U.S. Department of Transportation
Federal Highway Administration
1200 New Jersey Avenue, SE
Washington, DC 20590
202-366-4000


Skip to content U.S. Department of Transportation/Federal Highway AdministrationU.S. Department of Transportation/Federal Highway Administration

Construction

 
 

Guidelines for Determining if ___DOT'S Consultant Agreement Costs are Reasonable and Supported

FHWA STA Division Office
1994 PR/PE Review

Word Version (31 kb) | PDF Version (12 kb)

  1. Basic understanding of ___DOT's organizational arrangement of contractural services office (called professional services in districts) and project management office:
    1. Central Office organizational structure.
      • Contractural services
      • Project management
    2. Overview of Central Office's role in the process.
      • Contractural services
      • Project management
    3. District Office organizational structure.
      • Professional services
      • Project management
    4. Overview of District Office's role in the process.
      • Professional services
      • Project management
  2. Overview of consultant usage and major steps in the process:
    1. Types, $ amount, and % of work done by consultant?
      • PD&E
      • Design
      • Construction engr. & inspection (cei)
      • General consultant used?
      • Management consultant used?
    2. Who are the responsible persons to administer consultant agreements. How many projects (type, $ size) assigned per staff member for managing.
      • Professional services
      • Project management
    3. Steps in process
      • Develop scope
      • Prepare staff-hour and cost estimate
      • Advertise
      • Long list/ short list of firms and technical committee makeup.
      • RFP's sent to short list firms.
      • Scope of services meeting.
      • Oral technical proposals by short list firms.
      • Rating/ranking process by technical review committee.
      • Firm selected.
      • Negotiation of scope, staff-hour and price
      • Execute agreement
  3. Negotiation Process
    1. Staff-hour negotiation process

      Who Conducts and How:

      State's Estimate:

      • Process to develop ___DOT's estimate
      • Based on what factors
      • Any historical data on level of effort needed for work types
      • Any comparison to similar projects done in-house
      • Any comparison to other districts

      Consultant's Estimate:

      • What does STA provide to firm, when?
      • When is firm's estimate received

      Process to Reach Agreement:

      • What resources are used to conduct effective negotiation session(s). Does it include refined scope of work, evaluation factors - relative importance, audit opinion, etc.

      Documentation:

      • What's in files to support hours agreed to

      Other Factors Affecting Process:

      • Training
      • Problems with firms using different position titles
    2. Salary Rate Negotiation

      Who Conducts And How:

      State's Estimate:

      • Process to develop ___DOT's estimate
      • Based on what factors
      • Historical data on salary for position type
      • Any comparison to state salary for same position type
      • Any comparison to other districts

      Consultant's Estimate:

      • What does STA provide to firm
      • When submitted

      Process To Reach Agreement:

      • What resources are used to conduct effective negotiation session(s)

      Documentation:

      • What's in files to support salary rate agreed to

      Other Factors Affecting Process:

      • Training
      • Problems with firms using different position titles
  4. Compensation
    1. Priced proposal from consultant:
      • Any cost comparison data ($/mile, %construction cost, or other units)
      • When use lump sum (well defined) vs cost + fixed fee (variable effort needed). Why; advantages, disadvantages?
      • Use of cost per unit work or billing rate (specific rate of compensation)
    2. Changes in scope of services during negotiation process.
      • How does project funding shortfall affect negotiation.
    3. Fixed fee:
      • Range of % allowed
    4. Direct expense costs:

      Process to determine reasonable expenses:

      • How negotiated with firm
      • Any comparison to state dot costs
      • State district comparisons
      • Historical firm data; based on what

      Paid as lump sum or actual invoices:

      • Best method; advantages or disadvantages
    5. Overhead Rates
      • Applied To salary only?
  5. Contract Modifications
    1. Supplements And Amendments (S/A's)
      • Are there more S/A's on lump sum or cost+ agreements, why?
      • Are S/A's on lump sum agreements treated differently than on cost+ agreements.
      • Is additional operating margin (fee) paid for S/A's on lump sum contracts
      • Const. Change orders - any efforts to classify cause of; is it due to error or omission of firm, thus collect damages
PDF files can be viewed with the Acrobat® Reader®
Word files can be viewed with the Word Viewer
Updated: 10/27/2015
Federal Highway Administration | 1200 New Jersey Avenue, SE | Washington, DC 20590 | 202-366-4000

All Federal Highway Administration (FHWA) information technology systems will be unavailable, Friday, December 2, at 10:00 p.m. to Sunday, December 04, at 11:59 p.m., EDT, while work is being performed on the network. During that time, users will not be able to access any FHWA systems.

If you have any questions or problems, please contact the 5-Help Service Center @ (866) 466-5221 or 5-HelpServiceCenter@dot.gov.