The use of qualifications-based selection in public procurement: A survey research
| DOI | https://doi.org/10.1108/JOPP-03-02-2003-B004 |
| Published date | 01 March 2003 |
| Pages | 215-249 |
| Date | 01 March 2003 |
| Author | Yuhua Qiao,Glenn Cummings |
| Subject Matter | Public policy & environmental management,Politics,Public adminstration & management,Government,Economics,Public Finance/economics,Texation/public revenue |
JOURNAL OF PUBLIC PROCUREMENT, VOLUME 3, ISSUE 2, 215-249 2003
THE USE OF QUALIFICATIONS-BASED SELECTION IN
PUBLIC PROCUREMENT: A SURVEY RESEARCH
Yuhua Qiao and Glenn Cummings*
ABSTRACT. Public agencies have started to shift away from the
traditional lowest responsive and responsible bid to other approaches in
purchasing certain items and services. These alternative approaches emphasize
the quality of the products and the qualifications of the vendors. The purpose of
this article is to explore the use qualifications-based selection (QBS) and other
non-traditional source selection methods in public procurement processes. An
online survey was sent out to 1665 members of the National Institute of
Governmental Purchasing, and a mail survey sent a random sample to 300
American Public Works Association members. The survey results show that
while the traditional lowest responsive and responsible bidding is still the
dominant selection method when all procurement is considered, QBS and other
non-traditional methods have gained wide acceptance and use in public agencies,
especially for the purchase of professional services and information technology.
INTRODUCTION
Public procurement is an old and a big business1 (Thai & Grimm,
2000; American Bar Association, 2000). But only until recent years
have public officials realized their strategic role in contributing to the
improvement of public services. For public procurement to meet such an
important responsibility, governments have reengineered or reformed
many aspects of the public procurement process. In this article the
authors examine the changes in one of these aspects – how public
agencies select vendors.
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* Yuh ua Qiao, Ph.D., is Associate Professor, Department of Political Science,
Southwest Missouri State University. Her research interests are in public
budgeting and financial management and in general public administration.
Glenn Cummings, CPPO, is Director, Purchasing Division, Broward County,
Florida. He was the past president of the National Institute of Governmental
Purchasing and presently serves as Parliamentarian for this organization.
Copyright © 2003 by PrAcademics Press
216 QIAO & CUMMINGS
One emerging phenomenon in source selection is that public
agencies have started to shift away from the traditional lowest responsive
and responsible bid to other approaches in purchasing certain items and
services, ranging from Request for Proposal (RFP) to qualifications-
based selection (QBS). These alternative approaches emphasize the
quality of the products and the qualifications of the vendors. The
purpose of this article is to document and explore the degree to which
QBS and other non-traditional selection methods are used in public
procurement processes. As a pioneer study on the use of QBS, this
research is important. Its results will allow both practitioners and
academia to understand better selection practices of public procurement
at the present and in the near future. To explore the use of qualifications-
based selection in public procurement, this article has four parts. The
first part reviews the literature regarding recent changes in public
procurement and highlights the recent emphasis on qualification-based
selection. The second part explains the research method. The third
section discusses the findings in reference to the existing literature. The
conclusion discusses the policy implications of this study and highlights
future research.
SOURCE SELECTION METHODS IN PUBLIC PROCUREMENT: A
LITERATURE REVIEW
With public demand for more effective and efficient services and with
dramatic increasing use of information technology, public procurement
has faced challenges and opportunities in recent years. Thai and Grimm
(2000) noticed the environmental changes and the consequent issues
public agencies have faced in recent years. Pettijohn and Qiao (2000)
explored how public agencies have changed their ways to procure
information technology (IT). McCue and Pitzer (2000, p. 400) stated
that “in the face of growing uneasiness by elected officials, service
delivery managers, and citizens about rule-driven process, inefficient
systems, and poor management of resources, purchasing professionals
are being challenged to develop new dynamic, adaptable structures.”
Reforms in public procurement practices and process are inevitable,
given the social and technological changes and the increasingly complex
nature of public procurement. The traditional procurement system
formed during the first part of the twentieth century is rules-driven and
regulations-driven. These rules and regulations attempt to provide equity,
integrity and efficiency in the public procurement system2 and worked
USE OF QUALIFICATIONS-BASED SELECTION IN PUBLIC PROCUREMENT 217
well in an environment in which government tasks were relatively simple
and straightforward and when procurement dealt with simple
commodities. However, as government jobs became more complex and
its procurement, particularly the information technology and professional
services acquisitions, became more intricate, many of the rules were
outdated and severely limited the central procurement office's ability to
respond to these changes (Kelman, 1990; National Association of State
Procurement Officials [NASPO], 1999).
Traditional Source Selection Method: Competitive Sealed Bidding
While many changes have occurred in public procurement systems,
the focus of this research is on how public procurement agencies select
vendors and award contracts. “The evaluation of bids and offers is a
highly significant part of the purchasing process. It brings together the
two principal aims of public contracting: economy and fairness”
(Council of State Governments, 1987, p. 72). Under the traditional
procurement system is the long-standing policy recommendation that
“competitive sealed bidding be the preferred method of contracting
above a certain dollar amount” (NASPO, 1997, p. 1). All government
procurement statutes require that under competitive sealed bidding, a bid
is awarded to the lowest responsible and responsive bidder.
“Responsiveness” means that the bid meets all of the material terms of
the solicitation’s requirements. “Responsibility” means that the bidder
“has the capability, financial capacity, and integrity to perform the
contract” (NASPO, 1997, p. 66).
The rise of competitive sealed bidding during the mid-20 century was
necessary to prevent waste and corruption in public procurement. This
practice opens the process to public scrutiny. All the sealed bids are
opened publicly and the award goes to the lowest bidder, not to favored
vendors. “Awards to other than the lowest bidder must be clearly
explained in terms of the previous stated criteria” (Lynch, 1995, p. 331).
Competitive sealed bidding worked well then, and it still works well
now in determining awards when the product or services are essentially
identical, irrespective of which bidder receives the award. However,
there are situations where it is impossible to delineate adequately the
differences among bidders when the award must be on a strict
competitive bid basis. To address this inadequacy in the traditional bid
system, some governments have enacted laws that grant procurement
officials discretion to take action deemed to be most advantageous to the
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