Procedure for the procurement of consulting service - DOH

MANUAL PROCEDURES FOR THE PROCUREMENT OF CONSULTING SERVICES
5. INDEFINITE DELIVERY CONTRACT (PRICE AGREEMENT)
These contracts are used when Procuring Entities need to have “on call” specialized services to
provide advice on a particular activity, the extent and timing of which cannot be defined in advance.
These are commonly used to retain “advisers” for implementation of complex projects (for
example, dam panel), expert adjudicators for dispute resolution panels, institutional reforms,
procurement advice, technical troubleshooting, and so forth, normally for a period of a year or
more. The Procuring Entity and the firm agree on the unit rates to be paid for the experts, and
payments are made on the basis of the time actually used.
INCENTIVE BONUS
Can a Procuring Entity give incentive bonuses to consultants?
No incentive bonus, in whatever form or for whatever purpose, shall be allowed 4 ( Section 42.4 of the
revised IRR).
LIQUIDATED DAMAGES
What happens when the consultant fails to satisfactorily complete the services required under the
contract?
When the consultant fails to satisfactorily complete the services required under the contract within the
specified period, inclusive of duly granted time extensions, if any, the consultant shall be liable for damages
for the delay. Consequently, it will have to pay the Procuring Entity liquidated damages in an amount equal
to one-tenth (1/10) of one percent (1%) of the cost of unperformed portion for every day of delay (Section
68 of the revised IRR).
In no case shall the sum of liquidated damages reach ten percent (10%) of the contract amount. If it does,
the contract shall automatically be rescinded by the Procuring Entity, without prejudice to other courses of
action and remedies open to it. The Procuring Entity may also take over the contract or award the same to
a qualified consultant through negotiation. In addition to the liquidated damages, the erring consultant‟s
performance security shall also be forfeited.
In case the delay in the completion of the services exceeds ten percent (10%) of the specified contract time
plus any time extension duly granted to the consultant, the Procuring Entity may rescind the contract. It
then forfeits the consultant‟s performance security and takes over the prosecution of the contract or awards
the same to a qualified consultant through negotiated procurement.
4 For FAPS, any allowable incentive bonus would be provided in the standard bidding documents for the project. However, an incentive bonus is generally allowed
only when it would be of benefit to the Procuring Entity. The option to grant incentive bonus is given by the IFIs to the Procuring Entity.
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