DAVID GIONGCO Caltrans Local Assistance Engineer

Same Consultant for Design and Construction Management? Revisited

Can our consultant designing a project also perform the construction management/oversight for the same project?

I originally addressed this topic in 2011, but it’s worth revisiting because the policy was changed recently …

The use of a consultant for both design and construction management services is not prohibited on federal-aid projects. While it’s Caltrans’ practice to not allow it on state-administered projects, local agencies are allowed to do so given they have measures in place to address potential conflicts of interest.

FHWA specifically addresses the topic on their ”Procurement, Management, and Administration of Engineering and Design Related Services - Questions and Answers” webpage:

  1. May a consulting engineering firm that performed design services on a FAHP funded project be procured to perform subsequent construction engineering/management and/or inspection services on the project? (Posted 7-20-11, Revised 3-2-12)

Yes, Federal requirements and FHWA policies do not expressly prohibit the same consulting firm from providing services on subsequent phases (e.g., design and construction engineering/management and/or inspection) of a project that utilizes FAHP funding. This may be permissible provided contracting agencies have established the necessary controls and provide sufficient oversight to ensure that a conflict of interest does not exist or have approved procedures to mitigate any conflict or potential for a conflict. While not expressly prohibited under Federal requirements, this practice may be prohibited under State law or contracting agency policies and procedures. Prior to allowing a firm to provide services on multiple phases of a project, contracting agencies need to evaluate and demonstrate that their policies, procedures, and practices associated with the procurement, management, and administration of engineering consultant services comply with Federal and State laws and FHWA requirements. (See Conflicts of Interest Question & Answer Nos. 1 and 6)

A firm performing construction engineering/management and/or inspection services on the same project on which the firm also performed design services provides the firm an opportunity to influence or affect project decisions on scope changes, design changes, construction revisions, contract change orders, and other related issues. This can result in project delivery efficiencies, as the firm that designed the project is well-suited to verify that the project is being constructed in accordance with the design and can resolve issues related to the design on behalf of the contracting agency. However, this scenario may also pose a potential conflict of interest if the firm has a vested financial interest in failing to disclose deficiencies in its design work product and seeks to insulate itself from pecuniary liability in subsequent phases of the project, such as minimizing or ignoring design errors and omissions, rather than serving the best interests of the contracting agency and the public. Procuring a different firm from the design firm to provide the necessary construction engineering/management and/or inspection services provides another level of review and reduces the risk of, or potential for, a conflict of interest.

Contracting agencies are responsible for ensuring the public interest is maintained throughout the life of a project and that a conflict of interest, direct or indirect, does not occur or is sufficiently mitigated by appropriate public agency controls. Contract documentation which clearly defines each contracting party’s roles, responsibilities, and duties for a project is essential to the protection of the interest of all stakeholders. Prior to allowing a consulting firm to provide services on subsequent phases of the same project, the contracting agency must establish appropriate compensating controls in the form of policies, procedures, practices, and other safeguards to ensure a conflict of interest does not occur in the procurement, management, and administration of consultant services. In general, qualified agency staff serving in responsible charge of a project, coupled with comprehensive policies, procedures, and contract documentation, will mitigate the potential for conflicts. (See Conflicts of Interest Question & Answer No. 6)

Provided the necessary contracting agency controls and oversight practices are established, a consultant may be procured to provide both design and construction phase services for a project under a single solicitation. However, consideration should be given to the project scope and complexity, estimated duration of the preconstruction phase, objectivity of environmental analyses if also included within the scope of services (as specified in 23 U.S.C. 112(f)), and the need to provide fair and open competition.

When design and construction phase services are procured under a single solicitation, the selection of the consulting firm must be based on the overall qualifications to provide both design and construction phase services, which require different skill sets, experience, and resources. Procuring these services under different solicitations may result in selection of a more qualified firm to perform services in each phase, as the most qualified firm to perform design phase services may not be the most qualified firm to provide construction phase services. Similarly, the qualifications and capacity of a firm may change over time. As such, it may not be appropriate to contract with a consulting firm to provide construction phase services at the outset of a design phase, knowing that these services may not be needed for an extended period of time until the preconstruction phase of the project is complete and construction funding authorized.

The contract with a consulting firm providing design phase services on a project may not be amended to include construction phase services unless the desired construction phase services were included within the original advertised scope of services and evaluation criteria of the solicitation from which a qualifications based selection was conducted. (See Competitive Negotiation Question & Answer No. 11)