How to achieve a fair procurement process
A level playing field makes for a solid foundation for infrastructure.
Procurement, through a Request for Proposal (RFP), is how architects and engineers are hired to design Canada’s infrastructure. This includes exciting new museums and libraries but also the day-to-day infrastructure for offices, renovations, roof rehabilitation, barrier-free washroom upgrades, and thousands of regular projects.
But how architects and engineers are hired is increasingly challenged.
When the government makes decisions, we expect to be treated fairly. We expect to be given an opportunity to be heard in front of a fair and impartial decision-maker who can provide the rationale for their decision.
In contracts, we seem to have forgotten about fairness. Contract conditions in many RFPs are fundamentally unfair. For example, they can ask that the architect protect the client from all damages that the client may experience, regardless of whether the architect is responsible. This implies a level of perfection that is so unreasonable it cannot be insured. Contract language can also violate provincial law, such as the Architects Act, and expose the professional to unreasonable transfer to risk. In some cases, contracts extend payment terms so that the professional is helping to bridge finance the project.
These conditions are in RFPs for projects from school boards, colleges, universities, provincial governments, and the third-party service providers public services use to distance themselves from the contract.
Many of these RFPs are so egregious that the regulator of architecture in Ontario, the OAA, regularly issues warnings to the profession on risk, liability, and the potential un-insurability of the contract. Loss of insurance coverage could result in charges of professional misconduct and, in the end, deny the client of access to funds to cover errors or omissions.
Brookfield Global Integrated Solutions (BGIS) has awarded contracts for the design of buildings that require a regulated professional, like an architect or engineer, to unregulated designers. RFPs have been repeatedly issued with multiple addenda, even for the simplest scopes of work.
The federal government, in retaining Brookfield Global Integrated Solutions (BGIS) to maintain their assets, has permitted contracts that do not align with ethical or professional standards and creates a culture that prohibits our natural rights to compete on a fair and reasonable basis for work that is funded by our own government.
Fee-Based Race to the Bottom
Most RFPs contain some scoring that includes the consideration of fees. Research shows that this is fundamentally flawed. Once a basic technical threshold is reached, fees decide the selection. The lowest fee will win, often to the detriment of a successful outcome.
PSPC awards work based on a 90% technical score with 10% reserved for fees. However, Global Affairs Canada makes the same decision based on 40% fees while the National Research Council makes the decision on 20% fees. Inconsistency across the federal government makes it hard to see how fairness is considered.
Even when the fee is only 10% of the total there is still a problem. The basis of the award should be on technical merit and best value. The best value is not the lowest price.
On a recent RFP for standing offer work in Quebec, PSPC used a set of standard definitions for experience level to determine what defined a senior, intermediate, or junior staff member. These definitions came from a standardized contract that included recommended hourly rates.
A recent project saw our office achieve a perfect technical score, with 90 out of 90 possible points, beating 23 other teams with the remaining 10 points for fees. Our fee score placed us in the 11th position. In both cases, the awarded fee was less than half the industry’s normal hourly rates.
Quality Based Selection
In 1972, the United States passed the Brooks Act. This prohibits considering the role of fees in decision making for architecture and engineering on the basis that a fair and reasonable fee can be negotiated. Seven simple steps make the RFP process faster, simpler, easier to administer, and, importantly, allow for a fair and transparent discussion of project risks, goals, insurance, and fees.
This process was also developed, and endorsed, by the Canadian federal government and is contained in a 2006 Infraguide, published by the Federation of Canadian Municipalities. It is largely ignored.
Today, some of the best and brightest talents in architecture and engineering do not even read the RFPs. They know that a fee-based competition and the onerous costs of responding to complex RFPs puts them at a disadvantage. Respondents are either very large firms who can self-insure, or are firms willing to gamble that if a project goes wrong, the contract conditions will not stand up in court, or will take so long to get there that they’ll retire before it happens.
This is no way to build the infrastructure Canada needs.
Put simply, if you were hiring someone for your office and knew that the going rate for the position was to pay someone $30/hour, would you really think you were going to get good value for $15/hour?
Every day, we make hiring decisions based on clear expectations for salary, skill, and open, transparent dialogue that is based on treating someone fairly.
Why don’t we make the same decision when hiring for contracts to design the important physical infrastructure our society needs?
This article was also published in The Hill Times on March 24th, 2021.
Toon Dreessen is president of Ottawa-based Architects DCA and past-president of the Ontario Association of Architects. For a sample of our projects, check our portfolio at bit.ly/DCA-portfolio. Follow @ArchitectsDCA on Twitter, Facebook, LinkedIn, and Instagram.