Wednesday, June 15, 2011

Preventing "Bait and Switch" of Key Personnel

Having clear procedures and language in your Request for Proposals (RFPs), Request for Qualifications (RFQs), and contracts about the commitment level and substitution procedures of key personnel can be an effective tool to prevent a consultant from proposing an individual in order to obtain the project, only to substitute them later and replace them with a less experienced individual (bait and switch).

Key Personnel as Evaluation Criterion:  When public agencies issue either a RFP or RFQ, typically one of the key evaluation criteria will be the experience of key personnel who will be used on the project.

Proposal is Commitment to Use Specific Staff:  Because the successful firm is selected, at least in part, on the qualifications and experience of the key personnel, the RFP or RFQ should state that by submitting a proposal or a statement of qualifications, the firm is making a commitment to use the key personnel during the contract, should they be selected.  The following is an example of language I have seen used in RFPs and RFQs:
By submitting a proposal [or statement of qualifications], the proposer agrees and acknowledges that it will provide for the duration of the project, the full complement of staff required to perform the work of the project, including the specific individuals identified in its proposal.
Substitution Procedures to Key Personnel:  However, because people do leave jobs or become unavailable for personal reasons, it is important that there be a deliberate process for substitution of the consultant's key personnel.  Any proposed substitute should have the same or higher qualifications and experience as those being substituted, and the substitution should be subject to approval by the public agency.  The following is an example of language I have seen used in contracts:
The consultant agrees to provide all professional personnel necessary to perform the scope of work, including the following individuals who were named in the consultant's proposal [statement of qualifications] submitted in response to the public agency's Request for Proposals [or Request for Qualifications].  These key personnel shall remain assigned for the duration of the project, unless otherwise agreed to in writing by the public agency.  In the event the consultant proposes to substitute any of the key personnel designated below, the individual(s) proposed must demonstrate similar qualifications and experience as required to successfully perform such duties.  The public agency shall have the sole right to determine whether key personnel proposed as substitutes are qualified to work on the project.  The public agency shall not unreasonably withhold approval of staff changes.
Position Title
Name of Individual

Check with Your Attorney:  In developing commitment and substitution language for your RFPs, RFQs, and contracts, be sure to discuss it with your agency's attorney.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC


IssyPLS said...

So what's the penealty for "switching" after you have a signed contract?

Mike Purdy said...

In theory, a public agency could find a consultant in breach of contract for switching personnel without similar qualifications. A company who makes such a switch does so at their own risk as it may damage their reputation and ability to obtain future work from that public agency.

Anonymous said...

I disagree. They do it all the time in government contracts. The contracts are often silent in this regard and the contractors propose a "dream team" only to switched after contract award.

Anonymous said...

I am wondering if anyone has tried to put in a substitution processing fee of a significant size to discourage wholesale bait and switch of staff. The fee would be based on the administrative cost of reviewing the substitution and the impact on the program. It might include a factor based on the differential between the winning bid and the next lower bid.

Anonymous said...

What if a contractor proposes certain key personnel, and the awarding agency / client 'suggests' (after award) that the contractor hire an incumbent in place of one of the proposed key personnel? Does the contractor have to replace their proposed key personnel with the client's desired incumbent? Is there any legal or ethical boundary crossed?

Mike Purdy said...

A public agency puts itself at some risk if they suggest that a contractor hires someone different from who the contractor originally proposed. If things don't work out for the contract, or there are performance issues, the contractor may well blame the public agency, arguing that the contract wouldn't have had problems if they could have used who they originally proposed. Is the contractor obligated to replace their key personnel with the agency's choice? It really depends on the language of the contract. Absent any specific contract language addressing this question, it's something that should be very carefully negotiated between the parties.