7 Prequalification: Consultancy Appointments
7.6 Assessment of prequalification applications
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On receipt of requests from applicants, the client should issue the prequalification documents. These
documents should state how an application is to be packaged and submitted.
The client should acknowledge receipt of the completed prequalification applications.
In the event that the quality-based selection method is not to be adopted and if it is intended to charge for the subsequent issue of the proposal dossier, details should be given in the prequalification notice. However, it is customary to issue dossiers free of charge.
7.5 Issue and return of prequalification documents
Fig. 7.1 – Choice of fee payment terms ALL
Briefing information available at time of appointment
VERY LITTLE
Fixed fee
Percentage of proposal price plus percentage of final cost
Percentage of final cost
Target man-hours at agreed rates
Reimbursable plus fixed fee
Fully reimbursable
LOW Scope for variations HIGH
LOW Complexity of the project HIGH
MIN Employer control MAX
The period between the notice of invitation to prequalify and the latest date for the return of completed applications should not be less than four weeks.
Subject to any local regulation, in addition to the issue of a notice of invitation to prequalify, as described above, names of possible consultants can be obtained from other sources including:
- FIDIC Member Associations;
- persons or organisations that have employed consultants for similar projects.
It is usual for the client to appoint a committee of suitably experienced persons to evaluate the applications and prepare a shortlist of suitable consultants. The evaluation analysis can conveniently be described in two stages.
The first stage requires the committee to check the completeness of applications and the eligibility of applicants to prequalify. An applicant declared bankrupt or convicted of fraud, money laundering or corruption or who has knowingly
7.6 Assessment of prequalification applications
7 Prequalification: Consultancy Appointments
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When the quality-based method of selection is adopted, great care must be taken to identify differences at the prequalification stage between potential
applicants’ abilities and qualities. The aim at the prequalification stage is to rank all applicants so that it is the highest ranking applicant only who is taken forward to negotiate a consultancy services agreement.
It is recommended that the second stage of the quality-based selection analysis uses a numerical comparison between applicants for each of the criteria.
Each criterion is given a maximum score of 100.
To avoid possible distortion in scoring values, which might be caused by different evaluators marking
relatively high or low, the scoring against each criterion for all applicants should be made by the same evaluators, who should be not less than four, and the scores averaged. To assist in the comparison of applicants, it is also recommended that all applicants are scored for a particular criterion before considering the next criterion.
It is suggested and recommended that the criteria to be considered for comparison between applicants should include all, but need not be limited to, the following factors:
- Organisation and management; administration; location of offices.
- Available resources in terms of management capability
7.6.1 Assessment for quality-based selection
Notes 1 An ‘s’ is marked for suitable and a ‘u’ for unsuitable applicants.
2 Applications found to be incomplete or ineligible or lacking in financial stability are excluded from the second-stage of the analysis for quality-based selection and from the third stage of the analysis for selection with price comparison, as applicants 4, 8 and 11 marked by a ‘u’ in this example.
Table 7.1 –Analysis of prequalification applications for consultancy appointments: 1st stage
Matrix example for the evaluation of eligibility and completeness of applications and of financial stability Prequalification Criterion
Eligibility and Completeness of Application Financial Stability Code for Prequalification Applicants
submitted false information with the object of gaining prequalification should be excluded from the evaluation.
In addition, the committee should be satisfied that the applicant has the financial resources and backing to meet salaries, wages, materials, supplies and all other costs until the forecast payments become due under the agreement and to meet the costs of all other ongoing commitments during the period of the services.
As a guide the committee will expect the total annual turnover of the applicant to be in the order of at least three times the anticipated annual turnover of the contract. Failure to meet the minimum financial requirements should result in the applicant being excluded from further evaluation.
The results of this first stage of the assessment can be conveniently recorded, as shown in Table 7.1 -Analysis of prequalification applications for consultancy appointments, by marking either ‘s’ for suitable or ‘u’ for
unsuitable applicants against each of the described criteria.
The outcome of the subsequent assessment of the second stage of the evaluation process for
prequalification for the quality-based selection, as compared with prequalification for the submission of proposals in which price will be a subject of comparison, will differ.
The important difference is that with quality-based selection the chosen applicants with whom negotiations are to be carried out are identified upon completion of the prequalification stage.
However, if price is to be a factor in the evaluation, the successful applicant is not known until completion of evaluation of all proposals received at the end of an evaluation period, as described in Sections 9.3 and 16.3.
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7 Prequalification: Consultancy Appointments
Notes 1 Applications found to be suitable with regard to eligibility, completeness of application and financial stability are evaluated in the second stage of the analysis. Applicant numbers 4, 8 and 11 are excluded as a result of the findings shown in the example of Table 7.1.
2 The average scores against each of the criteria out of a maximum of 100 for each criterion are entered in this matrix in this second stage of the analysis.
3 In this analysis, all applicants, except numbers 4, 8 and 11 are taken forward for the scores to be weighted.
Table 7.2 –Analysis of prequalification applications for consultancy appointments Quality-based selection: 2nd stage - scoring
Prequalification Criterion
1 Structure, organisation & management 2 Available resources & design capability 3 Services to be subcontracted
4 Experience: relevant projects completed 5 Experience: relevant projects in progress 6 Experience: geographical
7 General suitability
8 Quality assurance system, health and safety plan and environmental policy
1
Code for Prequalification Applicants Weighting Applied
Notes 1 The criteria headings and weighted percentages to be applied will have been set out in the proposal request and cannot be amended at the prequalification evaluation stage.
