by Guest Blogger Nan Johnson, VP Municipal Systems
The professional services agreement is a negotiated agreement that provides the municipality with a path to have a qualified systems integrator under contract to provide support for the water/wastewater plant control systems as well as their collection and distribution telemetry systems. Selection of an integrator may be made based on submitted qualifications to an RFP issued by the municipality or initiated by the systems integrator as a proposed agreement.
Why Pursue a Professional Services Agreement?
Such an agreement provides several advantages to the municipality. One is that they can secure a long-term supplier of services for the controls/automation portions of their treatment and collection/distribution systems without the repeated distraction (and associated costs) of the design-spec-bid-selection process. Once the qualified integrator is selected and a negotiated agreement reached, work may be performed, with municipality acceptance of submitted scope and bids for each task required, at agreed upon rates.
The second advantage is that the municipality is always presented with a clear scope of work and associated cost for each project, giving them an opportunity to ask questions and obtain a clear understanding of the scope prior to approval to proceed. They can confirm design requirements prior to the integrator submitting a formal bid for approval. And a third advantage is that any modifications to their control system are being performed by an integrator that has become familiar with the municipality’s standards or preferences and their work processes, eliminating the risk that may come with selecting a different integrator for each project, some (all) of which may not have the same level of familiarity, thus making modifications that don’t conform to standards/preferences.
The support services may include emergency support where the integrator is required to respond within a number of hours to provide assistance or on-site support. It may also involve maintenance support, where the integrator provides staff to maintain or calibrate field instrumentation, PLC hardware, HMI software and computer servers/workstations. The third area of support services that are included in the professional services agreement is where the Systems Integrator provides Engineering design and implementation services for modifications, upgrades, replacements or improvements to the control systems.
These services may be performed direct to the municipality or where the systems integrator works with a consulting engineer as part of the design phase for a project. The professional services agreement allows the municipality to have continuity in the system design and implementation with a single systems integrator rather than having multiple participants working on the control system. This helps to ensure standardization throughout the system. The municipality is the decision maker while the systems integrator provides technical direction and guidance that allows the municipality to make decisions based on technical options and financial analysis.
A municipality that wants to initiate obtaining a professional services agreement may issue an RFP, either as an open request for any integrator to respond to or to a small group (typically three) already selected based on qualifications. Successful candidates must meet the qualifications of the RFP. Responses typically include labor rates, travel expenses, and markup percentages on materials. The municipality will negotiate an agreement with the selected integrator covering types of work covered, length of the agreement, cancelation/renewal conditions, final accepted rates, and other typical project terms and conditions. It is common for this stage to require several revisions to reach acceptability by all parties. The final agreement is then presented to the municipality’s governing body (council, mayor, board of commissioners, etc.) for approval.
With an agreement in place, the integrator and an assigned representative for the municipality will establish expectations for the work tasks and schedule. Additional tasks may be assigned by the representative during the term of the agreement, for which the integrator establishes a scope and bid or not-to-exceed cost, and which must be approved by the municipal representative prior to the work actually taking place. Alternatively, the integrator may identify additional tasks which it feels are needed and present the scope/cost proposal to the representative for approval. In either case, the municipality’s representative must give approval before work can be performed.
Professional services agreements normally have a defined time frame of duration, typically two or three years, with extensions of from one to three years possible if both parties are in agreement. The possibility of an extension provides motivation to the integrator to perform well, while the limit on duration offers an exit opportunity for the municipality if they are unhappy with the integrator’s performance. The agreement is not authorization to perform work. As stated above, only the municipality’s assigned representative can authorize work to be done. Rather, the agreement defines the process and the guidelines under which work may be performed. Invoicing by the integrator adheres to a pay application policy defined in the agreement, typically requiring the representative to review and approve the invoice before it’s submitted to the municipality’s accounting department for payment.
Our clients with whom we have implemented professional service agreements have experienced the following benefits.
- Response time for emergency service is defined in the agreement, allowing the municipality to contact the integrator and receive necessary support (via phone, remote access, or on site) without having to generate a PO or contract, greatly facilitating problem resolution.
- The work related to planning, design, and implementation of upgrades, modifications, and improvements can be performed without involving a consulting engineer. The municipality takes the lead role in defining the scope while the integrator provides the services related to design and implementation.
- Standardization of design and software results from having a single integrator performing work over a period of time. Standards and procedures put in place at the onset of the agreement are carried out through every task or project. This allows the operations and maintenance personnel for the municipality to have consistency between plants, stations, and controls.
Professional service agreements may not be a fit for every municipality, but many are discovering the benefits of implementing such agreements for certain types of work within their water/wastewater control systems. If you want to learn more and have a representative call on you, simply contact us and indicate your interest in professional service agreements.