Step 2: Cost Estimate
A cost estimate shall be prepared covering the cost of the consulting assignment for the required services. The guidelines for preparation of a cost estimate for consulting services can be found in ▬►PPR -2007, Chapter 2, clause 12; ▬►PWD Part II, Procedural Directives, Volume A 15.3 step 2; ▬► [departmental guidelines and decisions for the estimation of manpower, logistics and rates]
PPR - 2007, Chapter 2, Clause 12
12. Cost Estimate of Consultancy Service:
(1) A Public Entity shall have to prepare the cost estimate of consultancy service subject to Rule 9.
(2) While preparing the cost estimate of consultancy service pursuant to Sub-rule (1), the following matters shall be taken into account:-
- The norms, if any, relating to cost estimate of consultancy service prepared by the concerned ministry,
- Terms of reference of the concerned consultancy services,
- The actual cost incurred on the procurement of the same nature made in the current or previous year by the concerned Public Entity or other Public Entity.
Provided that the cost estimate under this clause shall be prepared by adjusting price to the rate of previous years.
(3) In preparing cost estimate under this Rule the Public Entity shall have to mention the following cost:-
- Remuneration of key manpower and other manpower,
- Travel expenses, lodging expense for manpower, office expense, necessary goods, equipment and services expenses, translation of report and other documents, printing expense,
- If the consultant has to organize training, seminar and travel, the expenses required for such activities and other expenses.
Step 2. Cost Estimate
Preparation of a thorough cost estimate is necessary for assigning realistic budgetary
resources. The following guidelines are recommended:
- For small assignments, the cost estimate shall be based on applicable norms and schedule of prices.
- The cost estimate for large assignments shall be based on the client implementing agency’s assessment of the resources needed to carry out the assignment including staff time, logistical support and physical inputs such as vehicles, laboratory equipment etc. The estimates for inputs will be verified with actual inputs incurred in other similar projects.
- The cost shall be divided into two broad categories: remuneration and reimbursable items and shall further be divided into foreign and local costs if applicable.
- In preparing the cost estimate the remuneration rates of staff time shall be computed from private sector basic salaries multiplied by a factor of 2.8 to account for social charges, overheads and fees. The exact factor to be used in the consultant's contract shall be decided during negotiations. The cost estimate shall be clearly mentioned in the project implementation plan.
- The rates for reimbursable items shall be based on the prevailing market rates and prices applicable to the project site conditions. No overheads or fees shall be applicable on reimbursable items.
- The staff time shall be estimated on a realistic basis considering successfully completed projects by foreign and national personnel.
- Variations in excess of 15% shall not generally be permitted once the estimate is approved.
- Reference should be made to sector specific costing procedures (PWD II Chapters 18-26) while estimating the cost of the consulting assignment.