PART III:
Consultants' or Experts' Services

Article 15: Use of Consultants or Experts

    The procuring entity or project owner may enter a contract with consulting firms or individual experts for the provision of expert advice or assistance in institutional matters and services in connection with the implementation of projects, detailed engineering and design.

    Consulting firms will be preferred where the work is complex and requires multi-disciplinary expertise and experience.

    Individual consultants will be used for particular assignments requiring specialized knowledge and experience of one individual and there is no need for inputs from a team or head office support.

    The method of selection of consultants shall follow the following main procedure which is the quality and cost based selection method.

Quality and Cost Based Selection Method

    This method uses a competitive process among short-listed firms that takes into account the quality of the proposal and the cost of the services in the selection of a successful firm. Cost as a factor of selection shall be used judiciously. The relative weight to be given to the quality and cost shall be determined for each case depending on the nature of the assignment. The selection process shall include the following steps:

    • Terms of reference : The procuring entity or the project owner shall be responsible for preparing the TOR for the assignment. The scope of the services described in the TOR shall be compatible with the available budget. TOR shall define clearly the objectives, goals, and scope of the assignment and provide background information (including a list of existing relevant studies and basic data) to facilitate the consultants' preparation of their proposals. If transfer of knowledge or training is an objective, it should be specifically outlined along with details of number of staff to be trained, and so forth, to enable consultants to estimate the required resources. TOR shall list the services and surveys necessary to carry out the assignment and the expected outputs (for example, reports, data, maps, surveys). However, TOR should not be too detailed and inflexible, so that competing consultants may propose their own methodology and staffing. Firms shall be encouraged to comment on the TOR in their proposals. The consultants' responsibilities should be clearly defined in the TOR.

    • Cost Estimate (Budget): Preparation of a well-thought-through cost estimate is essential if realistic budgetary resources are to be earmarked. The cost estimate shall be based on the procuring entity or project owner assessment of the resources needed to carry out the assignment: staff time, logistical support, and physical inputs (for example, vehicles, laboratory equipment). Costs shall be divided into two broad categories: (a) fee or remuneration (according to the type of contract used) and (b) reimbursables, and further divided into foreign and local costs if needed. The cost of staff time shall be estimated on a realistic basis for foreign and national personnel.

    • Short list : The short list of up to six (6) firms and not less than three (3) is compiled from different sources of information but must include a review of the responses to a notification published in a Lao language newspaper and an English language newspaper; domestic and international consultants registered to do business in Lao PDR; consultants identified by associations of consulting firms or by international organizations and financial institutions. In selecting consulting firms and experts for the short list, the procuring entity or project owner will have regard to the objective section criteria enumerated in Article 17.

    • Invitation to submit proposals : The procuring entity or project owner shall send a letter of invitation together with the request for proposals including the evaluation criteria and the terms of reference to all firms appearing on the short list; The letter will invite the consultants to submit their proposals within a specified number of days which shall not be less than 30 days. The invitation shall require the consultants to prepare and submit two proposals, one technical and the other financial. The technical proposal shall contain information relating to the consultants' technical capacity and proposed implementation methods. The financial proposal shall contain the price and shall be opened only after evaluation of the technical proposal. The proposals shall be contained in two separate sealed envelopes and clearly identified and must be submitted at the same time.

    • Evaluation of proposals : The aim of the evaluation is to select the most suitable proposal on the basis of the request for proposals. The received proposals will be analyzed and compared in terms of the proposed methodology, schedules, experience of the firm, experience and capabilities of the proposed personnel, the quality of management and technical equipment available. After evaluation and approval of technical proposals, the firms securing the minimum qualifying mark specified in the Request for Proposal document shall be invited to the public opening of financial proposals. The financial proposal is then evaluated in relation with the evaluated quality, and followed by combined technical and cost evaluation. The total score shall be obtained by weighting the quality and cost scores and adding them. The weight for the “cost” shall be chosen, taking into account the complexity of the assignment and the relative importance of quality. The weight for the cost shall normally be in the range of 10 to 20 points, but in no case shall exceed 30 points out of a total score of 100. The proposed weightings for quality and cost shall be specified in the request for proposal. The firm obtaining the highest combined score shall be invited for negotiations.

