User

User’s Guide

for

Standard Bidding Document

for the

Procurement of Consultancy Services

For International Bidding

Federal Democratic Republic of Ethiopia

January 2006

Table of Contents

Acronyms ........ 3

Guidance Notes on the use of the Standard Request for Proposals and User Guide....................................... 4

Purpose of the Request for Proposals (RFP) .................................................................................................4

Purpose of the User Guide ...........................................................................................................................4

When to Use the Request for Proposals for Consultancy Services ................................................................ 4

Structure of the Request for Proposals Document ......................................................................................... 5

Rules for drafting RFP Documents ................................................................................................................6

Summary of the Bidding Process ................................................................................................................. 7

1. Selection of Bidders ............................................................................................................................... 7

2. Preparation and Issue of Bidding Documents ............................................................................................7

3. Bidding Period and Receipt of Proposals .............................................................................................. 8

4. Proposal Opening ................................................................................................................................ 8

5. Proposal Evaluation ............................................................................................................................... 9

6. Bid Acceptance and Contract Award and Placement ............................................................................ 9

Guidance Notes for the preparation of Notices seeking Expressions of Interest and Letters of Invitation........ 11

Notices seeking Expressions of Interest .................................................................................................. 11

Letters of Invitation ...................................................................................................................................12

Guidance Notes on the Preface Section....................................................................................................... 13

Guidance Notes on Section 1. Instructions to Bidders.................................................................................. 14

Guidance Notes on Section 2. Bid Data Sheet............................................................................................. 15

Guidance Notes on Section 3. Evaluation Criteria........................................................................................ 20

Guidance Notes on Section 4. Bidding Forms .............................................................................................24

Guidance Notes on Section 5 Eligible Countries........................................................................................... 25

Guidance Notes on Section 6: Terms of Reference....................................................................................... 26

Guidance Notes on Section 7. General Conditions of Contract for the Provision of Consultancy Services...... 28

Guidance Notes on Section 8. Special Conditions of Contract...................................................................... 29

Guidance Notes on Section 9. Contract Forms ......................................................................................... 36

Agreement .................................................................................................................................................36

Advance Payment Security ........................................................................................................................ 36

Guidance Notes on the Letter of Acceptance............................................................................................... 38

Acronyms

BDS Bid Data Sheet

EC Evaluation Criteria

GCC General Conditions of Contract

ITB Instructions to Bidders

LS List of Services

PE Procuring Entity

RFP Request for Proposals

SBD Standard Bidding Document

SCC Special Conditions of Contract

SOR Schedule of Requirements

TOR Terms of Reference

Guidance Notes on the use of the Standard Request for Proposals and User Guide

Purpose of the Request for Proposals (RFP)

The purpose of the RFP is to provide Procuring Entities (PEs) with one standard draft containing basic contractual provisions and safeguards which are required by the Government of the Federal Democratic Republic of Ethiopia in the execution of public procurement and the use of public funds.

The RFP for the Procurement of Consultancy Services has been designed to:

(i) Simplify the drafting of a specific RFP document for Procurement of Consultancy Services by procurement staff;

(ii) Minimise the time required by the Tender Committee to approve RFP documents prior to release;

(iii) Reduce Bidders’ time and effort in the preparation of proposals; and

(iv) Facilitate and simplify the evaluation and comparison of proposals and Contract award by the Procuring Entity.

The key feature of the RFP is that it can be used with minimum changes, as it does not contain explanations, footnotes or examples that should not form part of the RFP document.

Purpose of the User Guide

This User Guide has been prepared to provide guidance to public officials in the correct use of the RFP for Consultancy Services as a model for preparing an individual RFP.

Users should ensure that the correct User Guide is referred to. Different User Guides have been produced for each standard document including the Standard Bidding Documents (SBD) for the Procurement of Goods, Non-Consultancy Services and Works. Users should refer to the header and footer of each page of the User Guide to ascertain this.

The RFP/SBD contains guidance notes for Bidders (or Financial Institutions) only, which are mainly in Sections 4 and 9. These notes should not be deleted from the document when drafting.

All the explanations and notes necessary for PEs to use the standard documents are contained in this User Guide.

All guidance notes, in both the standard documents and the user guide, are found between square brackets in bold e.g. [insert date for submission of proposals].

This User Guide is not part of the RFP and is not intended for issue to Bidders.

When to Use the Request for Proposals for Consultancy Services

Procurement Method and Value

This RFP for the Procurement of Consultancy Services is suitable for use under the Request for Proposals procurement method, where foreign bidders are invited, either with or without a call for expressions of interest. A call for expressions of interest must be published, when the estimated value is above the threshold determined in the Directives. An alternative RFP is available for use when only Ethiopian bidders are invited.

