if this is given ex ante). background, knowledge of the terrain, the country, · The TOR should take into account the organiza- and the Borrower's organization. If the capacity to tion of the Borrower and its level of readiness, in- craft a good TOR is not available in-house, the cluding its staff capabilities, institutional strength, Borrower should hire a specialist, keeping in mind that and organization. if he or she is from a firm, the firm may become ineli- The level of detail and quality of information that gible for executing the services if the assignment is can be contained in the TOR influence the selection funded by the Bank. The TOR must be written by ex- method to be adopted (see chapter 9). For example, if perts with only the interest of the Borrower in mind the TOR for a complex assignment cannot be defined and who can understand its circumstances and level of with adequate precision and detail, QBS may be more readiness to conduct the assignment. Often a Borrower appropriate than QCBS, whereas the latter is preferable asks Bank staff to assist with information and ideas in when both a defined scope of work and a reliable staff- drafting the TOR. When assisting a Borrower, Bank month or cost estimate is available. staff may consult the TOR database available in the The authors of the TOR should be experts in con- Bank intranet and only with great caution adapt an ex- sulting services similar to those of the TOR. This is im- isting TOR to the specific requirements of the assign- portant to ensure that the description of the objectives ment being considered, keeping in mind that this TOR and scope of work of the assignment is realistic, the may have had very different staff time and cost esti- background information provided is adequate, con- mates and may have been prepared for a completely sultants are not burdened with unnecessarily demand- different Borrower. ing requirements, and the time schedule is consistent The Bank reviews the TOR proposed by the with the objective of the assignment and the output re- Borrower as part of the RFP and, if satisfied, releases its quired of the consultants. "no objection." A consultant employed by the Bank or The authors of the TOR should also be familiar the Borrower to prepare a TOR should not nominate with main local conditions, such as climate, environ- 48 Scope of Work 1 0 . 3 . 3 ment, institutions, laws, customs, holidays, remuner- · Rationale for the project ation levels, transportation systems, and so forth. · Project history (what has been done so far and by Seasonal variations, together with the peculiarities of whom) the region where the assignment will take place, should · List of relevant studies and basic data be considered if they are likely to affect the execution · Need for consultants in the project and issues to be of field activities. Aspects related to the logistics of the resolved project should also be considered. If a field visit by the · Activities to be carried out by the consultants consultants is necessary, but not feasible, then an aer- · Source of financing for the assignment ial trip may be arranged to enable them to form an · Supervision arrangements overall impression of the area. If capacity-building activities are required as part of the assignment, the Borrower should include them 10.3.2 Objectives of the in the TOR, for which additional time and budget Consulting Assignment should be allocated (see chapter 6). To avoid misleading consultants, the TOR should pre- The TOR should clearly identify and define the cisely describe the objectives and expected results of output and deliverables required of the consultants, the assignment. Typical objectives of an assignment in such as reports, data, maps, drawings, or software, and should include all inputs that the Borrower will send Bank-financed projects may include the following: to the consultants. These may include past prepara- · Sector and strategy studies or assessments tion studies, databases, aerial photographs, maps, and · Studies on public sector reform, institutional and records of existing surveys. The TOR should also iden- regulatory reforms, or leadership and management tify the Borrower's executing agency and explain insti- change tutional and organizational arrangements for the · Masterplansorprojectfeasibilitybeforeinvestment supervision of consultant work. In addition, the TOR · Preparation of bidding documents and project- should list and specify the facilities and counterpart detailed design staff to be provided or designated by the Borrower. · Project management and implementation super- vision · Capacity building and training 10.3 Outline of the · Collection and analysis of data Terms of Reference · Evaluation of Borrower assets for sale (such as in The TOR normally comprise the following sections: privatization projects) · Project background · Objectives of the assignment 10.3.3 Scope of Work · Scope of work This section of the TOR details all the main activities · Capacity-building program (or tasks)1 to be conducted by consultants and the ex- · List of reports, schedule of deliveries, and period of pected results of those activities (or tasks). The TOR performance should describe only the activities, not the approach or · Data, local services, personnel, and facilities to be methodology by which the results are to be achieved, provided by the Borrower because the latter are the responsibility of those prepar- · Institutional and organization arrangements ing the proposals. Nevertheless, in certain cases, the TOR may provide strong suggestions on the approach 10.3.1 Project Background and indications on the methodology that consultants could or should use to execute the assignment. Under The background summarizes the main features of the certain selection methods, the Borrower can disclose its project and describes the assignment's key objectives own estimated staff-months or its estimated cost of the and general purpose. In particular, it should include the services, but not both. following: Often the project may require a phased consult- · Name of the Borrower ant assignment. In such cases, the TOR should be · Project location more detailed for the first phase and less detailed for DEVELOPING THE TERMS OF REFERENCE 49 1 0 . 3 . 3 Scope of Work the subsequent ones. The TOR for the subsequent 10.3.5 Reports and Schedule phases will be refined based on outcomes of the earlier of Deliveries phases. In a TOR, the scope of work of the assignment is The TOR should indicate the estimated duration of the usually defined by addressing the following issues (de- assignment, from the date of commencement2 to the pending on the project features and objectives of the date the Borrower receives and accepts the consultant's assignment, some of these issues may not be relevant, final report or a specified completion date. Other dates while others may have to be added): may be considered (for example, the date of effective- ness of the contract). The assignment's reporting re- · Relevance of the assignment for the implementa- quirements should be clearly specified. In particular, tion of the project for inception and progress reports, there should be a · Definition, scope, and limits of the assignment balance between keeping the Borrower well informed · Desiredlevelofdetail(levelofdesign,accuracy,com- and not forcing consultants to spend an excessive position of cost estimates, and so forth) amount of time preparing minor reports. The TOR · Span of projections (time horizon, life span of proj- should indicate the format, frequency, and content of ect components, and so forth) reports, as well as the number of copies, the language, · Necessary comparison of the assignment with simi- and the names of the prospective recipients of the re- lar projects ports. For all major reports, an executive summary is · Main issues to be addressed recommended as a separate volume. · Alternatives to be considered, and the main criteria Depending on the assignment, the following re- to be used to compare them ports are usually required: · Required surveys, special analyses, and models · Special equipment requirements (a) Inception Report. This report should be submitted · Borrower's institutional framework, organization, shortly after the commencement date. Any major and legal setting inconsistency in the TOR, deficiency in Borrower · Transfer of knowledge, objectives, and scope assistance, or staffing problems that have become · Language requirements apparent during this period should be included. · Units of measurement to be used The inception report is designed to give the · Need for continuity, such as data gathering Borrower confidence that the assignment can be · Quality management requirements (if needed) carried out as planned and as agreed on in the con- Phased assignments are likely to require that the tract, and it should bring to the Borrower's atten- scope of work be modified, depending on intermediate tion major problems that might affect the direction results. For instance, the scope of work for a feasibility and progress of the work. study originally covering a number of alternatives will (b) Progress Reports. These reports keep the Borrower be reduced if, during execution of the assignment, some and Bank regularly informed about the progress of alternatives prove not viable. Similarly, the scope of the assignment. They may also provide warnings of work can be expanded if more-accurate studies than anticipated problems or serve as a reminder for initially anticipated become necessary. In such cases, payment of invoices due. Depending on the needs the TOR should clearly indicate the circumstances of the assignment, progress reports may be deliv- under which a decision will be made by the Borrower ered monthly or bimonthly. For feasibility studies to modify the scope of work. and design assignments, delivery of progress re- ports at two-month intervals is generally satisfac- tory. For technical assistance and implementation 10.3.4 Capacity Building and supervision (in construction, for instance) progress Transfer of Knowledge reports are best submitted monthly. Progress re- If capacity building and transfer of knowledge are a ports may include a bar chart showing details of specific objective of the assignment, the TOR should progress and any changes in the assignment sched- provide specific details on the characteristics of the re- ule. Photographs are a quick and easy way of con- quired services and ask consultants to propose ap- veying the status of a project, and their use in proach and methodology (as discussed in chapter 6 of progress reports is encouraged. For technical assis- the Manual). tance services, progress reports also serve to set out 50 DEVELOPING THE TERMS OF REFERENCE Institutional and Organization Arrangements 1 0 . 3 . 7 the work program for the following months. Each To avoid difficulties caused by delays in allocating team member usually contributes to the prepara- Borrower counterpart staff to the project, the TOR tion of the monthly report. should be provided for such staff before the assignment (c) Interim Reports. If the assignment is phased, in- begins (para. 10.2). During the initial drafting of the terim reports are required to inform the Borrower TOR, the Borrower should, with assistance from Bank of preliminary results, alternative solutions, and staff, determine which of the Borrower's staff can act as major decisions that need to be made. Because the counterpart. If the Borrower provides support staff recommendations of an interim report may affect who will work under the consultants' responsibility, the later phases of the assignment (and even influence TOR should clearly indicate that the said staff will work the results of the project), both the Bank and the the same hours as consultants, will be under the con- Borrower should discuss the draft interim reports sultants' supervision, and will not be remunerated with consultants in the field. The Borrower should under the consultants' contract. not take more than 15 days to review and approve The Borrower's inputs, if not well defined in ad- draft interim reports. vance, are often a matter of contention for the duration (d) Final Report. The final report is due at the comple- of the assignment. Consultants tend to overestimate the tion of the assignment. The Borrower, Bank, and Borrower's contribution, and as a result, they reduce consultants should discuss the report while it is still their proposal price, particularly if the method of selec- in draft form. The consultants alone are responsi- tion takes price into account. Borrowers also tend to ble for their findings; although changes may be sug- promise more than they can actually deliver. It is there- gested during the discussions, consultants should fore important that the Borrower's inputs are defined not be forced to make such changes. If the consult- in the TOR as precisely and realistically as possible. ants do not accept comments or recommendations from the Borrower, these should be noted in the re- 10.3.7 Institutional and port. The consultants should include in the report Organization Arrangements the reasons for not accepting such changes. The TOR should define the institutional setup and the organization surrounding the assignment and indicate 10.3.6 Data, Services, Personnel, and the role and responsibilities of all those involved, spec- Facilities to Be Provided by the Borrower ifying the type, timing, and relevance of participation. The TOR should define the hierarchy and level of The RFP indicates the inputs provided by the Borrower authority of counterpart personnel, as well as the re- to the consultants in section 2, Instructions to Consult- quested level of experience of the Borrower's personnel ants (ITC). The TOR should complement the ITC by who will be integrated into the consultants' team. listing in detail all the information and services that will be made available by the Borrower. The TOR should also describe the Borrower's available software and Notes computer models to be used by the consultants, if any. Facilities to be provided by the Borrower may include 1. In TOR covering self-contained assignments such as office space, vehicles, survey equipment, office and feasibility studies and project designs, consultants computer equipment, and telecommunication systems. are generally required to describe the "activities" When possible, the Borrower may provide vehicles that they propose to carry out. In TOR of assign- for use by consultants during the course of their as- ments consisting mainly of the provision of special- signment. Otherwise, these should be provided for ized staff to assist the Borrower in certain functions, under the consultants' contract and turned over to the consultants are required to describe the "tasks" for Borrower at completion. The same can apply to items which they will be responsible. such as office and computer equipment. The Borrower 2. Date on which the consultants are expected to start should request compatibility with its own equipment. the services. DEVELOPING THE TERMS OF REFERENCE 51 C H A P T E R 11 Estimating Costs and Setting the Budget 11.1 Main Considerations · Communications · Office rent, supplies, equipment, shipping, and The cost estimate of a consulting assignment is prepared insurance by adding the remuneration of consultant staff and the · Surveys direct expenses to be incurred by consultants for the ex- · Capacity building and training programs ecution of that assignment. Those amounts are based on · Report translation and printing an estimate of staff time (expert per unit of time, hour, · Taxes and duties month) required to carry out the services and an esti- · Contingencies mate of each of their related cost components. Because the estimate of the required staff time is derived from the The cost estimate of an assignment is based on an TOR, the more exhaustive and accurate the TOR, the estimate of the personnel time (staff-months or staff- more precise the estimate. Sometimes the scope of work hours) required for carrying out the services, taking of the services is difficult to define and quantify because into account the time required by each expert, his or her billing rate, and the related direct cost compo- the output, extent, or exact duration of the services can- nents. When preparing a cost estimate, it is useful to not be easily specified in advance. In such cases, Bank draft a bar chart indicating the duration of each main staff should assist the Borrower by having an expert re- activity (work schedule) and the time to be spent by the view or prepare the TOR, staff time, and cost estimate consultant staff (staffing schedule). Examples of such and in adopting a selection method that takes these dif- schedules are given in appendixes 3 and 4, and exam- ficulties into account. ples of detailed cost estimates are given in appendix 5. A mismatch between the cost estimate and the TOR When the consulting services are to be carried out is likely to mislead consultants on the desired scope, by a mix of foreign and national consultants, the cost depth, and detail of the service required and may even- estimate should identify those portions to be paid in tually generate serious problems during contract nego- foreign and national currency, such as monthly rates tiations or (worse) during the implementation of the for professional staff, imported equipment, inter- assignment. Preparing a staff-month and cost estimate national travel and domestic travel, and all support for a consulting assignment is an interactive process services. Under Bank rules, the Borrower may require necessary to clarify to the Borrower whether the assign- consultants to accept reimbursement of local expenses ment can be carried out in a manner compatible with in local currency. Cost estimates include a breakdown the project objectives and the resources available. The of the total costs of the assignment in foreign and local preparation of the cost estimate can lead to the revision currency. (Figure 11.1 shows a flow chart for preparing of the TOR, including the scope of work of the services a cost estimate.) and the organization arrangements of the Borrower. In general, a cost estimate includes items relating to the following: 11.2 Estimating Cost · Consultant staff remuneration Components · Travel and transport 11.2.1 Consultant Staff Remuneration · Mobilization and demobilization · Staff allowances Staff remuneration is generally broken down into for- · Information systems eign and national staff, who may be further subdivided 52 Consultant Staff Remuneration 1 1 . 2 . 1 Figure 11.1 Estimating Cost and Budget TOR Assignment-Related Staff-Months Effort Other Expenses Activities - International and Foreign Staff Local Staff Local Air Fares - Other Travel Costs - Subsistence - Surveys Allowances Consultants' - Soil Investigations - Communications Clients' Country Country - Acquisition of - Office Rent Equipment & - Office Supplies Software - Report Translation - Other Activities - Shipping of Staff-Day or Staff-Month Personal Effects Staff-Hour Rates; Overseas - Local Taxes Rates Allowances - Others Cost of Cost of Foreign & Local Foreign & Local Foreign Staff Local Staff Currency Cost Currency Cost Contingencies: Physical Price, Escalation Tentative Budget Consistent with No Available Funds? Yes Final Budget into key staff and support staff. Foreign personnel may highest or the lowest international rates, but using rea- be split into field and home office staff. Remuneration sonable rates that allow for quality work in the field of rates for staff vary according to the sector of specializa- the assignment. To allow Borrowers the benefits of tion, depending on their experience, qualifications, widespread competition and flexibility in the type and and nationality. Adopting realistic remuneration rates origin of consultants, the Bank considers that ceilings when drafting estimates is difficult when proposals on remuneration rates are not acceptable. However, from different nationalities are expected. The estimated consultants should not take advantage of this and of the staff-months should not be priced based on either the lack of experience or information of some Borrowers to ESTIMATING COSTS AND SETTING THE BUDGET 53 1 1 . 2 . 1 Consultant Staff Remuneration propose unreasonable rates. Rates of NGOs and non- 11.2.4 Staff Allowances profit organizations are generally lower than those Expatriate staff normally are paid overseas and subsis- of private consulting firms. Rates charged by inter- tence allowances. The overseas allowance is part of the national consultants may also vary from case to case, monthly rate and is meant to represent an incentive for depending on factors such as Borrower-country risk, consultant personnel to accept work overseas. The sub- technical difficulty of the assignment, and the loca- sistence allowance is paid separately and generally in tion of the services (either in the home office, in the local currency to cover out-of-pocket expenses such as Borrower offices, or at the project site). hotel and living expenses. Staff allowances also cover In general, staff remuneration rates include dif- the costs of children's education and are normally paid ferent proportions of the following components, de- on a monthly basis for long-term assignments and on a pending on company- and sector-specific factors and calendar-day basis for short-term assignments. consultant country laws: · Basic salary 11.2.5 Communications · Social charges · Overheads Reasonable monthly allocations for international and · Fees or profit local telecommunications should be included. Modern · Allowances telecommunications, such as teleconferencing and the Internet, often can represent a cost-effective substitute Knowledge of the breakdown of staff remunera- for travel. tion rates may be necessary during the evaluation of certain financial proposals and during negotiations of time-based contracts when price is not a factor of se- 11.2.6 Office Rent, Supplies, Equipment, lection or when consultant rates appear to differ sub- Shipping, and Insurance stantially from those normally charged in the specific Depending on the assignment, local costs for office rent market segment. and supply of local equipment (including hardware) should be estimated separately, according to local rates. 11.2.2 Travel and Transport Foreign currency costs for supplies and equipment (in- cluding specific software, when needed) should also be To estimate travel and transportation expenses, it included in the estimate, together with related shipping should be assumed that all foreign consultant staff will and insurance costs. originate from the farthest eligible country. For assign- ments expected to last more than six months, a good 11.2.7 Surveys rule is to assume that two-thirds of the team members have dependents and to allow three round-trip airfares The cost of surveys (such as topography, cartography, per year for each of the families and one such trip for subsurface investigations, and satellite imaging) re- the remaining one-third of team members. Local travel lated to the assignment, as well as any other services to and transport costs should be based on local rates. The be subcontracted, should be estimated. number and type(s) of vehicles, as well as their opera- tion and maintenance costs, should also be included in 11.2.8 Report Translation and Printing the estimate. The cost of printing or translating reports is substan- 11.2.3 Mobilization and Demobilization tial and should be included in the cost estimate. Each staff member shall be allowed reasonable travel 11.2.9 Taxes and Duties time, a medical checkup, hotel costs, local transpor- tation, and miscellaneous items. Costs for shipping When preparing cost estimates, it is important to be personal effects should also be estimated. For more aware of the local indirect taxes (for example, value details, Bank staff may consult the staff relocation poli- added or sales taxes), levies, and duties that foreign and cies of the UN Development Program (UNDP) or the domestic consultants may have to pay and then be re- Bank itself.1 imbursed for by the executing agency in the Borrower 54 ESTIMATING COSTS AND SETTING THE BUDGET When Estimating Cost Components Is Not Possible 1 1 . 3 country. Local indirect tax items are transfers that are 11.3 When Estimating Cost not to be taken into account in the evaluation of finan- Components Is Not Possible cial proposals (para. 2.22 of the Consultant Guidelines).2 Nevertheless, local taxes and duties may represent a There may be assignments whose exact scope of work cash-flow burden for the executing agency, especially if cannot be clearly defined. In some cases, the need for reimbursements from the central administration of the consulting services originates from expected or unex- Borrower are slow. (Taxation of consulting services is pected emergency situations for which the scope of discussed in more detail in appendix 8 of this Manual.) work of the consultant assignment cannot be predeter- mined. In such cases, a reliable cost estimate is impos- sible, and a budget may have to be established based on 11.2.10 Contingencies funds availability, and the consultant will be selected The contingency amount, which completes the cost based on its past qualifications in similar assignments. estimate, should cover physical and price items. When the assignment to be entrusted to consult- Physical contingencies provide for unforeseen work ants is new or very unfamiliar to the Borrower and to that may be needed, while price contingencies account the consultants themselves, the best advice is to let for monetary inflation and other price increases (sub- consultants prepare a cost estimate based on their ex- paras. 18.6.7 [a] and [b]). perience and the conditions of the assignment. In such Physical contingencies are usually set at 10 to cases, the Borrower should invite proposals from con- 15 percent of the estimated cost of the assignment. A sultants with a high reputation of capacity and in- higher percentage may be appropriate for assignments tegrity and conduct the selection based on quality only in which the scope of work cannot be accurately spec- (QBS), followed by financial negotiations with the ified in advance and the amount of work required first-ranked consultant. from the consultant is uncertain (such as emergency assignments). Price contingencies for foreign and local costs should be considered only when the impact of Notes inflation or of other cost increases is expected to be sub- stantial. These contingencies should apply not only to 1. World Bank Staff Manual, rules 4.03, 6.13, and 6.17. the period of the assignment but also to the period 2. Local taxes, levies, and duties do not represent a between the drafting of the estimate and the start of the cost for the Borrower and are not financed by the assignment if this is likely to be delayed. Bank. ESTIMATING COSTS AND SETTING THE BUDGET 55 C H A P T E R 12 Setting the Evaluation Criteria 12.1 Introduction · Description of the technical approach and method- ology, work plan, and organization and staffing The assignment objectives and the underlying TOR proposed by the consultants to perform the assign- determine the qualifications and experience required ment (see para. 3.4 [c][i] of the ITC) of the selected consultants. In adopting the evaluation · Proposed professional staff (see para. 3.4 [d] of criteria of technical proposals, the Borrower wants to the ITC) ensure that the selected consultant is the most likely to · Estimates of the staff input needed to carry out the provide the best quality for the services given. Present assignment (see para. 3.4 [e] of the ITC) World Bank rules offer two types of technical proposal · Curricula vitae (CVs) of the proposed professional that may be used for the selection of consultants: the staff (see para. 3.4 [f] of the ITC) Full Technical Proposal (FTP) and the Simplified · Description of the proposed methodology and Technical Proposal (STP). Because the FTP and STP, staffing for training, if the training is a specific to some extent, differ in structure and content, crite- component of the assignment (see para. 3.4 [g] of ria that Borrowers shall use for their evaluation should the ITC) reflect these differences. Para. 12.2 briefly describes the structure and con- The FTP is recommended when tent of the FTP and STP and provides guidance for (a) the assignment is likely to have significant down- choosing the proposal type best fitted to the charac- stream impacts; teristics of the assignment. Paras. 12.3 through 12.10 (b) the assignment is large and complex and the TOR provide guidance for the definition of the relevant require consultants to carry out activities that evaluation criteria and subcriteria. differ substantially from each other or activities whose contents may vary, depending on the results of other previous activities to be carried 12.2 Types of Technical Proposal out under the same assignment (as may be the case, for example, with a phased assignment or 12.2.1 The Full Technical Proposal (FTP) an assignment requiring the comparison of dif- ferent alternatives); The FTP is the most detailed format of technical pro- (c) the assignment is new and unusual, making it posal; it was the only format used for the selection of difficult to specify, in the TOR, the tasks that consultants under Bank-financed projects up to the the consultants will have to complete, or alter- issue of the May 2004 edition of the Bank Standard native methods can be used to achieve the as- Request for Proposals (SRFP). The FTP comprises the signment objectives and required outputs; following seven sections: (d) the characteristics of the assignment require the · Briefdescriptionoftheconsultants'organizationand evaluation of specific aspects of the consultants' experience (see para. 3.4 [a][i] of the Instructions to experience, in addition to those already consid- Consultants [ITC] of the SRFP) ered by the Borrower during the preparation of · Consultants' comments on the TOR and on coun- the short list (the FTP [and not the STP] pro- terpart staff and facilities (see para. 3.4 [b][i] of vides a specific section in which consultants are the ITC) requested to outline their organization and re- 56 Evaluation Criteria for the FTP 1 2 . 3 . 1 cent experience on assignments similar to the the proposed technical approach and method- one under consideration); and ology, work plan, organization, and staffing are (e) the capacity-building program is a specific com- relatively uncomplicated and may be reasonably ponent of the assignment, because the FTP (and limited to 10 pages, and [ii] the Borrower can not the STP) provides not only a specific section evaluate the technical proposals without using in which consultants are requested to lay out subcriteria); their proposed methodology and staffing for ca- (c) the characteristics of the assignment do not re- pacity building, transfer of knowledge, and train- quire the evaluation of specific aspects of the ing but also a specific criterion (and subcriteria, consultants' previous work experience, in addi- if needed) for the Borrower to evaluate the suit- tion to those already considered by the Borrower ability of the proposed program. for the short list; and (d) capacity building is not a specific component of The FTP offers consultants the possibility of de- the assignment, and consequently it does not scribing their proposed methodology without limit to require a separate evaluation. the number of pages, while the STP recommends lim- iting it to 10 pages (see para. 12.2.2). The FTP also When one or more of the above conditions are not allows the Borrower to use subcriteria to evaluate (a) the fulfilled, the FTP should be used instead of the STP. adequacy of the proposed methodology and work plan The STP reduces the time and cost required not (see para. 12.3.1) and (b) the capacity-building pro- only by the consultants to prepare their proposals but gram, if requested by the TOR. also by the Evaluation Committee to evaluate them. 12.2.2 The Simplified Technical 12.3 Evaluation Criteria Proposal (STP) of Technical Proposals The STP is a new, less-detailed format of technical pro- 12.3.1 Evaluation Criteria for the FTP posal introduced in the May 2004 edition of the Bank SRFP. Different from the FTP, the STP comprises the The following criteria shall be used as a basis for eval- following four sections: uation of the FTP: · A description of the proposed technical approach · Specific experience of the consultants relevant to and methodology, work plan, organization, and the assignment staffing by the consultants undertaking the assign- · Adequacy of the proposed methodology and work ment (this section could also include consultants' plan in responding to the TOR comments on the TOR and counterpart staff and fa- · Key professional staff qualifications and compe- cilities and should normally comprise 10 pages, in- tence for the assignment cluding, if needed, charts and diagrams) (see para. Depending on the particular objectives of the as- 3.4 [c][i] and 3.4 [c] [ii] of the ITC) signment, two additional criteria may be required: · The proposed professional staff (see para. 3.4 [d] of the ITC) · Suitability of the transfer-of-knowledge (capacity- · Estimates of the staff input needed to carry out the building) program assignment (see para. 3.4 [e] of the ITC) · Participation by national consultants among pro- · Curricula vitae (CVs) of the proposed professional posed key staff staff (see para. 3.4 [f] of the ITC) The first of these two optional criteria should be included and the capacity-building program should The STP should be used when be clearly mentioned in the TOR when a transfer-of- (a) the assignment is unlikely to have significant knowledge (capacity-building) program is required by downstream impacts; the nature of the assignment (see chapter 6). The sec- (b) the assignment is of a routine, straightforward, ond optional criterion, participation of national con- or simple nature and when the TOR already de- sultants, should be included when necessary for the fine in detail the tasks the consultants will have assignment or desirable because the Borrower wants to to complete, the assignment objectives, and re- encourage the participation of national consultants in quired outputs (therefore, [i] the description of its activities as a matter of policy. SETTING THE EVALUATION CRITERIA 57 1 2 . 3 . 1 Evaluation Criteria for the FTP The Data Sheet contained in the ITC of the actual The other three evaluation criteria, RFP will indicate the points allocated to each of the cri- · specificexperienceoftheconsultantsrelevanttothe teria and subcriteria (see Paragraph Reference 5.2 (a) of assignment, the Data Sheet). Table 12.1 shows the range of points · suitability of the transfer-of-knowledge (capacity- that may be allocated to each criterion on a scale of 1 to building) program, and 100 in accordance with Bank Guidelines. The actual · participation by national consultants among pro- points must be adjusted to the specific characteristics posed key staff and circumstances of the assignment, including the rel- ative importance of each criterion or the Borrower's might also be divided into subcriteria. However, given preferences. A very good practice is to have those who their relatively small assigned weights (in most cases, a prepared the TOR advise on the choice of criteria and, maximum of 10 points each out of 100), adoption of if needed, subcriteria and the points given to each. subcriteria is not recommended, and the suggested ap- The criterion "adequacy of the proposed method- proach for evaluating an FTP under these three criteria ology and work plan in responding to the TOR" is is to assess the substantial responsiveness of the proposal divided into the following three subcriteria (see to the aspects listed for each of them in chapter 17. Paragraph Reference 5.2 [a][ii] of the Data Sheet of When the capacity-building program is a particu- the ITC): larly important component of the assignment, or even · Technical approach and methodology its main objective, this fact should be indicated in the · Work plan TOR; in such case, subject to the Bank's prior clearance, · Organization and staffing more than 10 points may be allocated to this criterion and subcriteria may be provided (see para. 12.8). The criterion "key professional staff qualifications Because subcriteria and their weighting often de- and competence for the assignment" is divided into termine the outcome of the evaluation, they must be the following three subcriteria (see para. 2.17 of the derived from the aspects that are critical to the success Consultant Guidelines and Paragraph Reference 5.2 of the assignment. Evaluation criteria and subcriteria, [a][iii] of the Data Sheet of the ITC): associated points, and the rating system form a numeric · General qualifications model to assess the technical merit of each proposal. · Adequacy for the assignment The more accurate the model, the more reliable the · Experience in region and language evaluation and the greater the likelihood that the Borrower will select the proposal of the consultants best suited for the assignment. All adopted subcriteria should be specified in the Table 12.1 Point Distribution of RFP as follows (see Paragraph Reference 5.2 (a) of the Evaluation Criteria for the FTP Data Sheet): Evaluation criteria Points · Underthecriterion"adequacyoftheproposedtech- nical approach, methodology, and work plan in re- Specific experience of the 0­10 sponding to the TOR," Borrowers must indicate the consultants points assigned to each one of the three subcriteria: Adequacy of the proposed 20­50 "technical approach and methodology," "work methodology and work plan plan," and "organization and staffing." Key professional staff 30­60 · Under the criterion "key professional staff quali- qualifications and competence fications and competence for the assignment," Suitability of the transfer-of- Normally 0­10 Borrowers must indicate the percentage weights as- knowledge (training) signed to each one of the three subcriteria: "general program--optional qualifications," "adequacy for the assignment," and Participation by national 0­10 "experience in region and language." Under this cri- consultants among proposed key staff--optional terion, Borrowers should also indicate, in addition to the team leader, whose position is mandatory, each Total 100 one of the key experts responsible for the main activ- 58 SETTING THE EVALUATION CRITERIA Evaluation Criteria for the STP 1 2 . 3 . 2 ities or technical disciplines of the assignment and the · Adequacy of the proposed technical approach, points assigned to each of them. methodology, and work plan in responding to the · When more than 10 points are allocated to "suit- TOR ability of the transfer-of-knowledge program," it is · Key professional staff qualifications and compe- recommended that the points allocated to the three tence for the assignment subcriteria spelled out in the Paragraph Reference 5.2 The Data Sheet contained in the ITC of the RFP (a)(iv) of the Data Sheet be disclosed in the RFP, discloses the points allocated to each of the evaluation because it increases the transparency of the evalu- criteria and subcriteria (see Paragraph Reference 5.2 [b] ation. The Borrower may adopt subcriteria that of the Data Sheet). Table 12.2 shows the range of points differ from those indicated in the Data Sheet if they that may be allocated to each of the two criteria on a do not adequately meet the characteristics of the scale of 1 to 100, in accordance with Bank Guidelines. capacity-building program. If points allocated The actual distribution should depend on the type of to subcriteria are not disclosed in the RFP, the assignment, the relative importance of the two criteria Evaluation Committee should allocate them shortly for the success of the assignment, and the preferences before proposal submission to reduce the risk of of the Borrower. A very good practice is to have those manipulation during the evaluation process. who prepared the TOR advise on the selection of sub- · The points allocated to each subcriterion should criteria and related points. vary according to its relative importance for the The criterion "key professional staff qualifications consultant assignment. It is recommended that no and competence" is divided into the following three fewer than 3 points be allocated to each subcrite- subcriteria (see para. 2.17 of the Consultant Guidelines rion. Allocation of fewer than 3 points would imply and Paragraph Reference 5.2 [b][ii] of the Data Sheet of that the subcriterion is of only minor importance to the ITC): the overall evaluation. · General qualifications Defining whether the methodology and work plan · Adequacy for the assignment or the quality of staff is more important depends on the · Experience in the region stage of the project, the nature of the assignment, and the preferences of the Borrower. On the one hand, be- Because the rationale of the STP is to provide a for- cause the methodology and work plan are usually less mat that is less time-consuming, less costly to prepare, important in the final stages of the project (such as con- and simpler to evaluate than the FTP, it is suggested struction supervision) and deserve fewer points, weight that no subcriteria for the criterion "adequacy of the given to key staff may be higher. On the other hand, be- proposed technical approach, methodology, and work plan in responding to the TOR" be adopted, but that cause the methodology and work plan are more im- the criterion be evaluated as a whole (see para. 17.3.4 of portant in the initial stages of a project (such as master this Manual). plans and feasibility studies) and deserve more points, Under the criterion "key professional staff qualifi- fewer points are left to key staff (see table 12.6). A cations and competence for the assignment," Borrowers Borrower with a strong sense of ownership over the must indicate the percentage weights assigned to each intellectual work requested of the consultant may one of the three subcriteria "general qualifications," dictate its own approach in the TOR and even in the methodology, in which case it may value the key staff of the consultants more than their firm's experience Table 12.2 Point Distribution of or methodology. Evaluation Criteria for the STP (Paras. 