What is the "Standard of Care" for Architects and Engineers in Designing Projects?

Most contracts between public agencies and architects or engineers designing a public works construction project require that the designer's standard of care "shall be no less than that exercised by architects of similar reputation performing work for projects of a size, scope and complexity similar to this project."  The language defining the standard of care may vary by agency and contract.  

John P. Ahlers

Code compliance is important:  Design contracts also generally require the designer to comply with building and other codes when designing the project.  In a 2014 Florida court case, the court held that the architect was liable for the construction change order costs that were necessary because the architect's design had failed to comply with current fire safety standards on a high school renovation project.  During the design process, the architect disagreed with the opinion of an independent design reviewer that the design did not meet code.  During construction, the building department determined that the plans were not in compliance with the code and required changes to the design and construction.

More information:  Well known and respected Seattle construction attorney John P. Ahlers has written a much more detailed summary of this court case in his August 28, 2014 blog, Architect Held to a Higher Standard of Care.

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Can Expired Contracts Be Resurrected?

What happens when a contract between a public agency and a business expires?  Is a new solicitation required?  Can the contract be extended through an amendment? 

Conservative position:  The conservative position is that an expired contract is expired and may not be amended to extend it.  Once the contract expires, nothing exists, and a new solicitation for continuation of services is required.

Risks of extending an expired contract:  Some public agencies, because of the need to continue to provide services, have been known to extend expired contracts.  The following are some of the risks associated with extending an expired contract:

• Audit risks:  If a contract has expired, there is no contract to amend or extend, and thus an auditor may argue that the public agency has not gone through the appropriate selection process for the additional or extended work.  If an agency makes the assumption that any expired contract may be amended, this would suggest, in the extreme, that an agency would never have to conduct a competitive solicitation in the future, but simply amend previously expired contracts.  Mitigating against an audit risk for extending an expired contract may be partially dependent on when the contract expired.  In other words, if the contract expired three months ago and a public agency is just now resurrecting it, that is a more difficult position to support than if the contract expired yesterday or last week.  If a public agency chooses to extend a previously expired contract, they should document the reasons why this action was necessary, instead of conducting a new solicitation.  This documentation should discuss the negative consequences to the operation of the public agency if a new solicitation was conducted and the agency was left without a service provider for a period of time.

• Contractual risks:  If an agency choose to amend a previously expired contract, the language in the amendment is important.  Without all encompassing language, the firm an agency contracted with could at some point argue that they are not bound by the original terms of the contract since it expired.  Thus, any amendment language would need to acknowledge that the contract had expired through an administrative oversight, but that both parties have explicitly agreed that all of the terms and conditions of the original contract continue to be applicable under the amendment.

• Protest risks:  There is a risk from other firms who may argue that they have not been provided the opportunity to publicly compete for the work that has simply been continued through an amendment to the expired contract.  Part of their argument may be that the original solicitation laid out the term of the contract and that they now have a right to compete for the continuation of the work.  A protesting firm may simply protest or they may challenge an action to extend an expired contract in court, which could end up delaying the provision of the services.

• Publicity risks:  Audit, contractual, and protest risks all come with potential negative publicity for a public agency if the information is reported in the local media.  Public agencies should weigh carefully whether the risks of extending the contract are worth the potential negative publicity.

Practical tips:  The following practical tips can help your agency in addressing the issue of whether expired contracts can be extended.

• Develop a policy:  Discuss and develop a policy on your agency's position on whether an expired contract can be amended.

• Track contract expiration dates:  Develop a clear tracking system to identify early on contracts that are expiring.  This type of system will provide sufficient time to develop and solicit services under a new contract.

• Talk with your attorney:  If your agency is faced with the situation of potentially amending an expired contract, be sure to discuss it with your attorney and seek their advice on the best course of action.

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Training in Alaska on Best Practices for Construction and Services Contracting

I was in Anchorage, Alaska on January 9-10, 2014 providing two days of training on Best Practices for Construction and Services Contracting.

