New Research Shows Selecting Firms Based on Qualifications and Experience Saves Time & Money on Engineering Projects

We have all been in the position when we are considering submitting a response to a Request for Proposals (RFP) that is price-based. The scope provided in the RFP is vague or too broad and developing a cost and scope puts an A/E firm in a position to make interpretations and assumptions on what to include or not include in its scope and fee estimate to stay cost competitive. These assumptions may not align with the Project Owner’s intent or desire but result in the cheapest bid.  This misalignment of scope with the owner’s objectives can create problems later during design.  

It is understandable, at some level, why there are so many priced based RFPs. At the municipal level, budgets are limited and there is pressure from Selectboards, City Councils, etc. to use price-based design selection procurement because it provides the most cost-effective way to choose an A/E firm, or so they think. 

There is new research from the ACEC Research Institute that found federal and state policies that select engineering services based on the design team’s qualifications and experience had lower overall project costs and better on-time delivery versus selecting firms based on low bid.  The study builds on previous research that found similar cost savings and project success for government agencies using Qualifications-Based Selection (QBS). From the report, a few of the benefits of using QBS to project owners are:

• QBS saves money – projects where QBS was used to procure engineering services experienced less overall lifecycle costs and an average of 7% reduction in construction change orders 
• QBS saves time – QBS results in a 50% increase in the number of projects that met all schedules versus non-QBS
• QBS produces higher levels of client satisfaction – 89% of QBS projects received “high” or “very high” satisfaction ratings from project owners
• QBS promotes innovation -- Projects incorporating QBS have a greater likelihood of producing innovative solutions

Another key benefit to the owner is that they are always in control of the costs because once the most qualified team is selected, a scope is collaboratively developed between the owner and the A/E firm so that both parties have a clear understanding of the expectations. A fair price that reflects the agreed upon scope can be developed by the A/E firm and negotiated with project owner. If an agreement on price cannot be reached with the most qualified firm, then the project owner can terminate the negotiations and move to the second most qualified firm. However, in most cases, the top-ranked firm is selected at a price that fits the client’s budget.

Since 1972 with the enactment of the Brooks Act, Federal law has required the use of QBS in the selection of Design Professionals on all federally funded projects. In Massachusetts, QBS is required for the selection of Design Professionals for all public buildings and for MassDOT, MBTA and MassPort projects. However, for many municipally funded horizontal projects, QBS is not required if using local or state money.  A/E services are not a commodity, and firms should advocate for the use of QBS in the procurement of A/E service for their benefit and that of the client.  For more information and a link to the full report on the ACEC/MA QBS website, click here.