GUIDELINE Gideline for the Selection of Engineering Services 1998 Mission Statement: To govern the engineering profession while enhancing engineering practice and enhancing engineering cltre Pblished by Association of Professional Engineers of Ontario Janary 2010
CONTENTS 1. INTRODUCTION...3 2. CLIENTS RESPONSIBILITIES...3 2.1 Defining the Scope of the Project...3 2.2 Strctring the Project...3 2.3 Preparing a Preliminary Cost Estimate...3 2.4 Choosing a Selection Method...4 3. SERVICES TO BE PROVIDED BY ENGINEERING CONSULTANTS...4 3.1 Consltative, Advisory, Investigative and Predesign Services...4 3.2 Project Management Services...4 3.3 Detailed Design Services...5 3.4 Contract Administration and General Review Dring Constrction...5 3.5 Resident Services Dring Constrction...6 3.6 Additional Services...6 3.7 Constrction Management Services...6 4. QUALIFICATION-BASED SELECTION SYSTEM...7 4.1. Direct Appointment...7 4.2 Selection Procedre...8 4.2.1 Preparing a List of Qalified Engineering Firms (Long List)...8 4.2.2 Reqesting Letters of Interest...8 4.2.3 Identifying Candidate Consltants (Short List)...9 4.2.4 Preparing Reqests for Proposal (RFP)...9 4.2.5 Two-Envelope System...9 4.2.6 Two-Stage System...9 4.2.7 RFP Processes...10 4.2.8 Interviewing Candidate Consltants...11 4.2.9 Selecting the Preferred Consltant...11 4.2.10 Meeting with the Preferred Consltant...11 4.2.11 Execting the Agreement with the Selected Consltant...11 4.2.12 Notifying Unsccessfl Consltants...11 5. Consltant Performance Evalation...11 2 Professional Engineers Ontario Gideline
1. INTRODUCTION This gideline shold be read in conjnction with the common Foreword and Glossary for PEO gidelines. Its prpose is to assist a ser of professional engineering services the client to choose the appropriate engineering consltant for a project. It does not apply to design/bild projects. Usally, engineering consltants recognize that a project s cost is of paramont importance to their clients. Clients shold note that engineering fees amont to a relatively small percentage of the total project cost especially when project life-cycle costs are taken into accont. Selecting appropriately qalified engineers sally reslts in good engineering designs and can significantly redce a project s life-cycle costs. Rather than merely meeting minimm standards, the services of appropriately qalified engineering consltants can enhance a project s vale to clients throgh rigoros consideration of alternatives, analyses of long-term operating and maintenance costs, and innovative design. It is therefore in the client s best interests to se a qalification-based selection method, which demonstrates the competence of the engineering consltant in the performance of the reqired engineering services. 2. CLIENTS RESPONSIBILITIES To provide the services appropriate to a particlar project, engineering consltants reqire a complete and clear set of terms of reference. Clients responsibilities inclde preparing terms of reference and a preliminary cost estimate. Before selecting an engineering consltant for a project, clients shold complete the following checklist. 2.1 Defining the Scope of the Project Clients shold describe the natre and extent of the project as clearly and precisely as possible, inclding defining the objective(s) to be met and otlining relevant backgrond information. They shold also state their expectations abot how objectives will be accomplished and the anticipated involvement of their staff, the engineering consltant and other relevant parties. The following criteria may help to define the terms of reference for engineering services. Objective(s) What shold the project accomplish? Backgrond What factors led p to the project? Scope What will be inclded in, or exclded from, the project? Approach How will the objective(s) be met? Resorces Who will be responsible for what? Deliverables What tangible reslts are expected? Timing When will the project start/finish? 2.2 Strctring the Project Clients may either retain comprehensive engineering services from a project s start to finish, or develop a work plan for contracting ot specific phases of the project to varios parties. They shold determine which alternative is appropriate in their sitation. 2.3 Preparing a Preliminary Cost Estimate A preliminary cost estimate will be only as accrate as the defined scope of a project or problem. In cases where very limited preliminary engineering has been ndertaken, this estimate will likely reflect the cost of engineering services contemplated in the scope of the project. In cases where more extensive preliminary engineering has been completed and the scope of the project has been well defined, Professional Engineers Ontario Gideline 3
