House Votes to Update Federal Contracting Rules
On Tuesday the House Oversight and Government Reform Committee took an important step in improving the way federal civilian agencies, such as GSA, contract with design firms.
Committee members voted unanimously to approve H.R. 5199, the Construction Consensus Procurement Act, which would prohibit the use of one-step selection procedures in federal design-build competitions valued at over $3 million.
Congressman Mark Meadows (R-NC), who introduced the bill, commented on the need for this legislation and did an excellent job summarizing the inherent problems with one-step selection:
This bill really encourages competition and reduces the participation costs in the federal design and construction contracts.
Some estimates indicate that architectural firms and teams competing for public sector design-build contracts can spend a median of $260,000 making the detailed plans and models, which is a significant outlay for small businesses that make less than $1 million annually. In the one-step process the government must evaluate numerous complex proposals and smaller companies, design firms in particular, face the dilemma of either betting it ‘all in’ on the contract they may not win, or declining to compete at all.
Encouraging the use of two-step for design and construction services will reduce the cost of competing in the government marketplace for small businesses, and will reduce the time contracting officers reviewing numerous, complicated design proposals in the one-step process.
The Committee’s top-ranking Democrat, Elijah Cummings (MD), also offered his support:
Due to the nature of [the one-step] process, often only large firms can compete for these contracts. Smaller firms face a dilemma: they must decide whether to spend significant time, effort, and resources to compete for a project they may have little chance of winning, and may refrain from competing at all.
The AIA has long supported the use of Qualifications Based Selection, or QBS, as the criteria for awarding government contracts to design firms. QBS isn’t perfect, but it’s the fairest way to select firms, and balances the government’s needs with firm resources.
That’s why we advocate for the use of a two-step selection process, whereby a small group of firms are first “shortlisted” based on their qualifications, with only those finalists submitting detailed plans before a winner is ultimately chosen. One-step ignores this critical first step of evaluating qualifications, and instead requires all interested firms to spend enormous amounts of time and money creating detailed plans for submission. It’s especially pernicious because there is no limit on the number of firms which can compete, and firms often are not made aware of how many other teams they must compete against. There are reports of firms spending hundreds of thousands of dollars, only to find out later that they faced competition of 20 or more teams and never truly had a reasonable chance of being selected.
Selecting firms using QBS has the added benefit of streamlining the process for federal agencies. With one-step, contracting officers are forced to review every firm’s detailed proposal, which can take months or even years, in order to find the most qualified teams. Two-step offers a much more direct path to that same result, thereby saving time and valuable taxpayer funds.
While the bill does only address civilian agencies (similar legislation would apply this language to the military side, but is still pending), it is a critical first step in modernizing the federal procurement landscape and ensuring firms of all sizes have a fair shot at showcasing their talents on the federal stage.
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Alex Ford, Manager, Federal Relations