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Transcript of Professional Engineering Procurement Services (PEPS) Camille Thomason PEPS Center of Excellence...
Professional Engineering Procurement Services (PEPS)
Camille ThomasonPEPS Center of Excellence ManagerOctober 18, 2014
SELECTION PROCESSES AND ADMINISTRATIVE QUALIFICATION
Professional Engineering Procurement Services (PEPS)
Agenda Topics
2
Rules Changes – Alignment with FHWA Requirements
Overview of Administrative Qualification
Preparing for the Federal Process
Other Processes
Questions
1
2
3
4
5
Professional Engineering Procurement Services (PEPS)
February 2013 Rule Changes – Align with FHWA Requirements
Texas Administrative CodeTitle 43, Part I, Chapter 9, Subchapter C
Applicable to advertisements posted after February 21, 2013
Revised the administrative qualifications process to align with federal requirements
Separated federal from non-federal process:– Federal Process– Other processes
Professional Engineering Procurement Services (PEPS)
Federal Process
For contracts subject to 23CFR Part 172
Required for the procurement of an engineering or design related service contract that is both:– Directly related to a highway
construction project, and– Reimbursed with federal-aid
highway program (FAHP) funding
Professional Engineering Procurement Services (PEPS)
Federal Process
Firms providing engineering and design related services must be administratively qualified with an effective rate by the SOQ deadline; (modified August 2013) or be determined eligible by the TxDOT Audit Office, to use the federal safe harbor rate, by the SOQ deadline.
Applicable to the prime and subproviders
Professional Engineering Procurement Services (PEPS)
Federal Definition per FHWA
CFR Title 23, Part 172Engineering and design related services means program management, construction management, feasibility studies, preliminary engineering, design, engineering, surveying, mapping, or architectural related services with respect to a construction project subject to 23 U.S.C. 112(a).
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Professional Engineering Procurement Services (PEPS)
Process Type and Administrative Qualification
Federal Process: Administrative qualification is required for firms providing engineering and design related services on applicable projects.
Other Processes: Administrative qualification is not required to compete.– Comprehensive– Streamlined– Accelerated
Projected Contracts List will identify the process type to expect
Professional Engineering Procurement Services (PEPS)
Agenda Topics
8
Rules Changes – Alignment with FHWA Requirements
Overview of Administrative Qualification
Preparing for the Federal Process
Other Processes
Questions
1
2
3
4
5
Professional Engineering Procurement Services (PEPS)
Administrative Qualification
Defined in the TAC A single process used by the department to verify
that a provider:– Has a Federal Acquisition Regulation (FAR) compliant indirect
cost rate that meets department requirements– Has a job cost accounting system adequate for segregating
direct and indirect costs, and– Is aware of federal cost eligibility and documentation
requirements Refer to rule 9.34 for specific requirements, as
needed
Two options for becoming administratively qualified
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Professional Engineering Procurement Services (PEPS)
Option 1 – Qualification by Audit
Requires the preparation of a FAR compliant audit report by:– A qualified public accountant or– Acceptable federal, state, or
local agency More typical for medium to
large firms Preparation time varies by
firm size and availability of a CPA
Cost can range from $10,000 to $15,000
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Professional Engineering Procurement Services (PEPS)
Option 2 – Qualification by Self-Certification
Option made available with February 2013 TAC rule changes
Requires the completion of a specific report by the firm
Resulting rate is FAR compliant, if completed correctly
Has become option of choice for most small and some medium firms
Preparation time controlled by the firm
Cost to complete is significantly less 11
Professional Engineering Procurement Services (PEPS)
Administrative Qualification
Not a process where TxDOT audits a firm’s indirect costs
TxDOT merely reviews the information and indirect cost rate development process for compliance purposes
If elements are in conflict with requirements, adjustments will be made for approval purposes
Any adjustments are discussed with the firm for clarification purposes
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Professional Engineering Procurement Services (PEPS)
FAR Compliant - Indirect Cost Rate
As approved by PEPS Admin Qual Group
Becomes effective:– Six months after the end of the
provider’s fiscal year, or– Immediately, if filed more than six
months after the end of the provider’s fiscal year
Effective no more than 12 months
Expires 18 months after the end of the fiscal year upon which it was based
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Professional Engineering Procurement Services (PEPS)
A Firm’s Administrative Qualification Status
TxDOT maintains a list, posted externally– Firms listed with date range of effective status– If the date range shown is not inclusive of the current date,
then the firm is not currently administratively qualified An administratively qualified firm has an effective
indirect cost rate according to TAC rule 9.34 (a FAR compliant rate)
Rates are maintained confidentially by the PEPS Admin Qual Group
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Professional Engineering Procurement Services (PEPS)
Posted List – Administrative Qualification Status
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Professional Engineering Procurement Services (PEPS)
FAR Compliant Rate
The firm’s actual indirect cost rate for the firm’s last fiscal year
Assumed to be the most representative rate of the firm’s indirect costs
Used for cost development purposes when selected
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Professional Engineering Procurement Services (PEPS)
Administrative Qualficiation
Not required for every firm Requirements vary by selection process
– Federal Process most restrictive– Comprehensive, Streamlined, and Accelerated processes offer
more flexibility
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Professional Engineering Procurement Services (PEPS)
Agenda Topics
18
Rules Changes – Alignment with FHWA Requirements
Overview of Administrative Qualification
Preparing for the Federal Process
Other Processes
Questions
1
2
3
4
5
Professional Engineering Procurement Services (PEPS)
Preparing for the Federal Process
Firms providing engineering and design related services must be administratively qualified with an effective rate by the SOQ deadline; (modified August 2013) or be determined eligible by the TxDOT Audit Office, to use the federal safe harbor rate, by the SOQ deadline.
