PROCUREMENT OF CONSULTANCY SERVICES
Terms of reference.
This is a document that defines all aspects of how the consultant or a team will conduct an evaluation. It contains the background, objectives and purpose of the proposal. It is also referred to as the scope of work or mandate.
The terms of reference prepared by a procuring entity sets out—
a. the background including the reasons necessitating the procurement;
b. the objects to be achieved by the procurement;
c. the output and deliverables expected from the person to be awarded the tender;
d. the qualifications necessary for a person to be awarded the tender;
e. duration of the assignment; and
f. any other relevant information as may be required in the tender document.
Preparation of terms of reference
Most organizations have standard rules in place for designing and publicizing consulting opportunities and requesting qualifications or proposals from consultants. The specific steps for developing the ToR for a consultation will vary according to this context. Recommended actions that mark common decision points for preparing ToR across all types of organizations fall broadly into two categories: those that should be completed before the writing of the ToR even begins and those that should occur during the writing and review stage. The planning stage comprises the following elements.
1. Establish the need and purpose for the evaluation.
Before drafting the ToR, the consultancy firm manager needs to first understand the skill or investment to be evaluated, including its social and economic context. This orientation will help the manager to better identify the objective(s) of the evaluation.
If the intent or potential value of the designated exercise is not clear or if there are no data sources to support a reliable impartial evaluation process, then plans for this assignment should be reconsidered before drafting the terms of reference.
In addition, a critical part of this early planning step will be to broadly consider the type of evaluation needed to effectively achieve the targeted objectives within the desired timeline. The scope, design, and methodology of evaluations span a broad spectrum and have direct implications for the level of effort in terms of the tasks required and the length of engagement
2. Identify and engage stakeholders.
Parties with a vested interest in the evaluation and contracting process should be engaged throughout the process of developing the ToR; therefore, it is important to identify relevant stakeholders and their roles early on. The list of stakeholders and their points of entry into the process will vary based on the organization and the nature of the study, but likely categories for inclusion are the following:
a. The lead evaluation advisor or unit in the contracting organization
b. Technical staff engaged with the project or program in focus
b. Specialized staff responsible for contracting, procurement, or accounting arrangements
c. Partners for the project or program
d. Any advisory council or steering committee established for either the project or the evaluation itself.
Once these stakeholders and their roles have been determined, they can be engaged at the appropriate points in the ToR development process for contributions to content and quality assurance.
It may be the case that the unit that commissions the evaluation is independent of the administrative unit under which the program is implemented. In this case, the independent unit may retain the right to the final shape and content of the ToR. Nonetheless, in order to commission a fair, valid, and useful evaluation, it is good practice to confer with the administrative unit early on.
3. Estimate resources available or needed for the evaluation.
The process and flexibility for establishing a budget will depend on an organization’s or partnership’s resources and practices. Understanding the opportunities and constraints provided by the available budget will be important for thinking through the scope and timeline of the evaluation and identifying who should be involved. Evaluation contracts range from short-term assignments for individual consultants costing under ksh100,000, to much more complicated large scale and/or long-term studies implemented by teams for ksh900,000 or more.
The ToR does not necessarily identify the specific budget for consultants, but this area still needs to be explored and clarified as part of the decision-making process.
4. Determine whether an internal or external evaluation consultant or team is needed. Both internal and external evaluations are legitimate and each approach has advantages. Developers of the ToR should decide whether the evaluation scope of work is best suited for an individual or a team and whether the study will be conducted internally, externally, or by a mixed team. Common configurations for leading or contributing to an evaluation include:
a. An individual consultant
b. A consulting team, situated at a firm or in an academic environment, either in-country or external
c. A team comprised of individual consultants, managed by the commissioner of the evaluation.
The ideal scenario for who should conduct the evaluation will vary according to organizational capacity, budget, the purpose of the evaluation, and the demands of stakeholders. However, certain considerations help inform this decision:
a. A smaller budget might be required if the evaluation can be conducted by in-house staff, assuming that available staff time and expertise is sufficient for the tasks.
b. Evaluations conducted solely by in-house staff could be seen as less objective by funders and other stakeholders, especially if these staff have a vested interest in the program being evaluated.
c. Hiring an outside consultant (individual or team) allows the commissioner of the evaluation to carefully select the best mix of expertise and experience for the assignment.
