Streamlined Contracting Process - Frequently Asked Questions

Question 1:  The new process will impact firms’ accounting systems to segregate base rate and Fringe & will increase ICR/OH rate. Please discuss DPAC views to reflect the impact.

All consulting firms are required to segregate and track both direct labor costs and indirect costs per the Federal Acquisition Regulations (FAR) and the CFR. Consistently accounting for direct labor and fringe benefits is essential to achieve equitable distribution of costs to all clients.

Caltrans’ proposed method of reimbursement will fairly compensate all consultants for their costs in an equitable manner. This reimbursement method is specifically intended to reimburse consultants for their costs, consistently and fairly, while ensuring equitable distribution of costs and providing equal opportunity for all to succeed.

It is important to note that the proposed reimbursement method for costs will not necessarily result in an increase of the Indirect Cost Rate and any increase is generally expected to be minimal.

Question 2:  What did A&E mean when stating that you want to establish “level playing field” by asking all consultant to treat fringes as ODC (pass through) as well as premium OT.

Caltrans recognizes that consulting firms may account for premium overtime as direct labor, indirect cost, or other direct cost (ODC). To streamline the A&E procurement process and improve efficiency, Caltrans has elected to reimburse consultants for premium overtime as ODC. This method of reimbursement allows Caltrans to reimburse consultants for the overtime premium in the most equitable manner, while ensuring that the client (project or contract) responsible for the overtime cost, pays costs incurred without distorting the Indirect Cost Rate (ICR). Consultants are expected to account for costs consistently for all clients, projects, and contracts. As such, fringe benefits will be reimbursed as indirect cost for all contracts since consultants account for fringe benefits in the indirect cost pool.

Question 3:  If the company’s accounting system treat these in different manner and ICR was approved by CT, how can we change accounting system.

A&E consultant can continue to utilize the same accounting system during the transition period (Fiscal Year 2019 ICR). ICR for fiscal year 2020 and beyond will be required to include a line item for the premium overtime and ICR shall include disclosure note with the ICR representing the reimbursement of premium overtime as ODC.

During the transition period, the consultant may propose adjustment to the proposed ICR when the reimbursement method is different from how the consultant accounts for the cost in question.

Example Scenario:

• Total Direct Labor (DL) = $8,889,000
• Total Indirect Costs = $9,400,000
• Total Premium Overtime Costs already included in the DL = $89,000

Assume a consultant has accounted for premium overtime as direct labor, the ICR is calculated as follows:

Total Indirect Costs / Total DL = ICR
$9,400,000 / $8,889,000 = 105.75%

However, Caltrans will reimburse the consultant for Premium Overtime as ODC (pass through), the ICR is calculated as follows:

Total Indirect Costs / (Total DL - Total Premium Overtime Costs already included in the DL) = ICR
$9,400,000 / ($8,889,000 - $89,000) = 106.82%

Question 4:  Does that mean that company has to recalculate OH rate?

Consultants are to propose an adjustment to the proposed indirect cost rate during the transition period. Future Indirect Cost Rates shall include a line item in the ICR schedule, and an auditor note for disclosing an ICR reflecting the reimbursement of premium overtime as an ODC.

Refer to "Outreach and Education" frequently asked questions 3 and 4.

Question 5:  Since every firm handles these deltas differently, how is Caltrans planning to move forward?

Caltrans will reimburse fair and reasonable wages as direct labor and fringe benefit specified by the DIR as indirect costs. According to our records, many firms already account for these costs per the proposed reimbursement methodology.

Question 6:  Caltrans A&E contracts for Construction Inspection is supposed to be based on most qualified. By having a maximum rate it’s no longer based on most qualified.

The consultant team is being selected based on qualifications and rates are not to be submitted or evaluated until ranking of consultants.