    • Price and contract negotiations : In the case of the quality cost based selection the negotiations shall be limited to discussions of the terms of reference, the methodology, staffing and conditions of contract. The negotiations shall not alter substantially the original scope of the services and the relevance of the initial evaluation should not be affected. Major reductions in work inputs should not be made solely to meet the budget. Financial negotiations shall include clarification of the salary and unit rates, consultant's tax liabilities and how the tax liability will be reflected in the contract. Proposed unit rates for staff-months and reimbursables shall not be negotiated as these have already been a factor of selection of the cost proposal, unless there are exceptional reasons. The representatives of the consultants shall have the authority to conclude a contract and must be prepared to discuss the contract's value and, where necessary, present justifying documents to support the price and other matters.

    • Failure of negotiations : If the parties fail to reach an agreement on the price or other terms of the contract, the procuring entity or project owner shall terminate the negotiations with the selected consultant and invite the next ranked consultant for negotiations.
 

Article 16: Other Methods of Consultants' and Experts' Selection

    In some circumstances, the quality and cost based method is not the most appropriate method for selecting consultants. The following other methods may be used within the parameters described below.

(1) Quality-Based Selection is appropriate for the following complex or highly specialized assignments for which it is difficult to define precise terms of reference and the required input from the consultants; assignments that have a high downstream impact and in which the objective is to have high quality expertise; and assignments that can be carried out in substantially different ways. Under quality based selection the request for proposals requests submission of both technical and financial proposals at the same time, but in separate envelopes. After evaluating the technical proposals the price envelope of only the consultant with the higher ranked technical proposal is opened and the rest are returned unopened, after the negotiations are successfully concluded. In case of failed negotiations with the top ranked consultant the financial proposal of the next highest technically ranked consultant should be opened for negotiations to conclude a contract. Other aspects of this selection process shall be identical to those of quality and cost based selection.

(2) Fixed Budget selection is used only when the assignment is simple and can be precisely defined and when the budget is fixed. The request for proposals shall indicate the available budget and request the consultants to provide their best technical and financial proposals in separate envelopes, within the budget. Evaluation of all technical proposals shall be carried out first and then the price envelopes shall be opened and the consultant who has submitted the highest ranked technical proposal and whose financial proposal is within the specified budget shall be selected.

(3) Least-Cost Selection is appropriate to selection of consultants for assignments of a standard or routine nature (audits, engineering design of noncomplex works and so forth) and where the contract amount is less than Kip 300 million. Under this method, a “minimum” qualifying mark for the “quality” is established. Proposals to be submitted in two envelopes are invited from a short list. Technical envelopes are opened first and evaluated. Those securing less than the minimum mark stated in the request for proposals are rejected, and the financial envelopes of the rest are opened in public. The firm with the lowest price shall then be selected.

(4) Selection Based on Consultants' Qualifications is used for very small assignments less than Kip 50 million for which the need for preparing and evaluating competitive proposals is not justified. From a shortlist of experienced consultants the firm with the most appropriate qualifications and references will be asked to submit a combined technical-financial proposal and then be invited to negotiate the contract.

(5) Single-Source Selection will only be used in exceptional cases on the prior approval of (i) At the central level, by the Minister or his/her assignee; and (ii) A t the level of Vientiane Capital or Provinces, the Governor or his/her authorized assignee, on grounds of economy and efficiency. Single-source selection may be used only if it presents a clear advantage over competition: (a) for tasks that represent a natural continuation of previous satisfactory work carried out by a firm and when the initial assignment was awarded on a competitive basis, (b) where a rapid selection is essential (for example, in an emergency operation), (c) for assignments less than Kip 50 million, or (d) when only one firm is qualified or has experience of exceptional worth for the assignment.