A team is preferred in cases where:
a. An intensive level of effort is needed under a tight timeline.
b. A diverse mix of qualifications is needed for various aspects of the study – such as survey design, statistical data analysis, interview skills, focus groups, and so forth.
c. Any risks for delaying study components due to unforeseen circumstances need to be mitigated.
Selecting individual consultants to form the needed team allows the agency managing the evaluation to establish the best mix of qualifications and experience, but it also requires more coordination and management from the commissioning agency. Typically, when individual consultants are used, the commissioning unit takes on the role of putting the various inputs from the individual consultants together to produce a final product.
Using a predetermined team through a firm could better ensure that the consultants will collaborate effectively and integrate their efforts. However, there will also be a cost (overhead, profits) imposed by this firm for management of the team.
Advantages of terms of reference
1. It defines the scope, approach, and methodology. ToRs typically specify the scope of the consultation (time period, depth, etc.), but vary in terms of how much flexibility consultants have to propose their own methodologies or approaches to complete the designated tasks. However, at least the expected broad approach is outlined clearly in the ToR to set realistic expectations among all relevant parties engaged in the study. The degree to which the consultant(s) can propose additional or alternative methods for completing the task(s) should also be specified.
2. It articulates the governance and accountability arrangements. This section highlights the governance and accountability arrangements. The ToR document can be crafted for an individual consultant or for a team. Various stakeholders will be engaged to facilitate or participate in the work, and parallel related tasks conducted by other consultants might be in progress. The ToR outlines the roles and responsibilities envisioned to carry out the assignment and the management and coordination arrangements. The hierarchy for accountability and the structure and resources established for support is also explicitly stated in this section.
3. It sets the guiding principles or values. A ToR specifies research ethics or procedures that the consultant (s) is expected to follow.
4. It identifies the professional qualifications of the individual evaluator or team. ToRs present the expected profile of the evaluation team. This includes describing desired experience and credentials, as well as noting the minimum professional requirements or competencies.
5. It defines the deliverables and schedule. The ToR specifies the expected deliverables, timeline, and any work plan if available. The ToR may ask the consultant to provide a detailed timeline and milestones within the timeline specified. ToRs list any products that the consultants should develop as part of their assignment. To the degree possible, this list includes details related to format, content, length, intended audience, and the expected review process.
6. It defines the budget. The ToR states the budget (and potentially other resources) available for the evaluation and what that budget covers.
Expression of interest.
A process used to shortlist potential supplier, contractors or service providers before then seeking detailed bids from the shortlisted tenders
It is generally used when the information required from the tenders is specific and the procuring entity is unsure of the capability of suppliers to provide the required goods or services.
Notice inviting expressions of interest
The accounting officer of a procuring entity may prepare a notice inviting interested persons to submit expressions of interest.
The notice inviting expression of interest prepared by a procuring entity gives a minimum period of 7 days for tenderers to submit the expression of interest.
The Accounting Officer of a procuring entity advertises the notice inviting the expression of interest in the dedicated government advertising tender portal or in at least one daily newspapers of nationwide circulation.
The notice inviting expressions of interest sets out the following—
a. the name and address of the procuring entity;
b. a brief description of the consultancy services being procured and, if applicable, the goods being procured;
c. eligibility and the qualifications necessary to be invited to submit a proposal; and
d. an explanation of where and when expressions of interest is to be submitted.
In regard to county-specific procurements, the accounting officer of a procuring entity advertises the notice inviting expressions of interest in the dedicated government’s advertising tenders portal, its own website, or in at least one daily newspaper of county-wide circulation. A county government and its entities advertises expression of interest for county-specific procurements on its notice boards located in conspicuous public areas.
The opening of expression of interest is carried out in accordance with the tender opening proceedings.
Selection methods for consultants:
i. Quality and cost-based selection (QCBS).
The procuring entity selects the quality and cost-based selection method as the preferred method to be used in evaluating proposals. The selection procedure is stated in the request for proposal. This implies that the proposal is judged on its quality and pricing (quality-price oriented)
This method uses a competitive process in the selection of the successful firm or consultant. The request for proposal, requests submission of both technical and financial proposal at the same time but in separate envelopes. Technical bids are evaluated without accessing the financial bids to determine quality.
