Part 2. Consultant Selection Procedures
To select a consultant for a particular job, an agency must decide how broad it wants its list of consultants to be for initial consideration, how many proposals it will consider, and how formal these proposals must be. The decision ultimately depends on how extensive the project is, although the time available for the selection process will also enter into the decision about how to proceed. The five types of selection procedures are described in the following sections.
Using this approach, an agency selects a single consultant either for a particular task or for a continuing relationship. Not all local governments have the flexibility to use this selection process, and an agency considering this option should consult with its legal adviser. For both legal and political reasons, an agency using sole-source procurement should document its reasons for doing so. Where a local government has the flexibility to use such a selection process, it may be appropriate to do so under the following circumstances:
- When a consultant, due to prior work with the local government, has significant background in a matter requiring resolution in a short period of time or on a very limited budget
- When it is politically or practically necessary to retain a local consultant, and there is only one who is qualified
- When the community requires the services of a consultant with a unique specialty
- If there is not sufficient time to go through a formal search procedure
- When significant cost savings can be achieved by using a consultant who is familiar with the community and the agency and its procedures
There is an alternative form of single-source procurement. If the consultant is familiar with a project from work done under a previous contract that was awarded after a competitive process, it may be possible to use an amendment to that contract to retain the consultant's services for later stages of the project or a related project. When that is possible, it is probably preferable to sole-source procurement because it builds on the legal and political strength of a competitive process.
Selection from a List of Prequalified Candidates
This process is particularly appropriate for small projects. It also works well when an agency anticipates a series of similar tasks but intends to award separate contracts for them, possibly to separate entities. This process works best when the agency continuously maintains an up-to-date list of consultants and their credentials. This procedure typically involves the following steps:
- Identification of consultants. The agency identifies a small group of qualified consultants (three to five) from an agency pool.
- Contact with identified consultants. The agency contacts those consultants to ascertain their availability and interest in the proposed project.
- Submission of qualifications and statements of approach. Each of those identified consultants interested in the project is then invited either to come for an interview or to submit an initial statement describing how that consultant would approach the project or problem.
- Selection. The planning agency then selects one of the consultants, based on the proposal, interview, or both. Selection criteria may include: overall experience, time available, understanding of project objectives, relevance of education and experience of probable staff, creativity exhibited by the consultant for the proposed project, clarity and usefulness of the proposed methods and techniques, appropriateness of this proposed project management structure, and the consultant's familiarity with the community. Some agencies skip the reference-checking step in this abbreviated format because the agency has identified consultants that it believes to be qualified. If the consultant is one that has not previously worked for the agency, however, agency officials would be wise to check references.
- Work program/Cost submission. After selecting a consultant, the agency asks for a detailed work program and cost information. This should be done only after selecting a consultant.
- Negotiations. Those submissions then provide the basis for negotiating a contract between the planning agency and the consultant.
- Alternatives. As with more complex selection processes, the agency can move down the list to a second or third consultant if it is unable to reach agreement with its first choice on the scope of services or the cost.
Selection from a list of prequalified candidates is also appropriate when one candidate on the agency's list is clearly and uniquely qualified to perform the task. A good example of such a situation would be one in which the final contracting authority wants to hire a local consultant. If only local consultants will receive serious consideration, there is no point in sending RFPs or RFQs to others. Submitting proposals costs money, as does reviewing them.
This procedure of selection from a list of prequalified candidates, like the sole-source procurement procedure, has the advantage of simplicity, brevity, and flexibility. In addition, the interview process allows staff to interact with the consultant at an early stage and may be useful when agencies want to encourage highly creative approaches. Its disadvantages are also those of the sole-source procurement procedure — there may be occasional charges of favoritism, and the field of consultants may be unnecessarily limited.