this estimate will likely reflect the total project cost. For more information on the cost of engineering services, see the PEO gideline Schedle of Fees for Engineering Services. 2.4 Choosing a Selection Method Clients may procre engineering services throgh either the direct appointment process (see Section 4.1) or the selection process (see Section 4.2) otlined in this gideline. They shold determine which process is appropriate in their sitation. 3. SERVICES TO BE PROVIDED BY ENGINEERING CONSULTANTS It is important that engineering consltants list all categories of work they are likely to be asked to perform within a contract, as well as those considered to be otside the scope of the contract. Items that reqire particlar attention when drafting a contract, especially for design and constrction projects, inclde: preparation of tender docments for seqential bidding; changes to drawings to sit contract changes arising from events otside the engineer s control; and preparation of itemized lists of constrction materials, inclding reinforcing schedles. When preparing a list of engineering services for contracts, consltants shold also consider the degree to which they will be reqired to obtain approvals from reglatory athorities having jrisdiction. The following seven divisions of services may be a helpfl resorce in preparing a comprehensive list. 3.1 Consltative, Advisory, Investigative and Predesign Services These services may inclde, bt are not limited to: expert testimony; appraisals and valations; investigations and stdies; rate strctre and tariff stdies; inspections, explorations, srveys, testing or other services concerning the collection, analysis, evalation and interpretation of data leading to specialized conclsions and recommendations; feasibility stdies on proposed projects, inclding stdies of clients needs, analyses of conditions or methods of operation, development of alternative concepts, economic analyses, environmental stdies and site location stdies; development of preliminary design reports, inclding otline specifications, preliminary cost estimates, etc.; and schematic design and design development for bilding projects. 4 Professional Engineers Ontario Gideline 3.2 Project Management Services Project management involves mobilizing a design and constrction team to plan, control and implement all of a project s activities from conception to completion of constrction. It also involves meeting client reqirements related to the project s fnction, qality, schedle and bdget. Project management services inclde, bt are not limited to: selecting consltants; conceptal stdies and economic feasibility;
planning, schedling, monitoring and controlling; estimating, bdgeting and cash control; engineering and design; arranging financing; procrement; risk management; constrction management; commissioning; and qality assrance. 3.3 Detailed Design Services Detailed design services are based on previosly established project reqirements. They comprise the preparation of engineering designs, drawings, specifications and contract docments. Examples of these services inclde, bt are not limited to: preparing drawings, resolving detailed problems, selecting eqipment and developing specifications; coordinating engineers and/or other design service grops; preparing detailed calclations, design drawings, specifications and contract docments; preparing, or collaborating with others responsible for preparing, estimates of the cost of the work; and providing assistance and advice to the client, related to tender call, evalation and award immediately preceding constrction. 3.4 Contract Administration and General Review Dring Constrction These services comprise administering the constrction contract and providing engineering review dring the constrction period, following the award of the contract. Distinct and separate from the services provided by resident field personnel, they shold not to be considered as a sbstitte for resident engineering services. They may inclde, bt are not limited to: providing advice on the interpretation of contract docments to the contractor or client, and issing spplementary details and instrctions as reqired; reviewing shop drawings for general compliance with design reqirements and contract docments; reviewing contractor s progress claims, inclding the validity of additions or deletions; issing progress certificates and change orders for the client s acceptance; making periodic site visits to assess progress generally and conformity of the work with the contract docments; reporting to the client on the progress of constrction; arranging for, and attending, reglar site meetings; carrying ot final review at the conclsion of the constrction contract; issing a sbstantial performance and/or completion certificate; and ensring that the contractor keeps as-bilt records. Professional Engineers Ontario Gideline 5
