2.3 Qualifications-Based Selection (QBS) & Public Contracting (G.S. 143-64.31)

2.3 Qualifications-Based Selection (QBS) & Public Contracting (G.S. 143-64.31)

In North Carolina, the procurement of professional land surveying, engineering, architectural, and landscape architectural services by public bodies is governed by Article 3D of General Statutes Chapter 143, commonly known as the North Carolina Mini-Brooks Act (G.S. 143-64.31 through 143-64.34). The statute mandates a Qualifications-Based Selection (QBS) process, establishing as public policy that professional design and surveying services must be procured based on demonstrated competence and professional qualifications rather than competitive price bidding.

1. Statutory Purpose & Scope of the Mini-Brooks Act (G.S. 143-64.31)

Legislative Intent

The General Assembly recognized that selecting surveyors solely on the lowest bid encourages cutting corners in records research, boundary recovery, and precision tolerances, resulting in costly boundary disputes, delayed public infrastructure projects, and clouding of public land titles.

Covered Public Entities

The Mini-Brooks Act applies to all levels of state and local government in North Carolina, including:

• State Entities: State departments, agencies, institutions, the University of North Carolina system, and community colleges;
• Local Governments: Counties, cities, towns, and consolidated city-counties;
• Public Authorities: Sanitary districts, school boards, airport authorities, water and sewer authorities, and public transportation authorities.

+-----------------------------------------------------------------------------+
|                   THE NORTH CAROLINA QBS STATUTORY MANDATE                  |
|                                                                             |
|   "It is the public policy of this State and all public subdivisions to     |
|    announce requirements for surveying services, and to select firms on     |
|    the basis of DEMONSTRATED COMPETENCE AND QUALIFICATIONS for the type     |
|    of professional services required, WITHOUT REGARD TO FEE, and thereafter |
|    negotiate a contract for... services at a FAIR AND REASONABLE FEE."      |
|                                              -- G.S. 143-64.31(a)           |
+-----------------------------------------------------------------------------+

2. The Step-by-Step QBS Procurement Lifecycle

The statutory procurement workflow consists of an initial qualifications evaluation followed by a strict, sequential single-firm negotiation process:

+-----------------------------------------------------------------------------+
|                        THE 5-PHASE QBS LIFECYCLE                            |
|                                                                             |
|   Phase 1: PUBLIC ANNOUNCEMENT (Request for Qualifications - RFQ)           |
|            Public notice describing scope; NO FEE REQUESTS PERMITTED        |
|                                   |                                         |
|                                   v                                         |
|   Phase 2: QUALIFICATIONS EVALUATION & RANKING                              |
|            Agency evaluates competence, staff, experience -> Ranks: #1, #2, #3|
|                                   |                                         |
|                                   v                                         |
|   Phase 3: SCOPE REFINEMENT & FEE NEGOTIATION WITH FIRM #1                  |
|            Detailed scope developed; Firm #1 submits fee proposal           |
|                                   |                                         |
|                  +----------------+----------------+                        |
|                  |                                 |                        |
|          [Agreement Reached]              [Impasse / Deadlock]              |
|                  |                                 |                        |
|                  v                                 v                        |
|   Phase 4: AWARD CONTRACT              Phase 5: FORMAL WRITTEN TERMINATION  |
|            Execute agreement with Firm #1       Terminate Firm #1 in writing|
|                                                 BEFORE negotiating with #2  |
+-----------------------------------------------------------------------------+

Key Phase Requirements

1. RFQ Issuance (No Cost Proposals): The public entity issues a Request for Qualifications (RFQ). The RFQ cannot ask for cost estimates, man-hour rates, fee schedules, or sealed price envelopes.
2. Evaluation and Ranking: The agency evaluates the submitting firms based on specialized expertise, past performance on similar public surveys, staff availability, and geodetic/equipment capabilities. The agency creates a prioritized ranking list (Firm #1, Firm #2, Firm #3).
3. Negotiating with Firm #1: The agency meets with Firm #1 to develop a detailed, granular scope of work. Once the exact scope is agreed upon, Firm #1 submits its fee proposal. Both parties negotiate to achieve a "fair and reasonable" compensation.
4. Handling Deadlock (Sequential Rule): If the agency and Firm #1 cannot agree on a fair and reasonable fee, the agency must send a formal written notice of termination of negotiations to Firm #1.
5. Moving to Firm #2: Only after the written termination letter is delivered to Firm #1 may the agency initiate discussions with Firm #2. The agency can never revisit or negotiate backwards with Firm #1 once terminated.

3. Statutory Small-Project Exemption (G.S. 143-64.32)

The North Carolina General Statutes provide a specific, highly regulated exception to the mandatory QBS process under G.S. 143-64.32.

The Dual Conditions for Exemption

An agency may exempt a project from QBS only if both of the following statutory requirements are met:

1. Who may exempt: G.S. 143-64.32 gives the exemption power to units of local government and the North Carolina Department of Transportation — it is not a general State-agency exemption.
2. Financial Threshold: The estimated professional fee must be less than fifty thousand dollars ($50,000).
3. In Writing: The exemption must be in writing. The statute requires a written exemption, not any particular form of resolution, but local procurement policies commonly implement it by board resolution.

A second, larger exemption sits in G.S. 143-64.34: State Building Commission projects, UNC capital projects, and community college projects are exempt when the estimated expenditure of public money is less than $1,500,000. Candidates routinely confuse the $50,000 local-government threshold with this $1.5 million capital-project threshold.

[!IMPORTANT] No Automatic Exemption: Projects with estimated fees under $50,000 are NOT automatically exempt from QBS. If a town council or county commission does not formally vote to adopt an exemption resolution, the mandatory QBS evaluation and sequential negotiation process still applies by law, regardless of the dollar amount.

4. Ethical Prohibitions on Competitive Bidding (21 NCAC 56 .0701(g)(3))

The NCBELS Rules of Professional Conduct strictly regulate licensee participation in public procurement:

• Prohibition on Fee Proposals: A licensee shall not submit a competitive price proposal, fee bid, or cost estimate to any public entity subject to G.S. 143-64.31 unless the entity has officially selected and ranked that licensee as the #1 firm and initiated contract negotiations.
• Unlawful Public RFQ Responses: If a public agency issues an RFQ that improperly requests cost figures or hourly rate tables from all respondents, a licensed surveyor cannot submit fees. The surveyor should inform the agency in writing of the Mini-Brooks Act mandate and submit only qualifications.
• Private Contracting Contrast: The Mini-Brooks Act applies exclusively to public government entities. In private commercial transactions (e.g., surveying for a private developer or individual homeowner), competitive price bidding and lump-sum quotes are fully permissible under North Carolina law.