PEPS DIVISION. Presentation for TxDOT Alliance HUB Symposium August 18, Professional Engineering Procurement Services (PEPS)
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1 PEPS DIVISION Presentation for TxDOT Alliance HUB Symposium August 18, 2016
2 Agenda Topics PEPS Introduction FY 2017 Procurement Plan Statewide FY 2017 Procurement Plan Houston Projects TxDOT Administrative Qualifications TxDOT Precertification 2
3 PEPS Mission Mission Work with our TxDOT customers and external partners to procure the most qualified consultants to deliver effective solutions for Texas Goals Deliver the right projects; Focus on the Customer; Foster Stewardship; Optimize System Performance; Preserve our Assets; Promote Safety, and Value our Employees Values People, Accountability, Trust, Honesty Professional Engineering Procurement Services represents the consolidated procurement organization supporting engineering, architectural and surveying contracts 3
4 PEPS - Organizational Chart Division Director: Martin L. Rodin, PE FTE Allocation: 89 Actual FTEs: 93 PEPS Division Director: Martin Rodin Center of Excellence Manager Dan Neal, PE Deputy Director Lucio Vasquez, PE El Paso Service Center Manager Efrain Esparza, PE Business Operations Manager Roy Gonzales Executive Assistant Kristina Kottke Austin Service Center Manager Charles Davidson, PE Central Service Center Manager Jaime Vela, PE Dallas Service Center Manager Joe Jancuska, PE Ft. Worth Service Center Manager Norma Glasscock, PE Houston Service Center Manager Gail Morea, PE San Antonio Service Center Manager Kori Rodriguez, PE 4
5 PEPS - Leadership Team Austin Service Center Charles Davidson Dallas Service Center Joseph Jancuska Fort Worth Service Center Norma Glasscock Houston Service Center Gail Morea San Antonio Service Center Kori Rodriguez El Paso Service Center Efrain Esparza Central Service Center Jaime Vela Jr. Division Director Martin L. Rodin Deputy Division Director Lucio Vasquez Center of Excellence Dan Neal Business Operations Center Roy Gonzales 5
6 PEPS - Division Director s vision Information Rich Environment Disqualifications ZERO disqualifications Improved contract screening Automated processes Earlier DQ notification Q&R Enhancement CST Boot Camps Intensive Q&R review Improved Q&R templates Information Sharing Post annual procurement plan online Post CST member names in RFQ Improved debrief process 6
7 PEPS Operating Statistics ANNUAL PROCUREMENT Consultant contract amount FY 2015 $795 Million Consultant contract amount FY 2016 $1.37 Billion INVOICES Number of Invoices Processed FY 2015 Over 4,000 Percent of Invoices Paid on Time FY % Number of Invoices Projected FY 2016 Over 6,000 CONTRACTS Number of Contracts Managed FY 2015 Over 400 Number of Contracts Projected FY 2016 Over 600 WORK AUTHORIZATIONS Number of WA currently in Queue 178 Number of WA Under 90 Days 148 7
8 Agenda Topics 1 PEPS Introduction FY 2017 Procurement Plan Statewide FY 2017 Procurement Plan Houston Projects TxDOT Administrative Qualifications 5 TxDOT Precertification 8
9 PEPS FY 2016 Accomplishments Procurement Plan Status The FY16 procurement plan approved in August 2015 provided for 60 solicitations (contract bundles) for a total of 279 contracts totaling $789 million. The modified FY16 procurement plan as of June 2016 provided for 71 solicitations (contract bundles) for a total of 398 contracts totaling $1.37 Billion. Amended Plan 71 Solicitations 398 Contracts $1.37 B $789 M Original Plan 60 Solicitations 279 Contracts 9
10 Future Letting Volume FY 2017 to FY 2025 Billions Prop 7 Will Significantly Increase Letting Volume $6.5 Billion Average Letting (FY ) $4.3 Billion Average Letting (FY ) Baseline Additional MAP-21 Proposition 7 10
11 PEPS FY 2017 Annual Procurement Plan Architecture $6,400,000 Bridge Inspection $52,000,000 Bridge On/Off Replacement $9,000,000 Construction, Engineering, Inspection (CEI) $191,080,000 CPM $6,000,000 Engineering $1,000,000 GEC/PMC $40,000,000 Geotechnical $19,000,000 Hydraulic $18,000,000 Other (describe in Comments) $16,000,000 Planning $17,000,000 Plans, Specifications and Estimates (PS&E) $412,568,500 Procurement Engineering $20,000,000 Schematic $25,000,000 Schematic / Environmental $200,000,000 FY WAVE PLAN Wave 1 - $407 M Wave 2 $262 M Wave 3 $364 M Wave 4 - $136 M Schematic/Environmental/PS&E $44,860,000 Survey $58,000,000 Traffic Engineering $16,000,000 Traffic Signal Timing $5,000,000 Utility Engineering $12,000,000 Materials Engineering $12,000,000 Facilities Engineering $6,500,000 Independent Engineer $20,000,000 Traffic & Revenue $5,000,000 Grand Total $1,212,408,500 11
