Contracting with architects and engineers – what’s required today? An update since construction reform

Reprinted from the Summer 2015 BrickerConstructionLaw.com Newsletter Download the complete Summer 2015 BCL.

Ohio’s Design Services Law (also often referred to as Ohio’s Qualifications-Based Selection Law) as originally enacted in 1988 applied to the State of Ohio and its agencies. In 1995 the qualifications-based selection (QBS) law was expanded to apply to other public authorities.¹ The law remained virtually unchanged, with the exception of an added provision that specifically stated no fee information for design services could be requested prior to the ranking of firms based upon qualifications,² until 2011; at that time, HB 153 implemented construction reform, which allows the State and all public authorities to use design-build services for public construction projects. In addition to adding the required QBS process for the selection of a design-build firm, the Design Services Law included other changes. One of these was the deletion of the $25,000 threshold for design services costs, below which the law did not previously apply.

When is the QBS process required for design services? As defined in Ohio Revised Code (ORC) Section 153.65(C), “professional design services” means “any services within the scope of practice of an architect or landscape architect registered under Chapter 4703. of the Revised Code or a professional engineer or surveyor registered under Chapter 4733. of the Revised Code.” With the elimination of the $25,000 threshold, the statutory process applies to any design services contract, no matter the cost. For example, survey services, which often cost less than $1,000, are subject to the process.

The revisions to the process did include a new exception. If the professional design fee will be less than $50,000, and the public authority maintains a file with current qualifications (the qualifications must have been submitted within the immediately preceding year), the public authority may select a design professional or firm determined to be most qualified to provide the required services from the qualifications in the file.³ ORC Section 153.68, which has been part of the Design Services Law since it was first enacted, permits public authorities to “institute prequalification requirements” and maintain files with current qualifications for use when the public authority requires design services.

One other exception to the Design Services Law was included in the original legislation and remains. The public authority head may determine in writing that a project is “an emergency requiring immediate action.”⁴ In this situation, the QBS process is not required.

Overview of the QBS Process for a design professional, including a criteria architect or criteria engineer for a project using the design-build delivery model (selection of a design-build firm requires other steps outlined in both the ORC and the Ohio Administrative Code)

1.   Determine if the design services are subject to the QBS process.

• Are the services within the scope defined for a registered architect⁵ or engineer⁶?
• Will the cost of services be less than $50,000 AND does the public authority have a file with current qualifications from design firms for the required services?
• Has the public authority head determined the project is an emergency requiring immediate action?

2.   If the QBS process is required, issue a public announcement or notice of the available con­tract for design services.

• No prescribed time period between the announcement and the time for submitting qualifications.
• Options for how notice is issued: (1) send to architect, landscape architect, engineer and surveyor associations; (2) news media; or (3) any publications or other public media, including electronic media.

3. Review, evaluate, and rank the qualifications received.

• Interviews are not required.
• Ranking 3 firms is required by the ORC, unless fewer than 3 firms submit qualifications or are determined qualified to provide the required services; if fewer than 3 firms are ranked, the public authority must determine in writing that fewer than 3 firms are available.
• No estimate or measure of compensation can be requested from a design firm prior to selecting and ranking firms.

4. Select the design firm ranked most qualified for the contract.

5. Negotiate a contract with the firm ranked most qualified.

• If the parties are unable to negotiate a contract, the public authority must give written notification to the firm ranked most qualified that the negotiations are terminated; then the public authority may begin negotiations with the design firm ranked next most qualified.
• Design firm must provide professional liability insurance, unless the public authority waives the requirement or accepts another assurance of financial responsibility.

Note that the public authority may only reject the recommendation of an interview committee for selection of the most qualified design firm and award of a contract for design services if it finds 1 of 6 items defined in Ohio Administrative Code (OAC) 153:1-1-03 exists for the design firm or the QBS process. This section of the OAC became effective March 27, 2014.

The OAC contains 2 other sections that amplify the Design Selection Law. However, these 2 sections are limited in application to the State. “State” is defined in OAC 153:1-1-01 as:

any organized body, office, or agency established by the laws of this state for the exercise of any function of state government; or any institution of higher education as defined in section 3345.011 of the Revised Code. The “state” does not include the department of transportation or the Ohio turnpike com­mission when engaging professional design services for transportation projects.

Using Prequalified Design Firms

The Design Services Law permits public authorities to prequalify design firms and to select design firms that have current qualifications on file with the public authority if the estimated cost for design services will be less than $50,000. For public authorities other than the State, the ORC and OAC provide no further guidance or direction on the process to prequalify firms or to maintain a file with current qualifications. For the State, OAC 153:1-1-02 provides a process for selecting the most qualified design firm from the list of prequalified firms maintained by the State. This process appears to be separate from the ORC 153.71(A) exception to the QBS process.

