DESIGN PART 1 SELECTING THE DESIGNER AGREEMENT FOR PROFESSIONAL SERVICES

SELECTING THE DESIGNER SCOPE OF DESIGN SERVICES QUALIFICATIONS-BASED SELECTION (QBS) COMPETITIVE BIDDING TWO-ENVELOPE SELECTION

SCOPE OF DESIGN SERVICES The detail and specificity of the scope of design services vary with the size and complexity of the effort. (from a general statement of performance specification to extensive itemized description of each task). The scope should specify the owner’s requirements for design services during construction and start-up phases. Owners that manage construction projects often have the in-house capability to prepare a well-defined scope of design services for use during selection of designer. Owners who do not regularly undertake construction projects usually engage an independent designer.

QUALIFICATIONS-BASED SELECTION (QBS) Qualifications-based selection (QBS) is generally accepted practice for design-bid-build contracting, particularly on public works projects. The owner selects the designer on the basis of qualifications submitted before final scope and fee are negotiated. Designers submit statements of interest and qualifications in response to an owner’s invitation or advertisement (Request For Qualifications - RFQ). The owner and/or selection committee evaluates responses according to the selection criteria. In many cases, the owner lists top three ranked designers and conducts interviews before selection.

Owner’s Selection Committee Typical selection committee members may include: –At least one professional engineer or licensed architect; –The owner’s principal contact with the designer; –The owner’s construction project manager; –The operations manager of the future facility; –An owner representative authorized to make subjective judgments on aesthetic project elements involving architecture or public perception. –To avoid conflicts of interest, committee members are not affiliated with competing design firms.

Selection Criteria Typical designer selection criteria includes the following: –Ethics –Professional registration –Specific qualifications (knowledge of codes or other governmental issues) –Similar experience –Resources –Availability (provide qualified staff and complete required services within a time frame that supports the project schedule)

Request For Qualifications (RFQ) Designers are often asked to submit modified U.S. standard forms –SF 254, Architect-Engineer and Related Services Questionnaire –CSF 255, Architect-Engineer and Related Services Questionnaire for Specific Project The standardized format allows the selection committee to easily compare the qualifications of key personnel and relevant project histories.

Selection Details The committee evaluates the statements of qualifications received against the selection criteria The owner or committee selects three candidate designers to receive a Request For Proposal (RFP). The FRP describes proposed project in as much detail as possible and includes the scope of design services. The owner invites best-qualified designers to meet with the selection committee for separate interviews. The selection committee ranks the designer based on their ability to meet the selection criteria, as well as information obtained at the interview and reference check.

Negotiation Following discharge of committee, owner invites top-ranked designer to appear for a second presentation. At this point, the owner and designer combine their capabilities, experience, and judgment to fully develop the scope of services. Once the full scope of services is developed, the owner and designer negotiate a fair and equitable compensation for the services to be provided. If the owner cannot reach agreement with the first selected designer, the owner terminates negotiations by a written notice, and begins negotiations with the second most qualified designer or third, until agreement is reached. When agreement has been reached, negotiations are formalized in a written agreement. The owner then promptly notifies firms that were not selected.

COMPETITIVE BIDDING Competitive bidding for design services is not allowed on federal projects or on many state and municipal projects under the Brooks Act and similar state statutes. Where competitive bidding is to be used, the owner first prepares a complete and comprehensive set of bid documents and contract provisions. Designers are invited to submit a price for the described scope of work. The owner compares the bids and selects the designer submitting the lowest bid, either in terms of price or hours of effort. The owner may require pre-qualification from designers to be eligible to bid.

Disadvantages of Competitive Bidding The low bidder may not be fully qualified. It is rare for an advertised scope of services to contain all design services required. The nature of agreement may limit the ability to achieve a “meeting of minds” on difficult project goals or objectives. Limited scope and fee tends to reduce the number of opportunities for alternative studies and evaluation, and limits the flexibility available. Skimping on design costs often increases number of change orders, misunderstandings, and other unplanned events and reduces the attention paid to operating and maintenance of efficiencies, all of which tends to drive up life-cycle costs.

