Here in California, the Public Contract Code makes it a bit more challenging for public agencies to use qualification-based contractor selection process, especially depending on the type of work being bid. Certain types of work (transportation, road rehab, telecommunication/radio systems) have restrictions that typically force a public agency to use the 'low responsible bid' process prescribed by the code. That said, I have used pre-qualification process to 'screen' potential bidders. It still has limited effectiveness if the bidder meets all of the pre-qual standards/conditions, but it can help reduce getting low bid from a contractor that is unfamiliar or doesn't have an adequate track record for the type of work being bid.
With respect to consultant selection, use of a qualification-based process is mandated. It provides better control to ensure that the most qualified firm is selected. Certainly there can be bias potential, but I have found it to be very effective as long as you have a defensible selection process that is administered consistently and equitably to each prospective firm. Using a Request-for-Qualification (RFQ) process, you can rank firms based on their credentials, relevant experience, project understanding and proposed scope/approach. I have encountered situations where the top-ranked firm's fee was deemed to be unreasonably high and the second-ranked firm was solicited to submit a fee proposal. Occasionally I would get a 'protest', but having documented ranking/scoring info. from diverse review panel helped to justify the ultimate selection.
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Patrick Echols P.E., M.ASCE
Fairfax CA
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Original Message:
Sent: 03-20-2018 16:18
From: Ala Al-Kazzaz
Subject: Quality Based Selection
Hi Stephanie
I am glad you brought up this important subject.
Lo-bidding is normally associated with collusive practice.We in the World Bank, usually advise the QBS for procurement of consultancy services. For works, the open tender preceded by pre-qualification could be the best competitive process in procurement.
Moreover, if an abnormal low-priced bid is received, the evaluation committee should conduct a thorough study to the individual item"s pricing as compared with other apparently normal priced bids as judged by the estimated cost. If the study reveals that the contractor has deliberately placed low pricing to the front works' items, then the committee should call that contractor to clarify the reasons behind that. In the case that the overall pricing of works' items is relatively and comparatively low, then the contractor should convince the client that he would complete the works with those prices.
Best
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Ala Al-Kazzaz C.Eng, M.ASCE
Procurement Consultant
World Bank
Holly Springs NC
Original Message:
Sent: 03-19-2018 02:44
From: Engr Mujahid Shafie
Subject: Quality Based Selection
Abnormally low bids and contractors' opportunistic bidding behavior are frequently observed in the competitive bidding system. Many research findings have pointed out that price competition itself is not sufficient to guarantee the use of economical and good quality products. The qualification-based selection (QBS) system has been proposed as a potential solution to this problem. However, due to lack of supporting data, most previous studies could only assess its effectiveness based on a single case experience and subjective opinions from questionnaire surveys. Few studies have analyzed contractors' pricing behavior under the QBS system and the effects of the QBS system on market competition. This paper develops a simulation model to analyze contractors' pricing behavior and dynamic competition process under the QBS system. The research results suggest that although the QBS system has potential to encourage contractors to place more emphasis on project quality, once the price is included as one of the selection criteria, abnormally low bids could still be problematic. The success of the QBS system is highly dependent on the linkage between contractors' past performance and the evaluation of contractors' qualifications. Only when contractors' past performance is carefully and constantly examined and closely reflected in the bid evaluation can the contractors' opportunistic bidding behavior be reduced and quality products be ensured.
Original Message------
Do you work in an area that requires the use of quality based selection (QBS)? If so, what have you seen that works and what have you seen that doesn't work? Have there been any "unintended consequences" of QBS?
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Stephanie Slocum P.E., M.ASCE
Associate Principal
Hope Furrer Assoc Inc
State College PA
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