Thursday, February 21, 2013

NY Audit Criticizes Fire District's Consultant Selection Practices

The New York State Comptroller's Office issued an audit report criticizing the Jericho Fire District for failing to select professional services based on a competitive process.

No RFP process used:  The fire district argued that "the board reviewed and pricing and qualifications of the professional service providers and was confident that it was paying a fair amount for the services obtained."  The board also suggested that using a Request for Proposals process does not ensure that qualified firms will be obtained, and that they rely more on interviews and reference checks.   

Article:  Click here for an article on the audit from the Long Island Newsday website.

Best practices:  Many public agencies debate the issue about how consultants should be selected.  Here are a couple of best practices and principles that can help guide consultant selection practices.
  • Do not use price as an evaluation criterion when prohibited:  Many states have laws that prohibit the use of price as an evaluation criterion for the selection of architects, engineers, and similar professional services.  In Washington state, four disciplines are covered by this qualifications based selection process: architects, engineers, landscape architects, and land surveyors.  It is described in RCW 39.80.  In addition, federally funded projects are subject to the federal Brooks Act that prohibits use of price in the selection process for a fairly expansive list of disciplines. 
  • Use price as a selection criterion when permitted:  When not prohibited, price should be part of the evaluation criteria for selecting consultant services.  It helps ensure that public agencies are receiving competitive prices.  Agencies must assess how much weight price should play in the evaluation process.  For a scope of work that is not clearly defined and that relies heavily on the expertise and judgment of the consultant, price should be a lower percentage of the evaluation points.  However, when services to be provided are more routine, well-defined, and less subject to the judgment and expertise of the firm hired, price should be a higher percentage of the evaluation points.
  • Transparency:   Without an RFP process, public agencies are subject to criticism that contracts are being awarded based on friendships, relationships, and even financial kickbacks from firms.  It is important for public agencies to be aware of public perception of their processes (or lack of processes).
  • Have written selection policies:   Each public agency should have procurement policies, based on any applicable state laws or regulations that define what dollar threshold contracts must be subject to an RFP process versus those smaller contract amounts that may be selected on a more informal basis.
  • Pay based on contract terms:  Public agencies should monitor performance in accordance with the contract terms.  In addition, public agencies should carefully review invoices to ensure that payment is based on the terms of the written contract.  In the case of the New York state fire district noted above, one contract was set at an hourly rate of $40, bu8t the district made payments at $50, without any written amendment to the contract.
Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, 

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