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PROJECT ADMINISTRATION INSTRUCTIONS
PAI No. 2.01
Issued on October 2010
Revised on April 2022

DEFINITIONS, PRINCIPLES AND RESPONSIBILITIES

A. Introduction

1. This Project Administration Instructions (PAIs) define commonly used terms and elaborates on the general principles in the Guidelines on the Use of Consultants by Asian Development Bank and Its Borrowers (Guidelines on Use of Consultants). PAIs 2.02 to 2.07 set forth the specific requirements and procedures in recruiting and managing consulting services. Appendix 1 spells out frequently used abbreviations in the PAIs on consulting services.

B. Definitions

2. In these instructions,

C. Principles

3. ADB’s policies on recruiting and managing consultants follow six principles:
4. Such principles are best served through a competitive process among qualified shortlisted consultants, usually with a selection that is based on the quality and cost of services.

5. ADB and its borrowers’ EAs aim to recruit consultants promptly and effectively by: • providing a range of recruitment options; • permitting quick engagements for emergency assignments; • harmonizing procedures with those of the other major multilateral development banks; and • monitoring the recruitment process.

D. Anticorruption Policy

6. ADB requires consultants, borrowers, EAs, IAs, and ADB staff to observe the highest standard of ethics when selecting consultants and implementing contracts under ADB-financed and administered projects. If ADB determines that a consultant, EA or IA has acted corruptly, fraudulently, collusively or coercively during selection or implementation, ADB may take any of the steps listed in para 1.23 of the Guidelines on Use of Consultants. Staff should refer allegations of corrupt, fraudulent, collusive, coercive or obstructive behavior to the Office of Anticorruption and Integrity (OAI).

E. Conflict of Interest

7. ADB considers it a conflict of interest when a party has interests that could improperly influence its performance of official duties or responsibilities, contractual obligations or compliance with applicable laws and regulations. A conflict of interest may not, in all cases, in and of itself, constitute a violation of ADB’s anticorruption and integrity framework and as applicable, the ADB Code of Conduct and Standards (for consultants), if appropriately addressed or mitigated. Conflict of interest can be actual, potential or perceived. If user units identify any actual, potential or perceived conflict of interest at any time, they shall refer the matter to OAI. ADB will address conflicts of interest and may reject a consultant selection if it decides that a conflict of interest has affected the integrity of selection. Para 1.11 of the Guidelines on Use of Consultants describes examples of potential conflicts of interest. Former ADB staff who were previously primarily involved in processing and/or supervising a TA, loan and/or grant project must not be hired to implement assignments under those projects.

8. If an ADB, EA or IA staff who is engaged in the selection of a consultant is faced with a potential conflict of interest, then such staff must immediately disclose this situation. For an EA or IA staff, the disclosure must be made to ADB and to the head of the agency concerned. The EA or IA staff also needs to follow the relevant provisions of the Guidelines on Use of Consultants. For ADB staff, the disclosure must be made to the authorized director of the staff concerned. If the ADB, EA or IA staff is a member of a consultant selection committee (CSC), then the disclosure must also be made to the other members of the committee. If ADB (for EA or IA staff) or the director of the ADB staff concerned (for ADB staff), as the case may be, decides that an actual, potential or perceived conflict of interest exists, then the staff concerned must be excluded from the entire consultant selection process. If the ADB, EA or IA staff is a member of a CSC, then the CSC must decide by a majority vote on whether or not a conflict of interest actually exists, and record such determination in the minutes of the meeting.

F. Avoiding Unfair Competitive Advantage

9. A consultant competing for an assignment should not gain an unfair competitive advantage from having completed a related assignment. To avoid this, ADB and its borrowers provide all the shortlisted consultants with the same information so that no consultant has an unfair advantage. To avoid having to be excluded from competing for the provision of the related services, the consultant must make information, data, and reports available for disclosure to other shortlisted consultants.

G. Consultant Management System (CMS)

10. CMS is an on-line information technology (IT) system that allows PPFD and user units to advertise consulting services opportunities, recruit consultants, manage contracts, and process consultants' performance evaluation reports. Consultants also use CMS to register in ADB’s consultant database and submit expressions of interest and proposals.

11. PPFD generally requires user units to use CMS for recruiting consulting services that ADB administers.

12. As internet is essential for consulting firms, ADB believes that using CMS will normally not disadvantage any firm in the competitive selection for consulting services. Yet, for special circumstances, such as recruiting national consultants from a remote place that has no internet access in a DMC, PPFD or user units may follow the procedures in PAI 2.04 (para. 2) and may process the recruitment of consultants without using CMS. The recruitment of consultants may also be done without using CMS when the CMS is not functioning, is experiencing a prolonged technical problem or is unavailable for data processing.

