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    Contracting with architects and engineers – What’s required today?

    A review of the statutory qualifications-based selection process and when it is required

    Ohio public entities are required to follow a qualifications-based selection (QBS) process when hiring an architect, engineer or other design professional to perform professional design services. Although the QBS process and changes implemented with construction reform have been in effect since 2011, not all public owners and design professionals are aware of and/or follow the current process. 

    At its simplest, the QBS process includes four steps:

    1. Announce an available contract for design services (often done through a short legal notice published in the newspaper).
    2. Issue a public announcement (a request for qualifications or RFQ) of available contract for design services, which includes basic information about the project, required services and criteria against which firms will be measured.
    3. Evaluate the statements of qualifications and statements of interest received from design firms, which may include interviews (though interviews are not required) and the ranking of firms based upon qualifications to determine the most qualified.
    4. Negotiate a reasonable fee for services and then preparation of an agreement with the selected firm that defines the services and fee.

    When is the QBS process required for design services? 

    As defined in Ohio Revised Code (ORC) Section 153.65(C), “professional design services” means “any services within the scope of practice of an architect or landscape architect registered under Chapter 4703. of the Revised Code or a professional engineer or surveyor registered under Chapter 4733. of the Revised Code [emphasis added].” The statutory process applies to any design services contract, no matter the fee amount. For example, survey services, which often cost less than $1,000, are subject to the process unless the public entity can use an exception included in the ORC (discussed below). And, don’t forget that engineering services include construction materials testing and inspection services as well as geotechnical services for soil borings which are often required for a construction project.

    When using the design-build delivery method for a public construction project, the public owner must first select a criteria architect or engineer before the statutory process prescribed for selecting the design-build firm can proceed. Selection of the criteria architect or engineer is subject to the QBS process, unless a statutory exception is available. While the state maintains certain prequalified lists of design professionals on the Ohio Facilities Construction Commission (OFCC) website, they are only available for the state and its agencies. Other public owners must follow the applicable law when design services are required.

    What is the correct way to publish the public announcement of an available design services contract?

    Often public owners will send the notice of an available contract to a pre-selected group of firms. But, what does the ORC require? ORC 153.67(D) prescribes the options a public owner may use. The public announcement may “be sent to any of the following that the public authority considers appropriate:”

    1. Design-build firms, including contractors or other entities that seek to perform the work as a design-build firm
    2. Architect, landscape architect, engineer and surveyor associations
    3. The news media
    4. Any publications or other public media, including electronic media

    Note that the only option for sending the public announcement (or legal notice) directly to design professionals without publication of the notice is when the design-build construction delivery method will be used. The easiest way to comply with the statutory requirement is to publish a short legal notice in the local newspaper. In addition, copies of the RFQ can be sent directly to design firms.

    Exception when a qualifications file is maintained

    Under ORC Section 153.71(A), if the professional design fee is estimated to be less than $50,000, and the public authority maintains a file with current qualifications (the qualifications must have been submitted within the immediately preceding year), the public authority may select a design professional or firm determined to be most qualified to provide the required services from the qualifications in the file. ORC Section 153.68, which has been part of the QBS process since it was first enacted, permits public authorities to “institute prequalification requirements” and maintain files with current qualifications for use when the public authority requires design services. The prequalification requirements should be based on factors set out in ORC 153.65(D). The file may be set up at any time, and does not need to be established through publication requirements of ORC 153.67(D), discussed above; rather, the solicitation may be sent directly to design professionals. Legal counsel can help put together a resolution or authorizing legislation detailing the requisite process.

    Exception when an emergency exists requiring immediate action

    One other exception to the QBS process, which was included in the original legislation and remains, is for an emergency requiring immediate action. ORC 153.71(B) defines this exception and provides that the public authority head may determine in writing that a project is “an emergency requiring immediate action.”

    What happens if fewer than 3 design firms submit qualifications in response to an RFQ?

    ORC 153.69(A) requires the public owner to “select and rank no fewer than three design firms which it considers to be the most qualified to provide the required professional design services.”  However, if fewer than three firms submit qualifications,  and the firm is determined to be qualified, the qualifications received are to be evaluated and ranked to determine the most qualified firm per ORC 153.69(A). The public authority is also required to state in writing that fewer than three qualified firms were available at the time the design services were needed.

    Can any cost or fee information be requested with qualifications submittals?

    No. ORC 153.691 was enacted in 2003; it specifically states that public owners may not request fee information, including “any form of fee estimate, fee proposal, or other estimate or measure of compensation prior to selecting and ranking professional design firms.”

    What happens if an agreement cannot be negotiated with the firm ranked most qualified?

    While it is unusual to not reach an agreement with the firm ranked most qualified to provide the required design services, it does happen. In that situation, the public owner may terminate the negotiations in writing with the firm and begin negotiating an agreement with the firm ranked next most qualified. The public owner also has the right to terminate the overall process and start over; it may not, however, re-open negotiations with the firm with which it terminated negotiations.

    Contract negotiation considerations

    Once the firm is selected, the next issue that will come up is the fee. Fees are typically set at a fixed amount based on a percentage of the cost of the project, and they depend on the size and complexity of the project and scope of services desired. A main issue for consideration for owners is to establish exactly what the percentage is based on—the total project budget, construction cost budget, inclusion of specialty services, inclusion of additional site visits for on-site observations of work, etc.  

    A few other (sometimes) contentious provisions include indemnity provisions, the level of privilege attributable to conversations with the architect over matters disputed with the contractor, ownership of the drawings and specifications (if the agreement is prematurely terminated), and the level of protection provided to the owner as it relates to the design professional’s services. Legal counsel can help negotiate these issues.

    Summary of current statutory QBS process

    1.

    All architecture and engineering contracts are subject to the QBS process, regardless of estimated fee for services, unless:

    • The public authority maintains a file with current qualifications and the estimated cost of design services will be less than $50,000.
    • The public authority head determines in writing that there is an emergency requiring immediate action.

    2.

    Architectural services include planning and programming, as well as design services.

    3.

    Engineering services include surveyors, geotechnical services, soil borings, construction materials testing and inspection, abatement, investigations, and commissioning services, all of which are overseen by currently registered engineers.

    4.

    No fee estimate or measure of costs of services may be requested from firms before the ranking and selection of the most qualified design firm.

    5.

    The easiest way to comply with the statutory requirement to publish the announcement or legal notice of an available contract is to publish a short notice in the local newspaper.  If the newspaper is a member of the Ohio Newspaper Association, it will post the notice on PublicNoticesOhio.com. The notice may also be sent to plan rooms and other services that maintain information about available contracts for construction projects. Sending the RFQ directly to design firms without publishing the notice of an available contract in the newspaper is not an option provided in the ORC, except when selecting a design-build firm, or when establishing a qualifications file for services that are estimated to be less than $50,000.

    6.

    Design-build delivery method requires:

    • Selection of a criteria architect/engineer initially, following the statutory QBS process, unless an exception is available. 
    • Selection of a design-build firm, following the requirements included in the ORC and OAC, which is a two-step process.

     

    Conclusion

    The QBS process required for public authorities can be tailored to a specific construction project or program, depending upon the size and complexity of the project, as long as the essential steps required by the Ohio Revised Code are followed. Consult legal counsel for assistance to define a process and document it appropriately, as well as to prepare a design services agreement with the firm selected as most qualified to provide the required services. 


    This is for informational purposes only. It is not intended to be legal advice and does not create or imply an attorney-client relationship.

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