Only bids which have attained the minimum technical score proceed to the opening of the financial bid. The bidder obtaining the highest combined score based on the formulae provided in the request for proposal document is recommended for the award of the contract. The evaluation criteria in the request for proposal may include the following:
a. specific experience;
b. methodology proposed including key deliverables;
c. key personnel;
d. transfer of knowledge; and
e. participation of nationals.
Procedure for quality and cost-based selection method.
a. both the quality and the cost of bids are taken into account in a process under which technical bids are evaluated without accessing the financial bids; and
b. the relative weight to be given to the quality and cost components of the evaluation depends on the nature of the assignment and is stated in the request for proposals.
Evaluation under Quality and Cost Based Selection
A bid submitted under the Quality and Cost Based Selection (QCBS) method is submitted under the two envelopes submission method and evaluated to determine the—
a. quality, with regard to a technical bid, in accordance with—
i. an evaluation against set criteria on a merit point system to determine the total technical score for the technical bid received; and
ii. the total scores determined compared to the minimum technical score;
b. only bids which have attained the minimum technical score proceed to the opening of the financial bid which is conducted as follows—
i. the bidders who attained the minimum technical score are invited to attend the opening of the financial bids;
ii. during the opening of the financial bids, the procuring entity reads out the technical score to all bidders who attained the minimum technical scores;
iii. an evaluation is done against a set criteria on a merit point system to determine the total financial score for the financial bid; and
iv. the total scores determined compared to the minimum financial score;
c. total weighted cost score, with regard to a financial bid, where the bidder attained the minimum technical score; and
d. bidder obtaining the highest combined score based on the formula provided in the request for proposal document, is recommended for the award of contract.
ii. Quality based selection (QBS)
It is an evaluation method that uses quality as the primary factor in a process under which technical bids are evaluated without accessing the financial bids and a financial evaluation is undertaken only for the best technical bid.
This method is used for:
a. complex or highly specialized assignments for which it is difficult to define precise terms of reference and the required input from the consultants;
b. assignments that have a high downstream impact and in which the objective is to have the best experts;
c. assignments that can be carried out in substantially different ways;
d. assignments and professional services which are regulated by Acts of Parliament which stipulate fees and charges applicable for such assignments.
Procedure for Quality Based Selection (QBS) evaluation method.
A Quality Based Selection (QBS) method is conducted as follows—
a. a technical evaluation is conducted against the set criteria on a merit point system to determine the best technical bid without accessing the financial bids;
b. the quality of a bid is the primary factor to be considered; and
c. the bid with the highest technical score takes priority in the first instance.
The procedure for the Quality Based Selection (QBS) method of a technical bid is conducted in three stages.
Preliminary examination
The preliminary examination is done following the opening of a technical bid to determine whether a bidder has qualified on the basis of having passed or failed the selection for the bid and the responsiveness of bids to the terms of the bidding document.
A bid that fails to qualify or that is found to be nonresponsive to the terms of the bidding document is eliminated from further evaluation.
Technical evaluation
The technical evaluation criteria is then be used to—
a. evaluate each technical bid against the technical evaluation criteria; and
b. the same method of technical evaluation as that utilized for the Quality and Cost Based Selection (QCBS) method.
The evaluation committee prepares a technical evaluation report of the technical bids received which—
a. substantiates the results of the evaluation;
b. describes the relative strengths and weaknesses of the bids; and
c. indicates which bid is recommended to proceed to the financial evaluation.
Financial evaluation
A financial evaluation is conducted of the bidder—
a. who submitted the best evaluated technical bid being invited to submit a financial bid where only technical bids were submitted; or
b. of the financial bid of the bidder who submitted the best evaluated technical bid where both technical and financial bids were submitted under the dual envelope method.
The financial bid is negotiated by the procuring entity in accordance with the provisions of the Regulations
iii. Least cost selection (LCS)
It is used for selecting consultants for assignments of a standard or routine nature where well- established practices and standards exist.
Procedure for evaluation of least cost selection.
A procuring entity may use a least cost selection method to identify the lowest priced bid which meets all the commercial and technical requirements. It is preferred for assignment of a standard or routine nature where well established practices and standards exist.
