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Guidelines on the Use of Consultants by Asian Development Bank and Its Borrowers

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Procedures for Selection of Consulting Firms

Introduction

6.01. Except as otherwise provided in these Guidelines, and except as otherwise agreed by the ADB in a particular case, the procedures set forth in the following paragraphs of this Section shall apply in the selection of consulting firms by the ADB or its borrowers. The ADB considers that, in most cases, the general policies and procedures concerning the engagement of consulting firms can best be addressed through competition among qualified shortlisted firms in which the selection is based both on the quality of the proposal and the cost of the services to be provided (quality-and-cost-based selection [QCBS]). QCBS is the ADB’s preferred selection method for consulting firms; however, in some cases, QCBS is not the most appropriate method of selection. For complex or highly specialized assignments, selection is usually based on the quality of the proposal alone and, in such cases, quality-based selection (QBS) may be used. The proposed selection method will be specified in the ADB’s project document and, if it is proposed that QBS be used for selection of consulting firms, adequate justification must be provided.

Terms of Reference

6.02.

1. Before the actual process of selection of a consulting firm starts in each case, the objective and scope of the proposed work and the functions and duties to be assigned to the consultants should be clearly and adequately defined in the "terms of reference". Normally, the terms of reference are supplemented by additional information such as a summary of data, facilities and services which will be provided to the consultants by the borrower in the case of a loan project and by the recipient entity in the case of a technical assistance project.
2. The ADB and the borrower or the ADB and the recipient entity, as the case may be, should collaborate in the preparation of terms of reference and agree thereon in each case.

"Short List" of Consulting Firms

6.03.

1. The selection of a consulting firm for a particular assignment usually begins with the preparation of a reasonably sized list of firms claiming expertise in the field.
2. On the basis of a detailed examination of the experience and capabilities of the firms included in such a preliminary list, a shortlist of firms, to be invited to submit proposals for the assignment, should be prepared. The shortlist should normally consist of 5-7 firms considered to be the most qualified and suitable to receive invitations for proposals, and the firms to be included in such a list should represent the ADB's member countries in a reasonably balanced way without there being any rigid shares.

6.04.When the borrower prepares a shortlist of consulting firms for an ADB-financed project:

1. The borrower may obtain information about qualified firms from associations of consulting firms, diplomatic missions of the ADB's member countries, the borrower's own diplomatic missions, and the ADB. When the ADB provides such information to a borrower, the ADB will not make specific recommendations on the names of consulting firms, which may be included in a shortlist.
2. The borrower should submit to the ADB the names of consulting firms proposed to be included in the shortlist before the invitation for proposals is issued to the short-listed consulting firms, so that the ADB may satisfy itself that the proposed firms are qualified to perform the work and that there is a reasonably wide field of choice of consultants from different member countries. The ADB retains the right to disapprove firms proposed by the borrower, but will refrain from making specific nominations or suggestions unless the task to be performed is of such an unusual character that only a few qualified firms may be found to accomplish it.

6.05.When the ADB itself selects a consulting firm for a technical assistance project, the names of firms to be included in the shortlist will be submitted to the recipient entity for comment and statement of any objections before the invitation for proposals is issued to such firms.

Invitation of Proposals

6.06. After preparing a shortlist of consulting firms pursuant to paragraphs 6.03-6.05 of this section, an invitation will be issued to the shortlisted firms to submit their proposals.

6.07. The invitation for proposals should include the terms of reference (see paragraph 6.02 of this section), a copy of the criteria to be used by the ADB or its borrower to evaluate proposals and any other supplementary information (which may include estimated person-months) concerning the proposed work and the conditions under which the work is to be performed. When the QCBS method is to be used, the invitation will state that the weight for technical quality will be 80 percent, the weight for cost will be 20 percent, and the minimum qualifying evaluated score a technical proposal receives must be 75 percent of the maximum available for technical qualifications.

6.08. The invitation for proposals will clearly indicate the selection method to be used. When QCBS is used, consulting firms are required to submit their technical and financial proposals at the same time but in separate sealed envelopes. When QBS is used, as price will not be used as a selection criterion, firms only submit their technical proposals and the financial terms will be discussed and agreed during contract negotiations with the first-ranked firm.

6.09. The consulting firms should furnish, as a part of their proposals, (i) estimates of the time and person-months required, both in the field and in the home office, to comply with the terms of reference; and (ii) the names and qualifications of personnel to be assigned to the work. Sixty (60) days are normally allowed for preparation and submission of proposals.