The training was sponsored by the Alaska-NAPM chapter.  

Contact me if you would like a copy of the outline of the training.

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com

Have You Changed Your Indemnification Clause in Your Contracts?

It's been more than a year since the Washington State Legislature amended the provisions for what is permitted in contracts regarding indemnification.  Has your agency updated the indemnification clause in your contracts?  This blog posting is a repeat of one from April 24, 2012 with only minor changes.

With strong backing and support from the professional design community, the Washington State Legislature approved in 2012 (with only one dissenting vote) Substitute House Bill 1559 related to indemnification provisions in public contracts. Then Governor Christine Gregoire signed the bill. 

Previous Law:  The purpose of the previous law in RCW 4.24.115 was to establish a standard of concurrent negligence in indemnification clauses.  In other words, a public agency may not require a contractor to indemnify the public agency against liability for damages "caused by or resulting from the sole negligence" of the public agency.  Instead, the previous law established that indemnification is valid and enforceable only to the extent of the concurrent negligence of the contractor and public agency. 

3 Changes in Law in 2012:  SHB 1559 amended RCW 4.24.115 in the following three areas:

• Clarification of covered parties:  The previous law stated that it applied to a contract "relative to the construction, alteration, repair, addition to, subtraction from, improvement to, or maintenance of, any building, highway, road, railroad, excavation, or other structure, project, development, or improvement attached to real estate, including moving and demolition in connection..."  [emphasis added]  Many agencies interpreted the phrase "relative to" to include contracts for architectural, engineering, landscape architectural, and land surveying services, even though the language was not explicit.  SHB 1559 specifically added contracts for these four disciplines to the protections provided for in the law.

• No duty to defend:  One of the regular sticking points in negotiating contracts with designers relates to whether the indemnification provided by the designer covers their duty to defend the public agency in the event of a claim.  SHB 1559 explicitly prohibits language in public contracts that includes the duty to defend and the cost of such defense.

• Extent of indemnification:  The previous concurrent negligence standard was only applicable to liability for damages related to bodily injury and property damage.  Thus, for any other type of liability, a public agency could apply a sole negligence standard.  SHB 1559 changed this.  The concurrent negligence framework expanded to cover any liability arising out of any services performed on the contract.

Have you changed your contracts?  SHB 1559, approved in 2012, became effective on June 7, 2012.  Has your agency reviewed and changed indemnification language included in both construction contracts and contracts for architectural, engineering, landscape architectural, and land surveying services?

Talk with your attorney:  Indemnification is a complicated area and attorneys are best suited to sort through and develop appropriate contract language.  If you have not already done so, public agencies should consult with their attorneys for what language may need to change in their contracts. 

More Information:  Two Seattle area law firms have written helpful articles about SHB 1559 that may help in understanding this 2012 legislation:

• April 5, 2012 article by Stan Beck and Grant Degginger from Lane Powell PC in the Seattle Daily Journal of Commerce: Design professionals win big in revised anti-indemnity statute.

• April 17, 2012 blog by John P. Ahlers of Ahlers & Cressman PLLC: Washington's Anti-Indemnification Statute (RCW 4.24.115) is Amended to Include Design Professionals and Contractors Receive a "Kiss"

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Standard Contract Language

Standard Contracts:  There are a variety of standard contracts used for public construction and architectural agreements.  Sometimes a public agency will use their own, specifically tailored set of documents.  Other times they will use a document or set of documents developed by an industry group, whether that is from the perspective of contractors, engineers, or architects.  

Here are some of the organizations with standard documents:

• ConsensusDOCS is a coalition of 40 associations in the design and construction industry that collaboratively develops and promotes standard form construction contract documents.

• EJCDC (Engineers Joint Contract Documents Committee) is a joint venture of the following organizations: American Council of Engineering Companies, American Society of Civil Engineers, National Society of Professional Engineers). 