H. Responsibilities

a) EA Responsibilities for Loan or Grant-Financed Projects

13. The EA or IA authorizes, selects, engages, and supervises consultants following the Guidelines on Use of Consultants for a loan or grant-financed consulting assignments. For this, the RRP indicates that the EA (or IA) will administer the consulting services. However, under special circumstances, such as when an EA lacks capacity, the EA may request assistance from ADB in selecting the consultants, provided that the EA negotiates and signs the consulting service contract, and provided further that the relevant directors of PPFD and the user unit agree to provide such assistance.

b) ADB Responsibilities for TA, Staff Consultancy and Consultancy in Non-sovereign Operations

14. ADB is normally responsible for selecting, engaging and supervising consultants financed by ADB's internal administrative expense budget, capital expenditure budget, TA grant, and other grant projects where the RRP indicates that ADB administers the consulting services. ADB may also be responsible for hiring consultants funded by advance payment from prospective clients in its non-sovereign operations.

c) EA and ADB Responsibilities for Recruiting Consultants for Delegated TAs

15. To increase the EA's ownership of TA projects and to improve sustainability of project benefits, ADB may, through a Memorandum of Understanding with the recipient government, delegate responsibility to the EA for the recruitment and supervision of TA consultants. The recommendation to delegate follows an assessment of the EA’s capacity to recruit and manage consultants, and is indicated in the TA report or TA concept paper (CP), whenever a full TA report is not required, for approval by the department head, the vice-president, the President or the Board, as appropriate. The project officer assesses the EA capacity during a fact-finding mission. PPFD may assist the project officer in undertaking the EA/IA procurement capacity assessment. Depending on the EA's capacity, delegation may be partial or complete. For complete delegation, the EA selects and signs the contract with the consultant, and assumes primary responsibility for supervising the consultant. For partial delegation (also known as "delegation through enhanced partnership"), the EA selects the consultant, ADB signs the contract, and the EA and ADB jointly supervise the contract. PAI 2.05 sets out the procedures for recruiting consultants under delegated TAs.

d) Responsibilities of Procurement, Portfolio and Financial Management Department (PPFD)

16. PPFD is responsible for ensuring that ADB staff comply with ADB's requirements, by monitoring the recruitment process for consulting services that are either administered by the EA or ADB. It reviews documents, advises staff and chairs the CSC, when required. PPFD responds to consultants' and EAs’ queries regarding the selection process.

17. PPFD determines the terms and conditions, signs the contracts and supervises the contract variations for consulting services that ADB administers. PPFD may also, under certain conditions or thresholds (as defined in PAI 5.09), delegate particular contract administration activities to user units for consulting services that ADB administers. Unless PPFD or a delegated recruiting party signs the contract and issues the notice to proceed (NTP), the user unit should not commit to engage the consultant or direct the consultant to start working. The same principle also applies to a case where a replacement or new consultant team member is to be mobilized under an existing contract through a contract variation. In such cases, the user unit should not mobilize the consultant until PPFD or the delegated recruiting party signs the contract variation.

18. PPFD supervises the consultants’ performance evaluation process, and maintains and updates the consultants' performance evaluation reports. PPFD may also communicate with consultants about their performance evaluation results.

19. PPFD, supported by the Information Technology Department (ITD) manages CMS. PPFD answers internal and external inquiries on CMS business processes.

e) Responsibilities of User Units

20. For consulting services that ADB administers, user units prepare the TORs, select the consultants following the PAIs, supervise implementation of consulting services contracts, authorize consultant payments and evaluate consultant performance. Heads of departments ensure that consulting services are used and implemented properly. User units respond to questions from consultants on assignments.

21. With PPFD support, user units ensure that EA staff complies with ADB policies and procedures for consulting services that EAs administer.

f) Responsibilities of Controller’s Department (CTL)

22. CTL verifies and processes ADB payments to consultants under ADB contracts. g) Responsibilities of Information Technology Department (ITD)

g) Responsibilities of Information Technology Department (ITD)

23. ITD provides IT support on the CMS and helps internal and external users resolve IT issues related to CMS and other activities involving recruiting IT consultants.

h) Responsibilities of Office of the General Counsel (OGC)

24. OGC advises on legal issues arising from recruiting consultants, administering contracts and related activities.

i) Responsibilities of the Strategic Partnership Division of SPD (SPSP) and the Partner Funds Division of SDCC (SDPF) under the Sustainable Development and Climate Change Department (SDCC)

25. SPSP advises staff on issues related to the processing of project-specific cofinancing and SDPF advises staff on issues related to trust funds and during the implementation of cofinanced projects, with both coordinating staff and cofinanciers.

j) Responsibilities of Consultant Selection Committee (CSC)

26. A CSC is convened to decide on consulting services matters, when required by PAI 2.04, 2.05 or 2.07. CSC is normally convened to conduct technical evaluation of consulting entities proposals.

