Consulting Services Operation Manual, Asian Development Bank

Consulting
Services
Operations
Manual

Consulting Services Operations Manual

© 2008 Asian Development Bank
6 ADB Avenue, Mandaluyong City
1550 Metro Manila, Philippines

All rights reserved. Published 2008.
Printed in the Philippines.

Publication Stock No. 020608
ISBN 978-971-561-657-7

Cataloging-In-Publication Data

Central Operations Services Ofﬁce.
Consulting Services Operations Manual.

Mandaluyong City, Phil.: Asian Development Bank, 2008.

A user’s guide and practical aid to the process of recruiting and supervising consultants.
1. Consulting Services I. Asian Development Bank.

Use of the term “country” does not imply any judgment by the authors or ADB as to the legal or other
status of any territorial entity.

The Asian Development Bank (ADB) encourages printing or copying information exclusively for
personal and noncommercial use with proper acknowledgement of ADB. Users are restricted from
reselling, redistributing, or creating derivative works for commercial purposes without the express,
written consent of ADB.

Overview of Consulting Services

Contents
PREFACE ............................................................................................................................................... vii
NOTE .............................................................................................................................................. viii
ABBREVIATIONS ...................................................................................................................................... ix
CHAPTER I. OVERVIEW OF CONSULTING SERVICES
A. What Are Consulting Services and Why Are They Needed? ...................................................... 1
B. Consultants and the Project Cycle ............................................................................................. 3
C. Types of Consultants and Their Use ........................................................................................... 4
D. ADB Policies on Use of Consultants ........................................................................................... 7
E. Roles and Responsibilities in Consultant Recruitment ........................................................... 8
F. Governance Considerations ....................................................................................................... 8
G. Sources of Information on Consulting Services ...................................................................... 12
CHAPTER II. PREPARING A CONSULTING SERVICES PACKAGE
Part A: Work Plan, Staffing Schedule, and Terms of Reference ......................................................... 17
A. Identifying Consulting Services Needs .................................................................................... 18
B. Defining Consultancy Output .................................................................................................. 19
C. Defining the Scope of Work and Preparing an Implementation Schedule ........................... 20
D. Identifying the Expertise Required for Each Task ................................................................... 23
E. Preparing a Preliminary Staffing Schedule .............................................................................. 24
F. Preparing Outline Terms of Reference ..................................................................................... 25
CHAPTER III. PREPARING A CONSULTING SERVICES PACKAGE
Part B: Budget......................................................................................................................................... 31
A. Budgets for TA-Funded Consulting Services vs. Budgets for
Loan-Funded Consulting Services ........................................................................................... 31
B. Steps in Preparing the Budget .................................................................................................. 33
CHAPTER IV. PREPARING A CONSULTING SERVICES PACKAGE
Part C: Method of Selection, Type of Proposal, and Finalization of the Package ............................ 39
A. Deciding on the Method of Selection....................................................................................... 39
B. Deciding on the Type of Proposal............................................................................................. 44
C. Finalizing and Confirming the Consulting Services Package ................................................ 45

ConsultingServices Operations Manual

CHAPTER V. PREPARING REQUESTS FOR PROPOSALS
A. Undertaking a Capacity Assessment and Preparing a Procurement Plan ............................ 49
B. Establishing the Borrower’s Consultant Selection Committee ............................................. 50
C. Advertising Consulting Services Requirements ...................................................................... 50
D. Expressions of Interest .............................................................................................................. 51
E. Associations Between and Among Consulting Firms ............................................................. 52
F. Preparing the Reﬁned Long List ............................................................................................... 52
G. Preparing Short-Listing Criteria and Evaluation Criteria ....................................................... 53
H. Selecting the Short List and Approving the Evaluation Criteria ............................................ 56
I. Setting up a Consultant Recruitment Activity Monitoring System........................................ 59
J. Government Clearance of the Short List (for ADB-recruited consultancies) ....................... 59
K. Preparing Documents Required for the Request for Proposals ............................................. 60
L. Review of Key EA Documents by ADB and Issuance of Request for Proposals ................... 61
M. Responding to Queries of Short-Listed Consultants .............................................................. 62
CHAPTER VI. EVALUATING PROPOSALS
A. Responsibility............................................................................................................................. 67
B. Evaluating Technical Proposals ................................................................................................ 67
C. Evaluating Financial Proposals ................................................................................................ 76
D. Ranking Proposals and Inviting for Contract Negotiations.................................................... 79
CHAPTER VII. NEGOTIATING A CONTRACT
A. Issuing a Letter of Invitation to Negotiate ............................................................................... 86
B. Selecting the Negotiating Team ................................................................................................ 87
C. Preparing for Negotiations ........................................................................................................ 87
D. Initiating Negotiations .............................................................................................................. 89
E. Discussing Issues Arising from the Proposal ........................................................................... 90
F. Preliminary Agreement on Type of Contract Document ........................................................ 94
G. Joint Examination of Standard Contract.................................................................................. 96
H. Finalizing Appendixes A to I of the Contract for Loan-Funded Assignments ...................... 96
I. Agreeing on Special Conditions................................................................................................ 97
J. Submitting the Draft Contract to Higher Authorities for Approval and
to ADB for Review ...................................................................................................................... 98
K. Submitting the Signed Contract for Loan-Funded Consulting Services to ADB .................. 98
L. Failure of Negotiations .............................................................................................................. 99
CHAPTER VIII. RECRUITING INDIVIDUAL AND STAFF CONSULTANTS
A. Borrower Recruitment of Individual Consultants................................................................. 105
B. ADB Recruitment of Individual TA Consultants and Staff Consultants .............................. 106

Contents

CHAPTER IX. RECRUITING OTHER TYPES OF CONSULTANTS AND
CONSULTING SERVICES
A. Resource Persons ..................................................................................................................... 113
B. Nongovernment Organizations .............................................................................................. 114
C. Specialized Agencies and Institutions ................................................................................... 115
D. Field-Level Service Delivery Contractors............................................................................... 116
CHAPTER X. SUPERVISING CONSULTING SERVICES
A. Issuing the Notice to Proceed ................................................................................................. 119
B. Review of Inception Phase ...................................................................................................... 120
C. Issuing Contract Variations ..................................................................................................... 122
D. Reporting and Monitoring ...................................................................................................... 123
E. Billing and Payment ................................................................................................................ 124
F. Disputes and Conﬂicts ............................................................................................................ 126
G. Terminating Services Prior to End of Contract ...................................................................... 127
H. Concluding the Assignment ................................................................................................... 128
I. Evaluation ................................................................................................................................ 129
APPENDIXES
1. Documents on Consulting Services ...................................................................................... 135
2. Data Sheet ............................................................................................................................... 137
3. Curriculum Vitae (CV) for Proposed International or National Experts ............................ 139

Preface
In April 2006, the Asian Development Bank (ADB) issued a revised edition of its Guidelines on
the Use of Consultants by Asian Development Bank and Its Borrowers, (the Guidelines), incorporating
signiﬁcant changes resulting from the harmonization of policies and procedures with those of the World
Bank.
While the Guidelines set basic policies and procedures, further guidance on using consultants is
provided to ADB staff through the project administration instructions (which are updated periodically).
A third reference, which provides information on practices and procedures in even greater detail and
to a wider audience, has been the Handbook for Users of Consulting Services (the Handbook). The last
edition of the Handbook was produced in 2002. Thus, when the new Guidelines were issued, a substantial
amount of updating was needed, both because of the changes to the Guidelines themselves and because
of incremental changes in policies, practices, and procedures over the years.
In considering the type of document needed to replace the Handbook, it was decided to aim at a
broader utilization and a wider audience than the Handbook had served, and to produce a publication
that could be used for training purposes as well as a reference. It was thus decided to produce a
somewhat different document with a more practical and pragmatic focus that would be aimed at all
users and providers of consulting services for ADB. This current Consulting Services Operation Manual
(the Manual) is the product of that decision.
This Manual sets out the policies, practices, and procedures for recruiting and using consultants
by ADB and its borrowers, covering the range of activities for which consultants are recruited, the
different types of consultants and when their services are used, the range of differing consultant selection
methods, and the procedures for the administration of consulting services by both ADB and its client
borrowers.
A unique feature of the Manual is a self-study questionnaire provided at the end of each chapter.
This is to be used as a summary of the chapter, as a review of the material covered, and as a basis for
testing during training sessions.
The Manual should be seen as a user’s guide and as a practical aid to the complex process of
recruiting and supervising consultants. Any comments or advice on the Manual are very much welcome
and may be addressed to:

Philip Daltrop
Principal Director
Central Operations Services Ofﬁce
Asian Development Bank
6 ADB Ave., Mandaluyong City
consulting@adb.org

vii

Note
This Consulting Services Operations Manual supports the information contained in the Guidelines
on the Use of Consultants by Asian Development Bank and Its Borrowers and the project administration
instructions on recruiting and using consulting services. In cases of uncertainty or ambiguity, users
should consult the Guidelines as the ofﬁcial and primary source of reference on recruiting consultants
under ADB-ﬁnanced projects.
It should also be noted that “benchmark” or “threshold” values given in this Manual— such as the
contract amount at which technical assistance is delegated to the user division1 or the contract amount
at which various types of proposals are required—were valid during preparation in 2007. These values
may change over time and should be checked with the latest project administration instructions in case
of doubt or uncertainty about their validity.

1
The unit within ADB directly responsible for supervising consulting services.

viii

Abbreviations
ADB Asian Development Bank
ADF Asian Development Fund
ADTA advisory technical assistance
BTP biodata technical proposal
CMS consultant management system
COSO Central Operations Services Office
CPS country partnership strategy
CQS consultants’ qualifications selection
CRAM consultant recruitment activity monitoring (system)
CSC consultant selection committee
CSRN consulting services recruitment notice
CV curriculum vitae
DACON data on consulting firms
DICON data on individual consultants
DMC developing member country
EA executing agency
EOI expression of interest
ETP evaluated total price
FBS fixed-budget selection
FTP full technical proposal
GEFP gross evaluated financial proposal
GFP gross financial proposal
ICS individual consultant system
LCS least-cost selection
MDB multilateral development bank
NEFP net evaluated financial proposal
NGO nongovernment organization
OAGI Integrity Division of the Office of the Auditor General
PAI project administration instruction
PPTA project preparatory technical assistance
QBS quality-based selection
QCBS quality- and cost-based selection
RETA regional technical assistance
RFP request for proposals
RRP report and recommendation of the President
SRC staff review committee
SSS single-source selection
STP simplified technical proposal
TA technical assistance
TOR terms of reference
UN United Nations

ix

Chapter I

A. What Are Consulting 1. The Asian Development Bank (ADB) defines consultants as
Services and Why Are individuals or entities able to provide special expertise in one or more
technical fields. These services may be of an advisory, supervisory,
They Needed? or implementation nature and are provided by skilled experts with
specialized knowledge and experience.
2. The services rendered by consultants are normally for a finite
period of time and a well-defined scope of work described by clear
terms of reference (TOR) and are generally of an intellectual nature.
They cover a wide range of diverse activities, which may entail but
are by no means limited to feasibility studies, advisory services,
construction supervision, policy studies, strategy formulation,
preparation of key documents such as tender documents, training,
quality control, financial and accounting services, environmental or
social impact studies, economic and financial analyses, professional
editing, and public information provision.
3. Such services are provided from a range of sources. Traditionally,
consulting services have been offered by such entities as engineering
firms, financial advisors, accountancy firms, law firms, and
management consultants. In recent years, the field has expanded
to include firms with almost all kinds of expertise and orientation,
from information technology through agricultural services to
environmental technology. All these types of firms have found a
market for their particular type of expertise and have, to a greater
or lesser extent, been able to develop sufficient levels of business,
experience, and knowledge to offer their services to a wide variety
of clients. They range in size and nature from major, established
companies with several thousand employees, covering a wide
breadth of disciplines, to small, boutique-type outfits with small
numbers of staff having a highly specialized focus. In addition, a
large number of individual experts have entered the market and
have provided their services either directly or, at times, through
particular consulting firms. Nongovernment organizations (NGOs),
institutes, universities, and international agencies also provide
consulting services from time to time.
4. The main need for consulting services occurs when an
organization or government does not have the required expertise of
its own. This may occur for various reasons:
K Τhe expertise may be needed only for a limited and clearly
defined period.

1


K It may be highly specialized and not readily available within
a particular organization or entity.
K It may be expensive and thus feasible only when outside
resources are available to pay for it.
K It may not be available in a particular country.

K It may be required to support and develop the capacity
of an agency and its personnel to ensure that a project is
implemented to high standards and that the results of the
project investment are sustainable.
5. Within the realm of ADB-funded activities, consulting services
are normally used by
K recipients of ADB loans or technical assistance (TA) grants
for project supervision purposes, training, preparation of
loans and TA activities, policy advice, or special studies; and
K ADB itself to strengthen in-house technical capacity for a
limited period, to substitute for expertise that is temporarily
unavailable, to undertake special in-house studies, to provide
technical advice or guidance, or to upgrade or improve in-
house technology.
6. Such activities may occur at any part of the project cycle and may
be funded by various sources including project loans,1 TA grants,2
and ADB’s own administrative budget.
7. The value and scope of these services are considerable. In
2006, loan funds were used to recruit almost $250 million worth
of consulting services by various member country governments.
TA grant funds are used to recruit about $135 million in consulting
services annually through about 1,650 contracts, while around
$20 million in consulting services is funded directly from ADB’s
administrative budget every year. This represents over $400 million
per year overall, which is a significant amount of business and
procurement.

1
The term “loan” in this manual covers loans provided by ADB and other cofinanciers.
It also covers project grants from the Asian Development Fund and cofinanced project
grant financing from other agencies for which the implementation and administration
procedures are the same as loans.
2
The term “technical assistance grant” in this manual covers grant funding from ADB’s
own Technical Assistance Special Fund, the Japan Special Fund, and other similar
funds. These grants may be of three types: (i) project preparatory technical assistance,
(ii) advisory technical assistance, or (iii) regional technical assistance.

2


B. Consultants and the 8. ADB’s standard project cycle follows five basic stages: (i)
Project Cycle country partnership strategy (CPS) formulation, (ii) TA and loan
preparation, (iii) appraisal and approval, (iv) implementation, and
(v) evaluation.
Consulting services may be used in each of these stages and are
required in some of them. The links between consulting inputs and
the project cycle are shown diagrammatically in Figure 1 and are
summarized below:
K Stage 1 Country Partnership Strategy (CPS) Formulation.
During the preparation of the CPS, consultants are often used
to supplement ADB staff expertise.
K Stage 2 Preparation. Consultants may be required to assist
the assigned ADB staff to prepare TA proposals for project
preparatory technical assistance (PPTA), advisory technical
assistance (ADTA), and regional technical assistance (RETA).
After this, for projects and programs intended for loan
financing, consultants will normally be required to prepare
the loan proposal with funding from a PPTA.
K Stage 3 Appraisal and Approval. Consultants are often
used during the fact-finding and appraisal missions for loan
projects, when the project scope is being finalized and the
results of the PPTA are being assessed.
K Stage 4 Implementation. Consultants are used to help
implement loan-funded projects, carry out associated
studies, and provide support such as capacity building
under TA grants associated with loan projects. In addition,
consultants are also used to implement stand-alone ADTA
(not associated with a loan project or program) and RETA.
K Stage 5 Evaluation. Consultants are used to assist with the
evaluation of the results of loans and TA activities both at
project completion and subsequently during postproject
evaluation.
9. Other consulting services may be required from time to time, for
example to undertake internal studies, but the bulk of consulting
services recruited by ADB and its borrowers are used during these
five stages of the project cycle.

3


Figure 1: Consultants and the Project Cycle

Stage 1
Formulation of CPS
Consultants are often required to assist CPS mission

Stage 5 Stage 2
Evaluation Preparation
• Consultants are often required • Consultants are often required for
to assist in preparing project preparing PPTA, ADTA, and RETA
completion reports
• For loan projects and programs,
• Consultants are required to assist PPTA-funded consultants are
with evaluation reports required for project formulation

Stage 4
Implementation Stage 3
• Loan-funded and ADTA consultants Appraisal/Approval
are required to assist in implementing
a loan project or program • Staff consultants are required for
loan fact-finding
• ADTA and RETA consultants are
required for implementing stand- • Staff consultants are required
alone ADTA and RETA for appraisal

ADTA = advisory technical assistance, CPS = country partnership strategy, PPTA = project preparatory technical assistance,
RETA = regional technical assistance.

Source: ADB Operations Manual.

C. Types of Consultants 1. Consulting Firms
and Their Use 10. The main source of consultants and the primary recipient of
consulting services funding are consulting firms of diverse spe-
cializations that provide teams of consultants to either the bor-
rowers of ADB funds or ADB itself. They are normally recruited to
help undertake the mainstream activities of the borrower’s project
executing agencies (EAs), implementing ADB-funded loans, and
assisting ADB in providing support to these agencies through TA
grants. These firms provide project preparation services, project
implementation supervision services, training, advisory servic-
es, and policy guidance. They also undertake special studies and
regional studies under RETA. Under loan funding they are normal-
ly recruited by the borrower, and under TA grant funding they are
normally recruited by ADB.3

3
In recent years some TA grants have been delegated to EAs for implementation. In such
cases, consultant recruitment is undertaken by the EA rather than ADB.

4


11. Consulting firms are normally classified as either international
– firms that have international experience and are capable of
undertaking work in any of ADB’s member countries at international
rates – or national – firms that are registered in an ADB developing
member country (DMC) but do not have international exposure and
normally undertake assignments only within that country, usually at
significantly lower rates.4
2. Individual Consultants
12. Individual consultants are recruited for similar activities as
consulting firms when a full team is not considered necessary.
They may be independent experts not permanently associated with
any particular firm, or they may be employees of a firm recruited
on an individual basis. They may also be employees of an agency,
institute, or university. They are normally recruited for project
implementation supervision, training, provision of specific expert
advice on a highly technical subject, policy guidance, special studies,
compliance supervision, or implementation monitoring. Individual
consultants are not normally recruited for project preparation unless
the proposed project is simple and, generally, a repeat of an already
established and successful project. If more than three experts are
required, then the assignment should normally be undertaken by a
team from a firm. As with consulting firms, individual consultants
are classed as either international or national, depending on their
level of expertise and their international experience and exposure.
3. Staff Consultants
13. Staff consultants are also normally individual consultants but
are funded directly from ADB’s administrative budget. (In rare cases,
teams of consultants from a firm may be engaged as staff consultants
for in-house studies such as improvement of the information
technology system or a personnel policy review.) Most often staff
consultants supplement ADB’s in-house staff with specialized, time-
bound expertise and may be employed to help formulate a TA grant,
prepare a specialized policy paper, design specialized information
technology software, or participate in an in-house study. Limitations
are placed on the amount of time any single person may be recruited
as a staff consultant. At present an individual may be recruited
for only 12 months out of any 24-month period without special
dispensation.
4. International and National Agencies and Institutions
14. International and national agencies or institutions (including
universities) may also from time to time be recruited to provide
consulting services or “consulting-like” services. These services

4
Some firms that are established in DMCs have international experience and thus could
be considered for either category depending on the particular assignment.

5


may be provided by individuals (as discussed above) or by teams.
Special agreements exist with some agencies such as the Food and
Agriculture Organization Investment Center to provide expertise on
a cost-sharing basis. ADB’s Guidelines on the Use of Consultants by
Asian Development Bank and Its Borrowers5 (the Guidelines) provide
strict limitations within which such services can be used and the
methods by which such expertise can be recruited. Nonetheless,
there are at times distinct advantages to using such agencies.
Experts and teams from international and national agencies and
institutions may undertake a variety of roles across the whole field
of possible consulting services. These may range from project
preparation through project supervision and policy advice to
project benefit monitoring and evaluation. Often, but not uniquely,
international agencies are used for project preparation and policy
advice, while national agencies or institutions may be used for
project implementation activities and project benefit monitoring
and evaluation.
5. Nongovernment Organizations
15. NGOs are increasingly becoming involved in the provision of
consulting services for bilateral donors, multilateral agencies, and
other development agencies. They are normally involved in the
project implementation phase of the project cycle, where their
strengths involving field-level experience and grassroots connec-
tions with beneficiaries and stakeholders can be best utilized.
They are often involved in beneficiary mobilization; field training
in health, agriculture, and education projects; implementation
monitoring; and safeguard monitoring. NGOs are normally classi-
fied as international (registered in a developed country and work-
ing in a number of developing countries), national (registered in a
particular country and working throughout that country), or local
(registered in a particular country but working only in a limited
geographic area). Normally the NGO itself is recruited as an entity
rather than supplying individuals, as may sometimes be the case
for consulting firms, since it is the expertise of the organization, not
of a particular individual, that is required.
6. Resource Persons
16. Resource persons are persons of particularly high caliber or spe-
cific levels of experience, often distinguished in their field, who are
hired to provide input and guidance during conferences, seminars,
workshops, or policy sessions. They are generally recruited using TA
grant funds or the ADB administrative budget, and the recruiting
entity is usually ADB. Normally such experts are hired for periods of
10 days or less. Special procedures are used for their recruitment.

5
Asian Development Bank. 2006. Manila. Periodically updated.

6


7. Other Types of Consultants
17. Another class of consultants comprises agents or professionals
recruited to provide standard professional services to the
borrowers’ EAs during project implementation. Whereas many
consultants provide a service that requires initiative, innovation,
and imagination, this group performs routine activities that are
nonetheless important and of a professional caliber. These include
such experts as procurement agents, inspection agents, and auditors.
Special adaptations of normal procedures are often used for their
recruitment.
18. Finally, a small group of consultants is normally hired directly
by ADB for special in-house training and personnel development
activities. These may be recruited either as individuals or as a
team from a firm. Recruitment is normally done by ADB’s Human
Resources Division using special procedures.

D. ADB Policies on Use 19. ADB’s policies on the use of consultants are spelled out in the
of Consultants Guidelines and Project Administration Instructions (PAI) 2.01.6 Six
basic principles apply:
K Consulting services should be of high quality.

K Engagements should be economical and efficient.

K All qualified consultants should have the opportunity to
compete for assignments.
K ADB aims to develop and use consultants from its DMCs.

K The selection process should be transparent and should not
involve a conflict of interest.
K Good governance and ethical behavior are especially
important.
20. It is ADB policy that, in the majority of cases, these considerations
can be best addressed through competition among qualified short-
listed firms or individuals in which selection is based on the quality
of the proposal and, where appropriate, on the cost of services to be
provided.
21. A further aspect of ADB policy on the use of consultants is to
progressively delegate the authority for consultant recruitment to
regional departments, resident missions, and regional offices; also,
where capacity exists, to delegate the recruitment of consultants
under TA grants to borrower EAs.

6
Available for reference on the ADB website at http://www.adb.org/Documents/
Manuals/PAI/pai-201.pdf

7


E. Roles and 22. The responsibility for consultant recruitment using ADB
Responsibilities financing and the oversight of the recruitment process vary
depending on the type (and amount) of funding being provided.
in Consultant For consulting services recruited with ADB loan funds, recruitment
Recruitment7 is normally the responsibility of the borrower, although at times
ADB may assist with the selection process. Actual recruitment
activities will normally be undertaken by the project office within the
borrower’s EA, but oversight within the government will normally be
the responsibility of the main agency coordinating with ADB. This
may be the Ministry of Finance, the State Bank, or the Ministry of
Planning, depending on the particular country.
23. For consulting services recruited using TA grant funds or ADB’s
administrative budget, recruitment is normally the responsibility of
ADB, although for some TAs this may be delegated to the recipient
government. Direct responsibility for recruitment is shared between
the project user division and the Central Operations Services Office
(COSO). For TA grants $600,000 and under, the project user division
undertakes recruitment activities, whereas for TA grants above that
figure, COSO plays a more central role.
24. In addition, COSO also plays a major oversight role for all types
of consultant recruitment (loans, grants, and ADB’s administrative
budget), while the ultimate oversight role is played by the Integrity
Division (OAGI) of ADB’s Office of the Auditor General.

F. Governance 25. The bulk of ADB-funded consulting services are related to the
Considerations preparation or supervision of ADB loans amounting to around $7
billion annually and TA grants amounting to $200 million on an
annual basis. Under such circumstances, good governance and
ethical practices are a concern when recruiting and supervising
consulting services.
26. Three topics need to be addressed in this context. The first is
conflict of interest, which implies that a situation exists within which
there is the potential for malpractice or inappropriate behavior. The
second is unfair competitive advantage, which implies a situation
where there is unequal access to knowledge and information about
a consulting assignment. The third is fraud and corruption, which
implies that malpractice or inappropriate, unethical, or criminal
behavior has indeed taken place. These matters are discussed below.
1. Conflict of Interest
27. The Guidelines define conflict of interest as “a situation in
which a party has interests which could improperly influence that
party’s performance of official duties or responsibilities, contractual

7
The term “recruitment” is considered to comprise the selection of consultants as well
as their engagement through negotiation. Guidelines, op. cit., p.5

8


obligations, or compliance with applicable laws and regulations
and that such a conflict of interest may contribute to or constitute a
prohibited practice under ADB’s anti-corruption policy.”8 Even the
appearance of conflict of interest needs to be avoided so that there
is no possibility of suspicion that malpractice might occur even if it
does not occur.
28. Examples of conflict of interest would include
K the case wherein an individual in the borrower’s EA has an
interest or share in a national firm or NGO that is proposed
for a consulting assignment within that individual’s
department;
K when a consultant recommends a type of process or equip-
ment in which his or her firm has a proprietary interest or
share;
K when a close relative of a staff member of either the borrower’s
EA or ADB is short-listed for a consulting assignment; or
K when a company submits a proposal for an assignment
that involves the analysis of its own work or that of close
associates, such as when a company submits a proposal to
carry out an environmental impact assessment for a project
designed by an associated firm, or when consultants are
asked to certify the financial statements of an affiliate firm
or parent company.
29. Conflicts of interest may best be avoided by following the rules
set out in Section 1.11 of the Guidelines. These state that consultants
shall not be recruited when
K there is a conflict between consulting activities and
procurement of goods, works, or services;
K there is a conflict among consulting assignments; or

K there is a family relationship between the consultant and
the borrower’s or ADB’s staff.
30. Government officials and civil servants are eligible to be hired
under consulting contracts, either as individuals or as members of a
team of a consulting firm, only if
K they are on leave of absence without pay,

K they are not being hired by the agency they were working for
immediately before going on leave, and
K their employment would not create a conflict of interest.

8
Footnote 5.

9


2. Unfair Competitive Advantage
31. A similar issue to conflict of interest is that of unfair competitive
advantage. This may be a problem if one firm submitting a proposal
for a contract has preferred access to information that is not readily
available to all firms wishing to express interest in the assignment
or already selected for the shortlist. This may occur when a firm is
already working with the EA or ADB on another assignment, and
thus has access to internal information and documentation. It is
to avoid unfair competitive advantage that firms or individuals are
not allowed to submit a proposal for a project for which they have
prepared the TOR.
32. Unfair competitive advantage is best avoided by full transpar-
ency so that all firms or individuals interested or involved have full
information about a consulting assignment and its nature, scope,
and background information. The publication on the ADB website
of TA papers, reports and recommendations of the President (RRPs),
consulting services recruitment notices (CSRNs), and PAIs has gone
a long way in recent years to level the playing field among competing
individuals and companies and thus to prevent unfair competitive
advantage.
3. Fraud and Corruption
33. The Guidelines (Section 1.23) define four types of fraud and
corruption that constitute unethical practices:
K “Corrupt practice” means offering, giving, receiving, or
soliciting, directly or indirectly, anything of value to influence
improperly the actions of another party.
K “Fraudulent practice” means any act or omission, including
a misrepresentation, that knowingly or recklessly misleads,
or attempts to mislead, a party to obtain a financial or other
benefit or to avoid an obligation.
K “Coercive practice” means impairing, harming, or threaten-
ing to impair or harm, directly or indirectly, any party or the
property of the party to influence improperly the actions of
a party.
K “Collusive practice” means an arrangement between two
or more parties designed to achieve an improper purpose,
including influencing improperly the actions of another
party.

10


34. In response to such practices ADB has a stringent anticorruption
policy.9 To prevent unethical practices and provide an opportunity
to identify them, ADB includes a provision in consultant selection
documentation that permits it or its representative to inspect
accounts, records, and other documents relating to consultant
selection and to the performance of the contract, and to have them
audited by auditors appointed by ADB.
35. ADB also has a system, over and above its regular audit
procedures, designed to allow groups or individuals to identify
unethical practices. OAGI can be contacted directly through the
ADB website, and instructions are provided as to what to report.
An E-mail form is also provided. Allegations will be investigated by
OAGI, and, if necessary, further investigations will be undertaken.
36. If corrupt, fraudulent, collusive, or coercive practices have
been proven, the following steps (singly or in combination) may be
taken:
K The award or a proposal for award of contract may be
rejected.
K If the consultancy is loan funded, and if the situation is not
remedied on a timely basis by the borrower, the portion of
financing involved may be cancelled.
K Sanctions may be imposed any firm or individual, including
declaring a consultant ineligible for recruitment under ADB
financing either indefinitely or for a stated period of time,
and any existing contract may be terminated.
Disciplinary action may also be taken by either the borrower or
ADB against any of their personnel proven to have been involved in
unethical practices.
37. ADB does not normally make public the names of consultants
declared ineligible for recruitment, but they are informed that they
have been sanctioned and that an attempt to participate in ADB-
financed activities while ineligible will result in an extension of the
sanction period and a notice on ADB’s website, including the party’s
name.
38. These provisions are taken seriously. Between 1988 and the end
of 2006, 182 firms and 179 individuals were declared ineligible to
participate in ADB-financed activities.

9
ADB. 1998. Anticorruption – Our Framework Policies and Strategies. Manila.

11


G. Sources of 39. A number of sources of information on ADB-funded consulting
Information on services are available. The two primary sources are the Guidelines
and the PAI. The Guidelines are available in hard copy and on the
Consulting Services ADB website at http://www.adb.org/Documents/Guidelines/Con-
sulting/. The PAI is available on the website at http://www.adb.org/
Documents/Manuals/PAI/default.asp. In addition, numerous other
documents and services are available. These are accessible mainly
through the “business opportunities” link on ADB website. They in-
clude the following:
K the consultant management system (CMS),10 where ﬁrms or
individuals can register with ADB;
K a frequently asked questions link on the consulting services
page on the website;
K a documents on consulting services link, which includes
formats and templates for a number of key documents such
as standard contracts, curriculum vitae formats, detailed
descriptions of selection procedures, forms and templates
for EAs, and forms and templates for contract administration
(individual URLs and links to these documents are provided
in Appendix 1);
K a link to proposed projects showing their scope, estimated
cost, EAs, and processing schedules;
K CSRNs showing the recruitment timetable and the TOR for
TA contracts about to be let; and
K procurement notices for loans, which document upcoming
consultancies for approved loan projects.
40. Additional sources that require a bit more research include “early
warning” information about lending (loans) and nonlending (TA)
products provided through CPSs and CPS updates posted on the
ADB website at http://www.adb.org/Documents/CSPs/default.asp,
and detailed procurement information shown in the procurement
plan for a loan project, which is appended to the RRP and attached
to the schedule of the loan agreement dealing with procurement
and consulting services.

