QBS actually saves money
Worried that selecting based on qualifications, rather than price will drive up the cost of your project? By making your selection based on the lowest bid, you may be taking on risk. Using QBS actually focuses competition for professional services on the most meaningful factors: qualifications, competence, previous performance, and expertise.
A 2022 study of data, gathered from hundreds of projects, across a host of project types, sizes, and geographic regions, proving that using QBS saves money and time, while fostering innovation. Click to access your free report, An Analysis of QBS in the Procurement of Engineering Services.
Q: What are the general services engineers and architects provide?
A: The basic phases of service on a typical project are feasibility study, preliminary design, final design, construction bid evaluation, and construction observation. Architectural projects often include a detailed programming phase that would precede actual design work.
Q: How are architectural and engineering firms retained?
A: The traditional method of hiring engineering and architectural firms for public work is through a process known as negotiated procurement or qualifications-based selection. The basic goal of this selection procedure is finding the best-qualified firm or individual to perform the work. There are seven major elements to this procurement procedure: identifying the project, public notice, submittals of qualifications, review of submittals, interviews, ranking respondents, and negotiation of a contract.
Q: Why not bid these services?
A: Selecting a firm construct a project differs from selecting a firm to design the same project. A construction contract can be awarded to the lowest responsible bidder because all major aspects of the project are defined, including the type and amount of construction materials required to complete the project. On the other hand, you retain architects and engineers to turn your concept into a set of plans and specifications. The engineers and architects take an idea and give it definition. The contractor takes that definition and turns it into a physical reality.
Q: Can QBS be used with Design/Build projects?
Yes! Design/build is an alternative delivery process. QBS should be used to select the design/build team. Some organizations advocate a two-step process to 1) select an owner representative and 2) select a design/build team. More detailed information is available from the Michigan QBS office
Q: What other types of firms are selected through qualifications-based selection?
A: All professional design firms should be retained for public work through qualifications-based selection. This would include (in addition to engineering and architectural firms) geotechnical, landscape architectural, photogrammetry, planning, owners’ representatives, environmental consultants, and surveying firms. Design firms frequently offer combined services. For example, many firms provide both architectural and engineering services, hence the term A/E. Many civil engineering firms also provide land surveying services.
Q: How does qualifications-based selection work?
- The contracting agency announces that it needs architectural or engineering services for a particular project and invites interested firms to submit information about their qualifications and their experience.
- The agency then reviews and evaluates the submissions and selects a “short list” of three to five firms.
- Personal interviews are usually conducted with these firms to discuss each firm’s qualifications, philosophies and overall approach to the project.
- Once these interviews are completed, the agency ranks the firms.
- The top-ranked firm is then invited to negotiate a formal agreement. This includes a discussion of your concepts and goals, the alternatives that might be considered, a specific scope of work, the general approach of the firm to the scope of work, and the firm’s compensation for the project.
Q: Does this process inhibit competition?
A: Not at all. It focuses competition for professional services on the most meaningful factors: qualifications, competence, previous performance, and availability.
Q: Are there programs to help me take advantage of qualifications-based selection procedures?
A: Yes. In most states, design professionals offer assistance to state and local agencies through their professional societies. In some states, such as Michigan, programs have been established in the public interest to provide independent facilitators or technical advisors who work with public officials to structure a qualifications-based selection procedure, benefitting the taxpayers and users of public facilities. Michigan QBS is the designated organization in Michigan to provide these services.
Q: Why is qualifications-based selection the preferred method of selection for public projects?
A: As stated in the American Bar Association’s “Model Procurement Code for State and Local Governments”: “The principal reasons supporting this selection procedure for architect-engineer and land surveying services are the lack of a 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 most qualified architect-engineer or land surveying firm is considered initially, and price negotiated later.”
Q: Isn't price a factor in the selection process?
