NAEPnet

1. www.NAEPnet.org

2. Professional Services: How do you get them? Gregory A. (Greg) Pratt, VCO, VCCO Assistant Director of Purchasing for Facilities Support Virginia Polytechnic Institute and State University (Virginia Tech)

3. TOPICS: • What are Professional Services? • Procurement Processes and Options. • Takeaways: What is of key importance?

4. Professional Services: What are they? • In Virginia, Professional Services are defined in the Code of Virginia as: “work performed by an independent contractor within the scope of the practice of accounting, actuarial services, architecture, land surveying, landscape architecture, law, dentistry, medicine, optometry, pharmacy, professional engineering…”

5. Professional Services: What are they? • Virginia Law provides for a specific procurement methodology for Professional Services that differs from how we procure Goods and Services: • Qualifications based, not price • Request for Proposal, no Bid option

6. Where to start? • Once your Institution determines the need for professional services, a Scope of Work needs to be prepared which identifies or outlines the services required. The Scope of Work also identifies the criteria, limitations and parameters for the services, and describes the product(s) expected. A Scope of Work may range from very general to very specific.

7. Items to consider: • What are you trying to accomplish? • What disciplines and/or areas of expertise are needed for the particular term contract or project you are working on? • What options exist for acquiring Professional Services?

8. Procurement methods In Virginia, four (4) options exist for acquiring Professional Services: • Term Contracts • Single Project Procurement • Category B – Small Purchases of A/E Services • Emergency Procurement of A/E Services

9. Procurement options – more details… • Term contracts are used to engage the services of an A/E to provide investigations, cost estimates, designs and related services for multiple small projects over a one-year period of time (can have multiple renewals with the approval of both parties). There can be limitations which apply to term contracts for professional services. In Virginia, any individual Project Order fee shall not exceed $200,000.00 and the aggregate total of fees for all Project Orders issued during the Contract Term (typically one year) shall not exceed $1,000,000.00.

10. Procurement options – more details… Term Contracts continued: What is a Project Order? A Project Order is the document used in conjunction with a purchase order to authorize the A/E to perform the work for a specified project for a specified amount. Additionally, no A/E may at any time have more than one (1) A/E Term Contract with any one (1) Agency, including any subdivisions or branches thereof. Please verify any limitations that may apply in your situation.

11. What are the steps? • The process for seeking services under the Term Contract and the Single Project Procurement processes are similar: An RFP would need to be advertised/posted publicly for an established number of days (30 calendar day requirement in Virginia) which outlines the nature/type of the project(s), describes the disciplines/expertise required and describes the nature of the services expected to be required.

12. What are the steps? • The RFP shall also describe the factors pertinent to the evaluation and selection process (evaluation criteria, negotiations process and selection). • Either prior to or during the advertising period, an evaluation committee for the RFP will need to be identified and certified. Virginia Tech utilized an evaluation committee member certification form which outlines the responsibilities and duties of committee members and also speaks to the ethical requirements as well (to view a sample form, refer to Attachment A).

13. What are the steps? • Evaluation committee members need to be “vested” in the process. Meaning that they need to be knowledgeable of the services being acquired either from an engineering, design or business standpoint. • After the advertising period is completed and proposals have been received, the individual proposals will need to be reviewed and verified (ensuring that the required professional licenses are valid, insurance coverage's are valid and in effect and other requirements of your State or Institution are all being met)

14. What are the steps? • After the proposals have been reviewed and verified, they can then be distributed to individual committee members. Virginia Tech utilizes the distribution meeting as the time to review the evaluation committee member requirements and to complete the evaluation committee member certification forms. • The evaluation process requires first and foremost that the committee members READ THE PROPOSALS!

15. What are the steps? • Committee members individually review the proposals and then meet as a group to rank the firms according to the criteria outlined in the RFP (occasionally multiple meetings are required to complete the ranking process). Highest ranking firms are “shortlisted” for interviews. • The number of awards to be made will determine the number of interviews to be conducted. In Virginia, if multiple awards are to be made against a single RFP, then that must be stated in the RFP.

16. What are the steps? • At the conclusion of the interview process, the evaluation committee meets again to determine which is the highest ranking firm. • Negotiations are then conducted with the highest ranking firm in accordance with the RFP. If acceptable terms can be reached, then a contract will be issued (term or for a single project). If an agreement cannot be reach, then the firm must be formally notified (in writing) that negotiations are being terminated and then we move to the next highest ranking firm and begin negotiations again.

17. What are the steps? • This process continues until an acceptable agreement is reach and a contract is issued or until the required number of term contracts have been awarded. • For term contracts, the contract is not established until an initial project is identified and a Project Order is issued.

18. Procurement methods continued… • Single Project Procurement is the acquisition of A/E services for a particular project, i.e. construction of a new research lab. The steps required to procure the services of an A/E firm for a single project are basically the same as those for Term Contracts.