The least cost selection method requires the use of separate sealed envelopes for submission of technical and financial bids.
The procedure for the least cost selection method evaluation of a technical bid is conducted in three stages.
Preliminary evaluation
A preliminary examination is conducted to determine—
a. whether a bidder has qualified, on the basis of having passed or failed the selection for the bid; and
b. the responsiveness of bids to the terms of the bidding document.
A bid that fails to qualify or that is found to be nonresponsive to the terms of the bidding document is rejected.
Technical evaluation
A technical evaluation of a bid is conducted—
a. to evaluate each technical bid against the technical evaluation criteria; and
b. following the same method of evaluation as that utilized for the Quality and Cost Based Selection.
A bidder who does not secure the minimum qualifying score is rejected.
The evaluation committee prepares a technical evaluation report prior to the financial evaluation.
Bidders who have secured the minimum qualifying mark are notified of the date and time set for the opening of the financial bids.
Financial evaluation
The opening date of the financial bids is as specified in the request for proposal documents. Financial bids are opened publicly, and at the public opening, there are publicly read out the—
a. name of the bidder;
b. technical score; and
c. bid price.
A financial evaluation is conducted by reviewing the conversion of bids to a single currency as stated in the invitation to bid.
For the purposes of evaluation, cost includes local taxes, and other reimbursable expenses such as travel, translation, printing of the report or secretarial expenses, where applicable.
Subject to any negotiations that may need to be held, the bidder who has submitted the lowest financial bid and meets minimum technical score is recommended for the award of contract. Negotiations are carried out in accordance with the provisions of the Regulations.
The evaluation committee prepares an evaluation report for submission to the accounting officer through the head of procurement function and it is accompanied by the professional opinion.
iv. Single source selection (SSS)
This is where the contract is negotiated with a single consultancy. It is not a preferred technique because of its uncompetitive nature. The services are from a single source. It is only applicable if it presents a clear advantage over competition.
In using the Single Source Selection (SSS) method, a procuring entity first prepares the justification for use of the method in the context of—
a. ensuring economy and efficiency;
b. natural continuation of previous assignments where continuity of technical services is required;
c. cases of urgency;
d. clear advantage over competition;
e. qualification, experience and exceptional worth of the consultant.
The decision to use the single source selection method is approved in writing by the accounting officer on recommendation by the head of the user department and the head of the procurement function and submit to the PPRA for approval.
A procuring entity prepares the terms of reference.
A procuring entity places an advertisement of the intention to single source in its website and invite anyone who wishes to bid within a minimum period of three (3) days and anyone who wishes to bid and in the event that there is a response to the advert then all interested suppliers are invited to submit proposals.
The terms of reference prepared are incorporated in standard document for request for proposal document and issued to the selected consultant with a request to submit a technical and financial proposal to the procuring entity.
A procuring entity, upon receipt of the technical and financial proposals, evaluates the proposals and submit recommendations for award to the accounting officer through the head of procurement function.
The head of procurement function submits the evaluation report to the accounting officer together with the professional opinion for award.
Upon approval by the accounting officer, the head of procurement function notifies the consultant of the award.
It is appropriate in the following cases, and only if it presents a clear advantage over competition—
a. where it can be evidenced that goods, works or services are available only from a particular supplier, or a particular supplier has exclusive rights in respect of the consultancy services, and no reasonable alternative or substitute exists; or
b. for tasks that represent a natural continuation of previous work carried out by the firm;
c. in exceptional cases, such as, but not limited to, in response to natural disasters and for a declared national emergency situation.
v. Consultants’ qualification selection (CQS)
This is a procurement process established and further developed as a process for public entities to use for the selection of architectural and engineering services for public construction projects.
It is a competitive contract procurement process whereby various constructing firms submit qualifications to a procuring entity who evaluates and selects the most qualified firm and then negotiates the project scope of work, schedule and consultant’s fee.
Under CQS, the cost of the work is not considered when making the initial selection for the best or most appropriate provider of the professional services required.
Fees for the services will be negotiated however, following selection and before contracting. Consultation qualification selection method is used for small assignments of which the need for preparing and evaluating competitive bids is not justified.
Procedure for consultants’ qualification selection method.