These services do not inclde directing the contractor s personnel in methods, schedling, procedres, seqence of work, or eqipment selection, except as may be specifically prescribed in the constrction contract. 3.5 Resident Services Dring Constrction Services dring constrction are considered to be resident when all office facilities reqired by staff at the site are provided by the client at no cost to the engineer, and when the staff assigned by the engineer are on site for a continos work period of at least six weeks. Resident services may inclde, bt are not limited to: providing reference srveys to the contractor, bt not srveys of legal property bondaries, and, where necessary, checking the contractor s srveys; determining that the contractor s work satisfies the intent of the design and conforms with the plans and specifications; arranging for, and/or carrying ot, all prescribed field testing and inspection of materials and eqipment; investigating, reporting and advising on nsal circmstances that may arise dring constrction; carrying ot final inspection at the conclsion of the constrction contract, as part of the client s acceptance program; maintaining sfficient data to otline crrent progress of the work; and certifying the contractor s reqest for payments regarding progress, qantities of work completed, materials delivered to the site, change orders, etc. Resident services do not inclde directing the contractor s personnel in methods, schedling, procedres, seqence of work, or eqipment selection, except as may be specifically prescribed in the contract docments. 3.6 Additional Services Additional services will vary according to the client s needs and shold be described in the scope of work. These may inclde, bt are not limited to: commissioning and start-p assistance; preparing maintenance and operating manals; determining deficiencies dring the warranty period; preparing the final acceptance docment at the end of the warranty period; assisting with facility management and/or operations after the commissioning and start-p; and providing as-bilt drawings. 3.7 Constrction Management Services These may inclde, bt are not limited to: contract strategy, administration and expediting; constrction logistics, planning, schedling and personnel forecasts; field office management and temporary facilities provision; materials receiving and warehosing; progress monitoring, trending and reporting; cost performance monitoring, trending and claims processing; and labor relations and safety maintenance. 6 Professional Engineers Ontario Gideline
4. QUALIFICATION-BASED SELECTION SYSTEM The qalification-based selection system provides the best vale-for-money in professional engineering services. It involves the selection of an engineering consltant sing the following qalitative criteria: technical competence; experience on similar projects; proven performance; availability of dedicated personnel for the dration of the project; ability to perform within time constraints; location and/or local knowledge, where this is of importance to the project; professional independence and integrity; and managerial ability. 4.1 Direct Appointment Some clients may wish to approach an engineering consltant directly for a proposal. It is advisable to se this method of selection only if: the client has been well served by the engineering consltant in the past; the client is well acqainted with the engineering consltant s resorces; maintaining continity on a project is a factor; the client has an eqitable and open roster rotation system; or the engineering consltant has been recommended and/or has demonstrated niqe qalifications to the client. Before proceeding, however, the client shold ascertain whether the engineering consltant: is interested; has the necessary expertise; has qalified staff available; and is willing to spply other relevant information as may be reqested. If the engineering consltant is interested and meets the criteria described above, the client may ask the engineering consltant to sbmit a proposal. Alternatively, the client and the engineering consltant may: discss the project in depth; prepare Terms of Reference for the project jointly; agree on the fee compensation and method of payment; develop a tentative project schedle; and establish an engineering fee bdget. Professional Engineers Ontario Gideline 7
4.2 Selection Procedre If clients believe it is in their best interest to select an engineering consltant throgh a formal procedre, they shold complete the following steps in seqential order. Steps Client Action Consltant Actions 1. Define project and scope of services reqired 2. Prepare long list of qalified consltants 3. Reqest letters of interest (optional)* Respond 4. Prepare short list of two to for consltants 5. Reqest detailed proposals Respond 6. Interview candidate attend interview consltants (optional)** 7. Select preferred consltant 8. Meet with preferred consltant Attend meeting 9. Execte agreement Execte agreement 10. Notify nsccessfl consltants Note: *Step 3 is optional and sed primarily in preparing the short list. **Step 6 is also optional and limited to complex or niqe projects. 4.2.1 Preparing a List of Qalified Engineering Firms (Long List) Except in nsal circmstances, the long list ranges from five to 10 engineering firms. In selecting firms for the long list, clients may wish to consider the following criteria: personal knowledge and/or experience of the client s staff; recommendations from other people or organizations who may have completed similar engineering projects; reqests from consltants asking to be considered; and lists of qalified engineering firms from sch appropriate associations as Conslting Engineers of Ontario or Professional Engineers Ontario. 