10
The consultant management system (CMS) replaced the former DACON and DICON
registration process.

12


Self-Study Questionnaire – Chapter I

1. Q. What are consultants?

A. ADB defines consultants as individuals or entities able to provide special expertise in one
or more technical fields.

2. Q. What kinds of services do consultants normally provide?

A. Consultants provide professional and intellectual advice. They perform a wide range
of diverse activities, which may entail but are by no means limited to feasibility studies,
advisory services, construction supervision, policy studies, strategy formulation,
preparation of key documents such as tender documents, training, quality control,
financial and accounting services, environmental or social impact studies, economic
analysis, professional editing, and public information provision.

3. Q. What are the main funding sources for ADB-financed consulting services?

A. Project loans, TA grants, and ADB’s own administrative budget.

4. Q. What are some of the types of services provided by consultants?

A. Engineering expertise, financial advice, accountancy, management advice, information
technology, agricultural services, and environmental technology, to name only a few.

5. Q. How large are the largest consulting firms? How small are the smallest?

A. The largest employ thousands of experts; the smallest consist of single individuals.

6. Q. When might the main need for consulting services arise?

A. When an organization or government does not have the required in-house expertise to
perform specialized tasks.

7. Q. Among ADB-funded activities, when are consultants most likely to be used?

A. K by the recipient of ADB loans or TAs for project supervision purposes, training,
preparation of loans and TA operations, policy advice, or special studies; or

K by ADB itself to strengthen in-house technical capacity for a limited time period, to
substitute for expertise that is temporarily not available, to undertake special in-house
studies, to provide technical advice or guidance, and to upgrade or improve in-house
technology.

8. Q. What is the approximate annual value of consulting services recruited using ADB funds?

A. Over $400 million.

13


9. Q. What are the three main types of consultants recruited using ADB funds?

A. Consulting firms, individual consultants, and staff consultants.

10. Q. What are three less common types of consultants recruited using ADB funds?

A. Consultants from international and national agencies and institutes, resource persons,
and consultants from NGOs.

11. Q. When are consulting firms normally used, and what type of services do they provide?

A. Consulting firms are normally recruited to help undertake the mainstream activities
of the borrower’s project EAs, i.e., implementing ADB-funded loans, and to assist ADB
in providing support to these agencies through TA grants. These firms provide project
preparation services, project implementation supervision services, training, advisory
services, and policy guidance. They also undertake special studies and regional studies
under RETAs.

12. Q. Under what circumstances is the borrower responsible for recruiting consulting firms,
and under what circumstances is ADB responsible for their recruitment?

A. Under loan funding, consulting firms are normally recruited by the borrower; under
TA grant funding, they are normally recruited by ADB, although there is an increasing
impetus to delegate the recruitment of TA-funded consultants to the ultimate borrower
and end user of ADB funds.

13. Q. When are individual consultants normally recruited?

A. For similar activities as consulting firms but when a full team is not considered
necessary.

14. Q. Where might individual consultants come from?

A. They may be independent experts not permanently associated with any particular firm,
or they may be employees of a firm recruited on an individual basis. They may also be
employees of an agency, institute, or university.

15. Q. When should a team of consultants from a firm be recruited rather than individual
consultants?

A. If more than three experts are required, then the assignment should be undertaken by a
team from a firm.

16. Q. When are staff consultants most likely to be used?

A. To supplement ADB’s in-house staff with specialized, time-bound expertise.

17. Q. Are there any limitations on the time individuals can be recruited as staff consultants?

A. Yes. At present any individual may be recruited only for 12 months out of any 24-month
period without special dispensation.

14


18. Q. What are the six basic principles of ADB’s consulting services policies?

A. K Consulting services should be of high quality.

K Engagements should be economical and efficient.

K All qualified consultants should have the opportunity to compete for assignments.

K ADB aims to develop and use consultants from its DMCs.

K The selection process should be transparent and should not involve a conflict of
interest.

K Good governance and ethical behavior are especially important.

19. Q. How can these principles best be applied?

A. In the majority of cases, through competition among qualified short-listed firms
or individuals in which selection is based on the quality of the proposal and, where
appropriate, on the cost of services to be provided.

20. Q. How can conflict of interest best be avoided?

A. By insisting on full transparency and by following the rules set out in Section 1.11 of the
Guidelines.

21. Q. Why is a firm or individual not permitted to submit a proposal for a project for which
it/he/she has prepared the terms of reference?

A. To avoid the situation wherein one proposer has an unfair competitive advantage over the
others.

22. Q. What steps may be taken if fraud and corruption are proven in the recruitment of
consulting services?

A. K The award or a proposal for award of contract may be rejected.

K If the consultancy is loan-funded, and if the situation is not remedied on a timely basis
by the borrower, the portion of financing involved may be cancelled.

K Sanctions may be imposed on any firm or individual, including declaring a consultant
ineligible for recruitment under ADB financing either indefinitely or for a stated period
of time, and any existing contract may be terminated.

K Disciplinary action may be taken by the borrower or ADB against any borrower or ADB
personnel proven to have been involved in unethical practices.

15

Chapter II
Preparing a Consulting Services Package
Part A: Work Plan, Staffing Schedule, and Terms
of Reference

41. As described in Chapter I, borrowers of ADB loans, recipients
of its TA grants, and ADB itself require a broad range of consulting
services during different parts of the project cycle. Consulting
services are also, at times, required for studies, special research,
training seminars, publications, and conferences not directly related
to project processing and implementation activities.
42. A critical part of the consultant recruitment process is preparing
an appropriately staffed and budgeted consulting services package,
with clear TOR directly related to the task to be undertaken. This
process may vary somewhat, depending on the type of consultancy
involved, but is normally undertaken through the following steps,
each of which is discussed in detail in subsequent sections of this
and the next two chapters:
(i) The consulting services needs are identified within the
perspective of the CPS and the project cycle.
(ii) A consultancy output is clearly defined.
(iii) The scope of work is defined and an implementation
schedule is prepared.
(iv) The expertise required to perform each task is identified.
(v) A staffing schedule is prepared.
(vi) TOR are formulated.
(vii) The consultancy package, including remuneration, per
diem, travel costs, support requirements, and contingen-
cies, is costed.
(viii) A selection method is chosen.
(ix) The type of proposal is selected.
(x) The consulting package is reviewed and firmed up.

17


This chapter deals with activities (i) to (vi); Chapter III focuses
on activity (vii); and Chapter IV deals with activities (viii) to (x).
Differences in the process, depending on the type of consulting
services required (e.g., support to TA grants or to project loans), are
pointed out in each section.

A. Identifying 43. The starting point for identifying most consulting services
Consulting Services needs of ADB and its clients is the CPS for each member country.
It is while preparing and updating CPSs that proposed investment
Needs projects and programs as well as the need for ADTA and PPTA are
identified,11 and it is while preparing and implementing TA and
loan projects that most consulting services are used. It is thus based
on the CPSs that the major needs for consulting services are also
first identified. These needs include consultants to help prepare TA,
to implement TA (including preparing projects under PPTA), and
to assist in implementing a project. Other consultancy services are
required from time to time. These may include staff consultants
for internal ADB activities, staff consultants to supplement project
completion or postevaluation studies, and consultants for RETA.
Most consulting services requirements, however, are first identified
in the CPS for each member country.
44. Identifying specific consulting services requirements thus takes
place when an ADB staff member, an ADB-recruited consultant,
and/or an official of the borrower’s EA begins to prepare or
implement an activity within the CPS. This is when the specific
expertise required and the length of the consultancy input need
to be defined. An important first step in doing this is to specify the
purpose of the consulting services clearly within the context of the
CPS and the project cycle. In line with the diagram of the project
cycle and consulting services needs illustrated in Chapter I, this will
normally be one of the following:
K a staff consultancy to assist in preparing the CPS;

K a staff consultancy to assist in a TA fact-finding mission
preparing a PPTA, an ADTA, or a RETA;
K a TA grant-funded consultancy to work with DMC officials to
formulate a loan project proposal under a PPTA;
K a TA grant-funded consultancy to implement an ADTA or
RETA;

11
These TA grants are a unique modality of ADB and do not exist in other major
multilateral development banks (MDBs). They allow the provision of significant
services to DMCs. The closest equivalents in other MDBs are trust funds consisting of
grant funds provided by various donor countries for specific activities.

18

Preparing a Consulting Services Package Part A

K a staff consultancy to assist with loan fact-finding and/or
appraisal;
K a loan-funded consultancy to help EAs implement a loan
project, or a TA grant-funded consultancy to provide support
to a DMC when implementing the loan project; or
K a staff consultancy to assist with project completion or
postevaluation of a loan or TA, or other evaluation study; or
at the start of the project cycle.
45. In simplest terms, the process of preparing a consulting
services package either for ADB or for the borrower’s EA thus begins
with identifying consulting services needs as embodied in the
statement:
“I/we need a package of consulting services to either (i) assist in
preparing a CPS; (ii) help prepare a PPTA, ADTA, or RETA; (iii)
formulate a loan project or program proposal through a PPTA;
(iv) implement an ADTA or RETA; (v) help during fact-finding
and appraisal of a project or program loan proposal; (vi) assist
a DMC in implementing a loan project or program; or (vii)
supplement ADB’s in-house expertise.”
46. Making such a statement is important to put the need for
consulting services in clear perspective. It may seem elementary,
academic, or unnecessary, but putting a consultancy in the
perspective of the CPS and the project cycle is a critical first step in
properly designing a consulting services package.

B. Defining Consultancy 47. Once the reason for the consulting services requirement has
Output been clearly defined, the next step is to define the ultimate output
of the consultancy as a basis for determining the scope of work to
be undertaken to achieve it. This can best be done by preparing an
output statement on what is expected from the consulting services
package.
48. An output statement should provide a concrete basis for
defining the type of work that needs to be done by consultants and
the amount of work involved. Some examples of clearly expressed
consultancy output statements are the following:
K For a staff consultancy to prepare a PPTA – “Provide,
as a staff consultant, food policy expertise and guidance
during the formulation of a PPTA proposal for an agriculture
program loan in the Kyrgyz Republic.”
K For a PPTA – “Build on past external investments by
preparing a water supply project for 50,000 households
in Gujarat, India, with a focus on improving household
connections from the main system constructed under an
earlier project.”

19


K For a capacity-building ADTA accompanying a loan
project – “Train 30 members of the provincial government
of Nghe An Province in Viet Nam in the operation and
maintenance of rural infrastructure with a focus on rural
roads and markets.”
K For implementation assistance under a loan project
– “Assist the Government of Bangladesh to implement the
Agribusiness Development Project by setting up and staffing
25 agribusiness advisory offices in rural areas known for the
production of high-value agricultural crops.”
49. At its simplest, the output statement will contain the type
of activity to be undertaken and the amount of money involved,
for example: “Prepare a participatory livestock project in Nepal
to be financed by a loan from ADB in the neighborhood of $25.0
million.”
50. Preparing the output statement may be a simple or a complex
task, depending on the nature of the consulting services required.
At its simplest (for example, when recruiting a staff consultant), the
statement will be prepared by the ADB staff member concerned.
For larger and more complex consulting assignments, preparing the
output statement may require the input of the concerned ADB staff
member, representatives of the end users of the services (i.e., the
borrower or EA), and PPTA or staff consultants through an iterative
and consultative process.

C. Defining the 1. Identifying and Listing Tasks to be Performed
Scope of Work
and Preparing an For this step and the next few steps, technical expertise and
Implementation experience are necessary. If the ADB or EA officer does not have
Schedule this expertise, then this is an appropriate time to provide it
through a staff consultancy (in the case of ADB) or a small-scale
TA grant (in the case of an EA).

51. Once the consultancy output statement is agreed upon and
clearly spelled out, the next step is to list the tasks to be performed to
achieve the agreed-upon output and scope of work. These tasks will
then be outlined in an implementation schedule or work program.
The process normally followed is a deductive one using the following
pattern:
K Question: “What do the consultants need to do to achieve the
stated output?”
K Answer: “They need to do “a,” “b,” and “c.”

20


K Next Question: “What do they need to do to achieve “a”?

K Answer: “They need to do “x,” “y,” and “z.”

K Next Question: “After “x,” “y,” and “z” are done and “a” is
completed, what do they need to do to achieve “b”?
K Answer: “They need to do “l,” “m,” and “n.”

…and so on until the output is broken down into a discrete number
of interrelated tasks. For example, in providing training for provincial
government staff in infrastructure operation and maintenance, the
deductive process in Box 1 may be followed. These same principles
apply to individual and staff consultancies as much as to large,
complex feasibility and design studies.

Box 1: Deductive Reasoning in Determining Consulting Tasks for
Provincial Government Staff Training

Training provincial government staff requires (i) analysis but also an assessment of what facilities
a prior needs analysis, (ii) formulation of training are available to provide the training and what type
programs and courses, (iii) implementation of of training expertise is available in the country or
training activities, and (iv) monitoring of the the provinces concerned. Further activities to be
training program. undertaken will thus include (i) assessment of the
available training facilities, and (ii) assessment
To undertake a needs analysis, a decision must of the capacity and qualifications of potential
be taken about who will receive training. To trainers. The process then continues through
make a decision about who will be provided the implementation of training, monitoring and
training, the provincial governments need to be evaluation of the training program, and final post-
informed about the training program and asked training assessment.
to name candidates. The tasks involved in the
needs analysis will thus include (i) informing the Each of the tasks needed to complete the scope
provincial governments of their participation of work must be identified so that a logical flow
in the project, (ii) requesting the nomination of and network of activities may be identified as
candidates, (iii) interviewing candidates, and (iv) the duties of the consultants. In the end, a list
assessing candidates’ training needs. of perhaps 20-30 activities (in this particular case
– but possibly as many as 100, depending on the
The next step will be the formulation of training overall scope of work) will be identified as tasks to
courses. This requires not just a prior needs be undertaken by the consultants.

52. In many cases, especially for PPTA, identifying consultants’
activities is guided largely by the requirements of ADB. For preparing
a project, there are stringent requirements in terms of technical
appraisal and design, social and environmental safeguards, and

21


economic and financial analyses.12 In other cases, the tasks to be
undertaken will depend on technical requirements or identified
areas of weakness in capacity, policy, or expertise.
2. Determining the Time Frame and Logical Sequencing of
Activities
53. Once identified, the tasks to be undertaken by the consultants
should be presented in a list and an estimate made of the time
required for each. This is only an initial estimate, since it may
change, depending on the available budget and the eventual staffing
schedule.
54. For PPTA, the time frame is often limited by either the availability
of funding or ADB’s processing schedule. For loan projects, the
amount of time provided may be limited by the willingness of
the government to borrow funds for international and national
55. The time required may be expressed in days, weeks, or years,
depending on the overall length of the consulting input. For a loan
consultancy, the unit normally used is months or fractions thereof
(usually a quarter-month). Often for ADTA and PPTA, which may be
of relatively short duration, the unit used is weeks; and for individual
or staff consultancies, days, weeks, or months, depending on the
overall period involved. However, for ease of management, it is often
better to use months or portions of months so that, for costing and
subsequent contracts, one standard measure is used.
56. After the tasks are identified and a time frame for each task is
assigned, a logical sequencing of the tasks must be determined.
Several tools such as flow charts and logical frameworks as well
as a number of computer programs can be used for this purpose,
depending on the complexity involved. Usually, though, for the type
of consultancy undertaken with ADB funding, a simple bar chart
is the best way to illustrate required outputs over time and their
relationship to each other. This can then be transformed directly
into an implementation schedule or work program.
3. Preparing the Implementation Schedule
57. Once the consulting tasks have been identified and the time line
has been allocated to them as well as their sequencing determined,
an implementation schedule can be prepared. An example of an
implementation schedule is given in Figure 2. While preparing
such a bar chart may be unnecessary for staff consultancies and
individual TA consultancies, it is usually useful, nonetheless, to go
through this process, especially to ensure that sufficient time has

12
Many DMCs now have very similar safeguard requirements to those of ADB, and
consulting services designed for PPTAs need to take these into account as well.

22


Figure 2: Typical Implementation Schedule for a PPTA
Month
Activity
1 2 3 4 5 6
I. Start up
1. Establish project office
2. Undertake literature review
3. Liaise with other projects, agencies,
and aid agencies.
4. Undertake introductory field trips to
project sites
5. Hold project inception workshop
II. Feasibility studies
1. Review existing engineering designs
2. Update technical proposals and determine
project costs
3. Establish mechanism for beneficiary
feedback
4. Undertake social surveys
5. Undertake resettlement surveys
6. Undertake environmental impact surveys
7. Identify project benefits
8. Undertake economic and financial analyses
III. Report completion
1. Prepare draft final report
2. Review period for draft final report
3. Workshop on draft final report
4. Preparing final report
IV. Major milestones
1. Reports
Inception report Interim report Draft final report Final report

2. Meetings Inception Midterm review Final tripartite meeting
meeting

been allowed to do the required tasks. Normally, an implementation
schedule includes not only the time inputs for individual tasks, but
also tangible outputs and activities such as reports, workshops, or
seminars as shown in the example in Figure 2.

D. Identifying the 58. To determine consulting services inputs, it is ﬁrst necessary
Expertise Required to determine exactly what expertise is required to perform each
task listed in the implementation schedule. In some cases, this is
for Each Task quite clear: an environmental analysis requires an environmental
specialist, a resettlement framework requires a resettlement
specialist, and an economic analysis requires an economist. In
other cases, especially with ADTA or RETA, determining the exact
expertise required may take more time and discussion and should

23


be done through an iterative process with the EA. For each task
listed in the implementation schedule, the question “Who will do
this?” needs to be asked and a specific, individual type of expertise
needs to be allocated to each task. The need for team leadership
activities to be specifically spelled out during this process should
not be overlooked.

E. Preparing a 59. Expertise requirements, once determined, should be listed in a
Preliminary Staffing preliminary staffing schedule. An example is shown in Figure 3.
Schedule 60. This is generally done through a two-stage process, since it
is often possible to combine types of expertise into one staffing
position. For example, if both financial and economic analyses

Figure 3: Preliminary Staffing Schedule
Expert Inputs in Months
Position Total Person
1 2 3 4 5 6
Months
I. International
Water resources
planner 5.50

Irrigation engineer 3.00
National water
supply engineer 3.00

Agronomist 1.50
Rural sociologist 2.25
Resettlement 1.25
specialist
Environmental 1.00
specialist
Economist/ 2.50
financial analyst
Total International 20.00
II. National
Irrigation engineer 5.25
National water
supply engineer 4.50
Operation and
maintenance 1.25
engineer
Agronomist 2.75

Sociologist 4.50
Environmental
specialist 2.25

Financial specialist 2.25
Economist 2.25
Total National 25.00
Total Overall 45.00

24


are required, the two requirements might be combined into one
consultant position, resulting in time and budget savings. It is,
nevertheless, useful to double check the draft implementation
schedule to determine whether the need for expertise will overlap at
critical periods, making this a less than optimal solution.
61. Once a preliminary list of experts is prepared, refinements are
possible. The EA can be asked what expertise it can provide, and
this can be documented and removed from the consulting services
package. More importantly, the need for international versus
national expertise can be assessed.
62. In terms of economy, and following ADB policy, it is often
best to maximize national inputs. In terms of efficiency, a basic
international presence on the consulting team is often required. In
most cases, maximum economy and efficiency are achieved through
an appropriate balance of the two, with national experts providing
local knowledge and international experts providing a broader
international perspective and generally more advanced levels of
technical expertise.
63. In addition, a decision may need to be made as to which
particular expertise requirement to combine with the team leader
responsibilities. For PPTA, this is often a technical expert like an
engineer, but there are often good reasons why a more generalist
type of expert should be the team leader, and a team leader position
may be created with only a minor number of technical duties. Just
managing a large team of diverse experts over an extended period is
a challenging enough job in itself, often requiring a range of expertise
and experience.
64. Once these steps are taken, a preliminary staffing schedule of
the consultant team showing the experts required, the split between
international and national expertise, and the estimated person-
months requirement can be prepared.

N.B. The preliminary staffing schedule should remain a draft until
a cross-check is possible with the financing available and the TOR
(see next section).

F. Preparing Outline 65. The TOR describe in detail what the overall duties of the
Terms of Reference13 consulting team will be and what the duties of each consultant team
member or individual consultant will be to achieve the intended

13
For a broader discussion on this topic pertaining mainly to loan projects, see: ADB.
2005. User Guide for Preparing Terms of Reference. Manila.

25


output of the consultancy. For loan projects, outline TOR are
normally prepared as an appendix to the RRP with more detailed
,
TOR sometimes provided in a supplementary appendix. For ADTA,
PPTA, and RETA, outline TOR are prepared for inclusion in the TA
paper, normally as Appendix 4. The template for ADB’s standard
TA Board paper allows only five pages of single-spaced type, so
the outline TOR for a TA must be both focused and succinct. More
detailed TOR may be prepared separately for inclusion in the request
for proposals (RFP) later. Nonetheless, preparing the outline TOR
for the TA paper is an important step, since it describes, in essence,
what consulting services are expected. The steps outlined below
may be followed:
1. Describe the Output Expected from the Consultancy
as a Whole
66. To give consulting firms an idea of the services they will be
expected to provide, the outline TOR should begin with a brief but
comprehensive paragraph on
K what the TA output is expected to be;

K how long is allowed for the work;

K what the counterpart agency, if any, will be;

K what reports and workshop or seminar activities will be
required during the implementation period;
K the experts required; and

K their estimated time inputs.

The basis for this should be the output description, the
implementation schedule, and the preliminary staffing schedule as
already described.
2. Prepare Lists of Tasks or Duties for Individual Experts
67. Identifying the tasks for each individual expert on a team is the
nub of any set of TOR and often the basis for the success or failure of
a TA grant or loan project.
68. The guide for preparing the list of tasks or duties should be the
output statement, the implementation schedule, and the preliminary
staffing schedule as well as the technical input of the team preparing
the TOR.14 Just as the expertise required for a TA or loan consultancy
can originally be derived from the implementation schedule, the
duties or tasks of each expert can also be derived by referring back

14
This would, under varying circumstances, include different combinations of the
ADB project officer, ADB mission members, staff consultants, PPTA consultants, and
representatives of the EA.

26


to it. These will, of course, need to be expanded, especially for
specialized disciplines. It is for this task that staff consultants often
make a major input during TA preparation, and PPTA consultants
make a major input during loan preparation.
69. Each list of duties should be both succinct and comprehensive
(taking into account the five-page limit in the case of TA). For
example, the outline TOR for an environmental specialist should go
beyond a simple statement that the expert must prepare an initial
environmental examination and should list at least 5—and probably
no more than 15—detailed tasks to be undertaken. Excessive detail
should also be avoided. It should be assumed that an expert knows
the basic practices of his/her field but needs to be told what is
required in specific circumstances. Thus, the TOR for an economist,
for example, may state specifically that a particular computer
program must be used for estimating project costs, but need not
describe in detail how to undertake a standard benefit/cost analysis
or calculate an economic internal rate of return.
70. The TOR for national consultants may be prepared in greater
or lesser detail, depending on how much their tasks will differ from
those of the counterpart international experts. If the tasks are more
or less the same, there is no point in duplicating TOR. An indication
can be made on the list of tasks that these will be implemented, e.g.,
by “one international economist for a period of 3 person-months
and two national economists for a total period of 6 person-months.”
On the other hand, if the tasks differ substantially, separate TOR are
warranted.
71. Some project officers prefer not to distinguish the tasks of
individual experts but instead to prepare a longer and more detailed
description of what the consulting team, as a whole, will provide
without splitting up tasks. These are generally known as “activity-
based” TOR as opposed to “position-based” TOR. Such general
TOR would indicate, for example, that “the consultants will identify
and prepare a rural development project in such-and-such a
province in such-and-such a country, taking into account available
natural resources, present land use, environmental and social
considerations, economic and financial viability, etc.” The TOR
would then list a range of tasks without regard to who will have the
responsibility to undertake them. In a few cases, especially ADTA
or RETA and some project implementation consultancies—where
the work to be done is not clearly defined, the number of experts is
small, and a degree of flexibility is required— this may be acceptable.
Normally, however, it is not, for several reasons:
K It is necessary to know that each task required for a
consultancy will be done and, therefore, it is advisable to
designate a specific expert to be responsible for it even if
other experts will also be involved.

27


K Individual experts need to know exactly what their respon-
sibilities are so that they can determine their personal work
programs and decide when their inputs have been com-
pleted.
K To properly manage the combined output of the team, the
team leader needs to know exactly who is responsible for
each task and needs to be in a position to monitor the output
of each expert against a measurable baseline, especially
when time is short and deadlines are tight.
K There is a need for a baseline against which to measure
the completion of TA outputs if and when disputes or
disagreements arise either within the team, with the EA, or
with ADB.
K Finally and most importantly, during the proposal evaluation
process, it is necessary to indicate the duties assigned to each
expert so that his/her experience can be properly assessed.
Section 12 of ADB’s standard biodata form requires a list of
tasks against which a consultant’s experience is assessed.
Unless each consultant’s duties are clearly indicated in the
TOR, it is very difficult for the consultant to complete this
section and also difficult to make an assessment of each
candidate’s suitability. If only a general or generic list of duties
is given for the team as a whole, each individual firm is likely
to list the tasks of particular experts differently in this section
of the biodata form, and a comparison of experts among firms
may not allow a true assessment of each expert’s capabilities.
3. Indicate Basic Qualifications for Each Expert
72. Some ADB officers and EAs prefer to indicate the minimum
qualifications for experts for each position. (This is more often done
in preparing TOR for a loan project than for a TA, or during expansion
of the TOR for a TA when preparing the request for proposals [RFP].)
Caution is advised in doing this. Setting the bar too high could result
in well-qualified experts being excluded or downgraded simply
because they have, for example, only a bachelor’s degree rather
than a master’s degree, despite many years of practical experience,
or because they have not worked in a particular country despite a
wealth of other experience. Furthermore, it is not unusual to find
experienced consultants whose original training is quite different
from their specialist expertise. For example, one highly effective
water resources planner recruited by ADB had his original degree in
theology. Of course, qualifications can be included at the discretion
of the individual project officer, but they should be carefully thought
out and reasonable. They should also be pointed out as being
“preferred” rather than “minimum cutoffs.”

28


Self-Study Questionnaire – Chapter II

1. Q. What is the step in ADB’s project cycle when major consulting services requirements are
first identified?

A. Preparing the CPS.

2. Q. What types of consulting services are needed at the various stages of the project cycle?

A. K Staff consultants are often required when preparing CPSs.

K Staff consultants are often required when preparing PPTA, ADTA, and RETA.

K Teams of consultants from firms or individual consultants are required when
implementing ADTA and RETA.

K Teams of consultants from firms and individual consultants are required when
preparing a project through the implementation of a PPTA.

K Staff consultants are often required to support ADB staff during loan fact-finding and
appraisal.

K Individual consultants and teams of consultants from firms are usually required to
provide support during project implementation.

K Sometimes staff consultants are also used for in-house studies and to help with various
tasks, such as project evaluations.

3. Q. Why is a specific “output statement” necessary when formulating a consulting services
package?

A. To focus discussions and to help reach an agreement between ADB and government
authorities on the scope of consulting services.

4. Q. What should an output statement contain?

A. A concrete basis for defining the type of work that needs to be done by consultants and
the amount of work involved.

5. Q. What is the best way to determine the tasks to be performed to achieve the agreed-upon
output and scope of work?

A. A process of deductive reasoning based on the output statement.

6. Q. Once the steps to achieve the consulting services output are defined, what should be done
next?

A. A preliminary time frame for implementation should be determined, and the activities
required listed in a logical sequence.

29


7. Q. What does an implementation schedule normally show?

A. The phased time inputs for individual tasks as well as tangible outputs and activities such
as reports, workshops, and seminars.

8. Q. What is the best way to identify the expertise required for the consulting services?

A. For each task listed in the implementation schedule, ask the question “Who will do
this?”

9. Q. In terms of staffing, what is the best way to achieve a maximum of economy and efficiency
while furthering ADB’s policies of promoting national consulting capabilities?

A. Aim for an appropriate mix of international and national expertise in the consulting
team.

10. Q. What is the core of a set of TOR?

A. A list of tasks and duties for each consultant.

11. Q. How is it derived?

A. By referring to the output statement, the list of tasks to be performed, and the staffing
schedule.

30

Chapter III
Part B: Budget

A. Budgets for TA- 73. Providing adequate funds based on realistic cost estimates
Funded Consulting is a key to the effective use of consulting services. There is no
point in fielding an individual expert or a team of experts without
Services vs. Budgets either sufficient time or support to allow them to undertake the
for Loan-Funded task assigned to them. This is much more critical in a TA than in
Consulting Services a loan. A loan project typically has a large, built-in physical and
price contingency covering the whole of the project investment.
Any underestimate in the need for consulting services and their
support can thus be made up by reallocations from the overall
project budget or the contingencies. This is not the case for a TA,
where contingencies are not only limited but also often needed to
cover currency fluctuations. A careful estimation of the costs of a
TA consultancy is thus a critical part of designing the consulting
services package.
74. The steps to be undertaken to determine a consultancy budget
are similar for all types of consulting services, although the results
may be presented in different ways. The costs for consulting services
under loan projects are normally part of the overall project cost and
are often displayed in the project cost table as such, without specific
allowances for support or contingencies. Also, items such as vehicles,
office space and equipment, and office staff may be considered
part of the overall project support or management costs and not
specifically in support of the consulting services. Similarly, price and
physical contingencies will normally be applied across the whole
project and not necessarily just to the consulting services. It is critical
for this to be taken into account when preparing the RFP during the
consultant selection process. All costs of the consulting package
need to be included in the data sheet that is sent to short-listed
consulting firms as part of the RFP not just the fees of the consultants
,
taken from the project cost table. A further issue is that of taxes on
consultant fees. While ADB does not, under normal circumstances,
fund duties and taxes, it may be necessary to include an allowance
in the remuneration for international consultants if the consultants
will be expected to pay local taxes from their remuneration.

