Qualifications Based Selection

[Mike Hartley]

Many of the local Land Surveyors I've spoken with do not know about, or do not understand, the Little Brooks Act (Qualifications Based Selection, or QBS) which is part of the California government code.

The QBS process is intended to afford the owner the flexibility to select a professional firm that is best suited for the task - one with the technical expertise, the latest technology, and the skills to enhance the quality of the project and lead to long-term cost savings. The idea is that owners should select professional firms based on best value, rather than on the initial lowest bid.

State law requires that awards be based upon "demonstrated competence and on the professional qualifications." This language and method of procurement is specified in the Little Brooks Act starting in Section 4525, Chapter 10, Division 5, Title 1 of the government code (see below for the applicable code sections). It applies not only to the state, but also to all local agencies (see below for a letter from Leroy Greene regarding Senate Bill 419 and QBS). I have also attached a brochure from ACEC. Obviously, the process used to select professional services is significantly different than the one used to select subcontractors. The QBS process requires that firms be ranked based on qualifications, then negotiations begin with the top ranked firm. If the client and firm cannot come to an agreement on a fair and reasonable fee, the client then negotiates with the second-ranked firm.

Has this topic been discussed recently in the CLSA forums?

[Raymond Mathe]

Great information Mike! All surveyors should consider this when they provide professional land surveying services to a state or local agency (including districts). The Federal and State laws have been on the books for quite some time and some agencies do it right and others…not so much.

It is always good to know the laws and regulations that affect your practice.

[7702]

Mike's posts are always well researched, well written and relevant.

Thank you.

[Jim Frame]

The local agencies I regularly deal with solicit cost proposals from qualified firms, and pretty much without exception award to the lowest-cost proposer. Their criteria for determining "qualified" are generally (1) appropriate licensure and (2) satisfactory prior experience with the firm. Sometimes it's reduced down to (1) only.

Does this comply with the statute? Consider that §4526 requires that "...procedures that assure that these services are engaged on the basis of demonstrated competence and qualifications for the types of services to be performed at fair and reasonable prices to the public agencies." Qualifications are met under (1) above. Demonstrated competence is met by (2) above, but could arguably be met by general reputation if no direct experience with the firm is available.

§4528 requires state agencies to negotiate with the best-qualified firm to determine compensation, and then onto the next-best if agreement isn't met. However, that's an optional condition for local agencies.

In short, I don't think that the Little Brooks Act requires a true QBS process at the local agency level.

[Mike Hartley]

The local agencies I regularly deal with solicit cost proposals from qualified firms, and pretty much without exception award to the lowest-cost proposer. Their criteria for determining "qualified" are generally (1) appropriate licensure and (2) satisfactory prior experience with the firm. Sometimes it's reduced down to (1) only.

Does this comply with the statute? Consider that §4526 requires that "...procedures that assure that these services are engaged on the basis of demonstrated competence and qualifications for the types of services to be performed at fair and reasonable prices to the public agencies." Qualifications are met under (1) above. Demonstrated competence is met by (2) above, but could arguably be met by general reputation if no direct experience with the firm is available.

§4528 requires state agencies to negotiate with the best-qualified firm to determine compensation, and then onto the next-best if agreement isn't met. However, that's an optional condition for local agencies.

In short, I don't think that the Little Brooks Act requires a true QBS process at the local agency level.

Jim, thank you for responding. I find it fascinating how local agencies differ in their procurement procedures and many think they are complying with QBS law when in fact they are not. And many others do not care to even try to comply.

The Little Brooks Act certainly applies to local agencies. For those who are interested, see Leroy Greene's letter and the text of Senate Bill 419 attached to my first post. In addition, SB 419 states that including local agencies is not a change in, but is declatory of, the existing law.

Exactly how local agencies procure based on "demonstrated competance and professional qualifications" can be a different process than that mandated for the state, but following and implementing QBS procedures is not optional for local agencies. The procedures you mentioned that some local agencies follow such as "being appropriately licensed = qualified" and "you've done work for us before = demonstrated competence" don't constitute compliance with QBS law. Price should not be a determining factor (I realize that it often is, but it's not supposed to be).

The last few years have been tough and drawing a line in the sand on QBS violations has been seen as too risky to some. But as the economy gets going again and the private sector surveyors start getting a backlog, I think we should take the opportunity to stand up for ourselves and our profession by properly responding to RFP's. What constitutes a proper response? A proposal that outlines your professional qualifications and that demonstrates your competence using resumes, photos, narratives, examples of completed projects, references, proposed scope of work, etc., but NOT pricing. If pricing is submitted, it should be in a sealed envelope that is opened only after that firm is selected, deemed most qualified, and is seated at the negotiation table with the agency. If your firm is not selected, then your pricing envelope should be returned unopened.