Selection Based on Responses to RFQs
An agency that does not maintain a list of potential firms or one that wants to consider a broader pool of candidates beyond any list may use a selection process based on RFQs. The typical steps in an RFQ process are similar to those used to select a consultant from a list of prequalified candidates. However, a general announcement is added to the process. A more rigorous set of selection procedures will also need to be employed because the local government will not be familiar with some of the firms submitting RFQs. The typical steps in the process are:
1. Announcement/distribution. The agency publishes advertisements in newspapers and professional journals that it intends to hire a consultant for a specific project. Typically, the advertisement announces the availability of a formal Request for Qualifications that includes a project description. The agency then mails the actual RFQ to firms responding to the ad. Sometimes, an agency decides to eliminate a step in the process and uses a simplified RFQ that can be published in place of the announcement. If an agency has a pool of consulting firms or knows of firms that have successfully completed similar work or that work regularly in the geographic area, it may mail copies of the advertisement directly to those firms. The RFP-RFQ listings on the APA website provides a convenient location for town, city, and county planning or community development departments in the U.S. and Canada to post RFQ announcements. The types of information that a community typically includes in an RFQ include:
- Contact information. Name, address, and phone number of the consulting firm.
- Form of organization. Whether firm is a partnership, corporation, or sole proprietorship, where it is organized, and the names of principals, officers, and directors of the firm
- Key personnel. Names of key personnel, their respective titles, experience, and periods of service with the firm
- Statement of qualifications. A narrative or other statement by the firm of its qualifications for the proposed project
- Availability. A brief statement of the availability of key personnel of the firm to undertake the proposed project
- Project list. List of projects completed by the firm
- References. Names and telephone numbers of persons whom the agency can call for references regarding the firm's past performance, preferably on similar projects.
2. Ranking. The agency then ranks the consultants responding to the RFQ on the basis of the information they submit.
3. Selection. Using the responses to the RFQ and supplementing those responses with the results of reference checks and, in some cases, interviews, the agency then selects one of the top-ranked consultants to undertake the proposed project.
4. Other steps. This process then follows the same steps as the process outlined previously: a request for a proposed work program and cost statement, negotiation of a contract, and, if those negotiations fail, consideration of other alternatives.
The RFQ selection procedure is particularly useful in cases in which the agency does not have an adequate pool of consultants that allows it to choose among prequalified firms. This is most likely to happen when the agency does not maintain a pool of consultants, its pool is outdated, or the information in its pool is not relevant to the proposed project. The RFQ process may also be in the choice in cases in which the agency wants to broaden its pool for political or professional reasons. Because this process is more open than either of the previous two, it is less subject to legal or political attack. This process may not, however, be adequate to meet state or local requirements for competitive selection processes.
Selection Based on Responses to an RFP
Many agencies select consultants primarily through the RFP process. In this process, a consultant must submit a full project proposal in order to be considered. (The contents of the RFP are described in Part 3, "An RFP for Consulting Services." This section describes the RFP process only.) The RFP itself may be widely advertised, mailed to a large pool of consultants, or distributed to a very limited number of consultants. Although some agencies believe that it is desirable to obtain as many proposals as possible, there are many reasons not to do so. Preparing proposals is expensive for consultants. It is unfortunate to require consulting firms that may not be seriously considered to go to that expense. Reviewing proposals takes staff time. Although sending out the initial mailing of 50 RFPs may not take a great deal of time, reviewing the 15 or 20 proposals that may result from that mailing will take lots of time. There is another factor for a community to consider. The planning consulting business is a relatively small and close-knit professional community. If a community distributes an RFP to dozens of prospective consultants, the smart and experienced consultants will learn of that. Some may decide not to submit proposals because of the apparent volume of competition and/or lack of focus by the agency. Consultants are particularly likely to resist entering competitions when it appears that the agency is encouraging submissions from unqualified firms (e.g., by sending an RFP for a zoning code update to a firm that primarily does site planning). Alternatively, a community can submit an RFP to a list of consultants that either have a track record with the agency or that regularly perform the kinds of services that the community needs. (For suggestions on how to identify such consultants, see Part 1.) The steps in the RFP process typically include:
- Announcement/distribution. The only significant difference from the RFQ process described above is that a full RFP is almost never published in advertisements. Consultants responding to ads must call or write to obtain the actual RFP.
