• Introduction
• Risk
• Conflict of Interest
• Assessment before Engagement
• Short-listing
• Pre-qualification Criteria
• Preparation of Project Brief
• Transparency of Information
• Restricted Tenders
• Selection Criteria
• Tender Evaluation
• Oral Presentations
• Tender Security
• Probity Clause

• Resources and Fees
• Defaults and Claims
• Indemnity
• Modifications and Variations
• Negotiation
• Prohibited Actions
• Tender Award
• Performance Monitoring
• Evaluation
• Review on Completion of Agreement
• Retainer-style Agreement
• Payment Procedures
• Documentation

Introduction

• a person or a company engaged under a term contract or on a job basis to provide specialist or professional advice to assist policy formulation or decision-making by the management of an organisation
• engaged to monitor contractors' performance on behalf of the organisation as in the case of works projects

Risk

Conflict of Interest

• devise clear policies to require all staff involved in the engagement of consultants to declare any actual or potential conflict of interest that may arise at any stage in the engagement and administration process

Assessment before Engagement

• assess carefully every request for external consultant service
• devise guidelines specifying the need for written justifications
• form an independent assessment panel comprising staff with the necessary technical knowledge and staff of the requesting department to ensure requests are assessed impartially
• designate a staff member at a senior level to approve requests
• consider the availability of expertise and resources for the consultancy within the organisation and assess whether the consultancy can be provided in a more cost-effective way

Consultant Search

• identify a short list of consultants in the specific field through a pre-qualification exercise
• ensure that there are sufficient number of short-listed consultants
• develop and maintain an approved of list consultants for organisations with a continuing need for consultant services should endorsed by a panel (e.g. a tender board)
• periodically review the criteria for the addition and deletion of consultants
• adopt a fair share principle (e.g. by rotation) in the invitation for tender proposals from consultants on the list to ensure that all the consultants are given an equal chance to compete

• pre-determine pre-qualification criteria such as size of firm, expertise, years of relevant experience etc
• inform all consultants of the criteria in the invitation for expression of interest

Preparation of Project Brief

• define carefully the extent of work
• outline the basis on which performance will be measured and payments will be made
• state clearly the deliverables or expected outcomes, the milestones for payment, and the skills and expertise expected of the consultant, the number and professional qualification of the staff required for the project
• include the requirement of ethical practices expected of the consultants and their employees (e.g. the requirement to declare conflict of interest and to avoid accepting advantages or frequent entertainment from the contractors they supervise)

Transparency of Information

• provide all short-listed consultants with the same information (such as tender forms and guidelines on the submission of tenders)
• provide sufficient time to prepare a tender proposal
• set a common deadline (i.e. date and time) for proposal submissions
• brief all short-listed consultants on the same occasion to ensure that they receive the same information if a pre-tender briefing is considered necessary
• make available any supplementary information given to a particular consultant to all other short-listed consultants

Restricted Tenders

• the use of restricted tenders must be fully justified, documented and approved by senior authority, preferably a panel of senior staff not involved in the nomination of the consultants

Selection Criteria

• predetermine the evaluation criteria and their weightings (in case a marking scheme is used for assessment)
• use of a panel (usually the tender board) to approve evaluation criteria
• include the criteria and weightings in the proposal invitation document for the information of all short-listed consultants
• not to vary the criteria unless all short-listed consultants are given an equal opportunity to revise their proposals

Tender Evaluation

• use a panel with members chosen on the basis of their knowledge and expertise as well as their position to conduct tender evaluation
• draw an independent panel member drawn from another business unit to ensure impartiality in decision-making, where feasible
• use an agreed format in the assessment of tender proposals and, in case a marking scheme is used, the scoring of the proposals against the selection criteria by the assessment panel
• record each panel members’ assessment/marks as well as the aggregate results

Oral Presentations

• restrict presentations by short-listed consultants to appropriate cases
• made the requirement for a presentation to the consultants before invitation of tender proposals
• not to allow subsequent addition of presentation requirement or inclusion at the request of one consultant unless with the agreement of the tender board and the opportunity to make presentation is given to all consultants concerned

Tender Security

• take steps to ensure the security of proposals received
• take precautionary measures include receiving tender proposals in a double locked tender box with the keys controlled by different staff members of responsible position, and tasking an independent team of staff to witness the tender box opening
• record tendered sums in a summary sheet
• not to accept late tenders
• return late tenders to the consultant concerned after recording securely keep all tender proposals to protect the confidentiality of commercially sensitive information

