June 26, 2017 (rev. 9/29/2017) Ohio Department of Transportation Conflict of Interest Waiver Process Guidance Concerning Review of Conflict of Interest Waiver Requests Purpose The purpose of this document is ensure consistent application of the Department s consultant conflict of interest rules and policy in processing requests for waiver of the rules. General The Department s Specifications for Consulting Services 2016 Edition serves as the terms and conditions for all ODOT consultant contract. Sections 2.15 through 2.18 of the Specifications define conflicts of interest and require consultants to identify potential conflicts. The requirements vary from broad institutional conflicts to specific prohibitions related services provided on a project. Each Specification section includes a provision that allows the Department to waive the requirement under appropriate circumstances. In order to standardize the waiver request process and ensure that required information is submitted by consultants, the Department has developed a standard Conflict of Interest Waiver Request form that must be used by consultants. The Specification sections are included below along with guidance for approving or denying waiver requests submitted by consultants. In addition to the Specifications, the Department s Manual of Procedures for Locally Administered Transportation Projects also includes provisions that are applied to ODOT held contracts. These provisions generally prohibit design consultants and subconsultants from providing construction inspection and administration services on projects in which the firm participated in design of the project. Requirements and guidance are included below. The Department s Conflict of Interest Waiver Review Committee, as appointed by the Director, reviews all waiver requests and either approves or denies the waiver. 1
Requirements and Guidance Document: Specifications for Consulting Services 2016 Edition 2.15 - Conflicts of Interest Prior to submitting a letter of interest in response to an ODOT project notification, the Consultant shall identify and evaluate potential organizational conflicts of interest or develop recommended actions for known organizational conflicts of interest. Consultants are directed to FAR 2.101, 9.504(a), OAC 4733.35-05, 23 CFR 636.116(a)(1), and 40 CFR 1506.5(c) (as amended) for guidance as to when a conflict of interest arises. If the Consultant determines that a potential organizational conflict of interest exists, the Consultant shall, before submitting its letter of interest, submit to the Department a Notice of Potential Conflict of Interest explaining the circumstances of the potential conflict and any remedial action proposed by the Consultant. The Department may meet with the Consultant to discuss any potential conflicts after receipt of such notice. If a waiver of potential conflicts of interest is needed, the Department may approve or deny the request for a waiver, and any decision to deny by the Department is final. If, as a condition of award, the Consultant s eligibility for future prime Consultant or Subconsultant awards will be restricted or the Consultant must agree to some other restraint due to the conflict, then the letter of interest shall contain a proposed clause that specifies both the nature and duration of the proposed restraint. The Department shall include the clause in the Agreement, first negotiating the clause s final terms with the successful Consultant if it is appropriate to do so. The restraint imposed by a clause shall be limited to a fixed term of reasonable duration, sufficient to avoid the circumstance of unfair competitive advantage or potential bias. This period varies. It might end, for example, when the first production contract using the Consultant s specifications or work statement is awarded, or it might extend through the entire life of a system for which the Consultant has performed systems engineering and technical direction. In every case, the restriction shall specify Termination by a specific date or upon the occurrence of an identifiable event. The Consultant warrants it has no public or private interest, and shall not acquire directly or indirectly any such interest, that would conflict in any manner with the performance of the Services under the Agreement. The Consultant shall not employ any person currently employed by the Department for any Services included under the provisions of the Agreement. The Consultant may have other contracts with other clients (e.g., utility companies, other units of government, or abutting land owners) whose interests may be in conflict with the objectives of a particular Department- 2
initiated Project. It is the Consultant s responsibility to avoid conflicts of interest in these circumstances and to disclose them as soon as they arise. Section 2.15 addresses organizational conflicts of interest and few if any waiver requests have been received concerning these rules. Any waiver requests received will be evaluated on a case by case basis. Document: Specifications for Consulting Services 2016 Edition 2.16 - NEPA Disclosure Statement By entering into any Agreement with the Department or accepting any subsequent assignment of work under that Agreement, the Consultant hereby certifies that, in accordance with 40 CFR 1506.5, that it is has no financial or other interest in the execution or outcome of the Ohio Department of Transportation Project. Section 2.15 addresses organizational conflicts of interest and few if any waiver requests have been received concerning these rules. Any waiver requests received will be evaluated on a case by case basis. Document: Specifications for Consulting Services 2016 Edition 2.17 - Restrictions on Participation in Construction Contracts It is understood that the Services performed by the Consultant under any Agreement with the Department may result in a highway construction Project initiated by the Department or an entity affiliated with the Department. The Consultant, and any of its Subconsultants that have provided Services to the Department that have been directly utilized in preparation of construction contract documents, will NOT be eligible to provide Services to the construction contractor for that Project, either as a prime Consultant or as a Subconsultant. However, the Department may determine that there is not an organizational conflict of interest for a Consultant or Subconsultant under the provisions of Section 2.15, and grant a waiver on that basis. Moreover, in regard to ORC Chapter 5525.01, the Consultant agrees that, as a limited agent of 3