• American Institute of Architects (AIA) provides standard contract documents used for construction and architectural contracts.

Cautionary note:  Public agencies should be aware that documents developed by industry groups generally have a focus on protecting the constituency that developed the documents, and don't always protect the public agency's interests as strongly as might be desired.

AIA Contracts Training:  The following provides information on upcoming training on the AIA contract documents:

• When:  Wednesday, July 31, 2013 (8:00 a.m. to 4:30 p.m.)

• Where:  Seattle, Washington (Washington State Convention Center)

• Cost:  $359

• Instructors: 
• John P. Ahlers
• Bruce A. Cohen
• Paul R. Cressman, Jr.
• Brett M. Hill
• Scott R. Sleight

• Class Outline: 
• Overview of AIA Documents
• Key Clauses in AIA General Conditions
• Key Clauses in AIA Agreement Between Owner and Contractor
• Analysis of AIA's Design-Build Documents
• AIA Integrated Agreement Forms
• Analysis of AIA Standard Form of Agreement Between Owner and Architect

• Registration:  Click here.

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Training in Spokane, WA: Developing and Managing RFPs and RFQs

Developing and Managing RFPs and RFQs

• When:  June 18, 2013 (8:30 a.m. to 4:30 p.m.)
• Where:  Spokane, Washington (Enduris Professional Center, 1610 S. Technology Blvd)

• Cost:  Free for WCIA members; $115 for non-WCIA members

• Instructor:  Mike Purdy 

• Class Outline: 
• When to Use and RFP vs. RFQ
• Solicitation Methods
• Developing Evaluation Criteria
• Writing Scopes of Work
• Managing the Solicitation Process
• Conflicts of Interest
• Cost and Price Analysis
• Advertising Issues
• Pre-Submission Meeting
• Receiving and Opening Proposals
• Evaluation Committee and Evaluating Proposals
• Managing Interviews
• Recommending Award
• Contract Negotiations

• Registration:  Click here. 

Questions?  Please contact me if you have any questions about the class.

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Developing and Managing RFPs and RFQs

I spoke last week at the Washington Municipal Clerks Association (WMCA) conference on Developing and Managing RFPs and RFQs.  Here's an outline of the 1.5 hour session (a very fast-paced overview), which I also teach as a full day class:

Planning the Procurement

• When to Use an RFP, RFQ, or ITB
• Qualifications Based Selection (QBS)
• Solicitation Documents
• Solicitation Method
• Scope of Work
• Evaluation Criteria
  

Conflicts of Interest

• May the designer also bid as a contractor?

Standard RFP/RFQ Provisions

• Schedule
• Submittal Requirements
• Conversations Before Advertising
• Questions and Changes - Addenda
• Federal Provisions

Evaluation Process

• Evaluation Committee Membership
• Orientation Meeting for Evaluation Committee
• Provide Documents to Evaluation Committee
• Ethical Issues
• Review and Scoring of Proposals
• Interviews
• Sample Interview Evaluation Criteria
• Attendance at Interviews
  

Contract Negotiations

• Scope of Work
• Hours
• Staff Allocation
• Fully Loaded Hourly Rates
• Markup Percentages
• Overhead

Contact me:  If you're interested in talking about me providing this training to your agency or association, please contact me.

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Training: "When Bad Things Happen to Bids"

I was in Milwaukee, Wisconsin last Thursday providing public works training at the Spring Conference of the Wisconsin Association for Public Procurement (WAPP), an NIGP chapter.  The conference was held in conjunction with V.A.L.U.E., a cooperative purchasing program in southeastern Wisconsin. 

Mike Purdy and Jesse Jackson
at Chicago's O'Hare Airport

Surprise in Chicago:  On a layover at Chicago's O'Hare Airport on Wednesday on my way to Milwaukee, I ran into Jesse Jackson who was there catching a flight also.  He very graciously agreed to pause for a picture with me.  It was an amazing experience - something totally unexpected!

