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‘Qualifications’ Top ‘Low Bid’ in Study

Tuesday, January 12, 2010

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Public agencies save money and have greater satisfaction when procuring certain subcontractors on a “qualifications” basis, rather than the lowest bid, a new study concludes.

Construction costs are lower, taxpayer dollars are used more efficiently, and construction satisfaction is higher when federal and state agencies procure design and engineering services when contractors are selected for their qualifications, reports An Analysis of Issues Pertaining to Qualifications-Based Selection, conducted jointly by the University of Colorado and Georgia Institute of Technology, and co-sponsored by the American Council of Engineering Companies (ACEC) and the American Public Works Association (APWA).

Researchers drew from a database of about 200 public and private construction projects in 23 states. The sample included transportation, water, commercial, and industrial projects, ranging in size from relatively small projects to those costing hundreds of millions dollars.

The study compared various procurement methods, including Qualifications-Based Selection (QBS), Best Value, Low Bid and Sole Source, with such factors as total project cost, projected life-cycle cost, construction schedule and project quality outcome.

Results show that using QBS to procure the design component of a construction project consistently meant lower overall construction costs, reduced change orders, better project results and more satisfied owners than in other procurement methods.

Since 1972, with passage of the Brooks Act, federal law has required QBS for procuring engineering and design services for federally funded projects. Most states and many municipalities follow the federal model in adopting QBS in their procurement policies.

Under QBS, the public agency evaluates and “short-lists” design firms based on qualifications. Negotiations are held with the top-ranked firm to secure a fair and reasonable price for design and engineering services based on the scope of the project. If the agency and firm cannot agree on a price, the agency opens negotiations with the second-ranked firm.

By using QBS to procure architectural and engineering (A/E) services, agencies were “better able to control construction costs and achieve a consistently high degree of project satisfaction” than those using other procurement methods, researchers said.

To obtain copies of An Analysis of Issues Pertaining to Qualifications-Based Selection, contact Mary Jaffe at ACEC at 202-347-7474 or through www.acec.org.

   

Tagged categories: Bidding; Construction

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