27. A CSC may be convened for technical evaluation of individual consultant selection for large contracts.

28. For consulting services that ADB administers, the CSC normally consists of a PPFD international staff member as chairperson, the user unit officer, and an international staff from another department chosen from a roster maintained by PPFD. The third member should be impartial and possess technical expertise that is similar to that being sought by the TOR. The CSC members represent directors of their divisions. Video or telephone conferences may be used when a CSC member is joining the meeting from another location. Under special circumstances, the CSC may be established based on the requirements of a specific task force designated by ADB Management or the relevant department heads. CSC decisions are final if the decision is achieved by consensus.

29. If a CSC does not reach a unanimous decision, the Chairperson refers the matter to the relevant PPFD director who will review the matter together with the director of the user unit and make a final decision. For consulting services that EAs administer, the CSC normally comprises 3-7 members appointed by the EA.

I. Types of Consultants

30. Consulting firms are usually used for complex assignments that require multipleexpertise-teamwork. Consulting firms may also be preferred for engagements that span over a long period and when the risk of loss of continuity is high.

31. Individual consultants are more suitable for assignments that can be carried out by individuals independently. Individual consultants may be engaged directly or through a firm.

32. Consultation with PPFD is required before contracting more than five individual consultants separately under one project, particularly whenever the assignments are interdependent on inputs by these consultants. In such a case, a consulting firm should normally be engaged through a competitive selection process to provide these individuals as a team.

J. Types of Assignments

33. For purposes of the PAIs, ADB classifies consulting assignments by the instruments or types of operations the consultants serve:
34. For purposes of the PAIs, ADB also classifies consulting assignments by expertise:

K. Using National Consultants from Developing Member Countries (DMCs)

35. ADB encourages using qualified consultants from DMCs.

36. ADB considers a consulting firm as a national firm of a borrower’s country if it is legally incorporated or organized as a legal entity under the laws of that country. Similarly, an individual consultant qualifies as a “national consultant” if he/she is performing assignment in his/her own country or in a country where he/she legally resides. The expert’s role does not require international experience. Individuals of ADB members who have appropriate authorization to legally reside and work in the country of the assignment but do not hold the nationality of that country may also be considered as national consultants.

37. Nationals of a DMC who possess the appropriate international experience may be considered for assignments that require international expertise, whether in the national's own country or in other DMCs. The international experience that is required for a particular assignment will be defined and described in the pertinent TOR.

L. Using Individual Staff Consultants

38. Staff consulting assignments do not normally include work that is typically performed in connection with a TA to ADB members, because ADB finances such work through TA operations.

39. Individual staff consulting assignments should include specific time-bound outputs; for example, providing technical expertise during a fact-finding, appraisal or review mission, writing a policy paper, or developing computer software. The TOR should clearly identify the outputs and expected completion dates.

40. Individual staff consulting assignments may also include ongoing work similar to the work ADB staff regularly perform. Individual staff consultants are typically recruited when:

41. Individual staff consulting assignments without specific time-bound outputs may only be used to temporarily alleviate staff shortage, and should generally last less than 1 year. The process for obtaining approval for staff consultants is set forth in PAI 2.04.

M. Eligibility

a) Eligibility Requirements for All Consultants

42. The Guidelines on Use of Consultants (para 1.13) lists the general principles on eligibility requirements for consultants working on ADB-financed assignments. Specific requirements are defined as follows:
      1 Experts employed or engaged by an eligible consulting firm will be considered eligible regardless of their nationality.
43. The following restrictions on government organizations and employees apply to all assignments:
44. Former ADB staff, advisers to executive directors, and former executive directors and alternate executive directors on the Board may not work as consultants for consulting services that ADB administers within 1 year of their effective termination date. Vice-presidents may not work as consultants for consulting services that ADB administers within 3 years of their effective termination date. The President may waive such requirements when ADB specifically requires a person’s services. Former ADB staff whose employment was terminated under Interest of Good Administration (IGA) provisions may be engaged by borrowers as loan consultants for ADBfinanced projects, but they are ineligible for engagement by ADB.

