A COALITION ADVOCATING FOR QUALIFICATIONS-BASED SELECTION (QBS) WHEN HIRING PROFESSIONAL SERVICES FIRMS.
Since 1972, QBS has been required by law in the United States.
Hundreds of thousands of Canadian professionals think it's about time Canada caught up.
Using QBS ensures that governments and organizations in Canada will hire the best-qualified firms at fair and competitive prices, instead of lesser qualified firms at artificially low prices. The benefits of QBS to buyers, vendors, and Canadian taxpayers are significant.
WHAT IS QUALIFICATIONS-BASED SELECTION?
QBS is a procurement process that has proven that buyers get better outcomes and greater value by excluding price as an initial evaluation criterion when hiring a professional services firm for projects in accounting, architecture, engineering, consulting, IT, research, communications, design, law, etc.
With QBS, firms are selected based upon their qualifications to do a project, instead of their low bid.
Here’s why including price as even a small part of the evaluation process gets buyers and taxpayers low value and higher costs….
When price is even a small part of the evaluation process vendors know that if they aren’t one of the lowest prices – regardless of how qualified they may be – they will not win the project.
This forces all vendors to interpret the project in it’s least viable form and to provide stripped down pricing for the least viable project knowing that the real cost of the project is likely higher and will be achieved using change-orders after they have won the project – a situation that creates project cost overruns and turns buyers and vendors into adversaries instead of partners.
This does not mean that vendors are being deceptive – it is simply a consequence of having price as a part of the evaluation. It forces vendors to comply by writing stripped down, low priced proposals which lead to inaccurate project costs and compromised projects. Ever wonder why a new building awarded for construction at $100 million becomes $150 or $200 million by the time it is finished? Likely one of the most significant contributing factors, was that it was awarded using a process that included price as one of the evaluation criteria. Don't blame the builders and designers. Blame the procurement process.
By removing price, the QBS process means vendors focus on demonstrating why they are the most qualified firm to do a project knowing that if they are selected based on their expertise, they will then be able to discuss and negotiate a REAL price and scope, instead of blindly providing an UNVIABLE low-bid.
It is important to remember that the buyer is free to cease negotiations with the most qualified vendor and move onto discussions with the second most qualified firm if they cannot agree to a price and scope with the first. This protects against overcharging that many fear will happen if price is not part of the initial selection of the firm.
What is NOT QBS?
“Best Value” as a generic procurement term is usually just another phrase for “low-bid RFP” and is not QBS
Any RFP that includes price as part of the evaluation process is not QBS – even if qualifications are part of the evaluation process (no matter how low price is weighted)
Any procurement methodology that evaluates price as part of the selection process is not QBS
While low-bid processes are appropriate for commodity goods, they are inappropriate, ineffective, and far too costly for use when procuring professional services that are custom, complex and costly.
“QBS works because it sets up a collaborative team approach from the outset. Working as a team and providing the design consultant with the resources to be innovative has positive impacts on the construction and life-cycle costs of infrastructure”
Jennifer Enns, P.Eng., Manager of Corporate Engineering and Energy Services in the City of Calgary
HIRING PROFESSIONALS BASED ON QUALIFICATIONS, INSTEAD OF LOW PRICE, BENEFITS ALL CANADIANS
Benefits To Buyers of Professional Services
Easier identification of the most qualified vendors
Collaborative instead of adversarial vendor relationships
More accurate project estimates meaning fewer project cost overruns
Lower procurement costs
More innovative project results
Reduced life-cycle cost of projects
Benefits To Vendors of Professional Services
Reduced sales costs
Collaborative instead of adversarial client relationships
Opportunities for innovation and life-cycle planning
QBS Canada is the passion project of Cal Harrison, who for almost 30 years has advocated for the abandonment of the price-based RFP when hiring professional services that are custom, complex, and costly.
Cal is the President of Beyond Referrals and the author of 3 books on the buying and selling of professional services including
The Consultant with Pink Hair.