Procurement and Contract Management

Methods of consultancy selection under the Public Procurement Act, 2063 and Public Procurement Regulation, 2064

A consultancy service is an intellectual service such as design, supervision, feasibility study, survey or advice, so the choice rests mainly on the consultant's quality and not on price alone. The Act and Regulation therefore give the public entity several selection methods. The entity must state the chosen method in the request for proposal (RFP) and follow open, competitive and transparent procedures. The usual steps are an expression of interest (EOI) notice, shortlisting of 3 to 6 consultants, issue of the RFP, technical evaluation, and then the financial evaluation and award.

1. Quality and Cost Based Selection (QCBS)

• This is the general method for most consultancies.
• Technical and financial proposals are submitted in separate sealed envelopes. The technical proposals are evaluated first, and the financial proposals of consultants who pass the minimum technical score are opened later.
• The combined score is calculated with weights stated in the RFP (technical weight usually 70 to 90 per cent, financial weight 10 to 30 per cent).

$S = S_t \cdot T + S_f \cdot F$

where $S_t$ is the technical score, $S_f$ the financial score, and $T$ and $F$ are the weights. The financial score is $100 \times \dfrac{\text{lowest price}}{\text{price of the proposal}}$. The highest combined score wins.

2. Quality Based Selection (QBS)

• Used for complex or highly specialised work, or work where the quality of the outcome matters most and cost is secondary, for example a major policy study or the design of a large bridge.
• Only the technical proposal is ranked. The financial proposal of the top-ranked consultant alone is opened and its price negotiated. If negotiation fails, the next ranked consultant is invited.

3. Fixed Budget Selection (FBS)

• Used for simple, well-defined work with a fixed budget that is stated in the RFP.
• Proposals above the budget are rejected. Among the others, the consultant with the highest technical score is selected.

4. Least Cost Selection (LCS)

• Used for standard or routine services where the practice is well established, such as audits or simple surveys.
• A minimum technical score is set. The consultant who passes it and quotes the lowest price is selected.

5. Selection based on the consultant's qualification

• Used for small-value consultancies where a full competition is not worth the cost. Proposals are asked from a few consultants and the best-qualified is chosen, with price then negotiated.

6. Selection of an individual consultant

• Used when the work needs a single expert and no team. The choice is made from the qualifications, experience and suitability of the individuals who express interest, with no formal competition among firms.

7. Single source selection (direct negotiation)

• Allowed only in exceptional cases with the approval of the competent authority, for example a task that continues earlier work by the same consultant, an emergency, or a field where only one consultant has the needed expertise.
• The reasons must be recorded and the price negotiated.

Safeguards that apply to all methods

• Conflict of interest is prohibited. A consultant who prepared the design generally cannot bid for the construction.
• Evaluation is done by a committee in line with the criteria stated in the RFP.
• The result is published and the award notice is issued, followed by the contract.
• A consultant who misrepresents facts can be blacklisted.

Conclusion. QCBS is the standard method. The others are chosen by the nature, complexity, and value of the assignment and by how much the quality or cost matters, so that the entity gets the most suitable consultant at a reasonable price.