31


75. By contrast, the standard template for TA Board papers includes
a table for the Cost Estimates and Financing Plan that details all these
items as one TA grant package. This lists not only the consulting
services but also the government’s contribution and other expenses
(such as an allowance for attendance of a government observer at
contract negotiations, or the recruitment of resource persons), but
the core of the budget is the cost of consulting services and their
support. A standard TA Cost Estimates and Financing Plan is shown
in Table 1.

Table 1: TA Cost Estimates and Financing Plan ($’000)

Item Total Cost

A. Asian Development Bank Financing
1. Consultants
a. Remuneration and Per Diem
i. International Consultants
ii. National Consultants
b. International and Local Travel
c. Reports and Communications
2. Equipment
3. Training, Seminars, and Conferences
a. Facilitators
b. Training Program
4. Surveys
5. Miscellaneous Administration and
Support Costs
6. Representative for Contract Negotiations
7. Contingencies
Subtotal (A)

B. Government Financing
1. Ofﬁce Accommodation and Transport

2. Remuneration and Per Diem
of Counterpart Staff
3. Others
Subtotal (B)
Total

76. Because of its comprehensive nature, reference to this table is
useful in costing all types of consulting services, not just those for TA,
and as a basis for preparing the data sheet provided to consultants
when proposals are requested. When used for loan projects, the
results can be used as a cross-check to ensure that all consulting
services costs have been included in the overall project costs.

32

Preparing a Consulting Services Package Part B

77. With the TA Cost Estimates and Financing Plan as a guide, a
consulting services budget can be readily prepared using the staffing
schedule and implementation schedule derived earlier as the basis
for determining the length and nature of each consultant’s input.
The process is outlined in the next section.

B. Steps in Preparing 1. Estimating Remuneration and Per Diem for
the Budget International Consultants15
a. International Consultants’ Remuneration
78. The number of person-months for each consultant is shown
in the preliminary staffing schedule. COSO calculates different
monthly rates for particular types of international expertise. These
are updated regularly, and available from COSO for ADB staff and
staff of EAs. They may be provided upon request by the ADB project
officer to the consultants preparing projects under PPTA and to the
EAs preparing data sheets for RFPs. The rates are shown in terms of
person-months.16
79. Multiplying the number of person-months of each expert by
the rates given provides an estimate of the total cost of international
consultant remuneration. A typical calculation would look
something like this:

3 person-months for a transport engineer @ $19,000 = $ 57,000
1 person-month for an agronomist @ $18,500 = $ 18,500
1 person-month for an economist @ $19,000 = $ 19,000
1 person-month for an environmentalist @ $18,500 = $ 18,500
1.5 person-months for a social impact
specialist @ $16,500 = $ 24,750
Total international remuneration = $ 137,750

This then needs to be added to the estimated cost of per diems for
international consultants.

15
In some cases the TA budget includes provisions for both a consulting team and, in
addition, individual consultants to be recruited separately. In these cases separate
cost estimates should be prepared for each grouping.
16
In its contracts with consultants ADB officially uses a “calendar day month” of 30 days
for fieldwork and a “working day month” of 22 days for home office work. Because
of the complexity of these allocations, which are used mainly for costing contracts,
it is usually best to estimate inputs in months or decimal fractions thereof when
preparing estimates for consultant time inputs. Thus inputs could be for, for example,
3.5 months or 2.25 months. This will give the level of detail needed for scheduling and
cost estimates without reverting to the issue of calendar days or working days.

33


b. International Consultants’ Per Diem
80. Updated per diem costs are also available from COSO. Per
diems are provided only for work in the country of operation or for
travel to and from the duty station (i.e., not for home-office work),
but a distinction needs to be made between time spent in different
locations within the country.
81. Typically, per diems in a capital or major city are higher than
for time spent in the field. To arrive at a reasonable estimate of per
diems, the time spent in the field or at the project site, the time
spent on international travel, and the number of days spent in the
country’s capital or major city must be estimated for each expert.
These are then multiplied by the appropriate per diem allowance,
and an estimate of total per diems for international experts is
arrived at.
82. For consultants staying for extended periods within the coun-
try (over 6 continuous months), per diems may be reduced on the
understanding that it will be possible for them to find rental accom-
modation. On the other hand, long-staying consultants working
on loan projects may wish to have their dependents with them and
may request supplements for education and dependent travel. Most
TA-financed consultant inputs—but not all—are relatively short, and
these contingencies do not often arise. Thus, it is generally better to
calculate per diem requirements for TA grant consultancies based on
the standard rates without worrying too much about special cases.
These can better be dealt with during contract negotiations.
83. A typical calculation of international consultants’ per diems
would look like Table 2.

Table 2: International Consultants’ Per Diem
Person- Total International Days in Field Days at Executing
Expertise Months Days Travel Days Agency Headquarters

Transport engineer 3 90 2 60 28
Agronomist 1 30 2 20 8
Economist 1 30 2 10 18
Environmentalist 1 30 2 20 8
Social impact specialist 1.5 45 2 30 13
Cumulative total (days) (A) 7.5 225 10 140 75
Per diem allowance ($) (B) 120 75 150
Per diem cost ($) (C) 1,200 10,500 11,250
(C= A X B)

Total per diem cost = $22,950

The total international per diem cost would thus be the cost of international travel days + days in field + days at EA headquarters, or in this
example: $1,200 + $10,500 + $11,250 = $22,950.

34


c. Combining International Consultants’
Remuneration with Their Per Diem
84. A simple addition of the two costs, remuneration and per diem,
provides the estimate for international consultants’ remuneration
and per diem. It then becomes possible to fill in the first item in the
TA Cost Estimates and Financing Plan table—viz., remuneration
and per diem for international consultants. This is typically the
largest cost of the total consulting services package. (In the case of
the above examples, it is $137,550 + $22,950 = $160,500).
2. Estimating Remuneration and Per Diem for National
Consultants
85. Estimating remuneration and per diem costs for national
consultants follows a similar process with a few variations. In the
case of the preparation of loan projects, most EAs are familiar
with national consultant rates and can provide these for the PPTA
consultants. For ADB staff preparing ADTA or PPTA, and for staff
consultancies, guidance on national consultant costs can also be
obtained from COSO, but it is worthwhile to check with sources
with local knowledge such as the EA and the resident mission.
The costs used in recent TA activities are also a good source of
information. National consultants generally receive per diems only
during fieldwork, but in some cases, if they will need to change
their residence temporarily, they may also qualify for per diem. For
example, a national consultant who is normally a resident of Ho Chi
Minh City in Viet Nam may be eligible for a per diem if moving to Ha
Noi for the consultancy assignment. Since there is no way of knowing
this when preparing the TA, it is best to err on the side of prudence
when estimating local per diems and to ensure that sufficient funds
are budgeted for them.
3. Estimating International and Local Travel
86. Adequate funds should be budgeted for international travel
to allow firms from all ADB member countries the opportunity to
participate equitably in the proposal. This means airfare estimates
should be sufficient to allow companies farthest from the project site
to cover airfares without drawing from other budget items. COSO
now advises the use of one standard airfare for international travel.
ADB staff can refer to COSO for the latest recommended rates. EAs
and consultants preparing projects can request these rates from the
project officer concerned. Care should be taken in determining the
number of international flights, since, in many cases, one per expert
will not be enough. The staffing schedule should be consulted, and
care should be taken to ensure that sufficient international flights
are budgeted to allow consultants to return for key activities such as
attendance at midterm or wrap-up workshops.

35


87. The amount of funds budgeted for local travel depends very
much on the situation of the particular consultancy. Besides local
airfares, in some cases it may be considered more efficient to provide
funds for vehicle purchase and in others for vehicle rental. Both have
their advantages, depending on the nature of the work to be carried
out, the amount of time involved, and the number of personnel
involved. Typically, importing vehicles may take time; thus, for cases
in which time is a constraint (such as ADTA and, particularly, PPTA
as well as staff consultancies) the provision of funds for car rentals,
as well as internal airfares is generally more appropriate than vehicle
purchase. On the other hand, upon completion of the consulting
services contract, equipment and vehicles are handed over to the
EA, which may be an important consideration in some cases.
4. Estimating Other Costs
88. Other costs associated with the consultancy (e.g., report
preparation, equipment, field surveys, interpreters and translators,
workshops, communications, and miscellaneous support costs) will
vary with the particular consultancy. If there is any doubt, it is best to
consult previous TA papers or RRPs for similar projects in the same
country prior to finalizing costs. It is critical that sufficient funds be
budgeted so that the consulting team can have the full support it
needs; otherwise, the work and the output will suffer. Three special
items need mentioning:
K For ADTA and PPTA, $5,000 or so is normally budgeted to
allow the attendance of an observer from the EA during
contract negotiations.
K Contingencies for ADTA, PPTA, and RETA operations
are normally estimated at 10%. As previously noted,
contingencies for loan projects will be calculated separately
for the whole project.
K For ADTA and PPTA, a minimum contribution by the
government or TA recipient is normally expected. In 2007,
this was at least 15% of the total TA cost for group A DMCs,
20% for groups B1 and B2, and 30% for group C.17 Guidelines
and updates on this can be found in Section D12/BP of the
Operations Manual. This contribution is usually made in
kind through the provision of staff, translators, office space,
and in-country transport.

17
ADB classifies its DMCs into four groups depending on their eligibility to borrow from
the Asian Development Fund (ADF) and ordinary capital resources (OCR). These
groups are (i) ADF only (Group A), (ii) ADF with limited amounts of OCR (Group B1),
(iii) OCR with limited amounts of ADF (Group B2), and (iv) OCR only (Group C).

36


5. A Check with Reality
89. Once the cost estimates for the consulting services and their
support are prepared, a check with reality is needed. Ideally,
budgeting for consultancy services should be based on a bottom-
up process, and funding should be adjusted to accommodate the
perceived and costed needs for expertise and support. However, this
is not always possible. If the consultancy is for a loan, the amount
proposed may not be acceptable to the government. If, for example,
the estimated consulting package will cost 20% of the total loan
amount, there may be some resistance. Many governments set a
ceiling on the portion of the loan amount that may be allocated
to consultancy and training versus physical investment—usually
5% or 10% of the total loan amount. If, on the other hand, the
consultancy is for ADTA, PPTA, or RETA, the cost will normally have
to be kept within the TA budget provided in the CPS. In many cases,
the original estimate will exceed this amount, since costs tend to
expand as more and more items that were not originally considered
are added into the cost table. Every effort should be made to ensure
that the funds available are sufficient to implement the consulting
assignment properly.
90. If the allocation of additional funds does not seem likely,
adjustments may have to be made to the cost estimates. Normally,
the first place to look for savings is in the support costs. Ultimately,
however, adjustments may have to be made not only in the support
costs but also in the time inputs of the experts themselves. This
must be done carefully. At what point will reducing the support
costs diminish the effectiveness of the consulting team? At what
point would reducing the inputs of the consultants result in not
achieving the desired output? One common place to look for savings
is in the number of person-months of international expertise. These
are usually the most expensive item on a unit cost basis and may
be substituted with national expertise up to a certain point. Again,
the question arises: How much will the substitution of international
expertise by national expertise affect the quality of the TA or
project implementation results? A balance of all three measures—
reduced support costs, reduced international expertise inputs, and
substitution of national expertise for international expertise—will
often resolve any underbudgeting during TA identification. If not,
serious consideration will need to be given to insisting on additional
funds for the consultancy or to lowering the expectations of what
can be achieved with the funds available.

37


Self-Study Questionnaire – Chapter III

1. Q. What is the difference in the presentation of consulting services costs between loan-
funded consulting services and TA grant-funded consulting services?

A. In cost presentations for loan-funded consulting services, the costs are shown as part of
the overall project cost. Consultants’ remuneration is thus normally shown as a line item,
separate from support costs such as transport, office equipment, and—even in some
cases—per diems. By contrast, under the standard TA Cost Estimates and Financing Plan,
all costs are shown for the TA as well as for the government’s counterpart contribution.

2. Q. Why is it important to know this?

A. When preparing an RFP for loan-funded consulting services, especially the data sheet,
all costs should be included. For loan-funded consulting services, this means provision
should be made for support costs as well as for remuneration in the cost estimates.

3. Q. What is the difference between the way contingencies are handled in costing loan-
funded consulting services and TA grant-funded consulting services?

A. For loan-funded consulting services, a large contingency normally covers the whole
project cost, which can be used for consulting services if necessary. For TA grant-funded
consulting services, contingency costs are limited to about 10% of the TA cost. This means
that costings for TA grant-funded consulting services need to be much more precise.

4. Q. Why is it helpful to use the TA Cost Estimates and Financing Plan table for costing all
types of consulting services from staff consultants to loan-funded consultants?

A. Because of its comprehensive nature.

5. Q. What is the largest single-cost item for consulting services?

A. Remuneration and per diem of international experts.

6. Q. How is it calculated?

A. Based on the staffing schedule, the time input in person-months for each expert is
multiplied by the standard monthly rate for each type of expertise. The time inputs for all
experts are then totaled. The days spent in the field and home office for each expert are
then calculated, and these are totaled. The two totals are then added.together. A separate
exercise is normally done for national experts.

38

Chapter IV
Part C: Method of Selection, Type of Proposal,
and Finalization of the Package

A. Deciding on the 91. For loan-funded consultants or TA consultants (PPTA, ADTA,
Method of Selection and RETA), the RRP or TA paper must indicate the method of
selection for consulting services. For loan projects, this is normally
decided when preparing the procurement plan in conjunction with
the borrower’s EA during the loan fact-finding or appraisal mission.
Preparation of the procurement plan is normally preceded by an
assessment of the capacity of the borrower to recruit and supervise
the implementation of consulting services. The selection method
chosen, as well as the degree of ADB supervision of the selection
process, depends to some extent on this assessment. For TA
consultants, the method of selection is chosen by the project officer,
in conjunction with COSO.
92. Consultants may be selected as individuals18 or as a team,
normally recruited from a firm but sometimes from an institute
or international agency. The following discussion refers to teams
of consultants selected from a firm. Chapters VIII and IX deal with
other types of consultants.
93. ADB uses six methods for selecting teams of consultants:
K quality- and cost-based selection (QCBS),

K quality-based selection (QBS),

K fixed-budget selection (FBS),

K least-cost selection (LCS),

K consultants’ qualifications selection (CQS), and

K single-source selection (SSS).

18
Staff consultants are almost always recruited as individuals.

39


These are described in detail in PAI 2.02A (available at www.adb.
org/Documents/Manuals/PAI/default.asp on the ADB website).
The normal selection method for TA and loans is QCBS. Flexibility
exists to use other methods if they appear more appropriate to the
circumstances within which the consultancy will be implemented.
Justification must be provided in the TA paper or RRP and agreement
,
received from (i) COSO in the case of TA (where recruitment is by
ADB), or (ii) the user division and COSO (for loans where recruitment
is undertaken by the borrower) if a selection method other than
QCBS is to be used. The three methods most commonly used to
date have been QCBS, QBS, and SSS. All six methods are discussed
below.
1. Quality- and Cost-Based Selection
94. QCBS is ADB’s preferred method of selection, since it allows
for both efficiency and economy. It allows a sorting mechanism
for technical quality as well as a weighting mechanism for cost.
Consultants submit both a technical proposal and a financial
proposal at the same time. The technical proposals are opened first
and evaluated against a maximum of 1,000 points. Any firm scoring
less than 750 points is considered technically nonresponsive and
is dropped from the list. Financial proposals are then opened and
ranked. The lowest proposal is allocated a financial score of 1,000,
and the financial proposals of other firms are prorated and provided
a score according to their value relative to the lowest proposal. A
final score incorporating a cost factor is then calculated, based
partly on the technical scores and partly on the financial scores.
The ratio normally used is 80% for technical score and 20% for
financial score, but this may, at the discretion of the project officer
(with appropriate justification and the agreement of COSO), be
set at either a ratio of 90:10 or 70:30 if circumstances warrant. For
consultancy services with a high level of complexity or impact, the
ratio chosen may be 90:10. For those with a lower level of risk and
where cost is a factor, 70:30 may be chosen. (The mechanics of the
selection process are described in detail in Chapter VI.)
95. As noted above, QCBS provides efficiency (qualifying firms
must attain a minimum technical score) as well as economy (firms
with lower priced proposals may still have an advantage). QCBS is
considered suitable for recruiting consultants from firms in most
situations. It is important, though, to ensure that the initial technical
selection process is rigorous enough to ensure that only technically
qualified firms are selected for financial proposal opening.
2. Quality-Based Selection
96. In certain cases, the importance of technical quality may be
overriding to the extent that it is counterproductive to consider cost

40

Preparing a Consulting Services Package Part C

factors in the selection. In the Guidelines, these situations are listed
as
K assignments that are complex or highly specialized, making
it difficult to define precise TOR and the required input from
the consultants;
K assignments where the downstream impact is so large that
the quality of services is of overriding importance for the
outcome of the project, since there may be a high negative
impact or cost if the services fail; and
K assignments that can be carried out in substantially different
ways such that financial proposals may be difficult to
compare.
97. In such cases, it is possible to use QBS rather than QCBS.
Another case when QBS might be used is when recruiting expertise
from a United Nations (UN) agency, NGO, or academic institute.
Such organizations may have an undue cost advantage vis-à-vis
commercial firms and—to present a more level field of competition—
proposals based purely on technical criteria may be considered
more appropriate than QCBS.
98. In QBS, initially only technical proposals are submitted. After
these are evaluated, the highest ranked firm is asked to submit a
detailed financial proposal. This is then subject to negotiation and, if
unsuccessful, the next ranked firm is asked for a financial proposal.
This process continues until a contract is successfully negotiated.
In view of the need for lengthy and detailed negotiations and the
greater possibility that negotiations will be unfruitful, QBS tends
to be a longer process than QCBS. Thus, in the interest of effective
work scheduling and project implementation, using QCBS may be
preferable even if technical quality is an overriding factor, but with
a 90:10 weighting ratio so that the technical aspects of the proposal
are not influenced by anomalous, low financial proposals. Another
possibility would be to use FBS (see next subsection).
3. Fixed-Budget Selection
99. FBS follows a similar process to QCBS but does not include a
weighting for cost. Firms are informed of the maximum possible
contract amount at the time proposals are requested. Technical and
financial proposals are submitted, and an evaluation is first made
of the technical proposals. Those scoring less than 750 points out of
1,000 are considered technically nonresponsive, and the firms are
dropped from the evaluation. Financial proposals are then opened.
Any proposals exceeding the maximum contract amount (which
has been specified in the data sheet in the RFP) are also rejected.
The firm that had submitted the highest-ranking technical proposal
among the remaining firms is then invited for negotiations.

41


100. FBS may be appropriate when
K the outcome or impact of the consultancy is important
enough to favor technical soundness over potential cost
savings possible through QCBS;
K the TOR are detailed, specific, precise, and position based;
and neither ADB nor the EA will change them during
implementation;
K the experts’ inputs in person-months are adequate to
complete the TOR and unlikely to need revising;
K the budget is sufficient for all the requirements in the TOR;
and
K the funding available is fixed and cannot be exceeded.

101. Examples of assignments for which FBS may be appropriate
for loan and TA grant funds include sector studies, market studies,
and surveys with limited scope; field studies during project
preparation; prefeasibility studies and reviews of existing feasibility
studies; social, land acquisition, or environmental surveys; reviews
of technical designs and proposal documents; and project benefit
monitoring.
102. FBS may be more appropriate for TA grants than QBS in
situations when a decision has been taken not to use QCBS. Under
TA grants, the maximum budget is fixed, having been approved by
the President or the Board of Directors based on the TA paper. It
is not possible to disburse funds in excess of this amount without
going through a cumbersome process of requesting additional
funding from the President or the Board. In effect, there is little
possibility of exceeding the level of funds approved in the TA paper.
FBS would allow, in these circumstances, a rigorous technical
evaluation while ensuring that the financial proposals remain
within budget. Most firms submitting proposals for TA operations
already know the budget in any event, since the TA papers are now
public documents published on the ADB website.
103. One advantage of FBS is that negotiations with a first-ranked
firm are simpler than QBS and are similar to QCBS. No detailed
negotiations about individual salaries, rates, or markups are
necessary, and the process is mainly a matter of verifying that all
costs will be adequately covered.
4. Least-Cost Selection
104. LCS uses procedures similar to QCBS and FBS. Firms submit
both a technical and a financial proposal as in QCBS and FBS. The
technical proposals are evaluated first. The firm with the lowest
financial proposal of those scoring 750 points or more on the
technical proposal is then chosen.

42


105. LCS may be suitable for use under loan projects if
K contracts are small, with a consulting services budget
usually $100,000 or less;
K services are standard and routine;

K well-established practices and standards exist;

K outcomes are clearly defined;

K there is a low risk of failure; and

K the assignment can be completed for different costs.

106. Examples of assignments for which LCS may be appropriate
include audits, simple surveys, engineering design and/or super-
vision of simple construction projects, and routine operation and
maintenance work and inspection. Most LCS contracts will be for
lump sums.
5. Consultants’ Qualifications Selection
107. CQS is usually used when specialized expertise is required;
recruitment time is critical; few consultants would be qualified for
the assignment; or because of special circumstances, the competitive
preparation and evaluation of proposals is not justified. Firms are
chosen from amplified expressions of interest (EOIs)19 submitted in
response to a detailed advertisement. The three top-ranked firms
are identified. The first-ranked firm is then requested to submit a
combined biodata technical proposal (next section) and financial
proposal as a basis for negotiations with the EA or ADB. Biodata are
evaluated and, if considered of sufficiently high caliber, the firm is
invited for negotiations. If this firm cannot submit an acceptable
proposal (in terms of personnel), then the second-ranked firm is
invited to submit a proposal. The upper contract amount limit for
this type of selection is usually $200,000, and the normal contract
used is for a lump sum.
108. CQS may be used for brief evaluation studies, high-level and
short-term legal assignments, participation in expert panels to
review projects, advisory assignments that are highly specialized
and narrow in scope, assignments that require the best available
qualifications, assignments for NGOs, simple safeguard studies
such as the preparation of an environmental impact assessment or
resettlement plan for a subproject, and emergency relief.

19
These will vary on a case-by-case basis but might include references from previous
clients, a detailed indication of staff qualifications, and an indication of the continuity
of senior management personnel in the firm.

43


109. Using CQS can save time, since, normally, only one proposal
is evaluated. The technical proposal is based on biodata, and the
negotiations may be carried out by e-mail and/or facsimile. If a lump-
sum contract is used, administration and supervision are simplified.
6. Single-Source Selection
110. SSS entails the selection of a firm without competition from
other firms. The Guidelines state that, since SSS does not provide
the benefits of competition, it should be used only in exceptional
cases. These are described as
K tasks that represent a natural continuation of previous
work carried out by the firm,
K emergency cases such as in response to disasters,

K very small assignments (i.e., less than $100,000), and

K when only one firm is qualified or has experience of
exceptional worth for the assignment.
At times, UN agencies are used to provide technical expertise
(commonly the International Labour Organization or the Food and
Agriculture Organization Investment Center). It is possible to use
the expertise of such institutions on a single-source basis, but only
if they meet the criteria laid out in paragraph 2.29 of the Guidelines,
which states:
“The justification for SSS shall be examined in the context of
the overall interests of the client and the project, and ADB’s
responsibility to ensure economy and efficiency and provide
equal opportunity to all qualified consultants. Justification for
the use of SSS must be given in the TA paper or RRP .”

B. Deciding on the Type 111. ADB uses three types of proposal: (i) full technical proposal
of Proposal (FTP), (ii) simplified technical proposal (STP), and (iii) biodata
technical proposal (BTP). FTPs include information on the firm’s
experience, a proposed approach and methodology that can be
quite lengthy (up to 50 pages), and a section containing the biodata
of proposed experts. STPs include only a short approach and
methodology section (up to 10 pages) along with a biodata section,
while BTPs contain only a graphic work plan, a staffing schedule,
and the biodata of each proposed expert. The normal time required
for submission of a proposal by a short-listed firm for an FTP is 45
days; for an STP 35 days; and for a BTP 21 days. These intervals can
, ,
be changed if there is a compelling need to do so.
112. Unless special considerations prevail, choosing a proposal
type is straightforward:
K FTPs are normally used for contract budgets over
$1,000,000.

44


K STPs are the normal type chosen for contract amounts
between $600,000 and $1,000,000.
K BTPs are normally used for contracts below $600,000.

113. If adequately justified, it is possible to require a proposal
type more complex or simpler than the norm. Thus, it is possible
to use an FTP for a contract of less than $1,000,000 if more detail on
the methodology is required, or a BTP for a contract of more than
$600,000 if there is a justifiable need to do so. The project officer
must indicate in the TA paper or the RRP which type of proposal
is being recommended. More information on the types of proposal
and how they are used is contained in PAI 2.02G.

C. Finalizing and 114. Finalizing the consulting services package entails a final review
Confirming the of the implementation schedule, staffing schedule, cost estimates,
Consulting Services and TOR. The most important step is to determine whether all
tasks required to achieve the desired output have been included in
Package the outline TOR. The next step is to ensure that sufficient time has
been allocated in the staffing schedule to implement the TOR. The
last is to determine whether adequate budget has been allocated
to implement the TOR as designed. Since the budget may be fixed
or limited, a series of iterations may be required before a final,
acceptable package is formulated. For loan-funded consultancies,
the selection method decided upon and the type of proposal will be
included in the procurement plan.
115. Once finalized, the consulting services package needs
to be confirmed. Consulting services packages, except for staff
consultancies, are normally prepared during a TA or loan fact-
finding mission. For a TA, they are normally prepared by the ADB
project officer (and/or possibly a staff consultant) in conjunction
with the proposed EA. For a loan, they are normally first prepared
by a team of PPTA consultants in consultation with the EA, and
then firmed up by the ADB project officer in conjunction with the
EA. Further refinements of the proposal are possible in both cases.
During the final meeting of the TA or loan fact-finding mission,
other government departments will have a chance to comment on
the proposed consulting services package. Then, upon the return
of the mission to ADB headquarters, the proposal will be reviewed
by a number of departments. Changes in cost, implementation
arrangements, staffing, and TOR are often made during this
process. In the case of loan projects, the EA and other government
departments/agencies have a final chance to review and comment
on the consultancy package during the appraisal mission. The
final version of the consulting services package is produced during
preparation of the RFP during the consultant selection process
and as outlined in Chapter V.

45


Self-Study Questionnaire – Chapter IV

1. Q. What are the six methods of selecting consultants used by ADB?

A. QCBS, QBS, FBS, LCS, CQS, and SSS.

2. Q. Which method does ADB prefer?

A. QCBS.

3. Q. Why is it preferred?

A. It allows for both efficiency and economy by selecting first for technical competence and
then adding a cost factor into the selection system.

4. Q. When might QBS be used?

A. When the importance of technical quality may be overriding to the extent that it is
counterproductive to consider cost factors in the selection.

5. Q. Instead of QBS, what other type of selection method could be considered if quality is
overriding and the budget is fixed?

A. FBS.

6. Q. What are the normal upper budget limits for CQS and LCS?

A. $200,000 and $100,000, respectively.

7. Q. What are the three types of proposal and when are they normally used?

A. K FTPs are normally used for contract budgets over $1,000,000.

K STPs are normally used for contract amounts between $600,000 and $1,000,000.

K BTPs are normally used for contracts less than $600,000.

46

Chapter V
Preparing Requests for Proposals

116. As noted in earlier chapters, consulting services financed with
ADB funds may be either (i) services of teams of consultants from
eligible consulting firms, agencies, or organizations;20 or (ii) services
of individual consultants recruited from a variety of sources. These
services may be recruited either directly by ADB or by the end-user of
ADB funds (i.e., the borrower in the case of loan funds or the recipient
in the case of grant funds). Normally, consulting services funded by
loans are recruited by the borrower, and consulting services funded
by TA grants or ADB’s administrative budget are recruited directly
by ADB.21 For loan-funded consultancies, the procurement plan
prepared at the time of loan fact-finding or appraisal will indicate
the precise method of selection. For TA-funded consultancies, the
method of selection is included in the TA Board paper.
117. The bulk of consulting services are recruited as teams from
consulting firms. Whether recruitment is done by ADB directly or
by the borrower, the procedures for recruiting consulting teams are
similar:
K The RFP is prepared and sent to a selected short list of
consulting firms.
K Proposals submitted by the firms are evaluated.

K Negotiations are undertaken with the highest ranked
firm.
These procedures are the main focus of this chapter on preparing
RFPs as well as Chapter VI on evaluating proposals and Chapter VII
on negotiating a contract. The procedures for the recruitment of
individual and staff consultants funded either by loans, TA grants,
or ADB’s administrative budget are described in Chapter VIII.
Procedures for recruiting other types of consultants are described
in Chapter IX.

20
Consulting assignments are classified as national or international. National
assignments are open only to consulting firms registered in the project country
or individual consultants who are citizens of the project country. International
assignments are open to consulting firms and individual consultants from all ADB
member countries, including the project country.
21
Recently there has been some variation in this pattern. Consulting services for some
delegated TA grants are being recruited by the borrower, while some loan-funded
consulting services are being recruited by ADB.

47


118. In the case of a loan-funded consultancy, the recruitment of
consulting services is normally undertaken by the EA’s project office
under the supervision of a consultant selection committee (CSC).
The RFP for a loan-funded consultancy is prepared by the EA’s
project office under the guidance of the responsible ADB division
and COSO.
119. In the case of a TA-funded consultancy, recruitment is
undertaken by ADB’s user division in coordination with COSO.
The RFP is prepared by the user division, but when the contract
budget for a TA-funded consultancy exceeds $600,000, the proposal
evaluation process is undertaken within ADB by a CSC chaired by
COSO. For contract budgets of this amount and below, the user
division undertakes the proposal evaluation.
120. The steps to be followed in requesting proposals for consultant
teams from qualified firms or other agencies are as follows:
K For a loan-funded consultancy or a delegated TA grant,
an assessment of the capacity of the borrower’s EA is
undertaken, and a procurement plan is prepared during
fact-finding or appraisal.22
K For a loan or delegated TA, a CSC is established by the
borrower.
K The consulting services needs are advertised.

K EOIs from consulting firms are received and catalogued.

K A refined long list of candidate consulting firms is
prepared.
K Short-listing criteria and evaluation criteria are prepared.

K The short list is selected, and evaluation criteria are
approved.
K A consultant recruitment activity monitoring (CRAM)
system is set up.
K For ADB-funded TA, clearance of the short list is received
from the recipient government.
K RFP documents are prepared.

K Key documents are reviewed, and the RFP is issued.

K The queries of short-listed consultants are addressed.

Each step is discussed separately in this chapter.

22
This step is not normally undertaken for TA grants or individual consultancies for
which ADB will be the recruiting agency.