A: Certainly. But until you, and the architects and engineers you are considering, know in some detail what professional services you need, price discussion can’t be meaningful. If you focus first on qualifications, you will be assured that the professionals you hire will have the technical ability and professional judgment to turn your vision into an efficient, effective and economical reality.
Q: Is the qualifications-based selection and negotiation procedure consistent with a competitive process?
A: Yes, QBS fully meets the goals of competitive procurement. It is highly competitive among the firms seeking the assignment. In fact, in the 1984 Competition in Contracting act, Congress explicitly declared that “competitive procedures” for Executive Branch agencies includes procurement of architectural or engineering services under the Brooks Act, which is the legislation mandating the use of qualifications-based selection for projects using Federal funds.
Q: Does the qualifications-based selection and negotiation method lead to political favoritism?
A: No. The qualifications-based selection procedure recommends that there be public announcement of project requirements so that all firms may submit their qualifications and be considered on their merits. The record is open for public scrutiny at all times during the selection process. In addition, attempts to introduce political favoritism into the process are opposed by the professional societies representing engineers, architects, and other design professionals.
Q: What does the term "scope of work" mean?
A: The scope of work is a definition of the project and the services to be provided to secure its execution, including specific tasks necessary for completion. Negotiation of the scope also involves an evaluation of alternative solutions or approaches to the project.
Q: Will the negotiated procurement process prevent problems during project execution?
The potential for these problems may be reduced because the parties will have a thorough understanding of respective responsibilities and obligations. Studies show that projects completed using QBS have shorter schedules and fewer change orders. Qualifications-based selection and negotiated procurement fosters cooperation because it eliminates the potential adversarial relationship between the client and the design professional associated with the selection made on the basis of price.
Q: Does qualifications-based selection increase project costs?
A: No. Using the QBS process to select the most qualified service professionals will bring out the most cost-effective requirements for a successful project through consideration of alternative methods and materials, life-cycle cost factors and costs of operation and maintenance of the facility. In a price-based competition for architectural and engineering services, potential design savings to you, the owner, are likely to be more than offset by higher construction costs resulting from less than optimal design considerations.
Q: Does qualifications-based selection increase project costs?
A: No, using price when selecting your design professionals can be even more costly, when one considers the life span of a construction project. The life-cycle, or life-span, of a building or engineering project is generally about 40 years, and negotiated design fees are usually less than one percent of a project’s total life-cycle cost; the other 99 percent are maintenance and operating costs. But the expertise of architects and engineers and the time spent in examining alternatives in, for example, energy use, can have a dramatic effect on maintenance and operating costs year after year.
Q: How do I know I'm getting a fair price?
A: A detailed discussion of the project scope and your expectations will enable the architect or engineer to develop as accurate a professional service budget as possible. Budget comparisons can then be made with past successful projects of a similar nature that you or others have undertaken.
Q: What happens if there is a lack of agreement during negotiations?
A: If for any reason you can’t reach agreement on the scope of work and compensation, negotiations with the top-ranked firm are formally terminated. This rarely happens, but if it does, the agency then enters into negotiations with the second ranked firm. The process is repeated until agreement is reached.
Q: Is a two envelope system where qualifications are placed in one envelope and price is placed in the second envelope with an assurance from the public body that the price will not be opened until the selection, based on the most qualified firm, is acceptable?
A: This is still considered a submission of a price in a competitive process and is considered a bid.
Q: What about the delivery of unit prices for the project?
A: The delivery of unit prices as a response to a Request for Proposals identifies relative information with respect to general fees and is not specific to tasks related to the project. The submission of a fee or rate schedule is acceptable, but not with an estimate of man-hours, which can be easily correlated to a fixed price or a bid.
Q: Are there exemptions for special conditions?
A: Yes, an emergency, acts of God or a time in which the consultant must be called in for immediate performance of task to eliminate danger are exemptions.
Q: During a short list or interview type of arrangement, if the interviewing party requests a price, is the consultant free to give a price at this time?
A: Price should not be given until the consultant is selected for the provision of service and negotiations are entered into to establish fee.