12.4 to 12.8 suggest proven practices for Evaluation criteria Points selecting subcriteria and allocating points [weights] to criteria and subcriteria for the evaluation of quality.) Adequacy of the proposed 20­40 methodology and work plan 12.3.2 Evaluation Criteria for the STP Key professional staff 60­80 qualifications and competence The following criteria shall be used as a basis for eval- Total 100 uation of the STP: SETTING THE EVALUATION CRITERIA 59 1 2 . 3 . 2 Evaluation Criteria for the STP "adequacy for the assignment," and "experience in re- the assignment because the Borrower has already short- gion and language." Under this criterion, Borrowers listed them based on their capabilities (that is, relevant should also indicate, in addition to the team leader, qualifications and experience in assignments of a simi- whose position is mandatory, each key staff responsible lar nature). Ideally, there should be little difference be- for the main activities or technical disciplines of the as- tween short-listed competitors from the point of view signment and the points assigned. of their specific experience. However, the experience of (Para. 12.7 recommends "best" practices for allo- short-listed consultants is evaluated to identify more- cating points (weights) to criteria and subcriteria for specific aspects of their qualifications that make them quality evaluation of the proposed key professional more-suitable candidates for the proposed assignment. staff.) Depending on the importance of such specific aspects, the Borrower will decide how many points to allocate to this criterion. It is recommended that no fewer than 12.3.3 Relative Weight of Technical 5 points be allocated; otherwise, the evaluation of the and Financial Proposals; specific experience of consultants in the field of the as- Minimum Technical Score signment would become practically irrelevant. (Aspects For both the FTP and STP, when cost is a factor of se- most frequently considered for evaluating specific ex- lection, the RFP has to indicate the relative weight as- perience are listed in para. 17.2.2 of this Manual.) signed to the technical and financial proposals. The weight for quality is normally 80 percent, with 20 per- cent for cost. Allocating more than 20 percent to the 12.5 Methodology and Work cost of the services is justified only for the selection Plan (for the FTP only) of procurement agents and inspection agents, which may be weighted up to 50 percent (see Consultant The methodology and work plan for performing the as- Guidelines, paras. 3.17 and 3.18). Bank policy requires signment is a key component of the technical proposal that the cost not be weighted less than 20 percent; and should be evaluated carefully. This may require the otherwise, the benefits of price competition would be selection of evaluation subcriteria well suited to the spe- minimal for the Borrower compared with the dis- cific aspects of the methodology and work plan pro- advantage of not being allowed to negotiate remu- posed by the consultants. neration rates. However, when quality is of primary A thorough methodology and work plan should importance, a minimum weight of 10 percent may be generally outline the following three main aspects of allocated to cost. the assignment: It is not mandatory to apply a pass-or-fail threshold when evaluating technical proposals. However, if cost is · Technical Approach and Methodology. In this sec- a factor of selection, a minimum technical qualifying tion, consultants are expected to highlight their un- mark may be provided in the RFP to reduce the risk of derstanding of the objectives of the assignment, the accepting low-quality proposals at a very low cost. A issues and their importance, and the approach they minimum technical qualifying mark in the range of would adopt to address them. They should then out- 70 to 80 percent is normal. Any technical proposal line the methodologies they propose to adopt and with a score below this mark is rejected, and the finan- show the compatibility of those methodologies with cial envelope is returned unopened at the end of the se- the proposed approach (for instance, the methods of lection process. Setting the threshold too high increases interpreting available data; carrying out investiga- the risk that most proposals will be rejected. (A nonre- tions, analyses, and studies; and comparing alterna- sponsive technical proposal will be rejected regardless of tive solutions). If the TOR requires the consultant to whether there is a minimum mark or not.) provide a Quality Plan and carry out the assignment according to its provisions, an outline of the Quality Plan (its list of contents, for example) should be in- 12.4 Specific Experience cluded in this section of the proposal. (for the FTP only) · WorkPlan.Theconsultantswillalsooutlinethemain activities of the assignment and their content and In the Bank SRFP, a maximum of 10 points is assigned duration, phasing and interrelations, and milestones to the specific experience of consultants in the field of (including interim approvals by the Borrower), as 60 SETTING THE EVALUATION CRITERIA Methodology and Work Plan (for the STP only) 1 2 . 6 well as delivery dates of the most important outputs. subcriteria may be inserted. A feasibility study of a The consistency of the technical approach and new seaport is an example in which the TOR assign methodology with the proposed work plan is a good major importance to traffic forecast, comparison of indication that consultants are able to translate their different layout alternatives, and design of large mar- understanding of the TOR into a working plan. A list itime structures. of the documents, including reports, drawings, In this case, the subcriterion "technical approach and tables to be delivered as the final output, should and methodology" might be split into four subcrite- be included here. The work plan will enable the ria, increasing the total number of subcriteria to six, as consultants to prepare the Work Schedule, follow- follows: ing Form TECH-8 of the RFP. · Traffic forecast · Organization and Staffing. In this section, the con- · Analysis of alternative layouts sultants outline the proposed structure and compo- · Geotechnical studies sition of their team. It will list the main activities · Other aspects of technical approach and method- involved, the key experts responsible, and proposed ology technical and support staff. The roles and responsi- · Work plan bilities of key experts should be set out in brief job · Organization and staffing descriptions. In case of association, this section will indicate how the duties and responsibilities will be This breakdown helps the Evaluation Committee shared among its members. Completion of the or- better focus on the different levels of detail in its ganization and staffing section will allow consultants evaluation. to summarize the team composition and task as- A phased assignment in which there is a need to signments in Form TECH-5 of the RFP and prepare evaluate the different phases separately (see para. the staffing schedule following Form TECH-7. An 10.3.3) is another example. In this case, the subcrite- organization chart illustrating the structure of the rion "technical approach and methodology" might be work team and the proposed links to the Borrower split into two subcriteria, increasing the total number and institutions involved in the project should also of subcriteria to four, as follows: be provided. · Approach and methodology of the first phase The approach and methodology, work plan, and or- · Approachandmethodologyofthesubsequentphases ganization and staffing are integrated aspects. The · Work plan · Organization and staffing work plan depends on the technical approach and methodology adopted, and those in turn determine The total points allocated to methodology and the required organization. work plan (20 to 50 for the FTP) should be split among To facilitate its understanding and evaluation the subcriteria, depending on the relative importance of the technical proposals, Borrowers are advised to of each for the assignment. Even in these cases, the invite consultants to illustrate in separate sections of number of subcriteria should be kept to a minimum. their proposals, in a concise manner, each of the three Otherwise, the features being evaluated may become aspects (see Form TECH-4 in section 3 of the ITC; also individually irrelevant and make the evaluation a me- para. 14.4.2). chanical exercise, rather than an informed professional Consistent with this recommendation, the follow- assessment of quality. ing subcriteria for the evaluation of "adequacy of the proposed methodology and work plan in responding to the TOR" are provided for under Paragraph Reference 12.6 Methodology and Work 5.2 (a)(ii) of the Data Sheet of the ITC: Plan (for the STP only) · Technical approach and methodology For assignments requiring an STP, technical proposals · Work plan are clearer when consultants outline in three separate · Organization and staffing chapters, even briefly, their technical approach and In very complex assignments, when the TOR re- methodology, work plan, and organization and staffing. quire consultants to carry out activities that differ Only for small or very simple assignments can such substantially from each other, additional evaluation subdivisions be omitted without diminishing the clarity SETTING THE EVALUATION CRITERIA 61 1 2 . 6 Methodology and Work Plan (for the STP only) of the proposal (also see the note in italics provided uation shall consider the combined qualifications and under the Form TECH-4 of the RFP). experience of all the proposed key professional staff in Between 20 and 40 points may be allocated by the each of the technical disciplines (also see para. 16.5.2 of Borrower under Paragraph Reference 5.2 (b)(i) of the this Manual). However, the team leader shall be evalu- Data Sheet of the ITC for the criterion "adequacy of ated separately because of his or her relevance for the the proposed methodology and work plan in respond- success of the assignment. ing to the TOR." Because no subcriteria are provided, An example of such distribution for the same the Borrower shall evaluate the proposed methodology agricultural development project outlined above is as and work plan as a whole, taking into consideration the follows: aspects listed under para. 17.3.2 and preferably using · Team leader: 25 points the grades indicated under para. 17.3.4. · Agronomy: 10 points · Pedology: 9 points · Socioeconomics: 8 points 12.7 Key Professional Staff · Hydraulic engineering: 8 points Qualifications and Competence Total 60 points for the Assignment (for both the The actual number of points (score) to be assigned FTP and STP) to each of the above positions (or technical disciplines) Key staff refers to the consultant staff who have man- shall be determined taking into consideration the qual- agement responsibilities or the key qualifications re- ifications and experience of the relevant key staff shown quired for the assignment. The RFP (see Paragraph in their curricula vitae (CVs). The evaluation is carried Reference 5.2 [a][iii] of the Data Sheet for the FTP and out using the following three subcriteria indicated in Paragraph Reference 5.2 [b][ii] of the Data Sheet for the the ITC:1 STP) shall indicate the distribution of points among the · General Qualifications. This subcriterion covers the key staff members who will cover the positions that the general experience of the candidate (total duration of Borrower considers most important for the success of professional activity), level of education and training, the assignment. Because the success of the assignment positions held by the candidate, time spent with the depends to a large extent on the performance of the consultant as staff, experience in the region where the team leader, in no circumstances should he or she be assignment is to be carried out, and so forth. given less weight than any other staff member. In small · Adequacy for the Assignment. This subcriterion re- teams, the team leader may be given more than 50 per- lates to the education, training, and experience of the cent of the total points allocated to this criterion. candidate in the specific sector, field, subject, and so An example of such distribution for an agricul- forth directly relevant to the assignment and the pro- tural development project is outlined below (it is as- posed position. This factor is critical and should be sumed that the total points allocated to the criterion given the greatest weight among the three subcriteria. "key professional staff qualification and competence · ExperienceintheRegionandLanguage.Thissubcri- for the assignment" is 60): terion illustrates the candidate's knowledge of local · Team leader: 25 points conditions, including culture, administrative sys- · Chief agronomist: 10 points tems, and government organizations, as well as his or · Chief pedologist: 9 points her ability to communicate in the local language. · Chief socioeconomist: 8 points Borrowers shall indicate in the Data Sheet of the · Chief hydraulic engineer: 8 points RFP (see Paragraph Reference 5.2 [a][iii] of the Data Total 60 points Sheet for the FTP, and Paragraph Reference 5.2 [b][ii] Some assignments (more specifically, those involving of the Data Sheet for the STP) the percentage weight large teams) may require interdisciplinary weighting. assigned to each of the above three subcriteria, based In these cases, Borrowers may indicate the points allo- on the weight ranges set out in table 12.3: cated to the most significant technical disciplines in the The following example illustrates the combined RFP, instead of those relating to staff members cover- weighting scheme that may be applied to the criterion ing the most important positions. In this case, the eval- "key professional staff qualifications and competence 62 SETTING THE EVALUATION CRITERIA Capacity-Building Program and Training (for the FTP only) 1 2 . 8 Table 12.3 Range of Percentage in The detailed point allocation resulting from the Point Distribution of Key Professional breakdown above is summarized in table 12.4. Staff Qualifications and According to table 12.4, the team leader can be Competence Subcriteria given a maximum of 7.5, 12.5, and 5 points, respec- tively, under "general qualifications," "adequacy for the Range of assignment," and "experience in region and language." Subcriteria percentage Similarly, the chief agronomist (that is, the expert indi- cated by the consultants as responsible for agronomical General qualifications 20­30 studies) can be assigned a maximum of 3, 5, and 2 Adequacy for the assignment 50­60 points, respectively. Experience in region and language 10­20 For the same agricultural development project, Total 100 should the Borrower allocate points to the most sig- nificant technical disciplines, the detailed point allo- cation would be the one summarized in table 12.5. In this case, when more than one expert is pro- for the assignment." The following example refers to posed by a consultant for the same discipline, the rele- the agricultural development project mentioned above. vant points are evenly distributed among them. For It is assumed that the Borrower has indicated in instance, in the above example, if a consultant pro- Paragraph Reference 5.2 of the Data Sheet the follow- poses three agronomists, each of the three is evaluated ing distribution of points: according to the table, and then the total score ob- · Team leader: tained by them is divided by three to obtain the score 25 points · Chief agronomist: of "agronomy." 10 points · Chief pedologist: 9 points · Chief socioeconomist: 8 points · Chief hydraulic engineer: 8 points 12.8 Capacity-Building Program Total 60 points and Training (for the FTP only) It is also assumed that the Borrower has assigned When capacity building is an important component of in Paragraph Reference 5.2 of the Data Sheet the per- the assignment, more than 10 points can be allocated to centage weight to the three subcriteria as follows: this area, subject to the Bank's prior approval. This area · General qualifications: could be divided into the following subcriteria: 30 · Adequacy for the assignment: 50 · Relevance of Program. Capacity building should · Experience in region and language: 20 cover in sufficient depth important issues in a given Total: 100 sector that will benefit the Borrower. Table 12.4 Distribution of Points between the Team Leader and Remaining Key Professional Staff Subcriteria General Adequacy for Experience in qualifications the assignment region and Position Points (30%) (50%) language (20%) Team leader 25 30% of 25 = 7.5 50% of 25 = 12.5 20% of 25 = 5.0 Chief agronomist 10 30% of 10 = 3.0 50% of 10 = 5.0 20% of 10 = 2.0 Chief pedologist 9 30% of 9 = 2.7 50% of 9 = 4.5 20% of 9 = 1.8 Chief socioeconomist 8 30% of 8 = 2.4 50% of 8 = 4.0 20% of 8 = 1.6 Chief hydraulic engineer 8 30% of 8 = 2.4 50% of 8 =4.0 20% of 8 = 1.6 SETTING THE EVALUATION CRITERIA 63 1 2 . 8 Capacity-Building Program and Training (for the FTP only) Table 12.5 Distribution of Points between the Team Leader and Technical Disciplines Subcriteria General Adequacy for Experience in qualifications the assignment region and Position Points (30%) (50%) language (20%) Team leader 25 30% of 25 = 7.5 50% of 25 = 12.5 20% of 25 = 5.0 Agronomy 10 30% of 10 = 3.0 50% of 10 = 5.0 20% of 10 = 2.0 Pedology 9 30% of 9 = 2.7 50% of 9 = 4.5 20% of 9 = 1.8 Socioeconomics 8 30% of 8 = 2.4 50% of 8 = 4.0 20% of 8 = 1.6 Hydraulic engineering 8 30% of 8 = 2.4 50% of 8 =4.0 20% of 8 = 1.6 · Approach and Methodology. This refers to the that short lists contain at least one firm from a devel- methodology and work program proposed to achieve oping country (unless qualified firms from developing the objectives specified in the TOR and ensure last- countries are not identified) and by factoring the par- ing benefits for the Borrower. ticipation of nationals into the evaluation of proposals · Qualifications of Experts and Trainers. This covers by introducing a specific criterion. Depending on the the technical qualifications of the proposed special- importance given to the participation of national con- ists, as well as their specific experience in providing sultants and the characteristics of the assignment, a capacity building and training similar to the one maximum of 10 points may be given for this criterion. requested by the TOR. National participation is assessed based on the percent- age share of national consultants covering key staff po- sitions in staff-months over the total staff-months of 12.9 National Participation key staff proposed for the assignment. Foreign consult- (for the FTP only) ants may satisfy national participation requirements either by associating (joint venture or subcontract) with The Consultant Guidelines encourage consultants to their local branch, if one exists, or with other national optimize the use of national consultants by establishing firms, or by incorporating national individual experts Table 12.6 Allocation of Points to Main Criteria for the FTP Adequacy of Transfer of National Specific methodology Key staff knowledge participation Total experience work plan qualifications (if required) (if required) points Guidelines 0­10 20­50 30­60 0­10 0­10 100 Type of assignment a Technical assistance/ 5­10 20­35 50­60 0­10 0­10 100 training Preinvestment studies 5­10 35­50 40­50 0­10 0­10 100 Design 5­10 30­45 40­50 0­10 0­10 100 Implementation/ 5­10 20­35 50­60 0­10 0­10 100 supervision a. When training is an important component of the assignment, subject to the Bank's prior approval, more points can be given to this criterion, and points of the other criteria are therefore reduced. 64 SETTING THE EVALUATION CRITERIA The Point System 1 2 . 1 0 Table 12.7 Allocation of Points to Main Criteria for the STP Adequacy of methodology work plan Key staff qualifications Total points Data Sheet of the RFP 20­40 60­80 100 Type of assignment Technical assistance 20­30 70­80 100 Preinvestment studies 30­40 65­75 100 Design 30­35 65­75 100 Implementation/supervision 20­30 70­80 100 into their work team. In all cases, for national partici- facie not justified or foreign consultants have not ex- pation to be rewarded in the evaluation of proposals, pressed interest and a sufficient number of qualified na- national experts should be part of the key staff, not just tional consultants is available. support staff. In special circumstances, Borrowers may further require the use of national consultants by preparing 12.10 The Point System short lists entirely composed of national consultants. This may apply to assignments below the ceiling(s) es- The allocation of points to the main evaluation crite- tablished in the Project Procurement Plan, when either ria might fall within the ranges indicated in table 12.6 competition including foreign consultants is prima and table 12.7, respectively, for the FTP or STP, de- Table 12.8 Evaluation Criteria and Sample Subcriteria Evaluation criteria (as defined in the Consultant Guidelines) Evaluation subcriteria (select a maximum of three) Specific experience of the consultants relevant to the assignment Adequacy of the proposed methodology · Technical approach and methodology and work plan in responding to the TOR · Work plan · Organization and staffing Note: The number of subcriteria may be increased, de- pending on the characteristics of the assign- ment (see para. 12.5). Key professional staff qualifications and · General qualifications competence for the assignment · Adequacy for the assignment · Experience in the region and language Note: These three subcriteria are defined by the RFP and cannot be changed. Suitability of the transfer-of-knowledge · Relevance of program (training) program · Training approach and methodology · Qualifications of training specialists Participation by nationals among proposed key staff SETTING THE EVALUATION CRITERIA 65 1 2 . 1 0 The Point System pending on the specifics of different assignment types that could be adopted by the Borrower when prepar- (see also paras. 12.1, 12.2, and 12.3). ing the RFP. (Subcriteria indicated in table 12.8 for the criterion "key professional staff qualifications and competence for the assignment" also apply to the STP.) 12.11 Evaluation Criteria and Subcriteria Table 12.8 summarizes the five evaluation criteria Note provided for by the FTP in the Standard Request for Proposals (SRFP) and gives examples of subcriteria 1. See Consultant Guidelines, clause 2.17. 66 SETTING THE EVALUATION CRITERIA C H A P T E R 13 Advertising and Short List 13.1 Main Considerations of expected consulting assignments, and shall advertise a request for expressions of interest (EOIs) for con- Unlike in procurement of goods and works in which sulting firms for each contract in the national gazette, all interested bidders are publicly invited to present in a national newspaper, or in a freely accessible elec- their bids, the consultant selection process is based on tronic portal. In addition, the Borrower shall advertise obtaining a few proposals from a short list prepared in the UN Development Business online (UNDB online) by the Borrower. Because it is too time-consuming and in the Development Gateway Market (dgMarket) and expensive for Borrowers to invite and evaluate each individual contract expected to cost more than proposals from all consultants who want to compete, US$200,000. Borrowers may also advertise requests selection is based on limited competition among qual- for EOIs in an international newspaper or in a techni- ified firms that, in the Borrower's view or experience, cal journal. are capable and can be trusted to deliver the required For unusual or very large assignments, the request services at the desired level of quality. for EOIs may also be sent to consulting and profes- From the consultant's point of view, the use of a sional associations, embassies, or reputed consultants short list reduces the number of proposals and therefore that are known to the Borrower. Borrowers should increases the chances of the consultant to be selected. send a copy of the request for EOIs to all the consult- For the Borrower, it is an effective way of attracting the ants who have initially responded to the GPN. (A sam- best candidates for the assignment. ple request for EOIs can be found in appendix 6.) Bank procedures for hiring consultants provide that consultant opportunities are first advertised by The request for EOIs should ask for sufficient the Borrower. Then, based on those consultants who information so that the Borrower may evaluate the submitted expressions of interest in response to the consultant's capabilities and eligibility to undertake the advertisement and from any other sources of reliable assignment. Information should include the following: information, the Borrower prepares a short list of con- · Core business and years in business sultants who will be invited to present proposals. · Qualifications in the field of the assignment (Figure 13.1 is a flow chart illustrating the steps in the · Technical and managerial organization of the firm short-listing process.) · General qualifications and number of key staff In addition to the information asked for by the re- 13.2 Advertising quest for EOIs, consultants should call the Borrower's attention to any conflicts of interest that they know The main objective of advertising is to inform as many about that may affect the objective performance of eligible consultants as possible about a consulting their services for the Borrower. opportunity under a Bank-financed operation. Adver- Given the often-large number of submissions, the tising promotes transparency and fairness and facilitates advertisement should stress the importance of brevity the participation of smaller firms that otherwise might of the information to be sent. The request for EOIs not have easy access to information or to local contacts. shall not include the assignment TOR, nor shall it ask Under the Consultant Guidelines, the Borrower is the consultants for their approach to the services or to required to issue a General Procurement Notice (GPN)1 submit the curricula vitae, because these documents for all projects financed by the Bank, including a list will be dealt with in the RFP. No legal documents such 67 1 3 . 2 Advertising Figure 13.1 Steps in the Short-Listing first consideration to those possessing the best quali- Process fications for the proposed assignment. When a short list meeting the diversity requirements set out in the Consultant Guidelines (para. 2.6) cannot be drawn up Advertising from the expressions of interest or the firms express- ing interest do not meet the Borrower's quality expec- tations, the Borrower may add reputable firms or ask Receipt of expressions the Bank in writing to supply a long list of capable firms. of interest The Borrower may also invite qualified consultants that may not be aware that a request for EOIs was issued, but are known to the Borrower for their good reputa- Review: - Firm capacity tion or record of past work for the same Borrower. - General qualifications Because preparation of the short list should be the Borrower's files - Specific experience responsibility of the Borrower, Bank staff are advised on qualified - Firms' organization consultants - Balance of experience not to recommend specific firms to the Borrower un- among firms less officially requested to do so, but can be helpful - Geographic distribution - Number of firms providing guidance on how to prepare a short list of capable consultants, especially if the Borrower lacks the necessary experience. Short list finalization The Bank Guidelines do not allow formal prequal- ification procedures, but recommend that in preparing the short list the Borrower consider, in addition to the Bank's no-objection information asked for in the request for EOIs, key fac- on RFP, including short list tors such as a consultant's reputation of integrity and impartiality rooted in independence from third parties. Also, the experience of the Borrower with a consultant Issuing of Letters of and the existence of a relationship of healthy trust are Invitation and RFP important considerations for the short list. The Bank is concerned about possible abuses that may affect preparation of the short list (para. 5.2.1) as certificates of incorporation of the firm, powers of and therefore considers the integrity of a professional attorney, financial statements, or translations of stan- consultant a necessary condition for eligibility to take dard brochures should be requested. The Guidelines part in Bank-funded assignments. Borrowers are ad- indicate that no less than 14 days from the date of post- vised to observe this requirement and consultants to ing on UNDB online shall be provided for responses stick to the norms of their profession, which require before preparation of the short list. them to always be honest and straightforward in deal- ing with the Borrower. Allegations of corruption that come to the Bank's attention will be examined care- 13.3 Preparation of Short Lists fully, and the sanctions set forth in the Consultant Guidelines will be applied when the Bank determines 13.3.1 General Considerations that the firm has been engaged in fraudulent or cor- rupt practices (para. 5.4). The Borrower prepares a short list comprising not The following are other considerations related to more than six firms. The Bank may agree to short lists the preparation of the short list: comprising a smaller number of firms in special cir- cumstances (for example, when only a few qualified · Short-listed consultants should be allowed to asso- firms in the field exist or have expressed interest for ciate with each other or with non-short-listed con- the specific assignment, or when the contract amount sultants only with the permission of the Borrower. does not justify the cost of wider competition). · Consultantsshouldberequiredtoconfirmtheirin- The Borrower reviews the qualifications of con- tention to submit proposals shortly after the invita- sultants who submitted expressions of interest and gives tion to submit proposals is issued. 68 ADVERTISING AND SHORT LIST Review and Approval of the Short List 1 3 . 5 · The Borrower should identify one or two additional 13.5 Review and Approval firms to include in the short list in case (a) any of the of the Short List short-listed firms decides not to submit its proposal Borrowers provide the Bank with the short list, or (b) some of the short-listed consultants associate together with the RFP and a memo explaining the with each other, after obtaining the Borrower's per- reasons for choosing the proposed firms. The Bank mission (this possibility should be indicated by the reviews the eligibility and qualifications of the con- Borrower in the Data Sheet attached to the ITC of the RFP). The Borrower shall obtain the prior approval sultants to ensure that they meet the required quali- of the Bank before adding a firm to the short list. fications. If the Bank finds the information provided by the Borrower insufficient, it may request the Under QCBS, the Borrower should not include in Borrower to provide additional information on the the same short list both consultants whose core busi- consultants. ness is to provide consulting services and other organ- In reviewing the short list, the Bank should ensure izations that have a different mission and cost structure that (such as NGOs, universities, government institutes, and UN agencies) (see para. 2.1). The latter group has · the short list comprises six consultants, unless cir- a different cost structure from consulting firms, and cumstances lead the Bank to agree to a smaller num- some organizations may enjoy privileges or subsidies ber of firms (see para. 2.6 of the Guidelines); that make price comparisons unfair. When a wide mix · the short-listed consultants are eligible and capable of experience is necessary, QBS, FBS, or CQS should of carrying out the assignment; be adopted. · at least one of the consultants is a firm from a devel- oping country, unless qualified firms from develop- ing countries are not available or interested; and 13.3.2 Geographic Origins · no more than two consultants from any one coun- of Invited Firms try are short-listed (except in those special cases in The short list should reflect a wide geographic area to which the list comprises only local consultants). provide opportunities for all eligible consultants (see After the Bank issues its "no objection" to the para. 3.2); therefore, the list should not include more RFP package, including the short list (para. 8.2.1), than two firms from any one country, and it should in- the names of the short-listed firms should not be clude at least one firm from a developing country un- changed without Bank approval. A short list that has less there are no qualified firms.2 However, in Borrower received the Bank's "no objection" is public and countries where local consultancies are well developed, should be accessible to other consultants (for exam- the short list may comprise only national consultants ple, to potential subconsultants who wish to propose (firms legally registered or incorporated in the country) associating with short-listed firms and to anyone re- if the assignment is below the ceiling (or ceilings) es- questing the information). The Bank may arrange tablished in the Procurement Plan approved by the for the publication of approved short lists for assign- Bank, a sufficient number of qualified national firms is available,3 and foreign consultants have not expressed ments it finances. Firms that expressed interest, as interest. However, if foreign firms express interest, they well as any other firm that so desires, can obtain a shall be considered for short-listing. copy of the final short list. 13.4 Associations Notes between Consultants 1. The General Procurement Notice is prepared Bank policy related to associations between consult- by the Borrower and sent to the Bank, which will ants is detailed under para. 3.4 of this Manual. arrange for its publication in United Nations Dev- Consultants expressing interest in a Bank-funded as- elopment Business online (UNDB online) and in the signment and Borrowers preparing the short list for Development Gateway Market (dgMarket). that assignment are advised to take into account the 2. See clause 2.6 of the Consultant Guidelines. considerations expressed in para. 3.4. 3. See clause 2.7 of the Consultant Guidelines. ADVERTISING AND SHORT LIST 69 C H A P T E R 14 Request for Proposals 14.1 Introduction The RFP must be prepared in one of the following three internationally used languages, at the Borrower's The Request for Proposals (RFP) provides all the in- discretion: English, French, or Spanish. In addition structions and information necessary for the short- to being prepared in one of these three languages, the listed consultants to prepare their proposals. The Borrower may also prepare the RFP in the national RFP also includes the assignment Terms of Reference language of the Borrower's country or in the language (TOR) and the draft contract. The Bank's Standard used nationwide in the country for commercial trans- Request for Proposals (SRFP) for Borrowers1 is the actions. If the RFP is prepared in two languages, con- mandatory format for the preparation of the actual sultants shall be permitted to submit their proposals RFP. The SRFP can be adapted to apply to any of in either of these two languages. In such cases, the the selection methods described in the Consultant contract signed with the successful consultant shall Guidelines. be written in the language in which its proposal was The SRFP includes the following sections: submitted, and this language shall govern the contrac- Section 1: Letter of Invitation (LOI) tual relations between the Borrower and the successful Section 2: Instructions to Consultants (ITC) (including consultant. the Data Sheet) If the contract is signed in a language other than Section 3: Technical Proposal--Standard Forms English, French, or Spanish and the contract is subject Section 4: Financial Proposal--Standard Forms (in- to the Bank's prior review, the Borrower shall provide cluding the appendix on breakdown of re- the Bank with a translation of the contract in the in- muneration rates)2 ternationally used language in which the RFP was pre- Section 5: Terms of Reference pared (the translation requested by the Bank should Section 6: Standard Form of Contract (including not be signed; the version in the national language General Conditions of Contract [GCC], prevails over the translation). Special Conditions of Contract [SCC], and Consultants may request clarifications of the RFP Appendixes) up to a certain number of days (indicated in the Data The SRFP includes two Bank Standard Forms of Sheet) before the deadline for submission of their pro- Contract: one for complex, time-based consulting posals. At any time before the submission of propos- assignments and the other for assignments remuner- als, the Borrower may amend the RFP, in which case ated on a lump-sum basis. The SRFP also includes two the deadline for submission may need to be extended. samples that may be used for smaller contracts under (The following paragraphs describe the different sec- time-based or lump-sum payment. tions of the RFP.) The SRFP is a standard document and can be used under many different conditions. It has been designed in such a way that some of its parts (for example, the 14.2 Letter of Invitation ITC and GCC) cannot be modified by the Borrower. Other parts (for example, the Data Sheet, TOR, and The Letter of Invitation (LOI) states the intention of the SCC) are assignment-specific and are used by the Borrower to enter into a contract for a given assign- Borrower to reflect country and assignment conditions ment and informs the short-listed consultants that they (see paras. 14.3, 14.4, and 14.5). are invited to submit a proposal for the assignment. 70 Data Sheet 1 4 . 3 . 2 It provides the following basic information: Paragraph Reference 1.3 Preproposal conference. A preproposal confer- · Name of the Borrower and the sources of funds to ence is recommended for complex assign- finance the consulting services · Names of the short-listed consultants ments when the proposal preparation benefits · Name of the consulting services assignment from field visits and the collection of docu- · Method of selection ments. The conference should be convened after consultants have had sufficient time to The LOI also instructs consultants to indicate examine the RFP. However, the conference whether they intend to submit their proposal alone or should leave enough time for consultants to in association with other consultants, either short- prepare their proposals, taking into account listed or not (the possibility to associate with short- the clarifications obtained during the con- listed consultants should be indicated in the Data ference. Minutes of the conference should be Sheet). This information is necessary to allow the made available to all short-listed consultants. Borrower to invite other consultants (see para. 13.3.1), Attendance at the preproposal conference is in case one or more short-listed consultants decline optional. the invitation or ask to associate with other short- 1.4 Inputs and facilities provided by the Borrower. listed consultants, thus reducing competition. In these A detailed list of the Borrower's inputs is cases, the deadline for submission of proposals may usually included in the TOR or in the draft have to be extended. contract. Under this heading, the Borrower should provide all additional information needed for consultants to understand the 14.3 Instructions to Consultants form and the extent of the Borrower's con- 14.3.1 Introduction tribution. Consultants may seek clarifications as necessary on such inputs because any am- The Instructions to Consultants (ITC) section contains biguity in what the Borrower will provide all the information and instructions that consultants may become an issue during technical and need to prepare responsive proposals (see appendix 2 financial evaluation of the proposals. of the Consultant Guidelines). Among other things, it 1.1.6 (a) Continuation. The Borrower shall indicate informs consultants about not only the type of tech- under this Paragraph Reference whether the nical proposal to be submitted but also the evaluation consultant might be expected to provide addi- process (including the evaluation criteria and sub- tional consulting services as a continuation criteria, their respective weights, and the minimum of the assignment. If this is a possibility, the qualifying mark) to provide for a fair and transpar- Borrower shall briefly outline in the TOR the ent selection process. The ITC should not be modified scope and nature of the future work envisaged. (see para. 14.1) other than through the Data Sheet 1.12 Validity period of the proposal. The validity with the Bank's prior approval. period should allow for an adequate period to negotiate the contract with the successful con- 14.3.2 Data Sheet sultant. It should also allow for negotiations The Data Sheet is the part of the ITC that contains with the consultant ranked second if the specific information relating to the Borrower and negotiations with the first are unsuccessful. the assignment. The column marked "Paragraph However, an excessive proposal validity pe- Reference" refers to the paragraph of the ITC under riod poses a strain on consultants, who must which the Borrower provides assignment-specific in- retain their staff for an indefinite period. If the formation to the consultants. The Data Sheet can be validity period is too long, the risk of staff sub- modified for specific country or project conditions stitution increases considerably. A reasonable that are not addressed by the ITC standard text by, for period is estimated to be between 60 and example, adding new paragraphs not provided for in 90 days after the proposal submission date. the ITC. (The following text provides clarifications to 2.1 Request for clarifications. The deadline for some of the references to the paragraphs included in requesting clarifications should allow the the Data Sheet.) Borrower sufficient time to prepare responses REQUEST FOR PROPOSALS 71 1 4 . 