2 In the example above applicant number 7 would be invited to negotiate a consultancy agreement as described in Chapters 9 and 16. Applicants with lower scores would be held in reserve.
Table 7.3 –Analysis of prequalification applications for consultancy appointments Quality-based selection: 2nd stage - effect of weighted percentages Prequalification Criterion
1 Structure, organisation & management 2 Available resources & design capability 3 Services to be subcontracted
4 Experience: relevant projects completed 5 Experience: relevant projects in progress 6 Experience: geographical
7 General suitability
8 Quality assurance system, health and safety plan and environmental policy
1
Reference Code for Prequalification Applicants Weighting Applied
and experience of professional and technical staff.
- Extent to which any consultancy services would be likely to be subcontracted.
- Relevant projects completed; capacity to complete the work;
project performance skills; past performance for other clients; methodology; innovation; efficiency.
- Relevant projects in progress.
- Experience in both the type of consultancy services required and the country or region in which the relevant works contracts are to be undertaken.
- Relationships with local consultants, taking into account any potential language difficulties.
- Quality assurance procedures, health and safety plan and environmental policy.
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The second stage of the analysis for selection with price comparison will determine, for each of the applicants remaining at the end of the first stage, their suitability based on criteria for comparison between applications and may include but need not be limited to the following:
-organisation and management; administration; location of offices;
- available resources in terms of management capability and experience of the consultant’s professional and technical staff;
- extent to which any consultancy services would be likely to be subcontracted;
- relevant projects completed; capacity to complete the work; project performance skills; past performance for other clients; methodology; innovation; efficiency;
- relevant projects in progress;
- experience in both the type of consultancy services required and the country or region in which the relevant works contracts are to be undertaken;
- relationships with local consultants, taking into account any potential language difficulties;
- quality assurance procedures, health and safety plan and environmental policy.
The marking will be subjective and, as already assessed for eligibility and completeness of application
and financial stability, will be recorded as ‘s’ for suitable or ‘u’ for unsuitable.
The agreed decision of the selection committee is then recorded on an evaluation matrix form, an example of which is shown in Table 7.4. In practice certain criteria for some applicants are not likely to be entirely satisfactory. In such cases supplementary notes may be made of any shortcomings for attachment to the evaluation form.
For the procurement of consulting services in which price is to play a part in the selection process, it would normally be satisfactory to carefully select not more than three to five applicants from the
prequalification analysis who have been described as
‘suitable’ as, for example, three to five applicants from numbers 1, 2, 3, 6, 7, and 10 shown in Table 7.4.
Whenever the number of prequalified applicants is greater than five, the analysis of the prequalification applications may be re-examined carefully to reduce the number. A review of any supplementary notes attached to the evaluation form should be made by the committee to identify the best prequalified candidates.
A review may be supplemented by previous experience of the client and by confidential enquiries
7.6.2 Assessment for subsequent selection with price comparisons
Each criterion will have been previously given a weighting factor as shown on the right-hand side of the example shown in Table 7.2. The average score against each criterion for each applicant is then adjusted by the weighted percentage. Table 7.3 provides an example of the effect of the weighted percentages.
In Tables 7.2 and 7.3 it is considered for this example that the subcontracting of services would be a detriment to the quality of services to be provided and, accordingly, has been given a negative weighting. While negative weighting and scoring will not generally be necessary, the example demonstrates how negative weighting may sometimes be appropriate.
The criteria headings and weightings may, of course, be adjusted to suit the circumstances of the project. Where appropriate and feasible, it is of advantage to interview each applicant’s management
and key personnel, to visit their offices and work places, to examine systems and methods of work, to hold discussions with their past clients and to inspect their completed projects. This is important if the scores of the highest ranking applicants are very close to assist in making a final decision.
The agreed decisions on the shortlist by the committee are then recorded on an evaluation matrix form, an example of which is provided by Table 7.3.
If the quality-based selection method is adopted, the highest ranked applicant – applicant number 7 in the example matrix shown in Table 7.3 – should be invited to negotiate a consultancy services agreement. In the event that the negotiations with the highest ranked applicant founder, the next highest ranked applicant should be invited to negotiate.
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7 Prequalification: Consultancy Appointments
When the recommended quality-based selection method is adopted, it is advised that a minimum of three and not more than five of the highest ranked applicants are held in reserve in the event that negotiations with the initially identified, highest ranked applicant founder. The remainder should be advised that their applications have not been successful.
When price is a factor in the subsequent evaluation process and the list of selected and prequalified applicants has been prepared, successful applicants should be notified and requested to confirm their intention to submit a proposal.
This should ensure, as far as possible, an adequate number of
competitive proposals. If a potential consultant wishes to drop out at this stage, the next best-placed applicant should be invited and requested to confirm his intention to submit a proposal.
Following this, all applicants should be notified of the list of selected prequalified consultants without their being given an explanation of the decisions.
The client should advise successful applicants when they can expect to receive proposal dossiers, and should notify all other prequalification applicants that they have not been selected.