DECember 2009 issue
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president’s notebook
Have Yourself a Quality-Based New Year
BY JIM BECKETT, P.ENG.
APEGGA President
Our official President’s Visits to the branches and to individual permit holders are the perfect way for me to find out what’s on the minds of members throughout the province. The conversations I have are about real issues facing our professionals in the field and on the job, every day.
I usually give a brief presentation on mobility, One Act Two Associations and trends in professional education, but the best part of these meetings for me is when I get to sit back and listen.
I meet interesting, astute individuals, who continue to amaze me with the breadth and strength of their professional skills. It’s a fantastic education, and each visit makes me realize how lucky I am to be part of our professions, and the President of our Association.
One of the fascinating things I’ve learned is that common concerns stretch from one end of our diverse province to the other. Although my 2009-2010 visit schedule has not yet come to an end, one of those commonalities so far involves quality-based selection, or QBS. During chats with permit holders, QBS rose time and time again.
We all want a deal, of course, whether we’re shopping for home renovation supplies or trying to find a consultant for a multi-million-dollar plant, bridge or other piece of infrastructure. The Beckett household is always looking for bargains and coupons. Professional responsibility on those big purchases of professional expertise and services, however, sometimes conflicts with the bottom line.
The best deal, in terms of immediate dollars spent, is not always the best deal in the long run. Neither is it always the best deal in terms of protection of the health, safety and welfare of the public.
This is nothing new, and it’s not a difficult concept to grasp. We’re bright professionals, so we know the lowest bid is not always the best or most appropriate bid.
In the real world, however, there are certain pressures that make doing the right thing difficult — and the right thing also happens, often enough, to be the more expensive thing. Those pressures have been particularly powerful and plentiful in the last half dozen years or so.
Remember when bashing the engineering of major oilsands projects was all the rage? For a year or two, you couldn’t read a business page of any Canadian daily newspaper, it seemed, without coming across another story about cost overruns.
I personally think engineers were a convenient target. Although I’m sure engineering contributed to the problem, the overruns also had a lot to do with the costs of inputs and poor overall budgeting and project management from the onset. But that’s somewhat of an aside.
Perhaps one of the results of all those overruns was increased pressure applied to those providing engineering to do it less expensively. The people responsible for buying engineering services were told to find providers willing to do the work for less.
A different type of pressure soon took the fore. Many projects ended up being put on hold when the bottom fell out of the price of a barrel of oil. Suddenly, oilsands projects weren’t as attractive, with or without overruns. At about the same time, the economy in general took a nosedive.
Labour was available to take on a backlog of infrastructure projects. Governments began investing heavily in infrastructure to stimulate the economy and help put Canadians to work.
With this reinvestment in infrastructure, members are again pushed away from quality-based selection. Whenever public dollars fund a project, an obligation to the taxpayer exists. This obligation is sometimes mistaken as cheaper is better, which increases the temptation to complete jobs inexpensively.
I’m reminded of the famous words of astronaut Alan Shepard, when he was asked what thoughts ran through his mind on the launch pad: “The fact that every part of this ship was built by the lowest bidder.”
Apparently, Mr. Shepard wasn’t reassured by the thought that cheap won the day in public contracts. And neither should we as professionals. The lowest bid does not necessarily translate into quality, and it does not necessarily translate into public safety. It doesn’t even necessarily translate into lower costs.
Here's what the APEGGA Guideline for Selecting Engineering, Geological and Geophysical Consultants says: “Low-bid procurement does not save taxpayer money over the life of the project, because it often leads to increased change orders and project maintenance costs. In addition, public health and safety — paramount concerns for public-sector projects — are undermined by low-bid procurement.”
In fact, the guideline says, government agencies have a responsibility to obtain the highest quality, safest design and lowest lifecycle cost they can, through quality-based selection.
What APEGGA does not do is completely forbid low-bid procurement. However, our guidelines do strongly lean in favour of quality-based selection, as the above suggests.
If you want to find out more about this important subject, visit www.apegga.org and look up the guideline. While you’re there, check out another guideline related to the subject, called Development of Consulting Rate Structures and Contracts.
Both of these documents are pertinent, thorough and current, having been reviewed and updated in the past few years.
I also urge professionals to look very closely at the gap between a low bid and a more expensive, quality-based one. Are there shortcuts being taken that threaten safety or ensure further, unexpected costs down the road? Or are there solid economies of scale and other well-planned efficiencies that result in a lower bid?
Also, we need to remember our first obligation, as reflected in our Code of Ethics:
“Professional engineers, geo-logists and geophysicists, in their areas of practice, hold paramount the health, safety and welfare of the public and have regard for the environment.”
While you’re pondering these and other deep professional thoughts over the Christmas season, please do take some time to enjoy friends and family. Merry Christmas, and a happy, healthy and prosperous New Year to you and yours.
Please contact me with any questions, comments or concerns at president@apegga.org. If I can’t help you, I’ll direct you to someone who can.