12 PEPS Future Procurement Direction Future Project Mix (PEPS Steering Committee) 50% Indefinite Deliverable (ID) 50% Specific Deliverable (SD) Future CEI will be Specific Deliverable by project Future GEC will be Specific Deliverable by project Future CEI will be one page work authorization at execution Minimize preclusion between Design and Construction Consider 5th wave as procurement volume increases Improve CST participation by Senior Staff 12
13 PEPS Where do I start 13
14 Agenda Topics 1 PEPS Introduction FY 2017 Procurement Plan Statewide FY 2017 Procurement Plan Houston Projects TxDOT Administrative Qualifications 5 TxDOT Precertification 14
15 FY 2017 Houston District Solicitations Pending (Subject to Change) Wave 2 - Houston Service Center to Procure Hydrology/Hydraulics ID Contracts (HOU, SAT & Statewide) - 8 contracts at $2M per contract Ferry Vessel Design SD Contract for Galveston Ferry Office IH 45 Schematic Services from IH 610 to IH 69 Traffic Signal Timing ID contracts for HOU- 5 contracts at $1 M per contract Wave 3 - Houston Service Center to Procure Post Oak Dedicated Bus Lane -1 CEI Federal SD Contract (formerly Wave 2) IH 610/US59(I69) Interchange-1 CEI Federal SD Contract (formerly Wave 2) Schematic/Environmental Services (HOU and SAT) includes innovative traffic needs - 15 ID contracts at $5M per contract Wave 4 - Houston Service Center to Procure Planning, Access Management and Traffic Analysis Studies - 2 contracts at $2M per contract 15
16 PEPS Houston - Procurement Tips Check that all mandatory forms are in your package! Keep alert to amendments! Showcase your PM and task leaders by focusing on details, challenges, their resolutions while identifying best practices whether the question directly requests that information or not. Present innovative ideas or alternatives Be clear, concise and technical. Take ownership! Use space wisely, it is not for marketing! QA/QC the SOQ by referring directly to the RFQ to avoid disqualifications. Use your best examples and give credit to the firm that performed the work under your team, as applicable. 14
17 PEPS Houston - Status of Recent Improvements: Improvements to the PTC form being made with future goal of automation. Phase 1 was introduced in Wave 4 for Precert Check. Phase 2 to be introduced during FY 2017 Wave 1 for AQ Check Standard NLCs conversion to standard pre-certified work categories has been delayed DQ notification format contains the reason for DQ Watch the HUB codes or DBE codes! Comptroller/Civil Rights Audit Findings: more emphasis on future monitoring of HUB goals or DBE as well as commitments made in Exhibit H-1 Payments to DBE or HUB sub-provider are to be recorded in the PS-CAMs portal by the Prime Provider. See instructions on TxDOT website on how to perform this. May impact payment of invoices if prime falls behind in the data entry into PS-CAMS. 15
18 Agenda Topics 1 PEPS Introduction FY 2017 Procurement Plan Statewide FY 2017 Procurement Plan Houston Projects TxDOT Administrative Qualifications 5 TxDOT Precertification 18
19 Administrative Qualifications Defined in the Texas Administrative Code, Title 43, Part I, Chapter 9, Subchapter C Process used by TxDOT to verify that a provider: Has a Federal Acquisition Regulation (FAR) compliant indirect cost rate 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 19
20 Options for Administrative Qualifications Two options for becoming administratively qualified Option 1: Audit Requires the preparation of a FAR compliant audit report. A qualified public accountant or Acceptable federal, state, or local agency Results in a FAR compliant indirect cost rate Option 2: Self Certification Requires the completion by the firm of a: cost report and an internal controls report Both reports must be signed by a company officer and notarized Results in a FAR compliant rate 20
21 FAR Compliant - Indirect Cost Rate As approved by PEPS Administrative Qualifications (AQ) 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 21
