NZAID Tools Activity Cycle Tools 

TOR | Terms of Reference Guideline

The Process for Developing TOR

There are a number of steps required to initiate, develop and sign off TOR. See diagram in Annex one: The TOR process.

1. Identify the need

A specific assignment may be initiated by any one of the key stakeholders. Prior to preparing detailed TOR it is important to discuss and reach agreement between key stakeholders on the need for the assignment and how best to meet stakeholder expectations.

NZAID staff at post have a key role in managing these preliminary discussions with our partners. It takes considerable time to clarify and discuss expectations, priorities and the preferred approach before the detailed terms of reference are drafted on paper. These conversations are a critical part of the planning process and experience demonstrates that they have a significant impact on the successful outcomes of the assignment.

2. Initiate discussion with the Programme team

At this planning stage, it is also useful to discuss some of the practical issues like:

  • context and clarity of roles: is the assignment partner- or NZAID-led?
  • the skills required to complete the assignment,
  • any contracting requirements
  • the selection process,
  • how any contracts will be managed,
  • the budget,
  • how the costs will be met,
  • what support is required to ensure the assignment is successful,
  • how responsibility will be shared between post and Wellington,
  • managing risks, and
  • quality assurance.

3. Initiate discussion with all stakeholders

These preliminary meetings can confirm some of the practical issues listed above and agree on:

  • assignment objectives and tasks
  • assignment outputs and milestones
  • contract management
  • reporting relationships
  • team composition

4. Seek advice from Team Leader, SAEG, Contracts

During the drafting stage you are encouraged to seek advice from partners, SAEG advisors, programme team leaders, and contracts advisors. For workload planning and contract management advice, Wellington staff are advised to create a draft instruction in Koru during this preliminary planning stage.

5. Draft TOR

Following these discussions, partners and/or NZAID can draft terms of reference for sign-off in Wellington. NZAID would encourage our partners to take the lead in developing the TOR and could support that process by sharing this guideline and adopting a participatory approach to the drafting task. Take time to work with all stakeholders and agree on the questions, the issues, and the intended outcomes. A simple, but effective check is to ask if the objectives are:

  • Specific
  • Measurable
  • Achievable
  • Results orientated
  • Time bound

All TOR need to follow the standard format provided in this guideline.

When using the Approved Contractor System, staff are required to follow the templates to complete Assignment specification and are encouraged to consider the wider issues and guidance provided in this NZAID tool.

The draft terms of reference can be developed by either the partners and/or NZAID staff. NZAID encourages our partners to take the lead in developing the TOR and could support that process by sharing this guideline and adopting a participatory approach to the drafting task.

All stakeholders are expected to actively engage in the drafting process through discussion, written feedback and drafting text. Investing time to address all issues, resolve concerns, and pay attention to detail will result in quality terms of reference and satisfactory outcomes. There are no effective short cuts.

Should the TOR specify that NZAID will purchase goods or services, the Mandatory Rules for Procurement by Departments, (Ministry of Economic Development, May 2006) apply. These rules require all NZAID procurement to:

  • enable open and effective competition,
  • encourage full and fair opportunity for potential suppliers,
  • recognize NZ’s international trade obligations and interests
  • result in best value for money.

This requires ensuring that goods or services are specified:

  • in terms of performance and functional requirements, rather than design or descriptive characteristics
  • based on international standards, where applicable, or otherwise on national technical regulations, recognised national standards, or building codes
  • by using full titles and listing acronyms when they are unavoidable.

Annex 2: Some key points to consider when preparing TOR identifies a number of common pitfalls in TOR drafting, including those relating to New Zealand public sector procurement rules.

6. Finalise TOR

NOTE: It is advisable and courteous that final drafts of TOR are seen by the advisors involved in providing advice at step 4.

All stakeholders need to agree on the TOR. In parallel with the development of selection criteria, the programme team should also have developed weightings to guide the selection process. These should be agreed by all stakeholders along with the TOR.

The partner government/organisation needs to agree (preferably in writing) with the TOR before they are finalised and ready for Team Leader approval. This can take considerable time.

NOTE: It is important to plan ahead, to allow adequate time and to maintain ongoing communication with all stakeholders at every stage of the process from developing terms of reference through to the conclusion of the assignment.

7. Seek Team Leader Approval

All NZAID managed Terms of Reference are signed off in Wellington. The Team Leader is responsible for approving all TOR for their direct reports. If the Team Leader is preparing Terms of Reference then the Director is responsible for approving the TOR.

8. Seek Assistance from your Contracts Adviser

If undertaking a tenders process, arrange a meeting with your Contracts Adviser.

9. Select Contractors

10. Negotiate contract and finalise TOR

Amendment of TORs used in supplier selection processes should be avoided. This is because not all tenderers have had the opportunity to bid against the amended TOR, undermining the principles of fairness in the process so re-tendering could be required. However, if during negotiations, minor variations to the TOR (or work plan) are suggested that will better achieve the objectives of the assignment these may be incorporated into the TOR (or ideally the work plan).

Any amendments to TOR must be agreed (by all stakeholders) in writing and MSG advised. The amended TOR must be dated and approved by the same Team Leader, attached to the Koru workflow, and printed for file.

It is important that any amendments are agreed prior to finalising the contract to avoid unnecessary variations and ensure better understanding and focus with the contractor.

11. Draft Contract and agree milestones

At this stage you will be required to agree milestones and confirm time frames.

Milestones can be any of the assignment outputs. The outputs may include any of the following:

  • meetings with key stakeholders
  • feedback to key stakeholders e.g. through a workshop or meeting prior to completion
  • draft and/or final report
  • workshops
  • manuals
  • draft TORs
  • strategy documents
  • draft agreements between stakeholders
  • debriefing NZAID and key stakeholders
  • presentation of key findings to stakeholders.

12. Finalise Contract

13. Brief contractor

A detailed briefing ensures shared understanding of objectives, methodology and intended outcomes. The location of this briefing — in Wellington or at post — will depend upon particular programme management arrangements. Care should be taken to include key staff in both locations in briefing arrangements.

During the briefing it is important to ensure that non-NZAID assignment team members, particularly contractors, are made fully aware of:

  • NZAID’s goal, operating principles , and all relevant policies and strategies, particularly those that are mainstreamed or cross-cutting
  • NZAID Activity Cycle Management Guideline and other relevant tools
  • how NZAID works (e.g. NZAID structure, roles and relationships; expectations of the nature and amount of contact with the Post while in-country),
  • who they should talk to if they have any problems,
  • key people we expect them to meet,
  • information on the political situation, and any sensitive issues.

Note: If the assignment involves field travel, it is helpful ensure that the Post has briefing notes to ensure a consistent message,

Briefings should outline the expectations of NZAID and partner for each of the key stages in the assignment:

  • Gathering information
    • Briefings with relevant NZAID staff (Wellington or Post) and others e.g. technical advisers or the Management Services Contractor (MSC)) prior to commencing work.
    • Review of documentation. Partner country and NZAID policies, country strategy paper, partner government development plans, other donor Activity documentation where appropriate.
    • Meetings with key stakeholders e.g. partner government officials, beneficiary communities - both women and men, NGOs including women’s organisations, other donors.
    • Field visits.

  • Analysing information

  • Presenting information for discussion and feedback

  • Finalising report/findings

NOTE: In general it is good practice to have the assignment team present initial findings to key stakeholders whilst they are in-country. If this proves difficult, an alternative is to ensure the team leader returns to discuss the final draft report with key stakeholders.

14. Commence assignment