Receipt and Evaluation of Proposals

1. For QCBS, the firms are required to submit technical and financial proposals at the same time (see paragraph 6.08). Any proposal received after the closing time for submission of proposals will be returned unopened, and no amendments to the technical or financial proposals will be accepted after the deadline. The envelopes containing the technical proposals will be opened by the consultants selection committee after the closing time for submission of proposals. The financial proposals will remain sealed and safely stored until they are opened publicly. In the case of the ADB, the chairman of the consultants selection committee will be responsible for safe storage of the unopened financial proposals. Any proposal received after the closing time for submission of proposals will be returned unopened.


2. The technical proposals received in a response to the invitation should be carefully analyzed and compared with respect to plans of approach; schedules; experience and capabilities of personnel to be assigned; the quality of supervisory leadership to be furnished; attention to be given by principals of the firm; facilities of the home office; and the assistance, if any, that may be available from others. Familiarity with the language and customs of the country in which the work is to be performed should be given due consideration.


3. The aim in evaluating proposals should be to select the most suitable technical proposal on the basis of technical qualifications to perform the work, rather than the best known or the most experienced firm. Of the various factors, the primary emphasis should be given to the personnel assigned to the work.


4. Under QCBS, after the technical quality is evaluated, firms whose technical proposals did not meet the minimum qualifying score or were considered nonresponsive to the invitation requirements and the terms of reference, will be advised upon completion of the selection process and their financial proposals will be returned unopened. Simultaneously, firms that have secured the minimum qualifying technical score will be advised of the location, date, and time set for opening of financial proposals. Adequate notice will be given to allow interested consultants or their representatives to attend the opening of the financial proposals.


5. The financial proposals submitted under QCBS will be opened publicly in the presence of representatives of the firms that choose to attend. The name of the firms, the technical quality scores, and the proposed prices will be read aloud and recorded when financial proposals are opened.


6. When QCBS is used, the consultants selection committee will then review the financial proposals and any arithmetical or computational errors will be corrected. To compare proposals, the costs will be converted to a single currency using the selling (exchange) rates for the currencies quoted by an official source, (such as the central bank in the country). The invitation will specify the source of the exchange rate to be used. For the purpose of evaluation, “cost” will exclude local taxes, but include all other costs involved in performing the services. The financial proposal with the lowest evaluated cost will be given a financial score of 100 percent and other proposals will be given financial scores that are inversely proportional to their prices.


7. For QCBS, the total score will be obtained by weighting the technical and financial scores and adding them (paragraph 6.07).

Contract Negotiations

1. When QCBS is used, negotiations will include discussions of the terms of reference, the methodology, staffing, and the borrower’s inputs. But these discussions will not substantially alter the terms of reference attached to the invitation. Proposed unit rates for remuneration of nominated experts and other expenses will not be negotiated, since unit rate cost has been a factor in the selection process.

2. When QBS is used, after selection of a firm (or a joint venture of firms) considered to be the best qualified for the assignment has been made, negotiations to agree the financial and other terms of the contract will be opened without delay. In the contract negotiations, it will be possible to take into consideration suggestions made by the selected firm, which frequently result in revisions to the scope of work; in such cases, meaningful negotiation of the financial terms can be started only after agreement has been reached on the scope of work.

3. The representatives of the selected firm who will conduct the negotiations on behalf of the firm must be prepared to discuss its cost estimates and to justify the elements involved, and must have authority to conclude a binding agreement.

4. If it is not possible to reach agreement, negotiations should be terminated with the concurrence of the ADB and opened with the firm next in ranking (and so on, if necessary, until an agreement is concluded).

1. For major contracts for ADB-financed technical assistance projects, for which the ADB itself selects a consulting firm, the representatives of the recipient entity should be invited to participate in the negotiations.

2. When the borrower negotiates a contract with a consulting firm for an ADB-financed project, the ADB will, as stipulated in paragraph 3.02(b), allow its staff to participate and assist in the negotiations, if so requested by the borrower.

Special Selection Procedures

6.13. The application of the general procedures for selection of consulting firms set forth in paragraphs 6.03-6.12 above may be waived by the ADB in exceptional cases if there is adequate justification, such as where only one firm may be invited to submit proposals because of its previous involvement in the same project (see paragraph 5.06) or in a closely related project.

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