QBS: qualifications- versus cost-based selection

Qualifications-based selection (QBS) avoids the pitfalls of low-bid and other cost-based selection methods by focusing on the owner’s vision and scope, and negotiating price based on a comprehensive understanding of project scope and deliverables. QBS makes it easier to bring in projects on time, within budget, with a minimum of changes and discordance during design and construction. Commissioning professionals are getting on board, learning the process, and educating clients.
By Diana Bjornskov, Building Commissioning Association, Beaverton, Ore. August 21, 2015

Learning objectives

  • Prepare for the application and process of qualifications-based selection (QBS) contract development
  • Choose recognized resources to develop qualifications for the selection process.
  • Make use of QBS to work with owners collaboratively to refine project deliverables and costs.

Qualifications-based selection (QBS) is a competitive evaluation, scoring, and selection process established 42 years ago for building owners to use when hiring professional service providers. It encourages owners to solicit—and project consultants to submit—proposals for specific scopes of work that are evaluated based on qualifications first. Consultants are then shortlisted and selected for budget negotiations after preliminary selection, but before contracts are signed.

QBS was approved for architectural and engineering design services on Federal construction projects by Congress on Oct. 27, 1972, through the Brooks Act (H.R. 12807, Public Law 92-582). The Brooks Act amended the first Federal Property and Administrative Services Act of 1949 regarding selection of building design professionals. It was intended for publicly funded owners “to negotiate contracts for architectural and engineering services on the basis of demonstrated competence and qualification for the type of professional services required and at fair and reasonable prices.” Under the Brooks Act, QBS is not universally applied—or often recognized—as a tool for private-sector projects.

The Brooks Act was passed to discourage federal property owners and managers from contracting large building design services based exclusively on price. Although not a mandate for the private sector, QBS is gaining ground among building-related professionals, like commissioning providers, well beyond the architectural and engineering practices for whom it was established.

Since 1972, QBS has been adapted into “mini-Brooks Acts” by 46 states and many local governments. Two states without QBS legislation—Iowa and Wisconsin—offer guidelines and QBS-type facilitation services. Vermont requires both qualifications and price for state-funded projects. South Dakota’s Bureau of Administration describes a process that begins like QBS and results in best and final offer (BAFO) selection.

Beyond legislation for public owners, numerous professional organizations recommend QBS and have developed internal policies and guidelines for its use. The QBS framework is endorsed by many architectural and engineering associations in the U.S. and Canada. The American Institute of Architects (AIA) and the American Council of Engineering Companies (ACEC) support QBS on behalf of their members. The Association of General Contractors of America is a strong proponent of QBS. Recently, the Building Commissioning Association has become first in its profession to initiate and adopt a QBS position paper and is actively advocating for QBS on behalf of building-commissioning professionals.

How owners should prepare for QBS

QBS is a decision-making methodology. It describes neither work practices nor specific qualifications for project services, but is rather an evaluation process for owners to seek and identify the most qualified provider for their project. QBS is not a uniform process; expectations vary from state to state, and project to project. QBS documentation is typically written only as a guide for owners to ensure their procurement practices are conducted in accordance with the Brooks Act (per Federal Acquisition Regulations Section 36).

The owner’s request for qualifications (RFQ) should contain a well-defined description of the project, including its requirements and goals, so responses can be evaluated by matching skills and experience to project criteria. With a detailed scope of work, proposers also can arrange teams and qualifications that meet the project requirements. At minimum, the project description should include:

  • Project name and location
  • Project outline (building type, use, size, occupancy, other facility characteristics)
  • Description of functional and space needs (e.g., medical, mission critical, technical, research, or other specialized facilities; environmental requirements, energy efficiency, etc.)
  • Budget estimate and schedule, including phases and completion requirements
  • Description or copies of work done on the project to date, if any
  • Description of specific services requested
  • List of expected deliverables and/or outcomes.

How commissioning providers should prepare for QBS

Commissioning is not specified as a professional service in the Brooks Act, but it is referenced in some state policy definitions of “related services.” U.S. Federal Acquisition Regulations define services within the QBS framework as “… including studies, investigations … evaluations, consultations … construction phase services … drawing reviews, preparation of operating and maintenance manuals, and other related services.” Given that these services are components of the commissioning practice, and that building owners and jurisdictions increasingly consider commissioning a professional service, it’s time to align QBS, commissioning providers, building owners, and the buildings industry.

The time has come to revisit QBS in relation to building commissioning services. It should be regarded by owners as one of the most important services to be hired based on qualifications. QBS is a tool that owners and commissioning providers should both rely on to ensure that capabilities meet expectations.

To respond to a QBS-based RFQ, commissioning providers must understand that it is a points- or percentage-based competitive rating process. They must be able to show experience, capabilities, similar project successes, and relevant work factors in a way that differentiates their proposed (unpriced) solution from others.

A key—and often overlooked—initial step is to recognize and state an understanding of the client’s project drivers and expectations. It is not just a mechanical, electrical, plumbing (MEP), and fire protection engineering systems approach to getting the work done, but one that shows an understanding of the owner’s “vision” for occupancy and the project’s long-term performance (not your vision, but theirs).

