Chosing A Consultant

Why hire a consultant? There are many reasons:

1. To supplement staff time.
Hiring a consultant is particularly appropriate when the project is a nonrecurring one (e.g., a new comp plan or zoning ordinance). If the project will carry over many years or is a continuous one, expanding staff is a better option.

2. To supplement staff expertise.
Some tasks, because they occur so infrequently, call for special skills that cannot be learned quickly or easily by staff (e.g., rewriting a zoning ordinance, preparing site studies for waste disposal sites).

3. To ensure objectivity.
Projects like department reorganizations or complex redevelopment plans that will displace residents can be very controversial, emotional, and political. A consultant may be able to find a "win-win" solution and can often be accepted by various parties as an objective mediator in any local disputes.

4. To ensure credibility.
The local planning director or staff may know the solution to a local problem but selling that solution to the public, council, or planning commission may be difficult without the blessing of an "expert" to verify that solution.

5. To obtain a variety of skills.
A small community with limited budget and planning staff (or, for that matter, no planning staff) can hire a consulting firm with access to a number of people with different skills. It would be difficult or impossible to hire enough part-time staff to find that variety of skills or find one individual who was that multi-talented.

6. To deal with legal requirements.
If a local government puts a freeze on hiring or is unwilling to commit to any long-term employment, an agency may only be able to hire a consultant to deal with an impossible work load or project.

If, after reviewing this list, the agency or government decides to hire a consultant, it must answer some key questions.

• What do we want the consultant to do?

• What skills, expertise, and experience must the consultant have to carry out the project?

• How will we relate to the consultant? That is, will we simply given the problem to the consultant and expect a completed report? Or will we provide staff support, citizen participation, review, or other input to the project?

• What working style, organizational, and locational considerations will affect the ability of the consultant to facilitate the relationship with us?

Budgeting for Consultants

If an agency intends to hire a consultant, it should have an established budget for the project and a source of funds from which to pay for the contract. If an agency is only "window-shopping" to see how much money it might cost to carry out a project, it should be very honest about that fact in any solicitation of proposals. Unfortunately for such a planning agency, an unfunded project is unlikely to attract many reliable proposals. Thus, if a planning agency really has no idea how much a proposed project might cost, it should consider hiring a consultant for a short and (usually) inexpensive "feasibility study."

It is difficult for an agency to develop a component cost schedule by projecting the probable services needed and the costs of each item of service. However, it is important for a public agency that is budgeting to hire consultants to understand something about the economics of a consulting firm. Consulting firms are businesses offering professional services. As such, they must cover such expenses as office space, salaries, equipment, and supplies; like other businesses, they try to make a profit, which represents the ability of the firm to continue to exist.

The daily salary of an agency employee cannot reasonably be compared to the daily billing rate of a consultant because it does not include overhead, fringe benefits, taxes, support staff, and, in general, the total cost of government. As a general rule, the billing rate of consultants will be between two and three times the salary that such an individual might earn in a salaried job. That multiple accounts not only for fringe benefits and overhead costs, but also for the fact that no one does "productive" work 100 percent of the time--consulting firms that compete for an agency's project will have non-billable time preparing the proposal, attending interviews, and negotiating a contract. If a firm succeeds in obtaining a contract, there will undoubtedly be non-billable time spent on travel or administration of the project.

Some Component Costs of a Consultant's Billing Rate

1. Salaries of professional staff, secretaries, drafters, and technical aids
2. Sick leave, vacation, and holiday pay
3. Office and drafting supplies
4. Printing and copying
5. Travel (auto and other)
6. Postage, freight, overnight delivery services
7. Telephone and telegraph
8. Equipment purchase and/or rental
9. Office rent
10. Building and property maintenance
11. Utilities
12. Legal services
13. Accounting services
14. Technical publications
15. Newspaper and magazine subscriptions
16. Professional dues
17. Attendance at seminars and conferences
18. Group insurance
19. Insurance (unemployment, workmen's compensation, liability, fire, theft, etc.)
20. Pension expenses
21. Taxes and licenses
22. Business promotion
23. Subcontractors

This material is a revised and edited excerpt from the article: "Selecting and Retaining a Planning Consultant: RFPs, RFQs, Contracts, and Project Management" by Eric Damian Kelly, AICP. It is Planning Advisory Service Report No. 443, published by the American Planning Association, February 1993.