3 . 2 Data Sheet and allow the consultants enough time to the site, or attend the preproposal conference, take them into account before submitting periods of up to three months are needed their proposals. Therefore, no less than 10 to (see also para. 16.2 of this Manual). 15 days should be provided for. 5.2 (a) Evaluation criteria, subcriteria, and relevant 3.1 Language(s) of proposals. The Borrower must points for the FTP. For the FTP, the following indicate the language that the proposals shall five criteria are provided in the Data Sheet: be submitted in: English, Spanish, or French. · Specific experience of the consultants rel- If the Borrower, in addition to having issued evant to the assignment the RFP in one of those three languages, · Adequacy of the proposed methodology has also issued the RFP in the national lan- and work plan in responding to the TOR guage of the country or in the language used · Key professional staff qualification and nationwide for commercial transactions, the competence for the assignment Paragraph Reference 3.1 shall include the · Suitability of the transfer-of-knowledge optional text provided for in the Data Sheet, program and the second language shall be indicated in · Participation by national consultants the text. among proposed key staff 3.3 (b) Estimated number of professional staff-months Because the last two criteria are optional required for the assignment, and the avail- (see para. 12.3 of this Manual), the Borrower able budget. Only the estimated total of pro- should first decide whether to adopt them: if fessional staff-months (not the individual it does not, zero points shall be assigned to staff-months) or the available budget should both criteria; if it does, the Borrower should be indicated, but not both. For FBS, only indicate the points assigned to each of them.3 the available budget shall be given, and not When capacity building is a particularly the staff-months required. important component of the assignment, the 3.4 Format of the Technical Proposal. The Borrower may allocate, subject to the Bank's Borrower should select the most appropriate prior approval, more than 10 points, to be format, considering the information given distributed among the three subcriteria: in para. 12.2 of this Manual. "relevance of training program," "training 3.4 (g) Capacity Building (Training). When training approach and methodology," and "qualifi- is a specific component of the assignment, the cations of experts, and trainers." Borrower should provide consultants with The Borrower should also indicate the appropriate information on the nature, ex- points allocated to the three subcriteria spec- tent, goals, and depth of such activity, either ified under the criterion "adequacy of the under this Paragraph Reference of the Data proposed methodology and work plan in re- Sheet or (preferably) in a specific section of sponding to the TOR": "technical approach the TOR (see also chapter 6 of this Manual). and methodology," "work plan," and "organ- 3.7 Taxes. Local taxation includes all identifiable ization and staffing."4 local indirect taxes levied on the contract (for With regard to the criterion "key profes- example, value added or sales taxes; social sional staff qualifications and competence charges; or income taxes on nonresident for- for the assignment," the Borrower should eign personnel, duties, fees, and levies) at na- indicate, in addition to the team leader, each tional, state, provincial, and municipal levels expert responsible for the most significant (see para. 2.22 of the Consultant Guidelines). activities (or each of the most important 4.5 Proposal submission date. Borrowers should technical disciplines) of the assignment and allow consultants a reasonable time for the the points assigned to each of them. The preparation of proposals. For small and sim- Borrower should also indicate the percent- ple assignments, four weeks between the in- age weights assigned to the three subcriteria vitation and submission should suffice. For to be used to evaluate each of the above experts large and complex assignments, however, for (or disciplines). Chapter 12 of this Manual which the consultants must associate, or visit provides suggestions (based on best practices) 72 REQUEST FOR PROPOSALS Technical Proposal Standard Forms 1 4 . 4 on how to select such experts (or disciplines), bank, a commercial bank, or an internation- how to distribute the relevant points, and ally circulated publication. how to assign the percentage weights to the Date of exchange rate. This date should not three subcriteria. be earlier than four weeks before the dead- The Borrower should also indicate points line for submission of proposals. allocated to the criterion "specific expe- 5.7 Formula for determining the financial score. rience of the Consultants relevant to the The Data Sheet proposes the following in- assignment." versely proportional formula: Sf = 100 × The minimum technical score ("St") shall Fm/F, in which also be indicated (see para. 12.3.3). · "Sf" means financial score, 5.2 (b) Evaluation subcriteria and relevant points for · "Fm" means lowest price offered, and the STP. For the STP, only the following two · "F" means the price of the proposal under criteria are provided: consideration. · Adequacy of the proposed methodology The Data Sheet allows for the adoption of and work plan in responding to the TOR other formulas. A Borrower willing to pro- · Key professional staff qualification and pose a formula different from the one sug- competence for the assignment gested in the Data Sheet should consider that The Borrower should indicate the points such a formula needs the Bank's "no objec- allocated to the criterion "adequacy of the tion" and may be accepted by the Bank only proposed methodology and work plan in re- if it reflects the real financial standing of the sponding to the TOR"; no subcriteria should proposals and does not distort the financial be provided for the STP. Consistent with the evaluation. rationale of the STP format (a simpler and Weights given to the technical and financial shorter technical proposal than the FTP), proposals. The best practice on how to select para. 3.4 (c)(ii) of the ITC indicates that the these weights under QCBS is given in para. description of approach, methodology, and 12.3.3 of this Manual. work plan should normally consist of 10 pages, including charts, diagrams, and com- ments and suggestions on the TOR and 14.4 Technical Proposal counterpart staff and facilities. To motivate Standard Forms adherence to the 10-pages recommendation, Section 3 of the SRFP includes the following eight the Borrower may establish and indicate Standard Forms: under this Paragraph Reference a penalty to be applied in case such limit is exceeded. For TECH-1 Technical Proposal Submission Form example, a reduction by 10 percent of the TECH-2 Consultant's Organization and Experience: score obtained under the criterion "ade- A. Consultant's Organization quacy of the proposed methodology and B. Consultant's Experience work plan in responding to the TOR" in case TECH-3 Comments and Suggestions on the Terms the 10-pages limit is exceeded by more than of Reference and on Counterpart Staff and 2 pages may be indicated. Facilities to Be Provided by the Borrower: As far as the criterion "key professional A. On the Terms of Reference staff qualifications and competence for the B. On the Counterpart Staff and Facilities assignment" is concerned, the same infor- TECH-4 Description of the Approach, Method- mation provided under Paragraph Reference ology, and Work Plan for Performing the 5.2 (a) applies. Assignment The minimum technical score ("St") shall TECH-5 Team Composition and Task Assignments also be indicated (see para. 12.3.3 of this TECH-6 Curricula Vitae (CVs) of Proposed Profes- Manual). sional Staff 5.6 Source of the official exchange rate. This should TECH-7 Staffing Schedule be an official source, such as the central TECH-8 Work Schedule REQUEST FOR PROPOSALS 73 1 4 . 4 Technical Proposal Standard Forms When the FTP is requested, all eight Standard ogy and work plan divided into the following three Forms shall be included in the RFP. When the STP is sections: requested, only the Forms TECH-1, TECH-4, TECH-5, · Technical approach and methodology TECH-6, TECH-7, and TECH-8 shall be included in · Work plan the RFP. · Organization and staffing Borrowers should not modify standard technical or financial proposal forms of the RFP. The objective This will help the Evaluation Committee to better of these forms is to allow the required information to focus the evaluation of the proposals because the three be presented in a clear and readily comparable man- subcriteria spelled out under Paragraph Reference ner and to allow Borrowers to easily understand and 5.2 (a) of the Data Sheet for the criterion "adequacy of evaluate proposals in accordance with the established the proposed methodology and work plan in re- criteria. Some of the Standard Forms are discussed in sponding to the TOR" coincide with the titles of the the following paragraphs. above three sections. For small or simple assignments for which sub- criteria are not provided under "adequacy of the pro- 14.4.1 Form TECH-3: Comments and posed methodology and work plan in responding to Suggestions on the TOR and on the TOR," Borrowers should omit the italicized text in Counterpart Staff and Facilities to Form TECH-4. Be Provided by the Borrower This Form shall be used when the FTP is required. 14.4.3 Form TECH-7: Staffing Schedule An objective of the Borrower engaging consult- Consultants shall provide the following in this form: ants is to access or explore new approaches, methods, and solutions, some of which it may not have consid- · A bar chart indicating the involvement over time of ered when drafting the TOR. In the RFP, Borrowers their foreign and local staff for the whole duration invite consultants to express their comments on the of the assignment. For each staff, the bar chart TOR and suggest improvements. However, consult- should distinguish between full time or part time ants tend to limit their comments on the TOR because and between home or field involvement. Both for- they assume that the TOR were prepared by experts eign and local staff shall be considered as "home" and reviewed and approved by the Bank and also staff when working at their respective home offices and as "field" staff when working on-site. For pro- because they fear that their proposal may be classified fessional staff, the involvement should be indicated as nonresponsive. individually; for support staff, by category. Consultants willing to propose modifications or · The staff-months input of each staff, total foreign improvements to the TOR, such as deleting an activ- staff input, total local staff input, and overall input ity they consider unnecessary, or adding another, or for the entire assignment. Monthly staff-month proposing a different phasing of the activities, should input is not required. present and justify such suggestions in section A of Form TECH-3 and incorporate them in their proposal. This will allow the Borrower to correctly evaluate their 14.4.5 Form TECH-8: Work Schedule technical proposals on their own merits. Consultants Consultants shall provide in this form a bar chart are also invited to comment in section B of Form indicating the duration of each main activity of the TECH-3 on the counterpart staff and facilities, if any, assignment, including delivery of reports, client ap- to be provided by the Borrower. provals, and other events. If the TOR indicate that the assignment is phased, consultants shall provide a sep- arate bar chart for each phase. Consultants should 14.4.2 Form TECH-4: Description of the bear in mind that the activities indicated in Form Approach, Methodology, and Work TECH-8 must be consistent with the activities (or Plan for Performing the Assignment groups of activities, or phases) that they will record The text in italics provided in Form TECH-4 of the when filling in Form FIN-3 of their financial proposal SRFP requires consultants to present their methodol- (see note 2 of Form FIN-3). 74 REQUEST FOR PROPOSALS Standard Forms of Contract 1 4 . 6 14.5 Financial Proposal are not suitable for the specific assignment (also see Standard Forms chapter 15). Although the General Conditions of Contract (GCC) of the Standard Forms cannot be Section 4 of the SRFP includes the following five modified, the Special Conditions of Contract (SCC) standard forms: may be modified by the Borrower before issuing the FIN-1 Financial Proposal Submission Form RFP to adapt them to the specific requirements of the FIN-2 Summary of Costs assignment or to add new clauses that the Borrower FIN-3 Breakdown of Costs by Activity considers necessary (for example, a penalty clause for FIN-4 Breakdown of Remuneration failure on the part of the consultant to submit con- FIN-5 Reimbursable Expenses tractual deliveries when due). The notes in italics included in the SCC provide Section 4 also includes the appendix "Financial important clarifications of particular paragraphs. Negotiations: Breakdown of Remuneration Rates." Clauses in brackets are optional. All notes should be All of the five Standard Forms above and the ap- deleted in the final text. pendix shall be used for both the FTP and STP. Borrowers should not modify financial proposal Standard Forms of the SRFP. The objective of these forms is to allow the consultants to present informa- Notes tion in a clear and readily comparable manner and 1. There is also a SRFP used by the Bank when it hires to allow Borrowers to easily understand and evaluate consultants directly, under its own budget or as ex- proposals. ecuting agency of a trust fund, which is similar to the one that is mandatory for Borrowers. 14.5.1 Appendix "Financial 2. The appendix on Breakdown of Remuneration Rates Negotiations: Breakdown of is to be used only in Quality-Based Selection (QBS), Remuneration Rates" and Single-Source Selection (SSS) (that is, when cost is not a factor of selection). The appendix to section 4 of the SRFP is used under 3. In most cases, subcriteria are not provided for QBS, and SSS. It provides self-explanatory informa- "specific experience" and "participation by nation- tion on the breakdown of remuneration rates, with a als"; for "suitability of the training program," sub- Sample Form that is intended to assist consultants in criteria are provided when transfer of knowledge is preparing for financial negotiations. a particularly important component of the assign- ment (see para. 12.7). 4. In most cases, these three subcriteria are fully ade- 14.6 Standard Forms of Contract quate to allow the Evaluation Committee to carry out a satisfactory evaluation; however, in very com- The Form of Contract should be prepared by the plex assignments, the subcriterion "technical ap- Borrower based on one of the Standard Forms of proach and methodology" might be split into Contract annexed to the SRFP or on another form additional sections, increasing the total number of agreed on with the Bank when Bank Standard Forms subcriteria (see para. 12.5 of this Manual). REQUEST FOR PROPOSALS 75 C H A P T E R 15 Types and Forms of Contract 15.1 Types of Consultant readily assessed) to be delivered within a specified dead- Contract line. Lump-sum contracts leave the risk of assignment cost overruns with the consultant. Borrowers spend substantial funds on consulting serv- Lump-sum contracts are often used in relatively ices and therefore need to consider how best to structure simple and clearly defined assignments such as planning the contracts for those services. Three main consider- and feasibility studies, environmental studies, detailed ations determine what type of contract to adopt in a design of infrastructures, preparation of databases, and Bank-funded consultant assignment: (a) the nature of surveys. Lump-sum contracts are also adopted in cases the assignment, (b) the distribution of risks and re- of sophisticated and clear-cut assignments of short wards between the Borrower and the consultant, and duration in which external factors generally are not (c) the circumstances of the Borrower and of the con- expected to influence (delay or substantially change) sultant. The level of capacity in contract management the outcome of the advice or study being provided. and consulting services supervision that the Borrower Remuneration is fixed for the duration of the will be able to provide may also be a factor in the choice. contract, and no physical or price contingencies are The Consultant Guidelines refer to the following normally provided. Payments are made in accordance types of contract: with a contractually agreed-on schedule at the delivery · Lump-sum of an agreed-on product. If payments are made against · Time-based a schedule of percentage of work completed, then, as · Retainer or contingency (success) fee a minimum, a progress report and supporting evidence · Percentage that the planned work has been completed satisfacto- · Indefinite-delivery rily should be submitted. The lump-sum contract is easy for the Borrower to Each type of contract is described briefly in the administer and requires little technical supervision, following paragraphs, as well as the criteria that are because no matching of inputs to payments is required. suggested for their adoption and correct application. This type of contract is also indicated for clients with For large assignments (above US$200,000), the type of relatively small or weak administrative and managerial contract to be adopted by the Borrower has to be agreed structures, but with capacity for appreciating the qual- on with the Bank during loan negotiations. ity of the consultants' advice or services. A lump-sum contract transfers cost risk to the consultants and gives Borrowers certainty about the 15.1.1 Lump-Sum Contracts costs involved in procuring consulting services. How- Lump-sum contracts are used mainly for assignments ever, it can increase the risks for the Borrower with re- in which the content and duration of the services gard to the quality of the advice. Because fees are fixed, and the expected output of the consultant are clearly after the contract is awarded consultants may inter- defined. Under a lump-sum contract, the Borrower nalize efficiency gains. Their incentives are to reduce agrees to pay the consultant a fixed sum of money for outputs compared with those they had originally services given with up-front specified technical char- planned so as to increase profit margins. acteristics, such as a study report, project design, and These incentives can be offset by the Borrower's tender document (the quality of which can usually be ability to assess and enforce quality standards. The 76 Retainer or Contingency (Success) Fee Contracts 1 5 . 1 . 3 Borrower can engage peer reviewers to monitor the Time-based contracts normally include a ceiling quality of advice and ensure that important issues are on the payments to consultants, and consultants will completely covered. This activity requires relatively suspend work until a change in the scope of work is little time or expense. If quality is not easy to assess, authorized or the deadline for the completion of the the timely delivery of the agreed-on output may be services is extended. This ceiling should include a con- one proxy. tingency allowance for unforeseen work and its du- Before committing to a lump-sum contract, con- ration, as well as a provision for price adjustments, sultants should evaluate the main technical, institu- where appropriate. An allowance for price adjustment tional, and (where necessary) political risks that may should normally be included if the contract lasts for affect their capacity to manage these parameters, and more than 18 months, or if foreign and local infla- they should make sufficient provision for them in the tion are estimated to exceed a certain rate (for exam- contract. ple, 5 percent per year). Another option includes an agreement to reduce unit fee rates if the volume of work exceeds an agreed-on level. 15.1.2 Time-Based Contracts This type of contract requires the Borrower to Under this type of contract, the consultant provides its supervise consultants closely and to be more involved services on a timed basis according to quality specifi- in the execution of the assignment. The Borrower is cations, and the consultant's remuneration is based usually aware of who is working on the job and the on (a) agreed-on unit rates for consultant staff multi- nature of each expert's task. Key staff are usually plied by the actual time spent by the staff in executing named in the contract, and their tasks outlined. the assignment and (b) reimbursable expenses using Administration of this type of contract may require actual expenses or agreed-on unit prices. Time-based significant administrative efforts and contract man- contracts transfer cost risk to the Borrower. They re- agement capacity on the part of the Borrower. quire a system to monitor and control assignment Time-based contracts are particularly suitable for progress and costs because the incentives of consult- long-term assignments (one or more years) wherein ing firms are to assign more resources on the job, in- the project can be subject to variations and delays that cluding more senior resources. may change the duration and modify the scope of the Time-based contracts are recommended in the consultant's services. Bank-funded projects, because following cases: of their nature and complexity, very often require consultants to be offered time-based contracts. · The nature and scope of the services are such that the TOR cannot be established with sufficient pre- cision, as may be the case for complex or unusual 15.1.3 Retainer or Contingency assignments that are difficult to define (such as (Success) Fee Contracts management of complex institutions or studies of This type of contract is often adopted to remunerate new approaches). financial advisers who assist Bank Borrowers in pri- · The duration and quantity of services (that is, the vatization operations that require the sale of assets. In amount of staff-months) depend on variables that these cases, the QCBS method, in which consultants are beyond the control of the consultants, or the are asked to quote a retainer fee or a success fee (or services are related to activities undertaken by third both), is generally recommended for the selection of parties (for instance, supervision of implementa- consultants. tion assignments). The proportion of retainer and success fees is · Theoutputrequiredoftheconsultantsisdifficultto often fixed in advance and is not subject to negotiation. assess in advance (for instance, for technical assis- The retainer fee proportion tends to be set higher if the tance, institutional development, or emergency sit- consultant's role contributes more to the planning and uations, in which the Borrower's requirements for design of privatization activities rather than to the assistance may evolve during the execution of the effort of successfully selling assets. The retainer fee is assignment). paid as a lump sum if the scope of work of the assign- · Acapacity-buildingprogram(transferofknowledge) ment and its duration can be clearly defined; other- forms part of the assignment. wise, a time-based remuneration should be adopted. TYPES AND FORMS OF CONTRACT 77 1 5 . 1 . 3 Retainer or Contingency (Success) Fee Contracts Success fees are appropriate when success is re- directly related to the quantity and cost of the goods lated to the efforts of the firms involved and is rela- or works procured or inspected. tively easy to quantify. Success fees should be retained for the transaction (sale) stage and should be reserved for those advisers whose efforts can have a significant 15.1.5 Indefinite-Delivery Contracts impact on sale price. Consultants can affect the asset (Price Agreement or Standing Offers) sale price by attracting a large number of bidders; by Indefinite-delivery contracts refer to contracts in which providing transparent, appropriate, and timely infor- an individual consulting firm or an association of mation to bidders; and by structuring the sale to en- firms is hired for a specified time period (usually three sure strong interest. to five years) to undertake tasks as and when the need The success fee is generally structured by taking arises. The specific workload is unknown at the outset; two parameters into account: (a) the value of the asset all that is known is that advice is likely to be needed in against which advisers will be rewarded and (b) the a particular area. structure of the fee itself. One approach for establish- Indefinite-delivery contracts are usually agreed ing a value basis to adopt is to have independent ex- on because it is anticipated that the services will have perts prepare an estimate. The adviser has an incentive two particular characteristics: to exceed that estimate. The incentive can be structured as a lump sum · Borrowerswillneedaccesstoimmediatelyavailable or as a share of the proceeds above the target value. or on-call services for urgent assignments, and a Alternatively, advisers can be given a sliding scale, lengthy competitive bidding process is impossible which is often preferred over other options because because of external circumstances. These services it associates the incentive more directly with the out- could include experts for urgent remedial actions in come of the transaction. Common estimates for the emergency situations caused by natural calamities, size of success fees are in the range of 0.2 to 3 per- wars, or epidemic outbreaks. cent of the transaction value, depending on the coun- · Eachindividualconsultancywillbequitesmall,mak- try concerned, size of the transaction, and market ing an expensive competitive selection process in- conditions. efficient, although, when added together, the amount In certain contracts, the retainer fee is subtracted of advice is substantial. from the success fee when the latter is paid at the end of These combined factors make it worthwhile to the transaction. In crafting success fee contracts, atten- appoint suitable consultants who can be on standby tion should be given to the possibility of termination of and are called upon when needed. However, locking the contract before the success fee is earned. in one set of advisers over a considerable period of The Bank does not finance success fees; they are time raises a number of issues related to the selection normally paid out of the revenues generated by the sale of the consultants; therefore, the quality and price of of the asset. the services proposed must be addressed. Because it is not known how often or for what specific tasks the con- 15.1.4 Percentage Contracts sultants will be called upon, they may not be able to submit a plan of work or a fixed total price. At the same In a percentage contract, consultants receive an agreed- time, the long contract period and the unknown acti- on percentage of the actual project cost or of the trans- vation dates mean that consultants may always credibly action sale price. This type of contract, which is still claim that the requested expert is not available. used by consultants and architects in some countries, Evaluation of proposals is typically based on the is discouraged by the Bank for consulting services capabilities of companies in the area under consider- because it offers no incentive to lower the cost of the ation, including their depth and breadth of experi- services. On the contrary, it may induce consultants to ence, area of expertise, and available staff. adopt more-expensive design solutions to increase the The awarded consultant is required, within a absolute value of their remuneration. The percentage framework contract, to provide its services based on contract is mainly used in Bank-financed projects for separate delivery orders issued by the Borrower dur- procurement or inspection agents for services that are ing the contract period. The consultant is expected to 78 TYPES AND FORMS OF CONTRACT Indefinite-Delivery Contracts (Price Agreement or Standing Offers) 1 5 . 1 . 5 Table 15.1 Correlation between Type of Assignment, Selection Method, and Type of Contract Type of assignment/scope of work Selection method Type of contract Critical studies in the field of policy, strategy, and management of Borrower's institutions Country economic, sector, or investment studies Master plans QBS Time-based Prefeasibility studies Complex feasibility studies Studies or design of complex projects Studies in new technology or human and social sciences Simple planning studies Simple feasibility studies Environmental studies Contract and detailed design of QCBS Lump-sum infrastructures Preparation of bidding documents Data processing Clearly defined strategy and management studies Technical assistance for institutional QBS or QCBS Time-based or indefinite-delivery development Technical assistance for privatization programs Technical assistance in investment projects QCBS Time-based Construction supervision QCBS Time-based Privatization operations QCBS Retainer and/or success fee Financial sector reforms QBS Retainer and/or success fee Procurement/inspection QCBS Percentage Simple, precisely defined assignment with FBS Lump-sum fixed budget Standard or routine assignments costing less than US$200,000 LCS Lump-sum TYPES AND FORMS OF CONTRACT 79 1 5 . 1 . 5 Indefinite-Delivery Contracts (Price Agreement or Standing Offers) carry out any such delivery order with the agreed-on flexibility, depending on the size and characteristics specifications and within the required time frame. of the assignment. Remuneration is based on agreed-on unit rates for staff plus reimbursable expenses; payments can be made based either on the time actually spent or on a 15.3 Bank Standard lump-sum basis. Contract Forms Administering an indefinite-delivery contract re- quires considerable capacity in the Borrower, who must Contract forms used in Bank-financed assignments negotiate and administer each delivery order. vary from a simple letter of agreement to detailed con- tracts. Two Standard Forms of Contract (whose use is mandatory for contracts exceeding US$200,000) and 15.2 Selection of the Appropriate two Sample Forms of Contract for small assignments Contract Form are annexed to the SRFP and are available in English, French, and Spanish. The type of contract to be chosen usually correlates They are recommended for the following: with both the scope of work of the assignment and the method adopted for the selection of the consultants. · Time-based assignments When the assignment is simple, the scope of work of · Lump-sum assignments the services is clearly defined, and the estimates of · Small assignments with time-based payments both staff-month effort and cost of the assignment are · Small assignments with lump-sum payments considered accurate, the selection of consultants is Small assignments are generally those costing less usually based on QCBS. In these cases, the lump-sum contract may be adopted. When these conditions are than US$200,000. not met, QBS and time-based contracts are more ap- The Bank's Standard Forms of Contract for as- propriate. When the nature of the assignment requires signments exceeding US$200,000 comprise four parts: the use of FBS or the LCS, the lump-sum contract · FormofContract,tobesignedbytheBorrowerand should normally be used. the consultant The type of contract may also depend on the inter- · General Conditions of Contract (GCC), which est of the Borrower in directly supervising consultant must be kept unchanged activities and on the desire that capacity building take · Special Conditions of Contract (SCC), which are place through a close interaction between Borrower specific to the assignment and consultant staff. For control and learning purposes, · Appendixes a time-based contract is more appropriate, assuming that the Borrower enjoys a sufficiently strong staff and Borrowers should be aware that the text of the institutional setup that allow for efficient supervision Form of Contract and of the GCC cannot be changed. of the assignment. If this is not the case, a lump-sum The SCC enable the Borrower to amend or supple- contract may be preferable. ment the clauses of the general conditions to reflect Table 15.1 indicates the correlations just out- local conditions and the specific characteristics of the lined. They should be applied with a good degree of assignment (also see para. 14.6). 80 TYPES AND FORMS OF CONTRACT C H A P T E R 16 Preparation, Submission, and Evaluation of Proposals 16.1 Introduction ligible) should be allowed to include deliveries of the RFP and the proposals. During this period, consult- This chapter explains the procedures for Bank ants may seek clarifications on the information con- Borrowers to follow, from the issuance of the Letter tained in the RFP. Consultants must submit their of Invitation to the selection of the consultant who is requests for clarifications to the Borrower in writing invited to negotiate the contract. (Detailed recommen- or by standard electronic means (including facsimile dations on best practices for rating evaluation criteria [fax] or e-mail). Borrowers must respond promptly, and scoring the various sections of the technical pro- also in writing or electronically, and send a copy of the posal are given in chapter 17.) query and its response to all short-listed consultants The procedures for evaluating technical proposals who have confirmed their intention to submit pro- outlined in the following paragraphs apply to QCBS posals. The Borrower should not reveal the source of and also (with a few modifications) to QBS, FBS, and the query. When the clarification results in impor- LCS. The procedures for evaluating financial propos- tant changes to any part or provision of the RFP, the als apply to QCBS, FBS, and LCS. The procedures Borrower must extend the deadline for the submis- set out in this chapter do not apply to CQS and SSS, sion of proposals (see para. 14.1) to enable consultants wherein the Borrower asks the selected consultant to to take into account the responses to their questions. submit technical and financial proposals; nevertheless, If the RFP provides for a preproposal conference, they provide general guidance to the Borrower for the clarifications should be recorded in the minutes and review of such proposals. sent to all attendees. Because attendance is not manda- The flow chart in figure 16.1 illustrates the steps to tory, the Borrower should fax or e-mail the conference be carried out during the preparation, submission, and minutes to those consultants who did not attend the evaluation of proposals for an assignment awarded conference, but who confirmed their intention to sub- under QCBS. mit proposals (see para. 14.3.2, para. ref. 1.3). Consultants should prepare their proposals using the Standard Forms contained in the RFP and should 16.2 Preparation of Proposals provide all information and documentation requested. Two types of technical proposal may be used for the selection of consultants: the Full Technical Proposal (FTP) or the Simplified Technical Proposal (STP). 16.3 Evaluation Committee (Structure and contents of the FTP and STP are detailed 16.3.1 General Considerations in para. 12.2 of this Manual.) The Borrower should give consultants enough The Evaluation Committee (EC) is a committee of ex- time to prepare their proposals. For the FTP, depend- perts appointed by the Borrower to carry out the eval- ing on the nature, size, and complexity of the assign- uation of technical and financial proposals. The EC ment, six weeks for relatively simple assignments and uses the evaluation criteria and subcriteria set out in up to three months for complex assignments should the Data Sheet attached to the RFP. be allowed. For the STP, three to four weeks should The EC is not authorized to change, amend, or usually suffice. These periods refer to the actual prepa- modify the TOR. Consultants prepare their proposals ration time, and additional time (sometimes not neg- based on the TOR included in the RFP, and proposal 81 1 6 . 3 . 1 General Considerations Figure 16.1 Preparation, Submission, and Evaluation of Proposals (QCBS Method) Letters of Invitation are issued. Technical evaluation report is prepared by the Evaluation Committee and delivered to Requests of the designated decision-making authority. clarifications Prebid Conference The decision-making authority reviews the technical evaluation report, decides on possible technical deviations, and approves the procedure. Evaluation Committee is appointed (shortly before proposals submission). Borrower forwards the technical evaluation report to the Bank for "no objection." Evaluation Committee meets to agree on rating system to adopt Once the Bank's "no objection" is received, for evaluating the technical proposals. the Borrower notifies the consultants of the Evaluation Committee confirms that date for the opening of the financial all members fully understand the proposals. evaluation process and method. Public opening of the financial proposals by the Evaluation Committee Technical and financial proposals are received. Evaluation Committee evaluates the financial proposals, determines the combined scores and the recommendation for award, and delivers the final evaluation report to the Opening of the proposals by the decision-making authority. appointed official. Provisions are taken for the safekeeping of the financial proposals. The decision-making authority reviews the final evaluation report, decides on its recommendation for award, and forwards the report to the Bank for its information. Each member of the Evaluation Committee independently evaluates the technical proposals. The Borrower invites the first-ranked consultant to negotiations. Evaluation Committee meets to discuss The Borrower forwards to the Bank the initialed and consolidate the evaluation. negotiated contract for its "no objection." responsiveness must be assessed against these TOR. and subcriteria and assign points to them relating to TOR should not be modified after submission of the aspects of the assignment that best fit Borrowers' proposals; such changes could affect the fairness and objectives and circumstances. For this reason, evalua- transparency of the selection process. tion criteria, subcriteria, and associated points should The EC cannot modify the evaluation criteria and not be modified. subcriteria set out in the Data Sheet. Borrowers, when The authority to award the contract lies with the preparing the Data Sheet, establish evaluation criteria Borrower and is subject to the Bank's "no objection," 82 PREPARATION, SUBMISSION, AND EVALUATION OF PROPOSALS Recommended Criteria for the Selection of the EC Members 1 6 . 3 . 2 when required. The task of the EC is to evaluate the pro- similar to the one described in the TOR, experi- posals and submit the Evaluation Report and recom- enced in the main disciplines of the assignment, mendations for award to the Borrower. The Borrower and possess sound professional judgment. may accept or (under special circumstances) reject the The following qualifications for EC member- recommendation of the EC (for example, if an impor- ship are suggested: tant aspect of the evaluation was overlooked). In that · Tenyearsofprofessionalexperience(verycom- instance, the Borrower may (a) ask the EC to revise its plex assignments may require more) evaluation and recommendation or (b) (in extreme · Threetofiveyearsofexperienceinthespecialized cases) even dismiss the EC, appoint a new Committee, field or discipline required by the assignment and repeat the evaluation. · A good command of the language in which the proposals are written (c) Familiarity with selection and evaluation 16.3.2 Recommended Criteria for Familiarity of the EC members with selection the Selection of the EC Members methods and evaluation procedures for consultant (a) Introduction proposals is important to ensure a correct evalua- Consultants' technical proposals are an intellec- tion of not only the level of responsiveness of each tual product; their evaluation must be based on proposal to the evaluation criteria established in the the professional judgment of competent and im- RFP but also compliance with the RFP instructions. partial evaluators. The judgment has to be tech- (d) Impartiality nically sound and objective, strictly complying Evaluators' impartiality is as important as their with the procedures and evaluation criteria indi- professional expertise and mastery of evaluation cated in the RFP, and capable of providing an ad- techniques. Consultants and other stakeholders equate explanation for each evaluation and the must be persuaded that the evaluation process is points assigned to it. objective, fair, and conducted strictly by the The fulfillment of these conditions ensures rules and procedures set out by the RFP. consultants a professional and fair evaluation of EC members must exhibit the highest standards their proposals and the Borrower a better chance of integrity, which preclude any questionable affil- to select the consultant who is best suited for the iation with the short-listed consultants, including assignment. It also increases consultants' confi- as an employee, consultant, relative, or political dence in the selection process and reduces the or business affiliate. Failure to comply should likelihood of complaints from consultants. disqualify the EC candidate. All candidates should The experience of EC members in the disci- disclose in advance any perceived, potential, or plines related to the assignment and their famil- actual conflict of interest that can affect their ob- iarity with evaluation techniques of consultants' jectivity, even if doing so could lead to exclusion proposals are both important. The EC should from the EC. All EC members should sign a writ- comprise individuals of comparable hierarchical ten agreement to abide by restrictions on transac- levels and from the institution responsible for the tions with invited consultants to ensure that the outcome of the project. When appointing the EC, credibility of the evaluation process is preserved the Borrower should seek the advice of the team and confidence in the Borrower is maintained. who drafted the TOR, who may indicate those Well-designed complaint procedures reinforce qualification requirements of the EC members confidence in the Borrower institutions and pro- that best fit the characteristics of the assignment. vide disincentives for the EC to engage in any un- Whenever possible, the EC should include one or fair practices. more members of the team who drafted the TOR (e) Timing (or at least be able to consult with them at any EC members should be appointed shortly before time during the evaluation). the deadline for submission of proposals to re- (b) Professional experience duce the risk of questionable contacts with short- Because the EC will assess the quality of the pro- listed firms before the submission of proposals. posed technical approach, methodology, work (f) Steps in appointing the EC plan, and competence of the proposed key staff, First, the Borrower decides on the number of its members should be familiar with assignments members. Three members are adequate when the PREPARATION, SUBMISSION, AND EVALUATION OF PROPOSALS 83 1 6 . 