QUALITY-BASED PROCUREMENT FOR PUBLIC ARCHITECTURE

Transcription

1 Chevalier Morales Architectes QUALITY-BASED PROCUREMENT FOR PUBLIC ARCHITECTURE PANELISTS: Marianne McKenna, OC, FRAIC, OAA, AIA Founding Partner, KPMB Architects Beth Kapusta Beth Kapusta Consulting Gilberto Delgado, FAIA Chief of Planning, Design + Construction, University of Toronto Toon Dreessen, OAA, FRAIC, AIA, LEED AP Architects DCA FACILITATOR: Helena Grdadolnik, FRAIC Director, Workshop Architecture helena@workshoparchitecture.ca

2 WHAT IS QBS (Quality-Based Selection)? Think of QBS as an RFP with PRICE weighted at 0%, and a budget disclosed to the vendors. Cal Harrison, BeyondReferrals.com Jasper Public Library by HCMA/Dub Architects 1

3 WHAT IS QBS? QBS IS THE ONLY LEGAL METHOD OF PROCUREMENT OF ARCHITECTURAL SERVICES FOR MOST GOVERNMENT AGENCIES IN THE UNITED STATES In 1972, the Brooks Act was implemented in the United States. For 45 years, it has been illegal to use price in scoring RFPs in all federal government procurement, across 49 of 50 U.S. states and hundreds of municipalities. The track record for quality in procurement is well known, and well documented. Toon Dreessen, Buying Better Buildings. Ottawa Business Journal 2

4 WHY QBS? 1. PRICE almost always becomes the deciding factor 2. PRICE requires a fixed scope 3. Determining PRICE between competitors is costly/wastes time 4. Proponents limit innovation to win based on low PRICE Even if price is just 10% of the evaluation criteria, it forces vendors to interpret the project in it s least viable form in order to have any chance at winning. Innovation, quality and operating costs considerations go out the door. John Gamble, ACEC Canada 3

5 WHY QBS? [QBS] Should be applied to any professional services that are Complex, Custom, Costly Cal Harrison, BeyondReferrals.com MAIN BENEFITS... Lowers risk (cost and schedule overruns) Encourages better quality/value (low fee encourages low service-level) ALSO... Lower procurement costs Fewer change orders/greater cost certainty Lower operating and long-term costs Potential for innovation/alternative solutions 4

6 WHAT IS NOT QBS? BAFO, DB, PFI, PPP, AFP + DBFM BFM with a small d - PRICE is the main driver AFP = linear/prescriptive scope (not able to innovate) Client + architect communication limited Stated reasons = risk and cost-savings (debunked in multiple studies) [PPP is] design by spreadsheet James Brown, Bing Thom Architects (Revery) [PPPs are] extremely difficult for architects. It adds a level of complexity -- and designing a big institutional building is already enormously complex. Donald Schmitt, Diamond Schmitt Architects There was a very robust process of consultation and many of the suggestions had cost implications. But our ability to address those was limited. Ana Maria Llanos, Diamond Schmitt Architects

7 WHAT IS NOT QBS? BAFO, DB, PFI, PPP, AFP + DBFM

8 WHAT IS NOT QBS? (SOME) DESIGN COMPETITIONS CULLINAN STUDIO 5 Baldwin Terrace London N1 7RU T+44(0) studio@cullinanstudio.com 12 th February 2018 Victoria and Albert Museum Cromwell Road Kensington London SW7 2RL To Whom It May Concern V&A East Collection and Research Centre Design Open Letter We have assessed the V&A East tender, and with deep regret have decided we have to decline to submit an expression of interest. Furthermore we really need to highlight how the approach the V&A has taken to appointing architects is unreasonably costly to the competing parties, part of a growing trend in public procurement. We are a design practice. We have previously been shortlisted for the Stirling prize. We have built award winning archives and visitor facilities for prominent public institutions. We thrive on design challenge and the subject matter in the V&A project is perfectly aligned with what we do and do very well. It pains me greatly to walk away from this type of project. But we are also a business, and the cost of competing for this job is just too high. The V&A has decided it wants to shortlist on track record. That is a good way to go, but a final selection for this particular job could be done by interview with a short presentation on an approach and big ideas. The reality of the full competition approach on this particular project is wasteful on so many levels. The V&A of all organisations should be valuing good design - not pushing design into a marginal loss-making corner, only able to be carried as a loss leader by larger commercial companies. Of course many will enter regardless and that is their commercial decision, and we are sure you will get the outstanding facility you envisage. But we thought you should be aware of the economic implications of this process.