the Department, it will not perform any work for a contractor or subcontractor for said highway construction Project that would facilitate the contractor s or subcontractor s pursuit of a Value Engineering Change Proposal. This requirement is based on OAC 4733.35-05 which prohibits engineering consultants from accepting compensation, financial or otherwise, from more than one party for services on the same project, or for services pertaining to the same project, unless the circumstances are fully disclosed to, and agreed to, by all interested parties or their duly authorized agents. ODOT included this rule in the Specifications to keep consultants on ODOT s side of the fence during construction to provide ongoing services and advice concerning design questions or contractor claims, and not working for the contractor simultaneously. The basic determinant in evaluating waiver requests under Section 2.17 is whether, in working for a contractor on a project in which the consultant provided services to the Department, a waiver would potentially place the consultant on both sides of the fence. The Department expects that consultants that prepared construction contract plans or other documents used in a construction contract will not be working for the construction contractor and providing advice to ODOT concerning their work at the same time. This concern is not restricted to the specific type of services provided by the consultant but applies to any services proposed to be provided to the contractor, even if different from the services provided to ODOT, either as prime consultant or subconsultant. However, in certain circumstances there is a very low risk (not zero risk) to the Department in approving a waiver of these requirements, and waivers are typically approved based on the following: 1. The services provided were testing or information gathering in nature and did not include engineering or surveying services. For example, if a subconsultant provided a geotechnical investigation but not engineering analysis or recommendations, a waiver would be approved in most cases. An exception could be a very complex geotechnical situation in which the sampling and testing information could be a significant factor during construction. 2. In instances (borrowing from FHWA design-build rule 23 CFR 636.116(a)(1)) where the role of the consultant or sub-consultant was limited to provision of preliminary design, reports, or similar low-level documents and all documents and reports delivered to the agency by the consultant or sub-consultant are made available to all offerors. Examples of this provision would be planning or environmental work performed by a subconsultant under the design contract or under an IDIQ contract that are unlikely to be the subject of a question or dispute, and/or the prime design consultant can assume responsibility for answering questions. It may be advisable to ask the design consultant if they believe the services of the subconsultant may be needed during construction. 4
Document: Specifications for Consulting Services 2016 Edition 2.18 - Restrictions on Participation in Design-Build Contracts The Consultant, and any of its Subconsultants that have provided Services to the Department that have been directly utilized in the preparation of design-build contract documents or a Scope of Services document, will NOT be eligible to participate in the design-build contract for that Project, either as a prime Consultant or as a Subconsultant. However, the Department may determine that there is not an organizational conflict of interest for a Consultant or Subconsultant under the provisions of Section 2.15, and grant a waiver on that basis. The waiver guidance for Specification Section 2.18 is similar to Section 2.17 and includes the text of 23 CFR 636.116(a)(1) which is included below for reference. In the case of design-build contracts ODOT s consultant prepares a scope of services document and provisions that require the Design-Build Contractor s consultant to prepare the design. But ODOT s interests remain the same in requiring consultants that contributed to preparation of the design-build scope of services (RFP document) to remain on ODOT s side of the fence during construction to provide ongoing services and provide advice concerning scope of services questions or contractor claims, and not working for the design-build contractor simultaneously. However, in certain circumstances (similar to the guidance provided above for Section 2.17) there is a very low risk (not zero risk) to the Department in approving a waiver of these requirements, and waivers are typically approved based on the following: 1. The services provided were testing or information gathering in nature and did not include engineering or surveying services. For example, if a subconsultant provided a geotechnical investigation but not engineering analysis or recommendations, a waiver would be approved in most cases. An exception could be a very complex geotechnical situation in which the sampling and testing information could be a significant factor during construction. 2. In instances (per FHWA rule 23 CFR 636.116(a)(1)) where the role of the consultant or sub-consultant was limited to provision of preliminary design, reports, or similar low-level documents and all documents and reports delivered to the agency by the consultant or sub-consultant are made available to all offerors. Examples of this provision would be planning or environmental work performed by a subconsultant under the design contract or under an IDIQ contract that are unlikely to be the subject of a question or dispute, and/or the prime design consultant can assume responsibility for answering questions. It may be advisable to ask the design consultant if they believe 5
