1 Instructor Mohammad Maljai, P.E. Caltrans HQ Division of Local Assistance PROCURING A&E CONTRACTS Module 1 - Introduction and Procurement Planning • Incurred cost audits of local agencies identified deficiencies in their A&E consultant contract procurement process • In 2013/2014 Caltrans conducted process reviews of 30 local agencies’ A&E procurement procedures http://www.dot.ca.gov/hq/LocalPrograms/Reports/ process-reviews/pr1401.pdf – Reviewed local agency processes, documentations and records – Identified weaknesses and deficiencies in procedures and record keeping (validating audit findings) – Recommendations from the final report included conducting further training Why This Training? 2 LTAP Center Training www.californialtap.org
Transcript
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Instructor
Mohammad Maljai, P.E.Caltrans HQ
Division of Local Assistance
PROCURING A&E CONTRACTS
Module 1 - Introduction and Procurement Planning
• Incurred cost audits of local agencies identified deficiencies in their A&E consultant contract procurement process
• In 2013/2014 Caltrans conducted process reviews of 30 local agencies’ A&E procurement procedures
– Reviewed local agency processes, documentations and records
– Identified weaknesses and deficiencies in procedures and record keeping (validating audit findings)
– Recommendations from the final report included conducting further training
Why This Training?
2LTAP Center Training www.californialtap.org
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• Improve knowledge of the requirements
– Identify and review process activities and tasksLocal Assistance Procedures Manual (LAPM) –Chapter 10
– Provide resources, references, and guides– Identify and review forms, documents, and checklists– Examine tools, templates, and samples
• Identify most frequent errors/deficiencies
• Minimize risk of losing federal funds due to non-compliance findings
Objectives of This Training
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• Definition of an A&E Contract
• Purpose of an A&E Contract
• Procurement Process/Roles and Responsibilities
• Planning for A&E Contracts
• Solicitation and Advertisement
• Evaluation and Selection
• Contract Negotiations
• Contract Audits
• Contract Execution
• Other Considerations
What You Will Learn in Series
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• Introduction
– Definition of an A&E Contract – Contract Life Cycle– 5 Phases of Procurement Process
• Phase 1 Planning
– Roles and Responsibilities– Segmenting and Scope– Cost Estimating– Type of Contract– Method of Payment
Module 1 – Today’s Agenda
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• A&E contracts are procured based on Qualification Based Selection (QBS), as specified in 40 USC Chapter 11, Sections 1101-1104, also known as the Brooks Act:
– Engineering and Design related services also known as Architectural and Engineering (A&E) services are:
What is an A&E Contract?
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• program management
• construction management
• feasibility studies
• preliminary engineering
• design
• engineering
• surveying
• mapping
• architectural related services
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– A&E services are required to be performed, approved, or logically/justifiably performed by a person licensed, registered, or certified as an engineer or architect
– Over time, it evolved to include licensed or certified environmental scientist/professionals, licensed surveyor and licensed landscape architects
• Incidental Non-A&E Services
What is an A&E Contract? (Cont’d)
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• A&E services can also be procured, but under certain conditions, through:
– Small Purchase Procedures (less than $150,000)
OR
– Non-Competitive (Sole Source) Procedure (a Public Interest Findings (PIF) is required)
What is an A&E Contract? (Cont’d)
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• Why do we contract out?
– No in-house engineering (or project professional) staff– Manage peaks on resource demands– Specialized skills
• What do we contract out?
– Capital transportation project development and implementation components
– Capital transportation projects related professional services
Why A&E Contracts?
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• Caltrans Local Assistance Procedures Manual (LAPM), Chapter 10
• State
– Government Code 4525-4529: “Contracting with A&E Firms”– California Public Contract Codes 10301-10381
• Federal
– Title 23 Code of Federal Regulation, Part 172 (23 CFR 172): “Administration of Engineering and Design Related Services Contracts” – Final Rule Effective June 22, 2015
State and Federal Laws and Regulations
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• Federal
– Title 23 United States Code Section 112 (23 USC 112): “Letting of Contracts” http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title23-section112&num=0&edition=prelim
– Title 23 Code of Federal Regulation, Part 172 (23 CFR 172): “Administration of Engineering and Design Related Services Contracts”; superseded by new Final Rule published on Federal Register on May 22, 2015 https://federalregister.gov/a/2015-12024
Resources (1)
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Federal– 48 CFR Part 31: “Contract Cost Principles and Procedures”
– 2 CFR Part 200 Subpart D: “Uniform Administration Requirements for Grants and Cooperative Agreements to State and Local Governments”http://www.ecfr.gov/cgi-bin/text-idx?SID=68576a7778cab4fa90464f3d2cc02cdc&mc=true&node=sp2.1.200.d&rgn=div6
– 49 CFR Part 26: “Participation by Disadvantage Business Enterprises (DBE) in Department of Transportation Financial Assistance Programs” http://www.ecfr.gov/cgi-bin/text-idx?SID=19d6f8a6ea0bb49089da7d4c17c760d3&mc=true&node=pt49.1.26&rgn=div5
– FHWA’s Procurement, Management, and Administration of A&E Contract Question and Answer http://www.fhwa.dot.gov/programadmin/172qa.pdf
– FHWA Contract Administration Core Curriculum Participant’s Manual and Reference Guide, October 2014 http://www.fhwa.dot.gov/programadmin/contracts/index.htm
– Uniform Audit and Accounting Guide for Audits of Architectural and Engineering (A/E) Consulting Firms, AASHTO, 2012 Edition http://audit.transportation.org/Documents/AudAcctgGuide2012(SPG-complete).pdf
