ASIAN DEVELOPMENT BANK

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ASIAN DEVELOPMENT BANK
ADBs EXPERIENCE WITH QCBS BIMILACI 15 May
2003
2003
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ADBs SELECTION METHODS FOR FIRMS

• Quality and Cost Based Selection (QCBS)
• Quality Based Selection (QBS)
• Direct Selection
• (used only in exceptional circumstances)
• QCBS is the preferred selection method

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THE QCBS PROPOSAL

• two components
• both submitted at the same time

technical proposal
financial proposal (sealed envelope)
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THE QBS PROPOSAL

• two components
• submitted separately

1st submission technical proposal
2nd submission financial proposal (only submitted
by first-ranked firm)
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QCBS vs QBS PROCEDURES
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QCBS RANKING

• Technical Score 80
  Financial Score 20
• Primary focus is on quality
• Percentages are fixed
• Contract Negotiations held
• with 1st ranked firm

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WHEN SHOULD USE OF QBS BE CONSIDERED?

• when scope of work is difficult to define in
  detail because of
• the complexity of assignment
• the need for an innovative solution
• alternative methodologies possible, therefore
  difficult to compare Financial Proposals

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DIRECT SELECTION

• used only in very exceptional cases as the Board
  does not favor direct selection
• must be strongly justified

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STEPS IN APPLYING QCBS METHOD

• 1 Technical Proposals evaluated first
• Technical Proposal must receive 750 minimum score
  from 1000 maximum
• 2 Financial Proposals of technically qualified
  consultants opened publicly
• Standard format for financial proposals
• Financial Proposals evaluated
• 3 Evaluation and Ranking Report prepared
• standard format used by EAs

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TA PROJECT LISTING REQUIREMENTS

• for TAs with a budget up to 400,000 must be
  listed on the internet for at least 60 days
• for TAs with a budget over 400,000 must be
  listed on the internet for at least 90 days

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SHORTLISTING CRITERIA

• 5 to 7 firms shortlisted
• Extensive experience in similar projects
• Experience in the project country or in a
  similar geographical region
• Balanced geographical spread of shortlisted
  firms
• For TAs firm must meet ADBs registration
  requirements in terms of staffing, management,
  and financial capabilities

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TYPES OF TECHNICAL PROPOSALS
Proposal Preparation Time

• Full Technical Proposal 60 days
• gt1,000,000
• Simplified Technical Proposal 45 days
• gt400,0000 lt1,000,000
• Biodata Proposal 30 days
  lt400,000
• Includes Methodology Work Plan, Personnel
  Schedule, Presentation, and Personnel

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THE BUDGET

• Budget is an estimate of the cost for the
  consulting services
• Prepared by ADB in conjunction with the EA during
  project formulation
• Budget indicates the maximum amount in
  available for the consulting services

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TERMS OF REFERENCE PERSONNEL SCHEDULE

• TOR specifies the number and skills of the
  required international and local experts
• TOR specifies total allocation of person-months
  for international and local experts
• Consultant allocates individual person months for
  experts in Technical Proposal
• Only specified experts should be evaluated
• Home-field time allocation, fragmentation of
  assignments, compliance with work plan to be
  evaluated

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PUBLIC OPENING OF FINANCIAL PROPOSALS

• Consultants are advised of date for Public
  Opening of Financial Proposals
• Read out Prices in Various Currencies
• Read out Technical Scores
• Hand out Table of Exchange Rates
• Only consultants whose technical proposals meet
  or exceed 750 points are invited. Other Financial
  Proposals are returned unopened

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EVALUATION OF FINANCIAL PROPOSALS

• Financial Proposal Format
• Consultants submit Financial Proposals in sealed
  envelope
• Consultants submit Financial Proposals in
  electronic format together with hard copy (CD or
  Floppy-Disk)
• Financial Proposals are evaluated for commercial
  compliance, arithmetical accuracy and omissions
• Costs shown in Financial Proposal must cover cost
  of all work/items in the Technical Proposal

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ARITHMETICAL CHECK

• Arithmetical Check
• Check multiplications
• Check sub-totals and totals
• Check whether Provisional Sums and contingency
  are in accordance with Data Sheet
• Make corrections as necessary

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FINANCIAL TECHNICAL CHECK

• Check compatibility of Financial Proposal with
  Technical Proposal
• Do experts inputs match?
• Do number of trips match?
• Do number of per diems match?
• Make corrections as necessary
• Is offered price within the budget allocation

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FINANCIAL SCORES AND RANKING OF PROPOSALS

• CSC performs calculation
• Point Scores of a Financial Proposal determined
  by applying formula
• FS (lowest price/price of P) x 1000
• (FS is the financial score of the Proposal being
  evaluated)
• Calculation
• 80 technical score 20 financial score
  
• ranking

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CONTRACT NEGOTIATIONS

• First ranked consultant invited to Contract
  Negotiations
• Technical details finalized
• Clarifications concerning TOR
• Timing of work
• Counterpart facilities
• Discussions should not substantially change TOR
  requirements or quality requirements as price has
  been a selection factor
• No negotiations on remuneration unit rates

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RANKING AND PRICESFrom 1 April 2002 to 15 April
2003

• 163 firms shortlisted for 29 contracts
• Price influence on the ranking of awarded
  contracts
• 25 first ranked firms with highest technical
  score 86.2
• 2 first ranked firms with second highest
  technical score 6.8
• 2 first ranked firms with technical score third
  and lower 6.8

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EXAMPLES (1)

• Firm TP TWT Prop. Eval. FP FWT
  Total Rank
• Score Factor Price Price Score
  Factor Points
• A 803 0.8 456,556 527,465 865
  0.2 815.37 1
• B 762 0.8 480,278 456,181 1000
  0.2 809.60 2
• C 773 0.8 494,721 495,382 921
  0.2 802.57 3
• Firm TP TWT Prop. Eval. FP FWT
  Total Rank
• Score Factor Price Price Score
  Factor Points
• A 826 0.8 355,499 355,331 990
  0.2 858.75 1
• B 829 0.8 349,105 381,665 921
  0.2 847.49 2
• C 791 0.8 357,714 351,687 1000
  0.2 832.80 3

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EXAMPLES (2)

• Firm TP TWT Prop. Eval. FP FWT
  Total Rank
• Score Factor Price Price Score
  Factor Points
• A (4) 763 0.8 446,326 463,189 1000
  0.2 810.40 1
• B (2) 781 0.8 500,039 503,881 919
  0.2 808.65 2
• C (5) 762 0.8 488,234 487,582 950
  0.2 799.59 3
• D (1) 788 0.8 545,667 575,802 804
  0.2 791.28 4
• E (3) 765 0.8 523,220 523,416 885
  0.2 788.99 5
• F (6) 750 0.8 627,743 627,743 738
  0.2 747.57 6

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CONCLUSION

• BASED ON RESULT TO DATE, FOR MORE THAN 90 OF
  CASES WHERE QCBS HAS BEEN USED, THE FIRST RANKED
  PROPOSAL HAD THE HIGHEST QUALITY
• QCBS HIGH QUALITY AT REASONABLE COST