Choosing the Right Consultant for Your Needs

Evaluating a Qualifications-Based Selection Process

Districts have many options when selecting architectural and engineering (A/E) consultants, but what is the best way to evaluate potential firms’ ability to meet your specific needs? Current research suggests that a Qualification-Based Selection (QBS) process may be the most effective tool in identifying firms with the specialized experience and expertise for your project.

What makes QBS unique is that it eliminates fees as a factor in evaluating a firm’s qualifications on their merits. It’s said that money changes everything, and it’s true. Despite one’s best effort to remain unbiased in evaluating qualifications, in this context, cost becomes an arguably inappropriate influence. Instead, QBS requires that firms are evaluated on their qualifications alone, a shortlist is generated, interviews are held, and a “best choice” is identified, after which negotiation takes place to establish a fee. Should that negotiation fail to yield a fair price, a new negotiation with the second qualified firm may take place, but that has shown to be the exception rather than the norm as most firms fully understand the constraints of their market.

QBS has been the legally mandated method for procuring professional design services by the federal government since 1972, with the passing of the Brooks Act. Its long-term success has inspired almost every state, including New York to adopt “mini-Brooks” type laws and regulations. This has also trickled down to local municipalities, agencies, and school districts, though it is often incorrectly implemented like in a “two-envelope” procurement, where firms submit their qualifications and fee separately. After the field is narrowed, the fee envelopes are opened to assist the reviewers in the final step of the evaluation. This is not considered a QBS, as the fee is considered before identifying the best candidate.

What often prevents the full implementation of QBS are several misconceptions about its cost and effectiveness. Here’s a closer look at the more prominent ones.

“The QBS process is not competitive.”

This is only true if one defines a firm’s “competitiveness” purely in terms of cost. Including fees as a selection factor could eliminate smaller, well-qualified firms from proposing altogether for fear of not being able to “compete.” Well-defined qualifications of the project team will often require larger firms to assign more senior and specialized personnel to your project, further leveling the playing field. QBS encourages a wider pool of firms to respond with their best and brightest. Amirali Shalwani, a researcher at the University of Kansas, studied this question in his doctoral dissertation in 2017. He concluded that there was no correlation between increased firm qualifications and increased fees in proposals.

Shalwani also co-authored a technical paper for the Journal of Architectural Engineering, where he reviewed 122 publicly procured A/E projects across North America and found no evidence of increased fees among QBS-procured proposals. That said, some data indicates slightly higher overall fees for more specialized teams, but that is typically a function of unique additional services they offer clients. Statistics show that the cost of those added services is offset by lower overall project costs.

“A good target for fees is six percent of the estimated construction cost.”

While not directly related to QBS, this is most likely based on the idea that since 1939 federal construction agencies have been required by law to limit the fee payable to an architect or engineer to six percent of the estimated construction cost. That accounts for only a portion of the services typically required by a school district. According to the American Council of Engineering Companies (ACEC), federal agencies have interpreted the statutory fee limitations as applying only to the part of the fee that covers the production and delivery of designs, plans, drawings, and specifications.

The agencies, therefore, consider that the six percent fee limitation does not apply to the cost of field investigation, surveys, topographical work, soil borings, inspections of construction, master planning, and similar services not involving the production and delivery of designs, plans, drawings, and specifications.

“The QBS process will increase the overall project cost.”

This can be broken down into a few key indicators, starting with a firm’s ability to address project complexity through exploring options in a total evaluative approach rather than proposing a merely acceptable solution. In a 2019 study by Dodge Data and Analytics and commissioned by the American Institute of Architects (AIA), owners were asked about their firms’ ability to deal effectively with their most complex projects.

Fifty-one percent of respondents preferred QBS selected firms over those selected on fee. A similar trend was observed in responses to a firm’s ability to handle a challenging site or unusually restrictive conditions—two common issues with K-12 projects. The ACEC recently published the study “Qualification-Based Selection of Consultants and Contractors: Breaking the Lowest Tender Price Culture” and found that the use of QBS procurement increases the quality of the tender’s design documents, which increases construction certainty.

Additionally, investing more design effort was shown to reduce the project’s final cost from early estimates by solving construction problems during the design phase when the costs are lower than after construction has commenced. Basically, a more robust design effort will result in a more responsive design, higher quality documents, and lower construction cost when compared to the pre-design estimates.

Another related phenomenon is that fee-centric consultant selection can result in a “minimum standards” approach. Douglas Gransberg, PhD, PE, MASCE, president and founder of Active Continuing Education Systems, LLC and former professor of construction engineering at Iowa State University, published a paper on how design factors of safety function as minimum requirements.

He explained that a consultant retained on a lowest fee basis can both legally and ethically reduce its engineering effort by increasing the design factor of safety. This act creates a situation where the project’s cost may rise above the amount that could have been achieved if the consultant’s fee permitted the design hours to minimize the factor of safety based on more in-depth engineering analysis. Consider a scenario where engaging in solar studies early in the design informs the size, orientation, and glazing selection in the windows, thus reducing capacity of the air conditioning, lowering installed cost and long-term operating expenses. Sometimes doing the minimum costs more.

In addition to producing higher quality projects at lower cost, QBS reduces cost growth during construction with less change orders and schedule delays. Paul Chinowski and Gordon Kinglsey published the study “Savings, Innovation & Efficiency: An Analysis of QBS in the Procurement of Engineering Services,” which discussed how QBS projects outperform the national average in both cost and schedule growth.

In terms of cost growth, the QBS projects analyzed in this study had an overall project cost growth of three percent. This is half of the national average of six percent. In terms of schedule growth, QBS projects outperformed the national average by having a schedule growth of seven percent versus the national metric of ten percent. That’s 50 percent less change orders and 30 percent less delays.

“My project can be just as good with fee-based selection.”

Beyond the quantifiable metrics above, there are some more subjective measures of success. The AIA study asked owners to rate their satisfaction with the performance of their teams along with 16 different aspects. In the end, QBS-selected teams scored greater levels of satisfaction in 15 out of 16 categories. Some examples were a “positive contribution to overall project team chemistry” where those with an opinion preferred QBS selected teams by 10 to 1. QBS procurement was preferred 7 to 1 for a team’s ability to maintain expected project quality level.

Perhaps the most telling result is of the final question asked to owners having experienced both fee-based and qualification-based selections of architects. With only 11 percent remaining neutral, 57 percent preferred the QBS approach to only 32 percent preferring a fee-based process.

Of those owners utilizing QBS over multiple projects, the preference jumps to 69 percent—signaling the more they use it, the more they realize its benefits. In 2009, Chinowsky and Kingsley published “An Analysis of Issues Pertaining to Qualifications-Based Selection,” which found that 93 percent of owners employing a QBS rated their projects as successful or highly successful.

Chinowski and Kingsley’s study in 2009 recognized social factors as a growing concern for owners. Sustainability and flexibility were the two most cited issues of the time. Since then, sustainability has remained at the top of the list, but even more esoteric factors such as resilience and social equity are garnering attention.

The study states that, “anecdotal evidence in this study indicates that non-traditional factors are being given a high priority by design firms who support QBS as they believe these will be a differentiator.” Additionally, municipal owners indicated that they value an increased ability to further their development objectives by emphasizing the positive opportunity on QBS projects to collaborate with an experienced design team. This allows them to build on the design team’s experience to better position their proposals for future funding.

QBS selected firms are better positioned to assist a school district in garnering public support for their projects. Firms procured through a QBS process can provide your project with all these advantages before, during, and after construction, without increasing cost.