Developing Public Works Bid Documents:  In Milwaukee, I did an hour long training session on "Best Practices in Developing Public Works Bid Documents."  Here's a high level outline of my presentation:

• Principals of Preparation
• Formats and Structures
• Components of Bid Documents
• Review of Individual Projects
• Document Control
• Long Term Review
• Training

When Bad Things Happen to Bids:  In the afternoon, I provided 3.5 hours of training on "When Bad Things Happen to Bids: Strategies for Ensuring a Successful Public Works Project."  Here's an outline of the interactive presentation:

• Why Aren't Bidders More Careful?
• Why do Bidders Make Mistakes?
• Missing Bid Prices
• Conflict Between Numbers and Words
• Bid Calculation Errors
• Claims of Error

• Is Your Bidder Playing Games?
• Bid is Too Low
• Unbalanced Bids
• Conditioned or Qualified Bids

• Will the Real Low Bidder Please Stand Up?
• Additive and Alternate Bids
• Tie Bids
• Responsive Bids
• Responsible Bidders
• Local Bid Preferences
• Bid Protests and Appeals

• What Can You Do to Manage Bidding?
• What Should be on the Bid Form?
• On What Days Should You Not Receive Bids?
• When is a Bid Late?
• When Should You Take a Bid Guaranty? 

Interested in this training?  If you are interested in me providing this training for your agency, NIGP chapter, or other professional association, please contact me.

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Contractor Releases Survey of Architectural Firms

M.A. Mortenson Construction Company has released their Architect Survey: The State of Design and Construction with poll results and quotes from 50 professionals at the 2012 national conference of the American Institute of Architects. 

Positive Outlook:  The overall mood of architects was optimistic: 

• Looking forward:  Two thirds of the architects responding predicted an increase in business for their firm during the next year (half said it grew over the past year), and the majority (83%) reported being at least somewhat optimistic about the "challenges and opportunities facing architecture today."  

• Increasing hiring:  While only a third of survey participants said their architectural firms were hiring a year ago, almost half (46%) reported they are currently hiring, and three quarters predicted they would be hiring a year from now. 

Additional survey topics:  The survey also probes a range of other issues through a mix of response statistics and representative quotes from respondents, including:

• Enthusiasm for BIM/VDC
• Faith in Integrated Project Delivery
• Opinions about traditional project delivery methods
• Design excellence
• Sustainability
• Importance of teamwork
• Builder involvement during the design phase
• Working with builders

Full survey:  The full survey is available on Mortenson's website as a PDF.

Mike Purdy's Public Contracting Blog 

© 2012 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Implications of New State Law on Indemnification

As I noted in a previous blog posting, the Washington State Legislature adopted EHB 1559 in 2012 that changes indemnification requirements on architectural and engineering contracts.  The new law will require different indemnification language in contract of public agencies

MRSC article:  The Municipal Research and Services Center (MRSC) has published an article entitled "New Indemnification Language for A/E Contracts" by John W. Carpita.  The article includes:

• A summary of the new law
• An analysis of the new law by Kevin J. Yamamoto, City Attorney for Puyallup
• Recommended contract language provided by Eric Larson, Deputy Director of the Washington Cities Insurance Authority

Click here to read MRSC's article.

Mike Purdy's Public Contracting Blog 

© 2012 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Indemnification Law on Public Contracts Amended

With strong backing and support from the professional design community, the Washington State Legislature approved (with only one dissenting vote) Substitute House Bill 1559 related to indemnification provisions in public contracts. Governor Christine Gregoire signed the bill.

Current Law:  The purpose of the current law in RCW 4.24.115 is to establish a standard of concurrent negligence in indemnification clauses.  In other words, a public agency may not require a contractor to indemnify the public agency against liability for damages "caused by or resulting from the sole negligence" of the public agency.  Instead, it establishes that indemnification is valid and enforceable only to the extent of the concurrent negligence of the contractor and public agency.