Professional Engineering Procurement Services (PEPS)
Federal Process
Administrative qualification is required for firms providing engineering and design related services on applicable projects.
What about firms not subject to the requirement?– They may be administratively qualified (not prohibited)– If not administratively qualified, no indirect cost rate, loaded
rates will be negotiated inclusive of base rate, indirect cost, and profit
What about a firm subject to the requirement, but unable to complete the administrative qualification process?– The only option is to establish eligibility
to use the federal Safe Harbor Rate20
Professional Engineering Procurement Services (PEPS)
August 2013 Rule Changes – Federal Safe Harbor Rate
The Federal Highway Administration is conducting a pilot program to evaluate the use of a “safe harbor rate.”
The safe harbor rate serves as an indirect cost rate for firms providing engineering and design-related services lacking a Federal Acquisition Regulations (FAR) compliant indirect cost rate.
The amendment to §9.35, Federal Process, allows the safe harbor rate to be used, which accommodates the department’s participation in the pilot program.
Rule change became effective August 15, 2013
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Professional Engineering Procurement Services (PEPS)
Safe Harbor Indirect Cost Rate – Test & Evaluation
Authorized FHWA trial Part of “Test and Evaluation Project TE-045” FHWA Financial Management Improvement (FMI) Initiative Purpose being to remove the potential barrier for certain firms TxDOT submitted the concept as the lead agency in
cooperation with the FHWA Texas Division Office 10 Participating states
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– Texas– Alabama– California– North Carolina– South Carolina
– Michigan– Missouri– North Dakota– Ohio– Washington
Professional Engineering Procurement Services (PEPS)
Safe Harbor Indirect Cost Rate – Test & Evaluation
The safe harbor indirect cost rate for optional use by eligible consulting firms on FAHP funded contracts under the test program is 110%.
Eligibility must be approved by the TxDOT Audit Office prior to the closing date of the solicitation in order to compete.
The test period for use and application of the safe harbor indirect cost rate on new contracts will expire on June 30, 2016.
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Professional Engineering Procurement Services (PEPS)
Safe Harbor Indirect Cost Rate
Level of use anticipated is low– Majority of solicitations are non-federal– Small firms are taking full advantage of self-certification– The rate is very low
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Professional Engineering Procurement Services (PEPS)
Eligibility Considerations
The firm has not had an indirect cost rate previously accepted by a cognizant agency and lacks previous experience with federally funded contracts for which an indirect cost rate would have been developed
The firm has limited or no federal contracting experience that has resulted in an accounting structure by which development of an indirect cost rate in accordance with Federal Cost Principles would be challenging and likely not result in a representative rate.
The firm lacks the financial resources to hire a certified public accountant (CPA) to conduct a FAR compliant audit.
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Professional Engineering Procurement Services (PEPS)
Eligibility Considerations - cont.
The firm lacks the financial sophistication to develop an indirect cost rate through the self-certification process.
The firm is a new or start-up firm without a contract-related history to use as a base for development of an indirect cost rate.
The firm does not have an audited or self-certified actual indirect cost rate developed in accordance with the FAR cost principals.
The firm is not currently administratively qualified, and has not been previously administratively qualified by TxDOT.
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Professional Engineering Procurement Services (PEPS)
Additional Guidelines
The firm must complete and submit the internal control questionnaire
The firm must demonstrate that they have, and are utilizing, an acceptable cost accounting system capable of segregating direct and indirect costs.
The safe harbor rate will be applicable for the duration of the contract.
The safe harbor rate is not intended for and will not be used as a field rate for a field-based contract. If needed, a field rate will be negotiated.
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Professional Engineering Procurement Services (PEPS)
Agenda Topics
28
Rules Changes – Alignment with FHWA Requirements
Overview of Administrative Qualification
Preparing for the Federal Process
Other Processes
Questions
1
2
3
4
5
Professional Engineering Procurement Services (PEPS)
Other Processes
The majority of TxDOT solicitations Administrative Qualification is not required to
compete So what rates will TxDOT use for a selected team?
Professional Engineering Procurement Services (PEPS)
Other Process
For a selected team:A. A firm may be administratively qualifiedB. Non-engineering firms are exemptC. Engineering services that are exempt:
• Bridge Inspection• Materials Inspection and Testing• Geotechnical Engineering• Surveying and Mapping• Subsurface Utility Engineering• Architecture
D. If none of the above, they can accept the TxDOTdeveloped rate
• As of August 2014 its 145%
For survey firms, only A or C would apply
Professional Engineering Procurement Services (PEPS)
Exempt Status
Means TxDOT does not expect a firm to be administratively qualified (although a firm is not prohibited from becoming administratively qualified)
If not administratively qualified:– The firm is not subject to taking the TxDOT
developed rate for contracting purposes– Loaded rates will be negotiated inclusive of base
rate, indirect cost, and profit
Professional Engineering Procurement Services (PEPS)
Agenda Topics
32
Rules Changes – Alignment with FHWA Requirements
Overview of Administrative Qualification
Preparing for the Federal Process
Other Processes
Questions
1
2
3
4
5
Professional Engineering Procurement Services (PEPS)
Administrative Qualification Guidance
External web page includes information presented
PEPS Administrative Qualification Group is point of contact for questions
Contact information posted on the web page– Bruce Reed (512) 416-2315
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Professional Engineering Procurement Services (PEPS)
Thank you - Questions?
Camille ThomasonPEPS Division – Center of [email protected]