Introduction Procurement Introduction Procurement of Consultant Servicesof Consultant Services

(based on PPA 2004 and (based on PPA 2004 and Best Practices)Best Practices)

Presented by:

NM Lema

Macrh, 2013

DefinitionsDefinitions ““procurement" means buying, purchasing, renting, procurement" means buying, purchasing, renting,

leasing or otherwise acquiring any goods or works leasing or otherwise acquiring any goods or works or services by a procuring entity and includes all or services by a procuring entity and includes all functions that pertain to the obtaining of any functions that pertain to the obtaining of any goods or works or goods or works or services services including description including description of requirements, selection and invitation of of requirements, selection and invitation of tenderers and preparation and award of contracts; tenderers and preparation and award of contracts;

Services include: Services include: ConsultantConsultant and Non-consultant and Non-consultant Services;Services;

We shall confine this training to procurement of We shall confine this training to procurement of Consultant ServicesConsultant Services Only Only

DefinitionDefinition ““ConsultantConsultant” ” means a company, corporation, means a company, corporation,

organization, partnership or individual person organization, partnership or individual person registered or capable of being registered by registered or capable of being registered by the relevant professional regulatory body the relevant professional regulatory body engaged in or able to be engaged in the engaged in or able to be engaged in the business of providing services in architecture, business of providing services in architecture, economics, engineering, surveying, economics, engineering, surveying, accountancy, auditing, taxation law, accountancy, auditing, taxation law, management or management or any field of professional any field of professional activityactivity including technical assistance, and including technical assistance, and who is according to the context, a potential who is according to the context, a potential party of the party to a contract with a client.party of the party to a contract with a client.

A professionalA professional

A professional is a person engaged in A professional is a person engaged in one of the learned professions;one of the learned professions;

For example, a professional engineer For example, a professional engineer in Tanzania is one registered with in Tanzania is one registered with Engineers Registration Board as Engineers Registration Board as such.such.

Lawyer….Lawyer…. Accountants…Accountants… Teachers…..Teachers…..

Basic PrinciplesBasic Principles The need to obtain the best value for The need to obtain the best value for

money in terms of price, quality and money in terms of price, quality and delivery having regards to set criteria;delivery having regards to set criteria;

Equality of opportunity to all prospective Equality of opportunity to all prospective consultants; andconsultants; and

Fairness of treatment of all parties.Fairness of treatment of all parties. Public procuring entities required by Law Public procuring entities required by Law

to ensure honesty, fairness and openness to ensure honesty, fairness and openness when dealing with bidders.when dealing with bidders.

General PrinciplesGeneral Principles– Equality of Opportunity– Equality of Opportunity

Ensure widest possible Ensure widest possible participation of biddersparticipation of bidders• Publication of tenders in local newspapers Publication of tenders in local newspapers

of wide circulation and other important of wide circulation and other important information media.information media.

• Neutral specificationsNeutral specifications• Specifying selection criteria in Tender Specifying selection criteria in Tender

documents and ensure selected tender documents and ensure selected tender conforms to the selection criteriaconforms to the selection criteria

Need for Employment of ConsultantsNeed for Employment of Consultants No expertise to provide the service No expertise to provide the service

internally within the respective internally within the respective organisationorganisation

Low capacity even if expertise is availableLow capacity even if expertise is available To derive benefit from expertise from To derive benefit from expertise from

outside the Clientoutside the Client’’s organisation (through s organisation (through increased value for moneyincreased value for money

donor conditionalitiesdonor conditionalities

Need for a Consultant?Need for a Consultant?

Specific long term benefits – build Specific long term benefits – build specific internal capacity through specific internal capacity through training;training;

Capacity building of strategic nature Capacity building of strategic nature – build capacity for use to generate – build capacity for use to generate funds funds

IF JUSTIFIED THEN THERE IS NEED IF JUSTIFIED THEN THERE IS NEED FOR ENGAGING A CONSULTANTFOR ENGAGING A CONSULTANT

What should a consultant do- What should a consultant do- Terms of Reference (TOR)Terms of Reference (TOR)

Definition of Definition of Terms of Terms of ReferenceReference::““task description for delivery of the task description for delivery of the project's services e.g. for a project's services e.g. for a consultancy; the set of guidelines consultancy; the set of guidelines prepared by the organisation prepared by the organisation contracting out the work which contracting out the work which establish the aspirations and logisticestablish the aspirations and logisticss””

Preparation of Terms of ReferencePreparation of Terms of Reference• The Client shall be fully responsible for The Client shall be fully responsible for

preparing the TOR for the assignment preparing the TOR for the assignment so that the scope of the services so that the scope of the services described in the TOR shall be described in the TOR shall be compatible with the available budget.compatible with the available budget.

• For any consultancy services to be For any consultancy services to be procured by the Client, the TOR shall procured by the Client, the TOR shall be prepared to inform consultants of be prepared to inform consultants of the the intended scope of workintended scope of work when they when they are invited to submit proposals and are invited to submit proposals and to to define the consultantdefine the consultant’’s servicess services in the in the contract to be negotiated after contract to be negotiated after selection.selection.

How do the Consultants know you How do the Consultants know you that need their services?that need their services?