3 . 2 Recommended Criteria for the Selection of the EC Members RFP requires consultants to submit a Simplified als are requested from only one consultant, a degree of Technical Proposal (STP), while five are recom- flexibility is acceptable when a minor delay occurs for mended when a Full Technical Proposal (FTP) is reasons beyond the control of the consultant. called for. A higher number of members allows When submission of both technical and finan- for the inclusion of EC members experienced in cial proposals is required, officials appointed by the the most relevant disciplines for the assignment. Borrower open the technical proposals immediately Second, the Borrower decides whether to select after the deadline. They verify that the financial en- EC members from its own staff or to employ in- velopes are sealed and deposit them in a safe place dependent consultants. Whenever possible, the under the custody of a designated officer (auditor, first option should be preferred because it allows legal counsel). The Borrower should record the date the Borrower to better assess (i) the integrity of and time that each technical proposal was received the candidates, (ii) their professional background and the date on which the technical proposals were and competence, and (iii) their familiarity with made available to the Evaluation Committee. Minutes proposal evaluation techniques. of the technical-proposal­opening event are kept, in- cluding lists of the firms that submitted proposals. The technical proposals are handed over to the Evaluation 16.3.3 Assistance to the Committee for evaluation. Evaluation Committee If the Borrower cannot form a sufficiently competent and reliable EC, it should appoint an independent 16.5 Evaluation Procedure consultant to assist the EC in the process of under- for Technical Proposals standing the selection procedures; defining the grades 16.5.1 Main Considerations of the rating system (see chapter 17); and carrying out the evaluation, including drafting of the technical After the Evaluation Committee has been appointed, evaluation report. If requested with sufficient lead the Borrower shall distribute the RFP to the EC mem- time, the Bank can assist the Borrower in identifying bers and instruct them to familiarize themselves with suitable independent experts. the characteristics and requirements of the assignment, the selection procedures, and the evaluation criteria and subcriteria. The head of the EC (and the Borrower's 16.4 Receipt and Opening project manager) should meet with all EC members to of Proposals review any questions they may have on the evaluation principles, procedures, and objectives. Usually famil- Under QCBS, FBS, LCS, CQS, and SSS, both techni- iarization with the RFP takes one to two days, and the cal and financial proposals must be submitted at the review meeting takes three to six hours, depending on same time. Under QBS, financial proposals may be the complexity of the assignment. Borrower staff who submitted together with technical proposals, but the drafted the TOR may assist EC members. more-common practice is to require submission of After the review meeting, the EC meets again to de- the technical proposal first, followed by submission of fine the grades of the rating system to be adopted for the financial proposal by the consultant whose tech- scoring the technical proposals, according to the criteria nical proposal is ranked the highest (two-envelope and subcriteria set out in the Data Sheet. The grading system; see chapter 9). system must be defined before the technical proposals Proposals must be submitted to a designated place are opened to prevent bias (or perceived bias) occur- (exact address, office, and room number, to avoid any ring because of the EC's knowledge of the opened pro- ambiguity) no later than the date and time indicated in posal contents. (Chapter 17 of this Manual provides the RFP. Under QCBS, FBS, and LCS, because price is a guidance on the definition of the grading system.) It is factor of selection, proposals received after the deadline recommended that the evaluation and scoring of tech- for submission are rejected and must be returned to the nical proposals be carried out after defining the grad- consultants unopened (any delay in submitting a pro- ing system. Otherwise, EC members would have to posal could be used to tamper with other proposals or assign a level of responsiveness of the proposals to each to allow the firm to modify its proposal price). Under of the different criteria and subcriteria without guid- CQS and SSS, wherein technical and financial propos- ance and support from predefined grades. 84 PREPARATION, SUBMISSION, AND EVALUATION OF PROPOSALS Evaluation of Proposals 1 6 . 5 . 2 This could easily distort the evaluation for the use of points and fractions of points, the rating system following main reasons: provides a few grades (from three to four) for each cri- terion and subcriterion (see chapter 17). The EC eval- · Evaluators may differ, even widely, in their defini- uation should be based on the proposal as submitted. tion, understanding, or interpretation of the same Under no circumstances can the EC request informa- criterion and also because of their subjective expe- tion or clarifications that may change the proposals. rience and understanding of the TOR. Issues to be clarified with the selected consultant will · Disparitiesinevaluators'relativegenerosityorsever- have to be discussed during negotiations. ity in judgment and ratings can easily be magnified After each member has independently rated all by the lack of common definitions of the require- criteria and subcriteria, it is good practice to read each ments to be considered for each criterion and sub- proposal again to ensure that scores reliably reflect the criterion. Large differences in scores caused by quality of the proposal. inadequate understanding of the TOR or improper Next, the EC should conduct a joint review and use of the evaluation criteria and subcriteria are dif- discuss the merits of individual evaluations and scores. ficult to reconcile and explain. Some evaluators tend to be generous while others will Before starting the evaluation, the EC members be rigid in their judgment and ratings. Such disparity should ensure that they does not matter, provided each evaluator is consistent and differences in scores are not too large. Large dif- · have no conflicts of interest, ferences should be reviewed and explained, because · understand the rating and scoring system, they often are caused by improper or inaccurate use of · havebeenprovidedwithevaluationworksheets,and the rating system.1 Reconciling differences that are · agree on how to evaluate the proposals. considered too large by the EC may result in members revising some of their ratings and scores. As such, any 16.5.2 Evaluation of Proposals changes should be recorded. If a discussion is needed to reach a final decision, an independent party should After the rating system has been defined and pro- prepare minutes. posals have been opened, the evaluation process can During the meeting, the EC should also comment begin. Members of the EC should not engage in any on the strengths and weaknesses of all proposals that communication with short-listed firms from the date have met the minimum technical score indicated in of their appointment to the date on which the contract the RFP. This will help identify any elements in the is awarded. Each member of the EC should first read winning proposal that should be clarified during ne- all proposals, without scoring them. This first review gotiations. helps determine whether the proposals are free of Eventually, for each of the technical proposals, significant omissions or deviations from the TOR or the EC should calculate the average of the scores allo- other key requirements of the RFP; it also allows EC cated to each criterion by all members, establish the members to assess the overall clarity of the proposals technical ranking of the proposals, identify the best, and identify elements that will require special atten- and propose it for award. tion in the evaluation. The evaluation also establishes whether a pro- Next, EC members shall begin their evaluation posal passes the minimum qualifying mark (or tech- process by applying the criteria and subcriteria set nical score) provided for in the RFP. If one or more forth in the Data Sheet. Each proposal should be proposals fail to meet the minimum qualifying mark, judged on its own merits and assigned an absolute-- both individual and joint assessments must be care- not comparative--grade. A comparative evaluation fully reviewed and justified. Short-listed consultants would single out the best proposal on a relative scale, are usually discouraged when their proposals are re- but still could leave the Borrower with a poor proposal. jected, particularly when they are only a few points Instead, the evaluation should measure absolute qual- below the minimum mark; therefore, the Borrower ity scored against predefined criteria and subcriteria should be prepared to debrief consultants to explain (see chapter 17 of this Manual). the evaluation of their proposals. The EC must conform to the evaluation process, Individual evaluators' results are recorded on based on RFP instructions and the predetermined rat- preestablished worksheets. Depending on the type ing system. To discourage subjectivity and avoid the of proposal submitted (either the FTP or the STP), PREPARATION, SUBMISSION, AND EVALUATION OF PROPOSALS 85 1 6 . 5 . 2 Evaluation of Proposals a period from half a day to two days should be allowed be nonresponsive, indicating that the consultants' for the evaluation of each proposal (see appendix 7 for financial proposals will be returned unopened at the proposal evaluation examples). end of the selection process. The Borrower simultane- ously notifies consultants whose technical proposals 16.5.3 Technical Evaluation Report were above the minimum technical score and informs them of the date, time, and place set for opening the The EC prepares a technical evaluation report that financial envelopes. The opening date should be defined shall record the scores given to each criterion and to allow sufficient time for consultants to make arrange- subcriterion, as well as explain the decisions. For each ments to attend the opening. proposal, the report also should indicate technical If consultants were initially requested to submit weaknesses or deviations from the terms set out in the financial proposals under QBS, the Borrower notifies RFP and comment on their acceptability. The Bank the consultant with the highest-ranked technical pro- recommends the use of its Sample Form of Evaluation posal and indicates the date, time, and place set for Report,2 which contains templates for the preparation negotiating the financial proposal and the contract. of both technical and financial evaluation reports. It is If only technical proposals have been received, the suggested that the EC appoint one of its members to Borrower will request the highest-ranked consultant draft the technical evaluation report. to submit a financial proposal. (One or two weeks is The technical evaluation report is submitted by considered a sufficient time period in which to receive the EC to the designated decision-making authority this financial proposal.) for review and approval. This decision-making authority may ask the EC to explain the report, but should not request that 16.6 Evaluation Procedure scores be changed. It should review the EC's evalua- for Financial Proposals tion of each proposal (on technical, contractual, and other aspects). If the EC finds a proposal nonrespon- On the date, time, and place set for opening the finan- sive, the decision maker may reject it at this stage. An cial proposals, the appointed Borrower's official delivers example of deviation that could lead to rejection of a them to the Evaluation Committee. The opening is pub- proposal may include the omission of a component of lic; consultants' representatives may choose to attend in the services, reflecting a poor understanding of the as- person or online. The Evaluation Committee verifies signment. The decision maker must also be satisfied that the financial proposals have remained sealed and itself that no proposal is inconsistent with the Bank's then opens them. The name of the consultant, the tech- rules (for example, a proposal that includes civil ser- nical points, and the proposed prices are read aloud vants who are employees of the Borrower). and recorded as each financial proposal is opened. The decision-making authority should decide When electronic submission of proposals is used, this how any acceptable deviation in each proposal should information shall be posted online. No modification be handled during negotiations, in case that proposal to financial proposals is permitted. The Borrower pre- is ranked first. pares the minutes of the public opening, which should For contracts subject to prior review, the Borrower be attached to the Financial Evaluation Report. sends the technical evaluation report to the Bank for The Evaluation Committee should first review review and "no objection." The financial proposals the financial proposals for arithmetical errors and in- should not be opened until the Bank's "no objection" consistencies between the financial and technical pro- to the report is received. The technical evaluation re- posals. Arithmetical errors should be corrected; in port is a confidential document, and its contents shall case of a discrepancy between a partial amount and not be disclosed. the total amount or between the wording and figures, the former will prevail in both cases. Omissions and inconsistencies should also be corrected. Activities 16.5.4 Notification to Consultants and items described in the technical proposals, but After receiving the Bank's "no objection" to the tech- not priced, shall be assumed to be included in the nical evaluation report, the Borrower notifies consult- prices of other activities or items. ants whose proposals did not meet the minimum If an activity or line item is quantified differently in technical score specified in the RFP or were found to the financial proposal than in the technical proposal 86 PREPARATION, SUBMISSION, AND EVALUATION OF PROPOSALS Rejection of All Proposals 1 6 . 8 and the Time-Based Form of Contract has been in- should ask the consultants to extend the validity of cluded in the RFP, the EC shall correct the quantifica- their proposals. tion indicated in the financial proposal so as to make it After technical and financial negotiations are com- consistent with that indicated in the technical proposal, pleted, the Borrower shall provide the Bank, in suffi- apply the relevant unit price included in the financial cient time for its review and "no objection," with a copy proposal to the corrected quantity, and correct the total of the initialed negotiated contract. If the negotiated proposal cost. If the Lump-Sum Form of Contract has contract resulted in a substitution of key staff or any been included in the RFP, no corrections are applied changes in the TOR and in the originally proposed con- to the financial proposal in this respect. For example, tract, the Borrower shall highlight the changes and pro- if a technical proposal indicates the presence of the vide an explanation of the changes. team leader at the assignment site for 12 months (but Once the contract is awarded, the Borrower shall the financial proposal indicates only 8 months) and the publish in UNDB online and in dgMarket the following Time-Based Form of Contract has been included in the information: (a) the names of all consultants who sub- RFP, an adjustment should be calculated by adding mitted proposals; (b) the total technical points assigned the corresponding amount of staff remuneration to to each consultant proposal; (c) the evaluated prices of the proposed amount. each proposal; (d) the final point ranking of the con- To compare proposals, evaluated prices should be sultants; and (e) the name of the successful consultant converted to a single currency using the exchange rate, and the price, duration, and summary scope of the con- date, and source indicated by the Borrower in the RFP. tract. The Borrower shall also send the same informa- The scores of the evaluated prices should then be cal- tion to all consultants who have submitted proposals. culated according to the formula provided in the RFP Consultants may wish to be informed of the rea- (see para. 14.3.2, Paragraph Reference 5.7). sons why they were not selected. The Borrower should When FBS is adopted, adjustments made by the provide reasonable, prompt, and satisfactory replies Evaluation Committee to correct omissions or in- to all such requests, either in writing or in a debriefing consistencies detected during the evaluation of the meeting, at the consultant's discretion. The Borrower financial proposal could raise the evaluated price of should not discuss the details of any other proposal a proposal over the available budget indicated in the except that of the inquiring consultant. If the consult- RFP. This could lead to the rejection of the proposal ant is not satisfied with the Borrower's explanation, it (see para. 9.3.3). can request the Bank to organize a debriefing meeting with concerned Bank staff. The Regional Procurement Manager coordinates this meeting. The debriefing process is intended to help losing firms understand why 16.7 Combined Quality they lost and encourage them to submit improved- and Cost Evaluation quality proposals in the future. If QCBS is the method of selection, the Evaluation Committee weighs and combines the scores of the tech- nical and financial proposals to obtain a final ranking 16.8 Rejection of All Proposals of the proposals and recommendation for award. The data are then recorded in the final evaluation report, If all proposals are found to be nonresponsive, the which is delivered to the decision-making authority. Borrower may be justified in rejecting all of them. The The authority reviews the report, confirms the rec- grounds for rejecting all proposals are as follows: ommendation for award, obtains any additional clear- · The proposals present major deficiencies in com- ance that may be required under local regulations, and plying with the RFP and specifically the TOR. forwards the report to the Bank for its information. · All proposals fail to achieve the minimum qualify- The Borrower invites the consultant whose pro- ing mark (technical score) indicated in the RFP. posal has obtained the highest combined score to ne- · The proposal prices are substantially higher than gotiate, informs the other consultants that they were the Borrower's estimated budget. unsuccessful, and releases the name of the selected firm. If the Borrower believes that negotiations could In the first case, there may be technical reasons fail or could go beyond the proposal validity period, it for the deficiencies. Most frequently, the Borrower and PREPARATION, SUBMISSION, AND EVALUATION OF PROPOSALS 87 1 6 . 8 Rejection of All Proposals consultants disagree on which contractual party should Bank's "no objection" to the technical evaluation. be responsible for executing specific assignment ac- When price is a factor of selection, the Borrower may tivities or on the exact content and feasibility of spe- then proceed with the financial evaluation. cific deadlines affecting the implementation schedule If the Borrower receives a complaint from a con- of the Borrower's project. In other instances, consult- sultant, copies of the complaint and the Borrower's ants may find the estimated staff-months and the dis- response shall be sent to the Bank for information. tribution of risks unacceptable. If, because of analysis of a complaint, the Borrower In the third case, the Borrower may not know the changes its contract award recommendation, the rea- ongoing remuneration levels of consultants for the son for the decision and a revised evaluation report type of service being considered, consultants may mis- shall be submitted to the Bank for "no objection." The interpret the TOR, or the Borrower's plans may be too Borrower shall publish once again the contract award, ambitious for the available budget. as provided for in the Guidelines. In all cases, good TOR, accurate budget, and re- If the Bank determines that the final evaluation view of the RFP before the Bank issues its "no objec- report, recommendation for award, or negotiated con- tion" can reduce the risks of nonresponsive proposals. tract is inconsistent with the provisions of the RFP, it In the third case, before rejecting all proposals, the shall promptly inform the Borrower and state the rea- Borrower, in consultation with the Bank, should inves- son for its determination. Otherwise, the Bank shall tigate the feasibility of increasing the budget or scaling provide its final "no objection" to the contract award. down the scope of services to meet the original budget. The Borrower shall confirm the award of the contract Before all proposals are rejected and a new re- only after receiving the "no objection" from the Bank. quest for proposals is issued, the Borrower shall notify The description and amount of the contract, together the Bank, indicating the reasons for such rejection, with the name and address of the firm, shall be subject and shall obtain the Bank's "no objection" before pro- to public disclosure by the Borrower after contract ceeding with a new selection process. The new process signing. (see para. 16.7). may include revising the RFP (including the short list) and the budget. These revisions shall be agreed on with the Bank. Calling for new proposals creates obvi- Notes ous delays and should remain the last resort. 1. For example, if there are 6 proposals and 5 EC mem- bers, there will be a total of 30 ratings for each aspect 16.9 Role of the Bank in the subject to evaluation. Comparing the 30 ratings will Evaluation Process allow the EC to (a) identify those members who have been systematically too generous or too severe and Selecting consultants is the Borrower's responsibility. (b) correct ratings that are obviously wrong. The The Bank does not take part in the evaluation of pro- highest rating ("very good") and the lowest ("poor") posals, but upon request of the Borrower, may pro- are usually easier to assign and more difficult to dis- vide advice on methodology and selection procedures pute. In fact, in most cases, it is quite evident to all before the actual evaluation takes place. EC members that an aspect of a proposal is of either In prior review assignments, the Bank reviews the outstanding technical quality, thus deserving a "very technical evaluation report and, if satisfied, sends its good" rating, or largely unsatisfactory, thus deserv- "no objection" to the Borrower (see para 8.2). The ing a "poor" rating. However, most ratings fall in the Bank may request additional explanations or infor- middle ("good" and "satisfactory") and reaching a mation about the report's content from the Borrower, consensus may be difficult. Comparing the ratings when necessary. In exceptional cases, the Bank may assigned to each element of the proposals by the EC ask the Borrower to submit one or more proposals for members may be helpful in this context. its review. The Borrower may proceed with the open- 2. "Sample Form of Evaluation Report: Selection of ing of the financial proposals only after receiving the Consultants," World Bank, 2004, Washington, DC. 88 PREPARATION, SUBMISSION, AND EVALUATION OF PROPOSALS C H A P T E R 17 Evaluation Practices of Technical Proposals Technical proposals for consulting services are an For the Full Technical Proposal (FTP), the crite- intellectual product; their evaluation must be based ria include the following: on the individual professional judgment of compe- · Specific experience of the consultants relevant to tent evaluators and should not be reduced to a purely the assignment arithmetical exercise. The difficulty is to ensure that · Adequacy of the proposed methodology and work this judgment is not exercised in an unreasonable or plan in responding to the TOR arbitrary manner. Evaluators may, either consciously · Key professional staff qualifications and compe- or unconsciously, manipulate the points awarded to tence for the assignment specific aspects in the evaluation for a number of rea- · Suitability of the transfer-of-knowledge (capacity- sons, including inadequate experience in the field of the building) program assignment or in evaluating proposals of this nature. · Participation by national consultants among pro- Therefore, it is important that subjectivity implicit to posed key staff any individual professional judgment be comple- The "transfer-of-knowledge" (capacity-building) mented by transparency, consistency, and fairness. criterion is included wherever it forms an explicit as- The individual evaluator entrusted with evaluation pect of the assignment. The "participation by national should, when required, be able to explain to the sat- consultants" criterion is optional for the Borrower. isfaction of a qualified reviewer from the higher For the Simplified Technical Proposal (STP), the authority, the public, or the Bank the reason for his criteria include the following: or her recommendation. One way of helping to achieve the above is by · Adequacy of the proposed methodology and work adopting a suitable rating system for the evaluation of plan in responding to the TOR technical proposals under the criteria and subcriteria · Key professional staff qualifications and compe- (if provided) established in the RFP. tence for the assignment This chapter complements chapter 16 because it For both the FTP and STP, the RFP should spec- provides detailed practical recommendations for rat- ify the subcriteria for the "key professional staff quali- ing evaluation criteria (and subcriteria) and scoring fications and competence," as indicated in the SRFP. various parts of the technical proposal. (Appendix 7 of For the FTP, the RFP should also indicate subcriteria this Manual provides examples of complex technical for the "adequacy of the proposed methodology and evaluations.) work plan," and those, if any, adopted for the other cri- teria. For all criteria and subcriteria, the RFP should al- ways indicate the points to be allocated to each of 17.1 Rating System them. In the RFP, the points assigned to a particular cri- The World Bank Standard RFP (SRFP) specifies the terion (or subcriterion) indicate the maximum score criteria used to evaluate technical proposals and the (maximum number of points) that can be allocated to points (or weights) given to each. The responsiveness it. The actual score given by the evaluator indicates the of a proposal to the TOR is determined by its respon- degree to which the proposal being evaluated under siveness to the adopted evaluation criteria (and sub- that particular criterion (or subcriterion) meets the criteria) indicated in the Data Sheet of the RFP. requirements (that is, its level of responsiveness). The 89 1 7 . 1 Rating System level of responsiveness for each criterion (and subcri- using agreed-on, predefined grades of responsiveness terion) is rated on a scale of 1 to 100. leaves the definition of the grades up to each evalua- Each EC member scores the technical proposals tor, making the scoring more likely to be subjective in two steps. First, the level of responsiveness of the and more difficult to compare. proposals to each of the criteria or subcriteria is esti- (The following paragraphs illustrate how to select mated on a percentage scale. Second, each percentage the rating grades and their definitions. Figure 17.1 rating is multiplied by the maximum number of illustrates a sample evaluation for one of the five points assigned to the relevant criterion (or subcrite- main criteria specified in the RFP.) rion) in the RFP to obtain the score (percentage rating × maximum number of points = score). For example, the criterion "specific experience of the consultant rel- 17.2 Specific Experience of evant to the assignment" may have been allocated a Consultants Relevant to the maximum of 10 points in the RFP. A proposal with Assignment (for the FTP only) a good level of responsiveness to this criterion is given a 90 percent rating and therefore receives a 17.2.1 Rating Scale score of 9 points. The Consultant Guidelines allow a maximum of 10 To make the scoring easier and more transparent, points to be allocated to the specific experience of the the rating scale of the level of responsiveness is usually firm (see table 12.1). Because consultants have been divided into a number of discrete grades. It is a good short-listed based on their experience, they are all practice to give scores based on the following grades: capable of undertaking the assignment; nevertheless, poor, satisfactory, good, and very good. Before open- some specific aspects of the qualifications may make a ing the technical proposals, the EC should agree on consultant more suitable than others. Under this cri- the definition of a grade for each criterion (or subcri- terion, Borrowers identify and evaluate those specific terion). That is, the committee should establish what aspects. will be considered poor, satisfactory, good, and very The grades indicated in table 17.1 are recom- good. Because each of the criteria (or subcriteria) refers mended as percentage ratings related to the evalua- to a different aspect of the proposal, the definition of tion of this criterion. Because consultants have already grades will differ from one criterion to the next. been short-listed based on their experience, their level Scoring technical proposals by this method offers of responsiveness to this criterion should not nor- the following advantages: mally be rated less than satisfactory (that is, not under · It provides the EC members with a shared defini- 40 percent). tion of the grades, making the evaluation easier and comparable (this is particularly helpful for less- 17.2.2 Aspects to Consider experienced evaluators). for the Evaluation · It reduces the risk of scoring inconsistencies and discretion. The EC should consider the following aspects in eval- · It binds each committee member to justify his or uating the specific experience of the consultants: her individual evaluation, based on a common def- · Experience in Similar Projects. Evidence of having inition of grades, discouraging intentionally biased successfully carried out similar assignments. evaluations. · It adds transparency and fairness to the evaluation · ExperienceinSimilarAreasandConditions.Thecon- sultants have worked in regions or countries with process. physical, cultural, social, and institutional character- Defining the grades is a difficult exercise that re- istics comparable to those of the country in which quires a thorough knowledge of the TOR, the main the assignment is to be carried out. technical issues to be covered by the consultant as- · Size,Organization,andManagement.Theconsultants signment, and the qualifications expected from the have the capacity (for example, staff, organization, consultants. It is worth allocating time and effort to and managerial skills) to carry out the assignment. this exercise because it may substantially improve the For some assignments, how long the consultants have quality of the evaluation. Rating proposals without been established is to be considered. 90 EVALUATION PRACTICES OF TECHNICAL PROPOSALS Defining the Grades 1 7 . 2 . 3 Figure 17.1 Rating System SCORE OF ADEQUACY OF RFP % METHODOLOGY CRITERIA SUBCRITERIA GRADES RATING & WORK PLAN Specific Poor 40 Experience of the Consultant Technical 8 points Satisfactory 70 20 x 70% 14 Approach & Methodology 20 points Good 90 Adequacy of Methodology & Very Good 100 Work Plan 46 points Poor 40 Qualifications & Satisfactory 70 Work Plan Competence of Key Staff 16 points Good 90 16 x 90% 14.4 30 points Very Good 100 Suitability of Transfer of Poor 40 10 x 40% 4 Knowledge 8 points Organization & Satisfactory 70 Staffing 10 points Good 90 Local Participation Very Good 100 8 points 32.4 · Specialization. For some assignments, it may be im- grades (based on the aspects listed in para. 17.2.2) is portant to evaluate the consultants' specialized skills given below (definitions may differ from case to case, and access to particular technologies related to the depending on the characteristics of the assignment): assignment. · Satisfactory. The consultants have experience in · Experience in Capacity Building. The consultants' the field of assignments similar to the one being experience in capacity building and transfer of knowl- edge of previous clients' personnel (if relevant). · Quality Management (QM). The availability of a Table 17.1 Recommended Grades well-established QM system may be taken into ac- and Percentage Rating for count for large and complex assignments. Specific Experience Percentage 17.2.3 Defining the Grades Grade (level of responsiveness) rating Because subcriteria are usually not provided for this Satisfactory 40 criterion (see para. 12.3), the specific experience will Good 70 be evaluated as a whole, using the grades set out in Very good 100 table 17.1. An example of the definition of these EVALUATION PRACTICES OF TECHNICAL PROPOSALS 91 1 7 . 2 . 3 Defining the Grades considered, but have not dealt with critical issues Table 17.2 Recommended Grades and specific to it (such as, for instance, delicate social Percentage Rating for Methodology or environmental issues). The consultants are ex- and Work Plan perienced in the use of standard approaches and methodologies required for the assignment. The Percentage Grade (level of responsiveness) rating consultants' permanent staff are adequate. · Good. The consultants have extensive experience in Poor 40 the field of the assignment and have worked in coun- Satisfactory 70 tries with similar physical and institutional condi- tions, including similar critical issues. Permanent Good 90 staff are adequate and highly qualified to cover the Very Good 100 requirements of the assignment. The consultants have experience with advanced approaches and methodologies for dealing with the specific require- · a zero rating in response to poor methodology may ments of the assignment. not be compensated by high scores in all remaining · Very Good. The consultants have outstanding, ad- criteria (this could lead to the rejection of a proposal vanced expertise in specific problem areas of the that is attractive in all other aspects). assignment that can promise an excellent execution of the assignment. The consultants' staff include top If a proposal appears to be unacceptable under experts in the field of the assignment. The consult- this criterion (it does not deserve to be rated even ants are considered world-class specialists in the ap- "poor"), it may be considered nonresponsive (see proaches and methodologies dealing with specific para. 16.5.3). issues in the assignment. The consultants operate according to well-established QM procedures. 17.3.2 Aspects to Consider Ratings should not be too rigid. If a firm does not for the Evaluation satisfy all the conditions set forth by the definition of one of the grades, but the grade under consideration The EC evaluates the quality and the adequacy of the appears to reflect the overall specific experience of proposed methodology and work plan by considering the firm better than the lower grade, the upper grade such aspects as the following: should be awarded. · Understanding the Objectives of the Assignment. The extent to which the consultants' technical approach and work plan respond to the objectives indicated 17.3 Adequacy of Proposed in the TOR. Methodology and Work Plan · CompletenessandResponsiveness.Doestheproposal (for both the FTP and STP) respond in an exhaustive manner to all the require- 17.3.1 Rating Scale ments of the TOR? · Clarity. Are the various elements coherent and the For the FTP, the Consultant Guidelines allocate between decision points well defined? 20 and 50 points to the "adequacy of methodology and · Creativity and Innovation. Does the proposal sug- work plan" criterion (see para. 12.3.1); for the STP, the gest any new approaches to the assignment or new Data Sheet contained in the ITC of the RFP (Paragraph methodologies that help achieve better outcomes? Reference 5.2 (b)) indicates the range between 20 and · TimelinessofOutput.Istheproposedactivitysched- 40 points (see para. 12.3.2). The grades indicated in ule realistic? Are the requested outputs provided table 17.2 are recommended for the percentage ratings on time? relating to the evaluation of this criterion: · QualityofResourceUtilization.Isthestaffingsched- The lowest grade is 40 percent, instead of zero, ule appropriate, with neither too many short-term because experts nor too many generalists? Is the proposed · a zero rating is not realistic (it would imply that the staff permanent or composed of external consult- consultant has not responded at all to the TOR under ants? In the latter case, it should be clarified whether this criterion) and the external consultants have worked on previous 92 EVALUATION PRACTICES OF TECHNICAL PROPOSALS Evaluation When Subcriteria Are Provided (for the FTP only) 1 7 . 3 . 3 assignments with the consultants' permanent staff. · Satisfactory.Thewaytocarryoutthedifferent This aspect should always be considered. activities of the TOR is discussed generically. · Flexibility and Adaptability. Are the methodology The approach is standard and not specifically and work plan flexible and easy to adapt to changes tailored to the assignment. Although the ap- that might occur during implementation of the as- proach and methodology are suitable, they do signment? This aspect is especially relevant when not include a discussion on how the consult- the assignment takes place in potentially changing ant proposes to deal with critical characteris- environments. tics of the assignment. The list of contents of · TechnologyLevel.Doesthemethodologyproposethe the Quality Plan (if required in the TOR) is use of state-of-the-art technologies and the adoption provided, but it is generic and does not reflect of innovative solutions? the specific features of the assignment. · Logistics. If the consultants must work at remote · Good. The proposed approach is discussed in sites, the consultants' approach to logistics could detail, and the methodology is specifically tai- also be considered. lored to the characteristics of the assignment · Quality Management. Especially for large and com- and flexible enough to allow it to adapt to plex assignments, the TOR may include a require- changes that may occur during execution of ment to provide a Quality Plan or its detailed list of the services. The list of contents of the Quality contents (see para. 1.3.2). Plan (if required in the TOR) is tailored to the specific characteristics of the assignment. · Very Good. In addition to the requirements 17.3.3 Evaluation When Subcriteria listed above under "good," important issues Are Provided (for the FTP only) are approached in an innovative and efficient The quality and adequacy of the proposed methodol- way, indicating that the consultants have un- ogy and work plan are evaluated by the following derstood the main issues of the assignment three subcriteria: and have outstanding knowledge of new so- lutions. The proposal details ways to improve · Technical approach and methodology the results and the quality of the assignment · Work plan by using advanced approaches, methodolo- · Organization and staffing gies, and knowledge. A detailed description Additional subcriteria may be specified in the RFP of the Quality Plan is provided in addition to when there is a need to focus on particularly important its list of contents (if required). aspects of the assignment (see para. 12.5). (b) Work Plan: First, the EC shall define, for each of the three · Poor. The activity schedule omits important subcriteria outlined above, the definition of the grades tasks; the timing of activities and correlation indicated in table 17.2. Such grade definitions should among them are inconsistent with the ap- be based on the specific aspects listed in para. 17.3.2. proach or methodology proposed. There is a An example of the definition of the four grades in lack of clarity and logic in the sequencing. table 17.2 for the three subcriteria listed above may in- · Satisfactory. All key activities are included in the activity schedule, but they are not clude the following (definitions may differ from case detailed. There are minor inconsistencies to case, depending on the characteristics of the as- between timing, assignment outputs, and signment): proposed approach. (a) Technical Approach and Methodology: · Good. The work plan responds well to the · Poor. The technical approach or the method- TOR; all important activities are indicated in ology (or both) envisaged to carry out im- the activity schedule, and their timing is ap- portant activities indicated in the TOR is propriate and consistent with the assignment inappropriate or very poorly presented, indi- outputs. Moreover, the interrelation between cating that the consultant has misunderstood the various activities is realistic and consis- important aspects of the scope of work. The tent with the proposed approach. There is a list of contents of the Quality Plan (if required fair degree of detail that facilitates under- in the TOR) is missing. standing of the proposed work plan. EVALUATION PRACTICES OF TECHNICAL PROPOSALS 93 1 7 . 