Department: Finance
Subject:
Government of West Bengal
Finance Department
Audit Branch
No. 8385-F(Y) Dated: 22.11.2013.
MEMORANDUM
Different departments of the State Government have to often seek services of consultants for the purpose of project planning, feasibility studies, construction supervision/ project management, advisory services, etc. to complement the capabilities available in the Government department or other Government bodies. The existing West Bengal Financial Rules do not prescribe procurement rules for selection and engagement of consultants.
2. It is, therefore, felt necessary to prescribe guidelines for the procurement of services of the Consultants. The undersigned is directed by order of the Governor to issue the Guidelines for selection of Consultants attached as Annexure to this memo.
3. The undersigned is also directed to delegate financial power upto Rs. 10 lakh per consultancy to the Additional Chief Secretary/ Principal Secretary/ Secretary of the Administrative Department for payment of professional service charge/ fee to the Consultant out of fund available under object head of ā28-payment of professional & special services-02-other chargesā subordinate to the functional Major head of the Department.
ANNEXURE to memo no. 8385-F(Y) dt. 22.11.2013
Guidelines for engagement of consultants
CONTENTS
Introduction
Expression of Interest
Selection of Consultants
Other Methods of Selection
Types of Contracts
Important Provisions in RFP/Contract
Selection of Individual Consultants
Annexurer I
Annexure II
Part-1
INTRODUCTION
1.1 Purpose
1.1.1 The purpose of these Guidelines is to define the State Governmentās broad policies and procedures for selection, contracting and monitoring of consultants and other professional services providers financed from the Governmentās resources.
1.1.2 The term consultant(s) includes a wide variety of private and public entities, including Transaction Advisors, consulting firms, engineering firms, management firms, procurement agents, inspection agents, auditors, investment and merchant bankers, universities, research institutions, Government agencies, non Government organizations (NGOs) and individuals/experts. These consultants can be engaged for help in a wide range of activities ā such as policy advice; institutional reforms; management; engineering services; construction supervision/ project management; feasibility studies, financial services; privatization studies and procedures, procurement services; social and environmental studies; identification of projects, preparation of DPR including those related to PPP projects, development of Computer hardware /software services etc. to complement the capabilities of the Government department or other Government authorities ( referred to as āengaging Departmentsā hereafter).
1.2 When and how to engage Consultant
1.2.1 The following main considerations would guide the need for engaging consultants:-
- (a) Absence of required expertise in-house;
- (b) The need for high quality services;
- (c) The need for economy and efficiency;
- (d) The need to have qualified Consultants for providing the specific services;
- (e) The importance of transparency in the selection process;
- (f) The identification of scope of work and the time frame for which services are to be availed of.
1.2.2 Administrative approval and financial sanctions from the competent authority as stipulated in the West Bengal Financial Rules shall be required for engagement of consultants/ professional service providers in any office of the State Government.
1.2.3 Engagement of Officials of the State Government or Retired Officers either in their individual capacity or as a part of a Consultantās team will be guided by the rules and orders of the State Government issued from time to time.
1.3 Applicability of Guidelines
1.3.1 These guidelines are applicable for selection of consultants by any department/ organization of the State Government where the costs of the Project/Assignment are funded by the State Government.
1.3.2 The consulting services to which these Guidelines apply are of an intellectual and advisory nature. These Guidelines do not apply to other types of services in which the physical aspects of the activity predominate (for example, construction of works, manufacture of goods, operation and maintenance of facilities or plant).
1.4 Consortium of Consultants
Consultants may associate with each other to form a consortium to complement their respective areas of expertise, or for other reasons provided the service is of homogeneous discipline. For instance, expertise in technical consultancy assignments should not be combined with financial and/ or legal consultancy and vice versa. Such an association may be for the long term (independent of any particular assignment) or for a specific assignment. The consortium may take the form of a joint venture or of a sub consultancy. In case of a joint venture, all members of the joint venture shall sign the contract and shall be jointly and severally liable for the entire assignment. In case of consortium of consultants one of the partners of the consortium must become the lead member of the consortium and the Engaging Department shall only deal with the lead member for all the purposes. Consultancy proposals with respect to the lead firm only should be evaluated and the lead firm should always be responsible for delivery of services.
