a new partnership · norma glasscock, p.e. peps negotiations center manager. doug dillon, p.e. bge,...

2020 Transportation Short Course October 14, 2020

A NEW PARTNERSHIPNorma Glasscock, P.E.PEPS Negotiations Center Manager

Doug Dillon, P.E.BGE, Inc.

October 14, 2020


Presentation Topics

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1 • Negotiations History

2 • Communication & Partnering

3 • Next Steps

2020 Transportation Short Course October 14, 2020 3

Negotiations History

Why now?• Consulting process began in

1970s / early 1980s

• Consulting has continually evolved and has seen significant changes over the last 10 years

• Negotiation process has not been examined for corresponding changes along the way


Rapid Deployment - Forming

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Approval of an annual rate negotiation process by the Texas Transportation Commission on May 30, 2019

PEPS Negotiation Center formed on June 03, 2019

PEPS Negotiation Center Manager chosen on June 06, 2019

Submitted a request to ACEC to form a Negotiation Task Force (NTF) on June 14, 2019

First NTF meeting was held on July 25, 2019

The basic concept for the annual negotiation was shared by a NTF member in the August 2019 meeting

GOALAn annual negotiation process of substantiating reasonable and accurate industry rates (costs) that is simpler, less contentious, and recognizes changing market conditions while providing for fair and reasonable compensation considering the scope, complexity, professional nature, and value of the services provided.


Negotiation Task Force Experience - Storming

Platform to discuss consultant challenges in a broad sense

Defined the goals and expectation of a partnership between ACEC, consultants, and TxDOT

Enhanced transparency from both perspectives

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Rate Negotiations - Then and Now

Significant time and labor required

Prime negotiates for sub-providers

Communicate through email

110 hours per contract (14 days)

Historical Process

Minimal time and labor required

All firms negotiate their own rates

Communicate through virtual meetings

Three to five days to complete

New Annual Rate Negotiations Process


Communication and Partnering


Pilot Process Implementation

Workshops with consultant representatives as subject matter experts to:

• Improve the line item definitions of Unit Costs and Other Direct Expenses (ODEs)

• Develop an single ODE list of maximum and fixed rates

• Refine labor classification descriptions

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Performing

• Began in February• 52 out of 101 firms chose to

participate• Completed negotiations in 6 weeks

The Pilot

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Contracts Growth of the Pilot Program

Wave 216 procurements55 contractsInvolved 161 separate pilot participant rate tables

Wave 319 procurements87 contracts223 separate pilot participant rate tables

Total35 procurements142 contracts384 separate pilot participant rate tables

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Expanded Participation

Wave 46 ID contracts for districts use

2 of 6 completed34 new participants to date

Wave 1 FY 21Full implementation for awarded contractsAll consultants on teams will participate

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TxDOT Experience

Opened communication with consultant providers

Labor and time savings for TxDOT•Only 2 of 52 pilot consultant negotiations have required a 2nd mtg•Improved time to reach execution of contract•Frees time for the Procurement Engineer to better serve their customers

Consistent application of the process•Only 1 submittal required certified payroll to validate rates

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Consultant Firm Experience

Portfolios are growing

Negotiations can be customized for unique contracts and projects

Allows for more informed planning for the consultant

Platform to discuss consultant challenges by individual firms

Consistent application of profit and escalation

Adversarial aspect is diminishing

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Industry Engagement

ACEC Industry committee of 10 firms (variety of sizes and work efforts)

PEPS initiated 7 work groups of 6 industry representatives to explore standardized UCs and ODEs (51 different firms from across the state and a variety of sizes were invited to participate, approx. 1 in 7 firms were involved)

•PSE - Design•CEI•Geotech/Materials

•Survey•Utilities•Traffic Engineering

•Schematic/Environmental

4 virtual presentations on Partial Implementation – with over 60 participants

2 ACEC Chapter and 2 ASHE Chapter briefings16


Next Steps

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Industry Engagement going forward

TxDOT committed to continuing engagement of Industry Partner committee thru the rollout of Wave 1 2021

Ongoing online presentations/workshops to introduce firms to the process

Industry suggestions on how to prepare for your first negotiation

Industry feedback on the topic of risk/profit

Industry feedback on the topic of rate escalation


Doug Dillon, P.E.Exec. Vice President; BGE, [email protected]

Norma Glasscock, P.E.PEPS Negotiation Service Center [email protected]

Questions and Discussion

a new partnership · norma glasscock, p.e. peps negotiations center manager. doug dillon, p.e. bge,...

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