Para 4.2.3 — CONSULT_MANUAL

2. In FBS, the selection process considers both the quality of proposals and the cost. FBS is a competitive method, encouraging consultants to provide high-quality services within the defined budget constraints.:

a) Fixed Budget: In the request for proposal (RFP) document, a specific fixed budget is specified. Consultants must adhere to this budget, and their proposed cost cannot exceed it.

4.2.3 Fixed Budget based Selection (FBS) for consultancy services: 1. GFR 2017 provide three methods for selection/evaluation of consultancy proposals viz. Quality and Cost Based Selection (QCBS), Least Cost System (LCS) and Single Source Selection (SSS). The Fixed Budget based Selection (FBS) method is now also allowed40 for selection of consultants.

Chapter 4: Bidding Design for Consultancy Services b) Quality Assessment: Consultants submit their proposals, and the evaluation considers the quality of these proposals. The proposal that scores the highest in quality (and is within the specified budget) is selected for award of contract. This assessment ensures that the selected consultant meets the project’s requirements effectively, within the stipulated budget.

3. FBS may be used when: a) the type of consulting services required is simple and/or repetitive and can be precisely defined; and b) the budget can be reasonable estimated, and set based on credible cost estimates and/ or previous selections which have been successfully executed; and c) the budget is sufficient for the consultant to perform the assignment.

4.2.4 Direct Selection: Single Source Selection (SSS) 1. Under some special circumstances, it may become necessary to select a particular consultant where adequate justification is available for such single-source selection in the context of the overall interest of Procuring Entity. (Rule 194 of GFR 2017, also see para 8.5.4). Direct selection is also called the Nomination mode of procurement (Please refer to para 4.3- 4-d) below). The selection by SSS/ nomination is permissible under exceptional circumstance such as:

a) tasks that represent a natural continuation of previous work carried out by the firm; b) in case of an emergency situation, situations arising after natural disasters, situations where timely completion of the assignment is of utmost importance; c) situations where execution of the assignment may involve use of proprietary techniques or only one consultant has requisite expertise; d) At times, other PSUs or Government Organizations are used to provide technical expertise. It is possible to use the expertise of such institutions on a SSS basis; e) Under some special circumstances, it may become necessary to select a particular consultant where adequate justification is available for such single-source selection in the context of the overall interest of the Ministry or Department. Full justification for single source selection should be recorded in the file and approval of the competent authority obtained before resorting to such single-source selection.

2. Procuring Entity shall ensure fairness and equity, and shall have a procedure in place to ensure that: a) the prices are reasonable and consistent with market rates for tasks of a similar nature; and b) the required consultancy services are not split into smaller sized procurement.

3. All works/purchase/ consultancy contracts awarded on nomination basis should be brought to the notice of following authorities for informationa) The Secretary, in case of ministries/departments. b) The Board of directors or equivalent managing body, in case of Public Sector Undertakings, Public Sector Banks, Insurance companies, etc; c) The Chief Executive of the organisation where such a managing body is not in existence. i) The report relating to such awards on nomination basis shall be submitted to the Secretary/Board/Chief Executive /equivalent managing body, every quarter. ii) The audit committee or similar unit in the organisation may be required to check at least 10% of such cases.

Risk Mitigation 1. Inappropriate Selection of SSS: There is a possibility that SSS system is selected where LCS or other systems would have been more appropriate considering the quality requirements or the capability of Procuring Entity to monitor the assignment. The assignment may be split into parcels to avoid competitive selection systems or to avoid obtaining higher level approvals for SSS. Full justification for single source selection should be recorded in the file and approval of the competent authority (schedule of Procurement Powers – SoPP should severely restrict powers for SSS selection) obtained before resorting to such single-source selection. In direct selection, the Procuring Entity should ensure fairness and equity, and the required consultancy/ Non-consultancy services are not split into smaller sized procurement to avoid competitive processes. 2. Cost may be unreasonably High: The single consultant is likely to charge unreasonably high price. Procuring Entity must have a procedure in place to ensure that the prices are reasonable and consistent with market rates for tasks of a similar nature. If necessary, negotiations may be held with the consultants to examine reasonableness of quoted price.

Manual for Procurement of Consultancy Services, Second Edition, 2025 4. SSS - Risks and Mitigations