1.5 Selection of Consultants
1.5.1 For selection of the consultants, normally, the engaging Department shall adopt two stage procedure. In the first stage, the engaging Department shall identify the likely sources on the basis of formal or informal enquiries and by inviting Expression of Interest (EOI) through advertisement. On the basis of responses received. Consultants meeting the requirement will be short listed for further consideration. In the second stage, the short-listed consultant will be invited to submit (Request for Proposals or RFP) their Technical and Financial Proposals. The consultant shall be selected based on evaluation of their Technical and Financial bids, the details of which are provided in Part 3 of these guidelines.
1.5.2 The selection of consultant shall follow any of the following methods; as considered appropriate:
- Quality and Cost Based Selection (QCBS): Under normal circumstances, thisāmethod of evaluation shall be used.
- Combined Quality Cum Cost Based System (CQCCBS): This method of selection shall be used for highly technical projects where weightage needs to be given to higher technical standards, while finalizing the prices, as per para 3.12 below.
- Quality Based Selection (QBS): This method of selection may be used under the following circumstances:
- (i) the outcome of the assignment will have high impact and hence it is essential to engage most qualified consultant. Examples are national policy formulation; capacity building program etc.
- (ii) the assignment is very complex or highly specialized where it is difficult to define scope of work with accuracy. Examples are country specific study; reforms related studies, high precision scientific work etc.
- Cost Based Selection (CBS): This method of selection may be used for the assignments of following nature: (i) assignment where any experienced consultant can deliver the services without requirement of specific expertise. Examples are traffic surveys, market surveys etc. and (ii) cost of which shall not exceed Rs. Ten lakh.
1.5.3 Selection by direct negotiations: The selection by direct negotiations/nomination is permissible under exceptional circumstance such as (a) for tasks that represent a natural continuation of previous work carried out by the firm, (b) in case of emergency situation, situation arising after natural disasters, situations where timely completion of the assignment is of utmost importance, (c) situations where the execution of assignment may involve use of proprietary techniques or only one consultant has requisite expertise. Such selection may normally be restricted to a financial ceiling of Rs. Five lakh.
1.6 Consultancy Tender Evaluation Committee (CTEC)
For all cases having financial implications of more than Rs. Five lakh, a CTEC comprising of at least three members at appropriate level including Financial Adviser or his representative and also a representative of the user shall be constituted by the engaging Department in order to carry out the consultant selection procedure. The CTEC shall be responsible for all aspects and stages of the consultant selection i.e. issuance of EOI, evaluation of EOI, short-listing of consultants, deciding Terms of Reference, issuance of RFP, evaluation of technical and financial proposals, negotiations and final selection of the consultant. Even in case of selection of consultant by direct negotiations having financial implication of more than Rs. Five lakh, the CTEC shall negotiate with the consultant on technical and financial aspects. [Note: Separate committees may be constituted for separate assignments.]
1.7 Forms of Contracts
1.7.1 Various forms of the contracts may be entered into by the Engaging Department with the consultant depending upon the nature of the assignment. Following are various forms of contracts:
- (i) Lump sum contract;
- (ii) Time based contracts;
- (iii) Success fee based contract;
- (iv) Percentage contract;
- (v) Indefinite delivery contract.
1.7.2 The lump sum contract is the preferred form of contract and under normal circumstances, the engaging Department shall use this form of contract. The other forms of contract shall only be used under special circumstances, as specified in Part 5 of these guidelines.
Part-2
Expression of Interest
2.1 Invitation of Expression of Interest
2.1.1. Where the estimated cost of work or service is upto Rs.5 lakhs preparation of long list of potential consultants may be done on the basis of formal or informal enquiries from other Departments or organizations involved in similar activities, Chambers of Commerce and Industry, Association of Consultancy Firms, etc.