Three Changes in Law:  SHB 1559 will amend RCW 4.24.115 in the following three areas:

• Clarification of covered parties:  The existing law states that it applies to a contract "relative to the construction, alteration, repair, addition to, subtraction from, improvement to, or maintenance of, any building, highway, road, railroad, excavation, or other structure, project, development, or improvement attached to real estate, including moving and demolition in connection..."  [emphasis added]  Many agencies interpreted the phrase "relative to" to include contracts for architectural, engineering, landscape architectural, and land surveying services, even though the language is not explicit.  SHB 1559 specifically adds contracts for these four disciplines to the protections provided for in the law.

• No duty to defend:  One of the regular sticking points in negotiating contracts with designers relates to whether the indemnification provided by the designer covers their duty to defend the public agency in the event of a claim.  SHB 1559 explicitly prohibits language in public contracts that includes the duty to defend and the cost of such defense.

• Extent of indemnification:  The current concurrent negligence standard is only applicable to liability for damages related to bodily injury and property damage.  Thus, for any other type of liability, a public agency could apply a sole negligence standard.  SHB 1559 changes this.  The concurrent negligence framework will expand to cover any liability arising out of any services performed on the contract.

Contracts will change:  The bill, which becomes effective on June 7, 2012, will require public agencies to review and change indemnification language included in both construction contracts and contracts for architectural, engineering, landscape architectural, and land surveying services.  Indemnification is a complicated area and attorneys are best suited to sort through and develop appropriate contract language.  Public agencies should consult with their attorneys for what language may need to change in their contracts. 

More Information:  Two Seattle area law firms have recently written helpful articles about SHB 1559 that may help in understanding this new legislation:

• April 5, 2012 article by Stan Beck and Grant Degginger from Lane Powell PC in the Seattle Daily Journal of Commerce: Design professionals win big in revised anti-indemnity statute.

• April 17, 2012 blog by John P. Ahlers of Ahlers & Cressman PLLC: Washington's Anti-Indemnification Statute (RCW 4.24.115) is Amended to Include Design Professionals and Contractors Receive a "Kiss"

Mike Purdy's Public Contracting Blog 

© 2012 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Training: Developing and Managing RFPs and RFQs

Developing and Managing RFPs and RFQs

When:  

• May 3, 2012 (8:30 a.m. to 4:30 p.m.) - Ridgefield, Washington (5 seats available)

• June 13, 2012 (8:30 a.m. to 4:30 p.m.) - Yakima, Washington (21 seats available)

Instructor:  Mike Purdy

Class Outline:

• Building the Public's Trust
• Planning the Procurement
• Standard Provisions and Concepts
• Conflicts of Interest
• Cost and price Analysis
• Advertising Issues
• Pre-Submission Meeting
• Receiving and Opening Proposals
• Evaluation Committee
• Evaluation Proposals 
• Managing Interviews
• Recommending Award
• Contract Negotiations
• Developing Scopes of Work

Sponsored by:  Washington Cities Insurance Authority (WCIA)

Cost: 

• Free - WCIA Members
• $115 - Non-WCIA Members

Information and Registration:  Click here for the Ridgefield class.  Click here for the Yakima class.

Mike Purdy's Public Contracting Blog 

© 2012 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

The Advantages of On-Call Contracts for Architectural and Engineering Services

What is an On-Call A/E Contract?  Public agencies often have ongoing needs for architectural and engineering services.  Rather than go through a separate selection process each time the need for such services arises (whether through a project-specific advertisement and selection process, or selection from among firms on an established roster), some agencies will advertise for on-call services.  

