Construction Project Management

Lecture No 3

Procurement
Professional
Services
 Lecture Coverage
 Definitions
 Types of Engineering Consultant Services;
 When are services of a consultant needed?
 What is the scope of consultant services? –
Terms of Reference
 How would the consultant know their
services are requires – Expression of
interest and short-listing consultants;
 Request for Proposals;
 Selection methods;
 Preparing Terms of Reference
 Definition
 “Consultant” means a company, corporation,
organization, partnership or individual person
registered or capable of being registered by the
relevant professional regulatory body engaged
in or able to be engaged in the business of
providing services in architecture, economics,
engineering, surveying, accountancy, auditing,
taxation law, management or any field of
professional activity including technical
assistance, and who is according to the context,
a potential party of the party to a contract with
a client.
 A professional engineer
 A professional is a person engaged in
one of the learned professions;
 A professional engineer in Tanzania is
one registered with Engineers
Registration Board as such.
Traditional Arrangement of Contractual Set-up

Client
Contract 1
Contract 2

Consultant No Contract
Contractor
Basic Consultant Services in CI

DESIGN
• Preparation of Project Supervision of
Brief Construction and
• Feasibility study and
• Preliminary design Commissioning
• Detailed design
Other Specialist Consultant Services
 Geotechnical engineering;
 Testing of materials,
 Environmental impact assessment
 Testing structures;
 Development of design manuals;
 Development of design standards;
 Preparation of project implementation
plans;
 Specialist Services Cont…..
 Adjudication;
 Procurement services;
 Failure investigation;
 Surveying;
 Specialist design services – eg. Design of
piling;
 Building services;
 Training
Need for Employment of Consultants
 Do we have the expertise to
provide the service internally?
 Do we have the capacity even if
we have the expertise?
 Can we benefit from expertise
from outside the Client’s
organisation (through increased
value for money)?
 Are there donor conditionalities?
 Need for a Consultant?
 Can we derive specific long term
benefits – build internal capacity
through training?;
 Capacity building of strategic
nature – build capacity for use to
generate funds
 IF JUSTIFIED THEN THERE IS
NEED FOR ENGAGING A
CONSULTANT
 What should a consultant do-
Terms of Reference (TOR)
 Definition of Terms of
Reference:
“task description for delivery of
the project's services e.g. for a
consultancy; the set of guidelines
prepared by the organisation
contracting out the work which
establish the aspirations and
logistics”
 Preparation of Terms of Reference
 The Client shall be fully responsible for
preparing the TOR for the assignment
so that the scope of the services
described in the TOR shall be
compatible with the available budget.

 For any consultancy services to be

procured by the Client, the TOR shall
be prepared to inform consultants of
the intended scope of work when they
are invited to submit proposals and to
define the consultant’s services in the
contract to be negotiated after
selection.
How do the Consultants know that
you need their services?
 Advertise and request for
Expression of Interest. (Are they
interested?)
 Ask them to inform you of their
eligibilities, capacities and experience
for the intended project.
 Only those Consultants that are
interested will express interests.
 Their Expressions of Interest will
be evaluated and a shortlist.
 Request for Proposals
 Short-listed consultants are issued with
documents requesting them to submit
consultancy proposals –
Request for Proposals (RFP);
 RFP contains the ToR, the conditions for
submission, the time, place and date
for submission, the criteria for
evaluation; the format for submission and
the proposed agreement when selected;
etc.
 The Proposal will then be evaluated as
per criteria.
 Available Optional Methods for
Selecting Consultants
 There are several methods that can be
used for selecting a consultant based on:
• Technical quality
• Combined technical quality and
price consideration;
• Compatible technical quality and
least cost;
• Fixed budget
• Consultants qualifications
 Two Envelop Concept
 Consultants compete mainly on basis
of expertise and competence
(quality) rather than price.
 Proposals for the two are submitted
separately – two envelops;
 Consultants are first evaluated on
the basis of expertise and then cost.
 This is to avoid bias on expertise
evaluation if one know that price
already.
 Selection based on Technical Quality

 Two envelops used – technical and

financial proposal.
 Best technical proposal invited for
negotiation on price.
 Negotiations should not alter the
quality of intended output.
 Used for highly complex and
specialised assignments for
which it is difficult to define the
precise ToR.
 Combined technical quality and cost
 Consultants submit two envelops – technical
and financial proposal as per RFP;
 Technical proposal evaluated as per criteria;
 Financial proposals are then opened for tech.
proposals that meet minimum requirements;
 Lowest cost get highest score;
 Technical and financial scores combined to
have aggregated score.
 Highest scoring consultant awarded the
project.
 Suitable for slightly complicated projects
 Compatible technical criteria and
least cost;
 Consultants submit two envelops – technical
and financial proposal as per RFP;
 Technical proposal evaluated as per criteria;
 Financial proposals are then opened for
tech. proposals that meet minimum
requirements;
 Lowest cost whose technical proposal is
above threshold wins.
 Suitable for routine kind of consultancy
assignment.
 Fixed budget
 Request for proposal shall have to
indicate the available budget;
 ToR shall be prepared to ensure that
the budget is sufficient;
 Technical proposal shall be opened
first and then financial proposal;
 Proposal that exceeds the available
budget shall be rejected;
 The Consultant that has the highest
ranked technical proposal shall be
invited for negotiation;
 Used when the assignment is simple
and tasks can be determined precisely
and budget is fixed.
Selection Based on Consultants Qualification