For lower value consultancy services, the simplified Request for Quotations document should normally be used.

Type of Contract

This RFP is suitable for both lump sum and time-based contracts. Alternative instructions or contract conditions have been included, where required. The Procuring Entity is required to state in the Special Conditions of Contract, whether the contract is to be a lump sum or time-based contract.

Lump-sum contracts are normally used when definition of the tasks to be performed is clear and unambiguous, when the commercial risk taken by the Supplier is relatively low and Suppliers are therefore prepared to perform the assignment for an agreed predetermined lump-sum price. The lump sum price is arrived at on the basis of inputs - including fee rates - provided by the Bidder. The Procuring Entity agrees to pay the Supplier according to a schedule of payments linked to the delivery of certain outputs e.g. reports. A major advantage of the lump-sum contract is the simplicity of its administration, as the Procuring Entity only has to be satisfied with the outputs without monitoring the staff inputs. Studies are usually carried out on a lump-sum basis: for example, surveys, master plans, economic, sector, simple feasibility and engineering studies.

Time-based contracts are recommended when the scope of the services cannot be established with sufficient precision, or the duration and quantity of services depends on variables that are beyond the control of the Supplier. For example, a time based contract may be appropriate for the supervision of construction works, where a monthly rate can be fixed, but the number of man months required is uncertain, as it depends on the progress of the construction. In time-based contracts the Supplier provides services on a timed basis according to quality specifications, and the Supplier’s payment is based on (i) agreed fee rates for Supplier staff multiplied by the actual time spent by the staff in executing the assignment, and (ii) reimbursable expenses using actual expenses and/or agreed unit prices. This type of contract requires the Procuring Entity to closely supervise the Supplier and to be involved in the daily execution of the assignment.

Structure of the Request for Proposals Document

The RFP is divided into nine separate Sections and a Preface. Procuring Entities are required to use all Sections of the standard document to produce an individual RFP for issue to Bidders. The standard document comprises:

Preface

Part 1 Bidding Procedures

Section 1. Instructions to Bidders (ITB)

Section 2. Bid Data Sheet (BDS)

Section 3. Evaluation Criteria

Section 4. Bidding Forms

Section 5. Eligible Countries

Part 2 Schedules of Requirements

Section 6. Terms of Reference

Part 3 Contracts

Section 7. General Conditions of Contract (GCC)

Section 8. Special Conditions of Contract (SCC)

Section 9. Contract Forms

Each section is provided as a separate electronic document, removing the difficulties of drafting long documents. Collation of the sections is accomplished by reading the preface and manually inserting the relevant sections into each part of the preface pages.

Rules for drafting RFP Documents

It is important that Procuring Entities always use the original RFP Document to commence drafting a new RFP for each new procurement requirement. Therefore, the original RFP should not be amended in any way.

The RFP has been designed to require the minimum of input or changes to the document so that a final RFP can be produced with minimum time and effort.

Most importantly the provisions in

Section 1 “Instructions to Bidders” and

Section 7 “General Conditions of Contract”

must be used with their text unchanged.

Any data or information that Sections 1 or 7 require are to be included respectively in

Section 2 Bid Data Sheet and

Section 8 Special Conditions of Contract.

Data and information contained in the remaining Sections should be modified as follows:

Section 3 Evaluation Criteria This section must be completed with details of the evaluation methodology and criteria to be applied. Examples are provided in this User Guide.

Section 4 Bidding Forms The Forms in this section are to be completed by the Bidder. No changes to the standard forms should be made by the PE.

Section 5 Eligible Countries A standard wording is included for government funded procurement. Changes may be made where the procurement is subject to donor rules or where the Government has introduced any different or additional rules on eligibility.

Section 6 Terms of Reference This Section should be completed with details of the requirement by the Procuring Entity.

Section 9 Contract Forms Procuring Entities are required to include the Contract Form in the RFP. Details do not need to be completed until the contract award stage.

This User Guide contains a section corresponding to each section of the RFP. It also includes an initial section on how to prepare the Letter of Invitation.

In drafting a RFP using the standard RFP, users should not:

Delete any Section or page breaks,

Make any changes to the headers of the RFP,

Make any changes to the footers of the RFP.

Summary of the Bidding Process

The Public Procurement Proclamation of 2004 and the Procurement and Contracts Directives detail the full procurement processes, rules and procedures and the procurement methods to be followed by Procuring Entities. The Proclamation and Directives must be complied with at all times.

