Selection under a Fixed Budget (FBS)
In the previous section, you learnt that QBS is used for complex sector and the quality of the project is of utmost importance. So the financial proposal is not considered initially in QBS.
In FBS method, the available budget is disclosed in the RFP to the invited consultants and the consultants who apply should be able to perform within the budget.
You cannot alter the financial proposals. Any proposal that exceed the indicated budget should be discarded and the consultant who has submitted the highest ranked proposal within the budget should be selected.
You should adapt this method when:
- The budget cannot be exceeded.
- The objective and the TOR including the scope of work are very precisely defined.
- The time and the staff effort required can be assessed.
- Capacity building is limited to a simple nature where estimation is easy.
Because the budget is fixed, the consultant's TOR cannot be changed substantially and technical negotiations cover only minor aspects.
Type of assignments for which this method of selection is adopted
FBS is likely to result in better quality proposals than under QCBS, because it is easier for consultants to maximise quality under a fixed budget than under simultaneous quality and cost competition.
FBS requires the TOR to be consistent with the established budget and to contain a well specified scope of work. .The main risk of using the FBS is discouraging good consultants from participating.