Advertise and request for Advertise and request for Expression Expression of Interest. (Are they interested?)of Interest. (Are they interested?)

Ask them to inform you of their Ask them to inform you of their eligibilities, capacities and experience eligibilities, capacities and experience for the intended project.for the intended project.

Only those Consultants that are Only those Consultants that are interested will express interests.interested will express interests.

Their Their Expressions of InterestExpressions of Interest will be will be evaluated and a shortlist.evaluated and a shortlist.

Request for ProposalsRequest for Proposals Short-listed consultants are issued with Short-listed consultants are issued with

documents requesting them to submit documents requesting them to submit consultancy proposals – consultancy proposals – Request for Request for Proposals (RFP);Proposals (RFP);

RFPRFP contains the ToR, the conditions for contains the ToR, the conditions for submission, the submission, the time, place and date time, place and date for submissionfor submission, the criteria for , the criteria for evaluation; the format for submission and evaluation; the format for submission and the proposed agreement when selected; the proposed agreement when selected; etc.etc.

RFPRFP will then be evaluated as per criteria.will then be evaluated as per criteria.

There are several methods that can be There are several methods that can be used for selecting a consultant based on:used for selecting a consultant based on:• Technical qualityTechnical quality• Combined technical quality and price Combined technical quality and price

consideration;consideration;• Compatible technical criteria and least Compatible technical criteria and least

cost;cost;• Fixed budgetFixed budget• Consultants qualificationsConsultants qualifications

Available Optional MethodsAvailable Optional Methods for for Selecting ConsultantsSelecting Consultants

Two Envelop ConceptTwo Envelop Concept

Consultants compete mainly on basis Consultants compete mainly on basis of of expertise and competence expertise and competence (quality) rather than price(quality) rather than price..

Proposals for the two are submitted Proposals for the two are submitted separately – two envelops;separately – two envelops;

Consultants are first evaluated on the Consultants are first evaluated on the basis of expertise and then cost.basis of expertise and then cost.

This is to avoid bias on expertise This is to avoid bias on expertise evaluation if one know that price evaluation if one know that price already.already.

Selection based on Technical QualitySelection based on Technical Quality

Two envelops used – technical and Two envelops used – technical and financial proposal.financial proposal.

Best technical proposal invited for Best technical proposal invited for negotiation on price.negotiation on price.

Negotiations should not alter the Negotiations should not alter the quality of intended output. quality of intended output.

Used for highly complex and Used for highly complex and specialised assignments for which specialised assignments for which it is difficult to define the precise it is difficult to define the precise ToR.ToR.

Combined technical quality and costCombined technical quality and cost Consultants submit two envelops – technical Consultants submit two envelops – technical

and financial proposal as per RFP;and financial proposal as per RFP; Technical proposal evaluated as per criteria;Technical proposal evaluated as per criteria; Financial proposals are then opened for tech. Financial proposals are then opened for tech.

proposals that meet minimum requirements;proposals that meet minimum requirements; Lowest cost get highest score;Lowest cost get highest score; Technical and financial scores combined to have Technical and financial scores combined to have

aggregated score.aggregated score. Highest scoring consultant awarded the project. Highest scoring consultant awarded the project. Suitable for slightly complicated projectsSuitable for slightly complicated projects

Compatible technical criteria and Compatible technical criteria and least cost;least cost;

Consultants submit two envelops – technical Consultants submit two envelops – technical and financial proposal as per RFP;and financial proposal as per RFP;

Technical proposal evaluated as per criteria;Technical proposal evaluated as per criteria; Financial proposals are then opened for Financial proposals are then opened for

tech. proposals that meet minimum tech. proposals that meet minimum requirements;requirements;

Lowest cost whose technical proposal is Lowest cost whose technical proposal is above threshold wins.above threshold wins.

Suitable for routine kind of consultancy Suitable for routine kind of consultancy assignment.assignment.

Fixed budgetFixed budget Request for proposal shall have to Request for proposal shall have to

indicate the available budget;indicate the available budget; ToR shall be prepared to ensure that ToR shall be prepared to ensure that

the budget is sufficient;the budget is sufficient; Technical proposal shall be opened Technical proposal shall be opened

first and then financial proposal;first and then financial proposal; Proposal that exceeds the available Proposal that exceeds the available

budget shall be rejected;budget shall be rejected; The Consultant that has the highest The Consultant that has the highest

ranked technical proposal shall be ranked technical proposal shall be invited for negotiation;invited for negotiation;

Used when the assignment is simple Used when the assignment is simple and tasks can be determined and tasks can be determined precisely and budget is fixed.precisely and budget is fixed.

Selection Based on Consultants QualificationSelection Based on Consultants Qualification

ToR to be prepared;ToR to be prepared; Request for Expression of Interest (EOI);Request for Expression of Interest (EOI); Select consultant on the basis of Select consultant on the basis of

experience and competence relevant to experience and competence relevant to the assignment;the assignment;

Prepare a shortlist;Prepare a shortlist; Select consultant with most appropriate Select consultant with most appropriate

qualifications;qualifications; Used for very small assignmentsUsed for very small assignments

Assignment No. 1.Assignment No. 1.

Preparation of Expressions of InterestPreparation of Expressions of Interest