this project is co-financed by the european union and the republic of turkey

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Bölgesel Rekabet Edebilirlik Operasyonel Programı’nın Uygulanması için Kurumsal Kapasitenin Oluşturulmasına Yönelik Teknik Yardım

Technical Assistance on Institutional Building for the Implementation of RCOP in Turkey

This project is co-financed by the European Union and the Republic of Turkey

Advanced Training PRAG Services 15-17 March 2011

PRAG Procurement Service Contracts – version November 2010Advance module – Day II

RCP-CICBy: Berk Babila, Managing Director - Ecorys in [email protected]

Ankara, 16 March 2011

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Content

• Terms of Reference− Purpose and role in the procurement

process − Structure and templates− Objectives formulation− Results and assumptions− Estimation of inputs and costs− Requirements of personnel− Reporting and Evaluation

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Terms of Reference

- Purpose and role in the procurement process - Structure and templates- Objectives formulation- Results and assumptions&risks- Estimation of inputs and costs- Requirements of personnel- Reporting and Evaluation

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Terms of Reference

Purpose and role of the ToR in the procurement process

• A key document, which describes the terms and conditions of a task to be performed

• A document that sets out the working relationship between the parties and communicates the mode for undertaking the assignment

• A document points out the responsibilities of the parties and the expected deliverables of the assignment

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Terms of Reference

What is ToR?

ToRs provide clearly detailed parameters for:

• why and for whom the operation is being done• what is intended to be accomplished• how it will be accomplished• who will be involved and• when milestones will be reached and project will be completed

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Terms of Reference

Objectives of a ToR

To ensure that:• ambiguities during the preparation of proposals, contract negotiation and

execution of services are cleared out• the specific task is carried out as outlined in the OIS• the Consultant, undertaking the task, will focus on the major issues and the

most serious, likely impacts of the task• the task is undertaken within the time-frame planned and the budget

allocated• risks of unnecessary extra work, delays and additional expenses are reduced

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Terms of ReferenceToR and other key documents

• ToR has to be in compliance with OIS- Objectives- Assumptions- Pre-conditions- Risks

• ToR has to be in compliance with FA - commencement date and period of execution

• ToR has to be in compliance with PRAG – template• ToR has to be in compliance with State Aid Provisions• ToR becomes Contract!!!

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Terms of Reference

Responsibilities for ToR

• The SRER submits ToR and budget estimate to the OS• OS revises ToR in accordance with checklists and submits to CFCU/EUD• EUD gives ex-ante approval after verification• During the implementation it is SRER’s responsibility to closely monitor the

performance of the Consultant’s experts and assure a qualitative and timely implementation of the project along with ToR

• At the end of the operation a final assessment of the Consultant’s performance will need to be carried out to check compliance with ToR

• OS/CFCU is in charge for contractual issues incl. payments and approval of expenses with ToR

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Terms of ReferenceTypesDepending on specificity of contract• Technical assistance (fee-based)

- to provide the experts specified in the contract- to manage or supervise a project

• Studies (global)- studies for identification and preparation of projects- feasibility studies, economic and market studies- technical studies- evaluations and audits

• Mixed• Depending on size of contract/procedure

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Terms of ReferenceTypes (2)

Depending on size of contract/procedure

• ≥ € 200 000 International Restricted Tender Procedure

• > € 10 000 but < € 200 000 Framework Contracts, Competitive Negotiated Procedure

• ≤ € 10 000 Single Tender

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Terms of Reference

− Purpose and role in the procurement process − Structure and templates− Objectives formulation− Results and assumptions&risks− Estimation of inputs and costs− Requirements of personnel− Reporting and Evaluation

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Terms of Reference

Structure

• There are no universal ToRs, which will be suitable for any assignment • However, there is a general structure, which should be observed when

preparing ToRs• ToR should start with a brief description and includes objectives,

activities, results, experts profile and reporting• A general structure of ToR has been drawn up by the EC in accordance

with the principles of project cycle management• The aim is to ensure that all issues are covered systematically and that

key factors related to clarity of objectives and sustainability are thoroughly examined

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Terms of Reference

Structure of ToR for TA

1. Background information2. Objective, purpose and expected results3. Assumptions and risks4. Scope of the work5. Logistics and timing6. Requirements7. Reports8. Monitoring and Evaluation

