Procuring Professional Services in Connection with a Capital Construction Project

Schools are not legally required to follow a competitive bidding process to obtain the professional services of Architects, Engineers, Surveyors, Construction Managers, and certain other professionals in connection with capital construction projects. However, the New York State Comptroller has stated that considering the magnitude of the cost for professional services involved in a capital construction project, schools should use some form of competitive process. In addition, New York State law requires schools to adopt internal policies and procedures that ensure that professional services are procured “in a manner so as to assure the prudent and economical use of public moneys in the best interests of the taxpayers . . . to facilitate the acquisition of goods and services of maximum quality at the lowest possible cost under the circumstances, and to guard against favoritism, improvidence, extravagance, fraud and corruption.” General Municipal Law §104-b (1).

We suggest that school officials consider using a Request for Proposals (“RFP”) process when seeking professional services. The use of a well-designed RFP process for selecting these service providers in connection with construction projects has been approved by the New York State Education Department. In addition to being compliant with applicable law and rules, issuing an RFP and following a systematic, carefully crafted RFP process to select an Architect, a Construction Manager, or other professional service provider in connection with your capital construction projects has many benefits.

One of the more important benefits of an RFP process is the leverage to negotiate the core elements of the professional relationship BEFORE you select a provider. You can and should use the RFP process to define your service needs, the selection criteria, the required construction timetable, insurance requirements, the frequency, form and substance of required communications, and the terms and conditions of the contract(s) to be entered into with the successful firm. Being clear and comprehensive during the RFP process helps to ensure that the successful firm not only understands your requirements, but makes a formal commitment to meet your needs, including your timetable, during the construction project. In addition, beyond the firm’s technical qualifications, the RFP process gives you the opportunity to examine whether the firm has the right “fit” and communication style for your community, Board of Education, and Administration in connection with a construction project.

The process involves the issuance of a formal request for proposals document; solicitation of available firms by advertising in the School District’s newspaper(s) of record and direct solicitation which may include solicitation of firms located outside the local area; a Q&A session with a visit to the facilities to be impacted by the construction for interested firms prior to proposal submission; the submission of formal proposals from interested firms; interviews with selected firms, you’re not required to interview all who submit a proposal; analysis of the proposals and the results of the interviews; and recommendation to the Board and selection of the successful firm, you are not required to select the “low bidder”.

You are not required to engage in a new RFP process in connection with each capital construction project. The standard requires periodic solicitation at reasonable intervals. You may use an RFP process to select a professional and use that professional for multiple projects. However, re-solicitation of professional services should be done using an RFP process within a reasonable period (not defined in the applicable law or rules), as your needs change, or the performance of your current firm fails to meet expectations.

The entire RFP process should be documented to establish compliance with applicable law and rules, and the documentation should be preserved in the permanent file for the construction project.

Here are some of the elements of an RFP process that make it a wise choice in connection with capital construction projects:

Scope of Services. The RFP document should clearly articulate relevant details about the school district and the specific goals to be achieved by the proposed construction project or other requested services (e.g., Building Condition Survey). You should be explicit about the scope of required services prior to selection to avoid confusion and frustration once the project is underway. Clearly define any unique aspects of the project and obtain a commitment from each firm to perform in compliance with your defined service needs and meet your project timetable.

Schedule. Invariably the schedule of the work to be done is a critical component of performance. Even though you may not have a final schedule, you should confirm that the firms understand the importance of developing and then delivering the project on time and on budget.

Standard of Performance. One of the reasons competitive bidding isn’t required is because the selection of a professional service provider has qualitative elements that can’t be measured by price alone. During the RFP process you should be sure that the successful firm meets your defined performance standards and is well qualified to deliver high quality services. Review their history of performance and check references, especially from other school districts.

Staff to be Assigned to the Project. The RFP process allows you to interview the specific staff to be assigned to your project and confirm they are acceptable. You should also obtain a commitment from each firm not to change the staff assigned to your project without your prior approval.

Terms and Conditions of the Contract(s). By using an RFP process you’re able to define in advance the terms and conditions of the contracts to be used for all services. That’s a very significant benefit to the school district and a key deliverable for the RFP process. Defining the contract provisions that protect the school district as part of the RFP process yields protections that might not be achievable if the contracts are negotiated after the selection of a firm. By including the contract terms and conditions in the RFP process you force the firms making proposals to either accept them or raise a formal objection as part of the process.

Insurance Requirements. Work with your insurance advisor or risk manager to be sure that the required insurance defined in the RFP provides appropriate protections for the school district. You should define clearly the appropriate coverages required and the firms should be factoring the cost of the insurance into their proposals.

Ancillary Services. If you’re looking for professional services in connection with a capital construction project, that’s the perfect time to seek ancillary services like the development of a Building Condition Survey and/or long-range planning services. The firms will likely be willing to price the ancillary services as low as possible as an inducement for acceptance in connection with the main construction related services to be provided.

Interviews. It’s during face-to-face interviews where you can narrow the list of firms under consideration and formulate preliminary recommendations. You should identify the firms that appear most qualified based on their formal written proposals and invite them to make a presentation to your selection committee. During the interviews you can seek any additional information and explore any areas of a proposal that are unclear. In addition, you can answer any final questions they may have. As part of the interview process, you should confirm with each firm its willingness to comply with all the requirements set out in the RFP, including the terms and conditions of the contract(s) they will be required to sign if successful and their commitment to completing the project on time and on budget.

Finally, if you are considering an Energy Performance Contract (“EPC”). New York State law specifically requires the use of a statutorily defined RFP process for the selection of an Energy Services Company (“ESCO”). New York State Energy law §9-103. The ESCO normally provides an energy audit, construction/installation, on-going maintenance services, and long-term energy consumption performance guaranties, as part of an EPC. The RFP process is the same as set out above, but with the addition of specific requirements designed to protect the school district in the context of an EPC solicitation. An EPC involves a complex, long-term business relationship with the successful ESCO (including long-term guaranties) so it’s critical that you follow the legally required RFP process and select the ESCO best able to meet your needs over a long period of time.

For more information on the use of a Request for Proposals process for selection of professionals in connection with a capital construction project or selection of an Energy Service Company in connection with an Energy Performance Contract, please contact our Firm at one of the telephone numbers listed below.