Qualifications Based Selection for Professional Services

1. Qualifications Based Selectionfor Professional Services Tom Leslie, P.E. Georgia Engineering Alliance Georgia City County Managers Association, Columbus, GA November 3, 2005

2. Overview Agenda • What is Qualifications Based Selection (QBS)? • Why use QBS? • Legislative Basis for QBS • Steps in QBS • Resources

3. What is QBS? Qualifications Based Selection is a process for acquisition of A/E Services that yields the highest probability of a successful project.

4. QBS Steps • Advertise • Review Qualifications from Competing Firms • Evaluate/Shortlist • Interview/Rank • Negotiate with No. 1

5. Definitions • Bid – Final Selection is based on cost only • Purchase of commodities or well defined services • Request for Qualifications – Final Selection is based on the perceived ability of the submitting firms to best achieve the most desired outcome • Used for selection of professional services, such as architects, engineers, lawyers, doctors, etc. • Services not well defined and depend on the firm’s ability to identify and appropriately address the problem or issue. • Request for Technical Proposal – This may be part of a RFQ or it may be a subsequent step. It is a more detailed discussion of how a particular project will be executed.

6. Definitions continued • “Project” – requires A/E design services • Examples: Roads Water/Sewer Landfills Industrial Park Court House Renovation Schools Fire Station

7. Legislative Basis for QBS State Agencies (OCGA 50-22) • Advertise – Georgia Procurement Registry (may also do so in newspaper) • Firms Submit Qualifications • Evaluate / Shortlist 3-5 / Interview/ Rank / Negotiate with No. 1 • If unsuccessful, terminate negotiations with No. 1 and go to No. 2

8. Legislative Basis for QBS continued Exceptions • Project must be > $1 million in construction cost or > $75,000 in fee • Emergencies • Board of Regents • Reuse of Plans by Same A/E

9. State Construction Manual • Stirrings at GSFIC in late 1990s to create uniform/rational design and construction process • Governor’s Commission for a New Georgia in 2004 • Governor Perdue’s Executive Order directing GSFIC/BOR complete by end-2005 • Includes expansive A/E Procurement Guidelines

10. Legislative Basis for QBS Local Governments • Nothing in State Law • But, for Transportation: “A county is prohibited from negotiating a contract except…(5) for engineering or other kinds of professional or specialized services; …”

11. Check your local CODE! • Require QBS? • Allow QBS? • Date last revised?

12. Why Qualifications Based Selection? • You've carefully thought out all the angles. • You've done it a thousand times. • It comes naturally to you. • You know what you're doing, its what you've been trained to do your whole life. • Nothing could possibly go wrong, right ?

13. Think Again...

14. Why Qualifications Based Selection? • Money - Can you afford not to? • Headaches – • Change orders • Claims • Project from h___ • Aspirin, tylenol, ibuprofen, loss of sleep Two things to remember about QBS… • Quality Brings Success • QBS is the First Step to Quality Projects

15. Money – Keep Life Cycle Costs in Mind DESIGN COSTS - 1.5% INDIRECT COSTS - 2.5% INITIAL CONSTRUCTION & LAND COST - 34% INTEREST COST - 32% MAINTENANCE & OPERATIONS - 32%

16. Analysis of Claims • Technical • Error and/or omission of a technical nature which resulted in a loss prevention file or claim • Non-technical (involved in 8 out of 10) • Breakdown in project or practice management processes which contribute to a claim • Insurance industry analysis of 24,000 closed claims/files over a 13-year period, worth over $1 billion in claim payments

17. Top 4 Non-Technical Contributors Percentage of Claims Affected

18. Project Team Issues

19. Communication Issues

20. Don’t Believe Me… • “Hiring a professional service firm is just like hiring a critical employee” David Griscom President APWA Georgia Chapter Public Works Director, White County

21. Who Supports QBS? • “EPD is a strong supporter of the QBS process to retain the services of a design professional. This is the process we use and it works well for us. We think it will work for other State agencies and local governments also.” David Word Assistant Director Environmental Protection Division

22. Who Supports QBS? • “… the Department strongly endorses QBS as the preferred method of selecting qualified, competent, and experienced professional engineering firms. We have a long history with QBS, and we are committed to its continued use at GDOT.” Harold E. Linnenkohl Commissioner Georgia Department of Transportation