the services of the subconsultant may be needed during construction. 23 CFR 636.116(a)(1) (1) Consultants and/or sub-consultants who assist the owner in the preparation of a RFP document will not be allowed to participate as an offeror or join a team submitting a proposal in response to the RFP. However, a contracting agency may determine there is not an organizational conflict of interest for a consultant or sub-consultant where: (i) The role of the consultant or sub-consultant was limited to provision of preliminary design, reports, or similar low-level documents that will be incorporated into the RFP, and did not include assistance in development of instructions to offerors or evaluation criteria, or (ii) Where all documents and reports delivered to the agency by the consultant or subconsultant are made available to all offerors. With design-build projects there is also a question concerning the type of services that a consultant or subconsultant that assisted in the preparation of an RFP document/scope of services may provide to the Department during the construction phase of a project. Such consultants may provide services to the Department through an Ongoing Services phase of the scope preparation agreement, or a new selection to provide inspection and/or contract administration services for the design-build construction contract. Document: ODOT Locally Administered Transportation Projects Manual of Procedures POLICIES CONCERNING THE USE OF CONSULTANTS Every LPA must provide a full-time public employee to be in responsible charge of the project. For those LPAs who utilize the services of consultants, the following policies shall apply: 1. Only consultants that are pre-qualified by ODOT will be eligible to provide services on projects that include services defined in ODOT s Consultant Prequalification Requirements and Procedures Manual. For projects that do not include such services, pre-qualification will not be required, but the LPA is still responsible to select a qualified consultant in accordance with the qualifications based selection procedures required by the Ohio Revised Code and Federal requirements if applicable. 2. For any single project, a consulting firm or sole proprietor retained by an LPA may act as design engineer for the preparation of construction contract plans, or perform construction contract administration including construction inspection services, but cannot perform both. 3. A consulting firm that designed a project (prime consultant) and any subconsultant firms involved in that design cannot administer a construction contract or provide 6
construction inspection services. Firms that are subsidiary to or have common ownership with the prime consultant or subconsultants are similarly prevented from administering a construction contract and providing construction inspection services. A waiver may be granted by ODOT for a project which involves specialty engineering expertise. However, the consultant may provide on-going construction phase services as an extension of the design effort for the purpose of advising the LPA concerning interpretations of the plans and specifications prepared by the consultant, conferring with the LPA as to any changed or unanticipated field conditions that will impact the work, and participating in a formal Partnering process, if applicable. The consultant shall not have any formal ongoing duties in administration of the construction contract or inspection and testing of the project. The consultant s personnel assigned to this phase of the work should be the same personnel that designed the project and prepared the plans. Typical on-going services activities include: a) Assist the LPA in answering pre-bid questions and attend the pre-bid meeting. b) Attend meetings including the preconstruction meeting, job progress meetings, partnering meetings if applicable, and other meetings as requested. c) In conjunction with job progress meetings or as requested, visit the job site at appropriate intervals to monitor critical areas of the work and advise the LPA of any conditions that would affect the work. d) Respond to questions and visit the job site on an as needed basis. e) Assist the LPA in review of contractor shop drawings, and in evaluation of change orders or claims. Although the Specifications for Consulting Services does not restrict consultants from providing construction inspection/administration services on projects in which they provided design or related services, the Department follows the policy set out in the ODOT Locally Administered Transportation Projects Manual of Procedures. In this document (relevant text included above) a consulting firm that designed a project (prime consultant) and any subconsultant firms involved in that design cannot administer a construction contract or provide construction inspection services. However, in certain circumstances (similar to the guidance provided above for Section 2.17) there is a very low risk (not zero risk) to the Department in approving a waiver of these requirements, and waivers are typically approved based on the following: 7
1. The services provided were testing or information gathering in nature and did not include engineering or surveying services. For example, if a subconsultant provided a geotechnical investigation but not engineering analysis or recommendations, a waiver would be approved in most cases. An exception could be a very complex geotechnical situation in which the sampling and testing information could be a significant factor during construction. 2. In instances (per FHWA rule 23 CFR 636.116(a)(1)) where the role of the consultant or sub-consultant was limited to provision of preliminary design, reports, or similar low-level documents and all documents and reports delivered to the agency by the consultant or sub-consultant are made available to all offerors. Examples of this provision would be planning or environmental work performed by a subconsultant under the design contract or under an IDIQ contract that are unlikely to be the subject of a question or dispute, and/or the prime design consultant can assume responsibility for answering questions. It may be advisable to ask the design consultant if they believe the services of the subconsultant may be needed during construction. In review of waiver requests submitted by consultants on Locally Administered Transportation Projects, either local let or ODOT let, waivers should be approved only if the local government (LPA) recommends approval. Services not Considered to be a Conflict of Interest Plan Review Services The Department frequently uses the services of Consultants to assist in review of construction contract plans, design build scope documents, or other documents related to project development, either through contracts for this specific purpose or other IDIQ contracts. In these instances the review consultant does not have a contractual relationship with the design consultant, and all comments provided must be reviewed by the Department prior to transmittal to the design consultant by the Department. The design consultant remains legally responsible for the final deliverable. The Department does not consider plan review services to be a conflict of interest and consultants that provide these services are eligible to provide services to either the Department or contractors on the projects for which they provided services. A waiver is not required. 8