Industry Watch – Procurement Models – How a Biased Report is Casting a Negative Light on a Perfectly Viable Procurement Model that Ensures Only The Most Qualified Contractors Bid Work.

In this week’s article, I have a piece written November the 3rd in the Richmond Times Dispatch by Patrick Wilson and Justin Mattingly.

The Article’s title is “Lack of competitive bid causes Richmond to pay too much for new schools, contractor group says“.

It’s a horrible title that demonstrates the bias of the writers even before you read the opening paragraph.

A fact that I kept clearly in mind when I created the title for this article.

Wilson and Mattingly begin their article by stating, “officials told elected leaders that the cost of building three new schools was increasing again

Note that this is me quoting the article, the authors of the article make this statement without a quote.

You can read the article for yourself, but the main points I want to focus on are the comments attributed to Jack Dyer.

Jack Dyer is President of Gulf Seaboard General Contractors Inc. a small General Contracting Company located in Ashland Virginia.

Dyer is also President of the Virginia Contractor Procurement Alliance an organization who’s singular stated goal is to, “insure that Virginia taxpayer dollars are used wisely when used to construct government infrastructure“.

Wilson and Mattingly go on to lay out Dyer’s primary objection which is thinly veiled behind cries about escalating costs on two Richmond elementary schools.

Dyer’s primary outrage is over the City’s use of an alternative procurement method.

The author’s define the alternative procurement method as Construction Manager at Risk and they juxtapose this method with traditional procurement methods.

They define the traditional procurement method, which they chose to call “competitive bid”, as a procurement method where the city, “must award the contract to the contractor who proposes to do what the government wants at the lowest cost.

The author’s then write, “Under construction manager at risk, the government asks contractors to submit their qualifications to do a project and then uses a variety of subjective criteria — not just lowest cost — to pick the winner.”

The bias could not be more clearly stated.

These characterizations and the terms used to describe them, show a fundamental ignorance about these procurement concepts and how they work.

First, let’s clarify that CM at Risk is not a procurement method.  I know this sounds like semantics, but the reality is that the “method” for soliciting a CM at Risk contract is the same as it is for other contract models.

That’s right!  CM at Risk is a contract model, not a procurement method.

The procurement method Dyer and the authors of the article are so opposed to is called a two-part solicitation.

Two part solicitations (or two-phase selection) is a procurement method that is currently under consideration in the Construction Consensus Procurement Improvement Act.  The bill has been placed on the Senate Legislative calendar for consideration as of April 2018.

The bill would allow the federal government to solicit contractor qualifications as part of the first phase of selection.  This first phase would allow the government to short-list the supplier pool based on qualifications.  The reduced supplier pool would then be invited to provide a quote under the second phase.

This form of solicitation allows the federal government to utilize more advanced contracting models like CM at Risk and Design-Build.  All of which were not allowed under previous procurement regulations.

Two-phase selection relieves the government of having to accept and review bids from unqualified or under-qualified suppliers.

It provides the government a fair and competitive way to solicit qualifications and not be biased or compelled to accept quotes from unqualified contractors.

Quotations are solicited only after qualifications have been reviewed and the pool of contractors has been down-selected to the most qualified contractors.  This ensures that all quotations are from comparably qualified contractors and gives a greater level of confidence to the quotes.

Closing

There are a lot more mis-statements and wrong ideas in this article.  I may write a follow up to address those as well, but the main point here is that Dyer and the alliance group he leads, know that they would be disqualified from many projects in the state of Virginia if the state adopted the two-phase selection process.

This method does not limit competition as the article suggests and it does not inherently cost more.  It simple eliminates unqualified contractors and allows the state to contract work in more advanced and sophisticated ways.

What do you think?  Do you think CM at Risk cost more?  Do you feel that two-phase selection should be allowed?  Tell me your stories.

Thanks for reading.  If you enjoyed this content, please feel free to browse my previous articles and please like, share, comment, and subscribe.  This helps promote my content and is greatly appreciated.

 

 

 

 

 

Advertisements

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.