TWO-ENVELOPE SELECTION In the two-envelope system, each designer gives the owner a technical proposal in one envelope and a price proposal in another. The owner opens technical envelopes first and and selects best qualified designer solely on the basis of technical merit. The owner then opens selected firm’s price envelope and uses cost information as the basis for negotiating for design services. If the negotiations with the first firm are unsuccessful, the owner may open second-ranked firm’s price envelope and begin negotiations. After the selection of designer, remaining price envelopes are returned to the firms unopened.

AGREEMENT FOR PROFESSIONAL SERVICES PURPOSE OF THE PROFESSIONAL SERVICES AGREEMENT ELEMENTS OF THE AGREEMENT STANDARD-FORM AGREEMENTS SHORT-FORM AGREEMENTS

AGREEMENT FOR PROFESSIONAL SERVICES After the selection of designer, next step is preparation of professional services agreement between the owner and the designer. Although most professional services agreements are prepared for a unique set of conditions and project objectives, standard-form agreements can be helpful in preparing an appropriate project- specific agreement.

PURPOSE OF THE PROFESSIONAL SERVICES AGREEMENT The professional service agreement is an especially important means of summarizing the negotiations and recording the consensus of the parties on the project goals and objectives and each party’s role.

ELEMENTS OF AN AGREEMENT Typical agreements consist of two parts: First part known as “scope/schedule/fee” section establishes issues that are unique to the project including scope, schedule, fee and owner’s responsibilities. The second part consists of term and conditions (general conditions). These sections address procedures for amending the agreement, standards of performance, insurance, coverage, allocation of risks, and termination. In formal contract documents, the terms and conditions typically appear first, with the scope/schedule/fee provisions provided in exhibits.

Project Phases and Scope of Services The services that designer provides during a complete constructed project are generally considered to be divided into six parts: –The study and report phase; –The preliminary design phase; –The final design phase (producing contract documents); –The bidding, or negotiating, phase for construction services; –The construction phase; –The post-construction, or operation, phase

Project Phases and Scope of Services (cont.) The design agreement specifies the project phases and the professional services to be provided in each, subdivided into discrete, project-specific tasks. (scope of services) The negotiated scope forms the basis for the schedule and fee for each phase. If the contractor joins the project team during design, the design scope might include more meetings with the contractor but fewer construction alternatives because the contractor can help guide the team to the most economical methods.

Instruments of Service Under most professional service agreements, it is the designer’s responsibility to produce documents that are among the end results of the tasks outlined in the scope of services. These documents (a.k.a. “instruments of service” or “deliverables”) are described in the agreement and may include: –Schedules –Preliminary reports of project feasibility –Opinions of probable costs –Reports of alternative investigations, project impacts on the environment and infrastructure –Preliminary design and outline specifications –Final design –Construction contract documents, including plans and specs –Reports on construction activities –Record drawings and final project reports –Operating and maintenance manuals

Fee for Services There are several methods of payment for professional services: –Hourly or per diem rates; –Retainer; –Salary costs times multiplier plus direct non- salary expense; –Cost plus fixed fee; –Lump sum; –Percentage of construction cost.

Owner’s Responsibilities Overall project quality is closely related to the owner’s willingness to be responsible for the timely and satisfactory performance of his or her responsibilities and associated tasks. These tasks typically include: –Defining project objectives –Project financing –Provide existing info on project and related site conditions –Arranging surveys and subsurface investigations –Coordinate activities with other team members –Maintaining required project records –Dictating or approving the terms of the contract –Specify insurance requirements –Carry out other activities necessary for designer’s performance –Related auditing of expenditures as required

STANDARD-FORM AGREEMENTS Standard-form agreements offer provisions that reflect accepted industry practices, using language that has been tested in court. They allocate risk fairly and set fair terms of compensation. The two leading professional societies that comprises procedure standard-form agreements for professional services are EJCDC and AIA.

SHORT-FORM AGREEMENTS If a project is routine or relatively small and simple, a well-drafted short-form agreement for professional services may be appropriate. Short form agreements can be: –A letter of understanding –A short-form professional services agreement