2020 Transportation Short Course October 14, 2020
A NEW PARTNERSHIPNorma Glasscock, P.E.PEPS Negotiations Center Manager
Doug Dillon, P.E.BGE, Inc.
October 14, 2020
2020 Transportation Short Course October 14, 2020
Presentation Topics
2
1 • Negotiations History
2 • Communication & Partnering
3 • Next Steps
2020 Transportation Short Course October 14, 2020 3
Negotiations History
Why now?• Consulting process began in
1970s / early 1980s
• Consulting has continually evolved and has seen significant changes over the last 10 years
• Negotiation process has not been examined for corresponding changes along the way
2020 Transportation Short Course October 14, 2020
Rapid Deployment - Forming
5
Approval of an annual rate negotiation process by the Texas Transportation Commission on May 30, 2019
PEPS Negotiation Center formed on June 03, 2019
PEPS Negotiation Center Manager chosen on June 06, 2019
Submitted a request to ACEC to form a Negotiation Task Force (NTF) on June 14, 2019
First NTF meeting was held on July 25, 2019
The basic concept for the annual negotiation was shared by a NTF member in the August 2019 meeting
GOALAn annual negotiation process of substantiating reasonable and accurate industry rates (costs) that is simpler, less contentious, and recognizes changing market conditions while providing for fair and reasonable compensation considering the scope, complexity, professional nature, and value of the services provided.
2020 Transportation Short Course October 14, 2020
Negotiation Task Force Experience - Storming
Platform to discuss consultant challenges in a broad sense
Defined the goals and expectation of a partnership between ACEC, consultants, and TxDOT
Enhanced transparency from both perspectives
7
Rate Negotiations - Then and Now
Significant time and labor required
Prime negotiates for sub-providers
Communicate through email
110 hours per contract (14 days)
Historical Process
Minimal time and labor required
All firms negotiate their own rates
Communicate through virtual meetings
Three to five days to complete
New Annual Rate Negotiations Process
2020 Transportation Short Course October 14, 2020 9
Communication and Partnering
2020 Transportation Short Course October 14, 2020
Pilot Process Implementation
Workshops with consultant representatives as subject matter experts to:
• Improve the line item definitions of Unit Costs and Other Direct Expenses (ODEs)
• Develop an single ODE list of maximum and fixed rates
• Refine labor classification descriptions
10
2020 Transportation Short Course October 14, 2020
Performing
• Began in February• 52 out of 101 firms chose to
participate• Completed negotiations in 6 weeks
The Pilot
11
Contracts Growth of the Pilot Program
Wave 216 procurements55 contractsInvolved 161 separate pilot participant rate tables
Wave 319 procurements87 contracts223 separate pilot participant rate tables
Total35 procurements142 contracts384 separate pilot participant rate tables
12
Expanded Participation
Wave 46 ID contracts for districts use
2 of 6 completed34 new participants to date
Wave 1 FY 21Full implementation for awarded contractsAll consultants on teams will participate
13
2020 Transportation Short Course October 14, 2020
TxDOT Experience
Opened communication with consultant providers
Labor and time savings for TxDOT•Only 2 of 52 pilot consultant negotiations have required a 2nd mtg•Improved time to reach execution of contract•Frees time for the Procurement Engineer to better serve their customers
Consistent application of the process•Only 1 submittal required certified payroll to validate rates
14
2020 Transportation Short Course October 14, 2020
Consultant Firm Experience
Portfolios are growing
Negotiations can be customized for unique contracts and projects
Allows for more informed planning for the consultant
Platform to discuss consultant challenges by individual firms
Consistent application of profit and escalation
Adversarial aspect is diminishing
15
Industry Engagement
ACEC Industry committee of 10 firms (variety of sizes and work efforts)
PEPS initiated 7 work groups of 6 industry representatives to explore standardized UCs and ODEs (51 different firms from across the state and a variety of sizes were invited to participate, approx. 1 in 7 firms were involved)
•PSE - Design•CEI•Geotech/Materials
•Survey•Utilities•Traffic Engineering
•Schematic/Environmental
4 virtual presentations on Partial Implementation – with over 60 participants
2 ACEC Chapter and 2 ASHE Chapter briefings16
2020 Transportation Short Course October 14, 2020 17
Next Steps
18
Industry Engagement going forward
TxDOT committed to continuing engagement of Industry Partner committee thru the rollout of Wave 1 2021
Ongoing online presentations/workshops to introduce firms to the process
Industry suggestions on how to prepare for your first negotiation
Industry feedback on the topic of risk/profit
Industry feedback on the topic of rate escalation
2020 Transportation Short Course October 14, 2020 19
Doug Dillon, P.E.Exec. Vice President; BGE, [email protected]
Norma Glasscock, P.E.PEPS Negotiation Service Center [email protected]
Questions and Discussion