23. Who Supports QBS? • “We are fortunate in Georgia to have progressive state law that supports QBS. Georgia’s QBS policy provides a structured tool for state agencies to use to select design professionals fairly in an open, lawful process. We fully appreciate that design services are professional services that should not be purchased as a commodity based upon price, but should be selected based upon provider qualifications.” Gena L. Abraham Director and Executive Secretary Georgia State Financing & Investment Commission

24. Who Supports QBS? • “GDTAE uses QBS on all its facilities projects. QBS provides the level of professional expertise required for top level architectural and engineering services. It makes sense to base your A/E selection on qualifications, not low fee.” Tony Bruehl Director-Facilities Management Georgia Department of Technical and Adult Education

25. Who Supports QBS? • “The American Public Works Association believe that the public interest is best served when governmental agencies select architects, engineers, and related professional technical consultants for projects and studies through Qualifications Based Selection procedures. Basing selection on qualifications and competence (rather than price) fosters greater creativity and flexibility, and minimizes the potential for disputes and litigation. ” National APWA Policy Statement

26. Who Supports QBS? • “QBS is the process of selecting… an architect (or) engineer… whereby competing firms are evaluated on the basis of their qualification (and) ranked in priority order. Contract terms, including price, are negotiated with the top ranked firm on the basis of a fully developed scope of work. If a county… is unable to reach agreement with the first firm, it terminates negotiations and begins negotiations with the second ranked firm… ACCG endorses the use of QBS for procurement of design professional services as an effective and efficient alternative to traditional low-bid procedures.” Association County Commissioners of Georgia 2004-05 Platform

27. Who Supports QBS? • “Experience has proven that selecting design professionals on the basis of price alone can often result in unmet project expectations and higher overall project costs. QBS, on the other hand, properly focuses the selection process on factors most critical to a project’s success: experience, competence and reliability. As stewards of public resources, all local officials should strive to provide the very best value to their constituents, and that is really what QBS is all about..” Jim Higdon Executive Director Georgia Municipal Association

28. Who Supports QBS? • “Sec. 902. The Congress hereby declares it to be the policy of the Federal Government to publicly announce all requirements for architectural and engineering services on the basis of demonstrated competence and qualification for the type of professional services required and at fair and reasonable prices.” Brooks Act (PL 92-582, 1972) Mandatory QBS for all A/E Procurements

29. Who Supports QBS? • 41 states mandate QBS for state projects. • 22 states mandate QBS for local government projects – including MS, TN, NC, SC, and FL.

30. Steps in QBS • Information Required Prior to Advertisement • Advertisement of Project / Prequalification Requirements • Request for Qualifications/Technical Proposals • Procurement Committee Appointment • Evaluation of Applying Firms • Development of Shortlist • Notification of Firms on the Shortlist • Oral Presentations • Rank in Priority Order • Negotiate

31. Information Required Prior to Advertisement • Project Description • Expected Use and Users • Schedule • Funding Plan • Special Performance Requirements • Project Implementation Plan

32. Prepare the Project for Public Advertising • Project description and location • Budgeted construction cost (if known) • Specific disciplines sought – special requirements • Contact person for technical questions (phone #, email, fax, hours) • Statement that QBS will be used • Submission date • Special contract terms • Description of qualification package • Rating criteria – list

33. Statement of Qualifications Stipulate expectations, “such as” • Length – number of pages – total/each section • Project Descriptions – must be similar/completed in last 5 years/located in Georgia (or SE) • Personnel – name project manager/key specialists and provide resume • No/limited marketing brochures • Expect response to each evaluation criteria • Prescribe outline/organization/table of contents/ other preferences

34. Evaluation Criteria From State QBS law – “such as” • Ability of professional personnel • Past performance • Willingness to meet time requirements • Project location • Office location • Current/Projected workload • Project approach • QC procedures • Involvement by MBE

35. Procurement Committee Appointment • Determine committee early. • Include at least three people. • Include user agency representatives. • Early agreement on evaluation criteria. • Keep records of scoring and notes. • Notify firms of the short list. • Deliver recommendations to Management and/or Board.