45. The Budget, People and Management Systems Department (BPMSD) clears proposals to engage former ADB staff for the first time as consultants for consulting services that ADB administers and in the case of former staff at director level and above, for each engagement. This occurs if: (i) the former staff was nominated by a first-ranked consulting firm in its technical proposal, or (ii) the former staff is proposed as an individual consultant for consulting services that ADB administers. The procedures to obtain clearance are as follows:

46. BPMSD shall form a committee to review proposals for the engagement of former staff whose positions were at the level of director or above, up to department or office head. The committee shall comprise the Director General, BPMSD as chairperson, the head of the user department or office, and the head of another department or office as an independent member. The Director, BPRS acts as the secretary for the committee. The committee considers all factors, including:

d) Spouses of ADB Staff

47. ADB staff spouses applying to work for consulting services that ADB administers will be subject to the conditions below.

48. Spouses of the President, Vice-Presidents, the Managing Director General and Heads of Departments/Offices are restricted from working as a consultant for consulting services that ADB administers. The Head of the user unit’s department or office may recommend that the President waive this restriction in cases where the candidate is a spouse of the Vice-President, or head of department or office. If the candidate is the current President’s spouse, the ranking Vice President may approve the recruitment.

49. The recruitment process for an ADB staff's spouse shall include due diligence to determine whether or not an actual, potential or perceived conflict of interest exists. A spouse may not be recruited as an ADB consultant if:
50. When a user unit suspects an actual, potential or perceived conflict of interest, it refers the matter to the Director General, PPFD, who will decide if the recruitment may proceed.

51. Staff must not promote their spouses’ interests. Staff should not communicate with prospective user departments for engaging their spouses as consultants. Doing so may result in disciplinary measures.

52. Spouses who are interested in individual consulting assignments should register in the CMS. Spouses interested in working for consulting firms or organizations as team members should contact those consulting firms or organizations directly.

53. If a spouse is a candidate on a shortlist, the relevant user unit should evaluate the spouse using the same eligibility requirements as other candidates. The fact that a proposed consultant is the spouse of a staff should not be a consideration for selecting such a consultant. The user unit should also confirm that the assignment will not create any actual, potential or perceived conflict of interest.

54. Single source selection of a spouse for an individual consulting assignment is discouraged. When a single source selection of a spouse is proposed, the user unit concerned must submit proof that no other qualified candidate has expressed interest, following public advertising of the position in the consulting services recruitment notice (CSRN), regardless of the assignment duration and level. The user unit submits a recommendation with a detailed justification including an assessment of any submitted expressions of interest through the head of the user department or office, to the Director, BPRS, for clearance. The head of the user department or office then approves the single source selection.

55. The Director, BPRS, clears the initial engagement of spouses, similar to the engagement of former bank staff.

56. ADB does not provide spouses working on individual consulting assignments with:
57. Close relatives of current ADB staff, other than spouses, may not work as consultants for consulting services that ADB administers. Administrative Order 2.01 Appendix 1 defines close relatives as spouse, children (including adopted children), mother, father, brother (including half-brother), sister (including half-sister), niece, nephew, aunt and uncle.
58. Close relatives of consultants currently engaged by ADB may not work as consultants if such engagement creates an actual, potential or perceived conflict of interest situation. Consultants who are close relatives shall not be engaged to work as individual consultants under the same assignment.

g) Consultants Currently Engaged by ADB or EA

59. A consultant who is currently engaged by ADB or by the EA for an ADB-financed TA, project or contract on a full-time basis is understood to be committed for a continuous assignment, whereby a home office work week consists of 5 working days and a field work week consists of 5 or 6 working days, as the case may be, in accordance with the terms and provisions of the contract. A consultant who is currently engaged on a full-time basis for an ADB-financed assignment must not work as a consultant, resource person or service provider for another ADB-financed TA, project or contract, and for any other employer or project. A consultant who is currently engaged on an intermittent basis for an ADB-financed assignment is allowed to work on another intermittent assignment, provided that PPFD receives clearance from the relevant user unit that there would be no overlapping in working days between the assignments in question.

h) Experts in Specialized Fields

60. For certain ADB-administered assignments that require specific professional qualifications, such as legal or IT experts, the department that possesses the relevant knowledge may have to provide its clearance for the proposed candidates before they may be engaged. See PAI 2.04 for details.

Abbreviations Used in the PAI