Remember too, many agencies prefer using qualifications based selection because they generally have less problems with the consultants chosen that way compared with those chosen by low bid.

Land Surveying services on all public works projects (federal, state and local) should be procured through QBS process. The law is on our side here. It helps those of us in private practice in that we don't have to low ball work to get it and it helps those surveyors in the public sector in that their job should be easier if a qualified firm is hired that is not trying to cut corners to make a profit. Also remember, the consultants' fees should be fair and reasonable so it also serves the public in that a scope of services for a fair and reasonable price is negotiated right up front. The Little Brooks Act does not mean that the agency writes a blank check. They've been down this road before and have very good statistics on what the costs should be.

[BrianSpore]

Mike,
Thank you for posting this along with the background information, I am having a hard time convincing the powers that be at the local agency that I work at that the professional services contracts should be based on qualification and not on low bid. What you have provided my just help me in my argument.

[Jim Frame]

The procedures you mentioned that some local agencies follow such as "being appropriately licensed = qualified" and "you've done work for us before = demonstrated competence" don't constitute compliance with QBS law.

I don't find anything in the statute to support this claim. In fact, the very title of §4527 is "Qualification for state contracts - optional locally," which indicates that local agencies are free to determine their own qualifications standards. §4527a goes into some detail about evaluating proposer qualifications and ranking them accordingly, but then §4527b states that the local agency "may undertake the procedures described in subdivision (a)" rather than "shall undertake..."

The same situation prevails in §4528. Subdivision (a) describes the QBS contract negotiation process, but Subdivision (b) states that it's optional for local agencies.

Price should not be a determining factor

I don't find anything in the statute to support this. §4526 refers to "fair and reasonable prices," and specifically describes the process under which the most qualified firms can be rejected if price negotiations fail. So price can certainly be a determining factor. Further, I don't find anything in the statute mandating a separation of technical and cost proposals (the "separate sealed envelope" thing). I know some agencies follow this practice, so perhaps there's been some litigation or AG opinions about this that I'm not aware of, but in any case I wouldn't expect those to pertain to local agencies given the clear legislative intent to make substantial portions of the statute's provisions optional for local agencies.

In short, I don't believe that local agencies using the process I described earlier (essentially, get 3 bids from licensed firms and award to the lowest bidder) is unlawful. If there are other statutes or case law that would counter this, I'd love to learn about them.

[Mike Hartley]

Here are some letters that, in my opinion, answer many of the local agency questions.

Regarding licensure, BPELSG issues licenses based on "minimum competency". It is clear that merely having a license to practice land surveying is not what the authors of our state legislature had in mind when they penned the phrase "demonstrated competence and professional qualifications." I will try to find some of the federal guidelines too. The Brooks Act is the federal law. Most states have "Little" or "Mini" Brooks Acts that were modeled after the federal law.

[Mike Hartley]

This is a guide for public agencies to use during the qualifications based selection of professional consultant services.

[Jim Frame]

The AECCC manual is, by its own admission, a "guide," and one predictably tipped in favor of the private sector. It also contains the following language: "it should be pointed out that there is no one correct procedure to follow in the selection of professional consultants by public agencies."

The assorted letter attachments all say pretty much the same thing: that local agencies are required to follow the law as written. And the law, as written, contains loophole language big enough to accommodate nearly any interpretation a local agency cares to make.

I should note that I'm in favor of a more strict QBS procedure for public agency contracts, I'm simply pointing out that current law doesn't have much in the way of teeth. The agencies I work with are well aware of this, and the 3-bids-lowest-bidder practice is likely to continue until the law is revised.

[land butcher]

One time I did a topo for a engr for a city project. The city contacted me to get on their list of surveyors.
After asking in numerous ways I was informed the city liked to have 5-6 surveyors on their RFP list but ALWAYS went with the lowest bidder.

They called because they liked the work we did but it boiled down to lowest bidder.

[Jim Frame]

As a side note, most of the time I find myself competing against the same handful of area firms, all of which do good work. In that sense, the 3-bid process is meeting the QBS objective, which is competent results at a fair price.

