Developing and Managing RFPs and RFQs

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1 Developing and Managing RFPs & RFQs Mike Purdy Michael E. Purdy Associates, LLC (206) (office) (206) (cell) 1 Free Subscription to my Blog:

2 Acronym Soup 3 RFB RFI RFO RFP RFQ RFQ IFB ITB SOQ SOW TLA What We ll Cover in Class We ll address RFPs and RFQs for Consultant services IT services Architectural and Engineering services We won t address Public Works contracts Purchase of goods, equipment, supplies, materials 4 2

3 Agenda Conflicts of Interest 3. Standard RFP/RFQ Provisions 4. Evaluation Process 5. Contract Negotiations 5 -Agenda When to Use an RFP, RFQ, or ITB Qualifications Based Selection (QBS) Solicitation Documents Solicitation Method Scope of Work Evaluation Criteria 6 3

4 - ITB vs. RFP vs. RFQ 7 When Should You Use an Invitation to Bid (ITB) or Request for Bids (RFB)? Scope of Work must be clearly defined Goods, Supplies, Equipment, Materials Public Works Construction Except for: Design-Build GC/CM (General Contractor/Construction Manager) Job Order Contracting - ITB vs. RFP vs. RFQ When Should You Use a Request for Proposals (RFPs)? Scope of Work: Less clearly defined Performance based Scope of Work Service requires judgment Qualifications of provider are important Basis of Selection: Qualifications and Price Qualifications, Price, and Approach (Proposal) 8 4

5 - ITB vs. RFP vs. RFQ 9 When should you use a Request for Qualifications (RFQs)? Only qualifications requested No price requested in RFQ Select most qualified firm Qualifications Based Selection (QBS) Price negotiated with most qualified Negotiate with next most qualified if unable to successfully negotiate with the most qualified - Qualifications Based Selection (QBS) Applicable laws State Chapter RCW Federal Brooks Act

- Qualifications Based Selection (QBS) State (Chapter 39.

Surveying 11 - Qualifications Based Selection (QBS) 12 Federal

Feasibility studies Preliminary engineering Design Architectural

6 - Qualifications Based Selection (QBS) State (Chapter RCW) Architecture Engineering Landscape Architecture Land Surveying 11 - Qualifications Based Selection (QBS) 12 Federal (Brooks Act) Program management Construction management Feasibility studies Preliminary engineering Design Architectural Engineering Surveying Mapping Related services [49 U.S.C 5325(b)] and 6

7 - Qualifications Based Selection (QBS) Licensing: Professional services of an architectural or engineering nature, as defined by State law, if applicable, which are required to be performed or approved by a person licensed, registered, or certified to provide such services as describe in this paragraph. 40 U.S.C Qualifications Based Selection (QBS) Related to Real Property: Professional services of an architectural or engineering nature performed by contract that are associated with research, planning, development, design, construction, alteration, or repair of real property; and 40 U.S.C

8 - Qualifications Based Selection (QBS) 15 Typically Performed By: Other professional services of an architectural or engineering nature, or incidental services, which members of the architectural and engineering professions (and individuals in their employ) may logically or justifiably perform, including studies, investigations, surveying and mapping, tests, evaluations, consultations, comprehensive planning, program management, conceptual design, plans and specifications, value engineering, construction phase services, soils engineering, drawing reviews, preparation of operation and maintenance manuals, and other related services. 40 U.S.C Qualifications Based Selection (QBS) 1. Applicability of Brooks Act and RCW Federally Funded: Use list of Brooks Act disciplines Non-federally Funded: Use list of RCW disciplines 2. Only Use QBS When Required Use price as a selection criterion for work not meeting QBS definition

9 -Quiz 17 RFP RFQ ITB? Security Services Printing Landscape Design Parking Lot Seal Coating Uniforms Geotechnical Engineering Graphic Design Environmental Engineering RFP RFQ ITB? Janitorial Supplies Architectural Services Vehicles Painting of Facilities Land Surveying Office Supplies Construction Management Computers - Solicitation Documents A/E Work Non A/E Work Non A/E Work (Alternate Method) Issue RFQ Issue RFP Issue RFQ (qualifications only) Evaluate and shortlist firms Evaluate and shortlist firms Evaluate and shortlist firms Issue RFP (price & proposal/approach) Evaluate and shortlist firms Interview Interview Interview 18 Select Select Select 9

10 - Solicitation Method 1. Advertise Separate Project 2. Roster Annual advertisement for roster Agency roster or joint roster Issue informal RFP or RFQ to select from roster 3. Advertise On-Call Contract 19 - Solicitation Method How should you make the RFP/RFQ available? By request On your agency s website (with or without login) On Builders Exchange ( 20 For manual pick up at your office 10

How long should the RFP/RFQ be advertised?

