Qualifications based selection is a method for procuring professional services based on demonstrated competence and qualifications at a negotiated fair and reasonable price. Projects administered by a federal, state or local agency that uses federal funds typically follow the Brooks Act, which requires the use of QBS for most applications. Sometimes local agencies feel they will get lower prices for professional services if they don’t use QBS, but instead bid professional services similar to how they bid construction contracts. However, there is significant merit to agencies, the public they serve and the bottom line of the overall project in using QBS for state and locally funded projects as well.
The most common area of bidding is for the construction of a project. There’s a significant difference between professional services and construction work, though. Before a contractor bids on a public project, he obtains a set of design plans and specifications that detail the exact scope of the work. In fact, the plans for a typical roadway project are detailed to the point that every item needed to construct the project is quantified. Every cubic yard of dirt, every linear foot of pipe, every pound of steel and every square yard of concrete is accounted for and presented in tabular form so the contractor can apply unit prices to each item and develop his final bid.
Phases for the project are clearly established so the contractor knows the sequencing required to construct the project. The scope of work has been developed with great detail in order to ensure that all bidders have a clear picture of what is expected of them and are on a level playing field before the bid.
Construction projects can use up a large portion of a municipality’s budget in any given year. They’re typically in an area where the public is in close proximity such as the widening of a road or the expansion of a building. In these situations, the safety of construction workers and the public is of the utmost importance.
The plans and specifications mentioned above are developed by professional engineers. The National Society of Professional Engineers has a creed that pledges “…the public welfare above all other considerations,” and to that end engineers need to deliver affordable solutions that can be built with minimal disruption to the public and in a safe manner.
Prior to the design, there may be many unknowns about a project. Unless you provide the same level of detail in a scope of work to a professional services firm as you do to a contractor, you cannot expect their approaches, and therefore their bids, to be comparable. One of the greatest benefits of hiring a professional services firm is the ability to select one that has demonstrated competence and similar experience with your type of project. Having a firm on your team that meets this criterion will bring great value to your project. The company will know the pros and cons of different design and construction techniques, including which ones should be applied to your project in order to make it the most affordable and sustainable.
I would suggest that QBS helps deliver projects collaboratively and that overall cost of the project is lower because of it. In order to bid professional services, a municipality has to spend a significant amount of time and effort developing the scope of work with enough detail that all of the engineers will bid on the same expectations: With QBS the scope can be developed with less effort on the shoulders of the municipal staff by including the selected firm in the process. Developing the scope of work together also cultivates a team atmosphere and creates a clear message for what the project will and will not entail.
The cost of professional services for an average municipal type project varies depending upon the complexity of the project. For purposes of this article, let’s assume we have a project construction cost of $1 million and a professional engineering fee of $100,000. By reducing the engineering fee by 10 percent, the fee is reduced by $10,000, and the time they have to spend on developing cost savings in their design has also been reduced. If they could have used that $10,000 to save 4 percent off of the construction costs by using fewer quantities or less expensive materials for example, this would have led to a savings of $40,000.
The bottom line of the project would have been better if the $10,000 was spent in the design phase, with a savings of $40,000 in the construction phase and perhaps more savings in the life cycle cost.
Obviously, there is a point of diminishing returns on this logic. You can’t keep paying more for the professional services and continue to get savings that cover the additional design costs. But professional engineers pride themselves on delivering projects that save their clients’ money. Why? Because they know it leads to being selected for more work down the road. When professional services are bid, on the other hand, it limits creativity and limits professionals from using his or her talents for your constituents’ best benefit.
Jerry Holder Jr., PE, has been involved in design and management of transportation projects for his entire 27-year career, ranging from city streets to interstate highways. He is the director of transportation for Garver, a regional engineering firm.