3 . 3 Evaluation When Subcriteria Are Provided (for the FTP only) · Very Good. In addition to the requirements of the proposed methodology and work plan." The listed above under "good," decision points proposed methodology and work plan are evaluated and the sequence and timing of activities are as a whole, using the four grades of table 17.2. An very well defined, indicating that the consult- example of how these grades could be defined, based ants have optimized the use of resources. A on the aspects listed in para. 17.3.2, is detailed below specific chapter of the proposal explains the (definitions may differ from case to case, depending work plan in relation to the proposed ap- on the characteristics of the assignment): proach. The work plan allows flexibility to ac- commodate contingencies. · Poor. The methodology for important activities in (c) Organization and Staffing: the TOR is inadequate, indicating that the consult- · Poor. The organization chart is perfunctory, ants may have misunderstood important aspects the staffing plan is weak in important areas, of the scope of work; the schedule of activities is and the staffing schedule is inconsistent with incomplete; staffing is inadequate; and the staffing the timing of the most important outputs of schedule is not fully consistent with the timing of the assignment. There is no clarity in alloca- the outputs. The proposed specialists have never tion of tasks and responsibilities. The pro- worked together as a team. posed specialists have never worked together · Satisfactory. Proposed methodologies are standard as a team. and generally suitable for the assignment, but no · Satisfactory. The organization chart is com- detailed discussion of the specific aspects of the plete and detailed, the technical level and assignment is provided; the activity schedule is composition of the staffing arrangements are complete and clear; composition of the staff is ad- adequate, and staffing is consistent with both equate; and staff levels are consistent with timing timing and assignment outputs. and outputs. · Good. In addition to the definition above in · Good. Approach and methodology are well defined "satisfactory," the staff is very well balanced and respond to the assignment's requirements. The (that is, they show good coordination, clear work plan is detailed and addresses the TOR well; all and detailed definition of duties and respon- important activities are indicated in the activity sibilities, not too many short-term experts, schedule, and their timing is realistic and consistent not too many generalists, staff skills and with the assignment outputs; and staffing is well needs are matched precisely, and they enjoy balanced (good coordination; clear, detailed defini- good logistical support). Some members of tion of duties and responsibilities). Some members the project team have worked together before of the proposed team have worked together on a few to some extent. occasions. · Very Good. Besides meeting all the require- · Very Good. Besides meeting the requirements listed ments for a "good" rating, the proposed team above under "good," the proposal includes important is integrated, and several members have innovations in approach relevant to the Borrower worked together extensively in the past; a and makes practical suggestions on how to im- detailed explanation of the Borrower's role prove the overall quality and efficiency of the as- and integration in the assignment is provided. signment, indicating clearly how they would be The proposal contains a detailed discussion implemented. The implementation of key activi- showing that the consultants have optimized ties is explained in detail. The proposed team is the use and deployment of staff with effi- well integrated, and several of its members have ciency and economy, based on the proposed previously worked together. logistics. If the consultants' approach and methodology do not fully satisfy all the conditions set forth by the def- 17.3.4 Evaluation When Subcriteria inition of one of the grades, but the grade under con- Are Not Provided (for the STP only) sideration appears to reflect the overall adequacy of For the Simplified Technical Proposal (STP), subcri- approach and methodology better than the lower one, teria are not provided under the criterion "adequacy the upper grade should be assigned. 94 EVALUATION PRACTICES OF TECHNICAL PROPOSALS Aspects to Consider for the Evaluation 1 7 . 4 . 2 17.4 Qualifications and current position and the level of responsibility en- Competence of Proposed Key trusted to them in previous projects, rather than on Staff (for both the FTP and STP) their acquired university degrees. Because experi- ence accumulates with age, staff members who are 17.4.1 Rating Scale 60 years or older are often satisfactorily employed For the FTP, the Consultant Guidelines allocate between on complex or sensitive assignments. Long-term 30 and 60 points to "key professional staff qualifications experience in consulting assignments may be ad- and competence for the assignment" (see table 12.1 vantageous, but evaluators should not give points to in chapter 12). For the STP, the Data Sheet contained older candidates when age is not especially relevant in the ITC of the RFP allocates, under Paragraph for the assignment. When knowledge of recent ap- Reference 5.2 (b) (ii), between 60 and 80 points to this proaches, methodologies, and technologies is criti- criterion (see table 12.2). For both the FTP and STP, the cal, younger experts may be preferable. grades indicated in table 17.3 are recommended as · Adequacy for the Assignment. This is the most im- percentage ratings relating to the evaluation of the portant aspect and should be carefully evaluated. proposed key professional staff. The lowest grade is Appropriate capabilities, adequate professional 40 percent instead of zero (for reasons similar to those skills, and experience should always be the key eval- described in para. 17.3.1). uation aspects. While the previous aspect, "general Grades in table 17.3 apply to both individual staff qualifications," evaluates the general experience of members and to members grouped by discipline (or the staff in the technical field in which they will activity) when interdisciplinary weighting is required work under the assignment, "adequacy for the as- (see para. 12.7). When evaluating staff, it is recom- signment" is meant to assess their capability to exe- mended that only those proposed for key positions cute the specific functions entrusted to them. Has should be considered. Junior or clerical staff shall not the expert recently held similar positions? If yes, be evaluated. were such positions relevant to assignments similar to the one under consideration? Has the proposed 17.4.2 Aspects to Consider team leader held such a position before? If yes, has for the Evaluation he or she managed a team similar to the one pro- posed (size, technical disciplines involved, similar The committee should evaluate key staff by consider- mix of home and expatriate personnel, and so ing the following aspects: forth)? How well do the knowledge and skills of the · General Qualifications. It is important to consider staff offered meet the needs of the assignment? the number of years of professional experience of · Experience in the Region and Language. When evalu- the consultants in the technical field in which they ating experience in the region, consider factors such will work under the assignment. For evaluation as the number of assignments carried out in the purposes, the value of prior university education country or in countries with similar cultures, admin- diminishes with age. Experts with more than 10 istrative systems, and government organizations. For years of experience should be evaluated on their expatriate staff, the RFP should specify, in addition to capabilities in one of the official languages of Table 17.3 Recommended Grades and the Bank, local language requirements for adequate Percentage Rating for Qualifications communication in the country of the assignment, if and Competence of Key Staff needed. Scores should be given only for the local language. In scoring national consultant staff, their Percentage knowledge of the language of the contract should be Grade (level of responsiveness) rating evaluated, instead of the local language. Poor 40 Key staff should be evaluated on their skills and Satisfactory 70 suitability for the job, irrespective of their nationality. Good 90 The qualifications of the team leader should be care- fully evaluated because this position plays a crucial Very Good 100 role in the assignment. If the team leader is acting as EVALUATION PRACTICES OF TECHNICAL PROPOSALS 95 1 7 . 4 . 2 Aspects to Consider for the Evaluation both project manager and expert, his or her qualifica- the one required under the assignment. His tions must be evaluated for each function, and the or her qualifications do not match closely the scores are assigned to each function proportional to assigned position. (For instance, the position the time effort dedicated to each of them (if the two requires a highly experienced project man- functions overlap). Full marks for each function are ager, while a relatively junior professional assigned only if the functions can be clearly separated with brief experience is proposed.) without affecting the quality of the services. · Satisfactory. The experience of the proposed expert fits the assigned position; in the past 17.4.3 Evaluation Using the Three 10 years or more, he or she has successfully Subcriteria Specified in the RFP held positions similar to the one proposed for the assignment in at least one project of The qualifications and competence of key staff shall be a similar nature. The proposed expert's skills evaluated using the following three subcriteria speci- (either professional or managerial, as the pro- fied in the RFP (see para. 12.7): posed position may require) are adequate for · General Qualifications the job. · Adequacy for the Assignment · Good.Thequalificationsoftheexpertaresuit- · Experience in the Region and Language able for the proposed position; over the past 10 years, he or she has held several similar Under each of these subcriteria, individual staff positions in similar assignments; the expert's members are evaluated, using the grades in table 17.3. skills (either professional or managerial) are The EC shall determine for each of the three subcrite- fully consistent with the position and charac- ria the definition of each of the grades indicated. Such teristics of the assignment. definitions should be based on the qualifications listed · Very Good. In addition to the criteria under in para. 17.4.2. "good," the expert has qualifications and ex- An example of the definition of the four grades in perience that substantially exceed the require- table 17.3 for each of the three subcriteria listed above ments for positions similar to the one being may include the following: considered. (a) General Qualifications: (c) Experience in the Region and Language (this · Poor. The proposed expert has less than example refers to expatriate staff): 10 years of relevant experience. · Poor. The proposed expert has never or only · Satisfactory. The proposed expert has 10 years occasionally worked in countries similar to the or more of overall working experience relevant one of the assignment, and his or her knowl- to the assignment, with relevant academic edge of one of the official languages of the education and training. Bank and the local language is insufficient to · Good. The proposed expert has more than properly communicate orally and in writing. 15 years of overall working experience; a · Satisfactory. The expert has worked in coun- substantial part of that experience relates to tries with cultural, administrative, and gov- consulting assignments similar to the one ernmental organizations similar to the ones under consideration; the expert's profes- of the country of the assignment; his or her sional achievements, such as position within knowledge of one of the official languages of the firm and level of responsibility, have the Bank is adequate. steadily increased over time. · Good. In recent years, the expert has worked · Very Good. The proposed specialist has more in the region of the assignment for at least than 20 years of specialized experience in the one year; and he or she is fluent in one of the field of the assignment and is recognized as official languages of the Bank, as well as in the a top expert in his or her field. The specialist local language. is fully up to date on the state of the art of the · Very Good. In addition to meeting the above discipline. definition of "good," the expert has detailed, (b) Adequacy for the Assignment: direct knowledge of the country and the lan- · Poor. The proposed expert has never or only guage resulting from years of professional ex- occasionally worked in a position similar to perience in the country. 96 EVALUATION PRACTICES OF TECHNICAL PROPOSALS Evaluation When No Subcriteria Are Provided 1 7 . 5 . 3 If the key staff proposed by the consultants do not · Methodology and Expected Results of the Program. fully satisfy all the conditions set forth by the defini- Definition of results in agreement with the objec- tion of one of the grades, but the grade under consid- tives of the TOR; approach to capacity building (for eration appears to reflect the overall adequacy of the example, program based on on-the-job training, or key staff better than the lower grade, the upper grade stand-alone training, or a combination) and method- may be assigned. ology proposed to attain the objectives are clearly explained and appropriate for the target audience; quality of learning materials proposed. 17.5 Suitability of the Transfer-of- · OrganizationoftheProgram.Degreeofdefinitionof Knowledge (Capacity-Building) the program (that is, the activities that will be car- Program (for the FTP only) ried out under the assignment); definition of roles, duties, output, and organizational arrangements of 17.5.1 Rating Scale the Borrower's personnel; level of skill and effort re- The Consultant Guidelines allow for a maximum quired from such personnel; consultant personnel of 10 points to be allocated to "suitability of the involved and the expected level of effort; and allo- transfer-of-knowledge (capacity-building) program," cation of responsibilities between the consultants except when training is an important component of and the Borrower. the assignment (see para. 12.3 and 12.8). The grades · Experience in Capacity Building, Transfer of Know- indicated in table 17.4 are recommended for per- ledge, and Training. The level of previous experience centage ratings related to the evaluation of transfer and qualifications of the consultant experts involved. of knowledge: · SupervisionandEvaluation.Arrangementsforsuper- The lowest grade is 40 percent instead of zero (for vision, implementation of the assignment, and im- reasons similar to those described in para. 17.3.1). If pact of the program (for example, progress reports, capacity building and training represent a particularly progress evaluation, and evaluation of the results important component of the assignment, more than attained). 10 points may be given to this criterion. In such cases, subcriteria, grades, and definitions will have to be 17.5.3 Evaluation When No Subcriteria determined along lines similar to those indicated in Are Provided paras. 17.3 and 17.4. When no subcriteria are provided for transfer of knowledge (capacity building) (see para. 12.3), the 17.5.2 Aspects to Consider program proposed by the consultants should be eval- for the Evaluation uated as a whole, using the four grades in table 17.4. The EC should evaluate the proposed transfer-of- An example of their definitions, based on the aspects knowledge (capacity-building) program by consider- listed in para. 17.5.2, is given below (definitions may ing the following or similar qualifications: differ from case to case, depending on the character- istics of the program): Table 17.4 Recommended Grades · Poor. Approach and methodology of the capacity- and Percentage Rating for Suitability of building and training program respond only par- the Transfer-of-Knowledge tially to the objectives indicated in the TOR, and (Training) Program resources allocated are insufficient. · Satisfactory. Program objectives and the approach Percentage are generally consistent with the requirements of the Grade (level of responsiveness) rating TOR; the proposed methodology seems suitable, but there is no discussion of its most important aspects; Poor 40 the capacity-building program is complete and well Satisfactory 70 defined; allocated resources are commensurate with Good 90 the objectives; the functions and responsibilities are only broadly defined; and the measures to supervise Very good 100 the program are only generally indicated. EVALUATION PRACTICES OF TECHNICAL PROPOSALS 97 1 7 . 5 . 3 Evaluation When No Subcriteria Are Provided · Good.Themethodologyisspecificallytailoredtothe cases, subcriteria may be established (see para. 12.8), objectives of the program and is discussed exhaus- and points are allocated in the RFP to each of them. tively. Timing of training activities is well defined and The EC should establish grade definitions for each one fully consistent with the time schedule of the activ- of the subcriteria, taking into consideration the aspects ities on which the training is based. The quality and indicated in para. 17.5.2. composition of consultant personnel involved are very well thought out and balanced. The duties and responsibilities of consultant and Borrower 17.6 Participation by National personnel involved are clear and defined in detail. Consultants among Proposed Measures to supervise the program and reduce risks Key Staff (for the FTP only) of abuses are clearly indicated. · Very Good. In addition to the definition under The Consultant Guidelines allow a maximum of 10 "good," approaches and methods proposed repre- points to be allocated to this criterion (see para. 12.3). sent new best practices. In the evaluation, these points will be allocated to each proposal in a proportion equal to the percentage share If the capacity-building program does not fully of national key staff in the total key staff time effort satisfy all the conditions set forth by the definition of proposed. (If, for example, 8 points are attributed to one of the grades, but the grade under consideration this criterion, and 50 percent of total staff-months or appears to reflect the overall adequacy of the training staff-hours of key staff is allocated by the consultants program better than the lower grade, the upper grade to national experts, the proposal will receive 4 points.) should be assigned. This criterion covers only the quantitative aspect of participation by nationals; qualitative aspects such as 17.5.4 Evaluation When Subcriteria experience of national key staff are captured by the Are Provided criterion "key professional staff qualifications and competence for the assignment" (see para. 17.4). The There may be cases where capacity building and train- participation of national consultants as domestic con- ing are an important component of the assignment, sultants, as local branches of foreign consultants, or as and the RFP has allocated more than 10 points to "suit- individual experts equally satisfies the Bank's recom- ability of the transfer-of-knowledge program." In these mendation on participation by nationals. 98 EVALUATION PRACTICES OF TECHNICAL PROPOSALS C H A P T E R 18 Negotiations and Award of Contract The common law of business balance prohibits paying a little and getting a lot--it can't be done." J O H N R U S K I N ( 1 8 1 9 ­ 1 9 0 0 ) The objective of negotiations is to arrive at a mutually nancial conditions of the proposal can be negotiated, satisfactory contract between the Borrower and the se- the team should have independent information on lected consultants. The parties will discuss the techni- market rates and salaries of consultant staff. Both par- cal proposal submitted, agree on the detailed scope of ties should appoint a chief negotiator, and, if required, work of the consultant assignment and all related the consultant's representative should submit a power arrangements, negotiate financial terms, and discuss of attorney. and finalize contract conditions. A good contract should Negotiations are based on a mutually agreed-on protect the interests of both parties in a balanced way. agenda comprising the main items to be negotiated The Bank's Standard Forms of Contract (discussed in (that is, methodology, work plan, proposed staff, in- chapter 15 of this Manual) are designed to ensure that puts, financial terms, and special conditions of the this is indeed the case. contract). 18.1 Preparations for Negotiation 18.2 Items Subject to Negotiation Under QCBS, the Borrower notifies in writing the con- Depending on the selection method and proposed sultant whose proposal has obtained the highest com- type of contract, technical and financial items that bined score (see para. 16.7) and invites the selected firm may be negotiated within the limits indicated under for negotiations. The Borrower indicates in the notifi- paras. 18.4­18.7 include the following: cation letter the date and time set for negotiations and · Scope of work any issues or comments on the consultant's proposal to · Technical approach and methodology enable it to prepare a response and make any necessary · Work plan and activity schedule arrangements. The Borrower also informs consultants · Organization and staffing, plus time schedule for whose proposals were not chosen which firm was se- key staff lected and that negotiations will begin with that firm. · Deliverables Under QBS, the Borrower notifies the consultant · Counterpart staff with the highest technical score in writing and requests · Counterpart facilities and equipment that the firm submit its financial proposal, if it was not · Contract special conditions submitted together with the technical proposal. · Staff unit rates The Borrower appoints a negotiating team whose · Reimbursable expenses members should be fully familiar with the TOR, the · Proposed contract price consultant's proposal, the comments and suggestions of the Evaluation Committee relating to the technical Unless the consultant contract is tax-exempt, dur- and financial evaluation reports, and recommenda- ing negotiations local tax liabilities on the contract or tions of the decision-making authority (at least one on contract items are a subject of clarification between member of the Evaluation Committee should take part the Borrower and the consultant, and adequate pro- in the negotiations). For QBS and SSS, wherein the fi- visions must be made for them in the contract. The 99 1 8 . 2 Items Subject to Negotiation contract should indicate the remuneration of the ter qualified (that is, the new staff should be evaluated consultant separately from all identified local taxes using the criteria and points specified in the RFP and payable under the contract. If the consultant is to be must receive equal or higher scores). reimbursed by the Borrower for such taxes, the con- tract should specify the way this should be done. If amounts payable by the Borrower to the con- 18.4 Limits of Negotiations sultant under the contract are subject to local taxation, it is the responsibility of the selected consultant, before Negotiations should begin by considering the com- starting financial negotiations, to contact the local tax ments, suggestions, and requests made by the EC on authorities to determine the tax amount (see para. 6.3 both the technical and financial evaluation reports of the ITC). The Borrower with experience from pre- and the recommendations of the decision-making vious contracts may assist the consultant in obtaining authority. the necessary contacts. The technical aspects (approach, methodology, work plan, and staffing) are discussed to reconcile the consultant's proposal and the circumstances of the 18.3 Outline of Negotiation Borrower. Technical negotiations may affect the qual- ity of the offered services, thus impacting upon the Procedures technical score of the proposal. The financial proposal Contract negotiations for small assignments are usu- (including remuneration rates when price has not been ally completed within one or two days; however, for a factor of selection) may also be negotiated, thus af- large or complex assignments, at least one full week fecting the financial score of the proposal. should be allowed. Negotiations may be also carried Because the quality of the technical proposal is the out in phases, when decisions are needed from other main factor in the ranking of consultants, Borrowers authorities. willing to reduce the scope of work or downgrade the The Borrower should prepare minutes of the ne- proposed staff to cut the proposed price should keep in gotiations. If the issues to be negotiated are many and mind that the overall quality of the proposal shall not complex, significant points can be initialed by the be substantially altered, because doing so may affect the counterparts as negotiations progress. When cost is not basis of the technical evaluation on which the ranking a factor of selection and the Borrower has reason to be- was determined. lieve that the staff rates proposed by the consultants are Sometimes, a consultant intentionally proposes a significantly higher than market rates, the Borrower methodology and key staff with qualifications above the may request that the consultants provide financial or requirements of the assignment to secure higher scores administrative records that justify such rates. in the technical evaluation and increase its chances of During the course of negotiations, the Borrower being selected and called to negotiate ("high-balling"). and the consultants may initially disagree on some im- Although this strategy of increasing quality also implies portant issues. In rare cases, agreement between the an increase in the offered price, the chances of being se- Borrower and the consultants may not be possible. If lected would remain high because either the price is not any issue remains unresolved after being referred to a factor of selection (QBS) or it is allocated a limited the decision-making authority, the only recourse may weight (QCBS). During negotiations, the consultant be to call off negotiations. The Borrower then notifies could propose or try to trim the scope of work or the the Bank, indicating the reasons for the decision. The quality of its proposal if the offered price exceeds the letter of notification is copied to the consultants. Once budget. This practice should not be accepted and may the Bank's "no objection" to the notification is ob- require the disqualification of the consultant. tained, the Borrower invites the second-ranked con- There are also limits to financial negotiations. They sultant for negotiations. should be used by the Borrower to achieve consistency If the validity period of the proposals is about to between the quality and the price of the services offered expire, the Borrower should ask all consultants for an and not just to induce a price reduction. For instance, extension. In that case, the consultants may propose if staff rates proposed by a consultant are consistent staff modifications without changing the proposed fee with market rates for similar services, the only nego- or may withdraw their proposal. However, the staff tiable item would be the fee component of the rate, and can only be replaced with those who are equally or bet- this cannot be cut unreasonably. 100 NEGOTIATIONS AND AWARD OF CONTRACT Negotiations of Technical Aspects 1 8 . 5 Borrowers' negotiating teams may want to extract The following paragraphs discuss in more detail arbitrary reductions of price from consultants, or force the main items to address during negotiations and offer them to accept extensions of the scope of work without examples of best practices to consider in different cases. price adjustments. These practices are unacceptable. (The flowchart in Figure 18.1 indicates the main steps Under FBS, the cost of the services is indirectly in the negotiations process.) taken into account, given that the best technical proposal within the established budget is selected. Therefore, as with QCBS, negotiations should in- 18.5 Negotiations of clude discussion only of technical aspects. Technical Aspects Similarly, under LCS, negotiations should also focus only on technical aspects. However, a price in- Technical negotiations can, within the limits imposed crease related to technical improvements can be nego- by the selection method, lead to the reduction of the tiated on condition that the proposal remains the least proposal price without affecting the quality or the costly. scope of the services by seeking a more efficient use of Figure 18.1 Negotiations (both technical and financial proposals received) Notification to the consultant ranked first in combined evaluation Appointment of the negotiating team Negotiations on technical matters: Negotiations on financial matters: - Technical approach - Staff rates (only for QBS, SSS, CQS) - Methodology - Reimbursable expenses - Work plan - Currencies of payment - Organization & staffing - Payment conditions - Counterpart personnel & facilities - Training program (when it is a specific component of the assignment) Negotiations on contract conditions: - Taxes - Contract effectiveness - Conflict of interest - Liability - Insurance - Inspection & auditing - Property of documents - Client's obligations (other than technical) - Settlement of disputes Initialization of negotiated contract Bank's "no objection" Contract signature NEGOTIATIONS AND AWARD OF CONTRACT 101 1 8 . 5 Negotiations of Technical Aspects the proposed staff to reduce the staff-months effort the consultant's team. Key staff substitutions should (for example, a better allocation of tasks to key experts not be allowed except where justified by circumstances in the work plan or a more efficient schedule of activ- beyond the control of the consultant (including, for ex- ities) or by simplifying the proposed methodology, or ample, unforeseen delays in the selection process). through a combination of both. A practice that the Borrower should not allow is When the offered price exceeds the available sometimes referred to as "bait and switch": the con- budget and negotiations fail to bring the price within sultant proposes high-quality key staff in the technical the budget, the Borrower may negotiate a reduction in proposal to be awarded the contract and subsequently the scope of work (para. 18.4). In some cases, reduc- seeks to replace them with other, less-qualified staff tions in the scope of work may not be possible without during negotiations or in the early implementation affecting the outcome or quality of the assignment. In stage of the assignment. Evidence of such practices such cases, the Borrower may need to seek additional would be grounds for contract termination. financing, or (as a last resort) new proposals may be in- If substitutions are unavoidable (an expert re- vited, with the Bank's "no objection," after revision of signed from the firm or became ill, for instance), each the TOR or the budget (or both). replacement should be evaluated to ensure that the qualifications of the proposed candidate are at least equal to, or better than, those of the staff being replaced. 18.5.1 Technical Approach, Individual qualifications shall be evaluated according Methodology, and Work Plan to the provisions of para. 17.4, and the remuneration The technical approach, methodology, and work plan rate charged by the consultant for the replacement shall proposed by the consultant should be discussed, taking not exceed the rate set forth in the proposal or agreed into consideration observations of the EC on the tech- on during negotiations. The adequacy of each candi- nical evaluation report and the consultant's comments date for teamwork shall be evaluated under the aspect on the TOR. Any differences between the consultant's "quality of resource utilization" of para. 17.3.2. understanding of the TOR and the position of the The composition of the consultant's team, the as- Borrower should be examined in detail with a view to- signment of tasks, and the time schedule should be re- ward reconciliation. viewed. Agreement should be reached on the period of The consultant's technical proposal is not a part of time that each key member is expected to work in the the contract. Therefore, once discussions are com- field and at the home office. pleted, the TOR should be revised to include any mod- ification of the scope of work agreed on between the 18.5.3 Counterpart Staff, Facilities, Borrower and the consultant. The final TOR is in- and Equipment cluded in the contract under Description of the Services and shall supersede both the original TOR and the RFP. Special attention shall be paid to clearly defining the The methodology and work plan agreed on, including extent and timing of inputs, facilities, and counterpart the work schedule with the list of documents to be de- staff to be provided by the Borrower. All equipment livered by the consultant and the staffing schedule, are and supplies required for carrying out the services and annexed to the final TOR and also form part of the con- all necessary surveys should be identified, agreed on, tract. If needed, the Borrower may suggest improve- and included in the contract. All too frequently, coun- ments of the work plan based on ideas developed by terpart staff and facilities are not clearly specified dur- competitors. However, it is not permitted to disclose ing negotiations and are later interpreted differently the proposals of competitors to the selected consultant. by the consultant and the Borrower, with serious con- When a capacity-building program is a specific sequences for the smooth and timely execution of the component of the assignment, it should also be dis- services. cussed in all necessary detail, as is the case with any other component of the technical proposal. 18.6 Negotiation of 18.5.2 Organization and Staffing Financial Conditions In the discussion of organization and staffing, clarifica- The financial proposal is negotiated based on the list tions should be obtained on the role of each key staff of of deliverables, scope and plan of work, and staff- 102 NEGOTIATIONS AND AWARD OF CONTRACT Staff Billing Rates 1 8 . 6 . 3 months effort proposed by the consultant, including 18.6.2 Lump-Sum Contracts the agreed-on modifications. Under a lump-sum contract, the consultant is paid an Items to discuss during financial negotiations will agreed-on lump-sum price based on a schedule of pay- vary according to the selection method adopted (that is, ments linked to the delivery of outputs. To arrive at the whether price is a factor of selection) and the payment lump-sum amount, the unit rates for personnel and re- provisions provided for in the contract (whether the imbursable expenses used by the consultant are in- contract is time-based or lump-sum). When price is a cluded in appendixes D and E of the contract. This is factor of selection (QCBS, FBS, or LCS), negotiation of used solely to determine the remuneration due for any unit rates is not allowed, nor is negotiation of unit rates additional services beyond the agreed-on scope of work for reimbursable expenses. However, total costs can (for example, an extension). The consultant is paid ac- sometimes be reduced by adopting more-efficient so- cording to the schedule specified in the contract, which lutions (for example, having teleconferences instead outlines the assignment's specific outputs. of meetings). When price is not a factor of selection In case of delayed payments, the terms of payment (QBS or SSS), negotiation of all financial conditions is and interest rate to be applied by the Borrower should allowed. also be defined during negotiations and included in the SCC. 18.6.1 Time-Based Contracts If the selection method included price as a factor of selection, financial negotiations are not allowed. Under a time-based contract, the assignment must be The Borrower can negotiate only the unit rates for completed within the time and the budget ceiling spec- personnel and reimbursables to be used for additional ified in the contract. These amounts are based on services. schedules that form part of the contract and provide details on the inputs (staff, vehicles, and so forth) and 18.6.3 Staff Billing Rates the cost of these inputs. A list of such schedules is given in the appendixes to the Form of Contract attached to When price is a factor of selection (QCBS, FBS, or the RFP. With some limited flexibility, the contract re- LCS), negotiation of staff rates is not permitted, except quires the consultant to adhere to these schedules. for exceptional cases (for example, staff rates are far Fieldwork is billed at monthly, daily, or hourly staff above market rates and above the rates usually charged rates, which need to be clearly indicated in the contract by consultants for similar contracts). to avoid any misunderstanding during implementa- Billing rates offered by a consultant typically de- tion. Home-office work is billed at staff-hour or staff- pend on three factors: the internal structure of the rates; daily rates calculated based on hours worked. the ongoing market rates in the country of the consult- If the selection method did not include price as a ant; and the level of the technical, institutional, and factor of selection, financial negotiations include staff country risk that the consultant can bear when working unit rates and begin with a discussion of the billing rates for a certain Borrower. Consultant market rates in the in foreign currency for expatriate staff and in the local country or region of the consultant may provide a valid currency for national staff. reference point to help the Borrower understand the If the selection method included price as a factor consultant's requested rates. of selection, negotiations of staff unit rates should not Borrowers generally may use the appendix, "Fi- take place, except for exceptional conditions such as, nancial Negotiations, Breakdown of Remuneration for example, when staff rates offered are much higher Rates," (provided in section 4 of the RFP) as a guide than rates usually charged by consultants for similar when negotiating consultant billing rates. Use of this contracts. Consequently, the inability to negotiate staff appendix may not be relevant or may need adaptations rates does not preclude the right of the Borrower to ask when considering organizations with cost structures for clarifications and, if offered rates are very high, to different from those of conventional consultants (such ask for changes in the rates, after consultation with the as financial intermediaries, NGOs, and universities). Bank. Although the parties may first try to reach an agree- Reimbursables are to be paid upon presentation of ment based on the breakdown of rates proposed, such receipts on actual expenses incurred and therefore are breakdowns should be considered with caution be- not subject to negotiations. cause they are generally based on past statistics or on NEGOTIATIONS AND AWARD OF CONTRACT 103 1 8 . 6 . 3 Staff Billing Rates circumstances different from those prevailing in the expenses appear (for instance, office rent, paid country of the Borrower. leave, and equipment). A breakdown of staff rates includes the following (d) Fee or Profit: elements (which are also described in the appendix of This is the consultant's fee, expressed as a percent- section 4 of the RFP): age of the sum of salary, social costs, and overhead. It usually ranges between 5 and 20 percent, de- (a) Basic Salary: pending on the nature and duration of the services Basic salary is the gross monthly salary paid to staff. and on the level of specialization and the risks in- Any overseas allowances should be identified sep- volved in the assignment. Fees or profit shall not be arately and not included in the basic salary. It shall awarded on international travel and living allow- not contain any premium or bonus, except where ances or other reimbursable expenses (except if an required by law or where it can be shown that the unusually large amount of equipment shall have to bonus is part of the regular salary. The salaries of be procured under the contract). permanent staff are usually not negotiable. (e) Away-from-HeadquartersandOverseasAllowance: (b) Social Charges: This amount is added to the salary paid to staff on Social charges are the costs to the firm of nonmon- overseas assignments or assigned to projects away etary benefits paid to staff under legislation in the from the home office. The allowance is normally consultant's home country or under the consul- calculated as a percentage of the basic salary and tant's own policies. They include such items as va- depends on the location of the assignment. Within cation, official holidays, sick leave, pension, social certain limits, overseas allowances are negotiable. security, and medical and life insurance. These In exceptional cases, a consultant could be asked to costs vary from country to country and, to a lesser substantiate the level of each cost element. extent, from consultant to consultant within the same country. Because most of the payments are required by law or by the consultant's personnel 18.6.4 Billing Time policies, they are nonnegotiable. (c) Overhead: Time spent in the country of the assignment is gener- Overhead expenses relate to the firm's costs in- ally billed monthly or as a fraction of a month, while curred following general expenses that are not di- home-office time is generally measured and billed in rectly related to the execution of the assignment working days or hours. For billing purposes, a day and cannot be reimbursed as separate items under worked is usually equal to 1/22 of a month and an hour the contract. Overhead includes such items as is equal to 1/176 of a month, but it can vary between home-office costs, the cost of staff not currently countries, depending on labor regulations. The "unit of employed on revenue-earning projects, rent, sup- account" (month, day, or hour) used for payment pur- port staff, marketing, and business development poses should be clearly mentioned for each key staff in costs, including the preparation of proposals. the contract. Overtime for professional staff is not Overhead varies from firm to firm and depends billed, whereas overtime of support staff at the home on the size, type of organization, and core business office and in the field is generally billable. of the firm. Some consultants charge different overheads for home-office and for field work, and 18.6.5 Reimbursable Expenses distinguish between short- or long-term assign- ments. The Borrower should not accept an add-on A list of reimbursable expenses payable in foreign and margin for social charges and overhead expenses local currencies is provided in the Data Sheet attached for staff who are not permanent employees of the to the ITC. firm. In such cases, the consultant is entitled only The Borrower usually reimburses expenses at cost to reasonable administrative and technical backup upon presentation of receipts, invoices, and so on. In costs, as well as fees on the monthly payments certain cases, such as for the acquisition and import of charged for subcontracted staff. Overhead is non- equipment needed for the execution of services and negotiable, except for nonpermanent staff (indi- where the consultant incurs additional administrative vidual consultants) and where double counting of costs, the consultant may be paid a fee or "handling overhead items in foreign or national reimbursable charge" of 5 to 10 percent above the specified invoice. 