4.2.2 Reqesting Letters of Interest A letter of interest (three to for pages of text), is normally not reqired for projects that are rotine or of low complexity. Clients shold reqest letters of interest from qalified engineering consltants only if sfficient information to prepare the short list of candidates is navailable from other sorces (see Sections 4.2.1 and 4.2.3). 8 Professional Engineers Ontario Gideline Clients generally intend letters of interest to be simple and inexpensive for engineering firms to prepare. However, in their attempts to be short listed, engineering firms tend to pt effort and expense into preparing elaborate sbmissions aimed at marketing their services effectively. It wold therefore be prdent for clients to inclde the following paragraph in their written reqests for letters of interest: This is not a reqest for proposal. Elaborate sbmissions are not expected or desired. (Two, Three, For) interested firms will be selected for (interviews, detailed proposals) and frther evalation. When preparing letters of interest, consltants shold inclde brief descriptions of:
the firm s ability and experience on similar projects, inclding references the client may contact abot past performance; key personnel available, inclding resmes; and the proposed organization of the project, if it is complex and/or involves stdy teams or consortims. 4.2.3 Identifying Candidate Consltants (Short List) From the long list, clients redce the nmber of qalified engineering firms to a reasonable nmber (two to for) of candidate consltants for detailed evalation. Clients can sally accomplish this by sing: their own performance evalation record on engineering consltants; the knowledge and experience of their staff; references from others who have carried ot similar projects; references from government agencies familiar with the consltant s capabilities and areas of expertise; and advice on how to select candidate consltants from engineering consltants with whom they already have bsiness relationships, if applicable. 4.2.4 Preparing Reqests for Proposal (RFP) Unless Letters of Interest have been solicited, this is the first point of consltant involvement in the selection process. The RFP shold contain a definition of the project, scope of services reqired and the terms of reference (see Section 2.1). It shold also ask the consltant to address the: staff or stdy team proposed for assignment to the project; resmes of key personnel; previos experience on similar assignments, with dates; project methodology, if applicable; schedle or time frame; and method of payment and basis for remneration, e.g. fixed lmp-sm fee; fee calclated on a timepls-expenses basis; fee calclated on a percentage-of-cost basis, or combination thereof. 4.2.5 Two-Envelope System In the two-envelope system, clients ask candidate consltants to sbmit proposals in two, sealed envelopes. One envelope contains the technical proposal exclsive of the engineering fee. The other contains the proposed engineering fee for the services. Upon receipt of this information, clients se the qalification-based selection system to evalate the technical proposals and to establish their order of merit. Dring the evalation period, envelopes containing proposed engineering fees remain sealed. Once a selection has been made, the client reviews the selected consltant s proposed engineering fee. In cases where two proposals are considered comparable, clients may wish to review the proposed engineering fees for both, before making a final selection. All envelopes containing proposed engineering fees sbmitted by nsccessfl firms are retrned nopened to the respective firms. 4.2.6 Two-Stage System In the two-stage system, clients ask candidate consltants to sbmit technical proposals withot any reference to engineering fees. Clients then se the qalification-based selection system to evalate the technical proposals and to establish their order of merit. The consltants with the top two proposals are asked to sbmit their proposed engineering fees for the assignment. Both consltants shold be advised of any changes to the scope of engineering services at this time. The client selects the preferred consltant based on the fee proposals. Professional Engineers Ontario Gideline 9