The one glaring exception to this occurred during the depths of the Great Recession, when an out-of-county general contractor "stole" a monument preservation project. The size of the project, which it should have been worth about $50k or so, and the economic times brought in a lot of bids -- 31 in all, about 5 times normal -- so I'm not surprised that I didn't get it. However, I was shocked at the winning number. The guy brought in his dad, a Bay Area grandfathered CE, to help him with the field work and (I assume) prepare the professional deliverables. His overall price was about half of mine. (I ended up at No. 11. Had I known then what I know now about the way the county evaluates the cost component, I probably could have broken into the top 4, but still not low enough to compete with that many hungry surveyors.)

Unfortunately, I have no idea if the winner did a competent job, since we have only his Corner Records and a bunch of new monuments to go by. I've since had occasion to use one of his new monuments, and I did find that his tieouts were good, so I'm hopeful.

[Mike Hartley]

The AECCC manual is, by its own admission, a "guide," and one predictably tipped in favor of the private sector. It also contains the following language: "it should be pointed out that there is no one correct procedure to follow in the selection of professional consultants by public agencies."

I agree that local agencies have the option of following the state procedure or developing their own, but the law and legislative counsel's opinion is clear ... the [initial] selection is to be based upon demonstrated competence and professional qualifications. It is also abundantly clear to me and many others (public and private) that one demonstrates competence and shows their professional qualifications by submitting a statement of qualifications in response to an RFQ. Every RFQ I've seen has a ranking mechanism of some kind. If price is a consideration in the scoring or ranking then that RFQ is violating state law. I realize it happens often, but that does not make it right.

On the other hand, we need to consider the agency's costs associated with preparing an RFQ, ranking them, interviews, etc. as well as the costs associated with the consultants SOQ responses. Many agencies have a less rigorous procurement process to hire for smaller projects. I know for example that the CDCR has a simple purchase order process for projects under $5000. Most QBS advocates I know do not expect agencies to go through the rigors of qualifications based selection for smaller projects. What is the dollar limit? Good question.

And yes, I do agree you are correct when you stated in your earlier post that price can ultimately be a factor if the agency and consultant cannot agree on price. However, price is not to be a determining factor in the ranking or [initial] selection.

The assorted letter attachments all say pretty much the same thing: that local agencies are required to follow the law as written. And the law, as written, contains loophole language big enough to accommodate nearly any interpretation a local agency cares to make.

Any interpretation? I disagree. The local agencies must adopt procedures that establish selection criteria based on qualifications and price is not to be part of the selection criteria.

And again, the rigorous QBS process does not need to be followed for smaller projects. For example, if you've done work for a municipality in the past (demonstrated competence) and they trust you (based on professional qualifications and your relationship), I see no problem with them hiring you directly as a trusted professional. But for them to put even a small project out to bid based on price is also a violation.

I should note that I'm in favor of a more strict QBS procedure for public agency contracts,

So am I, but I think we are stuck with §4526-§4529

I'm simply pointing out that current law doesn't have much in the way of teeth.

You are absolutely correct. It's a civil matter. Until someone files suit, the courts will not weigh in on this. There has been discussion about changing the PE and PLS Acts to make responding to unlawful RFQ's with pricing subject to disciplinary action. I think that would be a game changer and I would love to see it, but I won't hold my breath.

The agencies I work with are well aware of this, and the 3-bids-lowest-bidder practice is likely to continue until the law is revised.

Based on conversations with BPELSG and ACEC folks, there are no immediate plans to revise the law. Frankly though, I think the law is good. We need to educate these offending agencies and the government officials too. If the procurement folks are not following the law, they could be jeopardizing their funding sources and that ought to catch the attention of the electeds.

[Jim Frame]

We need to educate these offending agencies and the government officials too. If the procurement folks are not following the law, they could be jeopardizing their funding sources and that ought to catch the attention of the electeds.

With regard to the monument preservation project I mentioned, a few years ago I forwarded to Ric Moore -- at his request -- information about the way in which the county solicited bids for that job. I haven't heard anything further, so I don't know if anything ever came of it.

[Ric7308]

Jim,

Yes, you sent us this inquiry in Feb 2013. We looked at it internally and if I recall correctly, the agency was making a good faith effort to preserve survey monuments and to involve a licensed land surveyor but their procedures may not have been fully compliant with the PLS Act. I believe we were going to contact the agency in an effort to advise them relative to the PLS Act and if we did see any QBS issues, we would also mention that.

Thanks for the reminder. I'll check into the status on this.

