OAA Legal Opinion: Lowest Fee Not Required in Government Procurement

One of the largest misperceptions within the MASH (municipal, academic, school, hospital) sector is a requirement that all procurement must be based on the lowest price, a sentiment that then trickles down into the larger construction and design industry and beyond.

The Ontario Association of Architects (OAA) had issued a professional interpretation that the Broader Public Sector Procurement Directive does not apply to architectural services, and commissioned a legal opinion to get a definitive ruling.

The OAA has reported that one of Ontario’s most preeminent construction lawyers, Glenn W. Ackerley of WeirFoulds LLP, has similarly concluded that this perception regarding a lowest‐fee requirement when procuring architectural services “is mistaken” and that owners are free to instead focus on “best quality of service or design”.

The OAA would go one step further and suggest that any client or owner must make quality their sole focus. Why does this matter? It should actually matter a great deal to the MASH sector, to the people of Ontario as the end users of these facilities, and to the Government itself as both owners and responsible stewards of our tax dollars. We all have a stake in getting the best possible infrastructure.

The Federation of Canadian Municipalities (FCM) collaborated with the National Research Council Canada (NRC) and the Government of Canada to produce a National Guide entitled Selecting a Professional Consultant. While this Guide is worth sharing in its entirety, some key excerpts include:

  • While buying commodities through “tendering processes designed to identify the vendor with the lowest price” may be “cost‐effective for materials and equipment”, “consulting services, however, are not commodities and their procurement cannot effectively be obtained in this fashion”
  • While “the lowest‐priced proposal is often accepted on the assumption that it represents best value for the client [the] literature reviewed does not support this assumption.”
  • Best value for a client is “achieved when the focus is on finding the most effective, long‐term solution to a problem, not the cheapest design.”
  • “In the USA, the federal and most state governments have legislated against this method” of lowest‐fee procurement for architectural services

The Guide goes on to explore “lifecycle savings through design innovation,” finding that even a modest
increase in design cost (0.3 per cent) returns “savings in the ratio of 11:1”.

There is a growing focus and demand for infrastructure investment and Ontario is at a cross‐roads where
moving away from lowest‐price to true Quality‐Based Selection (QBS) is needed more than ever. It is time
for Ontario to get up to speed on something that our southern neighbours and many governments
around the world put to rest decades ago: architects must be selected based on qualifications.