The most qualified consultant will be invited to negotiations. Consultants are expected to propose fair and reasonable rates. The negotiation process will be conducted in accordance to 40 U.S.C 1104(b) Order of negotiation which states, "The agency head shall attempt to negotiate a contract, as provided in subsection (a), with the most highly qualified firm selected under section 1103 of this title. If the agency head is unable to negotiate a satisfactory contract with the firm, the agency head shall formally terminate negotiations and then undertake negotiations with the next most qualified of the selected firms, continuing the process until an agreement is reached. If the agency head is unable to negotiate a satisfactory contract with any of the selected firms, the agency shall select additional firms in order of their competence and qualification and continue negotiations in accordance with this section until an agreement is reached.”

Question 7:  The new SOQ instructions specifically address “key” personnel and it was stated that “new” staff, not on the org chart, cannot be added within the first 6 months of the contract. In conjunction with bullet #1, now it’s based on most qualified with a maximum rate that is available within the first 6 months even though the contract is usually 3 years long. If the maximum is applicable for the entire duration of the contract, even if you add someone in year 2, the cap has not been raised.

The addition of consultant staff guidance was developed in coordination with ACEC and Small Business Council. The evaluation of the most qualified team is performed during the consultant selection process. The awarding agency will utilize the most qualified team identified during the consultant selection process. Changes to the composition to the team will be evaluated on a case by case basis as provided in 23 CFR 172.9(d). Reasonable rates are established during the negotiation process. The rates agreed upon during negotiations are for the life of the contract. Consultants are encouraged to maintain an employee retention plan to minimize any disruptions of services or change of personnel that would adversely impact the composition of the team and project delivery.

Question 8:  Personnel with relevant “Caltrans” experience and PE license with a minimum of 5 years experience as Resident Engineer, which is usually the criteria, would make more in base salary than the top of Caltrans’ Transportation Engineer Range D which has a top base rate of $59.87. The minimum PW per their example, base + fringe, is $82.74/hr. This is based on DIR base rate of $50.05 + fringe of $32.69. In my years of consulting and administering over 15 Caltrans contracts I have never had an employee at the RE level with over $32 of fringe benefits.

Caltrans must evaluate proposed rates for fairness and reasonableness in accordance to 23 CFR 172.11(2). The DIR established the minimum base wage and fringe benefit wages. Caltrans recognizes that consultants account for wages as direct labor and fringe benefits as indirect cost. Fringe benefits is defined per 2 CFR 200.431 as follows “Fringe benefits are allowances and services provided by employers to their employees as compensation in addition to regular salaries and wages.” Consultants will be reimbursed for fringe benefits or fringe benefit allowances as indirect costs in conformance to 2 CFR 200.431. All consultants are expected to account for fringe benefits consistently on all work per FAR Part 31. Caltrans will reimburse fair and reasonable wages excluding fringe benefit costs as direct labor.

Example Scenarios:

• Scenario 1:  A consultant proposes a PE with 7 years of experience to provide construction inspection. The consultant pays the employee $82.74. Caltrans will reimburse the $32.69 as Indirect Cost and reimburse $50.05 as direct labor.

• Scenario 2:  The consultant proposes a PE with 15 years of experience to provide construction inspection. The consultant pays the employee $107.76. Caltrans will reimburse $32.69 as Indirect Cost and reimburse the $75.08 as direct labor. This ensures that Fringe benefits allowances and services are accounted for consistently for all consultants per 2 CFR 200.431.

Question 9:  When you add in the fact that smaller firms, in order to compete, sometimes has to pay a higher base rate to attract good personnel it complicates matters even further.

Caltrans is committed to maximizing small business, Disadvantage Business, and Disadvantaged Veteran Business participation. Caltrans anticipates that the New Streamline Negotiation process will maximize small business opportunities and participation.

Caltrans must perform fair and reasonable evaluations consistently to all consultants. The Fair and reasonable evaluations of proposed costs will ensure that all consultants have an equal opportunity to thrive and succeed as required by both state and federal regulations.

Question 10:  In light of the new cost proposals, I understand we need to include the fringe benefits paid by the company for employees listed on the cost proposal. Please provide, on letterhead or an official document, how you are defining and what should be included in “Fringe Benefits.” We want to make sure we have the correct information to address the request and are consistent across the board.