48


A. Undertaking a 121. During project preparation, fact-finding, or appraisal
Capacity Assessment for a loan project, the ADB mission is expected to undertake
(in close conjunction with the borrower) an assessment of the
and Preparing a borrower’s capacity to undertake procurement and consultant
Procurement Plan23 recruitment activities.24 Based on this assessment, the borrower
(with the assistance of ADB) is required to prepare a procurement
plan covering the first 18 months of procurement activity. The
procurement plan is expected to be annexed to the minutes of loan
negotiations, and it becomes part of the procurement schedule of
the loan agreement.
122. The purposes of the assessment are to identify the capacity,
procurement, and organizational constraints that might hinder
effective project implementation and to determine the overall
recruitment risk; to define training needs; and to define the level
of oversight required. The purposes of the plan are to address
the identified constraints, put in place appropriate review and
supervision processes to mitigate the risks, and build up the
borrower’s capacity to undertake recruitment and procurement
activities beyond the project’s life cycle.
123. The procurement plan should finalize the recruitment
arrangements for consultants and detail the prior review, post review,
and supervision arrangements for the recruitment process. This
includes determining the degree of supervision and guidance by
ADB during project implementation, and the nature and number
of submissions that the borrower requires. The plan should include
a brief description of the consulting services packages, selection
methods, types of technical proposal, budget for each package,
definition of prior review and post review, and recruitment schedules.
For sector projects, multitranche financing facility programs, and
other projects that include subprojects to be finalized during project
implementation, the plan should provide indicative consulting
packages and threshold values. The procurement plan should be
updated at the end of the first 18 months and, thereafter, once a year.

23
For loan-funded consultancies; not done for TA grant-funded consultancies unless
they are delegated.
24
For a full description, refer to COSO’s Guide to Procurement Capacity Assessment. An
assessment may also be required where TA consultant recruitment is delegated to an
EA.

49


B. Establishing 124. The borrower’s CSC is the body that oversees the consultant
the Borrower’s selection process for loans and delegated TA. It is responsible for
ensuring that proper procedures are followed and that the selection
Consultant Selection is fair, transparent, and impartial.
Committee25
125. Given the wide variety of partner governments and agencies
and their diverse institutional arrangements, the CSCs set up by
them for loan-funded projects will have a variety of arrangements.
Three principles should, however, be followed: A CSC should consist
of (i) a knowledgeable but impartial chairperson; (ii) an informed
official of the user agency, probably the project director; and (iii) a
neutral but knowledgeable member with no vested interests.
126. Depending on the country and its institutional structure, in
some cases, the chairperson may be from a different ministry (for
example, the Ministry of Finance); in others, a senior official in the
ministry or agency concerned may fill the position. ADB should be
informed of the composition of the borrower’s CSC as soon as it is
established.

C. Advertising 127. To ensure that qualified firms have the opportunity to submit
Consulting Services proposals for ADB loan and TA grant consultancy assignments,
ADB posts an outline of each project and the consultancy package
Requirements under “proposed projects” in the business opportunities section of
its website at www.adb.org/Business/Opportunities/prpprjcs.asp.
In the case of TA grants, this is posted, at the latest, after the return
of the fact-finding mission, but it is often done earlier if sufficient
details are known.
128. In addition, for TA grants, the ADB project officer is respon-
sible for posting a CSRN on the ADB website (www.adb.org/Docu-
ments/ADBBO/CSRN/default.asp) after the staff review commit-
tee (SRC) meeting or if a waiver of the SRC is received. The CSRN
describes the consulting assignment in detail and includes the
draft TOR. Posting the TA or loan consultancy package descrip-
tion is the responsibility of the project division and must be done
at least 30 days before short-listing.
129. Loan-financed project consultancy requirements are
usually posted under the “proposed projects” link in the business
opportunities section around the time that PPTA preparation is
under way. Further details are updated as the project proposal

25
It is no longer normal practice for ADB to establish a CSC during the process of
requesting proposals; CSCs within ADB are, currently, normally convened only to
evaluate proposals for TA-funded contracts valued at more than $600,000 or when
there are major issues or problems to be resolved concerning either loan-funded or TA
grant-funded consultancies. When convened, the ADB CSC consists of (i) a director
of COSO or a professional staff delegated to represent COSO as chairperson; (ii) the
project officer; and (iii) a third staff member with a background in a technical area
similar to that of the project, who acts as a neutral party.

50


is firmed up, and the material provided is generally in final form
upon the return of the loan fact-finding mission. At that time, the
consultancy package will normally have been finalized, TOR will
have been prepared, an assessment of the borrower’s recruitment
and implementation capacity will have been undertaken, and a
procurement plan will have been agreed upon with the borrower.
After approval by the Board of Directors, loans are no longer shown
in the “proposed projects” section of the ADB website or through a
CSRN. Instead, they are published as part of the general procurement
notice for the project as a whole (see www.adb.org/Documents/
ADBBO/procurement.asp).
130. In addition to the website postings, and if considered
necessary to get a full range of responsive EOIs, ADB or the borrower
may advertise in additional media such as newspapers, magazines,
or professional journals.26 Furthermore, the ADB project officer or
borrower’s project office may also contact a range of consulting
firms directly to elicit interest in the consultancy.

D. Expressions of 131. In the case of recruitment by the borrower, EOIs are normally
Interest sent directly to the project office of the EA by consulting firms and
other agencies interested in providing expertise for the consultancy
concerned. The address for submission is listed on the ADB website
both under the “proposed projects” section and in the general
procurement notice. EAs should only accept EOIs submitted in a
uniform, standard format. The EOI template for TA may be used
as a guide. This is available in the portion of the ADB website at
www. adb.org/Consulting/toolkit-template.asp. Any advertisement
posted by the EA should indicate where a firm may obtain a copy
of the EOI template. If a firm submits an EOI in any other format,
it is sent a copy of the standard format and requested to fill it in.
The returned and completed form is then considered the official
EOI. The deadline for submission for completed EOIs in the proper
format may be extended by 2 weeks beyond the original deadline if
an EOI in a different format has originally been submitted.
132. For consulting services being recruited directly by ADB, the
CSRN page of the ADB website provides a link to allow interested
firms the opportunity to submit an electronic EOI directly. This can
be viewed on the ADB external website by going to www.adb.org/
Documents/ADBBO/CSRN/default.asp and clicking on a particular
project. ADB’s preference is for electronic EOIs submitted in this
way, although firms may send in additional hard-copy material if
they wish.

26
This is a requirement under the procurement regulations of some DMC governments.

51


133. Whether recruitment is by ADB or by the borrower, the
recipient should document all EOIs received, give them full
consideration, and treat them with impartiality.

E. Associations 134. A group of consulting firms may form an association
Between and Among to express interest together and have their qualifications and
experience considered jointly. Associations may take the form
Consulting Firms or joint ventures or subconsultancies. Under a joint venture, all
members are jointly and severally liable for any possible contract
entered into with an EA or ADB. Under an association, partners
have a looser connection, and only one firm in the group contracts
directly with the EA or ADB. An association (whether joint venture
or subconsultancy) must nominate one member to represent it
during the selection process, but if successful, all members of a
joint venture sign the contract and are responsible for the entire
assignment, whereas only the lead firm signs the contract under
a subconsultancy. In either case, the qualifications of all firms
participating in a joint venture or an association are assessed
during short-listing. However, for subconsultancies more weight is
placed on the lead firm when the assessment is made. To determine
the nationality of a joint venture or association for the purpose of
short-listing, ADB or the EA uses the nationality of the lead firm
of an association. When expressing interest in an assignment, a
lead firm, either international or national, cannot be a member
of another subconsultancy or joint venture. Once short-listed, a
joint venture or subconsultancy may take on additional partners
to broaden its range of expertise and experience.

F. Preparing the Refined 135. The first step in the selection process is to prepare a refined
Long List long list of consulting firms. Either the EA’s project office in the case
of borrower recruitment or the ADB project officer in the case of
ADB recruitment normally prepares a refined long list. The source of
the refined long list is usually EOIs received during the advertising
process. These may be supplemented by CMS searches, especially
if not enough firms have expressed interest. The refined long list
normally consists of 15–20 firms from a broad geographic spread
of ADB member countries. Only firms registered in ADB member
countries may be considered for the refined long list. Firms should
be placed into broad geographic country groupings, of which one is
for firms from DMCs, to ensure global coverage.
136. To prepare a refined long list, the qualifications and experience
of all firms that have submitted an EOI are reviewed. CMS files
can be reviewed to examine the experience of firms that ADB has
previously employed. The list of sanctioned firms should be reviewed
to ensure that none are included in the list, and evaluations of past
performance of any firms that have previously been recruited may
also be reviewed. Individual EAs or governments may have their own

52


list of preferred or disallowed firms. Firms should be assessed on
their technical capacity as shown by their experience. An assessment
of experience is most important for contracts to be selected through
STPs and BTPs since, unlike for FTPs, the proposal formats do not
include a category for experience of the firm. In effect, evaluation of
the firms’ experience is undertaken during the long-listing process.

G. Preparing Short- 1. Short-Listing Criteria
Listing Criteria and 137. Short-listing criteria are normally prepared by the project
Evaluation Criteria office of the EA for borrower recruitment and by the ADB project
officer for direct ADB recruitment. Short-listing criteria should be
succinct but should provide a sound basis for selecting firms from a
particular country grouping. Typical short-listing criteria include
K experience with activities similar to the consultancy,

K experience in similar geographical areas,

K experience with similar project authorities,

K past experience with ADB projects and or TA (especially
important for PPTA),
K nature of the firm (e.g., whether it is a small, specialized
firm with limited staff or a large firm with access to a pool
of expertise),
K firm history (i.e., has it been in business for an extended
period and developed a track record in the field and/or
region?), and
K degree of in-house quality control (for example, if the firm
adheres to requirements of the International Standards
Organization or has an ethics code).
2. Evaluation Criteria
138. At the same time as the short-listing criteria are prepared,
proposed evaluation criteria for the selection of the firm and its
personnel are also prepared. Technical proposals are evaluated
against a range of criteria, depending on the type of proposal being
used. As noted in Chapter IV, FTPs are evaluated on
K the qualifications of the proposer,

K the approach and methodology, and

K personnel.

STPs are evaluated based on
K a brief (10-page) approach and methodology, and

K personnel.

53


BTPs are evaluated on the basis of
K a staffing schedule and graphic work plan, and

K personnel.

Note that weights for the three broad criteria for FTPs are flexible,
while those for STPs and BTPs are fixed.
139. These criteria are further broken down into subcriteria, and
weights are applied to them as shown in Tables 3, 4, and 5. All weights
for any type of proposal add up to 1,000.

Table 3: Sample Standard Evaluation Criteria for a Full
Technical Proposal

Example of
weights given
Item (for FTPs, these
may vary)

I. Qualifications of Proposer (100–200)
a. Experience in similar projects 70
b. Experience in similar geographic areas 50
c. Additional relevant subcriteria (optional) 30
II. Approach and Methodology (200–400)
a. Understanding of objectives 40
b. Quality of methodology 80
c Innovativeness (or comments on the TOR) 40
d. Work program 70
e. Personnel schedule 30
f. Counterpart facilities 20
g. Proposal presentation 20
III. Personnel (500–700)
a. Nominated international consultants
(each evaluated separately)
Team leadership (concurrent with another position) 50
Road engineer 80
Transport economist 90
Environment specialist 80
Social/poverty specialist 100
b. Nominated national consultants
Road engineer 40
Transport economist 40
Environment specialist 35
Social/poverty specialist 35
Total 1,000

54


Table 4: Sample Standard Evaluation Criteria for a Simplified
Technical Proposal
Weights given (for
Item STPs, these are
normally fixed)
I. Approach and Methodology (300) 300
a. Approach and work program 200
b. Personnel schedule 50
c. Presentation 50
II. Personnel (700) 700

Total 1,000

Table 5: Sample Standard Evaluation Criteria for a Biodata
Technical Proposal
Weights given
(for BTPs, these
Item
are normally
fixed
I. Staffing Schedule and Work Plan 100
II. Personnel 900

Total 1,000

140. Further and separate selection criteria are prepared for
personnel. The evaluation criteria for personnel are prepared
by dividing the rating of each expert into three parts: (i) general
qualifications, (ii) experience related to the project, and (iii) overseas/
country experience. These, in turn, are assigned a percentage weight
to signify their relative importance for evaluation. The percentage
weights applied to these factors would normally be within the
percentage ranges in Table 6. Should a position being evaluated be
that of team leader, the proposed candidate would be evaluated
twice—that is, once for the technical position and once for the
team leader position.

55


Table 6: Normal Percentage Weights for Evaluation Criteria
Factor Weight (range, in %) Example
General qualifications 10–20 15
Project-related experience 60–70 70
Overseas/country experience 10–20 15
Total 100

141. Once the weights for the evaluation are decided upon, they
are summarized in a personnel evaluation sheet and a summary
evaluation sheet, which will be included in the RFP to be issued to
short-listed firms. An example of a personnel evaluation sheet is
shown in Figure 4, and a summary evaluation sheet for an FTP is
shown in Figure 5.
142. For loans and delegated TA, these proposed evaluation criteria
are submitted to the borrower’s CSC for approval at the same time as
the short list is prepared. For nondelegated TAs, these are submitted
by the user division to COSO for approval on a no-objection basis
along with the short list (as discussed in the next section).

H. Selecting the Short 143. For loan-funded consultancies, the short list is prepared
List and Approving and the selection criteria are approved by the borrower’s CSC, with
oversight of the short-listing process by the ADB user division in
the Evaluation
coordination with COSO. For TA grant-funded consultancies, these
Criteria steps are undertaken by the user division. The short list, evaluation
criteria, a note describing the basis for selection, and a data sheet
for the RFP27 are then submitted to the relevant COSO director for
approval on a no-objection basis.
144. For the short list, six firms are normally selected from the
refined long list based on the short-listing criteria and after a review
of the submitted EOIs.
145. The short list must represent, to the extent possible, ADB
member countries in a reasonably geographically balanced
manner. Normally, only one consulting firm from any member
country is included. In special cases, two firms from one country
may be included, provided sufficient justification is given and
with the approval of the relevant COSO director for ADB-recruited
consultancies.
146. Minutes of all steps in the short-listing process should be kept,
and these should include a focused discussion on the strengths and
weaknesses of the submitted EOIs in the context of the application of
relevant short-listing criteria. Reasons should be given as to why the
firms identified for short-listing are considered the most qualified.

27
See Chapter V, Section J for more information on the data sheet.

56


Figure 4: Sample Personnel Evaluation Sheet
ASIAN DEVELOPMENT BANK CONFIDENTIAL
PERSONNEL EVALUATION SHEET

Name of Firm:

A B C
POSITION/AREA OF General Project-Related Overseas/Country TOTAL
EXPERTISE NAME Qualiﬁcations Experience Experience SCORE
15% 70% 15% (A+B+C+D)

Rating Score Rating Score Rating Score
a. Team leadership * 0 0 0 0
b. Expert 1 (Team Leader) 0 0 0 0
International Consultants 15% 70% 15% (A+B+C)
c. Expert 2 0 0 0 0
d. Expert 3 0 0 0 0
e. Expert 4 0 0 0 0
f. Expert 5 0 0 0 0
g. Expert 6 0 0 0 0
h. Expert 7 0 0 0 0
I. Expert 8 0 0 0 0
j. Expert 9 0 0 0 0
k. Expert 10 0 0 0 0
A B C
General Project-Related Experience w/ TOTAL
National Consultants NAME Qualiﬁcations Experience Intl. Org. SCORE
(A+B+C)
15% 70% 15%
Rating Score Rating Score Rating Score
a. Expert 11 0 0 0 0
b. Expert 12 0 0 0 0
c. Expert 13 0 0 0 0
d. Expert 14 0 0 0 0
e. Expert 15 0 0 0 0
f. Expert 16 0 0 0 0
g. Expert 17 0 0 0 0
h. Expert 18 0 0 0 0
I. Expert 19 0 0 0 0
j. Expert 20 0 0 0 0
k. Expert 21 0 0 0 0
l. Expert 22 0 0 0 0
m. Expert 23 0 0 0 0
Rating: Excellent - 100% Very Good - 90% Above Average - 80% Average - 70% Below Average - 50% Noncomplying - 0%
Score: Rating x percentage assigned to criterion * The Team Leader must be Expert 1.
Note: Interband ratings are not allowed in application of the above rating scale. For example, only a score of 90% or 80%
can be given, not 85%, 87%, etc.

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Figure 5: Sample Summary Evaluation Sheet

SUMMARY EVALUATION SHEET FOR FULL TECHNICAL PROPOSALS
[ALL SELECTION METHODS]
TA No.-Country: Title
Max. F1 F2 F3 F4 F5 F6
EVALUATION CRITERIA Weight Rating Score Rating Score Rating Score Rating Score Rating Score Rating Score
I. Qualiﬁcation 100 0 0 0 0 0 0
a. Experience in similar projects 50 0 0 0 0 0 0
b. Experience in similar
geographic areas 50 0 0 0 0 0 0
II. Approach and Methodology 200 0 0 0 0 0 0
a. Understanding of objectives 40 0 0 0 0 0 0
b. Quality of methodology 40 0 0 0 0 0 0
c. Innovativeness/comments
on TOR 20 0 0 0 0 0 0
d. Work program 40 0 0 0 0 0 0
e. Personnel schedule 30 0 0 0 0 0 0
f. Counterpart personnel &
facilities 20 0 0 0 0 0 0
g. Proposal presentation 10 0 0 0 0 0 0
III. Personnel (Areas of Expertise) 670 0 0 0 0 0 0
International Consultants 500 0 0 0 0 0 0
a. Team leadership * 50 0 0 0 0 0 0 0 0 0 0 0 0
b. Expert 1 nominated as team
leader 50 0 0 0 0 0 0 0 0 0 0 0 0
c. Expert 2 50 0 0 0 0 0 0 0 0 0 0 0 0
d. Expert 3 50 0 0 0 0 0 0 0 0 0 0 0 0
e. Expert 4 50 0 0 0 0 0 0 0 0 0 0 0 0
f. Expert 5 50 0 0 0 0 0 0 0 0 0 0 0 0
g. Expert 6 40 0 0 0 0 0 0 0 0 0 0 0 0
h. Expert 7 40 0 0 0 0 0 0 0 0 0 0 0 0
i. Expert 8 40 0 0 0 0 0 0 0 0 0 0 0 0
j. Expert 9 40 0 0 0 0 0 0 0 0 0 0 0 0
k. Expert 10 40 0 0 0 0 0 0 0 0 0 0 0 0
National Consultants 170 0 0 0 0 0 0
a. Expert 11 20 0 0 0 0 0 0 0 0 0 0 0 0
b. Expert 12 20 0 0 0 0 0 0 0 0 0 0 0 0
c. Expert 13 20 0 0 0 0 0 0 0 0 0 0 0 0
d. Expert 14 20 0 0 0 0 0 0 0 0 0 0 0 0
e. Expert 15 20 0 0 0 0 0 0 0 0 0 0 0 0
f. Expert 16 20 0 0 0 0 0 0 0 0 0 0 0 0
g. Expert 17 20 0 0 0 0 0 0 0 0 0 0 0 0
h. Expert 18 10 0 0 0 0 0 0 0 0 0 0 0 0
i. Expert 19 10 0 0 0 0 0 0 0 0 0 0 0 0
j. Expert 20 10 0 0 0 0 0 0 0 0 0 0 0 0
TOTAL 970 0 0 0 0 0 0
Score: Maximum Weight x Rating / 100 * The Team Leader must be Expert 1.
Note: Interband ratings are not allowed in application of the above rating scale. For example, only a score of 90% or 80% can be given,
not 85%, 87%, etc. However, for III. Personnel, ﬁgures in the rating column may result in interband ratings derived from the “Total Score”
column of the Personnel Evaluation Sheet.
Criteria Approved by: Date Approved: Evaluation Done by: Date Evaluated:

CHAIRPERSON CHAIRPERSON

58


I. Setting up a 147. After short-listing, the CRAM system is activated. This is a
Consultant system for monitoring the steps in the consultant recruitment28
process. It is based on a matrix called a “CRAM frame,” which
Recruitment Activity shows the steps normally followed in the recruitment process, the
Monitoring System normal length of time to complete each step, the planned date
of completion of each step, the actual date of completion of each
step, and deviations from the planned dates. Staff responsible for
monitoring the recruitment process can use the CRAM frame to
identify delays and to act promptly to get the recruitment process
back on schedule.
148. The CRAM frame is established upon the return of the TA fact-
finding mission in the case of TA grants and during formulation of
the procurement plan in the case of loans. For TA grants, the project
officer and the assigned COSO officer are responsible for keeping
the CRAM frame up to date. For loans, this is the responsibility of the
borrower agency through a specific appointed officer, who reports
the steps in the recruitment process to the ADB project officer.
149. The countdown of the CRAM frame schedule normally begins
upon submission of the short list. Thereafter, the schedule is regularly
monitored, and deviations from the agreed-upon schedule are
brought to the attention of the project officer by COSO. An updated
CRAM sheet needs to be attached to several submissions that the
borrower makes to ADB during recruitment. These instances are
pointed out below. Further details on the use of the CRAM system
are provided in PAI 2.02 parts D and E.

J. Government 150. In case of recruitment by ADB, at this point and prior to
Clearance of the issuing the RFP the short list must be cleared by the recipient
,
government—usually, the EA but sometimes also the ministries of
Short List (for finance and/or planning. This is to ensure that firms to which the
ADB-recruited government could justifiably object (based on previous experience)
consultancies) are not included in the short list. Normally, the government is given
10 working days to respond, and a lack of response is treated as
concurrence. If the government objects to a particular firm, then it
must fully justify its objection. The objection must be considered
and credible. If a firm is removed from the short list, a replacement
is not provided. Moreover, a suggestion from the government to
place new or additional firms on the short list, as occurs from time
to time, will not be accepted.

28
The recruitment process monitored by the CRAM system is considered to encompass
preparation of the RFP (Chapter V), evaluation (Chapter VI), and negotiation
(Chapter VII).

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K. Preparing Documents 151. Once the short list and the evaluation criteria are prepared,
Required for the the next step is to prepare the documents required for the RFP. The
standard package issued to the short-listed consultants includes
Request for Proposals
K Section 1 – An invitation letter, which also provides the
names of all short-listed firms;
K Section 2 – Instructions to consultants, including
instructions on preparing technical and financial
proposals, a data sheet, and the evaluation criteria;
K Section 3 – Standard forms for technical proposals;
K Section 4 – Standard forms for financial proposals;
K Section 5 – For TA grant-funded consultancies, the TA
paper, including the TOR; for loan-funded consultancies,
the RRP along with a full background description of the
project, the consultancy, as well as the TOR;
K Section 6 – Standard forms of contract (examples of both
time-based and lump-sum contracts should be included);
and
K Section 7 – List of ADB’s member countries.
Templates for these documents can be found on the ADB website
under Documents on Consulting Services at www.adb.org/
Consulting/documents.asp. Most of these documents are standard
forms or have already been prepared (such as the TA paper or RRP);
but in assembling this package, it is important to ensure that the
data sheet is properly prepared and that evaluation criteria are the
same as agreed upon during the CSC meeting.
152. The data sheet is particularly important. It indicates the (i)
selection method, (ii) type of technical proposal requested, (iii)
proposed budget for the assignment (see Box 2), (iv) deadline for
ADB or the borrower to receive the proposal, (v) number of copies of
the proposal required, and (vi) name and address to which proposals
are to be sent. For ADB recruitment, ADB normally requires that
copies of the proposal be sent to headquarters in Manila, and that
copies be sent to the EA and the resident mission. An example of a
completed data sheet is given in Appendix 2.

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Box 2. Preparing Budgets for QCBS

For the QCBS selection method, the proposed
. FBS. It is critical that the data sheet be prepared
budget will indicate the total amount of the con- correctly, since the consultants’ financial proposal
tract, along with a fixed amount for contingen- will depend on the information given. The budget
cies and fixed sums (known as “provisional” sums) should also deal with taxes on international
for specific items. The total contract amount may consultants in an appropriate way. For loan-
be either a maximum amount or an estimated funded consultancies, this depends on the laws
amount. A decision whether to use a maximum and practices of the country.
or estimated budget is taken at the time of RFP
preparation and depends on the level of contin- Taxes should be either
gency available and the degree of certainty about • excluded from the budget if remuneration of
the cost of the consulting assignment. Normally a international consultants will be considered
maximum contract amount is preferred in order tax free;
to prevent ambiguity during the evaluation pro- • excluded from the budget if the consultants
cess as to which financial proposals are respon- will be expected to pay tax without reim-
sive and which are not. bursement; or
• included in the budget if it is the end-user’s
The provisional sums are not subject to variation policy to impose taxes and duties but then
and are expected to be included in the financial to reimburse them directly to the experts
proposal in full. They include such items as funds to concerned.
recruit NGOs, finance field surveys and equipment,
or hold seminars or conferences. Provisional sums For ADB-recruited consultancies, payments are
are sometimes also used in preparing a budget for normally tax free to international consultants.

L. Review of Key EA 153. For loan-financed consultancies, when required by the
Documents by ADB procurement plan, key documents are normally sent to ADB for
approval before the EA issues the RFP This is normally the first
.
and Issuance of submission by the EA to ADB for review during the recruitment
Request for Proposals process. Documents to be reviewed include the following:
K the long list;

K the short-listing criteria and approved short list along with
a focused discussion on the strengths and weaknesses of
the submitted EOIs in the context of the application of
the relevant short-listing criteria, and why the six firms
identified for short-listing are considered most qualified;
K the evaluation criteria;

K the RFP including TOR, background information, the EA’s
budget for the assignment, the selection method, and the
type of proposal required;
K the draft contract; and

K the CRAM frame.

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The relevant ADB project division reviews these documents and
submits them to the relevant COSO division, along with any
comments, for approval on a no-objection basis. A formal CSC
meeting may be convened to review this documentation within
ADB if major issues are to be resolved. Once approvals have been
received, RFPs may be sent to the short-listed firms.

M. Responding to 154. Consultants may request clarification about any of the
Queries of Short- RFP documents within a reasonable time29 prior to the proposal
submission date. Any request for clarification is to be sent in writing
Listed Consultants to the address indicated on the data sheet. The EA or ADB will
then respond in writing and send written copies of the response—
including an explanation of the query but without identifying
its source—to all short-listed consultants. At any time before the
submission of proposals, the EA or ADB may amend the RFP by
issuing an addendum. The addendum is sent to all short-listed
consultants and is binding on them. To give consultants reasonable
time to consider an amendment to their proposals, the EA or ADB
at its discretion, if the amendment is substantial, may extend the
deadline for submitting the proposal.
155. In the context of responding to queries of short-listed
consultants, some key points of clarification with regard to personnel
need to be made:
K ADB does not object to more than one firm proposing
the same individual. Some firms require a statement of
exclusivity from their proposed team members, but this is
not a requirement of ADB for ADB-selected consultancies
or for EA-recruited consultancies. In the case of EA-
recruited consultancies, some DMC governments may
also require exclusivity, but the rules for this vary from
country to country.
K For ADB-recruited consultancies, former ADB staff and
spouses of ADB staff may be included in a proposal, but
their clearance by ADB30 is required prior to contract
negotiations if the firm proposing them is the highest-
ranked proposer.

29
Normally 15 days unless otherwise specified in the data sheet.
30
Clearance is required from the Budget, Personnel and Management Systems
Department if it is the first time a former staff member is being recruited as a
consultant.

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Self-Study Questionnaire – Chapter V

1. Q. In terms of consulting services, what are the purposes of the procurement capacity
assessment?

A. To identify the capacity, procurement, and organizational constraints that might hinder
effective project implementation; to determine the overall recruitment risk; to define
training needs; and to define the level of oversight required.

2. Q. In terms of consulting services, what are the purposes of the procurement plan?

A. To address the constraints identified by the capacity assessment, put in place appropriate
review and supervision processes to mitigate the risks, and build up the borrower’s
capacity to undertake recruitment and procurement activities beyond the project’s life
cycle.

3. Q. What should the procurement plan include?

A. It should finalize the recruitment arrangements for consultants and detail the prior review,
post review, and supervision arrangements for the recruitment process. It should indicate,
among other items, the budget for each recruitment package, the selection method, the
type of proposal, and the time period envisaged for the recruitment process.

4. Q. Who should form the core of a borrower’s CSC?

A. At the very least, (i) a knowledgeable but impartial chairperson; (ii) an informed official
of the user agency, probably the project director; and (iii) a neutral but knowledgeable
member with no vested interests.

5. Q. Where is the best place to find forthcoming consulting services assignments advertised?

A. On the ADB website under “proposed projects.” Further information on TA grant-funded
consultancies is provided under CSRNs, also on the website. For approved loan projects,
information is given under Procurement Notices.

6. Q. Who is responsible for direct oversight of the short-listing and preparing the RFP for
loan-funded consultancies and of the short-listing of TA grant-funded consultancies?

A. The project officer of the user division, in coordination with COSO.

7. Q. How does ADB receive EOIs for ADB-recruited consulting services?

A. Electronically, through the CSRN page on the website.

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8. Q. What does a refined long list of consulting firms normally consist of?

A. It may consist of 15–20 firms from a broad geographic spread of ADB member countries. At
least one DMC is usually included, and other firms may be placed into broad geographic
country groupings to ensure global coverage. The source of the refined long list is usually
EOIs received during the advertising process. These may be supplemented by searches
through ADB’s CMS system or the borrower’s own resources. Sanctioned firms are not
placed on the refined long list.

9. Q. Who normally prepares the short-listing criteria?

A. The project office of the EA for EA recruitment; the ADB project officer for direct ADB
recruitment.

10. Q. What are some typical short-listing criteria?

A. K experience with activities similar to the consultancy,

K experience in similar geographical areas,

K experience with similar project authorities,

K experience with ADB projects and/or TA (especially important for PPTA),

K nature of the firm (e.g., whether it is a small, specialized firm with limited staff or a
large firm with access to a pool of expertise),

K firm history (i.e., has it been in business for an extended period and developed a track
record in the field and/or region?), and

K the degree of in-house quality control (for example, if the firm adheres to the
requirements of the International Standards Organization or has an ethics code).

11. Q. What particular items are evaluated under FTPs, STPs, and BTPs?

A. FTPs are evaluated on the

K qualification of the proposer,

K approach and methodology, and

K personnel.

STPs are evaluated based on

K a brief (10-page) approach and methodology, and

K personnel.

BTPs are evaluated based on

K a staffing schedule and graphic work plan, and

K personnel.

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12. Q. How many evaluation points are allocated in total to each type of proposal?

A. 1,000.

13. Q. Which category gets the largest number of points in any type of proposal?

A. Personnel.

14. Q. What are the three factors assessed when evaluating personnel?

A. K general qualifications,

K project-related experience, and

K overseas/country experience.