You, the commissioning provider, should write down the owner’s critical success factors. Use them as a guide to describe your value proposition. Describe how you plan to perform the work, and list programmatic, technical, and management components. Identify who will do the work, resources that will be required, and, importantly, how you will mitigate risks. Points are generally awarded for being local, and for demonstrating relevant experience, reliability, and commitment by key team members.

In some cases, you may not be submitting a proposal directly to the owner, but rather through a design or design-build team where your qualifications will be added to theirs. At minimum, you can significantly improve the team’s qualifications by providing the quality assurance and qualifications information they should have—but likely had not—requested from you.

Properly performed, commissioning is the continuous quality assurance link across disciplines and schedule, from predesign through turnover and occupied building operation. The link that is not well-documented is the approach that commissioning providers and other professional services should take so that owners know how to prepare RFQs and requests for proposal that solicit high-value, project-specific quality assurance capabilities, so providers know how to respond. When owners learn how to solicit robust qualifications, they will ask for them.

QBS resources for owners and providers

It’s incumbent upon commissioning professionals to help educate their clients about QBS and the benefits compared to “low bid,” or other cost-based contracting mechanisms that don’t consider qualifications first and separately. The most comprehensive QBS study to date was conducted by the University of Colorado and Georgia Institute of Technology at the request of the ACEC. According to the report, researchers conducted an extensive survey of projects and analyzed the impact of QBS on project outcomes. Project data was gathered from a stratified sample, randomly drawn from geographically diverse projects. The study assessed cost, quality, and other measurements.

The research identifies specific benefits tied to QBS across the projects studied. QBS provides an even scale for a competitive qualifications-selection process while allowing for discussion of scope items before contracts are signed. By negotiating a price after evaluating qualifications and coming to an understanding on detailed scope, clients and commissioning providers can work together to ensure project agreement and cooperation before the contract is finalized. This collaborative process is designed to reduce construction issues, risks, and costs; contain schedule creep; and result in a higher-performing building project than cost-based decision-making.

Guidance is available to owners for following QBS procedures. Many states have posted their own methodologies on their websites. On a national scale, how-to resources include AIA’s QBS workbook with sample letters and other documents and ACEC’s Owner’s Guide to QBS.

Good models for QBS solicitations are available, though not easy to locate. Three different models from the University of Georgia, the University of California, and Rock Valley College in Illinois, provide useful prototypes in QBS-based RFQs that itemize project requirements and evaluation criteria for commissioning projects. Rock Valley College also includes a QBS response form.

Statements of qualification are, of course, the professional’s intellectual capital. They are not easily shared, and qualifications differ from firm to firm and project to project. However, because QBS is a federally mandated process, Standard Form 330 (SF330, 2013 version) covers basic QBS requirements and is available from both federal and state websites. SF330, composed of two parts, is required for most federally funded projects and is a useful tool for ensuring all requirements are met. SF330 is “all business”—no opportunity for lengthy prose—but it does help to outline qualifications, requiring the proposing team to organize, matrix, and cross-reference experience, knowledge, and skills of the team.

QBS contracting

Even in the public sector, QBS doesn’t always function as intended. As an example, one government agency recently skirted the federal QBS policy by awarding a project using “lowest-price, technically acceptable source-selection process.” While sometimes referred to as best value, it’s not. And it’s not likely that best practices and best outcome will be achieved through an award that starts with “lowest price.” A lowest-price-based process invariably results in revisions to the scope, schedule, and fees to accommodate changes, omissions, new ideas, etc. during the course of design and construction. When low bid is the decision-driver, quality suffers; there are untold examples of flawed buildings designed and constructed on the basis of lowest price instead of qualifications for a specified scope of work.

The future of buildings is clear: the global drive toward continuous improvement of building materials, systems, and practices demands a quality approach—not only in the context of architecture and engineering, but also in terms of all services that contribute to better building performance. Cutting back on quality assurance processes does not result in higher-quality results—ever.

Takeaways

  • QBS is a cooperative method for owners and commissioning providers to define contract terms for professional services
  • QBS helps owners and providers to develop accurate pricing as the scope of work is negotiated
  • QBS enables project teams to understand project terms and work together to deliver a quality project
  • Commissioning providers must help to promote the benefits of QBS to owners and other contract holders.

How does QBS help commissioning providers do their jobs better?

  • Stronger relationships with owner and project team
  • More clarity from the project outset regarding schedule, costs, deliverables, and expected outcomes
  • Increased trust among project players, thus easier to achieve a quality project on schedule and within budget.

Select North American QBS proponents:

  • American Council of Engineering Companies
  • American Institute of Architects
  • American Public Works Association
  • American Society of Civil Engineers
  • Associated General Contractors of America
  • Building Commissioning Association
  • Federation of Canadian Municipalities
  • National Society of Professional Engineers
  • Royal Architectural Institute of Canada
  • U.S. and Canadian Federal Governments
  • U.S. States and Canadian Provinces.

Owners’ QBS steps:

  • Prepare scope of work description
  • Establish evaluation criteria
  • Write and solicit qualifications
  • Develop qualified short list
  • Interview and rank three or more providers
  • Owner/provider jointly refine scope and contract terms
  • Negotiate contract (or move on to next-ranked provider).

Diana Bjørnskov is senior program manager at the Building Commissioning Association. She has spent more than 30 years in the building industry with extensive experience leading research and analysis of building industry issues, energy policy and legislation, market-potential assessment, and program planning.

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