22 Posted List Administrative Qualification Status Not required for every firm Requirements vary by selection process Federal Process most restrictive Comprehensive, Streamlined, and Accelerated processes offer more flexibility 22
23 Administrative Qualifications - Federal Process Administrative Qualifications (AQ) required for all firms providing engineering and design related services with an effective rate by SOQ deadline What about firms not subject to the requirement? They may be administratively qualified If not AQ, 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 AQ process? The only option to establish eligibility is to use Federal Safe Harbor Rate 23
24 Federal Safe Harbor Rate FHWA is conducting a pilot program to evaluate 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 an FAR compliant indirect cost rate TAC 9.35, Federal Process, allows safe harbor rate to be used by Texas in pilot program 24
25 Safe Harbor Indirect Cost Rate Test & Evaluation Safe harbor indirect cost rate is 110%. Eligibility must be approved by the TxDOT AQ Group prior to the closing date of the solicitation in order to compete. Test period for use and application of the safe harbor indirect cost rate on new contracts will expire on December 31, We are waiting on FHWA for guidance for the program moving forward after December 25
26 Safe Harbor - Eligibility Considerations 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 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 26
27 Safe Harbor - Eligibility Considerations 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 FAR The firm is not currently AQ and has not been previously AQ qualified by TxDOT 27
28 Safe Harbor - Additional Guidelines The firm must complete and submit the AASHTO internal control questionnaire. On TxDOT webpage. 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. If needed, a field rate will be negotiated 28
29 Accelerated, Streamlined, & Comprehensive Processes If not exempt, the firm must be AQ or accept an indirect cost rate developed by TxDOT This must be done by the date of selection For a selected team: 1. A firm may be administratively qualified 2. Non-engineering firms are exempt 3. Engineering services that are exempt: Bridge Inspection Materials Inspection and Testing Geotechnical Engineering Surveying and Mapping Subsurface Utility Engineering Architecture 4. If none of the above, they can accept TxDOT developed rate of 120%
30 Exempt Status Means TxDOT does not expect a firm to be AQ (although a firm is not prohibited from becoming AQ) If AQ, the approved indirect cost rate will be used If not AQ: 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
31 Agenda Topics 1 PEPS Introduction FY 2017 Procurement Plan Statewide FY 2017 Procurement Plan Houston Projects TxDOT Administrative Qualifications 5 TxDOT Precertification 31
32 Precertification Defined in Texas Administrative Code, Title 43, Part I, Chapter 9, Subchapter C, 9.33 Process used by TxDOT to establish minimum qualifications to perform work under a standard work category Requirement in order to be eligible for TxDOT Professional Service Contracts TxDOT advertises work to be performed using precertification work categories Firms providing task leaders must have active precertification status by the closing date of the solicitation 32
33 Precertification of Firms and Employees Employee Precertification Based on an individual s ability to meet requirements Professional and Educational Qualifications Previous Project Experience Firm Precertification Based on precertified individuals employed by the firm Some categories require specialized equipment Status can and will vary as employees come and go 33
34 Work Categories and Work Category Format 78 Separate Work Categories, divided into 16 Groups Basic Format Category Description Basic description of type of work Certification Requirements Professional Qualifications Experience Education These are the minimum technical requirements 34
35 Work Category Online 35
36 Applying for Precertification Application information can be found on the TxDOT website: Application is done online TxDOT Computer User ID is needed to begin The application process can take up to 60 days to complete 36
37 Q & A 37
38 THANKS 38
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