Summary:
ACEC-Ontario has consistently advocated for fair and reasonable contract, terms, conditions and fees for professional services. The “fair and reasonable” approach seeks to highlight procurement and contractual practices that do not align with industry standards and “open for business” practices.
Issue Details:
ACEC-Ontario has consistently advocated for fair and reasonable contract, terms, conditions and fees for professional services. The “fair and reasonable” approach seeks to highlight procurement and contractual practices that do not align with industry standards and “open for business” practices. While seeking fair and reasonable contracts from clients seems like an attainable goal, the Ontario marketplace has become increasingly difficult to navigate, with the trend of public sector clients opting to completely transfer project risk from them themselves on to the marketplace. ACEC-Ontario’s position is that fair and reasonable business practices can lead to more efficient and effective project delivery as a result of positive client-Consultant relationships.
Public sector clients in Ontario actively use contractual devices during procurement to shift risk away from themselves and on to their proponents. While the age-old adage of “who ever holds the gold makes the rules” is alive and well in with clients in Ontario’s design and construction marketplace, it is not a sustainable approach to procuring professional services for infrastructure. Consultants are bound by regulatory, insurance, and legal requirements that are often not considered in contract language for professional services projects. The consequence of this can be severe- not only could a Consultant’s business be jeopardized, but clients, as owners of the assets, could be left holding the cost, risk, and liability that was previously believed to be transferred to the Consultant.
A key driver of the fair and reasonable approach lies within procurement- if a client follows this approach, there is a greater likelihood of successful project outcomes. ACEC- Ontario advocates for Qualification-Based Selection (QBS) as a key element supporting successful project procurement. This approach to the procurement of professional services emphasizes selection of project proponents based on competency and qualifications, at prices that are fair and reasonable.
Having recently published an update to its initial study examining the benefits of QBS in the procurement of engineering and design services of 2007, the American Council of Engineering Companies Research Institute, the research reinforces the project delivery benefits that QBS provides to owners on all types of projects with data indicating that QBS continues to enhance project outcomes and owner satisfaction. Of particular importance is the study’s finding that QBS projects met all project delivery schedules at a 50 percent higher rate than non-QBS projects. In its conclusion, the study’s data ultimately confirmed the following benefits of QBS:
- QBS saves time and money and consistently outperforms that national average in the United States in terms of both cost and schedules
- All project types, including complex projects, derive significant value from the use of QBS procurement
- QBS leads to a greater likelihood of producing innovative solutions when price is not the driving factor
- QBS enhances the construction process resulting in fewer project delays and greater likelihood of owner satisfaction with the overall project
Taking a fair and reasonable approach towards procuring professional services speaks to a philosophy that seeks to have all parties be treated fairly and proportionately, while employing reasonable practices throughout contract negotiations and subsequent project delivery. As the province works through a $16.8 billion infrastructure backlog, ACEC-Ontario believes the Consultants who engage in public sector work should expect to work under fair and reasonable terms and conditions as they play a critical role in building up Ontario’s infrastructure and connecting our province more than ever before.