POLITICAL PULSE

Qualifications Based Selection Just Makes Sense

Christy Tarallo

Remember in math class when the instructor introduced letters into the equation and suddenly we were all solving for “x”? That’s where math lost most of us. It was one of the first instances in which some of us thought “I don’t even know what I don’t know.” Fortunately, that was also when a lot of our friends in the engineering industry discovered their calling. Boring multiplication tables became a lot more interesting, and seemingly impossible problems became fun brain teasers.

While grade school was long ago for most of us, those engineers are still solving problems in situations where most of us are stuck in the “I don’t even know what I don’t know” phase. Every Request for Qualifications or Proposals (RFQ or RFP) is another opportunity for those who have honed that expertise to problem-solve some of the built environment’s most difficult problems—and everyone, from local governments to consumers, benefits from it.

Local governments, in particular, benefit from the engineering industry’s problem-solving abilities. However, far too often they unknowingly get in their own way when searching for qualified firms to design new features within their respective jurisdictions. When a local government identifies a need, such as a park or a bridge, they often solicit engineering and/or architectural (A/E) firms’ help through an RFP or RFQ.

While the difference may only seem to be one letter in the alphabet, to some firms that “P”, which is often tantamount to “price”, is a huge deterrent. A park design may seem like a simple task, but they can be riddled with challenges. It often takes a well-qualified firm to acknowledge that the design may present unforeseen complexities due to its location or that the project presents an opportunity to create a complex drainage system that can alleviate a locality’s persistent runoff issues due to its proximity to a flood plain.

When hamstrung by the requirement for a “proposal”, many firms often opt out of responding to a solicitation. To them, assigning an accurate price before a conversation or analysis of the project’s potential complexities is often an impossible task.

Beyond the technical impracticalities that architects and engineers face when trying to assign cost to project unknowns, RFPs tend to result in negative outcomes. A 2022 study conducted by Paul Chinoswky of the University of Colorado Boulder and Gordon Kinglsey of the Georgia Institute of Technology proved this. Within it, they showed that requesting price during the procurement period for design services results in lower performance outcomes, unexpected—and often exorbitant—costs, and can inhibit schedule adherence.

Additionally, a comparative analysis conducted by the American Institute of Architects (AIA) examined the procurement of A/E services of two states, Maryland and Florida. The researchers found that in Maryland, where price estimates as well as technical expertise were once required in the bidding process, resulted in numerous negative outcomes and inefficiencies. Compared to Florida, which utilizes qualifications-based selection, or QBS, Maryland’s design professional selection process was “significantly more time-consuming and expensive than Florida’s.” The study found that the total design portion of a capital construction process in Maryland accounted for 13% of the estimated total construction cost. In contrast, Florida’s design cost only averaged roughly 7% of the entire project. Further, the entire process of procuring A/E professionals in Maryland averaged 31 months, compared to the Sunshine State’s A/E portion averaging roughly 21-month long process. In terms of both time and cost, QBS outperforms cost-based procurement approaches.

the lowest price proposal. This is a particularly troubling statistic that flies in the face of the assertion that price does not dominate the selection process.

To put it more bluntly, Florida’s former Secretary of Transportation, Kaye Henderson, when discussing cost-based proposals, famously quipped, “Once price is mentioned, it becomes the dominant and controlling factor throughout the remainder of the process…. Price suffocates decision-making and contract compliance.”

This aside, price is absolutely an important factor in procurement. Local governments ought to be responsible stewards of taxpayer dollars, and many earnestly believe that utilizing low-bid/ cost-based procurement is the highest form of financial responsibility. The research proves otherwise.

Qualifications-based selection, however, simply reorders a cost-based price proposal process. Technical expertise is evaluated, and firms are ranked and shortlisted. The local government, or client, then begins price negotiations with the highest ranked firm. The client then gets the opportunity to benefit tremendously from the firm’s expertise during these negotiations—even if they can’t agree on a price. The conversation is often an opportunity for the client to understand what they didn’t know before. Further, if a satisfactory price can’t be agreed upon, then negotiations can be terminated, and the local government can move on to the next highest ranked firm. The local government benefits tremendously from this process in tangible and intangible ways that cost-based proposals simply cannot offer.

A real-world example of this can be found in hiring the right candidate. When an employer is looking for a new individual to fill a position, rarely do they ask for salary expectations and make a decision based on the compensation responses of the applicants, such is the case with RFPs. Employers analyze resumes, interview competent applicants, and shortlist their favorites. At the end of the process, the employer makes an offer, and a negotiation may commence between the candidate and the employer.

Oftentimes, government officials utilizing price-based proposals will state that cost only makes up a small portion of an overall decision. However, AIA’s comparative analysis found that while technical expertise was a required consideration, in the year prior to the study being conducted, 83% of all construction awards went to the firm with

If local governments can utilize QBS when hiring a full time employee, they ought to use it when hiring A/E services that design the world we live, work, and play in. Secretary Henderson said it best, “Under a pricebased selection, you can forget such professional ingredients such as innovation, added value, accountability, and advancing the science of engineering…. True value should be the goal, and value will not be obtained through a bid.”