In many cases,
as buyers in both our professional and private lives,
we assume that most service providers are essentially the same
and it is appropriate to choose the lowest-cost option. However,
when we require the professional medical services of a surgeon, for example,
the cheapest option may not be our first choice. In this case, qualifications and
experience become more important than the lowest price. The same is true for
selecting consultants to engineer and design your highway construction
projects using Federal-aid funds.
As the Local Public Agency, or LPA, when you need to hire a consultant
for engineering and design related services using Federal-aid funds,
you must follow federal requirements for competitive negotiation procurement
procedures unless your State Department of Transportation, or State DOT, allows
alternate procedures for lower cost contract amounts. The Federal Highway
Administration,
or FHWA, defines engineering and design related services
as program management, construction management, preliminary engineering,
engineering, design, surveying and mapping, and architectural related
services.
If your state provides a broader definition of engineering services in
law or regulation for you to follow,
these additional services are also subject to federal requirements. The
foundation for competitive negotiation procurement requirements is the Brooks
Act.
The Brooks Act is a federal law that establishes the qualifications-based
selection requirements for procuring engineering and design related services.
The process for hiring a consultant under the Brooks Act and competitive
negotiation procurement requirements can be broken down to three simple steps:
issuing a request for proposal, or RFP, to publicly solicit the need and
requirements for services; selecting a consultant based on qualifications to
provide the needed engineering services;
and negotiating fair and reasonable cost in contract terms with the selected
consultant.
Before you hire a consultant you must first detail how your agency will
administer this process by establishing written procedures unless your state
prescribes the procedure for you to use.
When you develop your own written procedures your State DOT must
approve them before they are permitted to be used on Federal-aid projects.
Let's take a closer look at some of the required steps of the competitive
negotiation procurement process.
The first step in hiring a consultant involves issuing a request for proposals.
Just as hiring a contractor requires a set of plans, specifications and
construction documents for soliciting bids,
hiring a consultant starts with developing a request for proposal, or
RFP. Your RFP must clearly detail the scope of work, qualifications,
responsibilities, and deliverables that you seek from a consultant.
The RFP must detail the estimated schedule for the performance and
delivery of the services
and the method of contract payment.
Your RFP must clearly define the evaluation criteria
used to assess and rate the qualifications of responding consultant
firms, along with the scoring weight for each of the assigned criteria.
The evaluation criteria
must relate to the qualifications needed to provide the advertised scope of work
and services.
The qualifications based evaluation criteria listed in your RFP
may include, but are not necessarily limited to,
the qualifications of staff, prior similar work experience, past
performance, workload capacity,
and technical project approach.
Federal requirements prohibit the use of in state or local hiring preferences and
do not allow you to consider price or any element of cost in the evaluation,
ranking, and selection of the most highly qualified consultant. Like other
solicitations, the RFP to hire a consultant must be advertised for a
sufficient amount of time in order to solicit proposals from as many qualified
consultants as possible.
You must allow fair and open competition by providing equal opportunity for in-state
and out-of-state consultants to compete.
Check with your State DOT to make sure you meet all requirements for
advertising the RFP in your state.
The second step begins after the close of the advertisement period.
All submitted proposals are evaluated and ranked according to the
evaluation criteria and scoring bases outlined in the RFP.
List, in order of preference, at least three consultants you determine to be
the most qualified.
As you prepare for negotiations you must develop an independent cost estimate
that reflects the advertised scope of work.
This estimate is used as the basis for negotiation with the selected
consultant.
Now you may begin the third step of negotiating cost and contractor terms with the
number one ranked most highly qualified consultant.
Your negotiations should focus on the level of effort and experience of staff
required to complete the scope of work and perform the needed tasks.
Only tasks included within the scope of work advertised in the RFP
may be incorporated into the selected consultants contract.
Ultimately you are required to determine and agree to contract terms
for fair and reasonable compensation considering the scope and complexity of
the needed work.
The cost principles of the Federal Acquisition Regulation, or FAR, are the set
of rules that govern the costs of goods and services using federal funds.
You are required to ensure compliance with the FAR cost principles for
determining allowable costs on consultant services contracts when
federal funds are used.
These costs include those directly associated with the specific contract as
well as a consultant's overhead costs which are formally referred to as their
indirect cost rate.
Each consultant is required to annually establish their indirect cost rate in
compliance with the FAR cost principles. A consultant's indirect cost rate can only
be approved for use by either a Federal Agency or State DOT.
Once approved,
the consultants indirect cost rate must be used for purposes of estimating,
negotiating ,and making payment on the contract.
As the LPA,
you are not permitted to negotiate or arbitrarily cap a FAR-compliant
indirect cost rate.
Contact your State DOT to verify that any proposed indirect cost rate is
in compliance with the FAR cost principles.
In some situations,
negotiations may breakdown if the satisfactory contract cannot be
negotiated. If this happens
you must first formally terminate negotiations before you begin
negotiations with the next highest ranked consultant.
It is important to understand you can only negotiate with one consultant at
a time. Negotiations with another consultant should only occur after
officially terminating negotiations with the prior firm.
Once you have successfully negotiated a fair and reasonable compensation for the
needed services,
a contract can be executed in accordance with your state's required procedures.
As with any contract,
your role is to monitor the consultant's work throughout the life of the contract
for quality and completeness. Additionally, consultant invoices must be
reviewed to ensure the costs are consistent with the FAR cost principles,
contract terms, and progress of the consultant's work.
When the contract is completed you are required to evaluate the
consultant's performance of the scope of work items listed in the contract.
You will use this information to assess a consultant's past performance if they
compete for future Federal-aid work. All records pertaining to the consultant
procurement and executed contractor services
are required to be kept on file a minimum of three years following
submittal of your final voucher to FHWA by your State DOT.
You will find these helpful if asked to demonstrate compliance with all the
requirements just covered.
Under most circumstances you must follow competitive negotiation procurement
procedures for hiring a consultant to provide engineering and design related
services funded by Federal-aid. As defined within the Brooks Act,
competitive negotiation requires you to select consultants based on
qualifications and experience. Contract award occurs only after the negotiation
of a fair and reasonable cost with the selected consultant.
Your State DOT
has the oversight responsibility for procuring and administering consultant
services. Prior to contracting with a consultant when using Federal-aid funds,
contact your State DOT for assistance, to ensure you meet all Federal and State
laws and regulations that apply.