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Archive for Wednesday, August 26, 2009

City discusses consultant costs, hiring process

August 26, 2009

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Three city commissioners are expressing concern about whether the process to hire city consultants is giving taxpayers the best bang for their buck.

Mayor Rob Chestnut and Commissioners Aron Cromwell and Mike Dever asked staff members to conduct more research on ways that the city could change its system of selecting a host of consultants that range from engineers to auditors.

Currently, the city uses a system that does not require interested companies to submit a price for their services up front. Instead, companies submit a list of qualifications, and a city team selects the most qualified company to present to commissioners. After the firm has been selected, a price for their services is negotiated.

“The public is very confused when you talk about this system,” said Cromwell, who is an environmental consultant by trade. “When they find out that we’re going to ask a company how much it will charge us for a project after we’ve selected them, they start laughing. That is not how it is done in their lives.”

Changing the way the city selects consultants caught the attention of a host of consulting companies. More than a half-dozen engineers and architects attended the City Commission meeting, and representatives from three different engineering and design trade groups urged commissioners to stick with the current system.

“I haven’t seen any evidence that Lawrence is paying more for design services than anywhere else in the state,” said Ron Gaches, executive director of the Kansas Society of Professional Engineers. “I think what you will find is that your system has created a highly competitive environment for design services.”

But it is a process that is different from how the private sector goes about selecting consultants, said Rob Chestnut, who serves as the chief financial officer for a local company.

“I have procured professional services for 25 years, and this (system) is completely opposite to anything I’ve done as a professional,” Chestnut said.

But the host of engineers and architects told commissioners that design work is often so project-specific that it is difficult for a company to give a meaningful price estimate until the company has detailed discussions with city leaders about the project. They said the city’s current system allows that to happen.

They said taxpayers are still protected because the city always has the option of breaking off negotiations with a company if a price can’t be agreed upon.

City commissioners were not of one mind on the subject. Commissioner Mike Amyx said he thought the current system likely serves the needs of the city well. Commissioner Lance Johnson, who owns a Lawrence engineering company, also said he thought the system worked fairly well, but was open to examining it more closely.

Dever, who also is an environmental consultant by trade, said he had mixed feelings about the issue but believed there likely were some changes that could be made.

Staff members will gather information about how Johnson County uses a system that factors in both qualifications and costs. A timeline for when commissioners will discuss the issue again wasn’t set.

Comments

blessed3x 5 years, 4 months ago

In defense of the city, I would just add that many times city commissions are too easily swayed by the "lowest price". Too often the "lowest price" gets you shoddy work that needs to be ammended with supplemental contracts and adds.

50YearResident 5 years, 4 months ago

Would you go to a car dealership and say, I'll buy that car, now how much is it going to cost me?

threetoedsloth 5 years, 4 months ago

I would if I knew (and I do know) that there are a multitude of car dealers that I can move on to if the dealer I've selected doesn't work with me. Same would apply to about any consulting/engineering firm.

That's not to say the city should be willing to walk away when prices discussed are well beyond their estimate of what the work should cost.

GardenMomma 5 years, 4 months ago

It's not a "this or that" kind of deal. Yes, it's about the qualifications and about the cost. I sure hope the city commission remembers this.

Don't buy on qualifications alone and get the cost after the fact and don't go for the cheapest either. Look at the whole picture. Get the best qualified at the best price. Duh.

blessed3x 5 years, 4 months ago

Would you go to a car dealer and agree to buy a car for $10,000 and then the dealer hits you with $1000 because they put the wrong tires on, $500 for delivery because they sent the new car to the wrong dealer and $1500 for new paint because they guys in the shop scratched it?

This happens all the time in the engineering world. Municipalities and DOT's will take the lowest bid and then the project is delayed/put in jeopardy because of poor engineering practices. Do you pick the contractor to put the new roof on your house because he had the lowest bid or because he came with great references and you know you can work with him?

I understand that it seems like cities put the cart in front of the horse in these situations, but doing the opposite can and does lead to even bigger problems.

This is why many times the client will advertise for RFQ's (Request For Qualifications) and not RFP's (Request For Proposal). The job may by dynamic and the scope may be apt to change. Shoot, many times the municipality simply doesn't have a handle on exactly what they need done. They have a vague idea, but until the consultant is onboard they may not fully understand the extents of the project and what improvements will be required. The city needs to know that they have a consultant onboard that can handle all aspects of the project, even the unforeseen ones. Picking a consultant by price alone, is a big mistake and in many cases coming up with a firm price is simply not possible.

50YearResident 5 years, 4 months ago

So the city says it's OK to hire a qualified consultant firm with an open end, no questions asked contract without any idea what the final price will end up being? Just bill me!

Zachary Stoltenberg 5 years, 4 months ago

Blessed3x has it absolutely right. The other way around a company hits the city with a low ball bid to get the contract, then they get into the project and come up with every excuse in the book to turn in a change order for more money with the justification of "well we didn't know that was going to be a part of the project." There is nothing wrong with the current system. It maintains the most credibility and the highest qualifications of the consultant and in the long run protects the city from over expenditures and unforeseen fees. It sounds to me like some consultant in town is unhappy the city isn't doing business with them and decided they are going to cry about it. If you're not getting the contracts there is a reason. The reason is that someone else is more qualified than you and can do a better job for less money than you. It's also not an absolute. If the city can't negotiate a reasonable fee they can still walk away. So 50 Year Resident, you analogy is more than a little off. In fact the process is exactly like buying a car. You say, I want that car then you negotiate the price. If you don't get to a price you're willing to pay, you walk away. Sounds fair to me! Go put on your tin foil hat and watch CNN.

samsnewplace 5 years, 4 months ago

City of Lawrence saying====Budget problems ??? Kinda makes you wonder.

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