15. Q. How many firms are normally selected for the short list?

A. Six from a geographic spread of ADB member countries, usually including one from a
DMC.

16. Q. Who normally selects the short list?

A. For loan-funded consultancies, the formal selection is normally done by the borrower’s
CSC. For ADB-funded consultancies, selection is done by the project officer of the user
division and sent to COSO for approval on a no-objection basis.

17. Q. How many firms may be included from each member country?

A. Normally only one, but not more than two.

18. Q. Besides the short list itself, what other documents are prepared at the time of short-
listing?

A. A summary evaluation sheet, a personnel evaluation sheet, and minutes of short-listing.

19. Q. What is the CRAM?

A. A system for monitoring the steps in the consultant recruitment process. It is based on a
matrix called a CRAM frame, which shows the steps normally followed in the recruitment
process, the normal length of time to complete each step, the planned date of completion
of each step, the actual date of completion of each step, and deviations from the planned
dates.

20. Q. When the user government is reviewing a short list for a TA grant-funded consultancy, is
it possible for it to recommend a substitute firm?

A. No. Firms may be dropped from the short list if there is a valid reason, but no substitute
firm may be added.

65


21. Q. Where can templates for most documents required for RFPs be found?

A. On the ADB website at www.adb.org/Consulting/documents.asp.

22. Q. Why is the data sheet one of the most important parts of an RFP?

A. The data sheet is particularly important because it indicates the following:

K the selection method,

K the type of technical proposal requested,

K the proposed budget for the assignment,

K the deadline for ADB or the borrower to receive the proposal,

K the number of copies of the proposal required, and

K the name and address to which proposals are to be sent.

23. Q. If prior review by ADB is required by the procurement plan before issuance of the RFP,
what documents are normally reviewed?

A. Included are the following:

K the long list;

K the short-listing criteria and approved short list;

K the evaluation criteria;

K the RFP including TOR, background information, the EA’s budget for the assignment,
the selection method, and the type of proposal required;

K the draft contract; and

K the CRAM frame.

24. Q. When responding to a query on the RFP from a short-listed ﬁrm, to whom should ADB
or the EA respond?

A. All short-listed ﬁrms.

25. Q. Can the date for submission be extended if there is a good reason to do so?

A. Yes.

66

Chapter VI
Evaluating Proposals

A. Responsibility 156. The evaluation of consultants’ proposals is undertaken by:
K the borrower’s CSC, for consulting services funded by
loans and delegated TA;
K a CSC convened by ADB, for consulting services funded
by TA grants when the estimated contract value is more
than $600,000; or
K the user division, for consulting services funded by TA
grants when the estimated contract value is $600,000
or less.
The process is undertaken through three steps:
K evaluating the technical proposals;

K evaluating the financial proposals; and

K ranking the firms, followed by an invitation to the highest
ranked firm for contract negotiations.
These steps are described in this chapter.

B. Evaluating Technical 1. Preparing for Evaluation
Proposals 157. All the RFP documents are important to the selection process.
It is worthwhile for any project officer of either the EA or ADB
involved in the selection procedure to read them through in detail
and to note some of the specific clauses, especially in the section on
Instructions to Consultants. Of particular note are the sections on
K participation of national consultants;

K participation of government employees;

K conditions for the employment of former ADB employees
and ADB spouses under ADB-recruited contracts;
K content and format for the technical proposal;

K content and format for biodata;

K requirement for a staffing schedule and a work plan;

K content, format, and rules pertaining to the financial
proposal;

67


K procedure for technical evaluation, including the rules
governing nonresponsive proposals; and
K procedure for proposal opening and financial verification,
including the rules for rejection.

2. Tools Used for Evaluation
158. Four basic tools are used during the technical evaluation
process:
K the proposals themselves,

K a personnel evaluation sheet (Figure 4 in Chapter V),

K a summary evaluation sheet (Figure 5 in Chapter V), and

K a scoring table.

159. ADB devised the scoring table to ensure consistency in
evaluations. Its use in the evaluation of proposals is obligatory. The
scoring table divides evaluations into six categories as shown in
Table 7. The rating definitions are as shown in Table 8.

Table 7: Scoring Table
Excellent 100%
Very Good 90%
Above Average 80%
Average 70%
Below Average 50%
Noncomplying 0%

Table 8 : Rating Definitions
Excellent 100% The proposal substantially exceeds the subcriteria
requirements.

Very Good 90% The proposal exceeds the subcriteria requirements.

Above Average 80% The proposal fully meets the subcriteria
requirements.

Average 70% The proposal adequately meets the subcriteria
requirements, but there are minor deficiencies.

Below Average 50% The proposal has significant deficiencies against
the subcriteria requirements that will probably
impact negatively on the implementation of the
assignment.
Noncomplying 0% The proposal either does not comply with the
subcriteria requirements or does not provide
enough information to allow a higher rating. For
example, nominating an expert who is a national of
a non-ADB member country is noncomplying.

68


160. There are reasons for using the scoring sheet and these
standardized scores:
K They provide the evaluators with a shared definition of the
ratings, making evaluation easier and more comparable.
K They reduce scoring inconsistencies and discretion.

K They require the evaluators to justify their evaluations
based on a common definition of ratings, thereby
discouraging any intentionally biased evaluators.
K They make evaluations more transparent and fair.

3. Evaluating Personnel
161. Since personnel make up between 500 and 700 points of an
FTP 700 points of an STP and 900 points of a BTP many evaluators
, , ,
prefer to evaluate the personnel from each firm first. This will give a
good idea of the strengths and weaknesses of the various firms. Other
factors (qualification of the proposer, approach, and methodology)
can then be used to distinguish between firms that are close in terms
of personnel ranking.
a. Rating Each Factor
162. Each expert must be evaluated separately using the three
factors in the personnel evaluation sheet and the rating levels in the
scoring table. The basis for assessing the experts’ ratings is the biodata
of individual experts contained in the curriculum vitae (CV) form,
which is an integral part of each proposal. An example of a standard
ADB CV form (included in the RFP) is shown in Appendix 3.
163. The main consideration in evaluating personnel is their
project-related experience. (normally accounting for 60–70% of an
individual evaluation). This is shown in Section 12 of the standard
ADB CV form. The experience shown should be judged against the
tasks assigned in the left-hand column of that section. The nature
and duration of the expert’s experience in each example given
should be carefully considered and an appropriate rating given from
the scoring table (from noncomplying to excellent).
164. The next most important factor to consider for international
consultants is country or regional experience. Extensive experience
in the country in which the assignment will take place is, of course,
desirable. If an expert does not have this exposure, experience in
a neighboring country with similar geographic, institutional, and
cultural characteristics will also count but, of course, not for the
maximum number of points. An equivalent category for national
consultants would be exposure to and experience with international
organizations and working with an international team.

69


165. The importance of general qualifications is somewhat variable.
Some project officers find it important that their consultants have
either a PhD or Master’s degree for the task that they need to perform.
On the other hand, practical experience may count to a greater
extent, and the requirement for a particular academic qualification
or type of academic qualification may be made less stringent.
Flexibility in assessing general qualification requirements should
also take into account the different educational systems around the
world. In addition, an assessment of general qualifications should
include not only academic qualifications, but also the items such
as membership in professional societies, language proficiency,
and general work experience listed in Sections 6, 9, and 10 of the
standard ADB CV form.
b. Calculating Weighted Rating and Overall Rating
166. After an expert is rated for each of the above factors (within
the range “excellent” to “noncomplying” from the scoring table),
the appropriate percentage is placed in the rating category of the
personnel evaluation sheet. This is then multiplied by the weight
given for each factor at the time the evaluation criteria were
formulated. The result is a weighted rating. The weighted ratings for
each subcriterion are then totaled, resulting in an overall rating for
each expert.
167. An example of such a calculation is shown in Table 9. The
total overall individual rating in this case is 85.5. This value should
be placed in the summary evaluation sheet as the expert’s rating.
To facilitate this process, the personnel evaluation sheets and the
summary evaluation sheet available on the ADB website (www.adb.
org/Consulting/all-methods/TAs/EV-FTP-TA.xls) are programmed
and linked so that the score for personnel evaluation is calculated
automatically and then transferred directly to the summary
evaluation sheet.

Table 9: Example of the Rating of an Individual Expert for the Personnel
Evaluation Sheet
General Project-Related Overseas/Country
Factor Qualifications Experience Experience
(A) (B) (C)
Weight (decided at the 20 65 15
time of short-listing)

Rating (decided by the Excellent = 100 Above average = 80 Very good = 90
evaluator, in %)

Weighted Rating (Weight
X Rating/100) 20.0 52.0 13.5

Overall Individual Rating (A+B+C) = 20.0 + 52.0 + 13.5 = 85.5

Note: Should the position being evaluated be that of a team leader, the proposed candidate would be evaluated
twice—once for the technical position to be held and once for the team leader position.

70


4. Evaluating Other Factors
168. Other factors that need to be evaluated to complete the
summary evaluation sheet include the qualification of the proposer
(for FTPs), the approach and methodology (for FTPs and STPs), and
the staffing schedule and work plan (for FTPs, STPs, and BTPs).
169. The qualifications of the proposer are determined based on
the list of projects provided in the proposal chapter “Experience of
the Firm.” In determining the rating for these projects (in terms of
experience in similar projects and similar countries), care should be
taken to determine the exact role played by the firm in the projects
listed. In some cases, firms may have played a major role in project
implementation and management; in others, they may merely have
provided some staff. It should be clear that the experience is that of
the firm and not of the experts (whose own experience is listed later
in the biodata).
170. In terms of the approach and methodology,31 the following
may be considered:
K Understanding the Objectives – What is the extent to
which the consultant’s technical approach responds to
the objectives indicated in the TOR? Does the proposal
respond to all the TOR objectives, or does it fail to address
some requirements?
K Quality of Methodology – Is the consultant’s proposed
approach complete, covering all the TOR requirements?
Is it logical? Is the methodology specifically tailored to the
assignment? Is the proposed methodology flexible enough
so that it can be easily modified, if necessary, during the
assignment?
K Innovativeness – Does the consultant propose in detail
ways to improve the implementation of the assignment
without substantially changing the TOR requirements?
Are the consultant’s approaches, methodologies, and
knowledge state-of-the-art?
K Work Plan – The work plan is a bar chart showing the
timing of the major activities described in the methodology
and the major milestones (i.e., meetings and reports).
Does the work plan adequately describe all the important
activities? Is the timing of the activities appropriate
and is the sequence logical, such that the outputs can
be delivered when required? Are the interrelationships
among the various activities appropriate and consistent
with the proposed methodology?

31
The work plan and staffing schedule for BTPs are also covered in this section.

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K Staffing Schedule (including organization chart) – Is
the format of the staffing schedule in accordance with
ADB’s standard, showing the inputs of all nominated
international and national experts on a quarter–monthly
and monthly basis? Are the timing and duration of experts’
inputs appropriate for the proposed methodology and the
activities shown on the work plan? Is the balance between
the time allocations in the field and in the home office
appropriate? Does the organization chart clearly show
the lines of responsibility and the links among the three
parties involved in the assignment: ADB, the EA, and the
consultant? How many trips to the country of operations
are scheduled for each expert, and is this number
appropriate in terms of economy and efficiency? If the
proposal is for a joint venture or an association, what
is the respective role of each member, and how are the
responsibilities allocated? Which is the lead firm, and how
well qualified is it for the role? Does the staffing represent
this responsibility?
K Counterpart Facilities – The counterpart facilities are
the consultants’ assessment of the support facilities
required from the EA to implement the assignment, for
example, office accommodation, local transportation, and
counterpart staff support. How complete and reasonable
are the consultants’ requirements? Do they reflect a good
understanding of local conditions? How do they compare
with the allowances made in the consultancy budget?
K Presentation of the Proposal – Is the proposal
intellectually sound, technically sound, and logical? Is it
easy to read, well written, well referenced, well organized,
complete, and convincing?

Each of these factors needs to be assessed versus the scoring
criteria, and a rating (0–100 based on the scoring sheet) placed in
the summary evaluation sheet.
5. Technical Ranking of Firms
171. The final ranking of the firms is achieved by
K applying the weights of the evaluation criteria to the
individual ratings to achieve a final score for each
criterion,
K totaling the final score for each criterion to get a final score
for the proposal as a whole, and
K ranking the proposals in terms of highest score to lowest
score.

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The results of the scoring for one firm will look like Table 10. This
process is carried out for each firm using the summary evaluation
sheet. Firms are then ranked (first, second, third, etc.) based on their
scores, and the technical evaluation is complete. (For an example of
a completed summary evaluation sheet, see Figure 6.)

Table 10: Summary Evaluation Sheet for Full Technical Proposals
(One Firm Only)
Firm’s Name
Evaluation Criteria Maximum Rating Scorea
Weight (based (maximum
(set at the on the weight X
time of short- evaluation rating)
listing) score) (%)
I. Qualifications of Proposer 150 123
a. Experience in similar projects 70 90 63
b. Experience in similar 50 90 45
geographic areas
c. Additional relevant subcriteria 30 50 15
II. Approach and Methodology 300 281
a. Understanding of objectives 40 100 40
b. Quality of methodology 80 90 72
c. Innovativeness 40 100 40
d. Work program 70 90 63
e. Personnel schedule 30 100 30
f. Counterpart facilities 20 90 18
g. Proposal presentation 20 90 18
III. Personnel (Area of Expertise) 550 465
International Consultants 400 345
a. Team leadership 50 89.4 45
b. Road engineer/team leader 80 87.5 70
c. Transport economist 90 88.3 79
d. Environment specialist 80 87.1 70
e. Social/poverty specialist 100 81.6 82
National Consultants 150 120
a. Road engineer 40 81.7 33
b. Transport economist 40 79.2 32
c. Environment specialist 35 78.1 27
d. Social/Poverty specialist 35 80.6 28
TOTAL 1,000 869
Ranking
a
Rounded

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Figure 6: Sample Completed Summary Evaluation Sheet

SUMMARY EVALUATION SHEET FOR FULL TECHNICAL PROPOSALS
[ALL SELECTION METHODS]
TA No.-Country: Title

Max. FIRM A FIRM B FIRM C FIRM D FIRM E FIRM F
EVALUATION CRITERIA
Weight Rating Score Rating Score Rating Score Rating Score Rating Score Rating Score
I. Qualiﬁcations of Proposer 70 65 65 65 56 65
a. Experience in similar projects 50 90 45 90 45 90 45 80 40 90 45
b. Experience in similar geographic areas 20 100 20 100 20 100 20 80 16 100 20
II. Approach and Methodology 230 183 208 195 159
d 179
a. Understanding of objectives 30 80 24 90 27 90 27 70 21
e 80 24
b. Quality of methodology 100 80 80 100 100 90 90 70 70
c 70 70
c. Innovativeness/comments on TOR 40 80 32 80 32 80 32 70 28
l 80 32
d. Work program 20 80 16 70 14 90 18 80 16
i 90 18
e. Personnel schedule 20 80 16 90 18 80 16 50 10
n 90 18
f. Counterpart personnel & facilities 10 70 7 80 8 70 7 70 7 e 90 9
g. Proposal presentation 10 80 8 90 9 50 5 70 7 d 80 8
III. Personnel (Areas of Expertise) 700 558.76 597.16 617.4 556.86 80 576.37
International Consultants 420 330 355 375 332 339
a. Team leadership * 50 74 37 75 38 91 46 84 42 75 38
b. Water Resources Management
Specialist/TL 130 74 96 81 105 97 126 78 101 75 98
c. Water Management Associations
Specialist 90 78 70 84 76 89 80 78 70 84 76
d. Integrated Water Resources Planner 40 79 32 91 36 89 36 84 34 84 34
e. Institutional Development Advisor 25 91 23 99 25 70 18 75 19 84 21
f. River Engineer (Morphology) 15 91 14 89 13 91 14 70 11 100 15
g. Agriculture Economist 20 84 17 81 16 78 16 86 17 78 16
h. Environmental Specialist 15 99 15 87 13 70 11 71 11 83 12
I. Resettlement Specialist 15 83 12 97 15 79 12 86 13 95 14
j. Quality Control Specialist 20 73 15 89 18 91 18 73 15 84 17
National Consultants 280 229 243 243 225 237
a. Water Resources Specialist/Deputy TL 45 84 38 90 41 90 41 74 33 82 37
b. Participatory Water Mgt. Specialist (IWMP) 7 82 6 90 6 72 5 80 6 90 6
c. Water Management Association
Specialist 40 74 30 90 36 90 36 72 29 90 36
d. Water Resources Planner 10 82 8 74 7 90 9 80 8 90 9
e. Institutional Advisor 15 97 15 84 13 74 11 84 13 82 12
f. Hydrologist 5 82 4 90 5 90 5 70 4 82 4
g. Design Engineer 5 90 5 84 4 90 5 72 4 82 4
h. Agriculture Extension Specialist 20 74 15 82 16 88 18 90 18 80 16
i. Fishery Development Specialist 20 84 17 82 16 90 18 82 16 90 18
j. Agriculture Economist 8 74 6 82 7 82 7 82 7 74 6
k. Gender and Poverty Specialist 15 82 12 90 14 90 14 84 13 90 14
l. Environmental Specialist 15 90 14 90 14 82 12 84 13 82 12
m. Resettlement Specialist 15 91 14 72 11 90 14 90 14 91 14
n. Quality Control Specialist (WMA) 10 72 7 90 9 84 8 82 8 82 8
o. Quality Control Specialist (Infrastructure) 15 72 11 90 14 72 11 82 12 82 12
p O & M Specialist 25 84 21 90 23 90 23 82 21 82 21
q. Financial Management Advisor 10 82 8 90 9 90 9 90 9 80 8
TOTAL 1000 807 870 877 772 820
Score: Maximum Weight x Rating / 100
Note: Interband ratings are not allowed in application of the above rating scale. For example, only a score of 90% or 80% can be given,
not 85%, 87%, etc. However, for III. Personnel, ﬁgures in the rating column may result in interband ratings derived from the “Total Score”
column of the Personnel Evaluation Sheet.

Criteria Approved by: Evaluation Done by: Date Evaluated:

CHAIRPERSON CHAIRPERSON

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6. Reaching a Consensus at a CSC Meeting
172. The evaluation exercise described above illustrates how an
individual evaluator would undertake the evaluation process. If a
formal or informal CSC meeting32 is to be held, each evaluator should
follow this process prior to the meeting. At the CSC meeting, the
scoring and ranking of all evaluators will need to be consolidated.
This is achieved through a process of consensus. The same general
steps are followed, but in this case, each evaluator explains his or
her reasons for the rating given in the personnel sheets and the
summary evaluation sheet. A consensus is reached and a value is
placed in a master personnel evaluation and summary evaluation
sheet. Minutes are kept to record major issues resolved (for example,
why a particular rating was given to a particular individual) and
the reasons for the overall rating of each firm. This latter point is
important, since various government authorities, ADB, or short-
listed consulting firms themselves may query the ratings.

At this point, if the selection method is QBS, the selection process
is complete, pending negotiation of a financial proposal during
contract negotiations.

For consultancies in which the selection is done by the borrower,
and prior review is required by the procurement plan, the results
of the evaluation are first sent to ADB for clearance. Once this is
received, the first-ranked firm is invited for negotiations.

For consultancies recruited directly by ADB, the highest-scoring
firm will be informed of its status and invited for negotiations.

For QCBS, LCS, and FBS proposals, other steps to follow are
outlined below.

7. Identifying Firms that Rate Below and Above 750 Points
173. At the end of the evaluation process, those firms that scored
fewer than 750 points are identified. For consultancies for which
the selection is done by the EA and prior review is required by the
procurement plan, the result of the evaluation and the names of
firms scoring 750 points and above are sent to ADB at this point for
clearance. This normally comprises the second submission during

32
A formal CSC meeting by the borrower’s CSC is required for all loan-funded and
delegated TA grant funded consulting services, while a formal CSC meeting is required
within ADB for TA grant-funded consulting services with estimated contracts more
than $600,000. For TA-grant funded contracts of $600,000 or less the user division may
decide to hold an informal, internal CSC meeting to evaluate proposals.

75


the recruitment process. Documents required for submission
include
K the summary evaluation sheet highlighting any proposal
that scored below 750 points,
K a personnel evaluation sheet for each proposal,

K comments on the strengths and weaknesses of each
proposal, and
K minutes of the evaluation meeting.

Financial evaluation continues after clearance has been received.
174. The EA (in the case of loans) or COSO (in the case of TA grants)
informs firms scoring below 750 points that their proposals have
been unsuccessful and their financial proposals are then returned
unopened. At the same time, firms scoring 750 points and above
are informed not only of this but also of the date and time of the
opening of financial proposals. This is normally at least 2 weeks
after the notification date to allow any consultants who wish to send
a representative to the proposal opening to do so.

C. Evaluating Financial 1. Public Opening of Financial Proposals
Proposals 175. Financial proposals for proposals that score 750 points
and above in the technical evaluation are opened publicly. Those
attending should sign an attendance form, and the following
procedure should be used:
K The score of each technical proposal that met the
minimum mark of 750 is read aloud.
K Each financial proposal is inspected to confirm that it has
remained sealed and unopened.
K Each financial proposal is opened, and the names of each
qualified consultant along with the total price shown in
the consultant’s financial proposal are read aloud.
K A rate sheet is distributed that indicates the applicable
currency exchange rate(s) as of the date of submission of
the proposals, which will be used to compute US dollar
equivalents during evaluation of the financial proposals.
K The likely schedule for contract negotiations and
commencement of the assignment is announced.
K A written record, is made of the proposal opening, detailing
the results.

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176. After the opening, all the other information in the financial
proposals is to be kept confidential. Whether they have attended the
opening or not, all qualified firms are sent a letter informing them of
the technical scores and total prices proposed by each qualified firm.
177. For borrower-recruited consultancies, the chairperson of the
CSC or a representative thereof normally undertakes these steps. For
ADB-recruited consultancies, a representative of COSO performs
these steps.
2. Verification of Financial Proposals
178. The financial proposal submitted by the firm is referred to
as the “gross financial proposal” (GFP). During the verification
process, GFPs are first checked for compliance with the data sheet.
Each GFP must include provisional sums and contingencies in
the amounts specified on the data sheet, and the validity period
of the proposals must accord with the validity period set down in
the data sheet.
179. A review is then made to ensure that the figures provided
in each GFP are consistent with the details of the corresponding
technical proposal (e.g., staffing schedule inputs, number and
duration of field trips, applicable per diems, etc.). The following are
taken into account:
K If the inputs shown in the GFP for any expert do not match
those shown on the staffing schedule in the technical
proposal, the staffing schedule inputs shall prevail and
adjustments will be made to the financial proposal
accordingly.
K If an expert included in the technical proposal is omitted
from the GFP then the cost of that expert is included in
,
the firm’s financial proposal at the highest rate for that
position from among all the financial proposals.
K In the case of TA, a minimum of person-months
required is normally included in the data sheet. If the
total international and/or national inputs shown on the
staffing schedule are below those indicated in the data
sheet, an adjustment will be made for the missing person-
months using the remuneration rate shown in the GFP for
individual international and/or national experts.
K The unit rates used for each expert will be fixed, and
it is not possible to change these rates during contract
negotiations.
K If any of the essential out-of-pocket expense items are not
priced in the GFP the consultant will be expected to bear
,
this cost at its own expense during implementation of the
contract.

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K If the number of international trips and per diems
calculated from the staffing schedule does not match
the quantities for these items shown in the GFP, no
adjustments will be made to the GFP inputs for the
purpose of evaluation. However, no additional costs
will be permitted for such omissions during contract
negotiations.
Finally, a review is made for computational errors. The proposal
amount is converted into US dollars using the exchange rate sheet
issued on the date of the public opening of the financial proposals.
The final amount is considered as the “gross evaluated financial
proposal” (GEFP).
180. For FBS and LCS, the selection process stops at this point.
Under FBS, the firm with the highest technical score and a GEFP
within the budget 33 will be invited to negotiate. Under LCS, the
firm with the lowest GEFP scoring 750 points and above will
be invited to negotiate. If required by the procurement plan,
submissions are made to ADB prior to invitations being issued.
These will comprise the
K minutes of the public opening of financial proposals,

K financial evaluation report,

K rankings, and

K minutes of the financial evaluation meetings.

3. Determining the Financial Score for QCBS
181. For evaluations using QCBS, if the data sheet for the RFP
indicates a maximum contract budget for the consulting services,
GEFPs are expected to be within this budget. If the GEFP of any
firm exceeds the budget, the proposal will be considered financially
nonresponsive and will be allocated a financial score of zero. However,
if the data sheet indicates an estimated budget, consultants will not
be penalized for exceeding it and their financial proposals will be
considered.
182. Once any nonresponsive financial proposals have been
identified, the remaining GEFPs will be converted into “net
evaluated financial proposals” (NEFPs). NEFPs include only variable
cost items such as remuneration and out of pocket expenditures.
Fixed cost items such as provisional sums and contingencies are not
included. NEFPs are calculated by subtracting the provisional sums
and contingencies (noncompetitive components) shown in the data
sheet from the GEFPs.

33
After adjustment for any oversight or errors.

78


183. The lowest NEFP is then given a maximum score of 1,000
points. This is then used as a basis to calculate the score of the other
financial proposals. The financial score for each proposal is inversely
proportional to its NEFP that is, the higher the NEFP the lower the
, ,
financial score. The financial score is computed as follows:
Financial Score = NEFP of the lowest priced proposal divided
by NEFP of the proposal under consideration, multiplied by 1,000
An example is shown below:
NEFP of lowest priced proposal = $799,000
NEFP of second lowest priced proposal = $850,000
Financial score of lowest NEFP = $799,000/$799,000 X
1,000 = 1,000
Financial score of second lowest priced NEFP
= $799,000/$850,000 X 1,000 = 940
Using this methodology, all proposals are given a financial score.

D. Ranking Proposals 184. Once the financial score for each qualifying technical proposal
and Inviting for is calculated, the whole evaluation process can be completed. This is
done by applying a weight to the technical score and a weight to the
Contract Negotiations financial score (which together add up to 100%) and adding them
together to achieve a final score. The normal weight used for the
technical component is 80%. The normal weight for the financial
component is 20%. However, the option to use ratios of either 70:30
or 90:10 exists, depending on the joint decision taken by the TA fact-
finding mission or the loan appraisal mission and the borrower as
outlined in the procurement plan.
185. A typical calculation for a proposal in which the technical score
is 830 points and the financial score is 940 points is as follows:
Technical score: 830 X 80% = 664
Financial score: 940 X 20% = 188
Final score: technical score (664) + financial score (188) = 852
(The final scores computed for each technical and each financial
proposal are rounded to the nearest whole number.)
186. Once the final scores for each proposal have been calculated,
they can be ranked from highest to lowest. In the event two or more
proposals have the same scores in the final ranking of proposals,
the proposal with the highest technical score will be ranked higher
and the next highest technical score will be ranked lower. After the
final ranking, the first-ranked consultant will be invited for contract
negotiations.

79


187. In the case of EA-recruited consultancies, prior approval
by ADB for inviting the first-ranked firm to negotiations may be
required by the procurement plan. If so, the following documents
are required:
K the minutes of the public opening of financial proposals,

K a financial verification report,

K the rankings, and

K the minutes of the financial evaluation meetings.

188. In the case of ADB recruitment, for contracts over $600,000,
COSO sends its evaluation report to CSC members for endorsement.
Any CSC member who wishes to discuss the evaluation may request
a CSC meeting. The user division within ADB informs the EA of the
name of the first-ranked consultant prior to inviting the firm for
negotiations. A representative of the EA is also normally invited
to attend. The role of the representative will be as an observer
and to confirm the support that the EA can provide during TA
implementation. An appropriate amount of funding should be
placed in the TA budget to accommodate the EA representative’s
attendance.

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Self-Study Questionnaire – Chapter VI

1. Q. Who is responsible for evaluating consultants’ proposals?

A. K The borrower’s CSC for consulting services funded by loans and delegated TA.

K A CSC convened by ADB for consulting services funded by a TA grant when the
estimated contract value is over $600,000.

K The user division for consulting services funded by a TA grant when the estimated
contract value is $600,000 or less.

2. Q. What are the four basic documents used for technical evaluation of proposals?

A. K the proposals themselves,

K a summary evaluation sheet,

K a personnel evaluation sheet, and

K a scoring table.

3. Q. What are the six scoring categories, and what percentage is attributed to each?

A. Excellent – 100%, Very Good – 90%, Above Average – 80%, Average – 70%, Below Average
– 50%, and Noncomplying – 0%.

4. Q. In the proposals, where is information on the project-related experience of each expert
documented?

A. In Section 12 of the standard ADB CV form.

5. Q. Why is evaluating the project-related experience of each expert particularly important?

A. The scoring allocation for personnel ranges from 500 to 900 points (depending on the
type of proposal), and project-related experience accounts for 60–70% of this amount.

6. Q. How is the overall individual rating for each expert calculated?

A. K The weight for each of the three factors (general qualiﬁcations, project-related
experience, and overseas/country experience) is multiplied by the rating given for
each factor to arrive at a weighted rating for each factor.

K These are then added together to get an overall individual rating.

7. Q. Where is the overall individual rating recorded?

A. In the summary evaluation sheet under “personnel.”

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8. Q. In evaluating approach and methodology, what factors should be assessed?

A. K the consultant’s understanding of the objectives,

K the quality of methodology,

K the degree of innovativeness,

K the quality of the work plan,

K the quality of the staffing schedule (including the organization chart),

K the requirement for counterpart facilities, and

K the proposal presentation.

9. Q. On the summary evaluation sheet, how is a firm’s score for each criterion derived?

A. By multiplying the maximum rate (set at the time of short-listing) by the rating given by
the evaluator.

10. Q. How is a firm’s total technical score derived?

A. By adding up the scores for each criterion on the summary evaluation sheet.

11. Q. How are firms ranked?

A. From highest to lowest depending on their total technical score.

12. Q. Once firms are ranked, the selection process is complete for the QBS system. What still
needs to be done under the QCBS, FBS, and LCS systems?

A. K Firms rated below 750 points are identified and (after receiving clearance from ADB in
the case of loan-funded consultancies) they are informed that they have not qualified.

K Financial proposals from the remaining firms are then opened and evaluated.

13. Q. What information is provided during the public opening of financial proposals?

A. K technical scores of firms scoring 750 points and above,

K total price of the financial proposals,

K rate sheet, and

K schedule for contract negotiations and the commencement of the assignment.

14. Q. Is the financial proposal accepted outright?

A. No, it is first checked for consistency with the data sheet and the technical proposal, and
for arithmetical errors and converted into US dollars to arrive at a GEFP.

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15. Q. Under QCBS, how is the financial score for each firm determined?

