Para 4.2 — CONSULT_MANUAL

4.2.1 Price based System - Least Cost Selection (LCS) 1. In this method of selection, consultants submit both a technical proposal and a financial proposal at the same time. Minimum qualifying marks for quality of the technical proposal are prescribed as benchmark (normally 75 (seventy-five) out of maximum 100 (hundred)) and indicated in the RfP along with a scheme for allotting marks for various technical criteria/ attributes. Alternatively, since in LCS selection, technical offers do not require be ranked (or to be added of weighted technical score to financial score – as in QCBS selection), it would suffice in appropriately simple cases (similar to EoI criteria, please refer to para 7.3.3-8), if the

2. The relative importance of Quality and Price aspects may vary from assignment to assignment depending on complexities/ criticality of quality requirements, internal capability of Procuring Entity to engage and supervise the assignment, as well as the value of procurements. Hence different systems of selection of consultants are designed to achieve appropriate relative importance (weightage) of Quality and Price aspects. Decision on system of selection is normally preceded by an assessment of the capacity of the user to engage and supervise the implementation of proposed assignment. The selection method chosen depends to some extent on this assessment. Selection of system of selection also should consider the likely field of Bidders.

3. The nomenclature of various selection methods below is in line with generally prevalent nomenclature: a) Price based System - Least Cost Selection (LCS); b) Quality and Cost Based Selection (QCBS); c) Fixed Budget based Selection (FBS) d) Direct Selection: Single Source Selection (SSS)

4.2 Systems of Selection of Consultants 1. Since the quality and scope of a consultancy assignment are not tangibly identifiable and consistently measurable, the technical and financial capability of consultants becomes an important though indirect determinant for quality and scope of performance. In such a situation value for money is achieved by encouraging wide and open competition among equally competent consultant. Thus, selection of consultants is normally done in a two-stage process. In the first stage, likely capable sources are shortlisted, on the basis of qualification and experience requirements for the given assignment for further consideration, if need be through an 'Expression of Interest' (EoI) through advertisement. The shortlist should include a sufficient number, not fewer than three (3) and not more than eight (8) eligible firms. In rare cases where less than three Consultants become eligible as per short-listing criteria, and the criteria cannot be relaxed, procurement may be continued with the approval of the Competent Authority. In the second stage, the shortlisted consultants are invited to submit their technical and financial (RfP) proposals generally in separate sealed envelopes. Evaluation of the technical proposal is carried out by evaluators without access to the financial part of the proposal. Financial proposals are opened after evaluation of quality.

4. Least Cost Selection - Risks and Mitigations

Risk Mitigation 1. Technical criteria may not be relevant to realization of quality of assignment. Technical criteria selected should be relevant and proportional to the requirement of quality of assignment and the selection process should be rigorous enough to ensure that on one hand no technically unsatisfactory bids should be able to get past a loose criterion and on the other hand no technically satisfactory offer should get ruled out by tight criteria. 2. Marking Subjectivity: The scheme of marking or its application may be subjective. It is important to lay down as objective a scheme of marking as possible. Cases where subjectivity is unavoidable (as in evaluation of methodology etc), a system of grading responses and their marking may be laid down in the bidding documents. Procuring Entity should also have a system of conciliation and moderation of widely disparate markings by different members of evaluation committee.

Manual for Procurement of Consultancy Services, Second Edition, 2025 evaluation criteria is only a fail/ pass criteria prescribing only the minimum qualifying benchmark. Thus, in LCS, a simplified evaluation criteria may also be used where instead of a marking scheme a minimum fail/pass benchmark of technical evaluation may be prescribed (i.e., must have completed at least two similar assignments; must have a turnover of at least Rs 10 (Rupees Ten) Crore etc). Any bidder that passes these benchmarks is declared as technically qualified for opening of their financial bids. The technical proposals are opened first and evaluated and the offers who are qualifying as per these technical evaluation criteria will only be considered as technically responsive, and the rest would be considered technically nonresponsive and would be dropped from the list. Financial proposals are then opened for only eligible and responsive offers (Financial bids of other unresponsive bidders are returned unopened) and ranked. L-1 offer out of the responsive offers is selected on price criteria alone without giving any additional weightage to marks/ ranking of Technical proposal. This system of selection is roughly the same as the price-based selection of L-1 offer (among the technically responsive offers) in procurement of Goods/ Works. (Rule 193 of GFR 2017, also see para 8.5.2)

2. LCS is considered suitable for recruiting consultants from firms in most assignments that are of a standard or routine nature (such as engineering design of non-complex Consultancy/ services/ works) where well-established practices and standards exist.

3. It is the simplest and the quickest system of selection and under normal circumstances, this method of evaluation shall be used as default since it allows for minimum satisfactory technical efficiency with economy. Justification must be provided if a selection method other than LCS is to be used.