The procuring entity, for the purpose of soliciting bidders under the qualification selection method:—
a. follows a two-stage process;
b. prepares the terms of reference;
c. requests bidders to supply expressions of interest and information concerning their experience and competence relevant to the assignment; and
d. establishes a short-list.
The procedure to be followed for the qualification selection evaluation method is conducted in two stages.
Stage one
The procuring entity—
a. evaluates the expressions of interest together and with any supporting information; and
b. selects a bidder with the most appropriate qualifications and references, to whom the contract is to be awarded.
The evaluation committee—
a. prepares a technical evaluation report of the expressions of interest received; and
b. submits the technical evaluation report to the accounting officer for his or her approval through the head of the procurement function, which is accompanied by the professional opinion.
The procuring entity does not proceed to Stage Two of the evaluation procedure before obtaining the approval of the accounting officer.
The procuring entity requests the successful bidder to negotiate the terms of the contract for the provision of the services.
Stage two
1. The accounting officer of a procurement entity may delegate negotiations to the evaluation committee appointed for the subject procurement.
2. Negotiations will take place only after the accounting officer approves the successful proposal and has notified the successful; and unsuccessful bidders.
3. Entering into a contract will be subject to successful negotiation.
4. The evaluation committee conducting negotiation prepares a report negotiation and submit to the head of the procurement function for onward submission to the accounting officer.
The negotiation report is accompanied by a professional opinion by the head of the procurement for forwarding to the accounting officer for decision making and approval.
The report and professional opinion forms part of the progress for procurement proceedings.
vi. Individual consultants’ selection (ICS)
Individual Consultants are selected on the basis of their qualifications and experience for the assignment. They may be selected on the basis of references, or through a comparison of capabilities among those expressing interest in the assignment or approached directly by the procuring entity.
The choice on how consultant is selected depends on duration of assignment. However, details on how the assignment will be carried out are stated in the Request for Proposal which comprises of Terms of Reference.
In response to the RFP, consultants are requested to submit detailed/ updated CVs and Financial Proposal that means is combined submission in separate envelopes. In regard to understanding the ToR, consultants are requested to make comments on the ToR of the assignment if any.
Individual consultant selection method may be used for an assignment for which—
a. a team of experts is not required;
b. no additional outside professional support is required;
c. the experience and qualifications of the individual are the predominant considerations; or
d. coordination, administration or collective responsibility between individuals is required.
Procedure for individual consultant selection.
The individual consultant may be procured using any one of the following approaches—
a. open advertisement by request for expression of interest; or
b. request for applications from the list of registered consultants in the relevant category within ceilings specified in the threshold matrix.
A procuring entity: –
a. prepares terms of reference setting out the objectives, scope of work, level of effort, evaluation criteria, scoring points and minimum technical score required to pass; and
b. estimates the cost of the consultancy based on the terms of reference and market rates. Where open advertisement for request of expression of interest is done, individual consultants are required to submit their applications with curriculum vitae, and other relevant testimonials, including professional and academic certificates.
Where a register of consultants under is used, an invitation is issued to at least five consultants. All submitted applications are opened in the presence of applicants or their representatives who choose to attend.
The evaluation committee uses the specified evaluation criteria in the bid document or invitation notice and terms of reference to evaluate and score each of the applications and rank each application according to technical scores.
The consultants that fail to attain the minimum technical score or have conflict of interest regarding the subject consultancy and other related assignments are disqualified from further consideration.
The evaluation committee prepares an evaluation report and submit it to the head of procurement for the professional opinion before submission to the accounting officer.
The first ranked individual consultant with the highest technical score is recommended for award of contract.
The head of procurement function prepares a draft contract setting out the proposed fees, terms and conditions of contract using the standard template issued by the PPRA.
After approval of the recommendation for award by the accounting officer, the first ranked individual consultant is invited to negotiate the fees, reimbursable expenses and contract terms
with the evaluation committee and where negotiation fail, the second ranked individual is invited to negotiate the contract.
A procuring entity issues the successful consultant with the notification of award and at the same time notify the unsuccessful applicant of their results.
vii. Fixed Budget Selection
It indicates the available budget in the tender document. The consultants are requested to provide their best possible technical and financial proposals in separate envelopes within the budget.
This method is appropriate only when the assignment is simple and can be precisely defined and when the budget is fixed.