19. Procurement methods continued… • Category B Small Purchase is the process utilized for the purchase of professional services when the total fee is less than $50,000.00. Under this process, A/E firms are requested to submit some very basic information regarding their particular firm such as: representative projects list, SWAM data, proposed consultant information, staffing and staff qualifications, ownership information, etc. (Contact me for a link to our forms directory)

20. What are the steps? Category B continued: A Request For Qualifications is advertised/posted publicly at least once a year requesting qualifications from A/E’s interested in providing services to the Institution on small projects where the fee will be less than $50,000.00. As firms submit their qualifications; their proposals are reviewed to ensure their professional licenses are valid, required insurance coverage's are valid and in effect and other State and Institution specific requirements are being met.

21. What are the steps? • Once approved by the university, the firm is added to the library of firms available for use. Firms are required to update their information annually in order to remain in the library. • What are the advantages of this method? Able to get projects underway much quicker. No additional advertising requirement, no committee evaluation process, no extended interviews (projects can be released based upon interviews of only three firms which are willing and capable of performing the required services).

22. Procurement methods continued… • Emergency Procurements of A/E Services. The emergency must be bona fide (not getting the project initiated timely does not count as an emergency!). • Emergency Procurements still contain the requirement to seek competition to the extent possible. Additional specific requirements regarding a written determination of the nature and extent of the emergency, signatures by the Agency head and public posting of the award. Please refer to those guidelines/requirements of your State/Institution.

23. Conclusions and assumptions… • Which method is best? The project and the situation will determine that. • Professional Services are “a-typical” and do not follow normal procurement processes. • The inability to be able to establish pricing upfront is a real issue and is uncomfortable to some people but is also a real advantage in allowing institutions to expand the realm of design especially in the public sector. At Virginia Tech we have a soft target for A/E Services between 8% and 15%.

24. Conclusions and assumptions… • The importance of the A/E selection process will continue to grow as we explore new building technologies and techniques. These technologies and techniques will help us to control operating costs and hopefully reduce or at least assist us in controlling initial construction costs (value engineering, BIM, etc.).

25. Professional Services: Summary: Key takeaways: What procurement options exist Professional Services at your institution? Use an evaluation committee and committee member certification process. Suggested key evaluation factors: • What are the A/E firm’s qualifications and past projects? • Is pricing within the expected range? • Diversity factors – SWAM Utilization goals Interviews are an integral and necessary step.

26. ATTACHMENT A – CERTIFICATION FOR RFP Certification for RFP Evaluation Committee Members Thank you for agreeing to represent the university by serving on the evaluation committee for  ____. In order to protect the integrity of the process, this certificate must be signed by each member of the evaluation committee. Before signing, you will have the opportunity to discuss the contents of this document with your Procurement Officer. It is crucial that the university maintain its image as an organization that provides fair and open opportunity for its business. In order to ensure fairness in the evaluation of proposals submitted in response to a Request for Proposal (RFP), it is very important that proposals be evaluated in an unbiased manner and without conflict of interest, and that the contents of proposals remain confidential throughout the evaluation process. For these reasons, we need to be very clear with those serving on evaluation committee regarding their responsibilities. Please read this form in its entirety, initial all areas, and sign this form. Return a scanned copy of the signed form to your Procurement Officer.

27. ATTACHMENT A – CERTIFICATION FOR RFP(CON’D) _______I acknowledge that I have been selected to participate as a member of the Evaluation Committee for the referenced RFP. _______I certify that I have read the university statement of Business Conduct Standards. http://www.cafm.vt.edu/busprac/_docs/2010_Statement_Business_Conduct_Standards.pdf. _______I certify that I have no financial interest in the companies that may be competing for this contract. Further, I have no personal associations that might create the appearance of a conflict of interest. If such situations occur during the contract evaluation period, I will excuse myself from the committee. _______I certify that neither I nor my immediate family members have any past or present employment history, business relationship, or personal affiliation with any companies that are known to be competing for this contract. If such a company does submit a bid/proposal, I will excuse myself from the committee. ______I understand that once the RFP is issued, I will engage in no communications with any company that may be competing for this contract regarding the contract, except as authorized. I will direct any inquiries received to the Procurement Officer, except as authorized. I understand that any communication with any of the companies responding to this RFP will be filtered through the Purchasing office and the Procurement Officer assigned to this project.

28. ATTACHMENT A – CERTIFICATION FOR RFP(CON’D) _______I understand that my obligations under this certification are of a continuing nature and that all processes and communications conducted by the committee after the closing date of the RFP are confidential and are not to be discussed with anyone outside of this committee. Furthermore, I will safeguard proposals and materials by keeping them in a secure area and not let them be viewed by others that are not involved in the evaluation and selection process. _______I certify that I have received no instructions or guidance from anyone regarding the desired outcome of this competition and the contract award and that I will evaluate all proposals fairly and without bias. RFP Number:       Title:       Print Name: ______________________________ Signature: ________________________________ Date: ____________________________________