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For large or complex construction projects, owners and public agencies often use qualifications-based selection (QBS) to prioritize experience and capability over merely selecting the lowest bid. QBS involves owners choosing architectural and construction firms that are most qualified for the work based on their relevant experience, track record of success and proposed approach to the project.

This article will explore the steps involved in QBS, highlight its advantages for project owners and construction companies, provide best practices and compare QBS with traditional lowest-bidder methods.

What is Qualifications-Based Selection (QBS)?

Qualifications-based selection allows owners and municipalities to choose contractors for their projects based solely on their suitability and capability to perform the work. QBS is commonly used to , as well as to choose construction contractors to execute the project.

In this process, an owner entity issues a request for qualifications (RFQ) for their project, which firms respond to with a statement of qualifications (SOQ). Additionally, firms may be required to submit a technical proposal outlining their approach to the project.

Once the companies’ qualifications have been evaluated, the owner picks a shortlist and ranks the contractors. Owners and procurement professionals then negotiate with the chosen contractor to develop a final budget and project details to award the contract.

In a low-bid selection process, agencies are often required to pick the lowest bidder among companies prequalified to bid on the project. Best value selection is a process in which both qualifications and cost are considered when awarding contracts. QBS provides a method for owners to focus solely on the best-qualified companies to work with on challenging projects.

QBS can be used for various delivery methods. It can work well as part of a progressive design-build delivery approach, which breaks the process into preconstruction and execution contracts. It is also commonly used in Construction Manager at Risk (CMAR) and design-build projects.

The QBS Process

Many to procure project design and construction services. The exact process may vary, but here are the basic steps of the process:

1. Planning

1. Identify the scope of work.
2. Announce a request for qualifications (RFQ).
3. Appoint the selection committee.
4. Establish the selection criteria.

2. Selection

1. Design or construction firms submit Statements of Qualifications (SOQs).
2. Choose a shortlist of companies.
3. Conduct site tours for shortlisted companies.
4. The project owner may issue a Request for Proposals (RFP) for technical details.
5. Rank the top 3-5 firms.

3. Negotiation

1. The project owner enters negotiations with the #1-ranked firm.
2. If no agreement is reached, the owner negotiates with the #2 firm.

4. Contract Awarded

QBS Criteria

Each project may have specialized criteria related to the work necessary, so owners should be as specific as possible for each project. Typical selection criteria in QBS include:

• Relevant Project Experience
• Track Record of Successful Project Delivery
• Financial Stability and Cash Flow
• Team Member Experience and Expertise
• Availability and Capacity to Take on a Project
• Safety Record
• Appropriate Licenses and Insurance Coverage

Benefits of QBS for Municipalities and Owners

Public and private owners use QBS to secure high-quality architectural, engineering and construction (AEC) services for their projects, rather than opting for the cheapest — and potentially lower-quality — outcome. By partnering with AEC firms, owners can leverage the expertise of the contracted company to help shape the project.

Starting Collaboration Early

It may be difficult to fully define the project before the creative design and technical engineering work are completed, so QBS for this part of the project can help the collaboration between the owner and consultants.

“When you have owners who are willing to do one-on-one and or interviews with the shortlisted teams, it opens the door to start collaboration early.” - Danica Mason

Strongest Teams for Complex Projects

Public projects with community involvement and many stakeholders benefit from having the most knowledgeable and experienced teams working on design and execution.

Saving Time and Money

According to a, 50% more QBS projects met construction schedule milestones than non-QBS projects. The cost growth for QBS projects in the study was 3%, which is half of the 6% national average cost growth.

Reducing Change Orders and Delays

The construction documents delivered using the QBS procurement process for design and engineering are of higher quality, necessitating fewer construction change orders and decreasing delays.

Best Practices for the QBS Process for Owners

Because QBS is necessarily subjective, bias towards known or larger firms can more easily creep into the process. Also, when selecting firms with experience on similar projects, owners may overlook firms with newer and more innovative approaches to the project.

The process can lack transparency, with firms or the public not fully informed of why the selection was made. This can cause suspicion about the process and the final selection. Without cost consideration, a firm with inflated prices could be selected.

Develop clear selection criteria.

Although the project may not yet be entirely shaped, it is important to delineate the committee's criteria for evaluating and selecting contractors.

Choose a well-rounded selection committee.

The committee needs to have experts from relevant disciplines and a wide variety of perspectives to best represent the stakeholders who the project will impact.

Be transparent about the process.

Projects that impact the public will attract attention, so being open about how the process works can help mitigate pushback or protests later. Firms that compete for the project also need a clear understanding of how the selections are made.

Conduct a careful negotiation of cost.

While cost is not a consideration when choosing the best-qualified contractor, it is an important part of the process, so negotiate to make sure that the work is being delivered for a fair price.

Comparing QBS to Price-Based Selection: Long-Term Value vs. Initial Cost

Selecting contractors based on the, often compromising quality.

Owners seek quality at the lowest cost, prompting contractors to bid low to secure the contract, which can result in difficulties completing the project under tight budget constraints. In the QBS approach, both the owner and contractor are motivated to achieve a quality outcome, and negotiating a fair price enables collaboration on cost management while maintaining project quality.

Opting for the lowest bidder can lead to a lower-quality project that may not last or effectively meet its intended purpose.

QBS projects prioritize the quality and longevity of the structure over initial cost savings. While constructing a more durable structure might require a higher upfront investment, it ensures greater value and durability in the long run.

Tips for Writing a Competitive SOQ

The standard format of an AIA A305 Contractor’s Qualification Statement is a good model for use in a QBS process, even if this structure is not required. Here are some tips to make the most accurate and appropriate SOQ for a project.

• Be accurate.

  Honest and accurate information is the baseline for a good SOQ. The detailed process of QBS will likely uncover any inaccurate statements and will reflect poorly on the company's reputation.

• Emphasize differentiators.

  Make sure that the SOQ reflects the qualities, characteristics and experience that make the company uniquely qualified for the project.

• Adapt to the specific project at hand.

  Don’t reuse the same SOQ for multiple projects. Emphasize project experience and company values that make the company especially relevant for this project and the aims of the owner or public agency.

• Make it attractive.

  A professional layout, well-written text and clear organization of the document can reflect the competence and care that the company will take if awarded the project. Make it easy for owners to read and understand the SOQ.

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The Future of QBS in Design and Construction

Qualifications-based selection is a strategic approach for owners and public agencies to ensure high-quality outcomes in complex construction projects. By focusing on the expertise and proven capabilities of architectural and construction firms, QBS aligns the goals of owners and contractors, promoting collaboration and innovation.

With a successful track record spanning more than 50 years, QBS is now widely employed by agencies globally to select design and construction companies for complex projects. QBS continues to demonstrate its value by delivering durable, cost-effective projects that meet and often surpass stakeholder expectations. Implementing qualifications-based selection can lead to more sustainable and successful outcomes that encourage robust collaboration to drive quality and innovation in the construction industry.

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