- Review. The review of proposals is typically a more complex process than the review of statements of qualifications. Some of the criteria to be used in the review process are suggested below.
- Preliminary ranking. The purpose of this step is to identify candidates for interviews.
- Interview. Interviews are included in most formal RFP processes. A later section of this chapter discusses the interview in more depth.
- Other steps. The other steps are identical to those in the RFQ process (see above).
Combining the RFQ/RFP in a Two-Part Selection Process
An agency can make the selection process more efficient and effective both for itself and for interested consultants by using a two-part, RFQ/RFP process. An agency following this process uses an RFQ process without interviews to identify a "short list" of consultants to be invited to submit full project proposals.
This process builds on the strengths of both the RFQ and the RFP. The agency can use this process to broaden its pool. It should make RFQs available to every consulting firm that might reasonably be interested in the project. Submitting a statement of qualifications does not involve significant expense for a consulting firm. Thus, a consulting firm will almost always respond to an RFQ if it is at all interested in the project and if it has the time and the expertise to undertake the work. Reviewing statements of qualifications imposes a far smaller burden on the agency than reviewing proposals. The agency, therefore, can reasonably review in depth more statements of qualifications than proposals.
The agency can then in good conscience request relatively detailed proposals from a small number of firms that it selects for that purpose. A consulting firm that knows that it has "made the short list" will almost always prepare a full project proposal. In turn, the agency can be certain of a high rate of return on its RFPs. The agency following this two-step process can choose to conduct interviews at one of two stages of the process. In making that decision, it must consider the burden that the interview process places on its own staff and commissioners, and the very significant cost to a consultant to prepare for and attend an interview. If the agency is willing to narrow the field to four or five firms that will submit proposals, it is reasonable to conduct interviews at the RFQ stage. However, if the agency prefers to review more proposals, it should defer the interviews to the last part of the proposal review. The principal advantage of conducting the interview later in the process is that the interviewers can then focus on questions about the proposed scope of work and on apparent differences among competing proposals.
If the agency does not conduct interviews in the RFQ process, it may want to hold a pre-proposal conference at which agency representatives can brief prospective consultants on the project and answer questions.
The RFP portion of this two-part process follows exactly the same steps as the RFP process outlined above, except that it is not announced. Rather, it is distributed only to the consultants identified as "most qualified" through the RFQ process.
The Final Step: Negotiations
Negotiating a contract is the final step in the selection process, regardless of which process has been followed. The aim of negotiation is to review and agree upon the various items that will appear in greater detail in the contract or agreement. Usually included are such items as scope of work and contract, work plan and schedule of activities, personnel assignments by agency and consultant, and method and schedule of payment. The negotiation process is relatively simple when the proposal stage has included a detailed scope of services and cost proposal. If the scope of services and cost proposal are a perfect fit, the local government can simply adapt the proposal to its own contract form (or ask the consultant to do so) and sign the contract.
The process, however, is not always so simple. There may be discrepancies between what the agency wants and what the consultant has proposed. It is important that the final agreement regarding all details should be reached at this point, including the scope and schedule for various work items, and deadlines for review and completion. The schedule is something that often requires adjustment after the proposal stage. Many selection processes are not completed on schedule, thus making any schedules outlined in the agency's RFP irrelevant.
The basis and schedule for interim fee payments are other important aspects of the negotiation process that are often not adequately covered by the proposal. Many firms that provide planning consulting services are small firms that cannot possibly conduct work on a multi-month project without receiving interim payments. To the extent that tasks are budgeted separately, the agency can agree to pay the consultant upon completion of each task. In many cases, however, it is appropriate to authorize partial periodic payments. The negotiations should establish how and when such payments will be computed and what documentation will be necessary. Where the agency will reimburse some or all costs, the negotiations should establish how and when such costs can be billed and what documentation is necessary.