A. K For assignments for which the data sheet in the RFP indicates a maximum budget,
GEFPs exceeding this amount are considered financially nonresponsive and are given
a financial score of zero. For assignments where the data sheet indicates an estimated
budget, GEFPs that exceed this amount will still be evaluated.

K Once any nonresponsive proposals have been identified, the financial scores for the
remaining financial proposals are calculated. This is equal to the lowest priced NEFP
divided by the NEFP of the financial proposal under consideration, multiplied by
1,000.

16. Q. Under QCBS, how are proposals finally ranked?

A. K For each proposal the technical score is multiplied by a weighting (normally 80%), the
financial score is multiplied by another weighting (normally 20%), and the two are
added together.

K The firms are then ranked from the highest to the lowest score, based on the combined
ratings.

17. Q. Are other ratios possible?

A. Yes. If considered appropriate, ratios of 70:30 or 90:10 can be used if earlier agreed upon
in the procurement plan or the TA Board paper.

18. Q. After firms are ranked, can the highest ranked firm be invited for contract negotiations?

A. Yes, although prior review by ADB of the selection may be needed for some loan-funded
consultancies and delegated TA if required in the procurement plan.

83

Chapter VII
Negotiating a Contract

189. This chapter outlines procedures for contract negotiations
with consulting firms for loan projects and delegated TA grants,
for which the EA is responsible, and for TA grants, where ADB,
normally COSO, is responsible. The chapter focuses on contract
negotiations for loan projects. In instances where practices
between EA-led negotiations and ADB-led negotiations differ
significantly or substantially, the differences are indicated in the
text or in footnotes.
190. The steps normally followed during negotiations between the
borrower and a consulting firm are as follows:
K The CSC of the borrower34 issues a letter of invitation to
negotiate.
K A negotiating team is selected.

K Prenegotiation preparations are made.

K Negotiations are initiated, with a confirmation of authority
to negotiate.
K Personnel, technical, or financial issues arising from the
consulting firm’s proposal are resolved.
K A preliminary agreement is reached on the type of contract
to be used.
K The standard draft contract is reviewed jointly in detail.

K The appendixes of the draft contract are filled out.

K The special conditions of the draft contract are agreed
upon and filled in.
K The draft contract is submitted to higher authorities for
approval and to ADB for review (in the case of EA-led
negotiations).
K The contract is signed and, in the case of EA-led
negotiations, submitted to ADB.

The key aspects of these steps are described in this chapter.

34
In the case of negotiations led by ADB, the letter of invitation is issued by COSO.

85


A. Issuing a Letter 191. A letter of invitation to negotiate is issued after
of Invitation to K under QCBS – a first-ranked firm has been selected after
Negotiate technical and financial evaluation;
K under QBS – a first-ranked firm has been selected after
technical evaluation;
K under FBS – a first-ranked firm has been selected after
technical evaluation and the financial proposals have
been verified as correctly presented within budget;
K under LCS – the firm scoring 750 points or higher but
with the lowest cost has been selected after technical
evaluation and review of the financial proposals; or
K under CQS and SSS – the proposal of the invited firm has
been reviewed and is considered acceptable from both
the technical and financial points of view.
In some cases of negotiations for loan-funded consulting services,
prior approval of ADB is required before negotiations can proceed.
This is mentioned in the procurement plan.
192. The consulting firm should be invited to negotiate at the
earliest possible opportunity, while the proposal is still within the
validity period shown in the data sheet. This is to avoid complications
and ambiguities if the validity period has expired. If it is not possible
to negotiate within the proposal validity period and the negotiations
will take place within a reasonable period from expiry, the firm
should be requested to extend the validity of its technical and
financial proposals until negotiations can take place.
193. The invitation letter
K informs the firm that it has been first-ranked;

K invites the firm to send an authorized representative to
negotiate the proposal and finalize a contract on behalf of
the firm (bringing a letter of authority to do so);
K proposes a schedule and agenda;

K asks the consultant to confirm the availability of team
members nominated in its technical proposal; and
K summarizes any issues identified during evaluation that
require clarification, any deficiencies that need to be
corrected, any team members that the borrower would
like to see replaced (and why), and any other corrective
action to be taken.
194. It is important that the firm be forewarned in the invitation
letter of any substantial issues that may be discussed so that its

86


representative can attend the negotiations fully briefed and with all
required information at hand. Most loan-funded consulting services
assignments are negotiated face-to-face, which entails a visit of a
representative of the consulting firm to the country concerned. The
cost of travel for negotiations is borne by the firm. For consulting
services funded by TA and of a small size, ADB may decide, at times,
to negotiate by facsimile rather than face-to-face.

B. Selecting the 195. The borrower’s negotiating team should consist of persons
Negotiating Team knowledgeable about the project, the role of the consultancy in it,
the procurement plan, the content of the consultant’s proposal,
and the comments and suggestions of the CSC on it. It should thus
contain at least one member of the CSC and one representative
of the borrower’s EA. Team members should be familiar with
the standards, practices, and norms of funding international
and national consultants in their country. If possible, at least
one member of the team should have had prior experience in
negotiating proposals with international and national consultants
for multilateral-funded projects. For QBS, CQS, and SSS, the team
should contain members who are familiar with consultancy rates
and salaries on an international scale and within their country. A
senior member of the team, with appropriate authority, should be
appointed chief negotiator. In the case of ADB-led negotiations for
TA-funded consultancies, the negotiating team consists of COSO
staff supplemented by a representative from the user division. This
representative is normally involved only in the technical aspects
of negotiations and not the financial aspects. In the case of EA-
led negotiations, ADB may be invited to send a staff member as an
observer. In the case of ADB-led negotiations, a representative of
the EA is usually invited to attend as an observer.

C. Preparing for 196. Prior to negotiations, steps should be taken to ensure that the
Negotiations negotiating team is fully briefed on the task facing it as well as the
specific conditions and circumstances that apply. Four key activities
should be undertaken:
K review of relevant documentation,

K review of standard draft contracts,

K identification of and agreement on key issues, and

K preliminary preparation of the special conditions section
of the standard contract.

1. Review of Relevant Documentation
197. Team members should review relevant documentation such
as the RRP TOR, consultant’s proposal, and the minutes of the CSC
,

87


to ensure that they are fully familiar with the background and what
is to be negotiated.
2. Review of Standard Draft Contracts35
198. The team should be requested to review in detail the standard
draft contracts (time-based and lump-sum) utilized by ADB. For loan-
funded consulting assignments, prior translation of the contracts
into the language of the country may be valuable in ensuring full
understanding of the contracts if English is not commonly used
as a working language. Contracts for loan-funded assignments
consist of three sections: general conditions, special conditions,
and appendixes.36 The general conditions set out the framework of
the agreement and cannot be changed. They are the same for all
contracts. If these are not adhered to, ADB will not agree to use loan
funds to finance the consulting services. All team members should
understand this and realize that there is no point wasting time and
energy trying to negotiate points that are nonnegotiable .
199. The special conditions set out the circumstances under which
the general conditions will be implemented under the circumstances
specifically prevailing for the consulting services assignment. They
are negotiable and provide specificity for the general conditions.
They are cross-referenced in the text of the general conditions.
200. The appendixes are also negotiable to a certain extent,
i.e., as long as changes will not result in a change of scope of the
assignment. They describe the scope of the consulting services; the
personnel; the reporting requirements; the cost estimates; and the
facilities, equipment, and services to be provided by the borrower to
the consulting firm.
3. Identification of and Agreement on Key Issues
201. The team should meet at least once prior to the negotiations
to determine its approach to the negotiations to be undertaken.
Unanimity and consistency should be sought on
K the need to replace any of the team members including any
ranked below average or noncomplying in the evaluation
of the technical proposal;

35
This step is not so critical for ADB-led negotiations for TA-funded assignments, since
COSO staff are already familiar with the standard TA contract.
36
Standard contracts for loan-funded consulting services are available on the ADB
website at http://www.adb.org/Consulting/all-methods/Loans/Section6-TBContract-
Loan-6Jul07.doc for time-based contracts and http://www.adb.org/Consulting/all-
methods/Loans/Section6-LSContract-Loan-6Jul07.doc for lump-sum contracts. The
standard ADB TA contract has a slightly different format consisting of the contract
itself first, then appendixes, and then general conditions at the end. The contract
document is the equivalent of the special conditions in the contracts for loan-funded
assignments. An example can be found on the ADB website at http://www.adb.org/
Consulting/all-methods/TAs/Section6-Contract-TA-17Aug07.pdf.

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K any deficiencies noted in the methodology or approach;

K any deficiencies or inconsistencies noted in the scheduling
of the consultancy as a whole or of individual inputs;
K any changes required to the support requirements
to be provided either by the consulting firm or by the
borrower;
K the position to be taken vis-à-vis the reimbursement of
duties and taxes (which should be consistent with the
decision taken during the costing of the consultancy and
when preparing the procurement plan);
K a position on any comments on the TOR raised by the firm
in its proposal or covering letter; and
K any deficiencies or mistakes noted in the firm’s financial
proposal.

4. Preliminary Preparation of Special Conditions Section of
Standard Contract
202. During the same meeting (preceding paragraph) or a
subsequent meeting, the negotiating team should prepare a
preliminary draft of Chapter III – Special Conditions of the standard
contract. This will provide a basis for discussion once the negotiations
themselves are under way.

D. Initiating 203. As negotiations are opened, negotiators on both sides (the
Negotiations EA or ADB and the firm) should keep in mind that the object of the
negotiation is to turn the firm’s proposal into a contract that can be
implemented to the mutual benefit of both parties and, critically,
to the benefit of the overall project. Negotiations are not a debate
within which to score points, but a means of achieving a mutually
agreeable conclusion. It may be helpful if the chief negotiator makes
this point. Minutes of negotiations should be kept (normally by the
EA or ADB representative), and important points may be signed by
both parties as negotiations proceed. A template for the minutes
of contract negotiations is available on the ADB website under
Documents on Consulting Services (www.adb.org/Consulting/
QCBS-Loan-CN-Minutes.doc).
204. At times (as set out in the procurement plan or decided upon
later), ADB may delegate a staff member to assist the EA during
negotiations. The ADB representative’s role is primarily as an advisor
in terms of policy and procedural matters and should be considered
essentially neutral.
205. Negotiations are normally initiated with a formal presentation
by each side. The chief negotiator of the EA will usually indicate why

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the firm has been chosen to negotiate, and the chief negotiator of the
consulting firm will normally reply, responding to some of the initial
points raised and indicating that the firm is prepared to negotiate.
206. After these opening remarks, the representatives of both
sides will normally indicate their authority to negotiate and their
authority to sign a draft contract. Usually, at least on the part of the
firm’s representative, written authorization to do so is presented.
Negotiations may then proceed along various lines, depending on
the preference of the negotiators and the agreed-upon agenda. The
steps outlined in subsequent sections of this chapter are a logical
sequence that should cover all necessary issues and normally lead
to a mutually satisfactory agreement.

E. Discussing Issues 207. The negotiators of both the EA and the consulting firm may
Arising from the wish to raise issues arising from the proposal. These normally relate
to
Proposal
K personnel;

K the work plan; methodology; scheduling of personnel
inputs; and the scheduling of outputs such as reports,
designs, seminars, and workshops;
K out-of-pocket expenditures;

K counterpart support;

K provisional sums;

K miscellaneous items such as provision for inflation
and contingencies and a clarification of contractual
arrangements; and
K finalization of financial arrangements.

1. Personnel
208. The most important issues—and the ones that need to be
addressed at the beginning of negotiations—generally have to
do with personnel. The firm will have been asked to confirm the
availability of its proposed personnel in the letter of invitation, but
a number of issues often need to be resolved. Despite its original
confirmation, the firm may need to replace personnel who, for
one reason or another, are not available. If negotiations are held
within the proposal’s validity period shown in the data sheet, then
it is normal to allow a replacement only under strict circumstances,
for example, if the originally proposed team member has resigned
from the firm, has been certified ill, has suffered an accident, or has
died. If the proposal validity period has expired, then the firm may
propose a replacement with a greater degree of flexibility. Proposed
replacement team members must be of equal qualifications or better.

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Under QCBS, FBS, and LCS, the remuneration rate for any replaced
team member will be the same as indicated for the replaced team
member in the original proposal.
209. In some cases, the EA or, during negotiations for TA-funded
assignments, ADB may also request a change in personnel. This
may occur if a particular team member is not considered suitably
qualified for the services to be rendered or has been evaluated as
below average or noncomplying, or because of history with the
agency or country concerned. In the case of ADB-led negotiations
for TA-funded assignments, it may also be because the expert was
rated “unsatisfactory” during a previous assignment; is ineligible;37
or, as an ex-ADB staff member being recruited for a first ADB-
funded assignment, has been rejected by ADB’s Budget, Personnel
and Management Systems Department. This request should have
been communicated to the firm in the invitation letter. As with a
replacement requested by the firm, for QCBS, FBS, and LCS, the
remuneration rate for a replacement will be the same as for the
expert replaced. Depending on the particular circumstances, an
excessive number of replacements requested either by the firm, or
by the EA, or by ADB may be the basis for suspension of negotiations.
If this happens during negotiations for a loan-funded consultancy
and if no resolution can be found, then ADB should be contacted
and a request made by the EA to proceed with negotiations with the
second-ranked firm.
210. At times, the consulting firm may wish to include additional
personnel above and beyond those listed in the RFP and the
proposal, or to eliminate a particular position and use the resulting
savings for another expert. This may be because an expertise gap or
an excessive focus on one type of activity has been identified. Such
requests may be valid, but would normally be better accommodated
through a contract variation once the contract has been signed and
the need for a change in the staffing has been verified during the
inception period.
211. Under current practices, negotiations on remuneration may
take place only under QBS, CQS, and SSS. These require special
procedures. They may be complex and time consuming, especially
for QBS. The outcome is often uncertain, and this is one reason QCBS
is now the preferred mode for consultant selection. For reference,
in case these procedures are to be followed, they are spelled out in
the RFP.
212. A major topic for clarification at this point during negotiations
for loan-funded assignments will be the question of duties and taxes.

37
There are various grounds for ineligibility including close family ties with ADB
personnel, being a national of a country that is not an ADB member country, or being
currently employed by the EA that the TA is supposed to be assisting.

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This issue should have been clarified while preparing the consulting
services package, and the RFP should indicate the expected
responsibilities of the consultant and its staff and of the EA; but it is
not always properly handled. The standard contract includes three
possible scenarios for duties and taxes. For nonnational consulting
firms and their staff, they are as follows:
K The consultant is exempted from any such levies.

K The consultant will be reimbursed by the borrower for
any such levies it might have to pay, or the borrower
will pay such levies on behalf of the consultant and the
personnel.
K The consultants will have to pay levies of this kind without
reimbursement by the borrower.

The firm is normally expected to have informed itself of the prevailing
taxation legislation in the country and to have made appropriate
arrangements to deal with the taxation issues of its nonnational
staff.
213. During the discussions on personnel, parameters should
also be established for dealing with allowances for long-term inter-
national experts. These will cover the circumstances under which
their families may accompany them, any allowances that may be
paid, and what provisions may be made for the education of accom-
panying children. Working practices and procedures may also be
discussed at this point, depending on the nature of the work and
the degree of integration with the EA’s counterpart team and office
facilities. In addition, the level of support to be provided to ensure
visas and permits for international experts and their families should
be confirmed. Also, the issue of salary adjustments for long-term
consultants may be raised. Adjustments are normally allowed for
experts who will be in the field longer than 18 months, and they are
normally applied at the end of the first year.
2. Work Plan, Methodology, Scheduling, and Specific TOR
214. Once the personnel lineup has been confirmed, the next
items to address are the work plan, methodology, scheduling, and
specific TOR. In particular, the consulting firm may need to justify
any deviations in its proposal from the work plan and methodology
requested in the RFP or at least to clarify why the particular
,
proposed work plan was chosen. Similarly, it may be necessary to
justify a particular timetable for fielding various team members, the
production of reports, the holding of workshops and seminars, etc.
215. The EA’s negotiating team will have had the benefit of reviewing
other proposals and may be able to make constructive amendments
to the methodology, work plan, and scheduling of the firm’s proposal

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on that basis. Conversely, the firm may also have some constructive
suggestions about the work plan or the timing of inputs that it was
not able to make in the proposal itself to conform with the proposal’s
requirements. Under an FTP there is room to comment on the TOR,
,
and such comments may be taken into account at this point. It is
normally possible to reach a mutually agreeable conclusion on these
items if both sides maintain a nonconfrontational attitude.
3. Out-of-Pocket Expenditures
216. A further item of discussion will be out-of-pocket expenditures.
For QBS, CQS, and SSS, detailed negotiations may be required to
establish rates for such items as airfares, per diems, equipment,
transport, and other out-of-pocket expenditures. Under QCBS, FBS,
and LCS contracts, the cost for these items will have already been
established. The main items for discussion will thus be
K minor adjustments to take into account changes in the
personnel schedule or the work plan (for which the unit
rates outlined in the proposal will need to be followed),
and
K any errors or discrepancies identified in the original
proposal that need to be corrected.

4. Counterpart Support
217. During negotiations on counterpart support, the EA or the
EA’s representative at ADB-led negotiations will be expected to
confirm the availability of any support listed in the RFP and may,
after negotiations with the firm, agree to provide additional support,
normally in kind or through the provision of counterpart personnel.
If it turns out that the counterpart support outlined in the RFP will
not, in reality, be forthcoming, then it may be necessary to provide
additional funding, generally under out-of-pocket expenditures, to
procure this support from other sources.
5. Provisional Sums and Contingencies
218. Provisional sums are those that are nonnegotiable at the time
of submission of the proposal and include fixed costs for items such
as seminars, workshops, the recruitment of NGOs, and particular
types of equipment that it is considered should not be subject to
price variations. In addition, the need for allowances for inflation
and unforeseen expenditures will need to be covered. To cover
these items, contingencies will have been included in the proposal
as a nonnegotiable fixed amount in the same way as provisional
sums. In addition, under QCBS these items are more easily dealt
with, since it can be assumed that an allowance for inflation has
already been built into the remuneration and per diem items of
the financial proposal. For QBS, CQS, and SSS, these items will

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need to be dealt with separately. During negotiations, it may be
possible to define the cost of the items covered by the provisional
sums and the contingencies more precisely. As a result, it may be
possible to reallocate some of the amount originally reserved to
items such as increased person-months or additional out-of-pocket
expenditures.
6. Miscellaneous Items
219. In addition to the above issues, a number of other items in the
proposal may be brought up during negotiations. These may include
the need to clarify contractual or associational relationships among
the partner firms of a joint venture or consulting consortium, or the
need to clarify relationships between an international firm and its
local partner.
7. Finalization of Financial Arrangements and Cost
220. Once all of the above issues have been satisfactorily resolved,
then the financial aspects of the contract can be finalized. In the
case of QCBS, FBS, and LCS, this normally requires only a few
adjustments to the original financial proposal. For QBS, CQS, and
SSS, the formal financial proposal (submitted prior to negotiations)
will need to be reviewed in full in the light of the quantitative and
unit cost agreements reached during negotiations.

F. Preliminary 221. ADB normally uses two types of contracts, time-based and
Agreement on Type of lump-sum, for which there are four types of standard contract
documents:38
Contract Document
K time-based contract documents for contract amounts
over $200,000;
K time-based contract documents for contract amounts
$200,000 or less;
K lump-sum contract documents for amounts over $200,000;
and
K lump-sum contract documents for amounts $200,000 or
less.
These documents consist of a general conditions section, which is
fixed and not negotiable, and a special conditions section, which

38
Besides time-based and lump-sum contracts, three other types of contract are
possible: retainer and/or contingency fee contracts, indefinite delivery contracts, and
performance-based contracts. These are not used as often as time-based and lump-
sum contracts, and there are no formal standard contract documents for them. For
TA-funded assignments, ADB uses the same contract document for both time-based
and lump-sum contracts.

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includes items negotiated between the EA and the firm.39 Both
parties should understand what can be negotiated and what cannot,
since much time and effort can be saved if this is fully comprehended.
Given that one of the deciding criteria is cost (i.e., over or below
$200,000), the only real decision to be made on the document to use
is whether the contract will be time-based or a lump-sum.
222. Under time-based contracts, fees are paid and expenses
reimbursed based on actual expenditure by the firm during
implementation. Billings are usually on a monthly basis. The firm
is paid for remuneration based on time sheets submitted by the
experts, and is reimbursed for out-of-pocket expenditures based on
receipts submitted for out-of-pocket items. Time-based contracts
are recommended when the scope of the services may need to be
adjusted during implementation or when the duration and quantity
of services depend on variables that are beyond the control of
the consultant. In time-based contracts, the consultant provides
services on a timed basis according to quality specifications, and
the consultant’s remuneration is based on
K agreed-upon unit rates for consultant staff multiplied
by the actual time spent by the staff in executing the
assignment, and
K reimbursable expenses using actual expenses and/or
agreed-upon unit prices.

This type of contract requires the client (i.e., the EA or ADB) to closely
supervise the consultant and to be involved in the daily execution of
the assignment.
223. Under lump-sum contracts, payments are made to the firm
as a percentage of the total contract at specific agreed-upon times
or upon completion of certain stages of the work. This may entail a
certain percentage on submission of the inception report, a further
payment on submission of the interim report, another on submission
of a draft final report, and a final payment upon acceptance of the
final report by the borrower. Such contracts are practical when the
output is clearly defined and there is little room for dispute as to
whether the work has been satisfactorily completed or not. Lump-
sum contracts are easier to supervise than time-based contracts,
since the former do not require such a high degree of oversight and
accounting. They may be considered appropriate for any type of
selection system but may be more appropriate for QCBS, FBS, LCS,
and CQS.

39
As previously noted, above standard contract for TA-funded assignments is somewhat
different, with the main contract document itself constituting the special conditions
section.

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224. The decision on the type of contract to use should be a mutual
one between the EA or ADB and the firm. It will often depend on
how well the issues surrounding the proposal have been resolved
and how precisely the inputs and expenditures of the proposal have
been clarified. If there are some gray areas about the inputs but
the outputs are well defined, it may be better to use a lump-sum
contract. On the other hand, if the inputs (or at least unit rates) are
clearly agreed upon but the outputs are somewhat uncertain, then a
time-based contract may be preferable.
225. In either case, the decision taken at this point should be only
preliminary. During the final part of negotiations, it may be found
expedient to change from one type of contract to the other.

G. Joint Examination of 226. Once a type of contract has been agreed upon, the negotiators
Standard Contract of both parties should take time to go paragraph by paragraph
through the general conditions of the standard contract. This
exercise will help confirm that the type of contract chosen is
appropriate; will help identify parts of the special conditions that
need to be agreed upon during the closing stages of negotiations;
and may help identify gaps or shortcomings in the personnel,
technical, and financial arrangements that still need to be resolved.
This joint exercise should lead to a closer mutual understanding
of the basis and mechanics of the agreement to implement the

H. Finalizing Appendixes 227. The appendixes in the standard loan-funded contract are as
A to I of the Contract follows:40
for Loan-Funded K Appendix A – Description of Services
Assignments K Appendix B – Reporting Requirements
K Appendix C – Personnel Schedule
K Appendix D – Cost Estimates in Foreign Currency
K Appendix E – Cost Estimates in Local Currency
K Appendix F – Summary of Cost Estimates
K Appendix G – Services, Facilities, and Equipment to be
Provided by the Client
K Appendix H – Standard Form of Advance Payment
Security
K Appendix I – Standard Dispute Notification Form

40
In the standard contract for ADB TA-funded consulting services, the appendixes are
somewhat different. They are: A – Terms of Reference, B – Personnel Schedule, C – Cost
Estimates and Payment Schedule, and D – Specific Assurances of the Government.

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228. Completing the appendixes should be straightforward at this
point in the negotiations. The description of services should come
directly from the final agreed-upon TOR. The reporting requirements
will have been mutually agreed upon when deciding on the type of
contract. The personnel schedule will have been finalized when
resolving issues arising from the proposal. The cost estimates in
foreign currency and local currency will have been agreed upon
when finalizing the financial proposal (normally, international
costs such as the remuneration of international consultants and
international airfares will be in international currency, while local
costs such as the remuneration of national consultants and local
out-of-pocket expenses will be in local currency). In addition,
services, facilities, and equipment to be provided by the client will
have been agreed upon during discussion of the technical proposal.
In the case of ADB-led negotiations, a similar exercise can also be
easily undertaken to finalize the slightly different appendixes in the
standard contract document for TA-funded consulting services.

I. Agreeing on Special 229. The appendixes and the special conditions (Chapter III of
Conditions the contract document) are the main items of the contract to be
negotiated. They distinguish a negotiated contract from the standard
contract and provide precision to the agreements reached. In
agreeing to and filling out the special conditions during negotiations
for loan-funded consulting services, particular attention should be
paid to the following:
K the section on duties and taxes (Section 1.10 in the
time-based contract and Section 1.8 in the lump-sum
contract41);
K the section on effectiveness of the contract (Section 2.1 of
both contracts); this may entail various requirements that
need to be fulfilled for the contract to become effective
such as approval of the contract by ADB, the EA’s approval
of the consultant’s proposals for appointment of specified
key staff members, effectiveness of the ADB loan, and
receipt by the consultant of advance payment and by the
EA of advance payment security;
K the need to account for inflation if the contract is longer than
18 months (Section 6.2[a] in the time-based contract);
K the billing schedule for time-based contracts (Section
6.4[a] of the time-based contract);
K the schedule of payments for lump-sum contracts (Section
6.5 in lump-sum contracts);

41
These references are to contracts over $200,000.

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K the interest rate for delayed payments (Section 6.4 [c]
of time-based contracts and Section 6.6 of lump-sum
contracts); and
K the mechanism for settling disputes (Section 8 of both
contracts).

J. Submitting the Draft 230. At this point, for loan-funded consulting services, the contract
Contract to Higher will normally have to be approved by the higher authorities of the
borrower. If required by the procurement plan, the draft contract
Authorities for
will also need to be sent to ADB for review.42 The sequence of steps
Approval and to ADB to be taken is normally as follows:
for Review
K Both parties initial the contract.

K The draft contract is sent to department or ministry
authorities for review and formal acceptance.
K A draft is sent to ADB for review after approval of the
borrower’s authorities.
K ADB approves the draft and advises the borrower EA. If
changes are required, these need to be communicated
back to the negotiating team for further revision prior to
this step.
K The consultant’s representative and the EA’s representative
formally sign the contract.

231. This is a rather delicate phase in the negotiation process and
needs to be carefully monitored. To avoid undue delays with internal
approval, the borrower’s authorities should be kept fully informed
of the progress of negotiations during the negotiation period, and
it may be worthwhile, if possible, to include a representative of the
approving agency on the negotiating team. This may be the ministry
or a legal division of the government. On the part of ADB, efforts
should be made to keep internal review procedures as expeditious
as possible.

K. Submitting the 232. Once signed, a contract for loan-funded consulting services is
Signed Contract again submitted to ADB for further review. At this point, ADB checks
to ensure that it is substantially the same as the draft contract
for Loan-Funded
sent earlier. In some cases it may not be, and further negotiations
Consulting Services between ADB and the EA and between the EA and the consulting
to ADB

42
By contrast, for TA-funded consulting assignments, the contract can be signed at this
point by ADB’s representative and the ﬁrm’s representative, and copies sent to the user
division. The minutes of negotiations are signed by ADB’s representative, the ﬁrm’s
representative, and the EA’s observer.

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firm may be required if ADB funding is to be released to finance or
partly finance the contract.
233. Once a contract has been signed, a number of additional
documents (besides the final contract itself) need to be submitted
to ADB:
K the names of the short-listed consultants who submitted
proposals;
K the scores of their technical proposals;

K the prices of the financial proposals (for QCBS, FBS, and
LCS);
K the overall ranking (for QCBS);

K the name of the consultant selected; and

K the amount of the contract.

This information is used for statistical purposes and for publishing
on the ADB website for public information.

L. Failure of 234. Should the negotiations be unsuccessful at any point, they may
Negotiations be terminated. If this should happen, the second-ranked firm will be
invited to negotiate. In the case of recruitment by the EA under loan
financing, prior ADB approval of these steps is required.

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Self-Study Questionnaire – Chapter VII

1. Q. When is an invitation to negotiate a contract normally sent to a consulting firm?

A. When:

K under QCBS – a first-ranked firm has been selected after technical and financial
evaluation;

K under QBS – a first-ranked firm has been selected after technical evaluation;

K under FBS – a first-ranked firm has been selected after technical evaluation and the
financial proposals have been verified as correctly presented within budget;

K under LCS – the firm scoring 750 points or higher and with the lowest cost has been
selected after technical evaluation and review of the financial proposals; or

K under CQS and SSS – the proposal of the firm invited to submit a proposal has been
reviewed and is considered acceptable from both technical and financial points of
view.

2. Q. What should the invitation letter contain?

A. K confirmation that the firm has been ranked first;

K an invitation to send an authorized representative to negotiate the proposal and
finalize a contract on behalf of the firm (bringing a letter of authority to do so);

K a proposed schedule and agenda;

K a request to confirm the availability of team members nominated in its technical
proposal; and

K a summary of any issues identified during evaluation that require clarification, any
deficiencies that need to be corrected, any team members that the borrower would
like to see replaced (and why), and any other corrective action to be taken.

3. Q. What are the four main activities in preparing for negotiations?

A. K review of relevant documentation,

K review of standard draft contracts,

K identification of and agreement on key issues, and

K preliminary preparation of the special conditions section of the standard contract.

4. Q. Which parts of the standard contract are negotiable and which are nonnegotiable?

A. The special conditions and the appendixes are negotiable. The general conditions are
nonnegotiable.

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5. Q. Why is it important for all members of the negotiating team to know this?

A. So that time is not wasted trying to negotiate nonnegotiable items.

6. Q. What is the main purpose of negotiations?

A. To turn the firm’s proposal into a contract that can be implemented to the mutual benefit
of both parties and, critically, to the benefit of the overall project.

7. Q. What do representatives of both parties need to formally undertake negotiations?

A. Written authority to negotiate on the part of the firm and the government.

8. Q. If negotiations take place within the proposal validity period, what are the circumstances
within which the firm can request the replacement of a team member?

A. The originally proposed team member has resigned from the firm, has been certified ill,
has suffered an accident, or has died.

9. Q. Is it possible for the EA or ADB to ask for the replacement of a team member?

A. Yes, as long as there is a sound reason, for example, when a candidate has been rated
below average or noncomplying during the evaluation, when a candidate has been rated
unsatisfactory on a previous assignment, or a candidate is ineligible.

