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Date: November 2006
Publication: Environmental Science and Engineering
Author: George Zukovs

Consider the following: When you seek legal advice, do you choose a lawyer that simply offers the lowest price? What about a dentist? Or a financial advisor? The answer is no – you make yourchoice based on demonstrated expertise and experience, in other words, qualifications. The same should apply to engineering consultants, but for most government-funded projects in Ontario it does not – yet.

But that may be about to change. On June 29, 2006, the National Guide to Sustainable Municipal Infrastructure (known as InfraGuide) released a brand new best practice guide, Selecting a Professional Consultant. This guide reflects the principles of Qualifications- Based Selection (QBS), a method of contracting for engineering services that has been long established in the United States, but has only recently gained a profile in Ontario.

QBS, also known as negotiated procurement, is a process that involves receiving and evaluating consultant submissions in response to a public notice of an intended project, selecting the best consultant for the intended project, and negotiating a mutually acceptable contract.

The process is divided into two phases. In the first phase, the client selects the consultant; and in the second phase, the contract is negotiated. Although the details may vary from client to client, the main steps are as follows:

The client develops the general scope of work and schedule.

  • The Request for Qualifications (RFQ) is issued through the client’s public notice process.
  • Statements of Qualifications are received and evaluated to determine the most qualified engineering consultants.
  • A short list of the most qualified engineering consultants is developed and engineering consultants are invited to an interview.
  • Interviews are conducted and engineering consultants are ranked according to predetermined selection criteria.
  • Working closely with the client, the top-ranked engineering consultant defines a detailed scope of work.
  • The engineering consultant develops and submits to the client a fee proposal based on the agreed scope of work.
  • The client and engineering consultant negotiate a mutually acceptable contract, including scope of work, schedule, and fee.
  • If an acceptable agreement cannot be reached with the top-ranked engineering consultant, the negotiations are ended and the client invites the next highest ranked engineering consultant to negotiate.
  • Once agreement is reached, a contract is signed.

Price is not considered in the QBS process until after the most qualified consultant is chosen. According to Kay Henderson, former Secretary of the Florida Department of Transportation, price is a necessary part of the selection process, but only after the best qualified engineering company has been identified. This approach helps everyone, clients and engineering consultants, to avoid confusing “price” with “value”.

When price is mentioned during the selection process, it becomes the controlling factor, effectively suffocating other, more critical, factors such as service, innovation, and performance. By introducing price after selecting the preferred consultant, the QBS process places emphasis on expertise and experience so that clients receive the best value for their investment.

Value is one of the strongest selling points of QBS, because over the long term, QBS saves money. A definitive study done by the American Institute of Architects compared cost-based procurement in Maryland with QBS procurement in Florida. The study found that the cost of Florida’s QBS process was 50% lower than Maryland’s cost based process; and, for every dollar spent on contracts, Maryland spent 3.8 cents, while Florida spent 1.6 cents. Florida’s use of QBS also resulted in faster project completion (35.5 months versus 49 months for Maryland) and more efficient use of state resources. With a staff of 51 and an operating budget of $1.6 million, Florida was able to deliver $100 million in capital projects, while Maryland required 96 personnel and an operating budget of $2.5 million and delivered only $65 million in capital projects.

The release of the QBS best practice guide is good news, and not a moment too soon. This is because Ontario’s use of QBS for engineering services lags behind that of other jurisdictions. The most progressive use of QBS has been in the United States, where Public Law 92-582, referred to as the Brooks Act, requires federal agencies to use qualifications based selection procedures for procurement of engineering services, while banning the use of competitive bidding. Since passage of the Brooks Act in 1972, at least 41 states mandate QBS for procurement of engineering services for state projects, and numerous municipalities have also adopted laws modeled after the federal statute.

Numerous non-governmental organizations in the U.S. have long advocated the use of QBS. According to the American Public Works Association, selecting engineering consultants on the basis of “qualifications and competence (rather than price) fosters greater creativity and flexibility, and minimizes the potential for disputes and litigation.” A main reason why may be because QBS involves a collaborative process between the client and the engineering consultant, providing the opportunity to establish rapport and to create a climate of trust early in the client-consultant relationship.