2.1.2. In addition to 2.1.1 above, where the estimated cost of the work or service is above Rs. 5 lakhs but below Rs. 10 lakh, except in cases of nomination or where direct negotiation is carried out as per provisions in West Bengal Financial Rules, an advertisement called āinvitation for Expression of Interestā (EOI) shall be released in at least one widely circulated English language daily newspaper and one vernacular language leading daily newspaper; for those of or above Rs. 10 lakh an advertisement called āinvitation for Expression of Interestā (EOI) shall be released in at least one English language National Newspaper. Simultaneously the advertisement shall be posted in the Departmentās website for preparing the short list. Attention of known reputed consultants may also be separately drawn wherever possible. Advertisement in newspapers shall be brief and give reference to departmental website. The advertisement must include, besides the broad scope of work or service, inputs to be provided by the Department, eligibility and the pre-qualification criteria to be met by the consultants and consultantās past experience in similar work or service, the last date of submission of EOI, how to get copy of EOI document, contact information of the engaging Department with name of contact person etc. Adequate time should be allowed for getting responses from interested consultants.
2.2 EOI Document
2.2.1 The Engaging Department shall prepare an EOI document. The EOI document shall contain following information:
- (i) Invitation to EOI: It shall include a copy of the advertisement whereby consultants are invited to submit their EOI.
- (ii) Brief about objectives and scope of work: This may include brief description about objective of carrying out the assignment, broad scope of work and expected deliverables of the assignment. This may also include the place of execution of the assignment.
- (iii) Instructions to the Consultants: It may include instructions regarding nature of job, inputs, if any, to be provided by the Department, submission requirement; requirement of bid processing fees; if any; last date of submission; place of submission; and any related instruction;
- (iv) Pre-qualification Criteria; this may clearly lay down the prequalification criteria which shall be applied by the engaging Department including consultantās past experience in similar work or service, for short listing the consultants.
- (v) Formats for submission. This section shall specify the format in which the consultants are expected to submit their EOI.
2.2.2 The engaging Department shall make available the copies of the EOI document to the interested consultants in hard copies as well as on its web site.
2.3 Short List of Consultants
2.3.1 The Engaging Department shall evaluate the consultants for short listing, inter-alia, based on their past experience of handing similar types of projects, strength of their man power and financial strength of the firm.
2.3.2 The engaging Department may assign scores to the response of each consultant based on weightages assigned to each of the criteria in EOI. Normally, the following weightages may be used for such evaluation:
| Serial no. | Criteria | Weightage |
|---|---|---|
| 1. | Past experience of the firm Number of years experience Past experience of studies/job of similar nature Past experience in carrying out studies/job in related sectors Studies/job carried out in West Bengal | 60% 20% 50% 20% 10% |
| 2. | Experience of Key personnel. | 25% Qualifications 30% Relevant experience 70% |
| 3. | Financial strength of the consultant. | 15% Turnover figure for last three years. 50% Net profit figure for last three years 50% |
2.3.3 The Engaging Department shall short list all the consultants who secure the minimum required marks [normally 50%]. The minimum qualifying requirement shall be specified in the EOI document.
2.3.4 Alternatively, the engaging Department may specify in the EOI document minimum qualifying requirement for each of the criteria i.e. minimum years of experience, minimum number of assignments executed, minimum turnover etc. Under such circumstances, the engaging Department shall apply pass-fail test and short list all the consultants who meet the minimum requirement as specified.
2.3.5 The short lists shall normally comprise at least three firms.
2.4 Cost Based Selection
2.4.1 For small assignments, where the engaging Department decides to select the consultant based on CBS method, the consultant shall be selected following single stage bidding procedure. Under single stage bidding procedure, the engaging Department shall invite financial proposals along with the EOI in two separate envelopes.
2.4.2 The financial proposals of all the consultants who have been short listed, as per clause 2.3 above, shall be opened in the presence of the short listed consultants who choose to remain present. The consultant, who has submitted the lowest financial bid, shall be selected as the L1 and shall be called for further negotiations.