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Terms of Reference

• Purpose and role in the procurement process • Structure and templates• Objectives formulation• Results and assumptions&risks• Estimation of inputs and costs• Requirements of personnel• Reporting and Evaluation

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Terms of Reference

Objectives

• Clear definition of the purpose of the proposed task and expected output for the assignment

• It should be kept up-to-date during implementation- results and activities may change as the project progresses- Project objective and purpose should not change

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Terms of Reference

Formulation objectives

• Before preparing the TOR the purpose must be clear• The project purpose plus the assumptions in the same row of the

logframe matrix should lead to the overall objective• What outputs are required must also be clear! Remember – purpose

should be achieved by the end of the project

• Overall objective – why the project is important• Specific objective – why the project is needed

Check with the operation identification sheet!!!

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Terms of Reference

Purpose

• The single central objective of the project in terms of sustainable benefits to be delivered to the project's beneficiaries

• Derived from the core problem that the project is trying to address• One project – one purpose

- If there is more than one purpose, it is likely that the purposes are repetitive, or that they overlap with results, or that the project is trying to address too many problems at once and should be split

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Terms of Reference

Purpose (2)

• The near-term impact and the immediate result of producing outputs• By definition, project purpose is outside of the direct control of the

project implementation team• The team can be held accountable for producing a set of deliverables

(outputs), but ultimately there is a set of important external factors outside of their control (assumptions) which may prevent them from accomplishing the Purpose

• Multiple purposes tend to weaken design and diffuse the efforts of implementation teams

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Terms of Reference

Distinguish between

• Purpose and activities• Purpose and results

- If the results lead to the project purpose without any assumptions in the results row of the logframe, then either the purpose is not ambitious enough, or conversely, the results are too ambitious.

- For example, the result "National network of testing laboratories and certification and inspection bodies functioning" is practically indistinguishable from the project purpose "Technical and management capabilities of quality infrastructure bodies developed". The purpose should be formulated along the lines of "Free movement of goods acquis enforced in relevant sectors".

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Terms of ReferenceCheck

• Overall objectives- Do the overall objectives explain why the project is important for society / sectoral

development?- Are the overall objectives inline with those elaborated in the operation

identification sheet?• Specific objective

- Is there only one specific objective?- Is it in line with the project fiche?- Does the specific objective express a direct benefit for the target group?- Are SMART indicators identified? - Do these enable measuring the achievement of the specific objective?

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Terms of Reference

Service contract for TA

• Overall objective• Purpose

- For larger/complex projects there can be more than one purpose (i.e one per project component)

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Terms of ReferenceRemember

Objectives of the Consultant's assignment is:• To carry out certain services under a Program/Component/Project• The contractual objectives of assigning a Consultant will often be narrower and

should therefore be clearly formulated in the Terms of Reference as e.g.:− advice and support (technical assistance) to the implementing agency− management of a component or sub-component,− study, master plan, survey, investigation− detailed engineering design, preparation of tender documents and assistance

in tendering and award− review (of a study, a design or an investigation)− contract administration and construction supervision, take-over and

commissioning− training and upgrading of staff, etc.

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Exercise

Objectives formulation

• Setting the overall objective and purpose

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Terms of Reference


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Terms of Reference

Results

• Immediate benefits for the end recipients• Often outputs are stated here to better define the workload of

Consultant• Expressed as a change• Compliant with project purpose and contributing to overall objective

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Terms of Reference

Presentation of results• Either

- in order of importance• or

− in chronological order− in line with objectives and listed (numbered) by project purpose or by component− very detailed (under global price)− based on Logframe− İn line with OIS (relevant results)− be quantified, timed and verifiable (SMART)− relevant to the TA Contract

Do not mix results with objectives!

State results for which the Consultant could be held responsible!!!

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Terms of Reference

Assumptions and Risks

• External factors beyond the control of the Consultant but important for the implementation of the project

- define the environment and sustainability issues- summarise factors which the project cannot, or chooses not to control - are factors which the project does not address, but should monitor

• Assumptions and risks should be aligned with the OIS• Consultant should address risks in their methodology

28Advanced Training PRAG Services 15-17 March 2011

If results are delivered and assumptions hold true, then the project purpose will be achieved

Pre-condi-tions

Means Cost

Objectively Verifiable Indicators

Intervention Logic

Sources of Verification

Assumptions

Overall Objectives

Project Purpose

Results

Activities

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Terms of Reference

Assumptions and Risks (2)

• Does the TOR address the assumptions outlined in OIS?• Is the probability of realisation of the assumptions acceptable?• Are pre-conditions outlined in OIS fulfilled?