104 NEGOTIATIONS AND AWARD OF CONTRACT Contingencies 1 8 . 6 . 7 Often Borrowers prefer to negotiate and pay fixed erally a commercial bank guarantee or other suitable rates to cover certain costs such as living expenses, in- guarantee issued by a reputable financial institution ac- ternational travel of the consultant's staff and their ceptable to the Borrower. When payment is on a lump- family members from the country of origin to the sum basis, payment against progress targets can be country of the assignment and back, and shipment of made when the consultant's output is produced at rea- personal items. Board and lodging and the education sonable intervals and is easy to identify. The Bank sug- of children of consultant staff are the most expensive gests that the bank guarantee be released when total items when employing a consultant in the country of payments reach 50 percent of the lump-sum amount. the assignment. Table 18.1 gives an example of a payment schedule for For short-term assignments (usually less than the detailed design of an infrastructure project. For six months), the daily allowance for board and lodging smaller projects, the last payment may take place upon may be based on the UNDP Daily Subsistence Allow- the delivery of final documents. ances or estimated, based on reasonable costs for hotels, meals, and local transportation. Some Borrowers may choose to reimburse a consultant's staff living expenses 18.6.7 Contingencies at cost. When local practices require the consultant's staff to pay several months' rent in advance, suitable ad- (a) Price Contingencies vance arrangements should be included in the contract. For contract durations of more than 18 months or Living expenses are generally paid for in the currency of when the expected rate of price inflation is more the Borrower. than 5 percent per year, the Bank recommends that the consultant's contract provide for price escala- tion in foreign and national currency, as appropri- 18.6.6 Payment Provisions ate. When taking price escalation into account, the cost-of-living indexes used as a basis for calculation Borrowers should avoid delaying payments without should be those of the countries of the consultant due cause to ensure that the consultant does not delay and of the Borrower, taking into consideration the its assignment for lack of funds. In general, a consult- currency of the contract. Price escalation can also ant will seek to be paid up front as much as possible to be used to adjust the cost of services to account for make sure that the necessary cash flow is always avail- longer-than-expected administrative delays that able to the assignment without having to resort to ex- occur between submission of the proposal and the ternal financing. A consultant may also prefer up-front date of effectiveness of the contract. payment if there is a possibility that the Borrower will An example of a price escalation formula is delay payments, forcing the consultant to finance the contained in the Special Conditions of the Bank's services. On the other hand, it is in the interest of the Standard Form, for time-based contracts in which Borrower to retain a final payment (usually not more price escalation formulas are applied to staff rates than 10 to 20 percent) until the final outputs have been and to reimbursable expenses. delivered to the requisite standards. Payment provisions, including amounts to be paid, schedule of payments, and payment procedures, shall be agreed on during negotiations. In a Bank-funded as- Table 18.1 Sample Payment Schedule signment, the consultant is paid either at regular inter- vals, upon presentation of invoices under a time-based Payment Progress target percentage contract, or in line with agreed-on outputs, according to a contractual payment schedule under a lump-sum Contract signature (mobilization) 15 contract. Definition of design criteria 15 The Borrower and the consultant should agree on the amount of the advance payments (for example, mo- Layout of major works 20 bilization costs). Such payments normally do not ex- Draft of final documents 40 ceed 20 percent of the contract value. Normally, if the Approval of final documents 10 advance exceeds 10 percent of the contract amount, it Total 100 must be backed by an advance payment security, gen- NEGOTIATIONS AND AWARD OF CONTRACT 105 1 8 . 6 . 7 Contingencies Lump-sum contracts, which are generally used · TotalContingencyAllowance.Thetotalcontin- for assignments of shorter duration, usually do gency allowance (price and physical) is about not provide for price escalation. (US$61,400 + US$96,140) = US$157,540 equiv- (b) Physical Contingencies alent, which brings the total contract value up to An amount to cover physical contingencies should US$1,057,540 equivalent. be included in all time-based contracts. The amount depends on the degree of definition of the consultant's scope of work and the type of service required. For example, it may be zero for lump- 18.7 Negotiation of sum contracts wherein the scope is precisely de- Contract Conditions fined; it may be set at 5 percent for the supervision of site investigations; it may rise to 10 percent for Before discussing the financial proposal, the parties well-defined assignments such as the detailed de- should discuss the clauses of the draft contract. The sign of a complex project; and it may rise up to General and Special Conditions of Contract should be 15 percent or more for master plans and complex reviewed to ensure that both parties understand the feasibility studies. Physical contingencies will gen- contract terms and conditions and that they faithfully erally be low for advisory services assignments. and clearly reflect the parties' agreement. Although the (c) Calculation of Contingencies GCC cannot be changed, special conditions are subject The following example shows how a calculation to negotiation. However, because they have already may be carried out for price and physical con- been adapted to the assignment before issuing the RFP, tingencies. A contract has been negotiated for negotiations should be limited to specific and justified US$900,000 equivalent, of which US$780,000 requirements of the consultant. covers foreign costs and US$120,000 equivalent Contract negotiations should end with both parties represents local costs. A total of US$180,000 of the initialing a draft contract and its annexes. For contracts foreign cost component of US$780,000 is paid to- for which prior review is required, a copy of the draft ward mobilization and is not subject to price esca- contract is forwarded to the Bank for its review and "no lation. The contract will run for three years, and it objection" before contract execution. is assumed that both foreign and local costs are The draft contract should include all appendixes evenly distributed over this period. The indexes required by the applicable standard contract form, pro- representing the foreign and local cost inflation viding the following information: have risen by 8 and 10 percent, respectively, in the past three years and are expected to do the same in · Negotiated TOR, including the scope of work of the the next three years. services, agreed-on methodology, organization chart, The calculation of price and physical contin- and program of activities indicating dates for com- gencies might appear as follows: pletion of the various tasks · Foreign Costs. · List of reports indicating format, frequency, con- Year 1 Year 2 Year 3 Total tent, submission dates, and approval procedures $200,000 $216,000 $233,000 $649,000 · Job descriptions of key personnel and the staffing · Local Costs. A similar calculation leads to a schedule total of US$132,400 equivalent. · Listofservices,facilities,andcounterpartpersonnel · Total Price Contingency. The total price varia- to be made available by the Borrower; also the tim- tion amounts to (US$649,000 + US$132,400­ ing for the provision of such services, facilities, and US$600,000­US$120,000) = US$61,400 equiv- counterpart personnel alent. · Estimated contract amounts in foreign or local cur- · Physical Contingency. A total of 10 percent rency (or both), indicating monthly rates for for- of contract value should be allowed (that is, eign and local staff and reimbursable expenses 10 percent of (US$900,000 + US$61,400), or · Detailedcapacity-buildingprogram(ifthisisaspec- US$96,140. ified requirement of the TOR) 106 NEGOTIATIONS AND AWARD OF CONTRACT C H A P T E R 19 Supervising Consultants 19.1 Contract Effectiveness The Borrower should designate a counterpart project manager with adequate technical qualifications, Consultants can seldom begin work immediately after managerial experience, and power of authority. In cer- signing the contract. A signed contract that has received tain instances, involving large and complex projects, a a written "no objection" from the Bank may not be ef- steering committee comprising high-level representa- fective until certain conditions (such as approval by tives of the Borrower and the consultant may be formed higher authorities) or compliance with certain prereq- to exercise arm's length supervision over the assign- uisites (such as funding requirements) are met. A con- ment. The steering committee shall always act through sultant is sometimes pressured to start work before its the counterpart project manager and the consultant's contract is effective. Such practice should be discour- team leader. It can be particularly useful when the aged, particularly when mobilization of consultant staff Borrower's executing agency and the consultant must involves large expenditures. coordinate their work with other Borrower agencies. To enable the consultant to begin work promptly, The opportunity to regularly report to such a commit- the Borrower should make arrangements for the su- tee can facilitate collaboration and understanding be- pervision of the assignment to be ready, particularly the tween the Borrower and consultant on disputes over following: important technical and contractual issues. The steer- · Appoint the counterpart manager and staff within ing committee should convene for specific purposes and on important assignment or contractual deadlines. the Borrower agency. · Prepare office space, vehicles, and other supplies. · Inform all concerned institutional parties. 19.2.2 Amendments · Effectuate advance payments. · Obtain authorizations, data, and background ma- The Borrower or the consultant may propose amend- ments to the contract when either unforeseen events terial. or the Borrower's decisions make it necessary to modify the TOR or the consultant's scope of work. In Bank-funded assignments subject to prior review, 19.2 Execution of the Assignment any deviation resulting in a contract price increase of more than 15 percent or any other substantial modi- 19.2.1 Supervision by the Borrower fication requires a Bank "no objection" and a contract The Borrower is responsible for supervising consultant amendment. assignments financed with Bank funds. The Borrower must monitor the progress of work, the timely comple- 19.2.3 Disputes tion of deliverables, the staff-months and money ex- pended (for time-based contracts), and determine During execution of the assignment, disputes may arise where within the contract changes in the scope of work between the Borrower and consultants. The parties in- might be appropriate. volved should attend to such disputes promptly and The contract usually requires that the consultant constructively. Unresolved disputes relating to techni- submit regular progress reports (see para. 10.3.5) and cal and administrative matters, such as interpretation that the Borrower provide comments promptly. of the contract, payment of services, or replacement of 107 1 9 . 2 . 3 Disputes personnel, should be treated in accordance with the The consultant collects and reviews the comments provisions of the contract. made by all parties and, in agreement with the Bor- rower, addresses these comments in the final report. If 19.2.4 Unsatisfactory Performance additional work is necessary to address important com- ments, such work may have to be financed (with or Poor performance may involve one or more particular without a contract amendment) out of the contingen- staff from the consultant's team, or the whole team. cies provided for in the contract, by government funds, Based on the provisions of the contract, the Borrower or through additional financing. will advise the consultant to take the necessary meas- Any mistake or incomplete work on the part of the ures to address the situation. Poor performance should consultant should be remedied at no extra cost to the not be tolerated; therefore, the consultant should act Borrower. Furthermore, the consultant is responsible quickly to comply with a reasonable request to improve for the technical integrity and impartiality of its find- the performance of the team or to replace any particu- ings and recommendations. The preferred way to han- lar staff member who is not performing adequately. If dle significant disagreements on technical matters is to the consultant fails to take adequate corrective actions, substantiate dissenting views in the report. Before the the Borrower may consult with the Bank and, if the final payment, the consultant must have completed the contract is subject to prior review, request the Bank's services, and the Borrower must have acknowledged "no objection" to terminate the contract. completion of the assignment. 19.2.5 Delays Consulting services may be delayed for a variety of rea- 19.4 Bank Role in Supervision sons. The consultant should notify the Borrower and In accordance with para. 1.4 of the Consultant Guide- explain the causes of such delays. If corrective action re- lines, the Borrower is responsible for preparing and im- quires extra work and the delay cannot be attributed to plementing the project and, therefore, for selecting the the consultant, the extra work should be reimbursed in consultant and awarding and subsequently administer- accordance with the contract. ing the contract. Bank staff have no direct supervisory role over the consultant. Any contact with the consultant should 19.3 Completing the Assignment occur with the Borrower's permission (and preferably The draft final report contains the conclusions of the in the Borrower's presence). Bank staff are often asked consultant's work and its recommendations. Given the to help review the consultant's work and may be called delay in publishing the formal final report, the final upon to bridge differences between the Borrower and draft is often the document used by the Borrower to in- the consultant on matters that may range from late pay- form its decision-making process. ments to major technical issues. Bank staff should assist This draft final report is distributed, as indicated in where possible, exercise impartiality, and encourage a the official distribution list, for review to all counter- sound Borrower-consultant relationship. (The main parts, relevant government departments, local author- steps of consultant supervision are illustrated in the ities who could be affected by the project, and the Bank. flow chart in figure 19.1.) 108 SUPERVISING CONSULTANTS Bank Role in Supervision 1 9 . 4 Figure 19.1 Supervising the Consultant Consultant's mobilization The Borrower & the consultant check the following: - Supervision/monitoring arrangements are in place. - Counterpart staff are made available. - Facilities to be provided by Borrower are made available. - All parties involved in the assignment are informed. - The Borrower's project manager is appointed. - Guarantees and advance payments are implemented. - Data and background information are made available. - Authorizations (if needed) are provided. Contract effectiveness The consultant issues the detailed Quality Plan (if required), including the procedures for executing the assignment. The Borrower and the consultant agree on the detailed content of inception, progress, and final reports to be delivered by the consultant. The Borrower's project manager supervises the assignment by - monitoring progress of work, The Bank's project officer, while on - reviewing progress reports (and sending them to the Bank), mission, may be asked by the - monitoring key staff employed, Borrower's project manager to - monitoring money expended, and assist in supervising the assignment. - deciding on possible modifications of the scope of work. The draft final report is issued by the consultant, reviewed by the Borrower's project manager, and sent to the Bank. The consultant incorporates into the final report the comments received. Accounts of the assignment are closed. SUPERVISING CONSULTANTS 109 C H A P T E R 20 Selection of Individual Consultants 20.1 Individual Consultants uals are needed for an assignment, it is often better to versus Consulting Firms hire a consulting firm so that the firm can be respon- sible for (a) identifying the best experts, (b) ensuring Borrowers often engage individual consultants on cohesiveness and technical solvency, and (c) provid- Bank-financed assignments. Individual consultants ing backup and transparent administration. are also employed extensively by the Bank itself to as- Nevertheless, when hiring a team of independent sist in all areas of Bank operations. The policy cover- individual consultants appears to be the most suitable ing their selection and management when they are solution, the Borrower should consider designating one engaged by the Bank is explained in AMS 15.00. of them as the team leader if the scope of work requires One frequently asked question is: should individual some degree of coordination. The team leader should experts or a consulting firm be hired for this particular be assigned clear responsibilities and authority com- assignment? The TOR of the consultancy assignment mensurate with the tasks of the team. This responsibil- provide the basis for the decision. Individual consult- ity may range from playing the role of the spokesperson ants are engaged on assignments for which (a) the on a panel of experts to being the technical leader or co- experience and qualifications of the individual are ordinator of a team of experts, with or without admin- the predominant considerations, (b) no support from istrative responsibility. The TOR of each team member a home office is needed, and (c) teamwork or a multi- should define his or her relationship to the team leader. disciplinary approach is not necessary. On the other hand, when integrated technical work and collective responsibility for the consultants' output are crucial elements (for example, in preparing a feasi- 20.2 Selection of Individual bility study), a consulting firm is required. Individuals Consultants can be considered for advisory services assignments or technical opinions on specific matters, in which spe- The process by which Borrowers select individual cialized individual knowledge is the key issue. consultants under Bank funding does not strictly fol- It is a misconception that employing a group of low the selection methods used for firms. It is worth individual consultants is cheaper than hiring a con- describing here the steps that Borrowers are required sulting firm. In fact, the opportunity cost of taking to take into account in this process. The Consultant valuable Borrower staff from their assigned duties to Guidelines also have applicability for the selection of supervise and manage teams of individual consultants individual consultants. can be high and is justified only when the task at hand has to be executed under direct Borrower control. The 20.2.1 Terms of Reference hiring of individual consultants instead of a firm has other hidden costs, including the cost of replacing ill Borrowers should first prepare a TOR for the consult- and unsuitable staff and professional liability for the ant assignment, including the scope of work and its end product. estimated cost. Bank staff responsible for the project In addition, the Bank believes that a policy of hir- should review the TOR and provide the Bank's "no ing individual consultants as opposed to a firm may objection" for any assignment whose cost is estimated lead to abuse and other undesirable practices such as to be above the prior review threshold established for nepotism. As a practical rule, if three or more individ- individual consultant contracts in the Loan Agreement.1 110 Nepotism 2 0 . 4 20.2.2 Advertising medical, leave, insurance, housing, and so forth). The Sample Contract for Consulting Services: Small Advertising is not required; however, in some cases, Assignments, which appears in the Bank SRFP, can Borrowers may consider the advantage of advertis- also be used. ing (for example, for individual assignments of a From time to time, permanent staff or associates long duration--say, 12 months or more). Borrowers of a consulting firm may be available as individual may decide to proceed in the same way for shorter consultants. In such cases, the conflict-of-interest pro- assignments if potential suitable candidates are un- vision described in the Consultant Guidelines will apply known. The request of expressions of interest should to the parent firm. include a short description of the task or job descrip- tion and the criteria for selection. 20.3 Hiring of Government 20.2.3 Selection Officials and Academics Individual consultants do not need to submit propos- Government officials and civil servants may be hired als; they are selected based on their qualifications for under consulting services contracts financed under the assignment. They shall be selected by comparing Bank loans, credits, trust funds, and grants only if they the qualifications of at least three candidates among (a) are on leave of absence without pay, (b) are not those who have expressed interest in the assignment being hired by the agency they were working for im- or have been approached directly by the Borrower. mediately before going on leave, and (c) their employ- Individual consultants considered for the comparison ment would not give rise to any conflict of interest. of qualifications shall meet the minimum relevant University professors or scientists employed by re- qualifications, and the one selected to be employed by search institutes can be contracted individually under the Borrower shall be the best qualified and shall be Bank financing if they have had full-time employment fully capable of carrying out the assignment. contracts with their institution and have regularly ex- An individual consultant may be selected on a ercised their function for a year or more before they are single-source basis (with due justification) in excep- contracted under Bank funding. tional cases such as the following: (a) for a task that is a continuation of previous work that the consultant has carried out and for which the consultant was se- lected competitively, (b) for an assignment with a total 20.4 Nepotism expected duration of less than six months, (c) in an emergency situation resulting from a natural disaster, Cases arise in which individual consultants seek to be and (d) when the individual is the only consultant engaged by the Borrower agencies where their rela- qualified for the assignment. For key assignments, in- tives, associates, or friends are employed in positions terviews may be set up, and invited candidates should of influence. These cases may cause perceived, poten- be paid travel and subsistence, as needed. tial, and real conflict-of-interest situations for the em- Capability of the candidates should be evaluated, ployee, as well as for the consultant, while discouraging based on their background, experience, and knowledge deserving candidates with no inside connections. The of local conditions (such as local language, culture, ad- Bank will not fund such candidates under any circum- ministrative system, and government organization). stances. Also see para. 4.3.3 of this Manual. The aspects to be considered in the evaluation are sim- ilar to those indicated in para. 17.2 of this Manual. Contracts normally take the form of a simple letter of Note appointment with TOR and employment conditions covering remuneration and direct expenses (including 1. OP/BP 11.00, Annex A, July 2001. SELECTION OF INDIVIDUAL CONSULTANTS 111 A P P E N D I X 1 Bank's Comments/ No-Objection Forms Contents Appendix 1.1 Bank's Comments/No-Objection to Request for Proposals 114 Appendix 1.2 Bank's Comments/No-Objection to Technical Evaluation 115 Appendix 1.3 Bank's Comments/No-Objection to Contract Award 116 113 Appendix 1 Appendix 1.1 Bank's Comments/ No-Objection to Request for Proposals [Heading]1 SUBJECT: [Country, Project Name, Loan Credit, Grant #, Services] Comments/No-Objection to Request for Proposals (RFP) MESSAGE: Mr./Messrs./Ms. [Name(s)]: Regarding your [form of correspondence]2 of [date], we have reviewed the draft Request for Proposals for the above-mentioned services and have . . . [Alternative I]3-- . . . the following comments: [Comments] Please review these comments and submit a revised RFP for the Bank's "no objection." [Alternative II]3-- . . . no comment. We have no objection to [Name of Project Authority] issuing the Request for Proposals to the short- listed consultants. Yours sincerely, [Name and position of Bank's responsible officer] 1. Heading of the appropriate correspondence: letter, fax, or e-mail. 2. Letter, fax, or e-mail. 3. Select appropriate alternative. 114 BANK'S COMMENTS/NO-OBJECTION FORMS Appendix 1 Appendix 1.2 Bank's Comments/ No-Objection to Technical Evaluation [Heading]1 SUBJECT: [Country, Project Name, Loan Credit/Grant #, Services] Comments/No-Objection to Technical Evaluation MESSAGE: Mr./Messrs./Ms. [Name(s)]: Regarding your [form of correspondence]2 of [date], we have reviewed the draft technical evaluation report for the above-mentioned services and have . . . [Alternative I]3-- . . . the following comments: [Comments] Please consider these comments and submit a revised technical evaluation report for the Bank's "no objection." [Alternative II]3-- . . . no comment. We have no objection to the technical evaluation report. Please inform us about the date, hour, and location of the public opening of the financial proposals of those technical proposals scoring above the minimum qualifying mark of _____ points.4 Yours sincerely, [Name and position of Bank's responsible officer] 1. Heading of the appropriate correspondence: letter, fax, or e-mail. 2. Letter, fax, or e-mail. 3. Select appropriate alternative. 4. Last sentence applies only when the cost of the services is a factor of selection. BANK'S COMMENTS/NO-OBJECTION FORMS 115 Appendix 1 Appendix 1.3 Bank's Comments/ No-Objection to Contract Award [Heading]1 SUBJECT: [Contract, Country, Project Name, Loan Credit #, Services] Comments/No-Objection to Contract Award MESSAGE: Mr./Messrs./Ms. [Name(s)]: Regarding your [form of correspondence]2 of [date], we have reviewed the negotiated consultant's contract for the above-mentioned services and have . . . [Alternative I]3-- . . .the following comments: [Comments] Please consider these comments and submit a revised draft final contract for the Bank's "no objection." [Alternative II]3-- . . .no comment. Please forward us a copy of the signed contract as soon as possible. Yours sincerely, [Name and function of Bank's responsible officer] 1. Heading of the appropriate correspondence: letter, fax, or e-mail. 2. Letter, fax, or e-mail. 3. Select appropriate alternative. 116 BANK'S COMMENTS/NO-OBJECTION FORMS A P P E N D I X 2 Single-Source Selection Form Contents Appendix 2.1 Single-Source Selection Form 118 Appendix 2.2 Single-Source Selection--Example of Justifications 119 117 Appendix 2 Appendix 2.1 Single-Source Selection Form 1. Description of Proposed Assignment Country: _________________________________________________________ Ln./Cr. or Other Source of Funds: ___________________________________________________________ Project Name: ___________________________________________________________________________ Implementing Agency: ____________________________________________________________________ Name of Proposed Consulting Firm: _________________________________________________________ Nationality: _____________________________________________________________________________ Estimated Number of Staff-Months: _________________________________________________________ Estimated Contract Value: _________________________________________________________________ Description of Proposed Assignment: ________________________________________________________ 2. Justification for Proposed Single-Source Selection1 Is this a natural continuation of same or previous assignment? Yes No If yes: (a) Give previous method of selection: Single Source Short List (b) Indicate whether proposed assignment is continuation of: Feasibility study to detailed design: Yes No Detailed design to implementation/supervision: Yes No Other [specify] ___________________________________________________ (c) Was a possible follow-up mentioned in the original RFP/LOI? Yes No Why is this appointment urgent? [explain reasons2] Why is the proposed consultant uniquely qualified for this assignment? [explain reasons2]________________ ______________________________________________________________________________________ Was previous assignment Bank-financed? Yes No Description of Previous Assignment: [provide description]_________________________________________ ______________________________________________________________________________________ Contract Value: ___________________________ Staff-Months: _____________________________ Starting Date: _____________________________ Completion Date:__________________________ Consultant's Performance on Previous Assignment: Excellent Average Poor 3. Clearance Regional Procurement Manager:3 _____________________________________Date: __________________ Operational Procurement Review Committee (OPRC):4 ___________________Date: __________________ Task Team Leader: _____________________________Phone Ext.: _________Dept: __________________ 1. Provide detailed information. 2. See Example of Justifications on following page. 3. Required for contracts above a certain value (currently US$200,000, BP 11.00, Annex A). 4. Required for contracts above a certain value (currently US$5,000,000, BP 11.00, Annex A). 118 SINGLE-SOURCE SELECTION FORM Appendix 2 Appendix 2.2 Single-Source Selection--Example of Justifications 1. Because competition is the rule under assign- policy issues because the Bank staying in ments financed by the Bank, to obtain the Bank's the project is contingent upon satisfactory clearance, justifications must always be provided progress on housing policy reform. It would if single sourcing is considered. Acceptance of be very difficult for the Borrower to be pre- single sourcing of a consultant is subject to the pared for the upcoming midterm review with- case meeting the requirements of the Guidelines. out access to technical assistance between the The justifications must be appropriate for the months of January and June 2004. For that case to be accepted. The following is an example reason, an interruption at this stage is partic- of a request for single sourcing a consultant that ularly undesirable. the Bank accepted based on the justifications (d) The task team leader has verified that consult- (highlighted) put forward. ant A will be charging the same rates to the PIU under Bank financing as it did under aid 2. "Washington, DC, January 20th, 2004." agency B financing. The Form of Contract (a) The consultant technical assistance on hous- it has chosen for the direct contract is the ing policy reform issues given to the Borrower "Contract for Consulting Services Time-Based under Project P has for the past two years (9/29/04)." been funded by a bilateral aid agency B under a parallel financing arrangement. Consultant 3. In light of the above, the PIU has requested ap- A has been performing to the full satisfaction proval for a direct contract with consultant A for of the Borrower. The financing for this com- the interim period from January to June, until the ponent, however, was cut off unexpectedly selected consultant from the competed process as of last December because of a donor's can be mobilized. decision. 4. The Bank accepted the single-source selection on (b) In November 2003, the Project Implementa- the main grounds that stopping the services at tion Unit (PIU) and the participating cities this stage would seriously jeopardize the project agreed with the Bank that this component and the Bank's future participation in it (para. would be funded from a Bank loan (this con- 2c). In addition, the cost of the interim assign- tingency was foreseen at project appraisal, and ment was only a fraction of the initial one a technical assistance category for housing (para. 2d); the Borrower confirmed that con- policy reform was set up in the loan docu- sultant A had performed well initially (para. 2a) mentation) and awarded following an inter- and was prepared to continue with the initial national competitive process. remuneration rates (para. 2d). Stoppage of the (c) However, the earliest the Request for Pro- initial contract was unforeseen. However, it posals (RFP) for this assignment could be happened beyond the control of the consultant issued is in late February or early March 2004, or the Borrower (para. 2a). The Bank considered and it is unlikely that a consultant could be that it was "in the interest of the Borrower and mobilized before June. There will be a mid- the project" and consistent with its principles of term review of the project in June 2004 for economy, efficiency, and equal opportunity; which all six participating cities will need therefore, it decided to continue with con- considerable technical assistance on housing sultant A. SINGLE-SOURCE SELECTION FORM 119 A P P E N D I X 3 Sample Work Schedule Contents Appendix 3.1 Assignment: Contract Design of a New Hospital 122 121 Appendix 3 The following table is a sample of the Work Schedule for the Contract Design of a New Hospital. It corresponds to the Form TECH-8 (section 3 of the SRFP). Appendix 3.1 Assignment: Contract Design of a New Hospital Months Activities 1 2 3 4 5 6 7 1 Study Phase 1.1 Conceptual design 1.2 Design criteria 1.3 Medical aspects 1.4 Architectural aspects 1.5 Structural solutions 1.6 Electromechanical equipment 1.7 Construction technique 1.8 Preliminary cost estimate 1.9 Interim report 1.10 Delivery of the interim report 1.11 Approval of the interim report 2 Design Phase 2.1 Civil works 2.2 Electromechanical equipment 2.3 Technical specifications 2.4 Tender drawings 2.5 Contract documents 2.6 Construction program 2.7 Maintenance plan 2.8 Detailed cost estimate 2.9 Final report 2.10 Delivery of the contract design 122 SAMPLE WORK SCHEDULE A P P E N D I X 4 Sample Staffing Schedule Contents Appendix 4.1 Sample Staffing Schedule 124 123 Appendix 4 The following table is a sample of the Staffing Schedule for the Contract Design of a New Hospital. It corresponds to the Form TECH-7 (section 3 of the SRFP). Appendix 4.1 Sample Staffing Schedule Staff input Total staff-month input No. Name of staff 1 2 3 4 5 6 7 Home Field Total Foreign personnel [Home] 4 1 John Major 6 [Field] 2 4 2 Phil Minor 6 2 5 3 Jean Lower 5 3 4 Francis Upper 4 1 3.5 5 Donald Right 4.5 1 4 6 Pat Left 4 5 7 Susan Center 5 14 8 Draftsmen 14 15 9 Support personnel 15 Local personnel [Home] 6 1 Ted Higher 6 [Field] 3 2 Todd Middle 4.5 1.5 10 3 Draftsmen 10.5 0.5 11 4 Support personnel 12.5 1.5 Subtotal 87.5 9.5 Total 97 124 SAMPLE STAFFING SCHEDULE A P P E N D I X 5 Cost Estimate Forms Contents Appendix 5.1 Cost Estimate 126 Appendix 5.2 Cost Estimate--Summary 127 Appendix 5.3 Cost Estimate--Staff Remuneration 128 Appendix 5.4 Cost Estimate--Reimbursables 129 Appendix 5.5 Cost Estimate--Office Costs 130 Appendix 5.6 Cost Estimate--Office Furniture and Equipment 131 125 Appendix 5 Appendix 5.1 Cost Estimate [Country] [Assignment] 1. The following cost estimate is presented in a generic form: it can be used for most assignments that include a team of experts (nationals or foreigners, or both) working in the Borrower's, the consultant's, or any other country on a long-term or short-term assignment. The consultant is incurring office expenses in the Borrower's country. 2. Should the assignment include surveys (as may be the case in most sectors such as health, education, rural development, and privatization), their cost would need to be assessed separately. (The templates in this appendix do not provide guidance to cost these surveys.) 3. To establish a cost estimate, costs are normally estimated using unit rates (staff remuneration rates, reim- bursable expenses) and quantities; exceptionally, some items may be estimated on a lump-sum basis. The method used to establish the cost estimate bears no relation to the type of contract that will be used and the method of remuneration of the consultant (time-based or lump-sum remuneration). 4. The consultant may be a firm or an association. The firm may have subcontracted part of the services. In both situations, the cost estimate does not provide information on the split of work between the association members or between the prime and subconsultants. 5. Costs are estimated in the currency in which they are incurred (that is, in the national currency [currency of the Borrower's country]) and in up to three foreign currencies, as permitted under the Consultant Guidelines. The use of different currencies is frequent in assignments that involve associations among consultants of different nationalities. 6. Price contingencies need to be included in the costs to reflect the impact (if significant) of the rate(s) of inflation in the countries in which the assignment takes place. This may be the case because inflation is (or is expected to be) high (say, above 5 percent per annum) or because of the duration of the assignment (say, beyond 18 months). Physical contingencies should also be included to cover uncertainties about the quan- tities listed in the technical proposal. 7. Assignment costs must be estimated net of local, indirect taxes; nevertheless, for budgeting purposes, the Borrower should also make adequate provision for the tax amount payable under the contract. 126 COST ESTIMATE FORMS Appendix 5 Appendix 5.2 Cost Estimate--Summary [Country] [Assignment] Local currency Foreign currency(ies)1 LC FC1 FC2 FC 3 1. Staff remuneration Key staff Other staff Subtotal 1 2. Reimbursables Transportation Air Ground Staff accommodation2 Office Rent Furniture/equipment Supplies, utilities Reports, documents3 Subtotal 2 3. Surveys (a) (b) Subtotal 3 4. Miscellaneous Subtotal 4 Total 1. A proposal can be expressed in a maximum of three foreign currencies. 2. Per diem (short-term consultants) and housing. 3. Purchase, translation, editing, printing. COST ESTIMATE FORMS 127 Appendix 128 5 COST Appendix 5.3 Cost Estimate--Staff Remuneration1 ESTIMATE [Country] [Assignment] FORMS Remuneration Rate2 Year 1 Year 2 Year 3 Year 4 Total Position Name LC FC1 FC2 FC3 SM3 Amount SM3 Amount SM3 Amount SM3 Amount LC FC1 FC2 FC3 1. Key staff4 1.1 ................. ................ 1.2 ................. ................ 1.3 ................. ................ Subtotal 1 2. Other staff5 2.1 ................. ................ 2.2 ................. ................ 2.3 ................. ................ Subtotal 2 Total 1. Includes national and foreign staff. 2. Rate per unit of remuneration (hour, day, or month); expressed in local currency (LC) or a maximum of three foreign currencies (FC), or both; rate increases (if any) over the years to be detailed separately. 3. SM: staff × unit of remuneration (for example, month). 4. Key staff (that is, professional staff [engineers, economists]). 