procurement in projects financed by islamic development bank country procurement workshop september...

Procurement in Projects Financed by Islamic Development BankCountry Procurement WorkshopSeptember 2015, Jakarta, Republic of Indonesia

Project Procurement (PPR) DivisionOperations Policy And Services Department (OPSD)

03. Selection of ConsultantProject Start-up Workshop

3Republic of Indonesia, September 2015

Selection Methods

Project Procurement Division, OPSD

• 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

Quality and Cost Base Selection (QCBS)

• 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

Least Cost Selection (LCS)

Selection of Consultant – LCS & QCBS

Project Procurement Division, OPSD 4Republic of Indonesia, September

2015

TOR, cost estimate

IDB NOL

Advertisement

Short List, draft RFP

IDB NOL (Short List,

RFP)

RFP sent to Short Listed Consultants

Proposal Preparation (30 days) & submission

Technical Evaluation

Technical Evaluation

Report (TER)*

IDB NOL Financial Evaluation

Consultant Evaluation

Report*

IDB NOL

Contract negotiation

Draft negotiated contract*

IDB NOL

Contract award

5 No Objection Letters (NOLs) required± 6 months after advertisement

LCS: Proposal with least price winsQCBS: Highest rank proposal in Combined evaluation wins

5Republic of Indonesia, September 2015

Terms of Reference (TOR)

Project Procurement Division, OPSD

• 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

6Republic of Indonesia, September 2015

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

7Republic of Indonesia, September 2015

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

8Republic of Indonesia, September 2015

Short List Evaluation

Project Procurement Division, OPSD

First Stage(not recommended

to use scoring)

Pass or Fail

Meet minimum qualification & experience

Result in a ‘long-list’ (‘pre-qualified’ firms)

Second Stage(may use scoring)

Strengths & Weaknesses of long-listed firms

Short list 6 to 8 best ranked firms

Keep one to two firms as reserve

9Republic of Indonesia, September 2015

Request for Proposal (RFP)

Project Procurement Division, OPSD

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,

Sections 1, 3, 4, 5 shall be customized as per the

assignment,

10Republic of Indonesia, September 2015

Request for Proposal

Project Procurement Division, OPSD

Criteria and range of scoresMain• Experience 5-10 points• Methodology and Approach 20-50 points• Key staffs 30-60 points

Optional• Transfer of knowledge 0-10 points• Participation by nationals 0-10 points

Total 100 points• Passing Grade = 70 - 80 points

11Republic of Indonesia, September 2015

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

Proposal Submission, Receipt & Opening

Project Procurement Division, OPSD

12Republic of Indonesia, September 2015

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

13Republic of Indonesia, September 2015

Inconsistent Scoring

• Scores are often broken down into nominal points

Methodology 50 pointsExcellent50 pointsGood 40 points Satisfactory 30 points Poor 20 points

Project Procurement Division, OPSD

14Republic of Indonesia, September 2015

Inconsistent Scoring

• Scores are often broken down into nominal pointsMethodology 50 points

Excellent50 pointsGood 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

15Republic of Indonesia, September 2015

Inconsistent Scoring

• Key Experts 1

Qualification 10 pointsPh.D. 10 pointsMaster 5 points Bachelor 0 points

• TOR requires at least a ‘Master’ degree

Project Procurement Division, OPSD

16Republic of Indonesia, September 2015

Inconsistent Scoring

• Key Experts 1

Qualification 10 pointsPh.D. 10 pointsMaster 5 points 50%Bachelor 0 points

• ‘Master’ degree is allocated 50% (‘not passed’)

Project Procurement Division, OPSD

17Republic of Indonesia, September 2015

Rating System

• Example 1

Methodology 50 pointsExcellent100%Good 90%Satisfactory 70%Poor 40%

Project Procurement Division, OPSD

18Republic of Indonesia, September 2015

Rating System

• Example 1

Methodology 50 pointsExcellent100% 50 pointsGood 90% 45 pointsSatisfactory 70% 35 pointsPoor 40% 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

19Republic of Indonesia, September 2015

Rating System

Define rating for each criteria and sub-criteria

and allocate a percentage of maximum

scoresRating 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

20Republic of Indonesia, September 2015

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

21Republic of Indonesia, September 2015

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

22Republic of Indonesia, September 2015

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

23Republic of Indonesia, September 2015

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

24Republic of Indonesia, September 2015

Key Success Factors in Selection of Consultant

Short List preparation and confirmation on

participationWell-defined evaluation

and scoring criteria, and its consistent

applicationQualitative assessments and remarks to

substantiate technical scoresConsistency-check

between technical and financial

proposals

Project Procurement Division, OPSD

25Republic of Indonesia, September 2015

Question and Answer

Project Procurement Division, OPSD

Republic of Indonesia, September 2015

Thank YouProject Procurement Division

Operation Policy and Services Departmentwww.isdb.org, ppr@isdb.org

prepared by Amirmehdi AsghariSenior Project Procurement Specialist

amasghari@isdb.org

أفضل مستقبالً نبني معاً Together we build a better future

Ensemble nous construisons un avenir meilleur

10Project Procurement Division, OPSD