1. Module 10 Session 10.4 Visual 1 Module 10 Organizing Procurement Session 10.4 Procurement of Services: Use of Consultants and Developing Terms of Reference

2. Module 10 Session 10.4 Visual 2 Instructional Objectives At the end of this session, learners will be able to 1.Define Terms of Reference (TOR). 2.Determine when it would be appropriate to use consultants. 3.Compare the advantages and disadvantages of using consulting firms with using individual consultants. 4. Given a vignette, identify appropriate sources for consultant expertise. 5.Based on the learner’s experience, describe issues in the use of consultants. (a) From the client’s perspective (b) From the consultant’s perspective

3. Module 10 Session 10.4 Visual 3 I nstructional Objectives (continued) 6.Describe a process for selecting and contracting for consultants. 7.Define the characteristics of a well-crafted TOR. 8.Use a checklist critically to review, and to recommend improvements to, the draft TOR for a specific assignment.

4. Module 10 Session 10.4 Visual 4 When To Use Consultants  Specialized knowledge or skills needed  Need for new ideas and perspectives  Cope with peak work loading

5. Module 10 Session 10.4 Visual 5 Types of Consultant Services  Policy support studies  Preinvestment studies  Preparation service  Implementation services  Technical assistance  Development and training

6. Module 10 Session 10.4 Visual 6 Consultant: A person or organization that provides advice

7. Module 10 Session 10.4 Visual 7 Some Common Types of Consultants  Private partnerships  Public companies  Government-owned firms  Public sector and nonprofit organizations  Universities and institutes  Law, accounting, and engineering firms  Individuals

8. Module 10 Session 10.4 Visual 8 Successful Skill Transfer Programs  Bona fide local consultants  Part of a long-term development plan  Reflects correct level of technology  Integrates local personnel

9. Module 10 Session 10.4 Visual 9 Successful Skill Transfer Programs (continued)  Appropriate mix of training experiences  Regularly supervised and evaluated by client  Adequately funded  Motivated and experienced consultant staff  Consultant measured on success

10. Module 10 Session 10.4 Visual 10 Factors That Condition the Success of Counterpart Relationships  Qualifications and Experience. Are the consultant’s team members and local staff of similar professional level?  Incentives. Are there incentives for local staff and the consultants to enhance participation?  Commitment. Are both parties committed?  Monitoring. Performance monitoring should be based on monthly reports, papers should be prepared by the local staff, and/or some sort of nonthreatening test program should be implemented.

11. Module 10 Session 10.4 Visual 11 Factors That Condition the Success of Counterpart Relationships (continued)  Time Available. Is the local staff available part time, normal full time (government working hours), or assignment full time (consultant’s regular working hours plus additional time as the job requires)? Working hours can be a source of friction, and part time availability (which is of limited use anyway) should be clearly defined.  Work Program. Are the roles of the local staff and the skills transfer program clearly defined?  Assignment Pressure. Is selected local staff able to work under pressure, meeting deadlines and responding to crises, which are typical of consulting assignments?  Assignment Suitability. Are assignments suitable for the specific tasks to be achieved by local staff?

12. Module 10 Session 10.4 Visual 12 “Twinning” of Organizations  Match developing country organization with more mature organization for technology transfer.  Benefits  Flexible  Tailored completely to needs  Long-term relationships possible

13. Module 10 Session 10.4 Visual 13 Determining Need for Consultants  Start with needs assessment

14. Module 10 Session 10.4 Visual 14 Key Questions  What is the exact nature of the identified issues?  What is the urgency of the situation?  Has there been any previous experience with such issues, and what lessons have been learned?  Is there any link with outside activities?  Have such issues been addressed by others, and how were they resolved?

15. Module 10 Session 10.4 Visual 15 Key Questions (continued)  Can the assignment be carried out internally?  What are the objectives to be attained?  What is the scope of services?  To what extent are own staff resources involved?  Who will be supervising the assignment?  Is there a need for input from other agencies?

16. Module 10 Session 10.4 Visual 16 Key Questions (continued)  Are there institutional, technical, and financial constraints?  Is phasing required?  Is packaging required?  Are there management, training, and skills transfer issues?

17. Module 10 Session 10.4 Visual 17 Individual vs. Organization  Individuals +Less expensive (less overhead) (-)More administrative load on client (-)Need to deal with problems of an individual  Organizations (-)More expensive (greater overhead) +Less administrative load on client +Not as dependent on specific individuals

18. Module 10 Session 10.4 Visual 18 Selection  Traditionally: use short list and evaluate on quality  New Developments:  Accept cost as well as quality in evaluation  Accept other forms of contract

19. Module 10 Session 10.4 Visual 19 Selection Based on Quality or Quality/Cost 1. Prepare Terms of Reference. 2. Prepare cost estimate. 3. Source services (prepare short list). 4. Establish evaluation criteria. 5. Issue Request for Proposal (RFP). 6. Evaluate. 7. Negotiate and award contract.

20. Module 10 Session 10.4 Visual 20 Terms of Reference (TOR)  The client’s instructions to the consultant  Criteria for a well-prepared TOR include  Detailed  Comprehensive  Unambiguous  States objective(s)  Determines scope

21. Module 10 Session 10.4 Visual 21 Drafters of TOR Should Know  Scope of the services to be performed  Definition of specific outputs  Background information  Related sector issues  Working environment (including seasonal variations, holidays, and so forth)  Project area (should have visited)  Borrower (the consultant’s client)  Human and environmental aspects  Training requirements and skills transfer possibilities (motivation of borrower staff; capabilities of local consultants)  Facilities provided by the borrower  Counterpart arrangements  Background information (past studies, available)

22. Module 10 Session 10.4 Visual 22 Structure of TOR  Background (Introduction or Preamble)  Objectives (What: Specific Outputs)  Scope (How)  Requirements for training and skill transfer  Reporting and approval procedures  Client’s contribution

23. Module 10 Session 10.4 Visual 23 Preparation of Cost Estimate (by Client)  Determine available budgetary resources  Helps invited consultants understand level of effort envisioned

24. Module 10 Session 10.4 Visual 24 Nine Cost Categories May Be Considered  Professional and support staff  Travel and transport  Mobilization and demobilization  Living allowances  Communications  Office expenses  Assignment-related surveys  The cost of the reports, including printing  Contingencies

25. Module 10 Session 10.4 Visual 25 SectorAssignment Percent InfrastructureFeasibility study0.5 - 3 Detailed design 3 - 8 Supervision of works 5 - 8 ArchitectureArchitectural design 2 - 4 Contract administration 2 - 3 IndustryFeasibility study 1 - 3 Outline design 1 - 3 Detailed design, procurement, supervision 8 - 12 Cost as Percent of Estimated Project Cost

26. Module 10 Session 10.4 Visual 26 Sourcing of Services  Using a Short List (Between 3 and 6 firms or individuals)  Developing the Short List  Client knowledge/experience  Request for expression of interest (Advertising)  Professional Associations  Other countries/organizations  Various lists of firms

27. Module 10 Session 10.4 Visual 27 Summary  Use consultants when  Need for specialized skill  Need for new perspectives  Insufficient staff  Types of consultant services  Types of consulting organizations  Process for selecting and hiring consultants  Needs assessment  TOR (objectives and scope)  Cost estimate  Evaluation criteria  Short list  RFP  Evaluation of proposals  Negotiation and award of contract