5. For example, bilingual secretary, typist, office assistant. Appendix 5 Appendix 5.4 Cost Estimate--Reimbursables [Country] [Assignment] Reimbursables LC FC1 FC2 FC3 1. Air transportation · Tickets1 · Luggage2 2. Ground transportation · Mobilization/demobilization, holidays3 · Operational: Vehicles4 Motorcycles5 3. Relocation/storage6 4. Temporary housing7 5. Miscellaneous8 Total 1. N × Airfare N: number of round trips home/duty station/home for mobilization, holidays, operations, demobilization. for staff and their eligible dependents N. _______ [Itinerary] Airfares: usually in economy class A: _______ [Itinerary] 2. Kg × U For excess and unaccompanied luggage. kg: as provided by the consultant to its staff kg: _______ [Country] U: unit cost as per airline tariff U: _______ [Country] 3. Us To/from airport in the Borrower's, the consultant's, or a third country, for mobilization, operations, holidays, demobilization. Us: unit cost Us: _______ [Country] 4. km × U Cost to include amortization/rental, driver, operation, maintenance, repairs, insurance. km: estimated mileage during assignment km _______ [Car] U: unit cost per km U: _______ [Car] 5. n × u n: number of motorcycles to be purchased n: _______ u: unit cost, including purchase, operation, maintenance, repairs, insurance u: _______ 6. S S: amount of allowance granted by the firm to its staff S: _______ 7. H H: amount of allowance granted by the firm to its staff H: _______ 8. Lump-sum Travel documents, visas, health certificates, work permits L: _______ COST ESTIMATE FORMS 129 Appendix 5 Appendix 5.5 Cost Estimate--Office Costs1 [Country] [Assignment] LC FC1 FC2 FC3 Rent2 Supplies3 Computer operation costs4 Communications5 Equipment, furniture6 Total 1. Costs to include contingencies (if any), as detailed separately. 2. Including utilities, maintenance, cleaning, repairs. (n × m) n: cost per month; m: number of months n: _________; m: _________ 3. Estimated on a monthly basis. (su × m) su: cost per month; m: number of months su: _________; m: _________ 4. Estimated on a monthly basis. (c × m) c: cost per month; m: number of months c: _________; m: _________ 5. Telephone, fax, estimated on a monthly basis (t × m) t: cost per month; m: number of months t: _________; m: _________ 6. See attached indicative list. 130 COST ESTIMATE FORMS Appendix 5 Appendix 5.6 Cost Estimate--Office Furniture and Equipment [Country] [Assignment] Rate Amount No. Description Unit Quantity (LC) (LC) Office furniture (purchase) 1 Large desks and chairs Set 2 Medium desks and chairs Set 3 Assistant desks and chairs Set 4 Double-door cupboard Unit 5 Plan filing cabinet Unit 6 Filing cabinet Unit 7 Desk lamps Unit 8 Meeting table with 12 chairs Set 9 White board Unit 10 Sofa set Set Office equipment (purchase) 1 Photocopying machine Unit 2 Blueprint machine Unit 3 Computer Set 4 Facsimile (fax) machine Unit 5 Ring binding machine Unit 6 Large stapler Unit 7 Safe Unit 8 Drafting board, chairs, and so forth Set 9 Video multisystem Set 10 Camera SLR Unit Total COST ESTIMATE FORMS 131 A P P E N D I X 6 Form for Request for Expressions of Interest Contents Appendix 6.1 Consulting Services 134 133 Appendix 6 Appendix 6.1 Consulting Services [Name of Country] [Name of Project1] Loan/Credit/Grant No.: Expressions of Interest This request for expressions of interest follows the General Procurement Notice for this project that appeared in Development Business No. [insert number] of [insert date2]. The [insert name of Borrower/Beneficiary3] has [received/applied for/intends to apply for] a [loan/credit/grant] from the [International Bank for Reconstruction and Development (IBRD) /International Development Association (IDA)] and intends to apply part of the proceeds of this [loan/credit/grant] to payments under the contract for [insert name of project/the services4]. The services include [brief description, organization, implementation period . . .5]. The [insert name of implementing agency/Borrower] now invites eligible consultants to indicate their interest in providing these services. Interested consultants must provide information indicating that they are qualified to perform the services (brochures, description of similar assignments, experience in similar conditions, general qualifications and number of key staff, and so forth). Consultants may associate to enhance their qualifications. A consultant will be selected in accordance with the procedures set out in the World Bank's Guidelines: Selection and Employment of Consultants by World Bank Borrowers,6 May 2004. Interested consultants may obtain further information at the address below [state address at the end of docu- ment] from [insert office hours7]. Expressions of interest must be delivered to the address below by [insert date]. [Insert name of office] [Insert name of officer] [Insert mailing address] Phone: [Indicate country and city code] Facsimile (fax): [Indicate country and city code] E-mail: 1. If appropriate. In some cases, there may be no project, properly speaking, but only a specific consulting assignment. 2. Day, month, year (for example, 31 January 1998); delete if not appropriate. 3. In case of a grant. 4. Insert title of services. 5. The intent is to enable potentially interested consultants to decide whether to prepare an expression of interest. 6. See Guidelines for eligibility requirements. 7. For example, 0900 to 1200 hours. 134 FORM FOR REQUEST FOR EXPRESSIONS OF INTEREST A P P E N D I X 7 Examples of Evaluation of Proposals Contents Appendix 7.1 Project and Construction Management Services for a Water Supply System 136 Appendix 7.2 Technical Assistance Services for an Agricultural Development Program 144 Appendix 7.3 Technical Assistance Services for a Privatization Project 146 This appendix refers to three typical, complex assignments to be awarded under QCBS. The appendix highlights the various steps of proposal evaluation by using evaluation worksheets compatible with the Bank's Sample Form of Evaluation Report--Selection of Consultants. 135 Appendix 7 Appendix 7.1 Project and Construction Management Services for a Water Supply System The Borrower needs to select a consultant to carry based on the existing contract design, and (b) super- out the project and construction management activ- vision during the construction of the water supply ities related to the implementation of a municipal system. Because the type of organization and staffing water supply system, including a water treatment required to carry out these two tasks is different, the plant, water distribution network, water tanks and Borrower considers it important to separately eval- towers, pumping stations, and so forth. uate the organization and staffing proposed by the invited consultants for these two tasks. Six qualified consultants are invited to submit proposals to be evaluated with QCBS. Transfer of Consequently, in the RFP, the subcriterion "organi- knowledge is not required, but the participation of zation and staffing" and relevant points are split into local experts during the construction management the following subcriteria: activities is considered important by the Borrower. · Review of the detailed design 4 points In the RFP, the following points (indicated in table · Supervision during construction 11 points A7.1) are allocated to the evaluation criteria: Under the criterion "key professional staff qualifi- Table A7.1 Points Allocated cations and competence for the assignment" (see to Main Criteria para. 12.7 of this Manual), the team leader is given Criteria Points 15 points. As for other members of the key staff, the characteristics of the assignment suggest the need 1. Specific experience of the con- to stress the importance of time and cost control sultants relevant to the assignment 5 specialists, hydraulic engineering, structural engi- 2. Adequacy of the proposed neering, soil mechanics, and electromechanical engi- methodology and work plan 30 neering. Table A7.2A indicates the overall point 3. Key professional staff qualifications allocation specified by the Borrower in the RFP for and competence 55 the team leader and the key staff relevant to the five 4. Suitability of the transfer of knowledge 0 disciplines considered. 5. Participation by nationals 10 Table A7.2A Key Staff Evaluation Total 100 Key staff members Points For the criterion "adequacy of the proposed Team leader 15 methodology and work plan," the following three Hydraulic engineering 9 subcriteria and relevant point allocations are indi- Structural engineering 9 cated in the RFP (see para. 12.5 of this Manual): Soil mechanics 6 · Technical approach and methodology 8 points Electromechanical engineering 6 · Work plan 7 points Time & cost control specialists 10 · Organization and staffing 15 points Total 55 The scope of work of the assignment (as detailed The percentage weights assigned by the Borrower in in the TOR) includes the following main tasks: the RFP to the three subcriteria of the criterion "key (a) review of the detailed design of the water supply professional staff qualifications and competence for system to be prepared by the selected contractor, the assignment" are indicated in table A7.2B. 136 EXAMPLES OF EVALUATION OF PROPOSALS Appendix 7 Table A7.2B Key Staff Evaluation tence" for the different members of the key staff, resulting from the total points (55) allocated to this Subcriteria Percentage Points criterion and the weights indicated in the RFP (see previous three tables). General qualifications 20 Adequacy for the assignment 60 The RFP also indicates the weights given to the tech- Experience in region & nical and financial proposals as follows: language 20 · Weight for the technical proposal 0.8 Total 100 · Weight for the financial proposal 0.2 The overall setup of the different subcriteria and rel- Before technical proposals were received, the Eval- evant points for evaluating the technical proposals uation Committee met to define the grades to adopt (provided by the RFP in the Data Sheet of the ITC) for the evaluation (see chapter 17 of this Manual) is summarized in table A7.3A. and made the following decisions: Table A7.3B indicates the points available within (a) Because no subcriteria were specified in the RFP "key professional staff qualifications and compe- under the criterion "specific experience of con- Table A7.3A Points Allocated to Criteria and Subcriteria 1 2 3 4 Specific Key staff Points Points Points Points experience of Methodology & qualifications and Participation consultants work plan competence by nationals No subcriteria 5 Approach & 8 Team leader 15 No subcriteria 10 methodology Hydraulic engin. 9 Work plan 7 Structural engin. 9 Organization & staffing: Review of detailed Soil mechanics 6 design 4 Supervision during Electromech. engin. 6 construction 11 Time & cost control 10 Total points 5 30 55 10 Note: Suitability of the transfer of knowledge has no points. Table A7.3B Key Staff Evaluation General Adequacy for Experience in qualifications the assignment region & language Key staff members (20%) (60%) (20%) Total points Team leader 3.0 9.0 3.0 15 Time & cost control specialists 2.0 6.0 2.0 10 Hydraulic engineering 1.8 5.4 1.8 9 Structural engineering 1.8 5.4 1.8 9 Soil mechanics 1.2 3.6 1.2 6 Electromechanical engineering 1.2 3.6 1.2 6 Total points 55 EXAMPLES OF EVALUATION OF PROPOSALS 137 Appendix 7 sultants relevant to the assignment," the com- · Consultant 2 proposes mittee decided to evaluate the specific experience as a whole, considering the following aspects: ­ three hydraulic engineers for the Hydraulic (i) experience in similar projects, (ii) experience Engineering Group, in similar areas and conditions, and (iii) size and ­ a civil engineer for the Structural Engineering organization (see paras. 17.2.2 and 17.2.3). Group, (b) For each one of the four subcriteria of "adequacy ­ a soil engineer for the Soil Engineering Group, of the proposed methodology and work plan," ­ an electrical engineer for the Electromechanical the committee adopted the four grades suggested Engineering Group, and in para. 17.3 (Poor, Satisfactory, Good, Very Good) and set the relevant definitions. ­ a time and cost control specialist for the Project (c) Similarly, for each one of the three subcriteria of Control Group. the "qualifications and competence of the key staff," the committee adopted the four grades Two of the five groups proposed by consultant 1 and suggested in para. 17.4 (Poor, Satisfactory, Good, one of the five groups proposed by consultant 2 Very Good) and set the relevant definitions. include more than one expert. For these groups, each expert is separately evaluated and scored, then (d) For the criterion "local participation," the com- the scores are averaged to obtain the group score mittee decided to allocate the available points in (see para. 12.7). a proportion equal to the percentage share of national key staff in the total key staff time effort All scores shown in the different samples are proposed (see para. 17.6). rounded to the third decimal. The following pages provide samples of the different The minimum technical score specified in the RFP evaluation worksheets that may be used by the mem- is 70. bers of the Evaluation Committee when evaluating the proposals, plus a scoring example based on the In this example, it is furthermore assumed that the points indicated for the different criteria and sub- following total prices are offered by the consultants: criteria in the preceding tables. (For the sake of sim- plicity, the samples refer to only one member of the Consultant 1: US$3,100,000 Evaluation Committee and two of the six invited proposals.) Consultant 2: US$3,400,000 Consultant 3: US$2,950,000 As for the proposed key staff, the following assump- Consultant 4: US$3,600,000 tions apply: Consultant 5: US$3,220,000 · Consultant 1 proposes Consultant 6: US$3,360,000 ­ three hydraulic engineers for the Hydraulic Engineering Group, The formula indicated in the RFP for determining ­ a civil engineer for the Structural Engineering the financial scoring is: Group, Sf = 100 x Fm/F ­ a soil engineer for the Soil Engineering Group, where Sf is the financial score, Fm the lowest price, ­ an electrical engineer and a mechanical engineer and F the price of the proposal under consideration. for the Electromechanical Engineering Group, and ­ a time and cost control specialist for the Project Control Group. 138 EXAMPLES OF EVALUATION OF PROPOSALS Appendix 7 Table A7.4 Evaluation Worksheet for Specific Experience Assignment Country Project Date of evaluation Evaluation carried out by Names of consultants 1 2 3 4 5 6 Consultant 1 2 3 4 5 6 Points Rating Score Rating Score Rating Score Rating Score Rating Score Rating Score Criteria (P) (R) % P x R (R) % P x R (R) % P x R (R) % P x R (R) % P x R (R) % P x R Specific experience (similar projects, similar areas & 5 70 3.5 100 5.0 conditions, specialization) Total 5 3.5 5.0 Table A7.5 Evaluation Worksheet for Methodology and Work Plan Assignment Country Project Date of evaluation Evaluation carried out by Names of consultants 1 2 3 4 5 6 Consultant 1 2 3 4 5 6 Points Rating Score Rating Score Rating Score Rating Score Rating Score Rating Score Criteria (P) (R) % P x R (R) % P x R (R) % P x R (R) % P x R (R) % P x R (R) % P x R Approach & methodology 8 70 5.6 70 5.6 Work plan 7 90 6.3 40 2.8 Organization & staffing Review of detailed design 4 70 2.8 90 3.6 Supervis. during construction 11 90 9.9 100 11.0 Total 30 24.6 23.0 EXAMPLES OF EVALUATION OF PROPOSALS 139 Appendix 7 Table A7.6A Evaluation Worksheet for Key Staff Qualifications and Competence (Group Scoring) Assignment Country Project Date of evaluation Evaluation carried out by Names of consultants 1 2 3 4 5 6 General Adequacy for the Experience in region Consultants: No.1 qualifications 20% project 60% & language 20% Total Points Rating Score Points Rating Score Points Rating Score Group Name points (P) (R) % P x R (P) (R) % P x R (P) (R) % P x R 1. Hydraulic Engineering Group 9 Hydraulic Engineer 1 1.8 70 1.26 5.4 90 4.86 1.8 90 1.62 Hydraulic Engineer 2 1.8 70 1.26 5.4 90 4.86 1.8 40 0.72 Hydraulic Engineer 3 1.8 90 1.62 5.4 70 3.78 1.8 90 1.62 Averaged subtotal 1.38 4.50 1.32 2. Electromech. Engineer. Group 6 Electrical Engineer 1.2 40 0.48 3.6 40 1.44 1.2 90 1.08 Mechanical Engineer 1.2 90 1.08 3.6 90 3.24 1.2 100 1.20 Averaged subtotal 0.78 2.34 1.14 Table A7.6B Evaluation Worksheet for Key Staff Qualifications and Competence (Group Scoring) Assignment Country Project Date of evaluation Evaluation carried out by Names of consultants 1 2 3 4 5 6 General Adequacy for the Experience in region Consultants: No.2 qualifications 20% project 60% & language 20% Total Points Rating Score Points Rating Score Points Rating Score Group Name points (P) (R) % P x R (P) (R) % P x R (P) (R) % P x R 1. Hydraulic Engineering Group 9 Hydraulic Engineer 1 1.8 90 1.62 5.4 70 3.78 1.8 70 1.26 Hydraulic Engineer 2 1.8 70 1.26 5.4 70 3.78 1.8 40 0.72 Hydraulic Engineer 3 1.8 90 1.62 5.4 90 4.86 1.8 90 1.62 Averaged subtotal 1.50 4.14 1.20 Note: This table may be used for scoring groups. If the key staff include only one expert per each of the disciplines or activities indicated in the RFP, they may all be scored using table A7.7A. If some of the disciplines or activities include more than one expert and others only one, the former may be scored as groups (using table A7.6A or A7.6B) and the latter as individuals (using table A7.7A or A7.7B). 140 EXAMPLES OF EVALUATION OF PROPOSALS Appendix 7 Table A7.7A Evaluation Worksheet for Key Staff Qualifications and Competence (Consolidated Scoring) Assignment Country Project Date of evaluation Evaluation carried out by Names of consultants 1 2 3 4 5 6 General Adequacy for the Experience in region Consultants: No.1 qualifications 20% assignment 60% & language 20% Total Points Rating Score Points Rating Score Points Rating Score Group points (P) (R) % P x R (P) (R) % P x R (P) (R) % P x R Team Leader 15 3 90 2.70 9 90 8.10 3 70 2.10 Time & Cost Control Group 10 2 40 0.80 6 70 4.20 2 100 2.00 Hydraulic Engineering Group 9 1.8 1.38a 5.4 4.50a 1.8 1.32a Structural Engineering Group 9 1.8 70 1.26 5.4 70 3.78 1.8 70 1.26 Soil Mechanics Group 6 1.2 40 0.48 3.6 40 1.44 1.2 90 1.08 Electromechanical Engineering Group 6 1.2 0.78a 3.6 2.34a 1.2 1.14a Subtotal 7.40 24.36 8.90 Total for the Key Staff 55 40.66 a. This score is taken from table A7.6A. Note: In this example, it is assumed that the key staff proposed by Consultant No.1 include three experts for the Hydraulic Engineering Group, two experts for the Electromechanical Engineering Group, and only one expert for each of the three remaining groups. Consequently, the Team Leader and the experts of the Structural, Soil Mechanics, and Time & Cost Control Groups of Consultant No.1 have been scored as individuals, using table A7.7A. The other key staff have been first scored as groups, using table A7.6A, and then the relevant averaged scores transferred to table A7.7A. Table A7.7B Evaluation Worksheet for Key Staff Qualifications and Competence (Consolidated Scoring) Assignment Country Project Date of evaluation Evaluation carried out by Names of consultants 1 2 3 4 5 6 General Adequacy for the Experience in region Consultants: No.2 qualifications 20% assignment 60% & language 20% Total Points Rating Score Points Rating Score Points Rating Score Group points (P) (R) % P x R (P) (R) % P x R (P) (R) % P x R Team Leader 15 3 90 2.70 9 100 9.00 3 70 2.10 Time & Cost Control Group 10 2 40 0.80 6 40 2.40 2 100 2.00 Hydraulic Engineering Group 9 1.8 1.50a 5.4 4.14a 1.8 1.20a Structural Engineering Group 9 1.8 70 1.26 5.4 70 3.78 1.8 40 0.72 Soil Mechanics Group 6 1.2 90 1.08 3.6 70 2.52 1.2 40 0.48 Electromechanical Engineer. Group 6 1.2 70 0.84 3.6 100 3.60 1.2 70 0.84 Subtotals 8.18 25.44 7.34 Total for the Key Staff 55 40.96 a. This score is taken from table A7.6B. Note: In this example, it is assumed that the key staff proposed by Consultant No.2 includes three experts for the Hydraulic Engineering Group and only one expert for each of the four remaining groups. Consequently, the Team Leader and the experts of the Structural, Soil Mechanics, Electromechanical, and Time & Cost Control Groups of Consultant No.2 have been scored as individuals, using table A7.7B. The experts of the Hydraulic Engineering Group have been first scored as a group, using table A7.6B, and then the relevant averaged score transferred to table A7.7B. EXAMPLES OF EVALUATION OF PROPOSALS 141 Appendix 7 Table A7.8 Evaluation Worksheet for Participation by Nationals Assignment Country Project Date of evaluation Evaluation carried out by Names of consultants 1 2 3 4 5 6 Consultant 1 2 3 4 5 6 Points Rating Score Rating Score Rating Score Rating Score Rating Score Rating Score Criteria (P) (R) % P x R (R) % P x R (R) % P x R (R) % P x R (R) % P x R (R) % P x R Rating equal to the percent- the share of national key staff 10 40 4.0 26 2.6 in the total key staff time effort proposed by the consultants Total 10 4.0 2.6 Table A7.9 Summary of Evaluation (Technical Proposal) Assignment Country Project Date of evaluation Evaluation carried out by Names of consultants 1 2 3 4 5 6 Consultants 1 2 3 4 5 6 Total Criteria points Score Score Score Score Score Score Specific experience relevant to the assignment 5 3.50 5.00 Adequacy of the proposed methodology & work plan 30 24.60 23.00 Key staff qualifications and competence 55 40.66 40.96 Suitability of the transfer of knowledge n. a. Local participation 10 4.00 2.60 TOTAL 100 72.76 71.56 Staff-months local Staff-months in field 142 EXAMPLES OF EVALUATION OF PROPOSALS Appendix 7 Table A7.10 Summary of Evaluation Assignment Country Project Date of evaluation Evaluation carried out by Names of consultants 1 2 3 4 5 6 Combined Technical evaluation Financial evaluation evaluation Technical Price Technical weight Technical Price Financial weight Price Total Consultants score factor points (US$) score factor points points 1 72.76 0.8 58.208 3,100,000 95.161 0.2 19.032 77.240 2 71.56 0.8 57.248 3,400,000 86.765 0.2 17.353 74.601 3 0.8 2,950,000 100.000 0.2 20.000 4 0.8 3,600,000 81.944 0.2 16.389 5 0.8 3,220,000 91.615 0.2 18.323 6 0.8 3,360,000 87.798 0.2 17.560 EXAMPLES OF EVALUATION OF PROPOSALS 143 Appendix 7 Appendix 7.2 Technical Assistance Services for an Agricultural Development Project The Borrower needs to select a consulting firm to Borrower in the RFP for the team leader and for the provide technical assistance services related to the key staff, relevant to the five disciplines considered. implementation of a large agricultural development project in a developing country. Table A7.12A Key Staff Evaluation Six qualified consultants are invited to submit pro- Key staff members Points posals, to be evaluated with QCBS. Because of the importance placed by the Borrower on the transfer Team leader 25 Pedologist 7 of knowledge, the TOR include a specific require- Agroeconomist 5 ment of a training program for the Borrower's per- Socioeconomist 5 sonnel. The participation of local experts in the Farm development specialist 4 technical assistance is also considered important by Hydraulic engineer 4 the Borrower. In the RFP, the points indicated in Total 50 table A7.11 are allocated to the evaluation criteria. The percentage weights assigned by the Borrower in Table A7.11 Points Allocated the RFP to the three subcriteria of the criterion "key to Main Criteria professional staff qualifications and competence for the assignment" are indicated in table A7.12B: Criteria Points Table A7.12B Key Staff Evaluation 1. Specific experience of the consultants relevant to the assignment 10 Subcriteria Percentage points 2. Adequacy of the proposed methodology & work plan 20 General qualifications 30 3. Key professional staff qualifications Adequacy for the assignment 50 and competence 50 Experience in region & 4. Suitability of the transfer of knowledge 10 language 20 5. Participation by nationals 10 Total 100 Total 100 The overall setup of the different subcriteria and relevant points for evaluating the technical proposals For the criterion "adequacy of the proposed work (provided by the RFP in the Data Sheet of the ITC) plan and methodology," the following three sub- are summarized in table A7.13A. criteria and relevant point allocations are selected (see para. 12.5): Table A7.13B indicates the points available within "key professional staff qualifications and compe- · Technical approach & methodology 5 points tence" for the different members of the key staff, · Work plan 5 points resulting from the total points (50) allocated to this · Organization and staffing 10 points criterion and the weights indicated in the RFP (see above). Within the criterion "key professional staff qualifica- tions and competence" (see para. 12.7), the team The RFP also indicates the weights given to the tech- leader is given 25 points. As for other members of nical and financial proposals as follows: the key staff, the characteristics of the assignment · Weight for the technical proposal 0.8 suggest the need to stress the importance of pedol- · Weight for the financial proposal 0.2 ogy, agroeconomy, socioeconomics, hydraulic engi- neering, and farm development. Table A7.12A Before receiving the technical proposals, the indicates the overall point allocation specified by the Evaluation Committee met to define the grades to 144 EXAMPLES OF EVALUATION OF PROPOSALS Appendix 7 Table A7.13A Points Allocated to Criteria and Subcriteria 1 2 3 4 5 Specific Key staff Suitability of Points Points Points Points Points experience of Methodology & qualifications and transfer of Participation consultants work plan competence knowledge by nationals No subcriteria 10 Approach & 5 Team leader 25 No subcriteria 10 No subcriteria 10 methodology Work plan 5 Pedologist 7 Agroeconomist 5 Organization 10 Socioeconomist 5 & staffing Farm developm. 4 Hydraulic engin. 4 10 20 50 10 10 Table A7.13B Key Staff Evaluation General Adequacy for Experience in qualifications the assignment region & language Key staff members (30%) (50%) (20%) Total points Team leader 7.5 12.5 5.0 25 Pedologist 2.1 4.2 1.4 7 Agroeconomist 1.5 3.0 1.0 5 Socioeconomist 1.5 3.0 1.0 5 Farm development 1.2 2.4 0.8 4 Hydraulic engineering 1.2 2.4 0.8 4 Total points 50 adopt for the evaluation (see chapter 17) and made (c) For the criterion "local participation," the com- the following decisions: mittee decided to allocate the relevant points in proportion to the percentage share of national (a) Because no subcriteria were specified in the RFP key staff time effort proposed (see para. 17.6). under the criterion "specific experience of con- (d) For each one of the three subcriteria of "ade- sultants related to the assignment," the commit- quacy of the proposed methodology & work tee decided to evaluate the specific experience plan," the committee adopted the four grades as a whole, considering the following aspects: suggested in para. 17.3 (Poor, Satisfactory, Good, (i) experience in similar projects and (ii) experi- Very Good) and set the relevant definitions. ence in similar areas and conditions (see paras. 17.2.2 and 17.2.3). (e) Similarly, for each one of the three subcriteria of "key professional staff qualifications and compe- (b) For the criterion "suitability of transfer of tence," the committee adopted the four grades knowledge," the committee decided to evaluate suggested in para. 17.4 (Poor, Satisfactory, Good, the transfer of knowledge as a whole, considering Very Good) and set the relevant definitions. the following aspects: (i) methodology and out- come of the program, (ii) organization of the (The evaluation worksheets that may be used by the program, and (iii) experience in training (see Evaluation Committee in evaluating the proposals are paras. 17.5.2 and 17.5.3). similar to the samples included in this appendix 7.1) EXAMPLES OF EVALUATION OF PROPOSALS 145 Appendix 7 Appendix 7.3 Technical Assistance Services for a Privatization Project The Borrower needs to select a consultant to provide leader and for the key staff relevant to the five disci- technical assistance services related to the privatiza- plines considered. tion of the power sector of the country. Six qualified consultants are invited to submit pro- Table A7.15A Key Staff Evaluation posals to be evaluated with QCBS. Transfer of Key staff members Points knowledge is not required, although the participa- tion of local experts is considered essential by the Team leader 18 Borrower. In the RFP, the points indicated in table Financial analysts 12 A7.14 are allocated to the evaluation criteria. Institutional experts 12 Table A7.14 Points Allocated Legal advisers 9 to Main Criteria Pricing experts 9 Criteria Points Total 60 1. Specific experience of consultants relevant to the assignment 10 The percentage weights assigned by the Borrower in the RFP to the three subcriteria of the criterion "key 2. Adequacy of the proposed methodology & work plan 20 professional staff qualifications and competence for the assignment" are indicated in table A7.15B: 3. Key professional staff qualifications and competence 60 4. Suitability of the transfer of knowledge 0 Table A7.15B Key Staff Evaluation 5. Participation by nationals 10 Subcriteria Percentage points Total 100 General qualifications 30 For the criterion "adequacy of the proposed Adequacy for the project 50 methodology and work plan," the following three Experience in region & subcriteria and relevant point allocations are selected language 20 (see para. 12.5): Total 100 · Technical approach and methodology 5 points The overall setup of the different subcriteria and rel- · Work plan 5 points evant points for evaluating the technical proposals · Organization and staffing 10 points (provided by the RFP in the Data Sheet of the ITC) are summarized in table A7.16A. Within the criterion "key professional staff qualifica- tions and competence" (see para. 12.7), the team Table A7.16B indicates the points available within leader is given 18 points. As for the other compo- "key professional staff qualifications and compe- nents of the key staff, the characteristics of the tence" for the different members of the key staff, assignment suggest the need to stress the importance resulting from the total points (60) allocated to this of financial analysis, institutional framework, legal criterion and the weights indicated in the RFP. aspects, and pricing of the assets to be privatized. Table A7.15A indicates the overall point allocation The RFP also indicates the weights given to the tech- specified by the Borrower in the RFP for the team nical and financial proposals as follows: 146 EXAMPLES OF EVALUATION OF PROPOSALS Appendix 7 Table A7.16A Points Allocated to Criteria and Subcriteria 1 2 3 4 Specific Key staff Points Points Points Points experience of Methodology & qualifications and Participation consultants work plan competence by nationals No subcriteria 10 Approach & 5 Team leader 18 No subcriteria 10 methodology Financial analysts 12 Work plan 5 Institutional experts 12 Organization 10 & staffing Legal advisers 9 Pricing experts 9 10 20 60 10 Table A7.16B Key Staff Evaluation General Adequacy for Experience in qualifications the assignment region & language Key staff members (30%) (50%) (20%) Total points Team leader 5.4 9.0 3.6 18 Financial analysts 3.6 6.0 2.4 12 Institutional experts 3.6 6.0 2.4 12 Legal advisers 2.7 4.5 1.8 9 Pricing experts 2.7 4.5 1.8 9 Total points 60 · Weight for the technical proposal 0.9 proportion to the percentage share of national · Weight for the financial proposal 0.1 key staff time effort proposed (see para. 17.6). Before receiving the technical proposals, the (c) For each one of the three subcriteria of "ade- Evaluation Committee met to define the grades to quacy of the proposed methodology & work adopt for the evaluation (see chapter 17) and made plan," the committee adopted the four grades the following decisions: suggested in para. 17.3 (Poor, Satisfactory, Good, Very Good) and set the relevant definitions. (a) Because no subcriteria were specified in the RFP under the criterion "specific experience of con- (d) Similarly, for each one of the three subcriteria of sultants relevant to the assignment," the com- "qualifications and competence of the key staff," mittee decided to evaluate the specific experience the committee adopted the four grades suggested as a whole, considering the following aspects: in para. 17.4 (Poor, Satisfactory, Good, Very (i) experience in similar projects and (ii) experi- Good) and set the relevant definitions. ence in similar areas and conditions (see paras. 17.2.2 and 17.2.3). (The evaluation worksheets that may be used by the (b) For the criterion "local participation," the com- Evaluation Committee in evaluating the proposals are mittee decided to allocate the relevant points in similar to the samples included in this appendix 7.1) EXAMPLES OF EVALUATION OF PROPOSALS 147 A P P E N D I X 8 Taxation of Consulting Services Contents Appendix 8.1 Taxation of Consulting Services 150 149 Appendix 8 Appendix 8.1 Taxation of Consulting Services To allow Borrowers to evaluate financial proposals Before finalizing the ITC for a specific assignment correctly, the Consultant Guidelines (para. 2.22) (para. 3.7 of the ITC), the Borrower must gain clarity and the RFP (para. 3.7 of the ITC) require that con- on the tax liabilities that arise for the agency itself sultants submit their price proposals excluding local when using consultants and at an early stage make identifiable indirect taxes. adequate provision in its budget. In the Data Sheet of the ITC, the Borrower shall inform consultants Local tax liabilities originating from consulting about which of the above alternatives apply. If ap- services contracts are often the cause of unclear pro- plicable, it is the responsibility of the consultant, posals and of unsatisfactory contracts. The identifi- before starting financial negotiations, to contact cation and calculation of local tax amounts are a the local tax authorities to determine the local tax difficult and time-consuming task for consultants, amount to be paid by the consultant under the especially for foreign consultants with little knowl- contract (para. 6.3 of the ITC). edge of the tax system of the Borrower's country. When in doubt, consultants should ask the Borrower Such local taxes generally include the following: in writing for explanations and, if needed, seek the advice of an expert in local taxation. · Indirect taxes (that is, value added taxes [VAT] on consultant remuneration amount) During negotiations, consultants must ensure that the contract contains accurate provisions for all · Duties on imported equipment and supplies local taxes that they will have to bill to the executing (for example, personal computers, scientific agency. If local indirect taxes are paid by the consult- equipment) ants and reimbursed by the executing agency, such · Duties on equipment imported or locally acquired taxes are billed to the agency by the consultants, who by the consultants that is treated as property of the make the payment to the tax authority. The execut- Borrower (for example: cars, office equipment) ing agency will present to the World Bank state- ments for reimbursement that clearly indicate the · Local social charges or income taxes on non- costs of consultants' services separate from local resident foreign personnel for locally performed indirect tax expenses, which the Bank will not fund. services Direct taxes (that is, income or corporate taxes) are Although the Bank does not reimburse Borrowers not relevant for the purpose of comparison of pro- for payments related to the above taxes and duties, it posals and should not be considered in the context leaves the Borrower to decide whether the consultant explained in the above paragraphs. should (a) be reimbursed by the executing agency, (b) be exempted, or (c) have the executing agency pay such levies on behalf of the consultant and its personnel. 150 TAXATION OF CONSULTING SERVICES A P P E N D I X 9 The Design Contest Contents Appendix 9.1 The Design Contest Procedure 152 Appendix 9.2 The Request for Design Proposals 153 151 Appendix 9 Appendix 9.1 The Design Contest Procedure The Design Contest (DC) is a selection method efficient use of the available space, attractiveness for under which short-listed firms (in general, architec- the potential users, revenue generation potential (if tural firms) are invited to submit their conceptual any), and estimated construction costs. design of a physical project (for example, a hospital, research center, or transportation terminal). The Each competitor shall present its sealed proposal conceptual design forming the main component of containing the preliminary conceptual design of its the DC is expected to highlight the esthetic aspects of proposed solution and the related cost estimate, the project, in addition to its technical characteris- responding strictly to the Request for Design Pro- tics. The conceptual design of a DC is a preliminary posals. Borrowers may require that proposals be design to be followed, in the case of continuation, by submitted anonymously to ensure that decisions be bidding documents and detailed engineering design. reached solely on the grounds of the indicated evalu- ation criteria and to avoid the Evaluation Committee The DC is different from the other methods of con- being influenced by the different renown of individ- sultant selection described in the CSM, which pick ual competitors. the consultant offering the most suitable methodol- ogy and team of experts, in that the DC participants The Evaluation Committee proceeds with the evalu- already provide the preliminary design of the solu- ation of the proposed designs, in accordance with tion that they propose. the broad evaluation criteria3 spelled out in the Request for Design Proposals. The winner of the Firms are short-listed based on experience, capa- contest is awarded a prize, which may consist of bility, and reputation, according to indications simi- either the contract for the subsequent design lar to those provided in chapter 13 of the Manual. phase(s) of the project or a money prize. Because The Borrower sends them a Request for Design preparation of the design for large projects is time- Proposals, including a letter of invitation; infor- consuming and expensive, a number of short-listed mation to proponents, including a Data Sheet to proponents (generally not all) may receive awards to address specific features of the project; a TOR com- partially offset the expenditures they have incurred. prising the design criteria; technical specifications; and other data to be provided by the Borrower.1 Evaluation criteria2 may include innovation, esthetic content, adequate blending with the surroundings, 1. Although some requirements are indicative, as in the stan- dard consultant TOR (for example, recommendations to address social, cultural, and environmental aspects of the design), others are strict specifications (such as use of spe- cific construction materials, architectural style, or volu- metric requirements). 2. These criteria differ from those used conventionally in the selection of consultants (that is, experience, methodology, staff, and cost of the services). 3. The Bank makes it mandatory to quantify these criteria. 152 THE DESIGN CONTEST Appendix 9 Appendix 9.2 The Request for Design Proposals This paragraph lists the most likely4 changes that Para. 1.6.2: Delete "or the termination of its need to be made to the Bank's SRFP to adapt it to a Contract." Request for Design Proposals. Para. 1.8: Delete "Furthermore, the Consultants shall be aware of the provisions on Letter of Invitation fraud and corruption stated in the spe- cific clauses in the General Conditions Para. 1: Indicate the types and amounts of the of Contract." rewards, if provided. Replace "contract" by "design contest." Para. 3.3: Items (b) and (c) should be deleted. Para. 2: Replace "[insert: name of consulting services Para. 3.4: The whole paragraph shall be replaced assignment]" by "[insert: name of design by the following: contest]." "Consultants are required to submit a Para. 4: Replace "[insert: Selection Method] and" Design Proposal providing the informa- with "the." tion indicated in the following paras. from (a) to (c): Para. 5: Delete section 3, section 4, and section 6. (a) The conceptual design of the proj- Para. 6: Under letter (b), replace "proposal" by ect, prepared according to the "design proposal." requirements indicated in the Terms of Reference attached to Instructions to Consultants. The Instructions to this RFP. Consultants should undergo major modifications, because several paragraphs are not applicable while (b) Comments and suggestions on the others shall be amended, as indicated below: Terms of Reference, including workable suggestions that could Definitions: Definitions (d), (j), (k), and (o) should improve the quality or effectiveness be deleted. of the conceptual design (or both). Consultants should incorporate Para: 1.9, 1.10, 1.12, 1.13, 3.5, 3.6, 3.7, 3.8, such suggestions, if any, in the 3.9, 4.2, 5.2 (ii), 5.3, 5.4, 5.5, 5.6, 5.7, design proposed. 5.8, 6, and 7 should be deleted. (c) A preliminary estimate of the con- Para. 1.2: Delete this paragraph and replace with: struction costs related to the project "The Consultants are invited to submit solution envisaged by the concep- a Design Proposal as specified in the tual design proposed." Data Sheet." Para. 4.1: Delete "(Technical Proposal and, if Para. 1.5: Delete "and contract negotiation" and required, Financial Proposal; see "prior to Contract award." para. 1.2)" and "Submission letters for Para. 1.6.1: Under item (iii), add "or" before (ii); both Technical and Financial Proposals replace "or (iii) supervision of the should be in the format of TECH-1 of Contract, may not be awarded a Section 3, and FIN-1 of Section 4." Contract" with "may be disqualified"; Para. 4.3: Replace "The [or "the"] Technical and delete "and the execution of the Proposal" with "The [or "the"] Design Contract." Proposal" at each occurrence in this paragraph. 