ADB CONSULTING SERVICES

1
ADB CONSULTING SERVICES

• overview of
• proposed revisions to
• ADBs Guidelines on
• consulting services

BIMILACI 7-8 April 005
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OBJECTIVE

• to explain ADBs proposals for revisions to the
  Guidelines on the Use of Consultants by ADB its
  Borrowers
• to receive comments from you on these proposals
• please send comments to consulting_at_adb.org

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AGENDA

• 1 rationale for revisions
• 2 key issues
• 3 ADBs proposed response

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1

• rationale for revisions

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ADB CONSULTING SERVICES GUIDELINES (1)

• Guidelines approved in 1979
• anticorruption provision incorporated in 1998 and
  updated in 2004
• quality cost-based selection (QCBS)
  incorporated in 2002

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ADB CONSULTING SERVICES GUIDELINES (2)

• outdated
• do not meet clients needs
• need to.
• simplify Guideline recruitment procedures
• introduce new approaches and best practices
• reduce time taken to recruit consultants
• utilize new technologies
• need to incorporate outcome from MDB harmonization

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ADB REFORM AGENDA

• underscores the importance of streamlined and
  more flexible administrative operational
  procedures to promote increased efficiency in
  operations and clearer accountability for
  delivering results
• responding to demand
• streamlining
• accountability
• range of approaches

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The Problem - TAs

• Quality and Cost Based Selection (QCBS) - Full
  Technical Proposal (FTP)

Actual averages based on analysis of historic TA
Streamlining future recruitment targeted
durations
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The Problem - Loan Selection
Quality and Cost Based Selection (QCBS) - Full
Technical Proposal (FTP)
QCBS FTP
Actual averages based on analysis of past loan
projects
Targeted durations
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CURRENT TIME TAKEN TO RECRUIT CONSULTANTS

• analysis shows
• TA, QCBS selection full technical proposal
  (FTP)
• current time 6 months plus (average)
• target time 3 months plus
• loans, QCBS selection full technical proposal
  (FTP)
• current time 20 months plus (average)
• target time 10 months

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MDB HARMONIZATION

• ADB has been participating with MDB/IFIs for the
  last 3 years
• such as WB, IDAB, EBRD
• need standard approaches to the extent possible

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2

• key issues

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NATURE OF SERVICES CHANGED

• nature of consulting services industry has
  changed since the Guidelines were first
  introduced
• originally mainly for engineering projects and
  services were provided by consulting firms
• consulting services now required across all
  sectors
• technical, social, economic, financial
• diversity of expertise required
• managing skills of lead firm critical

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EXPERTISE REQUIRED HAS CHANGED

• assignments now more complex
• a diversity of expertise required
• type of consultants providing service now come
  from diverse backgrounds
• consulting firms/organization
• (5-1000 employees)
• universities
• government agencies
• NGOs (small to large)
• independent individuals

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NEEDS OF ADBs BORROWERS

• consultant recruitment processes must..
• allow for quicker consultant recruitment
• take account of EAs varying specific needs e.g.
  PRC
• be streamlined, simplified, more flexible
• take account of EAs capacity to recruit
  consultant in some cases
• systems should provide EA with more information
  about pool of available consultants
• access to DACON DICON

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NEED TO FOCUS ON QUALITY

• at an entry level
• integrity management systems
• for short listing
• during evaluation of technical proposals
• better monitoring of consultants work
• performance evaluation - PER
• better ADB mechanisms for recording consultants
  PER historical record
• EAs PER and access to ADB PER data
• ISTS II
• information systems technology strategy

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CAPACITY OF CONSULTANTS FROM DMCs

• need for recognition of varying capacity
  capability of DMC consultants
• not one fit for all cases
• more use of DMC consultants for international
  inputs
• more use of technically qualified regional
  consultants
• term DMC domestic consultant will be
  changed to "national consultant

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NEED TO UTILIZE NEW TECHNOLOGIES

• examples
• greater use of pre-formatted documentation
• easier for consultants use
• easier for evaluation
• greater use of internet
• easier access to documents such as RFP
• E-consulting services
• greater use of email
• for contract negotiations
• greater use of video conferencing
• interviewing of team leaders

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PARAMETERS

• need for competition opportunity
• need to satisfy interests of
• Board/ADB owners
• clients, DMCs and EAs
• ADB staff needs for consultants
• consulting industry
• reduce recruitment time cost
• transparent procedures
• need for checks balances
• accord with ADB fraud anticorruption policy
  procedures
• capacity building
• ADB staff, EA staff, DMC consulting industry

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3

• ADBs proposed response

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ACTIONS TAKEN AS OF JANUARY 2005 (1)

• revised ADB web site advertisement for TA
  projects
• draft TOR for minimum of 30 days
• better focused EOIs required
• use of Consultant Recruitment Activity Monitoring
  (CRAM)
• ADB internal recruitment monitoring tool
• will be soon also used for recruitment by EAs
• more delegation to ADB project staff
• TA consulting services budget 500,000
• technical proposals
• STP up to 1,000,000
• BTP when budget 500,000

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ACTIONS TAKEN AS OF JANUARY 2005 (2)

• proposal preparation times reduced
• BTP reduced from 30 days to 21 days
• STP reduced from 45 days to 35 days
• FPT reduced from 60 days to 45 days
• contract negotiations 600,000 usually by fax
• for individual (TA staff) consultants more use
  of direct selection
• ICS web-based individual consultant recruitment
• delegation of some contract variation processing
  to project staff