Features of an On-Call A/E Contract:  Features on an On-Call A/E Contract include the following:

1. Public advertisement soliciting statements of qualifications
2. Issuance of a Request for Qualifications (RFQ)
3. Established evaluation criteria publicized in the RFQ
4. Scope of work defined for a specific discipline or focus within an A/E discipline
5. Selection of the most qualified firm
6. Negotiation of fully loaded hourly rates and markups
7. Execution of an On-Call contract
8. Negotiation of scope and amount for specific assignments
9. Execution of work orders for specific assignments
10. Maximum dollar threshold by policy for each work order
11. Maximum dollar amount by policy for the life of the On-Call A/E Contract

On-Call A/E Contracts vs. A/E Roster:  Some public agencies will establish an A/E Roster consisting of the qualifications of firms who have expressed an interest in doing business with the agency.  Depending on specific agency policies, rather than advertising for each need for A/E services, the agency will conduct an informal evaluation process (not advertised) and select a firm from the Roster.  On the other hand, an On-Call A/E Contract is an advertised solicitation for anticipated work, while firms on the A/E Roster are not evaluated until a specific project comes up.  

Advantages of an On-Call A/E Contract:  One of the advantages of an On-Call A/E Contract is that it is more streamlined than selection from an A/E Roster since formal solicitation, selection, negotiation of basic rates, and contracting have already occurred.  It is also more streamlined than a project-specific advertisement and solicitation in that solicitation and selection for multiple assignments occurs under just one solicitation process.

How Long Can an On-Call A/E Contract Last?  If a public agency advertises for an On-Call Contract for Architectural and Engineering (A/E) services, how many years can the contract last?  Public agencies who use On-Call A/E Contracts often do so in order to save administrative time and expense involved in frequent advertising and selection processes.  A typical duration is one year with the option to extend it for up to two additional one year periods.  In evaluating the duration of an On-Call A/E Contract, agencies should not establish such a long period of time such that no other firms have the option to compete for public contracts.  New firms are constantly being formed and firms reorganize with different and experienced partners from other firms. 

Advice from the State Auditor's Office:  Recently, there was some confusion when the Washington State Auditor's Office went on record with one public agency and stated that an On-Call A/E Contract should be limited to one year only.  Since then, the Auditor's Office has indicated that multi-year On-Call A/E Contracts are acceptable, but have outlined the following issues that should be addressed if an agency chooses to use an On-Call A/E Contract:

• Price Updates:  There should be an annual update of price information from the consultant.

• Qualifications Updates:  The consultant should update their qualifications on an annual basis.  The update should include a statement that they are not debarred, and that they are up to date in their quarterly payments of workers compensation premiums to the Department of Labor and Industries.

• Prevailing Wages:  To the extent that any of the work under the On-Call A/E Contract requires payment of prevailing wages, the consultant must file a Statement of Intent to Pay Prevailing Wages for the On-Call Contract, and an Affidavit of Wages Paid for each applicable task or work order under the On-Call Contract.

• Document Selection Process:  If the public agency has selected more than one consultant for an On-Call Contract for the same type of work, the agency should document the  process by which the selection for a particular task or work order was made.

Establish Agency Policies:  If your agency selects A/Es through different processes (advertise specific project, select from a roster, use an on-call contract), it is important to have clear agency policies that identify when a roster or on-call contract may be used.  These policies should address the dollar thresholds for the work along with other relevant factors.

What Laws and Regulations Apply?  Public agencies need to carefully understand what federal, state, local, and agencies laws and policies apply in any circumstance.  In Washington State, selection of A/E consultants is governed by chapter 39.80 RCW, and covers the disciples of architecture, engineering, landscape architecture, and land surveying.  Selection of A/Es and related disciplines on federally funded projects is governed by the federal Brooks Act. 

Your Opinion and Experiences:  I'm interested in learning what you agency's policies are regarding use of On-Call A/E Contracts and A/E Rosters.  Please leave a comment on the blog, contact me, or send me a copy of your policies.

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Training: Purchasing, Bidding, and Contract Management for Local Agencies

When:  September 21-22, 2011 (8:30 a.m. to 4:30 p.m.)

