Procurement in Projects Financed by
Islamic Development Bank
Country Procurement Workshop
September 2015, Jakarta, Republic of Indonesia
Project Procurement (PPR) Division
Operations Policy And Services Department (OPSD)
Project Start-up Workshop
03. Selection of Consultant
Selection Methods
Quality and Cost Base Selection (QCBS)
• Big and medium size assignments
• Quality and price factors are combined
• Minimum qualifying technical score is 75 to 80 points.
• The firms obtained highest combined technical and financial score
selected for contract award
• Although the price is factor in overall selection but quality remains
paramount for consideration
Least Cost Selection (LCS)
• Small assignments with standard or routine nature (standard accounting
or financial audit, simple engineering, simple project supervision or
inspection)
• Minimum qualifying technical score is 75 to 80 points.
• If a firm receives technical score below 10% of the highest technical
score, its proposal shall be returned unopened
• Lowest Price selected for contract award
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
3
Selection of Consultant – LCS & QCBS
TOR, cost
estimate
IDB NOL
Financial
Evaluation
IDB NOL
Technical
Evaluation
Report (TER)*
Consultant
Evaluation
Report*
Advertisement
Technical
Evaluation
IDB NOL
Short List,
draft RFP
Proposal
Preparation
(30 days) &
submission
Contract
negotiation
Contract
award
IDB NOL
(Short List,
RFP)
RFP sent to
Short Listed
Consultants
Draft
negotiated
contract*
IDB NOL
LCS: Proposal with
least price wins
QCBS: Highest rank
proposal in Combined
evaluation wins
5 No Objection Letters (NOLs) required
± 6 months after advertisement
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
4
Terms of Reference (TOR)
• Relevant background;
• The scope and objective of the project (description, phases, stages,
downstream work);
• Type of services required;
• Implementation schedule and expected outputs (periodic reports,
documents and end products);
• Training and transfer of technology (scope and nature);
• Method of remuneration for the services;
• Responsibilities of the project parties (Beneficiary, consultant and etc.);
• Appointment terms and conditions.
• For projects of simple or routine nature the TOR can be standard, but
for complex projects the TOR should leave room for the consultants’
creativity
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
5
Preparation of Short List
Expression of Interests
(EOI)
Advertisement – Request of ‘Expression of Interest’
(REOI) – use IsDB standard template
Notifications to embassies, consulates,
local representatives, chamber of commerce,
associations, etc. (for international short list)
EOI is not a ‘proposal’, scoring evaluation is
discouraged, if used – requires extra due diligence
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
6
Preparation of Short List
Short List
Requirement
6 – 8 Consultants
Geographical distribution, not more than two firms from
any one Member Country (international short list)
Association / partnership: joint-venture, sub-consultant
Prepare short list evaluation and recommendation report for Bank’s NOL
Short list cannot be modified without Bank’s prior approval
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
7
Short List Evaluation
First Stage
Second Stage
(not recommended
to use scoring)
(may use scoring)
Pass or Fail
Strengths & Weaknesses
of long-listed firms
Meet minimum
qualification & experience
Short list 6 to 8
best ranked firms
Result in a ‘long-list’
(‘pre-qualified’ firms)
Keep one to two firms
as reserve
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
8
Request for Proposal (RFP)
Simplified version of RFP for Complex Assignment
(Bank’s standard template)
•
•
•
•
•
•
Section 1 - Letter of Invitation
Section 2 - Instruction to Consultants
Section 3 - Technical Proposal - Standard Forms
Section 4 - Financial Proposal - Standard Forms
Section 5 - Terms of Reference
Section 6 - Standard Form of Contract Document
Section 2 & 6 shall not be
changed or revised,
Project Procurement Division, OPSD
Sections 1, 3, 4, 5 shall be
customized as per the
assignment,
Republic of Indonesia, September 2015
9
Request for Proposal
Criteria and range of scores
Main
• Experience
• Methodology and Approach
• Key staffs
Optional
• Transfer of knowledge
• Participation by nationals
Total
• Passing Grade = 70 - 80 points
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
5-10 points
20-50 points
30-60 points
0-10 points
0-10 points
100 points
10
Proposal Submission, Receipt & Opening
Submission
• Depending on the complexity of the assignment the period for
submission shall be between 30-90 days.