Project personnel should also be committed at this stage. At a minimum, both the consultant and the agency should designate project managers who cannot be replaced without the reasonable consent of the other party. The agency may want to require by contract that certain other personnel also participate in the project. All of these personnel issues should be resolved in the negotiation stage. If it is important to the selection committee that particular people who participated in the interview also participate in the project, the contract should spell that out.
Before negotiating with the top-ranked firm, these questions should be settled by the agency team: What compromise between quality and scope of work is possible if the budgeted funds are not sufficient to accomplish everything that was originally contemplated? and What are the desirable, essential, and minimum objectives of the project?
Both parties are likely to be eager to get the project moving at this stage, and both are likely to cooperate in expediting the negotiation process. However, neither party should put artificial time pressure on the negotiation process. The contract negotiated at this stage will guide the rest of the project. It is important that it be a good contract that is workable for and fair to both parties. If negotiations fail with the selected consultant, the agency should formally end the process and begin negotiating with the next firm on the list.
Issues Affecting the Selection Process
Several issues affect the types of processes outlined above. This section provides a discussion of those issues.
Establish a reasonable schedule at every stage of the selection process. Allow consultants a reasonable period of time to respond to an RFQ or RFP. Although most consultants can provide a good statement of qualifications within a few days, allow them at least two weeks even for that. For a full proposal, an agency should generally allow consultants at least a month.
Answering a Consultant's Questions about the RFP
Consultants often have questions during the process. Some are simply administrative, like Did my proposal arrive? or What time on Monday are these due? An agency secretary can usually answer those questions with little difficulty and with no prejudice to the process.
How an agency answers more substantive questions raises other issues.
Providing consultants with more information may help them to submit better proposals, which is certainly in the agency's interest. The RFP should directly address the issue of how the agency will respond to questions during the process to avoid charges of favoritism when it gives answers only to consultants who ask questions.
Some local governments use a pre-proposal conference to handle questions.
At that conference, which is usually optional, prospective consultants can obtain answers to their questions in the presence of other interested parties. Such a conference imposes some extra burden on consultants from other communities. However, if the pre-proposal conference is clearly informal, consultants can send junior personnel or even ask nearby professional associates to attend for them, thus reducing the cost of attending the conference.
Other local governments use written answers to written questions, either in addition to a pre-proposal conference or separately.
In such a system, the local government provides copies of all questions and all answers to all consultants receiving the RFP or to all who submit a letter requesting such information. This process is a very fair one that provides identical additional information to all prospective consultants, eliminating the possibility of perceived favoritism.
Still other agencies identify a contact person who is specifically designated to answer questions.
By routing all questions through a single person, the agency limits the risk of different consultants receiving different answers or wildly different sets of information.
Finally, some agencies offer additional documents on request, with the request sometimes requiring payment of a fee.
For example, in accepting proposals to update a zoning code, an agency may offer to sell copies of its existing zoning code to consultants who want to review it. Where there are relevant documents available, the agency should note that fact in the RFP.
Interviews are a valuable element of the process both for the agency selecting a consultant and for the consultant. Through the interview, the project teams for the agency and for the consultant can evaluate their ability to work together. There are intangible factors in any working relationship. If they are positive, the relationship is likely to be a good one. If they are not, the relationship may turn sour. The interview offers the opportunity for both parties to evaluate these intangible factors.
The consultant interview is very much like a job interview, and the interview team should explore exactly the same kinds of intangible factors that they would explore in hiring a person to perform the same job as a member of the staff. If the project is one that will require several formal presentations, the ability of the consultant to make such presentations is important. If, on the other hand, the principal task is to develop an economic model or to draft a document, the ability of the consultant to make public presentations may be unimportant.