 ToR to be prepared;
 Request for Expression of Interest
(EOI);
 Select consultant on the basis of
experience and competence relevant to
the assignment;
 Prepare a shortlist;
 Select consultant with most appropriate
qualifications;
 Used for very small assignments
 Preparation of ToR

 For any consultancy services to be

procured by a PE the TOR shall be
prepared to inform consultants of the
intended scope of work when they are
invited to submit proposals and to
define the consultants’ services in the
contract to be negotiated after selection.
 What should ToR contain?
 Project background
 precise statement of the objectives and goals
sought;
 a clear description of the nature and scope of
the services required and their context as well
as the time interval in which they shall be
provided;
 a description of the duties and responsibilities
of the consultant;
 a description of the duties and responsibilities
of the PE in relation to the services to be
procured;
 information on any counterpart staff and
its role;
 information on training and the transfer of
technology, where necessary;
 Reports and schedule of deliveries
 Data, services, personnel, and facilities to
be provided by the borrower
 Institutional and organization
arrangements
 Background of the project
 The background summarizes the main features of the
project and describes the objectives and general purposes
of the assignment. In particular, it should include:
 The name of the PE
 Project Location
 Rationale of the project
 Project history (what has been done so far and by whom)
 List of relevant studies and basic data
 Need for consultants in the project and issues to be
resolved
 Activities to be carried out by the consultants
 Source of financing for the assignment ; and
 Supervising assignments
Objectives of the Consulting Assignment
 The ToR should precisely describe the objectives and
expected results of the assignment to avoid
misleading consultants. Typical objectives of an
assignment may include
 Preparation of development programs
 Determination of project feasibility before an
investment is made
 Design of projects
 Preparation of bidding documents
 Supervision of works
 Provision of training
 Collection and analysis of data
 Evaluation of PE assets for sale
 Scope of Work
 This section of the ToR describes in detail all main activities
to be conducted by consultants and the expected results.
The TOR should describe only the activities and not the
approach or the methodology by which the results are to be
achieved since these would be the task of the proponents.
Nevertheless, the ToR may provide suggestions on the
approach or the methodology that consultants could or
should use to execute the assignment and, under certain
selection methods, can indicate the estimated staff-months
required.
 Often the project may require phased consultant
assignments. In such cases, the ToR should be more
detailed for the first phase and less detailed for the following
ones. The ToR details for the subsequent phases will be
refined as needed on the basis of the outcomes of earlier
phases.
 Scope of work
 In a ToR the scope of work of the assignment is usually defined
by addressing the following issues:
• Definition, scope, limits and criteria of acceptance of the assignment
• Desired level of detail (level of design, accuracy, and composition of
cost estimates, etc)
• Span of projections (time horizon, life span of project components, etc)
• Need to compare the assignment with similar projects
• Main issues to be addressed
• Need for surveys, special analyses, and models
• Need for special equipment
• Institutional and legal framework of the project
• Transfer of knowledge, objectives, and scope
• Language requirements
• Units of measurements to be used
• Need for continuity, e.g. data gathering, and
• Quality management requirements (if needed).
 Scope of work
 Phased assignment are likely to require that the scope
of work be modified depending on intermediate
results. For instance, the scope of work for a
feasibility study originally covering a number of
alternatives will be reduced if, during execution of the
assignment, some alternative prove unviable
 Similarly, the scope of work can be expanded if more
accurate studies than initially anticipated become
necessary. In such cases, the ToR should clearly
indicate the circumstances under which a decision will
be made by the PE to modify the scope of work
 Transfer of knowledge
 If transfer of knowledge is an objective of the
assignment, the ToR should provide specific
details on the characteristics of the of the
required services and ask consultants to propose
training approached and methods
 Estimating Costs and Setting the Budget
 Main considerations
• Consultant staff remuneration
• Travel and transport
• Mobilization and demobilization
• Staff allowances
• Information systems
• Communications
• Office rent, supplies, equipment, shipping, and
insurance
• Surveys
• Capability building and training programs
• Report translation and printing
• Taxes and duties
• contingencies
 When estimating cost
components is not possible
 For assignments whose exact scope of work
cannot be clearly defined
 A reliable cost estimate is impossible, and a
budget may have to be established based on
funds availability, and the consultant will be
selected based on its past qualifications in similar
assignments
 New assignment –invite high reputation of
capacity and integrity and conduct the selection
based on quality only followed by financial
negotiations with the first-ranked consultant.