• Clarifications to RFP - in writing by facsimile or electronic mail.
• Response letter should be copied to all short listed consultants.
• With prior IDB concurrence deadline for proposals submission can be
extended.
Note: No bid security
Receipt
• Delayed/Late proposals should be returned unopened.
Opening
• Immediate opening of technical proposals
• Financial proposals remain sealed
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
11
Evaluation of Technical Proposal
Steps
Recommend to use rating approach
Provide qualitative assessment to substantiate the scores
Avoid adding sub-criteria not included in RFP
Exercise due diligence
in giving ‘zero’, ‘perfect’ or ‘poor’ scores
Use Standard Technical Evaluation Report
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
12
Inconsistent Scoring
• Scores are often broken down into nominal points
Methodology
Excellent
Good
Satisfactory
Poor
Project Procurement Division, OPSD
50 points
50 points
40 points
30 points
20 points
Republic of Indonesia, September 2015
13
Inconsistent Scoring
• Scores are often broken down into nominal points
Methodology
50 points
Excellent
50 points
Good
40 points
Satisfactory
30 points
60%
Poor
20 points
• A ‘satisfactory’ evaluation normally passes minimum
requirement, hence score allocation should be ≥ passing grade
(70% or 35 points.)
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
14
Inconsistent Scoring
• Key Experts 1
Qualification
Ph.D.
Master
Bachelor
10 points
10 points
5 points
0 points
• TOR requires at least a ‘Master’ degree
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
15
Inconsistent Scoring
• Key Experts 1
Qualification
Ph.D.
Master
Bachelor
10 points
10 points
5 points
0 points
50%
• ‘Master’ degree is allocated 50% (‘not passed’)
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
16
Rating System
• Example 1
Methodology
Excellent
Good
Satisfactory
Poor
Project Procurement Division, OPSD
50 points
100%
90%
70%
40%
Republic of Indonesia, September 2015
17
Rating System
• Example 1
Methodology
Excellent
Good
Satisfactory
Poor
50 points
100%
90%
70%
40%
50 points
45 points
35 points
20 points
• Each evaluator refers to each rating’s definition for scoring and
prepares comment to substantiate the score (to be recorded in
the report).
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
18
Rating System
Define rating for each criteria and sub-criteria and
allocate a percentage of maximum scores
Rating definition corresponds to
requirement in the TOR
‘Satisfactory’ rating
receives ≥ passing grade (e.g. 70%)
Well-defined rating ensures consistency and
enhance technical evaluation process
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
19
Evaluation of Financial Proposal
Steps
Public opening of financial proposal
Arithmetic correction
(none for lump sum contract), exclude tax
Ensure consistency with technical proposal:
correction of quantity or price for missing item
Use Standard Consultant Evaluation Report
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
20
Short List
Typical Issues
Less than 6 firms (low response) or weakly qualified firms
Advertising: lacking, incomplete or unattractive
Weak evaluation criteria → weak or non-qualified firms
Stringent evaluation → precludes strong firms
Quality of short list is critical to the selection process
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
21
Request for Proposal (RFP)
Issues
Vague, incomplete or inconsistent evaluation Criteria
Fail to capture pertinent aspects of the TOR
Poorly defined & formulated
Unsuitable score allocation
Not all criteria included in RFP
Gaps with requirement during short-listing
Weak technical score & reduce firms participation
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
22
Maintaining Competition
Issues
Few Proposals Received
No confirmation from short listed firms
No ‘reserved’ firms
Short list not ‘updated’ despites withdrawal of firms
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
23
Key Success Factors in Selection of Consultant
Short List preparation
and confirmation on participation
Well-defined evaluation and scoring criteria,
and its consistent application
Qualitative assessments and remarks to
substantiate technical scores
Consistency-check between
technical and financial proposals
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
24
Question and Answer
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
25
‫معا ً نبني مستقبال ً أفضل‬
Together we build a better future
Ensemble nous construisons un avenir meilleur
Thank You
Project Procurement Division
Operation Policy and Services Department
www.isdb.org, [email protected]
prepared by Amirmehdi Asghari
Senior Project Procurement Specialist
[email protected]
Project Procurement Division, OPSD
Republic of Indonesia, September 2015
10