10. Q. If a team member is replaced, is there any limit on his/her rate of remuneration?

A. Under QCBS, FBS, and LCS, the rate of remuneration will be the same as the originally
proposed team member.

11. Q. What major issue is it important to clarify when discussing personnel for loan-funded
consulting services?

A. The arrangements to be made for duties and taxes. These should be in accord with the
formulation reached when the consulting services package was first prepared and with
the data sheet that was sent to the consultants as part of the RFP.

12. Q. What are specific issues in discussing the work plan, methodology, and scheduling?

A. The timetable for fielding of various team members; the production of reports; and the
holding of workshops, seminars, etc.

13. Q. Why is it generally easy to negotiate out-of-pocket expenditures under QCBS, FBS, and
LCS?

A. These have already been proposed by the firm in its financial proposal, and only minor
adjustments are necessary.

14. Q. Why is it important for the EA to confirm its counterpart support?

A. If it turns out that the counterpart support outlined in the RFP will not, in reality, be
forthcoming, then additional funding may need to be provided, generally under out-of-
pocket expenditures, to procure this support from other sources.

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15. Q. What are the five types of contract that ADB uses?

A. K time-based,

K lump-sum,

K retainer and/or contingency fee,

K indefinite delivery, and

K performance-based

16. Q. Which are the most commonly used?

A. Time-based and lump-sum contracts.

17. Q. Under what circumstances might a lump-sum contract be preferable, and under what
circumstances might a time-based contract be preferable?

A. If the inputs have some gray areas but the outputs are well defined, it may be better to use
a lump-sum contract. On the other hand, if the inputs (or at least unit rates) are clearly
agreed upon but the outputs are somewhat uncertain, then a time-based contract may be
preferable.

18. Q. If a proper negotiating agenda and schedule are followed, why should it be easy to
complete the appendixes to the standard contract for loan-funded consulting services?

A. K Appendix A, the description of services, should come directly from the final agreed-
upon TOR.

K Appendix B, the reporting requirements, will have been mutually agreed upon when
deciding on the type of contract.

K Appendix C, the personnel schedule, will have been finalized when resolving issues
arising from the proposal.

K Appendixes D, E, and F, the cost estimates in foreign currency and local currency, will
have been agreed upon when finalizing the financial proposal.

K Appendix G, services, facilities, and equipment to be provided by the client, will have
been agreed upon during discussion of the technical proposal.

K Appendixes H and I are standard forms.

19. Q. Why is there often a delay after a draft contract for loan-funded consulting services has
been agreed upon?

A. The draft must often be sent for approval by higher authorities of the borrower and by
ADB if the procurement plan so requires. Revisions may be required that entail further
negotiations.

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20. Q. Why does ADB carefully scrutinize the signed contract after it has been submitted by
the EA?

A. To ensure that the signed contract is substantially the same as the draft contract.

21. Q. What information is normally submitted to ADB along with a copy of the signed
contract?

A. K the names of the short-listed consultants who submitted proposals,

K the scores of their technical proposals,

K the prices of the ﬁnancial proposals (for QCBS, FBS, and LCS),

K the overall ranking (for QCBS),

K the name of the consultant selected, and

K the amount of the contract.

22. Q. Can an ADB representative assist with the contract negotiations?

A. Yes, but only as an observer.

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104

Chapter VIII
Recruiting Individual and Staff Consultants

235. When only a limited number of consultants are required
or when consulting tasks are not interrelated and do not require
coordinated management, individual experts may be recruited.
Individual consultants may be (among others) independent
consultants; consultants recruited from firms; or consultants
recruited from academic, government, or international agencies.
The recruitment of individual consultants is appropriate when
a task is relatively straightforward and no support from a home
office will be required. Individual consultants may be classified as
either international (if international expertise is required for the
assignment) or national (if the level of expertise required is available
within the country concerned). Normally, individual consultants are
not recruited if a team of more than three persons is required for a
particular task.
236. Individual consultants are normally recruited by the EA when
the funding source is a loan or a delegated TA, and by ADB when
the funding source is a TA grant. Individual TA-funded consultants
recruited by ADB are recruited using an in-house, web-based
individual consultant system (ICS). Since staff consultants are
usually individual experts and are recruited following the same
system, their recruitment is also discussed in this chapter.

A. Borrower 237. Individual consultants funded by loans are recruited by the EA
Recruitment following a process similar to QBS. The decision to recruit individual
consultants, and whether they will be international or national
of Individual consultants, is taken when preparing the procurement plan. The
Consultants procedures for selecting individual consultants are similar to, but
simpler than, those for selecting teams of consultants from a firm.
They entail
K preparing a consulting services package including the TOR,
time frame, number of person-months, and budget;
K advertising for candidates through ADB’s website and/
or directly in the print media (generally, international
publications, but also—in some countries—national
publications);43

43
Where possible, a standardized EOI format resembling ADB’s standardized format
should be used.

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K preparing a refined long list based on EOIs from interested
individuals, candidates suggested by ADB, candidates
listed on the ADB CMS system, and/or candidates
suggested by other agencies or sources;
K preparation of short-listing and evaluation criteria;

K preparation of a short list along with CVs of short-listed
candidates; for international consultancies, the short list
should include 3–5 individuals from a broad geographic
range of ADB member countries;
K approval of the TOR, evaluation criteria, and proposed
short list by the CSC;
K evaluation of the candidates by the CSC using the
standard ADB personnel evaluation form (see Figure 4 in
Chapter V);
K determination of the availability of the first-ranked
candidate (if not available, the second- and third-
ranked candidates may be contacted to determine their
availability);
K submission to ADB for approval of

¢ the finalized TOR,
¢ the ranked list of individuals and their CVs, and
¢ the format of the draft contract to be used (a sample
contract is available on the ADB website under
“Documents on Consulting Services”;
K following ADB’s concurrence, the commencement of
negotiations with the first-ranked candidate; and
K submission to ADB of a copy of the signed contract.

B. ADB Recruitment 238. Individual consultants recruited by ADB are normally funded
of Individual TA by TA grants, while staff consultants (who are normally individuals)
are funded by ADB’s administrative budget. Both cases employ a
Consultants and Staff similar recruitment process.
Consultants
239. Individual TA consultants normally undertake work that can
be considered as providing TA to member countries and may be
hired for either short assignments or extensive periods, depending
on the requirements set out in the TA paper.
240. On the other hand, strict limits are placed on the types and
length of assignments undertaken by staff consultants. They should

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normally provide specialized expertise and advice for limited
periods. The usual circumstances of their recruitment are
K when expertise, not available within ADB, is required for
producing a specific output such as a policy paper or a
computer program;
K when staff are not available for a particular assignment,
for example, during peak work periods or because staff
are on leave;
K when ADB’s staff skills-mix needs to be supplemented,
for example, when ADB staff do not have the required
expertise or experience for a particular task; or
K when ADB requires specialized expertise for a limited
period but not on an ongoing, full-time basis.

241. Staff consultant assignments that do not have specific
time-bound outputs must generally last less than 1 year, and staff
consultants can normally be recruited only for a total of 12 months
over a 24-month period. If an extension beyond this time is needed,
special procedures must be followed. These are outlined in PAI 2.03
Part C, available on the ADB website.
242. As noted above, to recruit individual TA consultants and staff
consultants, ADB uses a web-based system known as the ICS. This
allows the processing of a candidate’s recruitment to proceed with
a minimum of paperwork and avoids delays. The ICS also includes
guidelines to determine the remuneration rate of the consultant
based on a set of factors that include an assignment level (the
degree of responsibility of the position based on a scale of 1 to 7)
and a professional grouping (based on the type of expertise being
recruited, e.g., agronomy, civil engineering, economics, finance).
These are based on the TOR prepared for the assignment.
243. The steps to be followed are as follows:
K The user division in ADB enters the TOR into the ICS and,
based on the assignment level and professional grouping,
receives a remuneration rate, which can be used for
budgeting purposes.
K The user division identifies qualified candidates from
the CMS, EOIs, consulting firms, universities, research
institutes, and other sources. Individual TA assignments
are advertised on ADB’s website, so EOIs are usually
received for these assignments. Staff consulting
assignments are not, so greater effort is required to
identify qualified candidates. For assignments of 3

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months or less, if the assessed assignment level is lower
than 6, and if the primary candidate is not a former ADB
staff member, SSS is used; that is, only one candidate is
selected. For assignments over 3 months (or if the primary
candidate is a former ADB staff member), a short list of
three candidates is required.
K The biodata details and qualifications of short-listed
candidates are entered into the ICS, which provides a
matrix procedure for ranking the candidates on a scale
of 0 to 100. This ranking, referred to as the “qualification
grade,” must equal or exceed the minimum qualification
grade for the assignment level originally derived from the
TOR. If it does not, alternative candidates must be found.
K At this point, a number of clearances are required. These
are
¢ clearance from COSO of any candidates who were
previously engaged by ADB;
¢ clearance by the Budget, Personnel and Management
Systems Department of any former ADB staff member
who has not previously worked for ADB as a
consultant, and of spouses of current ADB staff;44
¢ clearance from the Office of the General Counsel for
any legal experts to be engaged;
¢ clearance from the Office of Information Systems
and Technology for information technology experts;
and
¢ a “no-objection” clearance from the concerned
government in the case of individual TA consultants
(but not staff consultants).
K While these clearances are being awaited, a noncommittal
inquiry letter and TOR are sent to the directly selected
or first-ranked candidate to confirm that he or she is
available. The letter includes either an affidavit of good
health or, for candidates 70 years old or older, a medical
certificate to be completed by the candidate’s doctor.
K Once clearance is obtained and the first-ranked or direct-
selected candidate’s availability is confirmed, the ICS is
used to obtain internal approval within the user division
and department and to submit a request to COSO

44
Former vice-presidents and members of the Board of Directors require clearance for
all assignments.

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to engage the candidate. The TOR, assignment level,
professional group, and qualification grade are attached
to this request.
K COSO decides on remuneration in one of three ways:

¢ for an international independent consultant, by using
the remuneration matrix based on the assignment level
and professional group in the ICS;
¢ for an international consultant who is a full-time
employee of a firm, by negotiating with the firm, based
on the supporting documents the firm submits, and
using the remuneration matrix as a reference;
¢ for a national individual consultant, based on COSO’s
data on local market rates.
K COSO then sends an offer and contract to the consultant.
This is normally nonnegotiable.

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Self-Study Questionnaire – Chapter VIII

1. Q. When is the recruitment of individual consultants warranted?

A. When a task is relatively straightforward and no support from a home office will be
required.

2. Q. When would it usually be inappropriate to hire individual consultants?

A. If a team of more than three individuals is required for a particular task.

3. Q. What types of consultants are normally recruited by ADB’s web-based ICS?

A. Individual consultants for TA, and staff consultants.

4. Q. For loan-funded consultants, when is a decision made on the recruitment of individual
consultants versus a team of consultants from a firm?

A. While preparing the procurement plan.

5. Q. What would be the normal sources used by the borrower’s EA to prepare a long list of
individual consultants?

A. EOIs from interested individuals, candidates suggested by ADB, candidates listed on
ADB’s CMS system, and/or candidates suggested by other agencies or sources.

6. Q. How many individual consultants should be included in the short list?

A. Three to five individuals from a broad geographic range of ADB-member countries.

7. Q. What are the three factors assessed in selecting individual consultants?

A. K general qualifications,

K project-related experience, and

K other factors.

8. Q. Where can the format of a draft contract be found?

A. On the ADB website under Documents on Consulting Services.

9. Q. What is the difference in funding arrangements between ADB-recruited individual
consultants and staff consultants?

A. Individual consultants are funded by TA grants; staff consultants are funded by ADB’s
administrative budget.

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10. Q. When are staff consultants normally hired?

A. K when expertise, not available within ADB, is required to produce a specific output
such as a policy paper or a computer program;

K when staff are not available for a particular assignment, for example, during peak work
periods or because staff are on leave;

K when ADB’s staff skills-mix needs to be supplemented, for example, when ADB staff
do not have the required expertise or experience for a particular task; or

K when ADB requires specialized expertise for a limited period but not on an ongoing,
full-time basis.

11. Q. How many candidates are placed on an ADB short list?

A. For assignments of over 3 months, three candidates are required on the short list. For
assignments of less than 3 months, SSS is used unless one of the candidates is an ex-ADB
staff, in which case three candidates are required.

12. Q. What are the clearances required for ADB-recruited individual and staff consultants?

A. K clearance from COSO of any candidates who were previously engaged by ADB;

K clearance by the Budget, Personnel and Management Systems Department of any
former ADB staff member who has not previously worked for ADB as a consultant, and
of spouses of current ADB staff;

K clearance from the Office of the General Counsel for any legal experts to be engaged;

K clearance from the Office of Information Systems and Technology for information
technology experts; and

K a “no-objection” clearance from the concerned government in the case of individual
TA consultants (but not staff consultants).

13. Q. What is the basis for determining the remuneration offered to individual and staff
consultants?

A. K for an international independent consultant, by using the remuneration matrix based
on the assignment level and professional group in the ICS;

K for an international consultant who is a full-time employee of a firm, by negotiating
with the firm, based on the supporting documents the firm submits and using the
remuneration matrix as a reference; or

K for a national individual consultant, based on COSO’s data on local market rates.

111

Chapter IX
Recruiting Other Types of Consultants and
Consulting Services

244. In addition to the most commonly used consultants
(consulting firms, individual consultants, and staff consultants),
the Guidelines also list a number of types of consultants and types
of consulting services that may be recruited from time to time.
These include resource persons, United Nations (UN) and other
specialized agencies, NGOs, procurement agents, inspection
agents, banks, auditors, and special delivery assignments. The rules
pertaining to their recruitment and the recruitment procedures to
be used are outlined in the Guidelines and, in some instances, in
PAIs 2.02 and 2.03. Key information about the most pertinent is
given in this chapter.

A. Resource Persons 245. Resource persons are individual consultants recruited by ADB
for short periods, normally up to 10 days, generally to provide expert
advice or guidance. Any engagement beyond this limit must be as an
individual consultant or a staff consultant. Recruitment procedures
are detailed under PAI 2.03 E.

B. Nongovernment 246. NGOs are increasingly being used by both the borrowers
Organizations of ADB funds and ADB itself. They are able to provide specialist
expertise along with the ability to contact and mobilize intended
beneficiaries of ADB loans and TA grants. They are also often well
placed to play a key role in benefit monitoring and in safeguard
activities because of their community and field-level contacts
and experience. A variety of recruitment procedures is followed,
depending on whether the NGO considered is international,
national, or local. These are outlined in detail in the Guidelines
(Section 2.38) and in PAI 2.02 Part H. Salient points to be noted are
given below.
1. International NGOs
247. International NGOs are those operating in a number of
developing countries. Some are very large and employ thousands of
staff in a range of disciplines. The following should be noted when
an international NGO is to be recruited:

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K When the borrower or ADB short-lists NGOs along with
consulting firms for a contract over $200,000, QBS or FBS
may be used so as not to give the NGO an undue financial
advantage.
K When the borrower or ADB short-lists only NGOs for
contracts over $200,000, QCBS is used.
K CQS is used for assignments expected to cost $200,000 or
less.
K SSS may be used to select an international NGO as long
as full justification is provided for assignments costing
$100,000 or less.

Further specific information on recruiting international NGOs is
provided in PAI 2.02 Part H and the Guidelines.
2. National and Local NGOs
248. National NGOs are incorporated or established and registered
in a particular DMC (where the contemplated assignment is to be
carried out) and operate mainly within and throughout that country.
In some DMCs, national NGOs are a large and potent development
force and have a considerable amount of experience and influence.
They are often able to reach and mobilize large numbers of people.
Local NGOs, on the other hand, are often small and based in a
particular geographic area. Their influence is also local, and their
skills may be limited. Salient information on the recruitment of
these types of NGOs is as follows:
K The normal recruitment method for national and local
NGOs for contracts over $200,000 is QCBS.
K Short-listing criteria for such assignments should include

¢ legal incorporation or establishment and registration
in an ADB member country (i.e., in the DMC where the
assignment is to be carried out);
¢ an operational history of at least 3 years, with
experience in implementing project activities;
¢ a management or advisory board; and
¢ an acceptable accounting and financial system.
K The normal recruitment method for national and local
NGOs for contracts costing $200,000 or less is CQS.
K SSS may be used to select a national or local NGO as long
as full justification is provided for assignments costing
$100,000 or less.

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Recruiting Other Types of Consultants and Consulting Services

C. Specialized Agencies 249. From time to time, ADB or an EA will recruit a specialized
and Institutions agency or institution to undertake a specific task for which it is
particularly well suited, or will place an institution or an individual
from a specialized agency or institution on a short list. Such
agencies may be international agencies from among the UN family
(e.g., the Food and Agricultural Organization, International Labour
Organization, Economic and Social Commission for Asia and the
Pacific), some other international agency such as the International
Rice Research Institute, or an academic institution such as a
university from any ADB member country. Universities are often
used for project benefit monitoring work, field surveys, and social
surveys, since they can mobilize large numbers of individuals for
short periods to undertake detailed survey work.
250. Since the types of assignment for which agencies and
institutions (and individuals from them) can be recruited vary
considerably, the procedures and processes for recruitment also vary
considerably. However, two main principles apply: fair competition
and transparency.
251. There are several consequences of this. For example, when
short-listing an agency or institution along with commercial firms,
the former may have a cost advantage, since
K their staff may accept lower salaries,

K there is no need to earn a profit, and

K they may have certain clearances (such as tax-free status
in the country concerned).

The standard practice under such circumstances is to use QBS or
FBS rather than QCBS as the selection method.
252. On the other hand, if all entities on the short list are agencies
or institutions, then QCBS may be used.
253. In some cases, the agency or institution has access to special
expertise or special backup and support facilities that make it
worthwhile considering recruitment on an SSS basis. In such cases,
there must be full justification that the use of SSS is in the best interests
of ADB, the recipient country, and the project; and the justification
to use SSS must be presented in the TA paper or the RRP .
254. In other cases, ADB and the agency concerned may have a
special arrangement or agreement. The FAO Investment Centre,
for example, has a memorandum of agreement with ADB under
which it undertakes assignments on a cost-sharing basis. Under
such circumstances, SSS would be an appropriate method of
recruitment.

115


255. The recruitment of national agencies or institutions for such
activities as monitoring or field surveys, on the other hand, may be
considered similar to the recruitment of NGOs for the same kinds of
activities. QCBS should be used for contracts valued above $200,000,
and CQS should be used for contracts of $200,000 or less.
256. Individual and staff consultants are recruited from agencies
and institutions in the same way as independent consultants.

D. Field-Level Service 257. Field-level service delivery contracts are important in
Delivery Contractors the social and rural sectors and may cover activities such as
beneficiary surveys, beneficiary mobilization, preparation and
dissemination of promotional materials, training seminars, and
social or environmental monitoring. They may also entail hiring
large numbers of individuals at relatively low wages such as
field interviewers, field trainers, health workers, and beneficiary
organizers. Such activities are usually undertaken at the field level
( sometimes in isolated parts of the country or in poor urban areas)
and are not amenable to packaging into competitive consulting
services contracts or to international or even national bidding.
Nonetheless, it is important to ensure that the organizations or
individuals chosen are adequately qualified and recruited using
transparent procedures. In many cases, local universities, institutes,
or NGOs will be the source of the expertise provided. Individual
contracts will normally be small—generally less than $100,000 and
often much less.
258. To ensure that appropriate individuals and agencies are
chosen in an economically efficient and transparent manner, the
job desciptions, minimum qualifications, terms of employment,
selection procedures, and extent of ADB review of these procedures
and documents should be described in the TA paper or RRP and,
for loan projects, sample contracts should be included in the
procurement plan.
259. Service contractors may be recruited to help identity and
implement the small-scale investment subprojects discussed in PAI
5.12, but their use is by no means limited to the very small investment
packages or the limited range of activities covered by that PAI.

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Recruiting Other Types of Consultants and Consulting Services

Self-Study Questionnaire – Chapter IX

1. Q. What is the maximum period for which resource persons can be recruited?

A. 10 days.

2. Q. Why do ADB and its borrowers increasingly use NGOs?

A. NGOs are able to provide specialist expertise along with the ability to contact and mobilize
intended beneficiaries of ADB loans and TA grants.

3. Q. What kind of activities are they often recruited for?

A. Beneficiary mobilization, benefit monitoring, and safeguard activities.

4. Q. How are the various types of NGO classed for consultant recruitment purposes?

A. International, national, or local.

5. Q. What selection method should be used when short-listing NGOs along with consulting
firms for a contract package costing more than $200,000?

A. QBS or FBS, since no cost advantage is applied.

6. Q. What selection method should be used if the contract package is $200,000 or less?

A. CQS.

7. Q. Is it possible to select international NGOs through SSS?

A. In exceptional cases and with full justification in the TA paper or RRP yes.
,

8. Q. What are the normal selection methods for national and local NGOs?

A. K for contracts over $200,000 – QCBS;

K for contracts of $200,000 or less – CQS;

K in exceptional circumstances – SSS.

9. Q. For contracts over $200,000, what should the short-listing criteria for national NGOs
include?

A. K legal registration in an ADB member country;

K an operational history of at least 3 years, with experience in implementing project
activities;

K a management or advisory board; and

K an acceptable accounting and financial system

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10. Q. What types of agencies and institutions, from time to time, may be recruited by ADB or
its borrowers to provide consulting services?

A. UN agencies, international agencies not affiliated with the UN, national level agencies,
and educational institutions such as universities and institutes.

11. Q. What are the two main principles that apply when considering the use of expertise from
such agencies?

A. Fair competition and transparency.

12. Q. What are the implications of these two principles when placing an agency or institution
on a short list with commercial consulting firms?

A. To ensure a level playing field in terms of cost, QBS or FBS should be used as the selection
method.

13. Q. Under what circumstances could SSS be considered a selection method for an agency or
institution?

A. K The agency or institution has access to special expertise or special backup and support
facilities.

K ADB and the agency or institution concerned have a prior agreement that may entail
cost sharing.

14. Q. When are field-level service delivery contractors used?

A. To supply field-level services such as beneficiary surverys and mobilization that are not
appropriate for packaging under international or national competitive consulting services
assignments.

118

Chapter X
Supervising Consulting Services

260. Supervising the implementation of consulting services
entails a series of activities that are basically the same for all types of
consultancies, whether individuals or from a firm, whether recruited
by ADB or recruited by the EA. These activities are
K issuing the notice to proceed,

K review of the inception phase,

K issuing contract variations,

K reporting and monitoring,

K billing and payment,

K dealing with disputes and arbitration,

K terminating services prior to the end of the contract,

K concluding the assignment, and

K evaluation.

These topics are discussed in this chapter.

A. Issuing the Notice to 261. A notice to proceed is required to initiate all types of consulting
Proceed services. It is normally issued as soon as possible after negotiations
have been successfully concluded and the contract has been signed.
Normally, the notice to proceed is issued by the EA for individuals
and firms hired under loan funding and by ADB for staff consultants,
individual consultants hired through a TA grant, and consulting
firms recruited under a TA grant.
262. In some cases, certain conditions need to be fulfilled before
a notice to proceed can be issued. These are known as “conditions
of effectiveness” and are spelled out in the special conditions of
the consulting services contract. One of the most common is the
approval of the loan by ADB. Another may be the appointment of
a particular expert as decided on during contract negotiations or
the clarification of a particular contractual arrangement between
or among the international and the national firms contracting the
services.
263. After the issuance of the notice to proceed, the contract
normally commences upon the arrival of the consultant or the
consulting team’s members in the country of operation.

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B. Review of Inception 264. For most consultancies lasting more than a few weeks, the
Phase work is divided into phases, of which one of the most critical is the
inception phase. The inception phase normally lasts about 1 month
from the time of the arrival of the consultant or consulting team and
covers the establishment of the consultant in the country, a review
of the work plan with the client (normally the EA), and the initiation
of the field work.
265. This will constitute the first time that the consulting firm will
have encountered the realities on the ground and is the initial period
of contact and cooperation between the EA and the consultants.
It is common for an inception report to be prepared to cover the
consultant’s experience and observations during this period, and
often a workshop or seminar is held to discuss it. It is normally
helpful if this coincides with a review mission from ADB so that an
ADB officer can attend. Even if no formal workshop is conducted, the
presence of an ADB staff member at the conclusion of the inception
phase can be very useful, at times even critical.
266. The following issues may be raised at the end of the inception
phase and will need resolution.
1. Overall Scope of Work
267. During the inception phase, it will be possible for the first time
for the consultant or consulting firm to get a full grasp of the task to
be undertaken. It may become clear that at the time of preparing the
proposal or when negotiating the contract the consultant did not
have a full picture of the situation. It may be that some particular
aspect of the job to be done was missed out or underemphasized
during the planning phase, or that some aspects of the work are
the mandate of agencies other than the appointed EA, and special
procedures will be needed in order to complete them. It may also
become clear that the capacity of the EA or its project office is not
as effective as was assumed during the planning of the consultancy,
and that extra support may be required to complete the work on
time. Likewise, the consulting firm may realize that some conceptual
or institutional flaws will affect the ultimate completion of the TOR.
These will need to be carefully documented and discussed in full
with the EA, project office, or other representatives of the borrower
(and possibly ADB), and measures must be taken to resolve the
issues through a change in the scope of work in the contract. The
EA or ADB officer may have recognized that there is a difference of
opinion with the consulting firm about the scope of work, and this
will need to be raised and resolved.
2. Work Plan and Staffing Schedule
268. On a less fundamental level, the consultants may have
recognized that changes in the various types of expertise or
their levels of input will be needed to complete the assignment

120


successfully. Gaps in the expertise required might also have been
identified such that additional experts may need to be appointed.
Again, these will need to be clearly identified; any proposed changes
justified; and full consultations or discussions undertaken with all
parties, including, as necessary, ADB. The EA or ADB officer may
also have developed reservations about the capacity or orientation
of one or more of the consultant’s personnel, and this issue will need
to be resolved.
3. Specific Terms of Reference
269. The inception phase is also the appropriate time to recognize
or identify changes needed in specific TOR for specific experts. Once
again, it is best to achieve a consensus on these changes among all
parties so that they can be expeditiously arranged and appropriately
resolved.
4. Access to Professional and Logistic Support
270. Within the first month of implementation, the degree of
support that can realistically be provided by the EA and its project
office will have become clear. Issues that may arise include
K availability and quality of office space, office equipment,
office consumables, secretarial services, and communi-
cations facilities;
K availability of competent counterpart staff and transla-
tors;
K support by the borrower in obtaining visas and clearing
imported equipment;
K availability of transport;

K access to documents and such items as aerial photos or
government statistics;
K access by the team and its personnel to particular offices,
departments, or key individuals;
K availability of acceptable living accommodation;

K sufficiency of per diems and other out-of-pocket expendi-
tures for international and national consultants; and
K sufficiency of per diems and out-of-pocket expenditures
for counterpart staff.
271. While the demands of the consultants should be reasonable,
the EA should be able to provide at least what has been promised
under the contract. If these items are not forthcoming or are of a
quality that affects the efficiency of the implementation of the
consultancy, then remedial measures will need to be taken. In some

121


cases, this could include additional funding to the consulting firm
from contingency funds in the contract or from a reallocation of
funds between budget lines to procure independently the items,
facilities, or services that the borrower was originally meant to
provide. In others, this may entail an agreement to provide the
required facilities and support by a particular date.
272. In any event, the EA (or ADB if recruitment and supervision
are by ADB) needs to understand that certain support items are
needed to complete the agreed-upon assignment successfully and
on time. On the other hand, consultants and consulting firms need
to remember that they are, by definition, working in countries where
full access to all the support facilities that they may expect in their
home countries may simply not be available.
5. Working Arrangements and Liaison
273. The inception period is the appropriate time to review and,
if necessary, improve the working arrangements and relationship
between the consultant or consulting team and the EA or its project
office. In most instances, the ideal situation is for the consultants and
the project office to work closely with each other. This is particularly
important when a degree of capacity improvement or on-the-job
training is expected. Sometimes, however, a close relationship is not
possible or does not evolve. This may be due to the simple fact that,
as a result of limited space, the consultant’s office is separate from
the project office; the staff of the project office and EA are already
burdened with many other responsibilities; cultural differences; or
a language barrier. Whatever the circumstances, it is important to
prevent a situation in which the consultants or consulting team is
working without feedback from or interaction with the EA or project
office. This is a particular concern during TA grant implementation
when the consultant or consulting firm may consider that ADB,
rather than the EA, is the client.
274. The need for good liaison and communication must be
addressed openly and frankly at the time of the inception review and,
if necessary, measures must be taken to improve communications
and relationships between the two parties. In some extreme cases,
this may mean a change in personnel either on the part of the
consultant or on the part of the EA. In most cases, this can be avoided
with a constructive approach by all parties.

C. Issuing Contract 275. The formal method of making and documenting a change
Variations in the consulting services contract is through a contract variation.
Contract variations are used to document agreed-upon changes
in the scope of work, personnel inputs, costs, TOR, timing of the
submission of reports, or out-of-pocket expenditures. There are
few consulting services contracts of any type that do not require a

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contract variation at one time or another. Normally, these relate to
changes that have a cost implication, but when there is a significant
change in the timing of an activity or a particular output, these should
also be recorded through a contract variation. Normally, the request
for contract variation is prepared by the consultant or consulting
firm and submitted to ADB for approval (for ADB-contracted
consultancies) or endorsement (for EA-contracted consultancies).
If the variation entails an increase in the contract amount, ADB’s
prior approval is required.
276. Instructions and documents relating to contract variations
(including forms to be used and examples) can be found on the ADB
website, www.adb.org/Consulting/documents.asp. In the absence
of their own documents, borrowers may wish to use ADB formats
and templates.
277. One common type of variation involves a change of
personnel. Sometimes a change of personnel is unavoidable
because of resignation, illness, accident, inadequate performance,
or personality conflict. When personnel are to be replaced, certain
factors need to be considered:
K Any replacement should be as well qualified or better
qualified than the person being replaced.
K Under QCBS, FBS, and LCS, the same remuneration will
apply to the replacement as was agreed upon for the
person being replaced.
K The consultant should bear all costs arising out of or
incidental to the replacement (such as airfares for the
substitute expert).

D. Reporting and 278. The timing, nature, and number of reports that the consultant
Monitoring or consulting firm should provide are normally contained in
the consulting services contract. These may vary considerably,
depending on the type of work being undertaken.
279. If the assignment is of a routine nature over a long period (for
example, implementation supervision), then monthly, quarterly, and
annual progress reports may be required. On the other hand, if the
assignment is to prepare a study or to implement a particular task,
a more specific type of reporting may be required. This could entail,
besides the inception report mentioned above, interim or midterm
reports, design reports, reports at the end of each phase of the work,
a draft final report, and a final report. These may be provided in a
number of media and formats but normally will entail hard and soft
copy versions. The production or acceptance of various reports is
often used as a milestone for payment under lump-sum contacts
and ADB-funded time-based TA contracts.