Fringe benefits is defined per 2 CFR 200.431 as follows “Fringe benefits are allowances and services provided by employers to their employees as compensation in addition to regular salaries and wages.” The DIR has established the minimum prevailing base wage and Fringe Benefit wages. Caltrans considers dollars above the prevailing base wage to be fringe benefits allowance when a consultant has not provided the minimum fringe benefits required by DIR. Furthermore, Caltrans will conduct a fair and reasonable evaluation of proposed costs in accordance to 23 CFR 172.11.

Question 11:  Can you define FCCM?

FCCM stands for Facilities Capital Cost of Maintenance. It includes the costs of the firm’s ownership of a building or other infrastructure for the company.

Question 12:  Who is eligible to use the SHR and how would a firm know if they are eligible?

Please request the Safe Harbor Rate information by contacting A&E Customer Service.

Question 1:  One item of concern is that before the contract is advertised and before it is listed on the look ahead report the district staff have been told they are not allowed to discuss with consultant the subject project information or any details. This makes it very difficult to research the project and being able to put together a good proposal and understand the projects need.

It is Caltrans’ intent to make the same information available to all consultants at the same time. The intent of this process is to ensure that all A&E consulting firms receive the same information at the same time to avoid the perception of providing an unfair advantage. We encourage consultants to continue directing all questions to the A&E Customer Service email.

Question 2:  During the cost negotiation phase (submittal of cost proposal), are we allowed to add additional staff members that were NOT included in the SOQ SF330 Key Personnel Resumes and Org Chart?

A&E contract procurements are achieved through the qualification-based selection process. Caltrans Selection Committee members evaluate and select the Most Qualified team based on personnel qualifications specified in the SOQ. As such, Caltrans will utilize the staff listed in the SOQ to perform assigned work. Personnel requests are not permitted within six months of the SOQ submittal due date for the contract.

Question 3:  Has there been discussion of updating the SOW Templates for these contracts?

Yes, there has been discussion to update the scope templates. Once the new Streamline process is fully implemented, DPAC may have additional resources available to update the Scope of Work Templates (SOW) for contracts as deemed appropriate.

Question 4:  Are primes required to submit Good Faith Effort (GFE) supporting documentation (emails from interested subconsultants, copies of advertisements, etc.) with their SOQ? Or is submitting the Goal Documentation forms without the supporting documentation sufficient?

It is highly encouraged that Good Faith Effort (GFE) documentation be submitted with every SOQ submittal to ensure that the responsiveness status of a team remain should one of the DBE firms lose its DBE status and the goal is no longer met during the contract procurement process.

Question 5:  Where can I obtain a copy of the SOQ Responsiveness Checklist?

The SOQ Responsiveness Checklist (PDF) is posted on Procuring A&E Contracts webpage.

Question 6:  Is it correct that Good Faith Effort (GFE) isn't accepted for DVBE?

Correct. As of July 28, 2009, the Good Faith Effort (GFE) is no longer an option to meet the DVBE participation goal, pursuant to Assembly Bill 21 of the Fourth Extraordinary Session (AB4X 21).

Question 7:  How is classification defined?

See the specific Scope of Work for employee classification (i.e., Contract Manager, Task Order Manager, etc.).

Question 8:  Are photos of certifications required when submitting the SOQ? Or can they just be listed in the resume/organization chart?

Copies of required certifications are to be submitted with the SOQ.

Question 9:  Where do we send protests?

Send protests to DPAC.Protest.Disputes.Terminations@dot.ca.gov.

Question 10:  It seems that many of the contracts state the projects are subject to prevailing wage; however, if no actual work is subject to prevailing wage and is just design work, for example, should we state our employees are not subject to prevailing wage requirements?

Each firm shall indicate in their submittal letter whether or not the firm is subject to prevailing wage requirements by the California Department of Industrial Relations (DIR).

Question 11:  Is the DBE goal 18%

Please read each RFQ carefully, as each RFQ will have a different DBE/DVBE participation goal requirement.

Question 12:  If we have to provide all resumes in Section E, do you have to put everyone in Section G or just key staff in that section?

Refer to the SOQ Submittal Instructions referenced in the specific RFQ. Section G is for Key Personnel Participation in Example Projects.