Ric

[Mike Hartley]

One of the biggest losers in the low-bid world is monument preservation efforts. Take for example a typical road reconstruction and widening project. In this example, any section or property corners within the paved area will be destroyed and because of the widening; the right-of-way monuments are in jeopardy too. Let's say for simplicity sake that all the monuments are of record. So in this scenario, the design team knows the extent of the widening and right-of-way acquisition. They also know, or should know, which record monuments are in harms way. Hopefully the design team is the municipality itself and cares about monument preservation. If the design team is from private industry, hopefully it was hired using QBS and will take the necessary monument preservation precautions.

On the other hand, the municipality or design team could just "put it all on the contractor". They could identify some, or all, of the record monuments on the plans. Or they could simply make a note reminding the contractor that any monuments in the construction area need to be preserved. That kind of note is common where I work and frankly not very effective. So what does the contractor do? He solicits bids for the staking from local surveyors who may or may not include time and money for monument preservation. Will the low bid surveyor properly research, recover, identify, tie out and document all the monuments? It has been my experience that does not happen, or does not happen well.

So going back a bit ... what if the design team's duties included ALL the work associated with monument preservation including post construction monumentation and proper documentation? That would help us all. Or what if the municipality hired the monument preservation work separately and directly using QBS. That would be an even better way to insure monument preservation.

"Putting it on the contractor" seems to be very ineffective from my vantage point. It is also seems to be in conflict with B&P code section 8726(i) which states that one practices land surveying when he/she "Procures or offers to procure land surveying work for himself, herself, or others." To be more specific, it seems to me that when a municipality or private design team puts the monument preservation efforts "on the contractor", they are setting up the contractor 1) be in violation of 8726(i) and 2) to be in a low-bid situation where it is unlikely that the monumentation preservation efforts will be highly effective.

Just some thoughts on a Sunday evening from a surveyor frustrated with the status quo. I welcome your comments.

[Warren Smith]

Here is a ranking scoresheet from last year in San Joaquin County.

We applied weighting for the subcategories. The task is for survey monument preservation fund services.

From this ranking - based on a generic scope of work - individual locations are assigned by purchase order and RFP. The scope includes a record of survey and a boundary analysis report for each monument location.

This process was adapted from our design procurement model.

[Mike Hartley]

I did a Google search for "qualifications based selection" and one of the top results was the wikipedia page. On it was referenced an AGC document entitled "Qualifications Based Selection of Contractors". I could not post the document itself due to file size, but here is the link:

http://www.agc.org/galleries/projectd/Q ... 0FINAL.PDF

This is a great document with lots of parallels between surveying/engineering and contracting/construction management. For example,

"Qualifications Based Selection (QBS): A procurement method in which
the final criteria for selection are qualifications and demonstrated competence.

Price and cost are not selection criteria, but they may be
considered during contract negotiation."

Or this gem,

"QBS creates a focus on quality and value, not price. It rewards the organizations and the people who can anticipate success through teamwork and who can demonstrate proactive behavior. It elevates construction to a service profession. QBS of contractors recognizes that construction
is not a commodity – it is knowledge and service".

Sounds very similar to many surveyors (myself included) that claim our work is a professional service, not a commodity.

This document also references an earlier presentation by Dave Crawford at Sundt in 2008 (see attachment).

[TTaylor]

Just a perspective from a former State employee.

I sat on a number of panels (10+) evaluating responses to RFQs for A&E contracts and I can safely say that the organization that I worked for was not ever going to be on the wrong side of the law concerning the selection process.

That having been said, I felt that the process limited the panel's abilities to really determine who was the most qualified. The first step was to evaluate the written responses to the RFQ, short list, then interview and score. The interview part was the most restrictive for the panel members. We had pre- written questions that each of us would ask of every team. That was basically all we could say. Nothing else. No clarification questions etc.

Additionally, after the interviews the team would hand over their cost proposal. These were detailed line item proposals with overhead. The problem came when one of the contracts was for specialty land surveying services that had no real cost precedents. I.e. TMLS. The contract was held up for months while they tried to work out the details. All the while I needed to write a task order for the service on a time sensitive project. Oy.

One last thought. Periodically throughout my career there were attempts to make construction staking a line item in a project contract. Thinly veiled effort to move money from Capitol Outlay Support (phase 3 state workers) to Capitol (phase 4 contractor). I.e. so that the higher ups could claim they reduced state support costs. Not necessarily the project's cost. Anyway, my point is that the project contract is a low bid selection process. IMO, putting an A&E service as a line item in a low bid contract violates the QBS requirements. They would be better having a separate A&E contract selected by QBS process if they need it to augment the state work force on any given project.