11 - Solicitation Method How long from advertising to presubmission meeting? Allow sufficient time for proposers to adjust their schedule 21 - Solicitation Method How long should the RFP/RFQ be advertised? 22 Depends on the solicitation RFQs may be shorter than RFPs RFP depends on complexity Check state law for your type of agency 11

12 - Solicitation Method Establish internal agency policy Dollar thresholds for solicitation method Selection from Roster Clear procedures 23 - Scope Criteria Submissions

13 -Scope of Work Type: When should you use Detailed vs. Performance scope of work? Audience: Who is the audience for the scope of work? 25 Ambiguities: How will ambiguities be addressed in court? Interpreted against the party who drafted scope -Scope of Work Unique: Each Scope of Work is unique No one size fits all Expertise: You must be or become an expert in the industry you re soliciting services for

- Scope of Work Resources 27 http://finance.groups.yahoo.

14 - Scope of Work Resources Scope of Work Resources Sample RFPs at

- Scope of Work Resources City of Federal Way at http://www.cityoffederalway.com/page.aspx?

15 - Scope of Work Resources City of Federal Way at Scope of Work Resources City of Everett at

- Scope of Work Resources KCDA (King County Directors Association) at http://www.kcda.org/kcda_awarded_contracts.

16 - Scope of Work Resources KCDA (King County Directors Association) at Scope of Work Resources Cities Counties Transit agencies Port districts School districts Universities State agencies Federal agencies 32 Call or them Participate in regional conferences 16

- Scope of Work Resources NIGP (National Institute for Governmental Purchasing) Resource Library online at http://www.nigp.org/eweb/startp age.aspx?

17 - Scope of Work Resources NIGP (National Institute for Governmental Purchasing) Resource Library online at age.aspx?site=nigp&webcode =ResLibSearch 33 ISM (Institute for Supply Management) Samples database for members only: cfm?itemnumber= Scope of Work Resources Your Agency Project Manager Contracting Staff Previous solicitations

- Evaluation Criteria What is important for the project? What qualifications and experience are important? What could happen if the wrong firm is selected?

18 - Evaluation Criteria What is important for the project? What qualifications and experience are important? What could happen if the wrong firm is selected? Is Company or Personnel Experience more important? 35 - Evaluation Criteria What firms will likely be competitive with the evaluation criteria you ve established? Will your evaluation criteria limit the market of likely respondents? Will the evaluation criteria likely result in a qualified firm being selected?

- Evaluation Criteria Include in RFP or RFQ: Evaluation Criteria Points possible for each criterion 37 - Possible Evaluation Criteria Evaluation Criteria Criterion 1 Relevant Experience of Firm

19 - Evaluation Criteria Include in RFP or RFQ: Evaluation Criteria Points possible for each criterion 37 - Possible Evaluation Criteria Evaluation Criteria Criterion 1 Relevant Experience of Firm Demonstrated expertise and experience in. Criterion 2 Staff Experience and Availability. A description of the staff proposed for performing the work as outlined that demonstrates relevant experience from other projects. Experience should include. Submit resumes of proposed staff. Discuss your proposed team members availability and commitment for the duration of this project. Maximum Points