In one respect, however, the consultant interview is very different from a job interview. For a job interview, the prospective employer typically covers at least travel expenses. For a consultant interview, the consultant is faced with absorbing the entire cost. On a large project, it is not unusual for a consultant to feel the need to bring several members of the proposed project team. Consultants expect to absorb those costs, within reason. An agency interviewing consultants can help to keep those costs "within reason" by doing several things:
Interviewing only a very small number of firms. Three firms is typically a large enough number to interview; five should be an absolute maximum, even on a large project. If the agency is unable to narrow the selection to three or four, it should request additional information in writing or do some reference checking to narrow the choice. An agency should interview only those firms in which it has a serious interest.
Providing interview guidelines that are consistent with the scope of the project. On a large project, it is reasonable to expect to meet several project team members at the interview. That is not reasonable on a small project, and the agency should acknowledge that in issuing invitations for interviews.
Scheduling interviews in advance. The best-qualified consultants may be busy, and it is not reasonable to expect them to send their top people to an interview at a specified time just a few days from the date of the call. When it is necessary to schedule interviews on short notice, give the consultants some choices about specific dates and times.
Scheduling interviews to reduce travel costs. Scheduling interviews a couple of weeks in advance will also allow consultants to take advantage of special air fares. Scheduling interviews on a Friday or Monday may allow a consultant the option of staying over Saturday night and qualifying for additional discounts. Some consultants prefer not to travel on weekends and would rather pay higher prices to travel during the week. Offer consultants traveling a long distance some flexibility in time of day in order to allow them to minimize the number of nights of hotel bills that they need to pay.
Check references. The best indication of consultant performance on a project will be performance on similar projects for other clients. Check some references that the consultant did not list but that are identifiable from the consultant's project list. In checking references, look for patterns. Few complex projects run smoothly at every stage. Do not hold a single negative comment or negative experience against a consultant. Everyone (including planning agencies and their managers) has had projects that have worked out less well than others.
One of the most important questions to identify from reference checking is whether the consultant was cooperative when things did not go well. A good consultant will work hard to fix mistakes and to overcome any problems in communication. Another question to ask in checking references is which personnel from the firm actually performed the work. In some firms, principals perform the jobs that they "sell." In others, principals primarily sell; a community that hires such a firm may not see a firm principal or officer after the interview.
Here are two good questions with which to close an interview with a reference: Would you hire this firm again? and Is there anything that I should have asked you that I did not ask?
Remember that the selection process is also a recruitment process. Keep consultants informed, "in the loop." Send each a short form letter acknowledging receipt of a submission and giving an approximate schedule for the next steps in the selection process. If delays develop, send a mailing to inform them of the reasons for the delay and its probable length. Finally, when the process is complete, write to each consultant, informing them of the agency's decision and thanking all of them for taking time to participate in the process. Losing is not a happy experience for a consultant, as it is not for a job-seeker, but feeling ignored is worse than losing and being treated with some respect.
Making the Selection
An agency that follows the suggestions above may find that the choice among consultants is obvious by the end of the process. Where it is not, the agency must rely on evaluation criteria to make the selection. Those criteria absolutely must be established before the first interview. Otherwise, the selection team may define the selection process in terms established by the first consultant interviewed. Such a result is not fair for the agency or for the other competing consultants. An agency should include the selection criteria in the RFP. If there are such criteria in the RFP, the selection team should follow them; surprisingly, some do not. Otherwise, the team must develop those criteria. A suggested list of criteria and a form incorporating those criteria that can be used as a tool for selecting a consultant are contained in Chapter 2 and Appendix C of Selecting and Retaining a Planning Consultant by Eric Kelly, Planning Advisory Service Report No. 443 (Chicago: American Planning Association, 1993).
This material is a revised and edited excerpt from Selecting and Retaining a Planning Consultant: RFPs, RFQs, Contracts, and Project Management by Eric Damian Kelly, AICP. It is Planning Advisory Service Report No. 443, published by the American Planning Association, February 1993.