Thank you, John.
The InfraGuide, Best Practice for Selecting Professional Consultants, was produced by a group of independent experts. It recommended a procurement system based on qualifications-based selection, or QBS for short. The principle behind QBS is simple. Professional engineers, architects, environmental scientists--those services should be hired based on qualifications, experience, competencies, and backgrounds they bring to a project, not on the lowest price. This practice differs from the process used by most federal departments, where, unfortunately, price is usually the determining factor in selecting consultants.
Think about this. Think about hiring an employee. When you interview candidates for a job, you would rarely hire based on who would do the job for the lowest pay. You would hire based on who can do the best job based on the qualifications being sought. QBS exemplifies this selection process.
Let us be clear, however. QBS is not a blank cheque allowing consultants to charge whatever fee they want. Negotiating a fair fee agreement is a key step in the QBS process. As a matter of fact, it's probably the key step, but a fee agreement is based much more clearly on a defined scope of work and much better value for the client.
The concept of procuring professional services based on the QBS approach would be new to the Canadian federal government departments. However, it's widely used elsewhere. Many jurisdictions have adopted this process. In the United States, for example, QBS has been legislated for federal procurement through the introduction of the Brooks Act in 1972. By this year, almost all the 50 United States have adopted this as well, or some variation thereof.
More recently, following a recommendation of the Johnson Commission in Quebec that investigated the collapse of the Laval overpass, the Government of Quebec last year passed legislation requiring a QBS approach for the procurement of professional architects, engineers, and environmental scientists. A number of Canadian municipalities have also followed suit.
Why should MPs, or Canadians for that matter, care about how engineers and architects are procured? Part of the answer to this question comes from a study conducted by the American Public Works Association that will be released this month. We hope to be able to forward this to you soon. The benefits to taxpayers and clients who use a QBS system include giving a greater emphasis to qualifications. Projects such as buildings, highways, and wharves can be designed in a much more sustainable fashion where the environmental footprint and life cycle cost is much lower.
Life cycle cost is an extremely important consideration when one considers that engineering and design on something like this building, a museum, a dam, or a road represent only 1% to 2% of the project's total life cycle cost, while operations and maintenance represent 80% to 93%. Bad design will increase that significantly. The APWA study proves that a QBS procurement system results in fewer change orders on projects, which lowers overall costs. It reduces litigation and delays. There is better schedule adherence. The study found that cost growth using a traditional price-based procurement method was 10% of the project on average, while in QBS it was 3%--big differences.
The APWA study also demonstrated that risk was lowered for both owner and consultant, particularly in more complex projects. QBS encourages greater innovation in design. Low price does not encourage innovation; it drives it out. It provides a better way of protecting intellectual property rights.
Given that the federal government directly procures billions of dollars worth of infrastructure and building services, it is in the best interest of the federal government to ensure maximum value, including life cycle value, for those dollars it spends. The evidence is unanimous, that the best way to do this is by procuring consultants using QBS.
As a side note, I must say that my firm is considered fairly small in the consulting engineering world. We're an employee-owned firm that recently passed 315 employees. Firms like ours and the smaller firms that John referenced support QBS because among the qualifications you can include are local content, local knowledge, local expertise.
John.