9 WHAT IS NOT QBS? RFPs THAT ARE UNFAIR OR INCLUDE PRICE 8

10 IMPLEMENTING QBS Buying Professional Services Replacing the Price-Based Request for Proposal with Qualifications Based Selection Many of the current practices we see in Ontario public sector procurements are not best practices and they are not set by policy. Process an end to itself, not a means. There is nothing in Ontario s Procurement Directive that stipulates lowest fee as a requirement for selection. Eleven principles to help institutional buyers of professional services efficiently and transparently hire the most qualified expert firms at a fair market price. Cal Harrison Dipl. Adv., BA, MBA, CMC Second Edition, August 2016 $79 USD 9

11 IMPLEMENTING QBS WHAT ABOUT PRICE? Construction cost of a building Lifecycle cost of a building A+E fees change orders (QBS 3%) A+E fees 1-2% construction 6-18% $1M construction operating + maintenance 80-93% While the industry average on construction cost growth [extras/change orders] is approximately 10%, QBS projects are 3%. Paul S. Chinowsky, PhD, Univ. of Colorado + Gordon A. Kingsley, PhD, Georgia Tech. 10

12 IMPLEMENTING QBS WHAT ABOUT PRICE? There is little to gain by undercutting design costs, but a lot to lose. 11:1 savings for design investments: fee increase of 0.3% can reduce operations/maintenance costs by 5% from: Federation of Canadian Municipalities Infraguide Total construction costs $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 1 2 QBS (may be higher fee) Industry average Total lifecycle costs $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 QBS (may be higher fee) Industry average

13 IMPLEMENTING QBS DEFINING FAIRNESS FAIRNESS INCORRECTLY INTERPRETED (an example): ALL questions and answers will be shared with ALL proponents. generalist firms benefit from the questions asked by high expertise firms no procurement advantage to the buyer, but may be harder to determine competitors expertise The practice gives unfair advantage to generalist firms, therefore contradicts procurement policies that require fairness and transparency. FAIR PRACTICE: A response to a question will be provided ONLY to those asking the question. All responses will be made via . Questions and answers will be shared among ALL potential proponents ONLY if the question is simply a correction of a typographical or factual error. 12

14 IMPLEMENTING QBS SIMPLIFYING THE PROCESS excessive proposal writing costs are a five BILLION dollar problem in Canada Cal Harrison, BeyondReferrals.com DON T ask ALL proponents for detailed info (i.e. schedule, workplan) Wastes time and money to produce and evaluate Better to be drafted by PREFERRED architect in negotiation/discussion with client 13

15 IMPLEMENTING QBS FOSTERING INNOVATION If there is any risk or challenge with QBS it comes if qualifications are too narrowly assessed. This eliminates the ability of other firms to gain experience. Cal Harrison, BeyondReferrals.com DO consider relevant experience, even if not the same DO consider quality and innovation DON T prefer bidders with similar projects but low quality/innovation DON T ask for a list of consultants that may/may not be relevant DON T ask for fixed pricing on items to be defined through design 14

16 IMPLEMENTING QBS FOSTERING TALENT + COMPETITION Design Montréal has organized 49 design competitions and workshops: 22 were anonymous competitions 30+ design and architecture firms won their first municipal contracts this way many of these projects have gone on to win design awards (OAQ, Governor General) Complexe Sportif Saint-Laurent by Saucier + Perrotte/HCMA 15

17 IMPLEMENTING QBS FOSTERING TALENT + COMPETITION Borden Park Pavilion by gh3 16

18 IMPLEMENTING QBS NEXT STEPS? A FEW IDEAS Establish a Provincial or National Architecture Policy a clear set of guidelines to direct public sector architecture (selection and delivery) Support the sector through opportunities City of Edmonton or Design Montreal model, i.e. anonymous competitions for small, significant public projects: 1st stage anonymous, 2nd stage paid, fixed fee established Improve procurement processes remove excessive paperwork, do not evaluate price, reconsider fairness (including in client-architect contracts) 17

19 QUALITY-BASED SELECTION QUESTIONS FOR DISCUSSION 1. What are the impediments standing in the way of quality-based selection of architectural services for Ontario public sector buildings? 2. What QBS best practice examples could be adopted more widely in the Ontario public sector? 3. Is there anything can we do (individually, as practices, or through our professional associations) to improve quality of public architecture through procurement practices that are truly fair and that provide the best value? - 4. WHAT NEXT? 18