20 - Possible Evaluation Criteria 39 Evaluation Criteria Criterion 3 Proposed Cost The proposed cost of the firm for. The agency reserves the right to negotiate the cost with the selected firm. [Do NOT Use for QBS] Criterion 4 Standard Contract Language The agency intends to utilize its standard consultant contract for this project that [is attached OR is available at the following website address]. Each firm must affirm in its Proposal that the terms and conditions of this contract are acceptable, or if the firm takes exception to any of the proposed in the Contract, the firm must specifically describe the reasons for the exceptions and propose in its Proposal alternative language for review and consideration by the agency. Firms not taking any exceptions to the terms and conditions of the Contract shall receive the full evaluation points for this criterion. Firms taking exceptions shall be evaluated and rated for this criterion based on the significance of the proposed exceptions and whether the proposed changes are of benefit to the agency. Maximum Points - Possible Evaluation Criteria 40 Evaluation Criteria Criterion 5 Location of the Firm Distance of the firm from the agency and how the firm would be able to effectively provide services to the agency. [Geographical preference prohibited on federally funded projects except for architects and engineers, or where part of legal licensing requirements] Criterion 6 References At least three references from previous clients for similar work completed by your firm. Cited references should include project name, reference name, title, project role, and current contact telephone number. Refer to Reference Checks section of this RFP for information about how reference checks will be used in the evaluation process. Maximum Points No points 20

- Evaluation Criteria Weighting of Price Criterion Clarity of Scope Definition Performance Risk Price as % of Total Points 41 Assign points for price based on percentage difference from low price

21 - Evaluation Criteria Weighting of Price Criterion Clarity of Scope Definition Performance Risk Price as % of Total Points 41 Assign points for price based on percentage difference from low price Conflicts of Interest Facts: A public agency hires a contractor as a consultant to develop specifications for a building audio/visual system. Question: May the contractor bid on the project when it is advertised for construction bids?

to prepare bid Designed around products only they are familiar with 43 Conflicts of Interest Issues to

22 Conflicts of Interest Issues to Consider: 1. Advantage: Does it give the contractor advantages in the bidding not enjoyed by others: Knowledge Time to prepare bid Designed around products only they are familiar with 43 Conflicts of Interest Issues to Consider: 2. Perception: What will be the perception in the contracting community about whether this is a transparent or equitable process?

Conflicts of Interest Issues to Consider: 3.

Protest: Does it increase the likelihood of a

23 Conflicts of Interest Issues to Consider: 3. Confidence: Does it increase the public s confidence in government contracting? 45 Conflicts of Interest Issues to Consider: 4. Protest: Does it increase the likelihood of a protest being received from other bidders?

24 Conflicts of Interest Issues to Consider: 5. FTA Regulations: Organizational conflicts of interest are prohibited (Circular 4220) Unequal Access to Information. The contractor has an unfair competitive advantage through obtaining access to nonpublic information during the performance of an earlier contract. Biased Ground Rules. During the conduct of an earlier procurement, the contractor has established the ground rules for a future procurement by developing specifications, evaluation factors, or similar documents. 47 Conflicts of Interest Issues to Consider: 6. Planning Ahead: Disclose intentions to designer before contracting with them whether they will be permitted to bid on the construction 48 FTA expects the recipient to analyze each planned acquisition in order to identify and evaluate potential organizational conflicts of interest as early in the acquisition process as possible, and avoid, neutralize, or mitigate potential conflicts before contract award. (Circular 4220) 24

25 Conflicts of Interest 49 The perception of a conflict of interest in a government agency diminishes credibility, erodes public trust, and compromises integrity. A conflict of interest creates the belief that the owner s interests may not be best represented, particularly concerning matters which are in dispute between parties. State Auditor s Office Performance Audit Sound Transit October 4, 2007 Standard RFP/RFQ Provisions -Agenda 1. Schedule 2. Submittal Requirements 3. Conversations Before Advertising 4. Questions and Changes Some Federal Provisions 25

Standard RFP/RFQ Provisions - Schedule for Procurement & Contracting 51 1. Advertisement date 2. Pre-Submission Meeting date 3. Last day to submit questions 4. Submission due date and time 5.