Where:  Ellensburg, Washington (Central Washington University, Mary Grupe Center)

Sponsored by: WSDOT and Municipal Research and Services Center

Cost:  $100

Instructors:  

• Mike Purdy, Michael E. Purdy Associates, LLC
• John Carpita, MRSC
• Toni Nelson, Vision Municipal Services

Subjects to be Covered:

• Purchasing Materials, Supplies, and Equipment
• Contracting for Services
• Public Works Contracting

Information and Registration:  Click here.

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Friday Deadline to Respond to Survey on A/E Selection Practices

Friday, August 26, 2011 at 5:00 p.m. is the deadline to respond to the survey I've created on A/E consultant selection practices.

Thanks to the 50 plus of you who have already responded.  I'd love to get at least 100 responses, so please take just a couple of minutes to answer 10 easy multiple choice questions.

Complete Survey Now:  Click here to access this online survey:  http://www.surveymonkey.com/s/L6GTZPF.

Thanks!  I'll publish the results of the survey in a future blog posting.

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Survey on Consultant Selection Practices of Public Agencies

In talking with many public agencies, I've noticed different practices related to:

• Consultant selection
• The role of evaluation committees
• Whether committees develop consensus scores
• How scores of individual committee members are documented.

What Are Best Practices?  I've created an online survey to find out what common and best practices are with public agencies.  

Click Link to Respond to Survey:  To participate in the survey and answer ten questions, please click on this link: http://www.surveymonkey.com/s/L6GTZPF.

Survey Closing Date:  The survey will remain open until next Friday, August 26, 2011.

Results of Survey:  I will publish the results on a future blog entry.

Thanks for your participation!

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Free Webinar on Contracting for Architectural and Engineering Services

Webinar on Contracting for Architectural and Engineering (A/E) Services

When:  Tuesday, August 30, 2011 (10:00 a.m. to 11:00 a.m.)

Cost:  Free

Where:  Your computer

Sponsored by:  Municipal Research and Services Center (MRSC)

Panel:

• John Carpita (moderator), MRSC
• Mike Purdy, Principal, Michael E. Purdy Associates, LLC
• Joe Simmler, Senior Project Engineer, Otak
• Jan Olivier, Transportation Manager, Kittitas County

5 Questions to be Addressed by Panel:

1.  Do you feel that Qualifications Based Selection (QBS) for A/E consultants is a good business practice?
2. What professional disciplines does QBS selection apply to and should it be used for certain non-A/E consultants?
3. What are the advance notification provisions of Chapter 39.80 RCW and how have they been applied correctly and incorrectly?
4. Do you feel that agencies select directly from their A/E consultant rosters more frequently than they should?
5. What are some best practices for agencies to follow in their Requests for Qualifications, interviews, and contract negotiations?

More Information and Registration:  Click here.

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Coming Soon: Audit on Construction Change Order Pricing

The Washington State Auditor's Office has completed most of their work on their performance audit of Construction Change Order Pricing for seven cities and one county in the state.  

Audit Being Finalized:  The auditor's office has requested the agencies audited to provide their technical review of the draft audit.  Once the auditor makes any changes in the audit based on feedback and corrections from the agencies, they will send the final draft report to the agencies for them to provide their formal written response to the audit.  The formal responses from the agencies will be published in the final audit.  The auditor hopes to publish the audit later this month.

Agencies Who Were Audited:  The following are the agencies that were audited:

• City of Bellingham
• City of Everett
• City of Puyallup
• City of Richland
• City of SeaTac
• City of Shoreline
• City of Spokane
• Thurston County

What Are Best Practices?  It promises to be an interesting audit report when it is finally published that will generate a lot of conversation (and some disagreement with the audit) over what practices should be followed.  It probably won't rise to the blockbuster level of some of the previous construction management performance audits that have come from the state auditor. 

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Are You Paying Consultants Consistent with Contract Terms?

In negotiating and executing a consultant contract, both the consultant and the public agency agree upon the basis of payment, including but not limited to hourly rates, permitted reimbursable expenses, and sub-consultant mark-up percentages.