The relevant parts of the bidding process are summarised here as follows:

1. Selection of Bidders;

2. Preparation and Issue of RFP Documents;

3. Bidding Period and Receipt of Proposals;

4. Proposal Opening;

5. Proposal Evaluation; and

6. Proposal Acceptance, Contract Award and placement.

1. Selection of Bidders

Under the Request for Proposals method, the Procuring Entity will normally publish a notice seeking expressions of interest, so that all potential bidders have the opportunity to participate. A standard format, with guidance notes on its completion, is provided later in this User Guide.

The notice must be published in a newspaper of wide international circulation or in a relevant trade publication or technical or professional journal of wide international circulation.

The Procuring Entity will then evaluate the expressions of interest received and develop a shortlist of between three and seven bidders.

Where the estimated value of the services is relatively low (below the threshold specified in the Directives), the Procuring Entity does not have to publish a notice and may develop a shortlist without seeking expressions of interest. The bidders should be selected from the approved suppliers list.

The RFP document should be accompanied by a letter of invitation. A sample letter and guidance notes on completing it are included later in this User Guide.

2. Preparation and Issue of Bidding Documents

The Procuring Entity is responsible for the preparation and issue of the RFP.

The Procuring Entity must use the standard RFP or other appropriate standard document issued by the Public Procurement Agency, as this is a mandatory requirement for contracts to be funded by the Government of the Federal Democratic Republic of Ethiopia.

In deciding the deadline for proposal submission the PE should allow Bidders sufficient time for obtaining and studying the RFP, preparing complete and responsive proposals and submitting the proposals. Procuring Entities are required to comply with the minimum bidding periods given in the Directives.

The RFP must be issued to all short-listed bidders at the same time. A record must be kept of the issue of all bidding documents.

3. Bidding Period and Receipt of Proposals

The Bidder is responsible for proposal preparation and the submission of its proposal. During the bidding period, the Procuring Entity shall:

Hold any pre bid meeting, if one is required, and issue minutes promptly;

Promptly respond to requests for clarifications from Bidders;

Issue amendments to the RFP if necessary;

Receive and record sealed proposals from Bidders or make a Bid Box available up to the deadline for proposal submission;

Close bidding at the precise date and time of the deadline and ensure that no late proposals are received;

Keep all proposals received secure until the time for proposal opening.

4. Proposal Opening

The Tender Committee is responsible for the Proposal Opening, which is a critical event in the procurement process. Procuring Entity staff must be aware that inappropriate procedures at Proposal Opening are usually irreversible and may require cancellation of the Bidding Process with the consequent delays and waste of time and resources.

The Tender Committee shall:

· Conduct the Proposal Opening strictly following the procedures specified in the ITB Sub-Clause 20 for all proposals received on or prior to the date and time of the proposal submission deadline. The term “Proposal Opening” can be misleading because a proposal for which a Proposal Withdrawal notice was received on time shall not be opened, but returned unopened to the Bidder. The sequence in which proposals are handled and opened is crucial.

· Ensure that all proposals that were received on time are accounted for, before starting the Proposal Opening, as proposals that are not opened and read out at Proposal Opening shall not be further considered.

· Ensure that only technical proposals are opened and that financial proposals are kept sealed and removed to a secure place after the opening.

· Agree before the Proposal Opening on the details to be read out. In most cases for consultancy services, the name of the Bidder is sufficient. The Procuring Entity may also decide to read out the names of any associates participating in the proposal. Where a bid security has been requested, the presence or absence of the bid security should also be announced.

· Not reject any proposal at Proposal Opening, except for late proposals received after the date and time of proposal submission deadline. Technically, late proposals should not reach the Proposal Opening, but in certain cases a Bidder may attempt to submit its proposal at the Proposal Opening place after the deadline.

· Examine the proposals at Proposal Opening in accordance with the provisions of ITB Sub-Clause 17. The Procuring Entity shall, verify at the Proposal Opening the existence of the documentation, confirming the validity of a proposal withdrawal, substitution or modification (as specified in ITB Sub-Clause 19). A withdrawn proposal shall not be opened and in consequence not read out and, therefore, they shall not be further considered by the Procuring Entity. Similarly, a proposal substitution or modification shall be opened and read out to replace or amend a proposal that was received on time.

5. Proposal Evaluation

For Consultancy services, proposal evaluation will be conducted in two stages and Tender Committee approval of the technical evaluation report must be obtained before opening financial proposals and conducting the financial evaluation.

The Tender Committee, assisted by a Technical Committee if required, is responsible for the evaluation of all proposals received. The Tender Committee must remember that mistakes committed at bid evaluation may later prompt complaints from Bidders, requiring re-evaluation of the bids, with the consequent delays and waste of time and resources.