26 Standard RFP/RFQ Provisions - Schedule for Procurement & Contracting Advertisement date 2. Pre-Submission Meeting date 3. Last day to submit questions 4. Submission due date and time 5. Evaluation of submissions completed 6. Meeting of evaluation committee 7. Notification to short-listed firms of interviews 8. Interviews dates 9. Notification to successful and unsuccessful firms 10. Begin contract negotiations 11. Contract execution Standard RFP/RFQ Provisions - Submittal Requirements Number of copies 2. Hard copy submittals 3. Electronic version on CD 4. Submission location 5. Submission deadline 6. Late proposals not considered 7. Contact person with public agency 8. Cover letter 9. Page limitations, if any 26

27 Standard RFP/RFQ Provisions - Conversations Before Advertising Can you talk with firms before an RFP or RFQ is advertised? To answer their questions To obtain information from them to help you What are the risks? Avoid giving preference in scope of work Avoid perceptions of favoritism 53 Standard RFP/RFQ Provisions - Questions and Changes 54 Requests for Information Through RFP/RFQ Coordinator All communications between proposers and agency through that individual Obtain answers from technical staff Fairness Promotes fairness so one firm doesn t get information not available to others 27

Standard RFP/RFQ Provisions - Questions and Changes Verbal questions

questions - May result in a change - May result in an interpretation

Addenda Require it in cover letter or on submittal form 2 Purposes of

28 Standard RFP/RFQ Provisions - Questions and Changes Verbal questions Directing proposer to location in RFP/RFQ discussing issue 55 Written questions - May result in a change - May result in an interpretation Standard RFP/RFQ Provisions - Questions and Changes Acknowledgment of Addenda Require it in cover letter or on submittal form 2 Purposes of Addenda Addenda that changes RFP/RFQ Informational Q & A do not change RFP/RFQ

29 Standard RFP/RFQ Provisions - Questions and Changes Statement for Addenda on Q & A: The following questions and answers are provided as a matter of information to clarify issues raised about the Request for Proposals (RFP). To the extent that changes to the RFP are required based on the questions received, the RFP has been modified as noted above in this Addendum. 57 Standard RFP/RFQ Provisions - Questions and Changes 58 3 Ways to Describe Changes in Addenda 1. Narrative Specify what portion of drawings and/or specifications are being amended Example: A new item G is added to the scope of work in Section , paragraph 1.40 as follows: 2. Replacement documents 3. Replacement documents in track changes 29

30 Standard RFP/RFQ Provisions - Some Federal Provisions 59 Resource Conservation and Recovery Act Energy Policy and Conservation Act Federal Lobbying Restrictions Program Fraud Civil Remedies Act of 1986 Copeland Anti-Kickback Act Civil Rights Act Age Discrimination in Employment Act of 1967 Buy America Requirements Fly America Requirements Federal Water Pollution Act Clean Air Act USDOT Seismic Safety Regulations Disadvantaged Business Enterprise Requirements Evaluation Process -Agenda Evaluation committee membership 2. Orientation meeting for committee 3. Provide documents to committee 4. Ethical issues 5. Review and scoring 6. Interviews 7. Interview sample evaluation criteria 8. Attendance at interviews 30

31 Evaluation Process - Evaluation Committee Membership Internal vs. External User department Non-user department External stakeholders Role: Does the Committee make the decision or only a recommendation? Chair: Appoint a chair Protests: Contracting staff and attorneys should advise only Who will hear and decide on protests? 61 Evaluation Process - Orientation Meeting for Committee What are the objectives of the solicitation? Do they have time to evaluate and interview? Are there any conflicts of interest? What are the evaluation criteria?

Evaluation Process - Provide Documents to Committee Published RFP (or RFQ) Proposals (or Qualifications) Submitted Evaluation Form complete and sign Conflict of Interest and Confidentiality Statement

32 Evaluation Process - Provide Documents to Committee Published RFP (or RFQ) Proposals (or Qualifications) Submitted Evaluation Form complete and sign Conflict of Interest and Confidentiality Statement 63 Communications only through RFP/RFQ coordinator Evaluation Process - Ethical Issues Conflict of Interest Affected Individuals Board member Employees Immediate family members Partner An organization that employs or is about to employ any of the above

Review and Scoring Members: Individual committee members review first Evaluation based on Proposals/Qualifications only Committee meets

33 Evaluation Process - Ethical Issues Conflict of Interest Prohibited Actions Selection, award, administration of a contract if there would be a conflict of interest, real or apparent Financial or other interest in the firm selected for award 65 Evaluating Process - Review and Scoring Members: Individual committee members review first Evaluation based on Proposals/Qualifications only Committee meets to discuss and develop consensus Changing scores or consensus form References: Role of References 66 Form: Use of Evaluation Form 33

Evaluation Process - Interviews 1. Proposals don t tell whole story Marketing team isn t who you ll be working with 2. Partnering: Need to meet key personnel you ll be partnering with 3.

