SA Association of SA Association of Consulting EngineersConsulting Engineers

QBS vs Price TenderingQBS vs Price Tendering

Quality Based SelectionQuality Based Selection

Competitive selection based on:Competitive selection based on:• Skills and qualificationsSkills and qualifications• Technical competenceTechnical competence• Reputation, experience & capacityReputation, experience & capacity• Commitment to client’s needsCommitment to client’s needs• Approach and personnel to be usedApproach and personnel to be used• Inclusion of previously marginalised Inclusion of previously marginalised

individualsindividuals

Why not Price Tendering?Why not Price Tendering?

Sets interests of client and consultant Sets interests of client and consultant at varianceat variance

No guarantee for fairness or No guarantee for fairness or transparencytransparency• People unqualified either to draw up or People unqualified either to draw up or

evaluate tendersevaluate tenders Unsuitable for the procurement of a Unsuitable for the procurement of a

professional serviceprofessional service• Will contractor complete 50% of building Will contractor complete 50% of building

as part of tender submission?as part of tender submission?

Why not price? Why not price? (continued)(continued)

Threatens the viability of a profession Threatens the viability of a profession which should be strengthened as a which should be strengthened as a matter of national importancematter of national importance

Short-sightedShort-sighted Places the delivery of infrastructure Places the delivery of infrastructure

and technological advancement - the and technological advancement - the renaissance of Africa - in jeopardyrenaissance of Africa - in jeopardy

SA Government PolicySA Government Policy

1997 Green Paper on Procurement 1997 Green Paper on Procurement ReformReform• ““Calling for open tenders … even for routine Calling for open tenders … even for routine

assignments, is neither in an organ of the assignments, is neither in an organ of the State’s not the consultant’s interest”State’s not the consultant’s interest”

• ““The selection of consultants on the basis of The selection of consultants on the basis of price alone may well lead to unsatisfactory price alone may well lead to unsatisfactory or even disastrous outcomes and could, in or even disastrous outcomes and could, in all likelihood, have been avoided at all likelihood, have been avoided at insignificantly greater overall cost”insignificantly greater overall cost”

Local Government Local Government Transition Act (No 209 of Transition Act (No 209 of 1993)1993)

““Subject to section 10G(5) of the Act, a Subject to section 10G(5) of the Act, a municipality may dispense with the calling municipality may dispense with the calling of tenders - of tenders - (a) in respect of any contract which is for the execution of (a) in respect of any contract which is for the execution of any work for the municipality where any work for the municipality where

(vi) the contract relates to the appointment of any person (vi) the contract relates to the appointment of any person to provide professional advice or services and the council to provide professional advice or services and the council concerned has consented to such an appointment, concerned has consented to such an appointment, provided that it is in accordance with a schedule of fees provided that it is in accordance with a schedule of fees approved by a nationally recognised institute or body.approved by a nationally recognised institute or body.””

Benefits of Recommended Benefits of Recommended Fee ScaleFee Scale

A Consulting Engineer is a Professional A Consulting Engineer is a Professional who takes responsibility for the who takes responsibility for the outcome and performance of his/her outcome and performance of his/her designdesign• Peace of mind that the client receives cost-Peace of mind that the client receives cost-

effective and professional advice backed effective and professional advice backed by professional liabilityby professional liability

• We accept the professional fee of a doctor We accept the professional fee of a doctor or legal counselor legal counsel

Benefits continuedBenefits continued

It is internationally acceptedIt is internationally accepted• Internationally accepted and Internationally accepted and

benchmarked norms - FIDICbenchmarked norms - FIDIC

• USA outlawed price competition by USA outlawed price competition by professional engineers, in 1972professional engineers, in 1972

• IBRD - no requirement for price IBRD - no requirement for price competition; primarily quality based competition; primarily quality based selectionselection

Benefits continuedBenefits continued

Takes arbitrary guesswork out of the Takes arbitrary guesswork out of the cost of using a professional consulting cost of using a professional consulting engineerengineer

Certainty and predictability in the Certainty and predictability in the outcome a client can expectoutcome a client can expect

Equitable and transparent Equitable and transparent environment within which environment within which professionals can compete on ability professionals can compete on ability not feesnot fees

Benefits continuedBenefits continued

Underpinned by a Code of ConductUnderpinned by a Code of Conduct

Endorsed by a Professional Endorsed by a Professional

Indemnity Insurance SchemeIndemnity Insurance Scheme

A Client has, in the SAACE, a body A Client has, in the SAACE, a body

to turn to should should it believe to turn to should should it believe

that a professional consulting that a professional consulting

engineer has failed it in any way.engineer has failed it in any way.