Question 13:  If we have to identify staff by Caltrans classification in Section E, will Caltrans be providing a spreadsheet of Caltrans' or State of California job classifications relevant to the procurement?

Refer to the SOQ Submittal Instructions referenced in the specific RFQ. Each RFQ will have a scope of work with descriptions of job classifications relevant to the procurement.

Question 14:  In part E, is it correct that only key personnel resumes must be submitted, and that remaining non-included individual resumes on the org chart will be requested when awarded?

Incorrect. All personnel, including the non-key personnel, must have a resume listed in section E.

Question 15:  When will the SOQ Submittal Instructions, available on the Procuring A&E Contracts webpage, be revised to incorporate the changes/clarifications being communicated and highlighted in the Outreach presentations?

The SOQ Submittal Instructions are currently revised and will be updated periodically.

Question 16:  Are all resumes (not just key personnel) required to be in SF330 format?

No, key personnel are required to have a resume listed in the SF330 format, but non-key personnel may be listed on a form of the consultant’s choice that meets the requirements for content and length.

Question 17:  Regarding the Disclosure of Conflict of Interest form that has to be attached after the Transmittal letter is it for Prime or subs?

The disclosure of Conflict of Interest form is required for both the Prime and subconsultant. Please reference the RFQ instructions, Section III, Conflict of Interest.

Question 18:  Do all sub firms need to be registered with DIR, even if their job or service is exempt from prevailing wages?

A SOQ shall not be accepted, nor any agreement or sub-agreement entered into without proof of the prime consultant, subconsultant(s), or vendor current registration to perform work subject to prevailing wage requirements pursuant to LC section 1725.5 [LC 1771.1(b)].

Question 19:  In section H, are Subs allowed one page or two pages?

In section H, each subconsultant is allowed 2 pages to include additional project examples.

Question 20:  It was mentioned that Caltrans Analysts may start reviewing a SOQ submitted prior to the 3:00 PM deadline. If a team submits their SOQ, then realizes there was a missing piece of information, and then resubmits their SOQ before the 3:00 PM deadline, will the Caltrans Analyst recognize the revised submittal? Or, will the team just be disqualified based on their original SOQ?

Yes, the Caltrans A&E Analyst will recognize the revised submittal as long as it is received before the 3 PM deadline.

Question 21:  Is there a page limit for the Communication Plan?

No, there is no current page limit, but it should not need to be more than 2 pages long..

Question 22:  Can a prime with under 50 staff still complete the requirements of firms over 50? This would be so the firm can be ready as it grows past the 50 people requirement.

Yes.

Question 23:  Is a statement from our HR department declaring our adherence to non-discrimination laws and standards under State of California laws and regulations admissible as an appropriate Non-Discrimination policy for Caltrans? Does Caltrans have any additional non-discrimination policies or requirements?

Yes, a statement from your Human Resources Department is sufficient.

Question 24:  Should resumes be numerically ordered according to role defined in the cost sheet?

Refer to the SOQ Submittal Instructions referenced in the specific RFQ. All proposed personnel to be utilized shall be grouped by firm. Personnel resumes shall be arranged by classification and numbered for each individual firm.

Question 25:  In addition to the Conflict of Interest Documentation, is that true that some sort of COI statement is required in the Transmittal Letters?

Refer to the SOQ Submittal Instructions referenced in the specific RFQ. Any COI should be listed in the transmittal letter as well.

Question 26:  Does Section 1 - Transmittal letter Section D describe if you must include former Caltrans employees listed on the org chart?

Yes, this is correct. Section 1 of the SOQ instructions requires the Prime to provide information on any former State of California, Department of Transportation (Caltrans) employee(s) listed on the organizational chart by the prime, and/or subconsultants, and/or vendor services providers.

Question 27:  Can I debrief if I didn't win; and if so, when? Also, can I obtain the proposals of the competitors?

Debriefing is available to anyone that submitted a SOQ. The debriefing meeting of the initial and final evaluation can be scheduled with the District Contract Manager for that contract. The debriefing may only cover your own evaluation of strengths and weaknesses..

