Low-cost bidding may not be the best approach to contracting for the services of a professional architect or engineer
( from Maine Townsman, August 1993)
by Jerry Haynes
Would you, as an elected official, hire a town manager or a public works director on the basis of salary, without first considering the person’s qualifications and experience? Of course you wouldn’t.
Most municipal officials will, however, at some point during their term or tenure, become involved with the selection of a design of a municipal building, the engineering design of a sewage system or treatment plant or, perhaps, a hydrological study or survey for the location of a playground or park. In any case, the selection of the design professional must be considered the most important decision to be made during the life of the project. It is the designer, the architect or engineer - let’s call it the A/E - who lays the groundwork for the success or failure of the project. It is the A/E who gives the project its esthetic look; it is the A/E who determines what materials will be become incorporated into the structure; it is the A/E who has the expertise to make certain that the project is completed in accordance with the plans and specifications - all of which have been approved by the owner – and within the project budget.
Many municipal officials consider the selection of an A/E as just another purchase to be awarded to the firm which provides the lowest price in a competitive bid situation. However, bidding A/E services is like bidding the selection of any professional service, e.g. your dentist or your lawyer. Do you really want the cheapest, or do you want the best value for their level of expertise?
After a thorough review of the competitive bidding process, one would quickly learn that, in the selection of a design professional, it is generally impossible to write a request for proposal (RFP) which defines the Scope of Work in sufficient detail to provide a truly competitive bidding environment - that is, a level playing, field for all firms wishing to bid.
Take the case of a building project, for example. Designers have different ideas as to how the building should look; the general layout, esthetics and types of materials. All such ideas may be perfectly acceptable, but some may better meet the needs of the particular, community than others. Some designers may have a greater depth of experience in the type of building being considered, a better track record of developing projects which have been completed on time and within the budget.
But completing the project on time and within budget is not the whole story. Let’s look down the road, 30 or 40 years after the project is completed. Has the project fulfilled its intended function and answered the program needs, as outlined by the building committee? If not, did the A/E have the necessary knowledge and experience to address these needs? Just as important; has the overall cost of maintaining the building been kept to a minimum? Did the designer incorporate into the building acceptable low maintenance cost materials? If not, why not?
QUALIFICATION-BASED SELECTION (QBS)
An alternative method to bidding for the selection of A/E services is through a process known as negotiated procurement or qualification-based selection.
There are five major elements to this procurement procedure: public notice, submittal of qualifications: review of submittals, ranking of respondents and negotiation of a contract.
Public notice: First, the contracting agency - let’s call it the owner - announces through newspaper ads, periodicals and related association publications, that it needs architectural or engineering services for a particular project and invites interested firms to submit information about their qualifications and experience.
Submittals: Those firms which have an interest in the project, and feel that they are qualified, submit proposals in accordance with a format which is supplied by the owner and, although the format will vary from project to project, it should generally contain such information as the preliminary scope of work, the project owner’s name, the name, address and phone number of the project’s contact person, the name or names of the firm’s owners, the number of years in business, the types of services offered, the background of key personnel, similar projects designed by the firm, a listing of projects underway and tire deadline for submitting statements.
Review: The owner then conducts interviews with those firms which have been short-listed. The purpose of these interviews is to discuss each firm’s qualifications, philosophies, availability and overall approach to the particular project. Once the interviews arc completed, the owner ranks the firms, using a pre-determined ranking system.
Contract Negotiation: The owner then invites the top-ranked firm to negotiate a formal agreement. These negotiations include a discussion of the owner’s overall goals, alternatives that might be considered, a specific scope of work and, finally, the firm’s compensation for the work. Note that A/E compensation has not been a consideration up to this point, nor should it be. If negotiations with the top-ranked firm are unsuccessful, negotiations with this firm are suspended and the second-ranked firm is invited to negotiate - and so on, until a formal contract is reached.
The often asked question is: "Does this procedure reduce competition and fly in the face of competitive bidding requirements?" The answer is most assuredly, "No." The procedure simply focuses competition for professional services on the most meaningful factors; qualifications, competence, track record and availability.
You may wonder why QBS is the preferred method of selection for public projects. The American Bar Association states in its Model Procurement Code for State and Local Governments: "The principal reasons for supporting this selection procedure for architects-engineer and land surveying services are the lack of definitive scope of work for such services at the time the Selection is made and the importance of selecting the best qualified firm. In general, the architect -engineer or land surveyor is engaged to represent the State’s interests and is, therefore, in a different relationship with the State from that normally existing in a buyer-seller situation. For these reasons, the qualifications, competence and availability of the three most qualified architect-engineer or land surveying firms are considered initially, and price negotiated later."
There are laws governing the procurement of architectural, engineering and other professional design services.
In 1972, Congress passed the Brooks Act, P L 93-582, which prescribes the use of QBS on federal civilian agency projects. A similar law was passed in 1982 applicable to federal military agency projects. Additionally, as many as 30 states have "Brooks-type" laws.
In 1979 the Governor of Maine signed into law 5 M.R.S.A. § 1742,(6) which requires the Bureau of General Services to negotiate architectural and engineering design services for public improvement projects on the basis of "evaluation of professional competency and qualifications required for the type of services contemplated at fair and reasonable prices."
One might wonder if it is necessary to follow Al rive of the QBS procedural steps for each project which is undertaken. The answer is a simple, "Not always." Depending on the size and complexity of the project, some steps may be skipped or minimized.
If this article has accomplished nothing else, we hope that we’ve successfully pointed out the fact that the design costs of a project, while contributing only 1% to 2% of the total costs over the project life, have a major impact on the cost of the construction, which on average consumes 42 percent of the life cycle costs and on the operational and maintenance costs, which cat up the remaining 56 percent. It is quite evident, therefore, that the selection of the design firm is most crucial and should be based primarily on the qualifications and experience of that firm.
The Maine QBS Program stands ready and anxious to provide assistance to municipalities to assure the best project possible for the taxpayer dollar.
Jerry Haynes is QBS Facilitator for the Maine QBS Program. His address is One Allagash Drive, Oakland, ME 04963 or call 465-3813