Contract Agreements

• include a Probity Clause which makes reference to the Prevention of Bribery Ordinance; the requirement to declare and avoid conflict of Interest; and the commitment to ethical practices through the adoption of a Code of Conduct by the consultants, their staff, agents and sub-consultants
• require consultants to disclose all potential conflicts on appointment

• specify in the agreement all necessary resources to be provided by the consultant and require him to propose all commitments and information support required of the organisation
• clearly state the recoverable expenses (and any limits), hourly rates, minimum fees, as well as methods and deadlines of payment
• require the consultants to provide billing details on a timely basis for payment purposes
• include a clause on “capping” of expenses and fees to avoid excessive charges as far as possible

• incorporate contract conditions to allow the organisation to deduct payment for any incomplete, delayed or omitted work, or to withhold payment until the service is performed to the satisfaction of the organisation
• include provisions for termination of the contract on default and for handling disputes and claims

• require the consultant should be required to take out suitable indemnity cover (with an insurer approved by the organisation) against any potential claims, subject to any defined risk exposure policy adopted by the organisation

Modifications and Variations

• clearly state in the consultancy agreement the distinguish between extensions of the scope of the contract and matters relating primarily to timing - such as delays in the submission of deliverables
• devise formal procedures to provide for the examination and approval of extensions of time and variations of work, taking into account the cost implications to the organisation
• set financial limits for the approval authority
• form a panel to approve extensions of time and variations involving high cost

Negotiation

• conduct Negotiation within established negotiating parameters
• conduct negotiation desirably by more than one person
• document all negotiated contract terms so as to achieve adequate accountability and to enable appraisal by independent third parties if necessary
• include a summary in reports and recommendations following negotiation the of both positive and negative features of alternative proposals

Prohibited Actions

• remind negotiators not to disclose technical information or intellectual property that may result in the improvement of a competing proposal
• advise negotiator against the following practices:
  • indicating to a consultant a price that he must meet to obtain further consideration
  • advising a consultant of his price standing as compared to another consultant (nevertheless, a consultant may be informed that his price offer is considered too high or unrealistic for consideration) and
  • furnishing information about other consultants’ tender proposals

Tender Award

• require the evaluation panel or responsible staff member to analyse the proposals, prepare an evaluation report, and submit the report to more senior authority or a tender board for final approval
• provide full justification if the best proposal is not recommended
• notify all successful and unsuccessful consultants of the results at an early date

Performance Monitoring

• devise procedures for the appraisal of consultants’ performance to ensure consultants with satisfactory performance records are retained on the approved list
• require the contract supervisor to prepare progress and performance reports at regular intervals on standard forms for management information

• devise procedures to identify unsatisfactory performance and initiate action, such as the issue of written notices to the consultant with suggestions for correcting any deficiencies and warnings in case of persistent deficiencies
• record any notices, warnings and recommended remedial actions
• terminate the agreement of and/or suspend inviting tender proposals in future from consistently inadequate performed consultants
• document termination or any sanctions imposed for future reference

• require the project supervisor of the organisation to prepare an overall appraisal report upon completion of the agreement
• take into account the complexity of the contract and any other factors for measuring the project outcome against stated objectives/requirements

Retainer-style Agreement

• devise a system for issuing formal instructions for each task assignment if the consultant is engaged on a term agreement
• supplement the general terms and conditions of the basic agreement with specific orders
• use regular performance reporting in term consultancies, with assessment on a time and/or project basis as best suits the nature of the work
• limit term appointments in time (normally 2-3 years) with a review of both performance and continued need of the consultant at the end of the term
• reappoint consultants according to the standard conditions of consultant selection and appointment in force

Payment Procedures

• make available expenditure reports on consultancy agreement to the management detailing the fees charged, milestone payments made, total amounts paid, etc
• require consultants to provide billing details for payment claims
• randomly verify the reimbursable components of their fees
• task responsible supervisory staff to verify consultant charges
• provide adequate guidelines to supervisory staff as necessary to ensure they discharge these duties effectively

Documentation

• maintain adequate records throughout the selection and administration process, detailing the tender proposals, the evaluation criteria, the recommendation and the decisions made
• subject these records to independent audit review
• maintain a database containing the details of individual consultancy agreements, their progress and final performance reports to monitor potential
• monitor the overlaps of consultancy services and verify cost effectiveness