Part-3
SELECTION OF CONSULTANTS
3.1 Once the short listing of consultants is completed, the engaging Department shall start the process of final selection of the consultant. The selection process generally includes the following steps:
- (a) preparation of Terms of Reference (TOR);
- (b) preparation of cost estimate and the budget;
- (c) preparation and issuance of the Request for Proposals (RFP);
- (d) pre-bid meeting;
- (e) receipt of proposals;
- (f) evaluation of technical proposals: consideration of quality;
- (g) public opening of financial proposals;
- (h) evaluation of financial proposal;
- (i) selection of the winning proposal;
- (j) negotiations with the selected consultant, if required
- (k) award of the contract to the selected firm.
3.2 Terms of reference
The Engaging Department shall be responsible for preparing the TOR for the assignment. TOR shall be prepared by those who have sufficient knowledge and experience in the area of the assignment. If the required experience is not available in-house, the task of preparation of the TOR can also be assigned to experienced consultants. The TOR shall include:
- i) Purpose/ objective of the assignment;
- ii) Detailed scope of work;
- iii) Expected input of key professionals (number of experts, kind of expertise required);
- iv) Proposed schedule for completing the assignment;
- v) Reports/deliverables required from the consultant.
- vi) Background material, records of previous surveys etc. available and to be provided to the consultant
- vii) Facilities such as local conveyance, office space, secretarial assistance etc., which can be provided to the consultant
- viii) Procedure for review of the work of consultant after award of contract.
The scope of the services described in the TOR shall be compatible with the available budget. TOR shall define clearly the objectives, goals, and scope of the assignment and provide background information (including a list of existing relevant studies and basic data) to facilitate the consultantsā preparation of their proposals. If transfer of knowledge or training is also an objective, it should be specifically outlined along with details of number of staff to be trained, and so forth, to enable consultants to estimate the required resources. TOR shall list the services and surveys necessary to cany out the assignment and the expected outputs (for example, reports, data, maps, surveys). However, TOR should not be too detailed and inflexible, so that competing consultants may propose their own methodology and staffing. Firms shall be encouraged to comment on the TOR in their proposals. The engaging Departmentās and consultantsā respective responsibilities should be clearly defined in the TOR.
3.3 Cost Estimate (Budget)
Preparation of a well-thought-through cost estimate is essential if realistic budgetary resources are to be earmarked. The cost estimate shall be based on the engaging Departmentās assessment of the resources needed to cany out the assignment: staff time, logistical support, and physical inputs (for example, vehicles, laboratory equipment). Costs shall be divided into two broad categories:
- (a) fee or remuneration (according to the type of contract used) and
- (b) reimbursable, and further divided into foreign (if applicable) and local currency payments.
The cost of staff time shall be estimated on a realistic basis for the personnel, as applicable, by ascertaining the prevalent market conditions and consulting other organizations engaged in similar activities.
3.4 Preparation and Issuance of the Request for Proposals (RFP)
3.4.1 Request For Proposal (RFP) is the bidding document in which the technical and financial proposals from the consultants are obtained. It contains the following:
- (i) A letter of invitation (LOI)
- (ii) Instructions to consultants (ITC)
- (iii) Terms of Reference (TOR)
- (iv) List of key positions/ professionals required for the assignment
- (v) Requirement of qualification and experience of the firm and of the key professional staff
- (vi) Criteria of bid evaluation and selection procedure
- (vii) Standard formats for technical proposal
- (viii) Standard formats for financial proposal
- (ix) Proposed form of contract.
The engaging Department shall use the applicable standard RFP with minimal changes as necessary to address project-specific issues. The engaging Department may use an electronic system to distribute the RFP. If the RFP is distributed electronically, the electronic system shall be secured to avoid modifications to the RFP and shall not restrict the access of short listed consultants to the RFP. The RFP will be sent only to the short listed consultants.
3.4.2 Letter of Invitation (L
Sd/- H.K. Dwivedi
Principal Secretary to the
Government of West Bengal