Question 28:  For the interview, is Caltrans looking for the Example Task Order presentation to be either 10 minutes or 15 minutes?

The Example Task Order presentation is the consultant’s opportunity to demonstrate the consultant’s knowledge of the SOW, the approach to delivering the work, and the challenges/risks associated with the deliverables.

Question 1:  Do you know if ACEC or another professional engineering association plans to host a workshop to feature the same presentation?

Caltrans is committed to holding New Streamline Contract A&E Procurement Process events to inform, educate, and coach all A&E consultants. These events will be held on a monthly basis. Flyers for the events will be posted on the Division of Procurement and Contracts (DPAC) website, under Outreach Events. Caltrans will also continue to announce upcoming events regularly at ACEC, Small Business Council, and CalMentor events to maximize participation of small businesses, Disadvantaged Business Enterprises, Disadvantaged and Veteran Business Enterprises. Everyone is encouraged to attend and share event information with their team and partners (prime, subconsultants, and vendors). Caltrans will also prepare and post training videos of the presentation and a Frequently Asked Questions link.

Question 2:  Was Small Business Council and ACEC informed with sufficient time before implementing the process?

Caltrans has shared the New Streamline A&E Contract Procurement Process with both Small Business Council and ACEC as well at CalMentor events and several contract outreach events held since December 2019. The existing training outreaches are meant to detail new process material and ensure A&E consultants and partners understand future expectations before their first contract. Once implementation begins, Caltrans is including a grace/training period to allow additional time for information submittal to ensure future success. Caltrans believes that the New Streamline A&E Contract Procurement Process will benefit all consultants especially small businesses, DBE, and DVBE businesses as it will expedite contract execution and allow firms to begin work much faster.

Question 3:  Will this new process apply for Local Agencies projects?

Local Agencies are encouraged to adopt the Caltrans Local Assistance Procedures Manual, Chapter 10, in regard to procurement of A&E contracts.

Question 4:  A&E procurement is based on qualification-based selection. DPAC is changing this selection process by changing firms’ financial system. Please share DPAC views.

The New Streamline Contract A&E Procurement Process only affects the Advertisement phase (SOQ Submittal Instructions) and the Negotiation phase. The qualification-based Consultant Selection process (SOQ review and Interview) will remain the same and financial documents cannot be accepted during this phase. Submittal of the financial documents occurs during the negotiation phase.

As provided in 40 U.S.C 1104 (b) “Order of Negotiation. -The agency head shall attempt to negotiate a contract, as provided in subsection (a), with the most highly qualified firm selected under section 1103 of this title. If the agency head is unable to negotiate a satisfactory contract with the firm, the agency head shall formally terminate negotiations and then undertake negotiation with the next most qualified of the selected firms, continuing the process until an agreement is reached.”

Question 5:  Is this new process part of Federal guidelines and consistent with AASHTO/FHWA? Other DOTs are implementing similar procurement process?

The Streamline A&E Contract Procurement process has been developed to improve and ensure compliance with both State and Federal regulations for Architecture and Engineering contract procurements. This procurement process conforms with both state and federal regulations including Government Codes 4525 et seq. and Code of Federal Regulations (CFR) Title 23, Part 172.

Caltrans is excited to implement this process and is committed to improving efficiency as a leader in transportation. Once this process is fully implemented, the timeline for contract execution will be consistently faster. Expediting procurement allows consulting firms to have contracts executed in a timely manner and begin work within 75 business days from the district’s/program’s contract request.

Question 6:  Many of the components of this process are being utilized by other State DOTs. Will a copy of the presentation be available?

The presentation will be updated and made available.

Question 7:  We are in process of submitting a proposal for advertised contract, when this new policy will be effective on?

Caltrans intends to implement documentation for the new process on different dates before the first contract is advertised mid-November to ensure a smoother transition and full understanding of the requirements.

Question 8:  Is the financial folder available to everyone so that we can review before proposal submittal? If so, where is it available?

Caltrans encourages all A&E consulting firms to request new information at their earliest convenience for review and understanding before competing for an A&E contract. The Financial Folder Structure can be requested by contacting A&E Customer Service.