34 Evaluation Process - Interviews 1. Proposals don t tell whole story Marketing team isn t who you ll be working with 2. Partnering: Need to meet key personnel you ll be partnering with 3. Personalities: Do they mesh? Evaluation Criteria: Have separate criteria for interview. Scores added to scores for proposal/qualifications Evaluation Process - Interview Sample Evaluation Criteria 68 Evaluation Criteria Presentation: Clarity of expression and thoroughness of presentation, firm s understanding of an approach to the requirements of the project. Specific Questions: Thoroughness and insight in providing direct and clear answers to the questions asked both ahead of time and during the interview. Communication: Overall quality of the team s presentation including interpersonal communications between team members and the interview panel. Quality of questions asked by the firm. Total: Points

35 Evaluation Process - Attendance at Interviews Evaluation Committee All members need to be at all interviews May have different committee from evaluation of proposals or qualifications 69 Contract Negotiations - Items to Negotiate Scope of Work 1. Accurate: Does the Scope of Work accurately and completely reflect the work you intend them to accomplish? 2. Clear: Is the Scope of Work clear to someone not familiar with the contract? 3. Dispute: If there was a dispute, would the Scope of Work be clear enough about your expectations for services and the deliverables?

Staff Allocation: Are staff with different hourly rates properly allocated for the various tasks?

36 Contract Negotiations - Items to Negotiate Hours 1. Reasonable: Are the hours proposed reasonable for the tasks to be performed? Compare to in-house estimate Staff Allocation: Are staff with different hourly rates properly allocated for the various tasks? Contract Negotiations - Items to Negotiate Fully Loaded Hourly Rates 1. Direct Salary Costs 2. Indirect Salary Costs 3. Overhead Costs 4. Profit Project risk and liability

Contract Negotiations - Items to Negotiate Markup percentages for:

Reimbursable expenses directly and as part of overhead 73 Michael E.

Blog (206) 762-2699 (206) 295-1464 mpurdy@mpurdy.com www.mpurdy.com http://publiccontracting.

37 Contract Negotiations - Items to Negotiate Markup percentages for: Sub-consultants Reimbursable expenses Overhead: Avoid paying for Reimbursable expenses directly and as part of overhead 73 Michael E. Purdy Associates, LLC - Contact Information 74 Office Cell Web Blog (206) (206) mpurdy@mpurdy.com hael-e-purdy-associates- LLC/ PO Box 46181, Seattle, WA Mike Purdy Principal 37

38 Michael E. Purdy Associates, LLC - Brief Bio of Mike Purdy 75 Public Contracting Manager: Retired in February 2010 after more than 30 years City of Seattle, Contracting Manager Seattle Housing Authority, Contracting and Procurement Manager University of Washington, Contracts Manager Procurement and Contracting Consultant: Consultant and frequent speaker/trainer since 2005 Helps public agencies, contractors, and consultants in understanding complexities of public contracting issues Author of the popular Mike Purdy s Public Contracting Blog ( Education: Bachelor s degree in business and public administration and MBA from University of Puget Sound (Tacoma, WA) Master of divinity degree from Fuller Theological Seminary (Pasadena, CA) Michael E. Purdy Associates, LLC - The Fine Print 1. Copyright: This document is copyrighted by Michael E. Purdy Associates, LLC. All rights reserved. No part of this document may be reproduced, modified, or transmitted in any form or by any means, electronic, mechanical or otherwise without prior written permission. 2. Not Legal Advice: The opinions, information, and interpretations provided in this document are the personal opinions of Mike Purdy, are for educational and informational purposes only, and do not represent legal advice. Mike Purdy is not an attorney. When appropriate, readers of this document are encouraged to consult with an attorney to obtain legal advice

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