Module 10 Session 10.4 Visual 1

Module 10

Organizing Procurement

Session 10.4 Procurement of Services: Use of Consultants and Developing Terms of Reference

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Instructional ObjectivesAt the end of this session, learners will be able to1. Define Terms of Reference (TOR).

2. Determine when it would be appropriate to use consultants.

3. Compare the advantages and disadvantages of using consulting firms with using individual consultants.

4. Given a vignette, identify appropriate sources for consultant expertise.

5. Based on the learner’s experience, describe issues in the use of consultants.

(a) From the client’s perspective

(b) From the consultant’s perspective

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Instructional Objectives (continued)

6. Describe a process for selecting and contracting for consultants.

7. Define the characteristics of a well-crafted TOR.

8. Use a checklist critically to review, and to recommend improvements to, the draft TOR for a specific assignment.

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When To Use Consultants Specialized knowledge or skills needed Need for new ideas and perspectives Cope with peak work loading

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Types of Consultant Services

Policy support studies

Preinvestment studies

Preparation service

Implementation services

Technical assistance

Development and training

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Consultant:

A person or organization that provides advice

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Some Common Types of Consultants

Private partnerships Public companies Government-owned firms Public sector and nonprofit organizations Universities and institutes Law, accounting, and engineering firms Individuals

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Successful Skill Transfer Programs

Bona fide local consultants

Part of a long-term development plan

Reflects correct level of technology

Integrates local personnel

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Successful Skill Transfer Programs (continued)

Appropriate mix of training experiences

Regularly supervised and evaluated by client

Adequately funded

Motivated and experienced consultant staff

Consultant measured on success

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Factors That Condition the Success of Counterpart Relationships

Qualifications and Experience. Are the consultant’s team members and local staff of similar professional level?

Incentives. Are there incentives for local staff and the consultants to enhance participation?

Commitment. Are both parties committed? Monitoring. Performance monitoring should be

based on monthly reports, papers should be prepared by the local staff, and/or some sort of nonthreatening test program should be implemented.

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Factors That Condition the Success of Counterpart Relationships (continued)

Time Available. Is the local staff available part time, normal full time (government working hours), or assignment full time (consultant’s regular working hours plus additional time as the job requires)?

Working hours can be a source of friction, and part time availability (which is of limited use anyway) should be clearly defined.

Work Program. Are the roles of the local staff and the skills transfer program clearly defined?

Assignment Pressure. Is selected local staff able to work under pressure, meeting deadlines and responding to crises, which are typical of consulting assignments?

Assignment Suitability. Are assignments suitable for the specific tasks to be achieved by local staff?

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“Twinning” of Organizations

Match developing country organization with more mature organization for technology transfer.

Benefits Flexible Tailored completely to needs Long-term relationships possible

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Determining Need for Consultants

Start with needs assessment

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Key Questions

What is the exact nature of the identified issues?

What is the urgency of the situation? Has there been any previous experience

with such issues, and what lessons have been learned?

Is there any link with outside activities? Have such issues been addressed by others,

and how were they resolved?

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Key Questions (continued)

Can the assignment be carried out internally?

What are the objectives to be attained? What is the scope of services? To what extent are own staff resources

involved? Who will be supervising the assignment? Is there a need for input from other

agencies?

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Key Questions (continued)

Are there institutional, technical, and financial constraints?

Is phasing required? Is packaging required? Are there management, training, and skills

transfer issues?

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Individual vs. Organization

Individuals

+ Less expensive (less overhead)

(-) More administrative load on client

(-) Need to deal with problems of an individual

Organizations

(-) More expensive (greater overhead)

+ Less administrative load on client

+ Not as dependent on specific individuals

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Selection

Traditionally: use short list and evaluate on quality

New Developments:

Accept cost as well as quality in evaluation

Accept other forms of contract

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Selection Based on Quality or Quality/Cost

1. Prepare Terms of Reference.

2. Prepare cost estimate.

3. Source services (prepare short list).

4. Establish evaluation criteria.

5. Issue Request for Proposal (RFP).

6. Evaluate.

7. Negotiate and award contract.

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Terms of Reference (TOR)

The client’s instructions to the consultant

Criteria for a well-prepared TOR include Detailed Comprehensive Unambiguous

States objective(s) Determines scope

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Drafters of TOR Should Know Scope of the services to be performed Definition of specific outputs Background information Related sector issues Working environment (including seasonal variations, holidays,

and so forth) Project area (should have visited) Borrower (the consultant’s client) Human and environmental aspects Training requirements and skills transfer possibilities

(motivation of borrower staff; capabilities of local consultants) Facilities provided by the borrower Counterpart arrangements Background information (past studies, available)

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Structure of TOR

Background (Introduction or Preamble) Objectives (What: Specific Outputs) Scope (How) Requirements for training and skill transfer Reporting and approval procedures Client’s contribution

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Preparation of Cost Estimate (by Client)

Determine available budgetary resources

Helps invited consultants understand level of effort envisioned

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Nine Cost Categories May Be Considered

Professional and support staff Travel and transport Mobilization and demobilization Living allowances Communications Office expenses Assignment-related surveys The cost of the reports, including printing Contingencies

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Sector Assignment Percent

Infrastructure Feasibility study 0.5 - 3Detailed design 3 - 8Supervision of works 5 - 8

Architecture Architectural design 2 - 4Contract administration 2 - 3

Industry Feasibility study 1 - 3Outline design 1 - 3Detailed design,procurement, supervision 8 - 12

Cost as Percent of Estimated Project Cost

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Sourcing of Services Using a Short List

(Between 3 and 6 firms or individuals)

Developing the Short List Client knowledge/experience Request for expression of interest (Advertising) Professional Associations Other countries/organizations Various lists of firms

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Summary Use consultants when

Need for specialized skill Need for new perspectives Insufficient staff

Types of consultant services Types of consulting organizations Process for selecting and hiring consultants

Needs assessment TOR (objectives and scope) Cost estimate Evaluation criteria Short list RFP Evaluation of proposals Negotiation and award of contract