4. Minor changes are not indicated in this appendix and will need to be made when preparing an ad hoc document. THE DESIGN CONTEST 153 Appendix 9 Para. 4.4: This paragraph should be replaced by hand over all the Design Proposals to "The Design Proposal must be anony- the Evaluation Committee." mous: it must not contain any logo, Para. 5.1: The words "to the time the contract is name, statement, or other indications awarded" should be replaced by "to the that could allow the Evaluation Com- time the winner is selected"; the words mittee to attribute a design to one of the "Technical and/or Financial" and competitors. Each competitor shall "and recommendation for award of prepare as many copies of its Design Contract" should be deleted. Proposal as indicated in the Data Sheet. The original and each copy of Para. 5.2: The words "Technical" and "technical" the Design Proposal shall be placed in should be deleted; the expression "(St)" separated, anonymous, and sealed should be replaced by "(S)." envelopes; each of these envelopes shall Para. 8.1: The words "and recommendations con- be marked only "Original" or "Copy" as cerning awards" should be deleted, and appropriate. The original and all copies the words "the publication of the award of the Design Proposal shall be placed of Contract" should be replaced by in another envelope marked "Design "the winner of the Design Contest is Proposal"; this envelope shall bear the selected." submission address and other informa- tion indicated in the Data Sheet." Data Sheet of the ITC. The Paragraph References of Para. 4.6: This paragraph should be replaced by the Data Sheet should be amended as indicated "After the deadline for submission of below: the Design Proposals, the high-ranked Official of the Borrower nominated for Para. Ref: 1.6.1 (a), 1.12, 3.3 (b), 3.4, 3.4 (g), this purpose shall open the first (outer) 3.6, 3.7, 3.8, 5.2 (a), 5.7, 6.1, and envelope of each Design Proposal and 7.2 should be deleted. shall mark with a capital letter each of Para. Ref. 1.1: "Method of selection" should be the inner envelopes containing the deleted. original and the copies of the Design Proposal. Such letter shall be the same Para. Ref. 1.2: "Financial Proposal to be submitted for all the envelopes of the same com- together with Technical Proposal: petitor and shall differ from the letters Yes...No" should be deleted. used to mark the envelopes of each of Para. Ref. 3.1: The first paragraph only should be the remaining competitors. The Official retained. shall record in writing the correspon- dence between each competitor and the Para. Ref. 4.3: Replace "Technical Proposal" with letter used to mark its envelopes. The "Design Proposal"; also delete the Official must carry out the marking and words "and the original of the recording alone, he or she shall guard Financial Proposal." the recording in a safe place under his Para. Ref. 5.2 (b): The whole Paragraph Reference or her responsibility, and he or she should be replaced by specific eval- shall not disclose the correspondence uation criteria and relevant points between competitors and letters to (refer to the main text of this anybody, including the Evaluation appendix). Committee, until the evaluation of the Design Proposals has been completed and the "no objection" of the Bank received. Once the marking and record- ing are terminated, the Official shall 154 THE DESIGN CONTEST Appendix 9 Technical Proposal--Standard Forms. The com- Terms of Reference. Only the following sections of ments referring to the following Standard Forms the Terms of Reference (TOR) discussed in chapter should apply. 10 should be included: Form TECH-1: In the first paragraph, "Request for · Background Proposal" should be replaced by · Objectives "Request for Design Proposals," the word "Proposal" should be replaced · Data to be provided by the Client by "Design Proposal," and the words "which includes this Technical The Borrower shall explain in the TOR the rationale Proposal, and a Financial Proposal of the project and the objectives to be achieved and sealed under a separate envelope" shall indicate the characteristics of the project that should be deleted. must be retained by all competitors and the ones for which they are invited to show their experience and The fourth and fifth paragraphs imagination. should be deleted. Forms: TECH-2, TECH-3B, and TECH-4 The remaining sections of the TOR (Scope of work; through TECH-8 should not be Capacity-building and Transfer of Knowledge; used. Reports and Schedule of Deliveries; and Data, Services, Personnel, and Facilities to be provided by Form TECH-3: In the title, the words: "and on the Client) should be disregarded. Counterpart Staff and Facilities" should be deleted. Standard Forms of Contract. Not to be used. Financial Proposal--Standard Forms. They shall not be used. THE DESIGN CONTEST 155 A P P E N D I X 10 Guidance Notes Contents Appendix 10.1 General 158 Appendix 10.2 Conflict of Interest Provision in Bank Guidelines and Level Playing Field 159 Appendix 10.3 Early Strategy Formulation Is Critical 160 Appendix 10.4 Dealing with the Selection of the Operator or Manager under the MC 161 157 Appendix 10 Waivers of Conflict-of-Interest Provisions in Cases where the Incumbent of a Utility Management Contract Wants to Compete for a Subsequent Lease or Concession Contract Appendix 10.1 General 1. Many developing countries, particularly econ- usually carries relatively low or no financial risks omies in transition, are adopting a two-phase during this period. Although the management approach to privatize public utilities. In the first and financial criteria for the subsequent lease or phase, they invite private firms to bid for opera- concession contract would be drastically differ- tion, maintenance, or management of the utility ent from the initial MC and further financing (or a combination of these services), referred to in through a Bank loan or credit may be inapplica- this note as a "Management Contract (MC)." In ble, the question has been raised whether the the second phase, which usually occurs several incumbent of the MC has a conflict of interest if years later, bids are invited for a lease or conces- it is permitted to submit a bid for the lease or sion contract, including sale of the assets. The concession contract. term of the first-phase MC is normally three to 2. The participation of an MC incumbent in bidding five years and is mostly geared to stop the physical for a lease or concession contract raises two and financial deterioration of systems or to im- issues: (a) Is the perceived conflict of interest prove performance in the short term, while the (COI) situation covered in the Bank Guidelines privatization of the utility through lease or con- for procurement? and (b) If so, can the advan- cession is organized and prepared for bidding. tages gained by the MC incumbent in the first The selection of firms for an MC is usually initi- phase be neutralized to a level that would ensure ated through a prequalification process and fol- fair competition in the second phase? Until now, lowed by either one-stage or two-stage bidding these issues have been resolved by decisions taken (separate technical and financial bids). The award on a case-by-case basis. In several instances, the of the contract is generally decided on the lowest Bank has concluded that some flexibility in the evaluated bid, based on a combination of a fixed application of the COI provisions, combined with management fee plus an annual success fee linked certain safeguards to neutralize the advantages of to specific performance indicators and independ- the incumbent, would be in the best interest of ent audits. Because the MC is usually financed the Borrowers and all other parties concerned. To through a Bank loan or credit, the selection make the transition from case-by-case resolution process is subject to Bank Guidelines. During the of this recurring COI question to a more universal three- to five-year term of the MC, the incumbent Bank-wide approach, this note provides guidance has the opportunity to gain firsthand knowledge on how to handle these cases. of the system and the public agency in charge of the utility (that is, its client). The incumbent 158 GUIDANCE NOTES Appendix 10 Appendix 10.2 Conflict of Interest Provision in Bank Guidelines and Level Playing Field 1. Both the Guidelines for the selection of consult- 3. Inflexible enforcement of the COI provisions ants and the Guidelines for the procurement of would result in a blanket exclusion of all MC goods and works include policy provisions stating incumbents from subsequent lease or concession that under certain circumstances, firms partici- contracts. This decision would be unacceptable to pating in upstream phases of a project are prohib- many Borrowers, because it would severely limit ited from supplying subsequent services, goods, the interest of the best potential candidate firms or works under the same project (para. 1.9 [a] of to take part in bidding for the short-term MC the Consultant Guidelines and para. 1.8 [b] of the contract and thereby sacrifice future chances to Procurement Guidelines). A similar provision is bid on the long-term lease or concession contract. included in the Standard Forms of Contract. The Consequently, the field of competitors would intention of the provisions is (i) to promote shrink, contrary to the general objective of all transparency, (ii) to protect the interests of the Bank-financed procurement to maximize com- Bank's Borrowers, and (iii) to maintain a level petition. The result would create a critical disad- playing field for all other bidders. The particular vantage for Borrowers and development work in fiduciary challenge for the Bank is how to balance general. Furthermore, in cases where the initial these safeguards against the development needs MC was not Bank-financed, there may be no and economic constraints of Borrowers wanting equivalent COI provision in that contract barring to privatize utilities. the incumbent from bidding on a subsequent contract. It would be difficult for the Bank to 2. As indicated above, Borrowers have shown a pref- insist that this bidder be denied the right to com- erence for privatizing utilities in stages and in pete for the lease or concession contract involving concert with evolving economic, political, and Bank financing because it was not subject to such social circumstances or the condition of the utility constraints when it accepted the MC. Hence, a company (or both). For example, a three- to more reasonable course of action would be to five-year MC may be initially the only feasible grant a waiver of the normal COI provision in the approach to private sector involvement or for an Guidelines by giving the Bank's "no objection" to extremely run-down utility with a negligible rev- the participation of an MC incumbent in bidding enue base in a very poor or high-risk country; it on a subsequent lease or concession contract. would be expected that following improvements The prerequisites for this waiver should include, in the management of the utility under this initial among others, a prudent analysis of local circum- MC and availability of evolving data from this stances, a strategy for neutralizing the incum- initial phase, a lease or concession contract may bent's acquired competitive advantages through later on be given more-favorable consideration full disclosure of information on utility opera- by decision makers and the public. A similar but tions to all bidders, and safeguards for maintain- less frequent scenario could involve the transi- ing a level playing field in the bidding process. tion from an MC awarded in response to an emergency situation to a new MC to be bid competitively. GUIDANCE NOTES 159 Appendix 10 Appendix 10.3 Early Strategy Formulation Is Critical 1. Early planning is critical to an orderly process and transaction costs involved. If a country's circum- to timely processing of procurement. It should be stances permit it, choices such as the privatization part of project preparation. Along with procure- of operations (leases) or the privatization of oper- ment planning, the availability and interest of ations and sale of assets (concessions) or partial/ potential bidders should be investigated by the progressive private sector participation (technical Borrower, with guidance from the Bank, to the assistance, management, or operations contracts point of proactively canvassing the "market." and so forth) should be decided in favor of the Under certain circumstances, this investigation longest possible term. While MCs are a "low- of the market may have to look closely at market powered" form of private sector participation, dominance by a particular firm. A firm that is they usually place no private equity at risk and already active in a utility operation in one part cover a relatively short duration, which is not of the country may have significant advantages in conducive to aligning the incentives of the op- local knowledge and contacts and the ability to erator with the long-term health of the utility. accept financial risks in another part of the coun- Certain questions typically arise in this context: try, even without involvement in the initial MC · Can the incumbent's performance under the contract. If a particular firm is clearly dominant MC have a negative impact on the value of the in the existing utility systems market of a country subsequent concession contract or the assets to and already holds a controlling share of it, the the detriment of the Borrower? Borrower's ability to obtain competitive pricing and favorable contract terms will be significantly · Can this risk be mitigated? compromised. In these cases, specific limits on · Will the participation of a firm with dominant the incumbent's future participation should be market share effectively preclude competition considered from the start and articulated in the unless other bidders can be convinced that the prequalification and bidding documents. Bank playing field is indeed level? project teams should emphasize to Borrowers the importance of early consideration of longer-term · What additional measures should be taken in options for the privatization process and the this case? 160 GUIDANCE NOTES Appendix 10 Appendix 10.4 Dealing with the Selection of the Operator or Manager under the MC 1. A key aspect of the privatization strategy should (c) Absolute prohibition against any participation focus on practical ways and means to neutralize of the incumbent in the modeling of the the acquired competitive advantage of the MC future structure or restructuring of the utility incumbent as an antidote to the reluctance of past the initial phase covered by its contract, other prospective bidders to take part in the com- or in preparing bidding documents for the petitive bidding process. From the start, the initial second-phase contract MC should include provisions to eliminate the (d) Obligation to allow competitors unencum- information asymmetry for the subsequent bered access to the utility facilities during the contract. All competitors for the second-phase bid preparation period for the second-phase contract should have equal access to all relevant contract to observe its operations data and other information that are necessary to prepare a responsive technical and financial bid. It is anticipated that these provisions will ulti- Although it may be impossible to be absolutely mately be formalized in standard bidding docu- certain that the incumbent does not have ments for MCs, to be made available to all more-intimate knowledge of the utility and Regions. its organization--particularly with regard to conditions and performance of the system-- 2. For new projects, a detailed description of the pri- than other bidders, the first-phase contract vatization and its integral procurement strategy should contain provisions requiring the incum- should be included in the Project Appraisal bent to reveal all critical parameters of the opera- Document (PAD), giving full details of the con- tion in periodic reports and to have them audited tracting approach, the safeguard provisions to be by an independent auditor. There should be an included in the bidding documents, and how the explicit understanding that these reports will other prerequisites mentioned in this Guidance eventually be shared with other bidders when the Note would be addressed. If these issues arise dur- second-phase contract is bid. Typical provisions ing the implementation of existing projects, a in the first-phase contract should include the detailed description of the proposed approach, following: with references to this Guidance Note, should be sent to the Regional Procurement Manager (a) Reports from the incumbents identifying key (RPM) for clearance. The RPM will decide, in data on system condition, outages, losses, consultation with LEGPR, whether (a) the pro- repair history, consumer census, financial posed arrangements meet the requirements of reports, assets, warranties, remaining life the Loan or Credit Agreement; (b) a waiver of cycle, hydraulic models, maintenance man- the COI provisions in the Guidelines should be agement systems, health and safety require- granted, in accordance with this Guidance Note; ments, GIS, and so forth and (c) the regional vice president (RVP) and the executive director (ED) need to be informed of (b) Inspection and verification of these reports by any resulting changes. Cases that require further independent engineers before they are made consultations (for example, if certain prerequi- available in the data room, which is open to sites have not been fully met) will be referred to bidders during the bid preparation period for the Operational Procurement Review Committee the second-phase contract (OPRC) for review and final determination. GUIDANCE NOTES 161 A P P E N D I X 11 Statement of Integrity Contents Appendix 11.1 Statement of Integrity 164 163 Appendix 11 Appendix 11.1 Statement of Integrity [Location, Date] To: [Name and address of Client] Dear Sirs: We, the undersigned, offer to provide the consulting services for [insert Title of Assignment] in accordance with your Request for Proposals dated [insert Date] and our Proposal. We undertake to observe during the entire process of selection and, in case we are awarded the contract, during its implementation, the principles of integrity of our profession, including abstaining from any act of fraud and corruption. This pledge includes our agent representative. Authorized Signature: Name and Title of Signatory: Name of Firm: Address: [Authorized Signature, Name and Title of Signatory, and Name and Address of Firm to be replicated, if a joint statement, for all invited consultants who agree in providing this statement.] 164 STATEMENT OF INTEGRITY A P P E N D I X 12 Procurement of Information and Communication Technology (ICT) Contents Appendix 12.1 Procurement of Information and Communication Technology (ICT) 166 165 Appendix 12 Appendix 12.1 Procurement of Information and Communication Technology (ICT) Excerpt from: 3. There would need to be some customization of the World Bank's standard Consultant Contract Procurement of Information and form to address property rights to the software Communication Technology (ICT)-- to be developed, secure ongoing warranty/ Guidance on Selecting Standard Bidding support after the end of the development work, Documents (SBDs) determine the disposition of the development equipment and development software licenses, (as issued on December 2003) lay out the approach to testing and accept- ance, and customize the payment clause for Use of the Request for Proposals (RFP) Approach milestones/achievements reflecting software development (rather than report writing, as in 1. Consultants have naturally been used by our the typical consultant assignment). clients for the provision of intellectual services such as information system (IS) project manage- The World Bank's Procurement Specialist/ ment support, development of ICT strategies, Procurement Accredited Staff assigned to the proj- user requirements, functional specifications and ect would need to clear these provisions and (de- design of application software, and the assembly pending on circumstances) may himself or herself of ICT bidding documents. However, the use of need to obtain advice in the process. OPCPR is consultants via the RFP approach has even been prepared to assist, among others, by providing extended, with success, to the actual implemen- samples for the additional or adjusted clauses. tation of application software. 4. To the extent that is practical, the development of 2. If a procurement focuses primarily on software an information system via the RFP approach design, development, or adaptation services, it should avoid determining the hardware and soft- would, therefore, be acceptable to use the RFP ware brands that will have to be used for the future approach (that is, procure the required software production environment. If, after seeking the work in the form of "consulting" services, World Bank's advice, such determination still can- including the options of using lump-sum and not be avoided, the need for possible brand prede- time-based contracts). termination via the assignment should be made explicit in the RFP so that consultants expressing The assignment should also be of a nature where interest (and their possible partners) would be it is more important to make progress in under- aware of the full stakes of the procurement. standing and shaping the likely end product (such as by creating a pilot) than in procuring a 5. As the software product emerging from a con- fully production-worthy system with precise sultant contract gains profile/structure and per- functional and performance indicators (which mits the identification of a desirable production would rather call for the use of the IS SBDs1). system, the scaling-up, finalization, and deploy- Under an RFP approach, the client assumes a ment/rollout of the production version of this larger risk; therefore, there should be less at stake information system would, in most instances, in the sense of a critical production outcome. Fur- require separate procurement using either the ther, the hardware and packaged software content IS1STG2 or IS2STG3 approach. should be minimal (for example, less than 20 per- cent of the estimated contract value), at the most allowing the consultant to procure a development platform as part of the contract price. 2. IS1STG (or IS1STG SBD): the single-stage version of the IS SBD. 1. IS SBD: the World Bank Standard Bidding Document for the 3. IS2STG (or IS2STG SBD): the two-stage version of the IS Supply and Installation of Information Systems. SBD. 166 PROCUREMENT OF INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) A P P E N D I X 13 Consultant Performance Evaluation Form Contents Appendix 13.1 Consultant Performance Evaluation Form 168 Appendix 13.2 Consultant Performance Evaluation Checklist 169 167 Appendix 13 Appendix 13.1 Consultant Performance Evaluation Form1 1. Assignment and Project Name 2. Consultant Name and Address 3. Participating Firms (if in Associations)2 (a) ..................................................................................................................................................................... (b) ..................................................................................................................................................................... (c) ..................................................................................................................................................................... 4. Description of Services (brief, less than a quarter of a page) 5. Contract Date3 6. Completion Date4 (Actual) 7. Original Contract Amount 8. Final Contract Amount (Approx., in US$) (Approx., in US$) 9. Evaluation (see next page for details) Score Rating 5 Outstanding 4 Very Good 3 Good 2 Satisfactory 1 Poor Explanation of Above Score (use additional sheets, if necessary) Name of responsible officer Signature Date 1. The information provided in the following table should be treated as confidential. 2. Associations can be in the form of a subconsultancy or a joint venture. 3. Signature date. 4. As agreed per contract, amendment to contract, or agreement in writing between the client and the consultant. 168 CONSULTANT PERFORMANCE EVALUATION FORM Appendix 13 Appendix 13.2 Consultant Performance Evaluation Checklist The following checklist is intended to serve only as a the Borrower believes that the consultant's perform- guide. Items of the checklist of each specific assign- ance has not been satisfactory. Furthermore, specify ment may substantially differ from those of this whether, during the implementation of the assign- checklist, depending on the characteristics of the ment, the Borrower has called the attention of the assignment, type of contract, and Borrower's needs consultant to these issues, how the consultant has and expectations. reacted, and which remedial actions were taken. 1. Has the consultant delivered all reports and 6. Has the consultant used for the execution of documents specified in appendix B of the con- the assignment the agreed-on key staff listed tract in the form and number and within the under appendix C of the contract? time periods set forth in said appendix? For time-based contracts, this question mainly refers 2. Are all reports and documents written and to the team leader and the key staff assigned by the edited in an orderly, concise, and clear manner consultant to work in the Borrower country. For that makes them easily understandable? lump-sum contracts, this question mainly refers to 3. Are they well coordinated between each other? the team leader and to the experts responsible for the main technical disciplines of the assignment, includ- For each report/document not fulfilling the above ing those who have carried out short-time missions conditions, specify the consistency of noncompli- to the Borrower country. ances, the reasons that have originated those non- compliances, and their possible impact on the 7. If replacement of some of the originally subsequent project phases (if applicable). agreed-on key staff occurred, has the consult- ant timely provided acceptable reasons? 4. Has the consultant satisfied the Borrower's 8. Has the replacement key staff been always con- expectations of services quality, such as ade- sidered by the Borrower of equivalent to, or quacy, applicability, effectiveness, sustain- better than, the qualifications and experience ability, innovativeness, and impartiality? of the replaced staff? 5. Has the consultant covered the scope of work 9. Have the consultant staff always adequately and achieved the objectives of the assignment behaved in dealing with Borrower staff, man- set forth in the "Description of Services" aging Borrower's resources, respecting local attached to the contract? habits and laws? If answers to the above question(s) are negative, pro- vide a brief but clear explanation of the reasons why CONSULTANT PERFORMANCE EVALUATION FORM 169 References Baum, Warren. 1982. The Project Cycle. Washington, DC: Bidders, Suppliers, Contractors, or Consultants." World Bank. Operational Memorandum. Internal document of the World Bank, Washington, DC (January 5). World Bank. 1960. "IDA Articles of Agreement." Washing- ton, DC: World Bank. ------. 1999a. "Hiring Government-Owned Universities, Research Institutes, Government Officials, and Academic ------.1986. "Standard Form of Agreement between a Bank Research Staff as Consultants in Bank-Financed Op- Borrower and a UN Agency." Washington, DC: World erations." Office Memorandum, World Bank, Wash- Bank. ington, DC (August 19). ------. The World Bank Operational Manual. Washington, ------. 1999b. "Sample Form of Evaluation Report: DC: World Bank.------. The World Bank Staff Manual. Selection of Consultants." Washington, DC: World Bank. Washington, DC: World Bank.------. 1992. Disburse- ment Handbook, 2nd ed. Washington, DC: World Bank. ------. 2001. "Procurement under Bank-Financed Operations." OP/BP 11, Washington, DC: World Bank ------. 1993. IBRD Articles of Agreement. Washington, DC: (July). World Bank. ------. 2002. "Administrative Statement (AMS 15.00), ------. 1994a. "Project Preparation Facility." OP/BP 8.10. Selection and Use of Consultants by the World Bank for Washington, DC: World Bank (May). Operational Purposes." In World Bank Administrative ------. 1994b. "Technical Assistance," OP/BP 8.40. Wash- Manual. Washington, DC: World Bank. ington, DC: World Bank, (October). ------. 2004a. Guidelines: Procurement under IBRD Loans ------.1995a. The Task Manager Handbook. Operation and IDA Credits. Washington, DC: World Bank. Policy Department, Operation Policy Group. Washington, ------. 2004b. Guidelines: Selection and Employment of DC: World Bank. Consultants by World Bank Borrowers. Washington, DC: ------. 1995b. "Retroactive Financing," OP 12.10. Washing- World Bank. ton, DC: World Bank (January). ------. 2004c. Standard Request for Proposals: Selection of ------. 1998. "Fraud and Corruption under Bank-Financed Consultants. Washington, DC: World Bank. Projects: Procedures for Dealing with Allegations against 171 Index academics, 111 communications, 54 adaptability, 93 competition, fair, 39 advance contracting, retroactive financing, 31­32 complaints, 13 advertising, 13­14, 67 completeness, 92 advisory services, 2 conference, preproposal, 71 amendments, 107 conflicts assignment activities, 16­17 borrowers, 36 assignments, 17, 19 completing, 108 clients, 17­18, 19 contract design, 122 relationships, 17, 19 execution, 107­108 conflicts of interest, 16­21 implementation, 20 Bank policy, 16 type of contract, 79 categories, 16­18, 19 association, between consultants, 11­13, 69 consultant, 21n.1, 25 auditors, 46 Consultant Guidelines, 21n.1 away-from headquarters allowance, 104 guidance notes, 159 prevention, 18­20 Bank's role, 34­36 consultant, 5­8 billing rates, contract negotiations, 103­104 agreement, objectives, 49 billing time, contract negotiations, 104 associations between, 11­13, 69 borrower conflict of interest, 21n.1, 25 assistance to, 36 financing, 31­33 conflict of interest, 24 individual vs consulting firm, 110 responsibilities, 28 marketing groups, 7 budget mobilization, 109 cost estimation, 52­55 notification, 86 steps, 53 organizations, 5­7 performance evaluation, 168, 169 capacity building, 27­30, 50, 72 previously engaged by the Bank, 21, 21n.3 evaluation, 97 quality, 2­4 on-the-job, 29 quality cycle, 3 rating, 97 remuneration, 52­54 Chinese walls, 20, 21n.2 request for expressions of interest, 134 civil servants, 10 requirements, 1 clarifications, request for, 71­72 responsibilities, 28 clarity, 92 selected and engaged, 14­15 closely held corporation, 6 selection, 9 coercive practice, 22 services, 1 cofinancing, 33 shortlisted, 11­12 collusive practices, 22 taxation, 150 commercial practice, 44 types, 1 173 Consulting Services Manual Consultant Guidelines Country Procurement Assessment Reviews (CPARs), conflict of interest, 21n.1 11 national consultants, 11 creativity, 92 Consultant Trust Funds. See trust funds contingencies, 55 data, provided by the borrower, 51 allowance, total, 106 data sheet calculation of, 106 design proposals, 154 contract negotiations, 105­106 ITC, 71 fee contracts, 77­78 delays, 108 continuation, 71 deliveries, schedule, 50 assignments, 19 demobilization, 54 contract, 35 design award, no-objection forms, 116 contest, procedure, 152 Bank standard, 80 request for proposals, 153­155 draft, 106 disbursements, 32­33 effectiveness, 107, 109 suspension of, 32­33 execution, 15 disputes, 107­108 downstream procurement of goods, etc, 16­17, 19 forms, 80 downstream provision of services, 17, 19 modifications after signing, 35­36 duties, 54­55, 55n.2 standard forms, 75 standard forms, design proposals, 155 economy, 37, 39 training, 27­30 efficiency, 37, 39 type of assignment and, 79 eligibility, 9­10 types, 76­80 equipment, 54 contract negotiations, 20, 99­106 contract negotiations, 102 conditions, 106 evaluation, 92 financial conditions, 102­106 Bank's role, 88 items subject to, 99­100 consultant's experience, 90­91 limits of, 100­101 consultant's performance, 168, 169 preparations, 99 criteria setting, 56­66 procedures, 100, 101 proposals, 81­83, 85­86, 136­147 technical aspects, 101­102 quality and cost, 87 corruption, 22­26 ratings, 88n.1 see also fraud subcriteria, 72, 73, 75nn.3,4, 98 corrupt practice, defined, 22 technical proposals, 20, 89­98 cost estimate, 52­55 without subcriteria, 97­98 components, 52­55 Evaluation Committee (EC), 81­84 items to include, 52 assistance to, 84 not possible, 55 scoring, 90 steps, 53 selection criteria, 83­84 cost estimate forms, 126 exchange rate, official, 73 furniture and equipment, 131 experience, rating system, 90 office, 130 expert, qualifications, 64 reimbursables, 129 staff remuneration, 128 facilities summary, 127 borrower's, 71 cost evaluation, 87 contract negotiations, 102 counterpart staff and facilities, 74 provided by the borrower, 51 contract negotiations, 102 fair competition, 39 174 INDEX Consulting Services Manual fee, contract negotiations, 104 see also simplified technical proposal; technical final report, 51 proposal finance, 31­33 funding, 15 financial institution, 8 as consultants, 45­46 general partnerships, 5­6 financial proposal General Procurement Notice (GPN), 13, 69n.1 contract negotiations, 75, 102­106 geographic origins of invited firms, 69 design proposals, 155 global trust funds, 32 evaluation procedure, 86­87 good, 91, 92, 93, 96, 98 score, formula, 73 government officials, 10, 111 standard forms, 75 grades, defining, 91­92 financing, retroactive, 31­32 grants, 32 flexibility, 93 guidance notes, 158 forms conflict of interest, 159 consultant performance evaluation, 168 operator or manager selection, 161 cost estimate, 126­131 strategy formulation, 160 no-objection, 114­116 IBRD loans, 31 request for expressions of interest, 134 IDA credits, 31 single-source selection, 118­119 implementation TECH-3, 74 fraud and corruption, 23 TECH-4, 74 services, 2 TECH-7, 74 support, 28­29 TECH-8, 74 inception report, 50 for-profit corporations, 6 indefinite-delivery contracts, 78 fraud, 22­26 individual consultants, vs consulting firm, 110 allegation sources, 23 advertising, 111 Bank's role, 24­25 professional practices, 5 borrower's role, 24 selection, 110, 111 consultants' role, 25 information and communication technology (ICT), 1 investigations and sanctions, 23 procurement, 166 prevention, 23­26 innovation, 92 professional associations' role, 25­26 inputs, borrower's, 71 see also corruption inspection agents, 8 fraudulent practice, 22 as consultants, 45 full technical proposal (FTP), 56­57 institutional arrangements, 51 capacity-building program and training, 62­64 instructions, 14 consultant's experience, 90 Instructions to Consultants (ITC), 13­14, 71 evaluationn criteria, 57­59 , 72 insurance, 54 methodology, 60 integrity, statement, 164 minimum technical score, 60 interim reports, 51 national consultants, 98 investigations, 23 national participation, 64­65 organization, 61 key staff. See staff points, 58, 64, 72 knowledge transfer, 27­30, 50 rating system, 89 specific experience, 60 language staffing, 61 experience, 95 subcriteria, 72, 93 proposals, 72 work plan, 60­61 Least-Cost Selection (LCS), 43 INDEX 175 Consulting Services Manual Letter of Invitation (LOI), 70­71 personnel, provided by the borrower, 51 design proposals, 153­154 physical contingencies, contract negotiations, 106 limited-liability companies, 6 point system, 65­66 limited partnerships, 6 policies and principles, 9­15 Loan Agreement, 9 poor, 93, 94, 96, 97 logistics, 93 post review, 36 lump-sum contracts, 76­77 preparation services, 2 contract negotiations, 103 preproposal conference, 71 price management, 93 agreement, 78, 80 manager selection, 161 contingencies, contract negotiations, 105­106 methodology, 93 printing, 54 adequacy, 92 prior review, 34­36 contract negotiations, 102 procedures, 15 evaluation, 92­93 procurement agents (PAs), 8 misprocurement, 13 as consultants , 45 mobilization, 54 professional staff Monthly Operational Summary, 14 estimated time, 72 multifunctional consultants, 20, 21n.2 point distribution, 63 qualifications and competence, 61­62, 72­73 national consultants see also staff participation, 39­40 profit, contract negotiations, 104 specialized, 12­13 program success, 28 staff, 98 progress reports, 50­51 use of, 10­11 project nepotism, 111 background, 49 nongovernmental organizations (NGOs), 7­8 services, 2 as consultants, 45 project and construction management services, water no-objection forms supply system contract award, 116 proposal evaluation, 136­139 RFP, 114 worksheets, 139­143 technical evaluation, 115 Project Appraisal Document (PAD), 14 notification to consultants, 86 Project Information Document (PID), 14 office project preparation facility (PPF), 31 cost estimate forms, 130, 131 property, 13 furniture and equipment, 131 proposal rent, 54 evaluation, 35, 81­83, 85­86, 136­147 operator selection guidance notes, 161 preparation, 81, 82 organization, contract negotiations, 102 receipt and opening, 83 organizational arrangements, 51 rejection, 87­88 overhead, contract negotiations, 104 submission, 82 overseas allowance, contract negotiations, 104 publicly held corporation, 6 parallel cofinancing, 33 quality, 37, 39 payment and Cost-Based Selection (QCBS), 40­41 contract negotiations, 105 -Based Selection (QBS), 41­42 schedule, 105 evaluation, 87 percentage contracts, 78 management (QM), 3­4 performing work assignment, 74 plan, 4n.2 176 INDEX Consulting Services Manual rating scale, 92, 97 services, provided by the borrower, 51 staff qualifications and competence, 95­96 shipping, 54 rating system, 89­90, 91 short list, 18, 34­35 readiness assessment, 28 preparation, 68­69 regional trust funds, 32 process, 68 reimbursable funds, 31­32 review and approval, 69 reimbursable expenses simplified technical proposal (STP), 57 contract negotiations, 104­105 criteria, 59­60 cost estimate forms, 129 evaluation, 59­60, 73, 94 rejection, all proposals, 87­88 methodology, 61­62 remuneration rates, 75 points, 59, 65 breakdown, 75n.2 rating system, 89 reports, 50 subcriteria, 73 translation, 54 work plan, 61­62 request for design proposals, 153 see also full technical proposal; technical proposal request for expressions of interest, 18 Single-Source Selection (SSS), 20, 44 request for proposal (RFP), 2, 14, 34­35, 70­75, 89­90, form, 118 justifications, 119 166 social charges, contract negotiations, 104 language, 70 staff no-objection forms, 114 allowances, 54 staff evaluation, 96 billing rates, 103­104 research institutes, 7, 10 contract negotiations, 102, 103­104 resource utilization, 92­93 professional, 61­63, 72­73 responsiveness, 92 qualifications and competence, 95­97 retainer fee contracts, 77­78 remuneration, cost estimate forms, 128 retroactive financing, 31­32 schedule, 74, 124 review standard bidding documents (SBDs), ICT, 166 post, 36 Standard Request for Proposal (SRFP), 70, 73n.1, 75n.1 prior, 34­36 standing offers, 78, 80 statement of integrity, 164 salary, contract negotiations, 104 state-owned consulting organizations, 6­7, 10 sanctions, 22 strategy formulation, guidance notes, 160 satisfactory, 91­92, 93, 96, 97 subcriteria, evaluation, 93, 96, 98 schedules submission date, proposal, 72 staffing, 124 subsidiaries, 12 work, 122 supervising consultants, 107­109 scope of work, 49­50 Bank, 108 Selection Based on Consultant's Qualifications (CQS), borrower, 107 43 supplies, 54 selection surveys, 54 consultant type, 44­46 effectiveness and efficiency, 46 taxes, 54­55, 55n.2, 72 fraud and corruption, 22­23 consulting services, 150 method, 40­44, 79 team leader, point distribution, 63, 64 procedure, 37­40 technical approach, 93 process, 13, 34, 37 contract negotiations, 102 steps, 37, 38 technical assistance loan (TAL), 31 time schedule, 47 technical assistance services, proposal evaluation Selection under a Fixed Budget (FBS), 42­43 agricultural development program, 144­145 self-contained assignments, 51n.1 privatization project, 146­147 INDEX 177 Consulting Services Manual technical disciplines, point distribution, 64 training, 72 technical evaluation consultant contracts, 27­30 no-objection forms, 115 stand-alone, 29 report, 86 transfer of knowledge, 27­30 technical proposal evaluation, 97 design proposals, 155 rating, 97 evaluation, 20 transparency, 39 evaluation criteria, 57­61, 65, 66 travel and transport, 54 evaluation procedure and practices, 83­86, 89­98 Trust Fund Agreement, 14­15 evaluation subcriteria, 63, 65, 66 trust funds, 14, 32 format, 72 Bank activities, 32 full, 56­57 recipient activities, 32 point system, 65­66 twinning agreements, 29­30 professional staff qualifications and competence, 61­62 UN agencies, 7 simplified, 57 as consultants, 44 standard forms, 73­74 understanding the objectives, 92 see also full technical proposal; simplified technical universities, 7, 10 proposal unsatisfactory performance, 108 technology level, 93 utility management contracts, 20­21 Terms of Reference (TOR), 12, 18, 74 design proposals, 155 validity period, 71 developing, 48­51 very good, 91, 92, 93, 94, 96, 98 drafting, 48­49 individual consultant, 110 waivers, 21, 21n.3 outline, 49­51 work plan, 93­94 time-based contracts, 77 adequacy, 92 contract negotiations, 103 contract negotiations, 102 timeliness, 92 evaluation, 92­93 trainers, qualifications, 64 work schedule, 74, 122 178 INDEX The second edition of the Consulting Services Manual provides detailed guidance to borrow- ers, World Bank staff, and consultants on the application of mandatory provisions of the Consultant Guidelines, the Standard Request for Proposal (SRFP), and other policies, and provides advice on the application of professional best practices on non-mandatory aspects of working with the World Bank. In recent years, an extensive harmonization effort has been put forward by the World Bank, the Asian Development Bank, European Development Bank, Inter-American Development Bank (IADB),and African Development Bank,with the aim of providing borrowers and con- sultants with a nearly common set of procedures for the selection of consultants. This edition of the manual takes into account the changes brought about by the 2004 edition of the Consultant Guidelines and the harmonized SRFP, among which were the introduction of the Simplified Technical Proposal for the selection of consultants; the revised policy on conflict of interest and fraud and corruption; the new,easy-to-use technical and financial pro- posal submission forms; and the harmonized versions of the time-based and lump-sum forms of contract. The chief intent of the Consulting Services Manual is to help borrowers make balanced and sensible use of the Consultant Guidelines and of the harmonized SRFP. This should help bor- rowers'obtain the consulting services that best suit their needs.The book will be of great inter- est to borrowers, consultants and consulting firms, members of international and national nongovernmental organizations, and staff at research institutions and federal and regional government agencies. ISBN: 0-8213-6523-1