Article: Why low-bid engineering does a disservice to Michigan taxpayers (MLIVE)

If a Snickers candy bar at one store is priced at 75 cents and the same Snickers candy bar costs $1 at another store, it may make good sense to buy from the first store rather than the second.

When it comes to choosing an engineering firm, however, it can be like comparing apples and oranges. All firms are not equal.

In a lot of cases, hiring the low-bid engineering firm doesn’t produce a quality project. And over the long run, costs could be higher for the project designed by the low-bid engineer.

Many communities, like the City of Big Rapids, however, choose to procure professional engineering services using qualifications-based selection, or QBS, followed by negotiating the scope and fees.

“I can’t imagine doing it a different way because the relationship you have with your engineers on a municipal level is probably one of the most critical,” said Mark Gifford, city manager of Big Rapids.

The city uses QBS to hire engineers for water, sewer, streets and airport projects.

“Cost is certainly a component, but looking at qualifications and experience is the best and only way to select something that is so important,” Gifford noted.

There’s currently a bill in the Michigan Legislature that will require communities use a QBS process on projects where the engineering fees exceed $25,000. House Bill No. 4447 was introduced by state Rep. Robert L. Kosowski, D-Westland, earlier this year and could move through the Legislature this fall. It would specify that local governments use QBS to hire architects, engineers and surveyors.

Instead of hiring the firm based on price, the QBS process requires interested firms to submit their qualifications, experience and references. Once a qualified firm is chosen, then the scope of work and fees are negotiated.

Most engineers, architects and surveyors support it and are pushing for a legislative hearing — with good reason.

“It’s evaluating the firms on the qualifications and competence, not on price alone,” said Ronald W. Brenke, PE, executive director of the American Council of Engineering Companies (ACEC) of Michigan. “Sometimes the engineering fees end up lower because the Owner has had a chance to sit down with the engineer to develop a detailed scope of work and the firm knows exactly what to base its fee on.

“Even if you pay a little more for engineering, chances are that you’re going to save a lot more on the back end.”

Since 1972, the federal government has required QBS on engineering, architecture and surveying projects that involve federal funding. Today, 46 of the 50 states require a QBS process. Michigan is among the four without a QBS mandate.

Some Michigan communities use a QBS process by choice because hiring an engineer is not like buying a Snickers bar or other commodity. A low-bid process can negatively impact quality because fewer hours are budgeted to do the job, and less experienced or lower cost staff are assigned to the job.

Professionals that are selected based on low-bid proposals do not have enough budget to provide creative or innovative solutions. It means less time and money will be spent to design the project. Based on a national study of projects, more change orders and construction delays resulted on projects that involved hiring the engineer based on low bid.

In the QBS process, the design professional and the local government collaborate on the best way to approach the design.

“People should realize that quality and value should be No. 1,” said Larry Fleis, president of Fleis & VandenBrink (F&V), a Grand Rapids-based engineering and architecture firm with nine offices across Michigan and Indiana. “They’re doing a disservice to themselves by thinking that hiring professionals on a low-bid basis is good for them.

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