– AASHTO Guide for Consultant Contracting, 2008 https://bookstore.transportation.org/item_details.aspx?ID=1196
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Resources (3)
• State
– Caltrans Local Assistance Procedures Manual (LAPM), Chapter 10 http://www.dot.ca.gov/hq/LocalPrograms/lam/lapm.htm
– Caltrans Division of Local Assistance Consultant Selection and Procurement web page http://www.dot.ca.gov/hq/LocalPrograms/AE/index.htm
– California Government Code 4525-4529: “Contracting with A&E Firms” http://www.leginfo.ca.gov/cgibin/displaycode?section=gov&group04001-05000&file=4525-4529.5
– California State Public Contract Code 10301 – 10381 http://www.leginfo.ca.gov/cgi-bin/calawquery?codesectionpcc&codebody=&hits=20
Resources (4)
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Contract Life Cycle
Procurement Planning
Procurement3-6 Months
PerformanceTypically 3-5 Years
Close-out2 Months
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Procurement Process
PROCUREMENT
PLANNING
EVALUATION AND
SELECTION OF
CONSULTANT
CONTRACT COST
NEGOTIATIONS
CONTRACT
EXECUTION
SOLICITATION
DOCUMENTS AND
ADVERTISEMENT
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#1 Select project
Set project objectives
Determine project schedule
Obtain CTC Allocation/Federal
Authorization to Proceed prior
to beginning reimbursable work
Submit LAPM Exhibit 10‐U,
Consultant in Management
Position Conflict of Interest
Statement, if applicable to
DLAE with Request for Federal
Authorization to Proceed
#2 Identify need for consultant
Appoint Contract Administrator
Segment project work
Define SOW of A&E consultant
Specify products to be delivered
STEPS #1 ‐ #3: PROCUREMENT PLANNING
#3 Estimate cost of consultant work
Determine type of contract
(project specific or on‐call)
Determine Method of Payment
(MOP): Lump Sum; Cost‐Plus‐
Fixed Fee; Cost Per Unit of Work;
or Specific Rate of Compensation
A&E = Architectural & Engineering
A&I = Caltrans Audits & Investigations
CT = Caltrans
DBE = Disadvantaged Business Enterprise
DLA = Division of Local Assistance
DLAE = District Local Assistance Engineer
LAPG = Local Assistance Program Guidelines
LAPM = Local Assistance Procedures Manual
MOP = Method of Payment
RFP = Request for Proposal
RFQ = Request for Qualifications
SOQ = Statement of Qualifications
SOW = Statement/Scope of Work
• Select project
• Set project objectives
• Determine project schedule
• Identify need for consultants
• Appoint Contract Administrator
Procurement Planning
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• Contract Administrator Role and Responsibilities
– Ensures that all records, files and other documents related to the contract procurement and management activities are retained in the contract/project files
– Provides direction to ensure the proposed work is advertised properly
– Prepares and distributes the Request for Qualifications (RFQ), description of work, and Request for Proposals (RFP), if used
– Prepares the draft contract– Arranges for preparation in advance of an independent estimate of
the value of the work to be contracted out
Procurement Planning
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– Ensures that the selection procedures are followed– Analyzes the selected/best-qualified consultant’s cost proposal– Ensures contract audit and review procedure is followed, Local
– Ensures that fee/profit negotiation is conducted and keeps records– Serves as the local agency’s primary contact person for the
successful consultant– Monitors the consultant’s progress and provides direction
Procurement Planning (Cont’d)
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– Reviews and approves the consultant’s invoices and/or progress payments to ensure that billings are in accordance with the terms and conditions of the contract, and correspond accurately to the work performed during the billing period
– Identifies other local agency staff for the consultant to contact, if needed
– Closes out the contract at completion, by processing the final invoice; completing a mandatory consultant performance evaluation, and final Disadvantaged Business Enterprise (DBE) utilization reports (Exhibit 17-F)
Procurement Planning (Cont’d)
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• Segment consultant work
Procurement Planning
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Complexity
Coo
rdin
atio
n
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• Define scope of consultant work
• Specify deliverables
• Determine type of contract
– Project specific
– Multi-phased or Multi-purpose
– On-call contracts
• Determine method of payment
– Actual Cost Plus Fixed Fee
– Lump Sum
– Specified (Specific) Rate of Compensation
– Cost Per Unit of Work
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Procurement Planning
• Actual Cost Plus Fixed Fee
– Actual cost, direct labor, indirect cost rate– Hours per task– Profit/fee (fixed $ amount)– Other Direct Costs (ODC) (material, equipment, travel)
• Appropriate for project specific contract when scope of work is well defined.
• Must carry a maximum (not-to-exceed) dollar amount that includes total actual cost (negotiated) and fixed fee.
– Actual cost, direct labor, indirect cost rate– Hours per task– Profit/fee (fixed $ amount)– ODCs (material, equipment, travel)– Total amount of contract (unadjustable)– Progress/milestone or one-time only payment
• Appropriate for very well-defined scope of work
• Consultant assumes responsibility for cost control
Procurement Planning
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• Specified Rate of Compensation
– For on-call contracts– Actual cost, direct labor, indirect cost rate, and profit/fee (loaded
– Detailed estimate to include:• Work or Labor Hours
• Types or Classifications
• Estimated labor rates, including indirect cost rate
• Other Direct Costs (ODCs)
• Fixed Fee or Profit
– Basis for Negotiations
– DBE Utilization Goal Setting
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Procurement Planning
• What is the cost of A&E contracts?
– Mostly labor– Multi-disciplines– Professional and sub-professional– Some technical and administrative– Material, equipment, travel or in contract terms, Other Direct Costs
