Tuesday, July 30, 2013

Louisiana Agency Mandates Price Evaluation Points for all RFPs

After many months of discussion and debate, Jefferson Parish, one of the largest counties by population in Louisiana, adopted an ordinance aimed at reforming some of the Parish's questionable contracting practices.  While it is an improvement, the new law is misguided in some aspects and doesn't go far enough in bringing transparency to the Parish's selection practices.

Price worth 20% of points:  The July 24, 2013 action (Ordinance No. 24528) by the Jefferson Parish Council requires that price be part of the evaluation criteria in selecting firms for providing non-professional services, and that "the cost evaluation shall be worth twenty percent (20%) of the total points assigned."  Before adopting the new law, price was not required to be part of the evaluation process.
  • Why 20% isn't always appropriate:  While price should always be part of the evaluation criteria for selecting consultants and service providers (other than architects, engineers, and related professionals), mandating that price always be 20% is misguided.  It is an art form to determine, on a case-by-case basis, how to weight the points between qualifications and price.  But Jefferson Parish has turned this art form and important discretionary decision, into a rigid formula that will often yield unintended results. The points to be assigned based on price should be lower when the qualifications and judgment of the consultant are more important and the scope of services are less prescriptive.  On the other hand, when the scope of services are more prescriptive and the qualifications of the consultant or service provider less important, then price should be a higher percentage of the overall points. Click here to read an earlier blog posting of mine on the subject.
Keeping price from influencing qualification scores: In an attempt to ensure that evaluators score proposals fairly based on qualifications without price being a consideration, the new Jefferson Parish law provides that the purchasing department will open sealed pricing proposals after all evaluators have scored the technical and qualifications portion of the RFP.  Purchasing will then assign the points for price based on a formula. The "proposer with the lowest cost shall receive the highest cost evaluation score."  Other proposers will receive proportional scores based on the percentage difference from the lowest price.

Political influence in the selection process:  Unfortunately, Jefferson Parish's new ordinance does not address the need to reform the selection process by removing the Parish Council from the decision making process.  After all evaluation scores have been tabulated, the Council provides unwarranted discretion to the council member in whose district the work will be performed, to select any of the firms who submitted proposals, even if they were not the highest rated firm.  This politicization of the selection process does not promote openness and transparency in public procurement and contracting and may lead to abuses of power.  The Jefferson Parish Council, as the legislative branch of government, performs many of the functions that are typically performed by an executive branch in implementation and administration.

More information:  
  • Click here for a July 29, 2013 news article from The Times-Picayune in New Orleans.  I'm quoted in the article.
  • Click here to read my blog from December 2, 2013 on "Consultant Selection - New Orleans Style."

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 

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