City focus on bid price, not qualifications costs more: multi-industry group
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Hey there, time traveller!
This article was published 27/08/2018 (1441 days ago), so information in it may no longer be current.
A multi-industry association that promotes an alternative to the lowest-cost contract award process says few candidates in the upcoming civic election appear interested in a process that’s been recognized to save tax dollars with better-built infrastructure.
QBS Canada says city hall uses a hiring process that favours low bidders over more qualified bidders, which it claims studies show ultimately results in higher costs and lower quality.
The group says the qualifications-based selection (QBS) process is considered a best practice by the Federation of Canadian Municipalities when hiring architects and engineers and doesn’t understand why politicians and the administration at city hall have not adopted it for infrastructure projects.
“People often think this is an excuse to allow engineers and architects to charge whatever they want but it’s absolutely not,” said Cal Harrison, president of the Winnipeg-based QBS Canada. “Even if they’re selected as the most qualified, they still have to negotiate a fair price. The idea is that instead of getting the least-qualified vendor at the lowest price, get the most qualified vendor you can afford at a fair price.”
QBS Canada, founded by Harrison in 2015, is a coalition of associations, companies, and professionals advocating for the use of qualification-based selection (QBS) when hiring professional services firms in Canada.
Harrison said that while he’s met with Mayor Brian Bowman and his staff and the city’s procurement officials, it’s appropriate to raise the issue now.
“Election time is when politicians really have to listen to you,” he said. “Now we can get the discussion going and I think that’s important.”
The City of Winnipeg’s policy for most infrastructure projects is to issue what’s known as a request for proposals, a document that outlines the project and invites firms to submit their qualifications, their plans to complete the project according to the city’s specifications and the price.
The city assigns each component of the submission a weight in the assessment process, with weight assigned to price varying anywhere from a low of 10 per cent to a high of 40. But, it’s generally assumed that all things being equal, the lowest price carries the day.
Harrison compared the procurement process to hiring employees.
“When you hire a staff architect for example do you select the cheapest one? Of course not — you tell candidates here’s the salary we can afford to pay, if you are interested, tell us why you are the best candidate. And then after reviewing resumes and doing interviews, you find the best candidate and you negotiate final terms and salary with only that one. So why do we demand low-bids from architects, engineers and construction-management experts when we hire them as contractors? Winnipeg is a progressive city, so it’s kind of embarrassing to be so far behind the rest of the world on this best practice. Especially since it costs nothing to start using QBS.”
Harrison said the QBS is similar to the RFP, except it doesn’t require bidders to include a price, adding that speeds up the process.
A civic spokesman said Harrison and supporters of the QBS process wrongly assume that all government agencies award contracts based on price alone.
“The city uses a weighted evaluation criteria of which price is only one of the criteria, ranging from 10 per cent to 40 per cent, of the available points,” said David Driedger, the city’s manager of communication, adding that the majority of the assessment is based on the qualifications.
Driedger said city hall is investigating the qualification-based standards.
The QBS proposal is supported by the Manitoba Heavy Construction Association. Chris Lorenc, the association president, said a qualifications-based process can be quicker than the typical RFP approach, adding that’s critical in Manitoba where municipalities and the provincial government don’t have the luxury of year-round warm weather for construction, explaining that engineering contracts need to be awarded as quickly as possible to beat the onslaught of winter.
Lorenc said the MHCA favours using the QBS process for contracts valued at $750,000 or less, projects he said that are considered more routine and where the city’s procurement officials are aware of the expertise of the bidders. He said that for more complex, more expensive projects, the city should rely on the traditional RFP approach.
Harrison said the QBS approach has been labelled a best practice by the Federation of Canadian Municipalities for more than 10 years, and has been the approach used by the United States federal government since 1972.