4.2.7 RFP Processes There are two processes sed to reqest proposals from engineering consltants. Clients may wish to se the following matrix to determine which process is the most sitable for a project, based on the project s complexity and estimated cost. ESTIMATED PROJECT COST COMPLEXITY HIGH MEDIUM LOW Over $1,000,000 RFP RFP RFP Process I Process I Process II $1,000,000 to RFP RFP RFP $500,000 Process I Process I Process II $500,000 or less RFP RFP RFP Process I Process II Process II RFP Process I Recommended for most engineering assignments, RPF Process I emphasizes competence and qalifications as the primary considerations in selecting consltants. In this process, reqests for proposals are normally sent to two to for engineering firms on the short list. For projects that are of high complexity or large in scope, clients shold hold a joint briefing meeting with their candidate consltants. This meeting shold serve to: identify the client s staff associated with the project and their responsibilities; review and explain the Terms of Reference; otline and, in some cases, disseminate backgrond material available to consltants for se in preparing proposals; provide an opportnity for consltants to ask qestions or seek clarifications; segregate the varios phases of the project; and enable consltants to assess the compatibility of their staffs with the client s staff. Sch joint briefing meetings will save the client s staff time. They will also ensre that all consltants are provided with identical information at an early stage in the preparation of their proposals. It is recommended that the two-stage system otlined in Section 4.2.6 be sed in this process. If the selected consltant s proposed fee strctre exceeds the client s bdget, the client and the consltant may negotiate a new fee strctre, based on revised terms of reference for engineering services. If the client and selected consltant are nable to reach sch an agreement, the client can restart the negotiation process with the consltant who is the second choice, and so on, ntil a satisfactory agreement is reached. RFP Process II RFP Process II also emphasizes competence and qalifications as the primary considerations in selecting consltants. However, it also recognizes that for some clients, engineering fees may be a primary consideration for projects that are rotine and/or low bdget. This process therefore ses the twoenvelope system otlined in Section 4.2.5. In the process, reqests for proposal are normally sent to at least one or more qalified engineering firms. When preparing RFPs, clients shold ensre that the scope of the project and its terms of reference are well defined and very explicit. 10 Professional Engineers Ontario Gideline
4.2.8 Interviewing Candidate Consltants Dring the evalation of the technical proposals, clients may interview one or two candidate consltants to clarify the points contained in their proposals. To ensre that all technical proposals are evalated on the same basis, clients may wish to discss topics not covered in a consltant s written sbmission. 4.2.9 Selecting the Preferred Consltant Under the qalification-based selection system, the selection of the preferred consltant is based on: technical competence; experience on similar projects; dedicated personnel available for the dration of the project; ability to perform within time constraints; proven performance; location and/or local knowledge, where this is of importance to the project; professional independence and integrity; and managerial ability. 4.2.10 Meeting with the Preferred Consltant Following the ranking of the candidate consltants, the client shold meet with the preferred or top ranked consltant to: discss the project in depth; pdate jointly the terms of reference, if reqired; agree on the engineering fee strctre; develop an engineering fee bdget; and negotiate other salient points leading to an Engineering Agreement. 4.2.11 Execting the Agreement with the Selected Consltant Clients are responsible for preparing Engineering Agreements for exection. For more information, see the PEO gideline Recommended Form of Agreement between Client and Engineer and the companion gideline. 4.2.12 Notifying Unsccessfl Consltants Following the sccessfl conclsion of the meeting with the selected consltant in Section 4.2.10, clients shold notify all nsccessfl consltants in writing that they were not selected for the project. Written notification shold inclde the name of the selected consltant. 5. CONSULTANT PERFORMANCE EVALUATION Althogh the concept of qality or vale may be sbjective, it can be made more tangible by defining and measring agreed-pon elements. Clients can establish a formal performance review and evalation process, sing vale-based criteria or performance indicators on which they and the engineering consltant have agreed. Performance reviews and evalations can be either ongoing dring the project, or ndertaken at project completion. Vale-based criteria can inclde the consltant s: adherence to bdget and schedle; commnication skills, inclding information flow to clients on changes in the scope of the project; ability to work with the client s staff; cost estimating accracy; innovation; presentation skills; and sitability and qality of end prodcts (e.g. reports, design, constrcted works, etc.). Clients shold meet with consltants to review their observations on the consltants performance. They shold also maintain a record of performance evalations for ftre reference in selecting consltants. Consltants shold be given an opportnity to respond in writing to clients concerns. Professional Engineers Ontario Gideline 11
Professional Engineers Ontario 40 Sheppard Avene West Site 101 Toronto, Ontario M2N 6K9 Tel: 416 224-1100 or 1-800-339-3716 Fax: 416 224-8168 or 1-800-268-0496 Enforcement Hotline: 416 224-9528 Ext. 1444 Website: www.peo.on.ca