Just a few things for you Mike. I hope they help.

[Civil Engineer]

It has been my experience working at the local agency level that QBS has been used for any contract of significant size. Typically there is oversight and potential audits when any federal or state funds are involved. For instance here is a link to Caltrans procedures:
http://www.dot.ca.gov/hq/LocalPrograms/ ... -10-22.pdf

However, I understand that my experience is limited since I am working with other licensed professional engineers all well aware of QBS. Where project managers are not licensed professionals and not informed about QBS, then maybe it's not being implemented. However, strictly going with the "low bid" is risky in terms of project delivery and quality of work. My guess is that low bid selection is infrequent and even more infrequent on any significant contract.

Other things:
1) The further the extreme toward a formal "quality" based selection the more work everyone has to do up front: the agency and the proposers. Where only one will actually get the work and there is no compensation for second place.
2) Generally new people and new firms can be perceived as less qualified than experienced established firms. Large firms are better able to handle the financial risk in proposal preparation, marketing, and interviewing and not getting the job.
3) My speculation (with regard to surveying services) is that there is likely less compliance with prevailing wage law than with QBS compliance. My understanding is that surveyors in the field are subject to prevailing wage.

[polarislandsurveying]

Mike

I want to thank you for posting this important information here so that all surveyors can start to push for more QBS at the local level. Thanks to your assistance by giving us this information I have been able to discuss this issue with local government here in Monterey County several times, with good results.

One example is a local city that had put the preservation of centerline monuments on the back of the contractor doing roadwork. Once I spoke to the city officials and gave them this information that you have shared here. They quickly changed their specifications, removing this work from the contractor's contract. They then hired a surveyor directly, from their approved list, to do this work.

We may not be able to influence the government folks every time, but just get the information out there. Perhaps next time, they will incorporate the correct procedures.

At the local level, I have seen QBS used correctly in some cases and incorrectly in others. With this treasure trove of information, we can all try to educate the governments that we work with.

IMHO
Lynn Kovach
PLS 5321

[dedkad]

I'm going to a QBS forum next week that is sponsored by ASCE (American Society of Civil Engineerrs) and ACEC-CA (American Council of Engineering Companies). There will be representatives from both organizations present, along with Caltrans and local agency officials. Anybody have any specific questions you want me to ask the panel?

[Mike Hartley]

Lynn,

That's great news that you have been able to make forward progress on QBS - especially as it pertains to monument preservation.

I think it is also really important to openly commend the agencies that do comply with QBS. If you have an opportunity, I encourage you to voice your/our appreciation.

Mike

P.S. I by no means have all the answers regarding QBS; however, I am available to look at any specific RFP and give my opinion as to whether or not it complies with QBS law/guidelines (or answer questions as best as I can). You can reach me at 559-645-4849 or mike@bedrockeng.com.

[Mike Hartley]

Dedkad,

I think you're referring to a forum happening on the Central Coast. That should be a well-attended, productive and informative event.

I think some of the more interesting QBS discussions I've heard involve how to comply with QBS on small projects. There are many local agencies that see the merits of QBS and want to comply, but can't justify the expense of a QBS procurement on a small project. A full RFQ/SOQ process can be expensive both for the agency that issues the RFQ and the consultants who respond with SOQ's.

In my opinion, it doesn't make much sense to use the full RFQ/SOQ method for a two-day design survey (just as an example). In this instance, and similar ones, an on-call services contract would work well. Consultants compete based on demonstrated competance and professional qualifications, the local agency selects one or more consultants, scope and price are negotiated as individual projects come to life. In this case though, the agency should not "put the project out for bid" amongst the pre-qualified consultants. That approach would violate QBS law.

Another acceptable QBS method of procurement is what I have heard referred to as the "trusted professional". In this case, the agency has familiarity with a certain consulting firm. The firm has previously demonstrated their competence and professional qualifications. Perhaps they have even become the "go-to" consultant for this agency. The two parties mutually agree on a proposed scope of services and price. In my opinion, this type of arrangement satisfies QBS, but depending on the circumstances it may violate other procurement guidelines. This method should be used cautiously and sparingly for small projects only (and yes, I realize "small" needs to be defined and means different things to different people).

To circle back, if I were to ask a question it would be, "How does, or should, this local agency comply with qualifications based selection procedures on small projects?"

Mike