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280. Specific individuals should be appointed within the project
office, EA, or ADB to review the reports as they are produced, to
provide feedback, and to monitor the implementation progress of
the consultancy. Shortcomings in the quality of the work produced
or deviations from the implementation schedule should be brought
to the immediate attention of the team leader, the head of the EA’s
project office, and the ADB officer concerned so that they can be
addressed at the earliest opportunity.

E. Billing and Payment 281. Two billing and payment procedures can be followed for
borrower-contracted consultancies:
K a direct payment procedure by ADB, or

K initial payment by the EA and subsequent reimbursement
by ADB.

The steps involved in both procedures are shown diagrammatically
in Figure 7.
282. In direct payment by ADB, the consultant bills the EA, which
then reviews the claim and verifies that personnel inputs and out-
of-pocket expenditures are in line with the contract, the work plan,
and the associated cost estimates. (Clarification of certain items
may be required, but further processing of undisputed claims
should proceed while any disputed items are being clarified.) A
withdrawal application is then prepared and submitted to ADB.
Based on the withdrawal application, ADB makes a direct payment
to the consultant. This payment will not include the reimbursement
of taxes and duties, which will need to be reimbursed separately by
the EA if this is the method agreed upon at contract negotiations.
283. Payment by the EA and subsequent reimbursement follow
a similar pattern, except that the EA directly pays the consultant,
and a withdrawal application is subsequently sent to ADB. The
EA is subsequently reimbursed, generally through a topping up of
its imprest account. Both procedures have their advantages and
disadvantages. In direct payment by ADB, the EA does not need to
worry whether funds will be available or not, and the consultant or
consulting firm can be confident that at least the base cost of the
consulting fees, exclusive of taxes and duties, will be paid promptly.
On the other hand, this may result in a degree of complacency with
regard to the ultimate reimbursement of taxes and duties to the
consultant if this is an issue.
284. For ADB-contracted consultancies (normally for TA grants and
staff consultancies), payment is made to the consultant or consulting
firm based on a schedule agreed on at contract negotiations,
often based on certain milestones or outputs. The consultant or
consulting firm submits an invoice to the user department detailing

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Figure 7: Steps in Processing a Consultant’s Claim for Payment

CONSULTANT EXECUTING AGENCY ADB

Prepares claim to borrower
Receives consultant’s claim
in line with services
for payment based on
provided and in
services completed
accordance with contract

Reviews personnel inputs
provided against work plan
and personnel schedule in
contract

Reviews out-of- pocket
expenditures against work
plan and cost estimates in
contract

Seeks clarification from
consultant, if necessary

Pays consultant if Advised of payment
Receives payment for reimbursement method is to for liquidation of
claim submitted be used (with imprest advances on imprest
account) account

If direct payment is to be Receives EA’s
used, prepares withdrawal withdrawal application
application for submission and claim made by
with claim to ADB consultant

Receives payment Processes/claims
for claim from ADB and makes payment to
consultant from the loan
Receives copy of
payment advice to
consultant

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the expenditures for personnel and out-of-pocket items. The user
department then reviews the documentation and forwards it to the
Controller’s Department for further review and ultimate payment.
In normal practice, if any item needs further scrutiny before
the Controller’s Department can approve payment, payment of
undisputed items will be made. But payment of any disputed items
will be withheld until the circumstances are clarified.
285. Advance payments by EAs to loan-financed consultants
may be agreed upon during contract negotiations. The terms and
conditions of such payments in foreign currency and local currency
are set out in the special conditions section of the contract wherein
the amount of advance payment is specified, as are the timing of
the payment and the amount of advance payment security to be
provided by the consulting firm. The advance payment is set off
by the EA in equal installments against monthly billing statements
until it has been fully set off. The advance payment security is then
released.
286. Advance payments are not normally made to TA-financed
consulting firms. However, firms are provided mobilization fees
(as agreed upon during contract negotiations). For individual TA-
financed consultants and staff consultants, COSO and the project
division may approve advances against their reimbursable expenses
when justified, although not for remuneration or expenses that are
paid by lump sum. Detailed procedures for doing this are spelled out
in PAI 2.04 Part A. During the assignment, one or more additional
advances may be approved on request, up to an aggregate limit of
75% of the expenses. Once an advance has been provided, requests
for any additional advance are not considered until the consultant
liquidates the previous advance.

F. Disputes and 287. Disputes between the consultant or consulting firm and the
Conflicts client may arise for a number of reasons. They may be the result
of delays prompted by weaknesses on the part of the consultant
or the EA; by a lack of funds; by delays in getting key approvals,
data, or information; by political considerations; or by causes
beyond anyone’s control such as natural disasters. They may be the
result of deviations from the TOR or work plan by the consultant
or unjustified requests for deviations by the EA or project office.
Commitments entered into by the borrower, its EA, or the project
office may not be fulfilled, or not in the way that the consultants
consider in conformity with their needs. Indiscretions may take
place, and cultural sensitivities may be offended. All these instances
are serious and unfortunate in themselves, but the most serious and
unfortunate aspect is that they hold up the implementation of the
consultancy and usually, by implication, the design, approval, or
implementation of a multimillion dollar development investment.

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288. All reasonable efforts should be made to avoid disputes in
the first place; both parties should attempt to deal with problems
as they arise on a mutually constructive basis. (This may include
the repatriation of consultant staff if necessary or a change in the
personnel of the borrower.) If this is not possible, Section 8 of the
standard contract sets clear procedures for dealing with disputes.
This entails
K provision of a notification of dispute by one party to the
other, and
K provision for a mutual resolution at two higher levels
of authority within the firm and the EA or borrower’s
representative.
Finally, if the dispute cannot be amicably settled between the
consultant and the EA, then provision is made for arbitration under
the Rules of Arbitration of the International Chamber of Commerce.
The results of this arbitration are binding.

G. Terminating Services 289. At times, a decision is taken to terminate a contract prior
Prior to End of to its conclusion and the completion of the consulting services
assignment. This may be for various reasons, some (for example,
Contract political disturbances or natural disasters) of which are beyond
the control of the consultant, the borrower, or ADB, and others
because of the failings of one party or the other. In some cases,
termination is the optimal choice; in others, it is detrimental to the
overall intent of the consultancy, which is generally to support the
design or implementation of an investment project. This implies a
missed opportunity and a waste of the funds already expended on
the consultancy. For these reasons, termination should be avoided
if possible, even if this means a considerable restaffing of the
consulting team.
290. Termination may be initiated by any party. For a loan-funded
consultancy, a decision taken by the EA to terminate a contract must
be sent to ADB for approval, while for a TA-funded consultancy, the
decision of an ADB user department to terminate a contract must
be approved by COSO and the Office of the General Counsel. In the
former case, the decision is conveyed to the consultant or consulting
firm by the EA, and in the latter case by COSO.
291. Termination must be undertaken within the terms of the
contract document. For EA-contracted consulting services, these are
spelled out in Section 2.9 of both the standard lump-sum contract
document and the standard time-based contract document. These
provide for a notice period of 30 days, the payment by the EA of any
legitimate outstanding fees and costs to the consultant or consulting
firm, and the payment of legitimate costs to return the team to their
home countries.

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292. In case of dispute over what is or is not a legitimate expense,
eligible for payment, the dispute mechanism described above is
invoked and, if it is not possible to resolve the matter amicably, the
issue is submitted for arbitration under the Rules of Arbitration of
the International Chamber of Commerce. The contract will remain
valid until the arbitration decision is made.
293. Termination of ADB-contracted consulting services is covered
in PAI 5.11 Section I and under Article XV of the standard contract
for ADB-recruited consulting services. This allows for a phased
process of consultation aimed at achieving an amicable resolution
of disputes, followed by a review with the borrower agency and
within ADB. If no resolution is possible, the contract is terminated.
Full reimbursement is made of all eligible costs up to the date of
termination (unless the termination was occasioned by the default
of the consultant) and for costs incident to the orderly liquidation
of the consulting services such as the return travel of the consulting
firm’s personnel. The user division normally indicates which of the
final billings by the firm are eligible for payment and which are not.
Disputes that cannot be settled amicably are settled under the Rules
of Arbitration of the International Chamber of Commerce.

H. Concluding the 294. The contract is normally considered closed on the day after the
Assignment completion date listed in the contract. Any expenditures incurred
after the completion date are unlikely to be funded. It is therefore
important, under all types of consultancies, to request an extension
of the completion date if it appears that additional items will need
to be billed after the completion date.
295. Often an assignment ends with the finalization and
submission of a report or design documents that may or may not
require clearance before all the costs are paid by the EA or ADB. This
is the case, particularly, for lump-sum contracts. All accounts must
also be cleared and liquidated before they can be properly closed.
296. From a logistical point of view, consultants and consulting
firms working under an EA-contracted assignment may need special
clearances to remove and repatriate equipment or vehicles brought
in for the assignment or for personal use. Similarly, exit permits or
tax clearances may also be needed for the smooth exit of personnel
and their families from the country. The EA’s representative should
provide the assistance necessary to ensure that this process proceeds
efficiently and without undue delay.
297. Equipment and vehicles purchased under TA grant funding
normally become the property of the recipient EA after the TA is
completed and should be fully accounted for and turned over by
the departing individual consultant or firm to the borrower’s EA at
the end of the assignment. The consultant or firm must then submit

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a certificate of turnover or disposal to the ADB user division. (See
PAI 2.04, Appendix 2 or PAI 5.11, Appendix 2 for examples.) The
consultant or consulting firm should normally submit the certificate
within a week or two of completing the assignment, but at the latest
together with the final claim.
298. For ADB-contracted consultancies, the consultant should
submit the final claim promptly after completing the assignment.
The standard consultant contract states that the claim must be
submitted within 60 days of completion. ADB does not normally
accept claims submitted after this deadline.

I. Evaluation 299. ADB evaluates all consultants and consulting firms that it
contracts. A full description of the evaluation process is provided
in PAI 2.05. The process followed for both firms and individuals is
similar. For a firm, the performance of the firm itself is assessed
based on technical, economic and financial, project-specific, and
project management factors. These are rated on a four-grade scale of
“excellent,” “satisfactory,” “marginal,” and “unsatisfactory.” Room is
provided on the rating form for comments to support the rating. Each
expert on the team is also rated on the same scale, and justification
is provided as necessary. The firm is then given an overall rating on
the same scale.
300. Individual consultants are evaluated on such items as practical
knowledge and experience, adaptability, productivity, and ability
to work with others. These are also rated on the same four-grade
scale, and supporting comments are provided along with an overall
rating.
301. For ADB-contracted assignments, the evaluations are done by
the project officer and other ADB staff who have had contact with
the consultants and are familiar with their work. These are then
submitted to COSO. If deemed necessary, COSO will hold a special
CSC meeting to discuss the ratings. This most often occurs if a firm
or individual is rated as unsatisfactory.
302. If this is the case and the firm’s or individual’s rating is upheld
by the special CSC, the firm or individual is advised of the rating and
provided 21 days to reply and appeal the rating. A further special
CSC is held to discuss the response. If the evaluation is upheld, then
a decision is taken as to whether the firm or individual should be
excluded from future short listings or recruitment by ADB. Such
exclusion may be for a finite period or it may be permanent. In the
case when a first-ranked firm has proposed an expert who has been
rated “unsatisfactory,” it is normally asked to replace the expert prior
to or during contract negotiations.
303. Some borrowers also rate consultants who have worked with
them and maintain records of consultants’ performance. This is one

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reason that short lists for grant TAs should be sent to the borrower for
clearance prior to issuance of an RFP The evaluation of consultants
.
(both individuals and those from ﬁrms) by the borrower should
be encouraged, and assistance and advice provided by ADB when
possible. One of the problems facing governments in doing this is
the diverse number and types of consultants working for a diverse
number and range of agencies within the country. This situation
could be resolved by providing assistance to set up a centralized
evaluation service in one of the major ministries.

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Self-Study Questionnaire – Chapter X

1. Q. What document is required to initiate all types of consulting services?

A. A notice to proceed.

2. Q. When is a notice to proceed normally issued?

A. As soon as possible after negotiations have been successfully concluded and the contract
has been signed.

3. Q. What are some typical conditions of effectiveness contained in a notice to proceed?

A. K approval of the loan by ADB,

K appointment of a particular team member, and

K clarification of contractual agreements between or among firms in an association or
joint venture.

4. Q. Why is the inception phase so important?

A. It is the first time that the consulting firm encounters the realities on the ground and is
the initial period of contact and cooperation between the EA or project office and the
consultants.

5. Q. What issues might be brought out in a review of the inception phase?

A. K the overall scope of work and its relationship to the TOR,

K adjustments required in the work plan and staffing schedule,

K adjustments required in the TOR of specific experts,

K the degree of access to professional and logistic support, and

K the adequacy of working arrangements and liaison between the consulting team and
the EA.

6. Q. What are some common problems with regard to professional and logistic support?

A. K availability and quality of office space, office equipment, office consumables,
secretarial services, and communications facilities;

K availability of competent counterpart staff and translators;

K support by the borrower in obtaining visas and clearing imported equipment;

K availability of transport;

K access to documents and such items as aerial photos or government statistics;

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K access by the team and its personnel to particular offices, departments, or key
individuals;

K availability of acceptable living accommodation;

K sufficiency of per diems and other out-of-pocket expenditures for international and
national consultants; and

K sufficiency of per diems and out-of-pocket expenditures for counterpart staff.

7. Q. How are these issues best resolved?

A. While the demands of the consultants should be reasonable, the EA should be able
to provide at least what has been promised within the contract. If these items are not
forthcoming or of a quality that affects the efficiency of the implementation of the
consultancy, then remedial measures must be taken. In some cases, this could include
additional funding to the consulting firm to procure independently the items, facilities,
or services that the borrower was originally meant to provide. In others, this may entail an
agreement to provide the required facilities and support by a particular date.

8. Q. What are some factors that impede a close working relationship between the consulting
firm and the client?

A. The consultant’s office may be separate from the project office; project office and EA
staff may be already burdened with many other responsibilities; there may be cultural
differences between the consultants and the EA staff; or there may be a language barrier
between consultants and EA staff.

9. Q. When are contract variations used?

A. To document agreed-upon changes in the scope of work, personnel inputs, costs, TOR,
timing of the submission of reports, or out-of-pocket expenditures.

10. Q. What are the main factors to be considered when replacing personnel on the consulting
team?

A. K Any replacement should be as well qualified or better qualified than the person being
replaced.

K Under QCBS, FBS, and LCS, the same rate of remuneration will apply to the replacement
as was agreed upon for the person being replaced.

K All costs arising out of or incidental to the replacement (such as airfares for the
substitute expert) should be borne by the consultant.

11. Q. What are the two possible payment methods for loan-funded consultancies?

A. K direct payment by ADB, and

K initial payment by the borrower and subsequent reimbursement by ADB.

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12. Q. What is an important characteristic of the direct payment procedure that both the
consulting firm and the borrower should note?

A. Payment by ADB will not include reimbursement of taxes and duties. If the contract
calls for this procedure in dealing with the tax issue, then payment will need to be made
separately by the EA.

13. Q. What is the most serious consequence of disputes between the consultant and the client
(either ADB or the EA)?

A. They hold up the implementation of the consultancy and usually, by implication, the
design, approval, or implementation of a multimillion dollar development investment.

14. Q. Which part of the standard contract sets out procedures for dealing with disputes?

A. Section 8.

15. Q. If disputes cannot be settled amicably between the consultant and the borrower or ADB,
what are the final steps taken for dispute resolution?

A. Arbitration under the Rules of Arbitration of the International Chamber of Commerce.
The results of this arbitration are binding.

16. Q. Why should early termination of a consulting contract be avoided if possible?

A. It implies a missed opportunity and a waste of funds already expended. This will be
detrimental to the overall intent of the consultancy, which is generally to support the
design or implementation of an investment project.

17. Q. Is ADB approval required if an EA decides to terminate a consultancy contract?

A. Yes.

18. Q. Must termination be in accordance with the provisions of the consulting contract?

A. Yes.

19. Q. What are some of the standard provisions?

A. K a notice period of 30 days,

K payment by the borrower of any legitimate outstanding fees and costs to the consultant
or consulting firm, and

K payment of legitimate costs to return the team to their home countries.

20. Q. For ADB-recruited consulting services, which department determines the eligibility of
final billings?

A. The user department.

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21. Q. Why is it important to request an extension of the completion date if it appears that
additional items will need to be billed after the completion date?

A. Any expenditures incurred after that time are unlikely to be funded.

22. Q. What happens to equipment and vehicles left over from a grant-funded TA at the end of
the contract period?

A. Equipment and vehicles purchased under TA grant funding become the property of the
recipient EA and should be fully accounted for and turned over to it by the departing
individual consultant or ﬁrm at the end of the assignment.

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Appendix 1
Documents on Consulting Services
Document URL

1. Harmonized Request for Proposal (RFP) for Recruiting www.adb.org/Consulting/all-methods-ta.asp
Consulting Firms for Technical Assistance Projects for All
Selection Methods (Updated: 20 August 2007)
2. Recruitment of Individual TA or Staff Consultant

CV format for individual consultants www.adb.org/Consulting/CV-format-individual-28 Aug07.doc

Noncommittal inquiry www.adb.org/Consulting/ICS-noncommittal-inquiry-21June07.
pdf
Sample individual consultant’s contract www.adb.org/Consulting/ICS-Contract.pdf

Computer requirements of consultants assigned at ADB HQ www.adb.org/Consulting/Computer-Requirements.pdf

Global group insurance policy for consultants www.adb.org/Consulting/GGIPC-1January2006.pdf

Request for payment to individual consultant/non-ADB staff www.adb.org/Consulting/Claim-Form.xls

Performance evaluation report form www.adb.org/Consulting/PER-IC.pdf

3. Harmonized Request for Proposal (RFP) for Recruiting www.adb.org/Consulting/all-methods-loan.asp
Consulting Firms for Loan Projects for All Selection Methods
(Updated: 20 August 2007)
Summary of major changes from previous RFP version www.adb.org/Consulting/changes-prevrfpvsasm.pdf

4. Submission Formats for Executing Agencies

Submission forms

QBS submission 1 – report on short-listing of consulting firms www.adb.org/Consulting/QBS-SUBMISSION-1.doc

QBS submission 2 – report on evaluation and ranking of www.adb.org/Consulting/QBS-SUBMISSION-2.doc
proposals
QBS submission 3 – draft negotiated contract www.adb.org/Consulting/QBS-SUBMISSION-3.doc

QBS submission 4 – signed contract www.adb.org/Consulting/QBS-SUBMISSION-4.doc

QCBS submission 1 – report on short-listing of consulting firms www.adb.org/Consulting/QCBS-SUBMISSION-1.doc

QCBS submission 2 – report on evaluation of technical www.adb.org/Consulting/QCBS-SUBMISSION-2.doc
proposals
QCBS submission 3 – report on financial evaluation and ranking www.adb.org/Consulting/QCBS-SUBMISSION-3.doc
of technical proposals
QCBS submission 4 – draft negotiated contract www.adb.org/Consulting/QCBS-SUBMISSION-4.doc

QCBS submission 5 – signed contract www.adb.org/Consulting/QCBS-SUBMISSION-5.doc

Direct selection submission 1 – report on consulting assignment www.adb.org/Consulting/DS-SUBMISSION-1.doc

Direct selection submission 2 – draft negotiated contract www.adb.org/Consulting/DS-SUBMISSION-2.doc

Direct selection submission 3 – signed contract www.adb.org/Consulting/DS-SUBMISSION-3.doc

Individual consultant submission 1 – proposal for engagement www.adb.org/Consulting/IC-SUBMISSION-1.doc
of consultant
Individual consultant submission 2 – signed contract www.adb.org/Consulting/IC-SUBMISSION-2.doc

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Document URL
Templates

Form EV 4.1 – record of attendance at the opening of the www.adb.org/Consulting/Form-EV-4-1.doc
financial proposals
Form EV 4.2 – record of technical score and proposal prices at www.adb.org/Consulting/Form-EV-4-2.doc
opening of financial proposals
Form EV 5 – summary evaluation sheet of individual firm’s www.adb.org/Consulting/Form-EV-5.doc
financial proposal
Form EV 6 – summary evaluation sheet of financial proposals www.adb.org/Consulting/Form-EV-6.doc

Form EV 6.1 – financial proposal price adjustments www.adb.org/Consulting/Form-EV-6-1.doc

Form EV 7 – summary proposal ranking sheet www.adb.org/Consulting/Form-EV-7.doc

Form CN minutes (QBS) www.adb.org/Consulting/QBS-Loan-CN-Minutes.doc

Form CN minutes www.adb.org/Consulting/QCBS-Loan-CN-Minutes.doc

5. Summary of methods for selection of consulting firms/
www.adb.org/Consulting/qcbs.asp
organizations

6. Standard forms for contract administration (revised Jan 2008)
Contract variation

Instructions to consultant to request a contract variation www.adb.org/Consulting/Instruct2Consultants-Nov07.pdf

Breakdown of billing rates form www.adb.org/Consulting/Breakdown.xls

CV format for replacement experts www.adb.org/Consulting/CV-format-replacement-28Aug07.
doc
Example of contract variation www.adb.org/Consulting/vo-sample-12Sep07.pdf

Contract variation form www.adb.org/Consulting/convar_form.xls

Illustrated example of contract cost estimates www.adb.org/Consulting/voform-sam.pdf

VO Request Form for User Division www.adb.org/Consulting/VO-Reqform-14Jan08.xls

Preparation and submission of TA monthly reports and claims www.adb.org/Consulting/instructions.asp
for payment
Instructions on preparing the monthly statement of www.adb.org/Consulting/prepare-mo-statement.pdf
consultant inputs and claims
Monthly statement of consultant inputs www.adb.org/Consulting/firmmsci.xls

Final statement of eligible costs www.adb.org/Consulting/finalstm.xls

Request for payment to individual consultant/non-ADB staff www.adb.org/Consulting/req_payment_form.pdf

7. Glossary of ADB consulting terms (Sept. 2001) www.adb.org/Consulting/glossary.pdf

136

Appendix 2
Data Sheet
DATA SHEET
TA No. 7901 - DMC Institutional Strengthening of the Urban Development Authority
Ref. No.: LOI/TA7901-DMC
Reference Clauses
in Section 2
1.1 Method of Selection QCBS
1.3 Representative/Contact Person and Address of the Executing Agency
Mr. John Doe
Director General
Urban Development Authority
13–14 National Blvd., Capital City, DMC
Tel. No.: 899 23 890 330
Fax No.: 899 23 212 278
E-mail Address: uda@dmcnet.com
1.4 The executing agency will provide the following counterpart facilities:
(a) office accommodation and transport; (b) remuneration and per diem of counterpart staff
1.12 Validity of proposal 03 August 2007 – 1600 hours
2.1 Clarifications may be requested not later than 23 April 2007
10 days before the submission date
4.1 Type of technical proposal required Simplified
4.1(v) Minimum number of person-months that must
be shown on the personnel schedule are:
International experts 22
National experts 8
5.1(v)(f) Provisional sums ($ amount)
Equipment 20,000 (fixed amount)
Training, seminars, and conferences 30,000 (fixed amount)
5.1(v)(f) Contingency ($ amount) 65,000 (fixed amount)
5.1(v)(f) Maxiumum budget for consulting services 700,000
assignment (including the provisional sums and
contingency shown above in $)1
5.1(v)(g) Examples of essential items of expenditure to be (Remuneration, out-of-pocket expenses [e.g., per
included on the financial proposal (other than diem, international/national air travel, miscellaneous
provisional sums and contingency)2 travel expenses, communication, report preparation,
production and transmission, land transportation,
vehicle rental, etc.])
6.3 Consultants must submit an original and 2 copies of the technical proposal and an original financial
proposal with CD to ADB at the following address:3

1
The amount of provisional sums is included within the budgeted ceiling in the data sheet (clauses 7.6 [QCBS], 7.7 [FBS], and 7,8 [LCS]).
2
The consultant must assess the relevant expenditure, other than the provisional sums and contingency, to be included in its financial
proposal. The relevant items of expenditure must be shown and found in the financial proposal. If any item is not shown, the cost
of such items will be treated as being included elsewhere in the financial proposal and cannot be introduced during contract
negotiations.
3
If QBS, only a technical proposal should be submitted.

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Reference Clauses
in Section 2
The Principal Director, Central Operations Services Office
6 ADB Avenue, Mandaluyong City 1550
Metro Manila, Philippines
6.4 Financial proposal to be submitted at the same Yes
time as the technical proposal
6.5 Submission time and date of proposal 03 May 2007 – 1600 hours
6.5 Name and address of ADB where correspondence concerning this request for proposal is to be sent:
Julia Kwan, Procurement Specialist
Central Operations Services Division 2
Fax: 63 2 636 2471
E-mail: jkwan@adb.org
6.5 One copy of the technical proposal for ADB resident mission with the following address:
Name of Incumbent
Country Director
DMC Resident Mission
Street Address,
Capital City,
DMC,
P.O. Box 2436
Tel: 5509 (899 23) 215 805 / 215 806 / 216 417
Fax: 899 23 215 807
E-mail: adb@bigpond.com.DMC
6.5 One copy of the technical proposal for the executing agency with the following address:
Mr. John Doe
Director General
Urban Development Authority
13-14 National Blvd., Capital City, DMC
Tel. No.: 899 23 890 330
Fax No.: 899 23 212 278
7.1 Minimum score required for technical proposal 750 points
7.1 Summary evaluation criteria Please refer to data sheet, Appendix 1
7.4 Expected date of public opening of financial 21 May 2007
proposals
7.4 Reference exchange rate ADB currency book rate on proposal submmission
date
8.1 Expected date to start contract negotiations 13 June 2007
9.2 Expected date to commence consulting 02 July 2007
services
Verified by:

Julia Kwan
Procurement Specialist
Central Operations Services Division 2

138

Appendix 3
Curriculum Vitae (CV) for Proposed
International or National Experts

1. Proposed Position [only one candidate shall be nominated for each position]: _________________

2. Name of Firm [Insert name of firm proposing the expert]: ___________________________________

3. Name of Expert [Insert full name]: _______________________________________________________

4. Date of Birth: ________________________________ Citizenship: _____________________________

5. Education [Indicate college/university and other specialized education of expert, giving names of

institutions, degrees obtained, and dates of obtainment]: ___________________________________

_______________________________________________________________________________________

6. Membership in Professional Associations: _______________________________________________

_______________________________________________________________________________________

7. Other Trainings [Indicate significant training since degrees under 5 – Education were obtained]:

_______________________________________________________________________________________

_______________________________________________________________________________________

8. Countries of Work Experience: [List countries where expert has worked in the last 10 years]:

_______________________________________________________________________________________

_______________________________________________________________________________________

9. Languages [For each language, indicate proficiency: good, fair, or poor in speaking, reading, and

writing]: ______________________________________________________________________________

_______________________________________________________________________________________

10. Employment Record [Starting with present position, list in reverse order every employment held by
expert since graduation, giving for each employment (format here below): dates of employment, name
of employer organization, positions held.]:

From [Year]: __________ To [Year]: ____________

Employer: _________________________________

Positions held: _____________________________

NOTE: Maximum of 5 pages.

139


11. Detailed Tasks Assigned 12. Work undertaken that best illustrates capability to handle
the tasks assigned
[List all tasks to be performed
under this assignment.] [Among the assignments in which the expert has been involved,
indicate the following information for those assignments that
best illustrate the expert’s capability to handle the tasks listed
in line 11.]

Name of assignment or project: _________________________

Year: ______________________________________________

Location: __________________________________________

Client: _______________________________________________

Main project features: ________________________________

Positions held: ______________________________________

Activities performed: _________________________________

13. Certification:
I, the undersigned, certify to the best of my knowledge and belief that Yes No
(i) this CV correctly describes my qualifications and my experience; K K
(ii) I am employed by the Executing or the Implementing Agency; K K
(iii) I am a close relative of a current ADB staff member; K K
(iv) I am the spouse of a current ADB staff member; K K
(v) I am a former ADB staff member; K K
• If yes, I retired from ADB over 12 months ago; K K
(vi) I am part of the team who wrote the terms of reference for this K K
consulting services assignment;
(vii) I am sanctioned (ineligible for engagement) by ADB. K K

I understand that any willful misstatement described herein may lead to my disqualification or
dismissal, if engaged.

________________________________________________________________Date: _______________________
[Signature of expert or authorized representative of the firm] [Day/Month/Year]

140


In April 2006, the Asian Development Bank (ADB) issued a revised edition of its Guidelines on
the Use of Consultants by Asian Development Bank and Its Borrowers, (the Guidelines),
incorporating significant changes resulting from the harmonization of policies and procedures
with those of the World Bank.
While the Guidelines set basic policies and procedures, further guidance on using
consultants is provided to ADB staff through the project administration instructions (which are
updated periodically). A third reference, which provides information on practices and
procedures in even greater detail and to a wider audience, has been the Handbook for Users of
Consulting Services (the Handbook). The last edition of the Handbook was produced in 2002.
Thus, when the new Guidelines were issued, a substantial amount of updating was needed,
both because of the changes to the Guidelines themselves and because of incremental changes
in policies, practices, and procedures over the years.
In considering the type of document needed to replace the Handbook, it was decided to aim
at a broader utilization and a wider audience than the Handbook had served, and to produce a
publication that could be used for training purposes as well as a reference. It was thus decided
to produce a somewhat different document with a more practical and pragmatic focus that
would be aimed at all users and providers of consulting services for ADB. This current
Consulting Services Operation Manual (the Manual) is the product of that decision.
This Manual sets out the policies, practices, and procedures for recruiting and using
consultants by ADB and its borrowers, covering the range of activities for which consultants
are recruited, the different types of consultants and when their services are used, the range of
differing consultant selection methods, and the procedures for the administration of
consulting services by both ADB and its client borrowers.

About the Asian Development Bank

ADB aims to improve the welfare of the people in the Asia and Pacific region, particularly the
nearly 1.9 billion who live on less than $2 a day. Despite many success stories, the region
remains home to two thirds of the world’s poor. ADB is a multilateral development finance
institution owned by 67 members, 48 from the region and 19 from other parts of the globe.
ADB’s vision is a region free of poverty. Its mission is to help its developing member countries
reduce poverty and improve their quality of life.
ADB’s main instruments for helping its developing member countries are policy dialogue,
loans, equity investments, guarantees, grants, and technical assistance.
ADB’s headquarters is in Manila. It has 26 offices around the world and more than
2,000 employees from over 50 countries.

www.adb.org
Publication Stock No. 020608
ISBN No. 978-971-561-657-7 Printed in the Philippines

Consulting Services Operation Manual, Asian Development Bank

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