By Gregory Rodriguez, Of Counsel, Best Best & Krieger LLP.
Gone is the day when public agencies only have one option — the traditional design-bid-build construction delivery method — for procuring a contractor for a public construction project. Instead, there is an increased willingness by state legislatures across the nation to provide public agencies with the flexibility to use alternative construction delivery methods, such as design-build, lease-leaseback and construction manager/general contractor. Often, these alternative delivery methods allow a public agency to procure a contractor that is determined to provide the “best-value” (evaluation of qualifications, experience and price) for a project, instead of just the lowest price under the traditional design-bid-build procurement method.
In this day and age, we all know how easy it is to buy a new dress shirt or pair of shoes online. Despite such convenience, there is never that certainty of perfect fit that you get when you take the time to try on that shirt and those shoes before buying. The same concept goes for developing a request for proposals for a public construction project. No two projects are alike and, unfortunately, there is no such thing as a “form” RFP. Just like the potential of your online shirt or shoes not fitting upon delivery to your doorstep, pulling language from an old RFP or a RFP found online can lead to unnecessary confusion during the procurement process — as language used by another agency for its project may not fit your project. Unfortunately, unlike being able to send back the shirt or shoes purchased online, it is usually not as easy to return a contractor or restart a procurement from scratch — not to mention that you do not get back the funds and administrative time already spent.
Although being able to select a contractor based on its skills and experience can be attractive for a public agency, especially when it is about to embark on a large or complex project, the agency needs to understand that the evaluation process under a best-value procurement takes time and care. However, if done correctly, the agency should find itself with a contractor that not only has the experience and qualifications to complete a project, but also one that is invested in the agency and has a philosophy for completing the project that aligns with the agency’s vision and expectations. On the other hand, if a best-value procurement is mishandled, then the agency can find itself in the same position as bidding out a contract under the design-bid-build scenario and often just selecting the lowest bidder for a project.
The following are tips for public agencies to assist in getting the most out of a best-value procurement:
- Know the law. When deciding to use an alternative procurement method, make sure you review the law that authorizes your agency to use that delivery method. Often, there will be mandatory findings that need to be made by an agency’s governing board before the construction delivery method can be used. In addition, the law may limit the use of the delivery to projects of a certain dollar amount. Also, there may be certain terms that must be included in a contract by law. Educating an agency’s governing board about the project and proposed alternative delivery method — and getting the board’s buy-in at the outset — can help make the road to project completion easier, especially if unavoidable issues arise during construction.
- Make sure the fit is right. Make sure you understand how the delivery method works and what responsibilities the agency will have if that delivery method is used. No method will allow the agency to completely delegate all responsibility to a contractor, but some methods enable the agency to pass more risk on to a contractor. Of course, passing on such risk often comes with an increased project cost. Just because you have heard good things about a certain delivery method (usually at a recent conference) does not necessarily mean it is right for your project, because certain methods work better for different types of projects (i.e. vertical vs. horizontal construction). Of course, new ideas are always worth exploring. However, before moving forward, it is critical to understand the relationship between owner, builder and designer that a specific delivery method creates and how risk is allocated between the parties with that method. Perhaps most importantly, no matter what delivery method is used, an agency needs to remain involved in monitoring the progress of construction, whether through its own staff or a hired consultant, and address issues as quickly as possible to prevent them from becoming major disputes that risk impacting project completion.
- Budget the right amount of time to complete the procurement. Doing a procurement properly requires time and planning. Unfortunately, time is not always a luxury when taking into consideration funding deadlines or the workload of a public agency’s procurement department. Nonetheless, it is important to consider the right amount of time that proposers will need to develop accurate and meaningful proposals (i.e. not just marketing materials) and how much time evaluators will need to properly review, evaluate and score those proposals. It is also important to remember that the evaluation of proposals is often an extra task that is added to an employee’s already busy workload. As a result, advanced calendar planning with evaluators should be employed when possible, especially when an agency plans to incorporate interviews into the evaluation process. If possible, it is beneficial to have a pre-evaluation meeting with evaluators to make sure they understand the project, know the requirements in the request for proposals and are aware of the evaluation criteria.
- Provide as detailed a scope of work as possible. Including a scope of work that is as detailed as possible is an essential step toward receiving proposals that articulate the planned methodology the contractor will use to complete a project on-time and on-budget. Moreover, a clearly defined scope of work will help with, and expedite, price negotiations with the selected contractor.
- Develop a clear evaluation process. A public agency needs to create a clear evaluation and interview process, which needs to be articulated in the RFP. The RFP should be concisely written and provide a potential proposer with a blueprint for what needs to be included in its proposal. The proposer should have a firm understanding of how its proposal will be evaluated and scored. The risk of a protest from an unsuccessful proposer increases greatly if the RFP does not comprehensibly set forth the evaluation process.
- Follow your evaluation process. Once a public agency has developed an evaluation process and presented it in the RFP, follow it!!! Any deviation from the published evaluation process risks a protest unless the agency can show that it is minor and does not provide a competitive advantage to a proposer.
- Have a clear protest process in place. As most agencies dread receiving a protest, they do not include protest procedures in their RFPs. If an agency decides to take this route, it should still have protest procedures in place that are easily accessible (i.e. posted online) and can be followed in the event of the receipt of a protest. Having clear protest procedures helps expedite resolution of a protest and can minimize any unnecessary delay in moving forward with final selection of a contractor. (Note that the receipt of federal funding on a project normally requires that protest procedures be included in the RFP.)
- Hold debriefs with unsuccessful firms. Developing a proposal can be an expensive and time-consuming endeavor for a contractor. Unsuccessful proposers appreciate having an opportunity to meet with the public agency to receive feedback on its proposals and to discuss why their proposals did not receive a higher score or ranking. Of course, ground rules need to be set to understand the goal of the meeting so it does not turn into a “witch hunt.” Holding debriefs can also reduce the risk of a protest and encourage qualified entities to submit proposals on future projects.
- Keep accurate records. A public agency should make sure its procurement file for a project is organized and accurate. The maintenance of accurate procurement files is important for dealing with any potential bid protests or audits.
The above tips are merely a snapshot of the myriad of items that should be considered when developing a request for proposals, but are some of the most important based on our experience.
The procurement process can be rewarding — just like finding that perfect fitting suit or shoes. While time is often not an amenity when doing a procurement, budgeting time to plan and incorporate some or all of the steps noted above can help you get the most out of your procurement. This likely will lead to a project that meets or exceeds the expectations of the agency, and perhaps, most importantly, the expectations of the taxpayers.
Gregory Rodriguez works in Best Best & Krieger LLP’s Washington, D.C. office. Greg has also served as in-house counsel for the San Diego Association of Governments, where he provided legal guidance on the agency’s public infrastructure projects.