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CRAM a copy of
this is attached to the hand out material
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REVISED GUIDELINES FORMAT

• will be a more user friendly document
• 2 parts
• policies - changes require Board approval
• procedures - changes require Presidents approval
• more useful working document for
• ADB staff
• governments/EAs
• consultants

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INVOLVEMENT OF DMCs

• review of suitability of DMCs country
  consultant recruitment procedures
• DMC consulting services capacity assessments
  studies
• better focused capacity building training of
  EAs
• introduce use of CRAM
• should substantially reduce recruitment time
• review role of ADB Resident Missions in
  recruitment of consultants under ADB loans
• need for more disclosure of information by EAs

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IMPROVING QUALITY

• more specific details about assignment to be
  provided in ADBBO
• expressions of interest (EOI) to be 2 part
• firms economic financial details, business
  integrity systems, details of permanent staff
• technical competence vis-à-vis TOR
• proposal presentation
• QA template format for consultants approach
  methodology
• management questions
• questions relating to TOR
• mid-term end of contract performance evaluation
• new ADB PER system

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CAPACITY BUILDING

• target groups
• ADB staff, EA staff, consulting industry
• capacity building of DMC consulting industry
• assessment of variable needs
• timing of training
• example for EAs prior to shortlisting and prior
  to proposal evaluation
• need for a review of methods and tools currently
  used
• impact assessments
• monitor effectiveness of training

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EXISTING SELECTION METHODS

• main methods of selecting firms will likely still
  be
• QCBS, quality cost-based selection
• 80 quality 20 cost
• will be used for most cases
• QBS, quality based selection
• 100 quality
• for cases where TOR are complex and a number of
  various approaches are possible

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FRAMEWORK CONTRACTS (1)

• framework contracts will initially be used by ADB
• could be.
• country based
• sector based, for example
• transportation sector, power sector
• under a financing mechanism
• a large RETA
• for a specific project
• a large complex project with many consulting
  services packages

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FRAMEWORK CONTRACTS (2)

• have been used by EU, EBRD, DFID others
• ADB version will be a different approach
• STAGE 1, prequalification of consortia
• advertisement sets out criteria that consortia
  lead firm must meet
• annual turnover, country/regional experience,
  technical experience
• RFP accessed on web
• RFP sets requirements for
• consortia experience and management capability
• categories of international and national
  consultants
• 3-4 weeks to prepare proposals
• framework will allow for participants by
• international national experts
• large small firms
• individual experts

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FRAMEWORK CONTRACTS (3)

• ADB will evaluate proposals using QBS
  contract 4 to 6 consortia
• framework contracts will be for 3 years
• no guaranteed work!

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FRAMEWORK CONTRACTS (4)

• STAGE 2, specific assignments
• contract awarded for each specific assignment
• 3 pre-qualified consortia invited on a rotation
  basis to submit proposals
• technical financial
• QCBS evaluation procedures used
• 750 minimum technical score
• final ranking 80 quality 20 price
• nominated experts must be those shown in
  pre-qualified submission or equal or better
  experts
• remuneration of experts must not exceed that set
  for in various categories in the RFP

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FRAMEWORK CONTRACTS (5)

• advantages..
• rapid mobilization of consultants
• 3 weeks for firms
• 2 weeks for individuals
• stage 1, pre-qualification estimated to take
  2-2.5 months
• simplicity of documentation contracting
  procedures
• transparent competitive system
• allows for potential participation of
• firms individuals
• international national consultants

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FIXED BUDGET SELECTION

• still under development
• procedure
• technical financial proposals submitted
• QBS evaluation of technical proposals
• public opening of financial proposals
• first ranked firm within budget awarded contract
• differs from QCBS as price not included in
  ranking
• use
• assignment is straight forward TOR well defined
  and budget is fixed
• examples
• public relations assignment such as making a film
• training programs

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LEAST-COST SELECTION

• still under development
• procedure
• technical financial proposals submitted
• QBS evaluation of technical proposals
• public opening of financial proposals
• consultant with lowest cost awarded the contract
• use
• small routine assignments where standards are
  well established and risks are low
• examples
• standard accounting auditing, surveys

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CONSULTANT QUALIFICATION SELECTION

• still under development
• procedure
• EOIs called for based on release of TOR
• consultants submit EOIs indicating
• technical expertise and work experience
• EOIs evaluated and 1st ranked firm invited to
  submit abbreviated technical proposal financial
  proposal
• if technical proposal is acceptable a contract is
  negotiated
• use
• when time is critical, high quality is required
  and the pool of suitable consultants is small and
  it is not feasible to call for detailed technical
  proposals
• examples
• high level oversight/review, short term high cost
  inputs such as legal and financial

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NGO SELECTION PROCEDURES

• still under development
• large well established NGO are considered to be
  consulting firms and they compete for work
  under normal selection procedures
• for small NGOs with limited businesses expertise
  there is a need for simplified procedures
  which
• provides for competition
• is not complex
• provides for fast recruitment and mobilization

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TIME FRAME

• a series of consultation workshops such as the
  one today are taking place to receive feedback
  from..
• ADBs shareholders
• EAs
• consulting associations and consultants
• anticipated proposed revised Guidelines will be
  submitted to Board in July 2005

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NEXT STEP IN PROCESS

• please send any comments you may wish to make
  on the content of this presentation to
• consulting_at_adb.org
• all feedback will be appreciated
• thank you for your participation at this
  seminar today