Review Invoices:  When invoices are submitted to the public agency for payment, it is critical for appropriate public agency staff to carefully review the invoice to ensure that the payment requested is consistent with the terms of the contract.

Audit Finding:  The Washington State Auditor's Office issued a Citizen Hotline Report on November 8, 2010 reporting on its investigation of charges made by a citizen against the City of Snoqualmie.  The citizen complaint complained that the City was overpaying consultants because City personnel were not carefully reviewing invoices submitted for payment.  The auditor found that the City was overcharged $13,000 based on invoices reviewed by the auditor.  The City then passed the costs onto private developers in accordance with agreements in place.

Specifically, the auditor noted the following overpayments by the City:

• Hourly Rate Overpayment:  The City paid a forestry consultant at an hourly rate of $110 per hour, when the contract limited the hourly rate to $85 per hour.  For a six month period in 2007, this amounted to an overpayment to the consultant of more than $4,000.

• Mileage Reimbursement Overpayment:  The City reimbursed the same forestry consultant for mileage at 48.5 cents a mile, while the contract only permitted reimbursement at 31.5 cents a mile, resulting in an overpayment of more than $1,600.

• Payment for Reimbursables Not Permitted:  The City reimbursed an engineering firm almost $1,700 for the use of a four-wheel drive vehicle and cellular telephones that were not allowable under the contract.

• Hourly Rate Overpayment:  The City approved invoices for and paid for the work of a senior project manager with an engineering firm at an hourly rate of $130, when the contract only permitted $120 per hour.

• Mileage Reimbursement Overpayment:  The City approved mileage reimbursement for an engineering firm in excess of what was permitted by the contract.  In addition, the City approved mileage reimbursement for personnel who were working on the project, but did not incur actual mileage expenses because no travel occurred.

Practical Tips:  In managing your consultant contracts, do you have processes in place to ensure that invoices paid are appropriate and consistent with the terms of the contract?  Here are a couple of procedural tips that can help you in managing contract payments.

• Contract Terms:  Know the payment terms of your contract.

• Copy of Contract:  Ensure that staff who are managing contracts or approving payments for contracts actually have a copy of the contract.

• Detailed Invoices:  Require that invoices be submitted in sufficient detail to determine the breakdown of costs so the public agency can determine if the costs are consistent with the terms of the contract.

• Review Invoices:  Have appropriate staff with direct knowledge of the work performed review the invoices not just for whether the work was performed, but whether the charges are consistent with the terms of the contract. 

• Internal Controls:  Institute appropriate internal controls within your agency so that others (supervisors, purchasing, contracting, or accounting) also review invoices for consistency with the terms of the contract.

• Rejection of Invoices:  Reject invoices submitted that are inconsistent with the terms of the contract, and require the consultant to re-submit the invoice after it has been corrected.

More Information:  Click here to read the complete 15 page Citizen Hotline Report.  In addition to the overpayments noted above, the report also concluded that the City could have saved a significant amount of money by hiring a city employee to perform the work instead of paying consultants. 

Mike Purdy's Public Contracting Blog (© 2010 by Michael E. Purdy Associates) 

http://PublicContracting.blogspot.com

Training: Contracting for Services in Washington State

Topic:  Contracting for Services in Washington State

Where and When (10:00 a.m. to 2:30 p.m.) - choose one location:

• Everett (September 14, 2010)
• Renton (September 16, 2010)
• Camas (September 21, 2010)
• Yakima (September 30, 2010)

Cost:  Free

Agenda:  

• What's the difference between purchased services, personal services, and professional services?
• What dollar thresholds apply for selection?
• What laws apply to different types of contracts?
• What advice do consultant give for how a public agency should structure and RFP or RFQ?

Sponsored by:  Washington State Chapter, American Public Works Association, Contract Administration Subcommittee

For more information and to register, click here.