The Tender Committee shall:

· Maintain the evaluation process strictly confidential

· Reject any attempts or pressures to distort the outcome of the evaluation, including fraud and corruption

· Strictly apply only and all of the evaluation criteria specified in the RFP to determine the proposals which proceed to the financial evaluation and subsequently to make a recommendation for award of contract to the Tender Committee.

Upon completion of both stages of the Evaluation, the Tender Committee shall be requested to make a Contract Award recommendation to the head of the Procuring Entity. It is important to note that the Contract Award decision by the head of the Procuring Entity is not a contract, it is a decision to award a contract to the successful Bidder. For consultancy services, negotiations are often held with the recommended Bidder, to finalise all technical details, prior to placing the contract.

6. Bid Acceptance and Contract Award and Placement

Bid acceptance and award and placement of a contract can be confusing for both parties if there is not a precise and specified procedure for award of contracts. The procedure specified in the Proclamation and Directives provides a sequence of events based on the need to recognise Bidders’ rights to appeal against the conduct of the evaluation and the need for a contract to be placed as soon as is practical after a decision to award has been approved. The following procedure is required under the Proclamation and Directives:

· The head of the Procuring Entity makes a contract award decision.

· The Procuring Entity notifies all Bidders of the results of the evaluation.

· After a period of five working days, if no complaint has been received by the Procuring Entity, the PE awards the contract by either issuing a Letter of Acceptance to the successful bidder or signing a contract (which is often done following the successful conclusion of any negotiations).

· Where a Letter of Acceptance is issued, the contract will be confirmed by issue of a full conformed Contract Document.

PEs should note that the Letter of Acceptance and the Contract Document should not contain any provisions or conditions which vary from those in the RFP, or the Bidder’s Proposal, including any subsequent clarifications or negotiations. Any such modifications should be agreed by the Bidder in writing before a contract award decision is made.

The Contract Document comprises those papers contained at Section 9 of the RFP and it is at the stage of contract award that these can be completed with details of the successful Bidder.

Guidance Notes for the preparation of Notices seeking Expressions of Interest and Letters of Invitation

Notices seeking Expressions of Interest

Notices seeking expressions of interest must be published for Request for Proposals, except where the estimated value of the services is less than the threshold specified in the Directives. They are designed to provide information that enables potential bidders to decide whether or not to participate in a procurement process. Apart from the essential items listed in the draft below, the notice should also indicate any important evaluation criteria which will apply and any further information relating to the proposed procurement process, such as the intension to hold a pre-proposal meeting.

The notice is for publication purposes only and is not a part of the RFP document.

Standard Format for Notices seeking Expressions of Interest

Invitation to Express Interest in [Subject of Procurement]

[Insert Procurement Reference number].

The [insert name of Procuring Entity] has allocated/received funds [if received state source] and intends to apply part of the proceeds of these funds towards the cost of [insert description of consultancy services to be procured].

The [insert name of procuring entity] now invites suitably qualified bidders to submit sealed expressions of interest for [insert description of consultancy services to be procured].

[Insert brief narrative of consultancy services required, normally four to six lines, including location of project, length of contract, type of services or professional staff required and other information necessary to enable potential bidders to decide whether to express interest.]

[Insert details of any particular qualifications, skills, experience etc. required.]

Expressions of interest will be evaluated in accordance with the Public Procurement Proclamation of the Government of the Federal Democratic Republic of Ethiopia. Participation is open to all eligible bidders. [If there are any restrictions on eligibility, such as source countries, include these here.]

Interested eligible bidders may submit expressions of interest to [insert name of procuring entity], including [insert details of information or documentation required].

Expressions of interest must be delivered to the address below at or before [insert time and date]. Late submissions shall be rejected.

[Insert name of office and name of officer]

[Insert postal address] and/or [Insert street address]

[Insert telephone and facsimile number, indicate country and city code]

Letters of Invitation

Letters of Invitation, using the format below, should be issued with the RFP document. The Letter of Invitation is not a part of the RFP document. The letter should be signed and the seal of the Procuring Entity should be affixed.

Standard Format for Letter of Invitation

{Letterhead paper with PE name and address}

[Insert date of issue]

Dear [insert name of Bidder]:

[Procurement Reference Number and Title of Assignment]

The [insert name of Procuring Entity] invites proposals to provide the consulting services reference above. More details on the services required are provided in the attached Request for Proposals (RFP) document.

The RFP has been addressed to the following shortlisted consultants:

[insert list of Shortlisted Bidders]

A firm will be selected in accordance with procedures described in this RFP and the Federal Government of Ethiopia’s Public Procurement Proclamation.

Please inform us, upon receipt:

(a) That you received the RFP;

(b) Whether you will submit a proposal; and

(c) If you plan to submit a proposal, when and how you will transmit it.

Yours sincerely,

[Insert signature, name, and title of Officer]