Non-state public authorities can determine their own process for establishing a file with qualifications from design firms to use when the estimated cost of services will be less than $50,000. The public authority may formally authorize the establishment and maintenance of the file with qualifications separate from a QBS process for a specific project. The public authority could more informally, through administrators without formal board, commission, or council action, establish a file by soliciting qualifications from design firms to provide various architecture and engineering services. If the public authority is soliciting qualifications for a specific project, it can also indicate that qualifications received in response to the RFQ will be placed in the public authority’s file for current qualifications. The public authority can notify firms that they are responsible to update qualifications on an annual basis, or the public authority can follow up with firms individually to request updated qualifications when specific services are required for which the estimated cost will be less than $50,000.

Conclusion

The QBS process required for public authorities can be tailored to a specific project, depending upon the size and complexity of the construction project, as long as the essential steps required by the ORC are followed. Consult legal counsel for assistance to define a process and document it appropriately, as well as to prepare a design services agreement with the firm selected as most qualified to provide the required services.

Summary of Changes to the Design Services Law

Things that remain the same

The exemption from the QBS process when design services compensation is estimated to be less than $25,000 was eliminated. All design services contracts are subject to the QBS process, unless: The public authority maintains a file with current qualifications and the estimated cost of design services will be less than $50,000. The public authority head determines in writing that there is an emergency requiring immediate action. The announcement or legal notice may now be issued through electronic media, if the public authority considers this appropriate. PublicNoticesOhio.com is the official website for posting Ohio public notices. This is a service provided by the Ohio Newspaper Association and, effective September 15, 2014, replaced the previous Ohio public notice website (part of the Ohio Business Gateway). A newspaper publishing the notice should also post the notice to this website. Design-build firm selection requirements are included in the ORC and OAC; this is a 2-step process and includes both qualifications and pricing, both of which are evaluated to determine the design-build firm that will provide the best value for the project. The required criteria architect/criteria engineer for a design-build project is selected following the QBS process.

Contracts for architecture and engineering services are subject to the statutory QBS process. Architecture includes planning and programming, as well as all design services. Engineering includes surveyors, geotechnical services, soil borings, construction materials testing and inspection, abatement, investigations, and commissioning services, all of which are provide by or overseen by currently registered engineers. The process remains essentially the same. No fee estimate or measure of cost of services may be requested from firms before the ranking and selection of the most qualified design firm.

End Notes

¹ “Public authority” is defined in ORC Section 153.65(A) (1) as “the state, a state institution of higher education as defined in section 3345.011 of the Revised Code, a county, township, municipal corporation, school district, or other political subdivision, or any public agency or authority, board, commission, instrumentality, or special purpose district of the state or of a political subdivision.” “Public authority” does not include “the director of transportation when exercising the director’s authority to prepare plans for, acquire rights-of-way for, construct, or maintain roads, highways, or bridges.” ORC Section 153.65(A)(2) (effective July 1, 2013).

² ORC Section 153.691 (effective Sept. 26, 2003)

⁴ ORC Section 153.71(A) (effective Sept. 29, 2011)

⁵ ORC Section 153.71(B) (effective Sept. 29, 2011)

⁶ OAC 4703-1-01(B) defines the “Practice of Architecture” as “providing or offering to provide those service, hereinafter described, in connection with the design and construction, enlargement, or alteration of a building or group of buildings and the space within and the site surrounding such buildings, which have as their principal purpose human occupancy or habitation, except where 

otherwise exempted by sections 3781.06 to 3781.18 and 3791.04 of the Revised Code. The services referred to include pre-design, programming, planning, providing designs, drawings, specifications and other technical submissions, the administration of construction contracts, and the coordination of any elements of technical submissions prepared by others including, as appropriate and without limitation, consulting engineers; providing that the practice of architecture shall not include the practice of engineering as defined in Chapter 4733. of the Revised Code, but a registered architect may perform such engineering work as is incidental to the practice of architecture.”

⁶ ORC Section 4733.01(E) states that “’[t]he practice of engineering’ includes any professional service, such as consultation, investigation, evaluation, planning, design, or inspection of construction or operation for the purpose of assuring compliance with drawings or specifications in connection with any public or privately owned public utilities, structures, buildings, machines, equipment, processes, works, or projects in the proper rendering of which the qualifications of section 4733.11 of the Revised Code are required to protect the public welfare or to safeguard life, health, or property.”