The bidder with the evaluated technical bid of the highest quality which is within the stated budget is recommended for the award of the contract.
Proposals under Fixed Budget selection method that exceed the indicated budget are rejected and the consultant who has submitted the highest ranked technical proposal among the rest is selected and invited to negotiate a contract.
Procedure for evaluation of fixed budget selection.
a. the procuring entity indicates its available budget in the tender document, and evaluation is considered as follows—
i. a bidder is required to provide, within the stated budget, the best possible technical and financial bids, in separate envelopes; and
ii. the bidder with the evaluated technical bid of the highest quality, which is within the stated budget, is recommended for the award of the contract.
b. the schedule of requirements or the terms of reference prepared by the procuring entity contains all the necessary detail to portray the sufficiency of the budget for the performance, by a bidder, of the expected tasks as will be contained in the contract;
The procedure for the fixed budget selection evaluation method of a technical and financial bid is conducted in three stages.
Preliminary evaluation
Following the opening of a technical bid, a preliminary examination is conducted to determine—
a. whether a bidder has qualified on the basis of having passed or failed the selection for the bid; and
b. the responsiveness of bids to the terms of the bidding document.
A bid that fails to qualify or that is found to be nonresponsive to the terms of the bidding document is rejected.
Technical evaluation
A technical evaluation of a bid is conducted—
a. to evaluate each technical bid against the technical evaluation criteria; and
b. following the same method of evaluation as that utilized for the Quality and Cost Based Selection method.
An evaluation committee prepares a technical evaluation report of the technical bids received which—
a. substantiates the results of the evaluation;
b. describes the relative strengths and weaknesses of the bids; and
c. indicates which bid is recommended to proceed to the financial evaluation.
The evaluation committee prepares a technical evaluation report prior to the commencement of a financial evaluation.
Financial evaluation
Bidders that have qualified on the technical criteria are notified of the date and time set for the opening of the financial bids and financial bids are opened publicly and at the public opening the following is publicly read out the—
a. name of the bidder;
b. technical score; and
c. bid price.
A financial evaluation is conducted and any bid that exceeds the budget is rejected.
Subject to any negotiations that may need to be held, the bidder who has submitted the highest ranked technical proposal, of bids submitted within the budget, is recommended for the award of contract.
Negotiations is carried out in accordance with the provisions of the Regulations.
The evaluation committee prepares an evaluation report for submission to the accounting officer through the head of procurement function and is accompanied by the professional opinion.
Competitive Negotiations.
A procuring entity may conduct competitive negotiations as prescribed where:
a. there is a tie in the lowest evaluated price by two or more tenderers;
b. there is a tie in highest combined score points;
c. the lowest evaluated price is in excess of available budget; or
d. there is an urgent need that can be met by several known suppliers. The procuring entity:
a. identifies the tenderers affected by tie;
b. identifies the tenderers that quoted prices above available budget; or
c. identifies the known suppliers as prescribed.
Where the tenderers that quoted above the available budget, the procuring entity:
a. reveals its available budget to tenderers; and
b. limits its invitation to tenderers whose evaluated prices are not more than twenty five percent above the available budget.
The procuring entity will request the identified tenderers to revise their tenders by submitting their best and final offer within a period not exceeding seven days.
The revised prices should not compromise the quality specifications of the original tender. Tenders are evaluated by the evaluation committee are appointed in the initial process.
The successful best and final offer is the best rated tender using evaluation criteria set forth in the tender documents.
Procedure for competitive negotiations.
In using competitive negotiations as per the Act, the accounting officer of a procuring entity appoints an ad hoc evaluation committee to negotiate with the bidder on the recommendation of the head of the procurement function.
Tenders evaluated by the evaluation committee are those that constituted the initial phase of the proceedings.
The accounting officer of a procuring entity requests the identified vendors to revise their bids by submitting the best and final offer within a period not exceeding seven days.
The revised prices should not compromise the quality or specifications of the original tender. The members of the evaluation committee conducting the negotiation prepare a report of the negotiation and submit it to the head of procurement function for professional opinion and onward submission to the accounting officer for approval.
The report prepared forms part of the procurement records.
A procuring entity, prior to applying the procedure referred to in the regulation, invites the concerned suppliers to submit their bids for competitive negotiations.