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