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Terms of Reference

Three questions for risk assessment

• Cost: does the risk have a cost impact?• Schedule: does the risk have an impact on the time schedule

(timing of outputs and results of the measure)?• Output and results: does the risk have an impact on the outputs

and results of the measure?

If not, then we are not dealing with a real risk

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Exercise

Results and assumptions

• Setting the assumptions and risks

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Terms of Reference


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Terms of Reference

Division of costs under fee-based contracts

1. Fees: cost for hiring the expert plus administrative expenditures for executing the contract and profit

2. Incidental expenditures: other direct cost for the contract (reimbursable)3. Provision for expenditure verification

• This division is done to ease the financial management of the service contract (not to check tickets, telephone bills etc.)

• Administrative costs are real costs for the consultants and they will charge you for it

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Terms of Reference

What is covered by fees?

Cost for experts: • Cost for hiring the staff (salary, fees, insurance, leave)• Travel from the place of residence of the expert to the base of operation(s)• Per diems / accommodation in the base of operation

- If the base of operation is Ankara - any travel of key expert and non-key experts to Ankara is included within the fee rates

- Per diems for Ankara are also included within the fee rates (for all experts) - If the experts travel from base of operation (Ankara) to other cities within Turkey or

Europe for specific missions, the travel and per diem expenses for these missions are included within incidental expenditure

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Terms of Reference

What is covered by fees? (2)

Office-related costs:• Office Rent• Purchase or rental of office equipment • Communications – fax, telecommunications, mail, courier etc.• Consumables – not related to direct actions of Contract• Secretarial services – for experts work – office managers,

secretaries, interpreters, etc.

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Terms of Reference

Rules

• The Consultant is paid for days actually worked - 7 hours – working day for short-term experts (report input in hours)- 22 days a month for long-term experts (report in days)

• Time spent for travelling exclusively and necessarily for the purpose of the Contract may be included in the number of days or hours, as appropriate, recorded in the timesheets

• The Consultant's personnel is not be entitled for either sickness or casual leave provided (Project Manager may permit the Consultant to take unpaid leave during the period of execution of the contract when agreed with SRER)

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Terms of Reference

Incidental expenditure

• Cover non-fee direct cost related to the contract:– Travel / per diems within the target region outside base of operation– Publications– Direct costs related to training – premises, equipment, accommodation,

interpretation, training materials, food or per diems for participants– Study tours, etc.– Translations of documents, etc. – Organisation of information campaigns– Setting up of a database– Development of MIS, etc.

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Terms of Reference

Expenditure verification

• Relates to the fees of the auditor who has been charged with the expenditure verification of the contract

• A budget heading with the introduction of detailed expenditure verification report

• A very detailed report – sufficient budget should be allocated (1-1.5% of contract value)

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Terms of Reference

Estimation of costs

• Necessary to estimate the value of the contract• Includes following stages:

– Estimation of human resource input– Estimation of other inputs – Valuation

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Terms of Reference

Human resources

• Estimate type of expertise that you need for the execution of tasks (senior/junior, and by function – training expert, procurement and contracting expert etc.)

• Estimate number of days for each task set in the ToR– Divide input on senior/junior

• Estimate total number of days (senior/ junior)• Add inputs for project management – Team leader (if full time – input

equals project implementation period)• Estimate the fees budget – you may use Framework Contracts costs for

valuation

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Terms of Reference

Travel and per diems under incidentals

• Include only travel costs and subsistence allowances for missions to be undertaken from the base of operations in the beneficiary country:

- Travel – economy class- Per diem – EU maximum rates

• Rough estimate is needed• Note that some contracts may require intensive travelling –

monitoring of projects, surveys, etc.

