The Procurement Juggernaut
By Perry Mitchelmore, P.Eng.
When I was a young man at Engineering School, a professor boasted that as engineers we do the “difficult” right away, the “impossible” will just take a little longer. That is the culture of ingenuity and creativity that exists in school. When I entered the engineering consulting world after graduation it was “A good engineer can design for a dollar what any old engineer can design for $5”. Fast forward 25 years in the workplace and it seems “everything” must be done right away, and ingenuity / creativity are shunned as “risky” and everyone wants the $5 solution! What happened along the path that led to this destination?
Part of the problem is the method of hiring professional engineering firms that work as consultants. About one in five professional engineers work in professional services as consultants. We work in big and small firms, private and public, and submit proposals regularly for work that requires a professional engineer, either a result of regulations, skill and knowledge. The preferred method of hiring by procurement professionals is a request for proposal (RFP), with each task broken down by hour and expense in a Time-Task-Matrix (TTM), where you outline “exactly” what you are going to do before you know what the problem is and the cost of your time and knowhow. A colleague described it as a “stab in the dark to the nearest decimal place”!
The system has an unconscious bias towards pre-packaged solutions, much like a commodity. In fact, many (most actually) procurement groups tell you how to present you “Proposal” such that it is easily compared to what other competitors are offering. Apples to Apples so to speak. Implicit is the assumption an engineer with equivalent “time” experience is the same as another engineer with similar time experience. One firms solution is as good as the next. Nothing unique. This explains in part why the $5 solution is so common.
Professional engineering services is NOT a commodity; there are many in our profession who act like it is, even many who think that it is, but make no mistake there is no such thing as a commodity in engineering. Its just plain wrong to believe that you do cannot be distinct and uniquely original. Tim Williams has written some great articles on marketing of professional services, but one line stands out for me, “When seeking to compare apples to apples, our job as professional service firms is the be an “orange”.
Qualification Based Selection (QBS) provides for an alternate form of procuring professional engineering firms by removing pricing from the evaluation stage, Pricing does come into pay later in negotiation, and there is no commitment to contract until an agreed pricing and scope are established. QBS is the preferred method of procurement by engineers because it provides a forum for creativity and ingenuity. If done correctly, it encourages apples, oranges, peaches and even vegetables, because a diversity of ideas is the source of innovation.
If beverage companies can sell us bottled water when the tap water is perfectly safe, then surely professional engineers can differentiate. We just need to believe we can…do the “impossible”. It will just take a little longer!