36. Evaluation of Applying Firms • Each member evaluates all submissions • Group should meet, compare scoring, and try to reach consensus on top three to five firms • Assign 1 or 2 members to check references of higher ranked firms • Members should not discuss outcome with submitting firms • Debriefing of firms should be provided by committee chair

37. Development of Shortlist • How many should be included? • Use standard reference checking form • Skip interviews? • Request technical proposals?

38. Firm Reference Checking • INTERVIEWER:________________ DATE:________________________ • FIRM:________________________ REFERENCE:__________________ • Develop 4-6 standard questions to ask each reference. • Personally call and interview assigned references. • How would you rate XYZ’s overall performance on your project(s)? • Did XYZ in any way negatively impact the project schedule? • Did XYZ in any way negatively impact the project budget? • Was there continuity in XYZ’s team throughout the project? • Would you hire XYZ to do another project for you future? • Did XYZ meet bid package deadlines? • Did XYZ work collaboratively with the contractor on value analysis?

39. Notification of Firms on the Shortlist • Notifying firms – all or just short listed? • In writing or by email or telephone?

40. Preparation for Oral Presentations • Let firms know the arrangements and rules • Provide agenda to firms • Questions, content, participants • Time limits and transitions • Room set up • Allow time for scoring and discussions between and/or after interviews • Allow time for breaks

41. Interview Format Recommendations • Time - an hour is usually sufficient (…all you can take…) 5 setup 30 presentation 15 questions and answers 5 knockdown. • Conduct all interviews the same day • Have same evaluation team at all interviews! • Complete evaluation before adjournment. • Media – provide guidelines on what you will allow • Boards and/or computer/projector are commonly used • Handouts – slides, food? • Presenters - Three to five usually sufficient (Principal, Project Manager, key Project team members).

42. The Interview • A/E presents “benefits” to the Owner versus “features” in the Qualifications Package. • A/E answers the question, “How can my experience and approach benefit the Owner?” • Owner answers the question, “Which firm is the best fit for my project?” • Subjective process but necessary to create a ranking.

43. Interview Scoring • Score sheets for each panel member and one for the full panel as a group. • Keep records • Agree on weighting before interviews • Discuss scoring between interviews • Try for a consensus on a group score sheet • Consolidate notes for later debriefings • “We the jury…”

44. Scope and Contract Negotiations with the Recommended Firm • May ask for scope tasks first • Meet (communicate) so that there is a meeting of the minds. • Take notes • Discuss “ball park” costs and budgets • Discuss schedules and submittals • Discuss check lists, standards, reviews, permits, etc. • Discuss contingencies and contract details • Discuss anything else that may affect price

45. The Price Proposal • Sufficient detail to show level of effort • Consider value pricing to share risks and rewards • Consider incentives for schedule improvements and savings • List possible costs of contingent services • How is risk allocated between Owner and A/E • Price depends on risk allocation

46. Negotiations • Set schedule for negotiations • Involve the decision makers • Focus on scope, risks, and contingencies • Don’t forget contract terms • Allow for QA/QC and response to “Questions” • Identify third party players (contingencies) • Agree in pieces. Whole will follow. • Is the construction budget realistic? • Remember: schedule-price-quality…pick two. • Don’t negotiate by ultimatum and remember the relativity of design cost to life cycle costs.

47. What If We Can’t Agree? • Termination of negotiations is formal. • You can’t go back. • The price from the 2nd ranked firm may be more. • Notify and debrief unsuccessful firms

48. Resources • Requests for Qualifications from real owners that use QBS • Simple checklist and reference table • Generic advertisement (use w/detailed RFQ) • Ad with project specific requirements • Project specific Request For Qualifications All documents available in Word or PDF format from www.QBSGeorgia.org

49. Resources • www.QBSGeorgia.org Facilitator Program • APWA Redbook – “Selection and Use of Engineers, Architects and Professional Consultants, Guidelines for Public Agencies” • GSFIC A/E Procurement Guidelines

50. Qualifications Based Selectionfor Professional Services Tom Leslie, P.E. Georgia Engineering Alliance Georgia City County Managers Association, Columbus, GA November 3, 2005