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Terms of Reference

Logistics and timing

• Project office:– How many office(s) and office space (10 sqm for each expert )– Provided by the consultant / or beneficiary

• Training premises (provided by the consultant / or beneficiary)• Check the logic of requested inputs• Specify the project start/end date• Time of implementation

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Terms of Reference

Support staff

• Support staff is paid by the Consultant:– Project director – Quality manager– Project assistant(s)– Secretary(ies)– Interpreter(s)/Translator(s)– Driver(s)

• Put requirements on backstopping staff only if really needed for the implementation (in exceptional cases)

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Terms of Reference

Other inputs

• Publications – translation, interpretation etc. • Direct costs for studies• Training – total number of training days (man/days of training =

number of participants x days of training)• Study tour: total number of man/days of study tours

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Terms of Reference

Incidental expenditure

• Estimate total value of incidental expenditures:– Add your calculations for publications, training, etc.– Add an error margin not less than 10%

• The provision for incidental expenditure should be stated in ToR as a lump sum. Do not give breakdown of costs! (otherwise the amounts identified become legally binding)

• Provision for incidental expenditure in ToR is an upper limit on the incidental costs. Only actual costs will be paid to the consultant.


Value of contract

Days Fee rate Value

Fees Team leader 200 900 180 000

Senior experts 200 800 160 000

Junior experts 150 400 60 000

Incidentals 50 000

Expenditure verification 1% 5 000

Total 455 000 plus error

470 000


From consultant’s view

Days/ months

Fee rate Value

Senior experts + TL 400 500 200 000

Per diems/ accommodation 12 1000 12 000

Tickets 10 400 4 000

Junior experts 150 250 30 000

Office rent 12 1000 12 000

Secretarial support 12 1000 12 000

Equipment 10 000

Consumables/ communication 12 1500 15 000

Incidentals 50 000

Expenditure verification 1% 5 000

Management fee 5-8% 25 000

Total actual cost 375 000

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Exercise

Estimation of inputs and costs

• Work on estimations for HR and incidentals

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Terms of Reference

– Purpose and role in the procurement process – Structure and templates– Objectives formulation– Results and assumptions&risks– Estimation of inputs and costs– Requirements of personnel– Reporting and Evaluation

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Terms of Reference

Type of experts

• Key experts

• Other experts

• Support staff and backstopping

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Terms of ReferenceType of experts (2)

• Team Leader• Senior Experts• Junior Experts

• FWC• Category I – 15 years• Category II – 10 years• Category III – 5 years

• Short term – experts working less than 6 consecutive months of the contract

• Long term – experts working more than 6 consecutive months of the contract

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Terms of Reference

Key experts

• All experts who have a crucial role in implementing the contract are referred to as key experts.

– Key expert 1: Team Leader– Key expert 1: Training Expert

• Recommended maximum of 4 key experts - otherwise the maximum scores will be negligible and evaluation will be difficult.


Terms of Reference

• The division of scores between O&M and Key experts, as well as the maximum scores for each category must be adapted according to the requirements of the specific tender procedure.

• The no. of key experts must correspond to the number of key expert profiles identified in the Terms of reference and should not exceed 4 key experts.

Evaluation grid

Maximum Organisation and methodology Rationale 20 Strategy 20 Timetable of activities 10 Total score for Organisation and methodology

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Key experts <Key expert 1> (Max 25 points) Qualifications and skills 5 General professional experience 5 Specific professional experience 15 <Key expert 2> (Max 15 points) <Key expert 3> (Max 5 points) <Key expert 4> (Max 5 points) Total score for Key experts 50 Overall total score 100

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Terms of Reference

Key expert requirements

• Identify: – Qualifications and skills: professional technical skills, team management

skills, communication skills, and/or language skills as appropriate– General professional experience: as appropriate– Specific professional experience: as appropriate

• Differentiate between minimum requirement and preferred requirement, if applicable, for GPE and SPE

• Be sure such experts exist in the market!• Do not give the profile of the ‘ideal expert’

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Terms of Reference

Key expert requirements (2)

• The criteria should be as broad as possible.

"preferably 10 years experience…but a minimum of 5 years required”

"a university degree in Economics or equivalent professional experience” (number of years should be stated) in order not to automatically disqualify offers with experts who have 40 years of relevant experience but which lacks the formal university degree

• if you put “university degree in Economics" and the tenderer proposed an expert with degree in Law … the offer should be rejected as deviating from the technical award criteria

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Terms of Reference

Key expert requirements (3)

• Profiles should be non-discriminatory• Participation in tendering procedures shall be open on equal terms to all

eligible persons • No discriminatory requirements for sex, age, nationality • The ToRs may not require an expert defined as local expert (defined as an

expert with permanent residence in the concerned country).• The nationality or place of residence may not be considered as a criterion.

This is not legal and can not be indicated in the request as it is discriminatory• You may use profiles developed by other ToR – EU/ World bank/ etc., but do

not forget to adapt them

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Terms of Reference

Other experts

• CVs for experts other than the key experts are not examined prior to the signature of the contract

• They should not be included in tenders• During the technical evaluation, the only aspect is considered for the

non-key experts is whether the number of working days are sufficient for the requirements of the ToR to be achieved

• In their proposal tenderer’s must indicate whether they are to be regarded as long-term/short-term and senior/junior in order to be clear which fee rate in the budget breakdown will apply to each profile

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Terms of Reference

Other experts (2)

• The selection of short-term experts after the contract start is subject of approval by the CA

• The selection procedure used by the Consultant to select these other experts must be transparent, and based on pre-defined criteria, including professional qualifications, language skills and work experience.

• Selection must be in line with Organisation and Methodology• Note that civil servants and other staff of the public administration of

the beneficiary country cannot be recruited as experts. Prior EUD Approval!!!

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Terms of Reference

Experts’ input

• It is recommended that the precise time inputs of the experts be left to the discretion of tenderers.

• Identify only absolute minima for the contribution of key experts. • The minimum % of time which experts should work in the beneficiary country

could be specified, e.g 75%, to limit the possibility that experts spend a large proportion of their time outside the beneficiary country to which they are supposedly giving technical advice

• performance of the contract (and therefore payment) is based on working days only

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Terms of Reference

Experts’ input

• The days and hours of work of the Consultant or the Consultant’s personnel in the country of the CA shall be fixed on the basis of the laws, regulations and customs of the country of CA and the requirements of the services

• Consultant's personnel shall not be entitled to either sick or casual leave provided

• Fee rates for all experts must include all the "administrative costs of employing the relevant experts, such as relocation and repatriation expenses

• Max 220 days a year (60 days paid leave by the Project Manager)• The schedule of estimated numbers of working days provides a direct basis

for calculating the maximum contract value

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Exercise

Requirements of personnel

• Draft a job description, and requirements for the Team Leader; in particular Qualifications&Skills, General Professional Experience, Specific Professional Experience

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Terms of Reference

– Purpose and role in the procurement process – Structure and templates– Objectives formulation– Results and assumptions&risks– Estimation of inputs and costs– Requirements of personnel– Reporting and Evaluation

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Terms of Reference

Reports

• In this section only progress reports (on activities) has to be listed (reports additional to the ones stated in the Scope of work)

• Types of reports- Inception report - Interim reports must be prepared every six months during the period of execution of the contract.- Final report

• Do not ask for more reports if you have other ways to follow the performance of the consultant:

-The consultant charges you for this reports-You waste time for reading and approving the reports

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Terms of Reference

Do not forget!

• Monthly progress reports!!!• MMM!!!• Reports for Steering Committee meetings!!!• All these reports are additional to any required in Section 4.2 of

Terms of Reference

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Terms of ReferenceContents

• Each report consist of a narrative section and a financial section. • The financial section contains the details:

- time inputs of the experts-incidental expenditure-expenditure verification;-Invoice

• Do not ask for more reports if you have other ways to follow the performance of the consultant:

-The consultant charges you for this reports-You waste time for reading and approving the reports

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Terms of ReferenceSubmission and approval

• Specify copies of the progress reports• Specify language of reports

– By contract these are in EN– If you want translation – specify– Specify hard/electronic

• Specify bodies responsible for the approving the progress reports -sequencing

• Specify to whom copies should be send

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Terms of Reference

Monitoring and Evaluation

• 8.1. Definition of indicators: – Specific performance measures chosen because they provide

valid, useful, practical and comparable measures of progress towards achieving expected results.

– Can be quantitative: measures of quantity, including statistical statements; or qualitative: judgements and perception derived from subjective analysis

• 8.2. Special requirements: If appropriate

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End of Day II

Closing

• Questions and Answers

this project is co-financed by the european union and the republic of turkey

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