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Current Design-Build Practices for Transportation Projects

2. Background

2.1. General Design-Build Program Information

The following is an overview of participating transportation agencies design-build programs, along with the date that the information was contributed or updated.

The Alameda Corridor Transportation Authority (ACTA) (Jan 2002)

ACTA is a joint powers agency formed by the Cities of Los Angeles and Long Beach to finance and develop the Alameda Corridor project, a rail/grade separation project connecting the Ports of Los Angeles and Long Beach to rail yards and other transportation facilities in central Los Angeles. ACTA has used design-build for a single, but significant, contract as an integral part of its plan for delivery of the Alameda Corridor. It obtained special authorization from the Los Angeles City Council to use an alternative procurement process for the design-build contract, basing selection on a lowest ultimate cost evaluation (evaluating the Authority's costs including operation, maintenance and right-of-way expense, as well as the design-build contract price), followed by limited negotiations. The Mid-Corridor Design-Build Project represents approximately two-thirds of ACTA's construction budget.

ACTA's Mid-Corridor Design-Build Project includes a 10-mile, 33' deep trench, extending from a point north of State Route 91 to a location near 25th Street in Los Angeles, and includes construction of a rail line immediately east of the existing tracks and the trench, allowing trains to continue through the area during the trench construction period. Improvements were also made to Alameda Street, with bridges constructed to carry street traffic over the trench at 29 crossings, and other roadway improvements were made at several locations.

ACTA's decision to use design-build was intertwined with its plan of finance, which included the sale of bonds secured by future fees to be paid by the railroads using the Corridor. In order to maintain acceptable coverage ratios and keep interest expense within an acceptable range, the project had to open for revenue service within a certain time period after issuance of the bonds. This time constraint, combined with the critical need for the project to be completed, required the Authority to use design-build.

The Authority's overall goals in developing the Corridor were (in order): time, price certainty, quality work product, reduced impacts to adjoining properties, and sharing the benefit of jobs with adjoining communities. Use of design-build for the Mid-Corridor Project definitely helped to meet the first two goals of time and price certainty. Design-build accelerated the project's total schedule by 18-20 months. The Mid-Corridor Project is currently valued at $770 million - an increase of approximately 8% over the initial contract price. Some of that increase was due to shifting work from other projects into the design-build contract. There was no perceived effect on the third and fourth goals of quality work product and reduced impacts to adjoining properties. A job training and local hire program was included by the design-build team to meet the fifth goal of sharing the benefit of jobs with adjoining communities. ACTA has absolutely met its goal and considers its design-build program to be successful.

Arizona Department of Transportation (AZ DOT) (Jan 2002)

AZ DOT has used design-build for a number of different projects including freeway widening, interchange reconstruction, and changing 2- lane highways to 4-lane divided highways. The values of its design-build projects range from $3.5 million to $185 million. Enabling legislation was co-sponsored by AZ DOT, AGC, and the local consulting engineers associations. Opposition from contractors, through lobbying of elected officials, resulted in a requirement that design-build projects must exceed $40 million and that design-build can be used for no more than two projects per year.

AZ DOT met its goals of quick construction within a reduced budget. The benefits achieved by using design-build included time reductions of approximately 30%, and cost savings of 5-6%, compared to design-bid-build.

New Jersey Department of Transportation (NJ DOT) et al (Atlantic City/Brigantine Connector) (AC/BC) (Jan 2002)

The Atlantic City/Brigantine Connector (AC/BC) is a special one-time project that was accomplished through a public-private partnership, stemming from a request for proposals issued by Atlantic City for development of the Marina district "H-tract," the former city dump. Mirage Resorts won a bid to develop a $750M casino resort in the area. In order to obtain access to the site, a Mirage affiliate entered into an agreement with the NJ DOT and the South Jersey Transportation Authority whereby each party would contribute one-third of the cost of a tunnel connecting the Atlantic City Expressway with the Marina district and Brigantine Island. The design-build contract was considered a public works contract due to funding by NJ DOT and the South Jersey Toll Authority, and was procured using the same competitive bidding process required for NJ DOT contracts (i.e., award to the lowest responsive, responsible bidder).

The Atlantic City Brigantine Connector's 2.5-mile route includes a 2,000-foot cut-and-cover tunnel, 10 new bridges and 2.3 miles of new highway, with 15 ramps, 23 retaining walls, interchange modifications, drainage, landscaping, traffic signals, highway lighting, curbs, median barriers, and impact attenuators. Numerous utilities were installed or relocated during the project. The scope of the work also included environmental mitigation measures, a landscaped park, and pedestrian bridges. Many local streets were widened and resurfaced, and several city blocks of residential housing, as well as portions of the Atlantic Energy power facility, were either demolished or relocated. The tunnel, which goes under US 30 and a residential area, includes storm water pump stations, ventilation, and related electrical and mechanical systems.

The goal in using design-build was to shorten the time as much as possible, and also to obtain cost certainty. The contract was awarded to a joint venture for a bid price that was $30 million less than the engineer's estimate. The Contract included a $28 million contingency available for a broad range of risks. This represented the limit of liability of the project developer and the public agencies funding the project. The contractor received 85% of the contingency funds remaining at the end of the job.

Colorado Department of Transportation (CDOT) (Jan 2002)

CO DOT obtained legislation in 1999 authorizing it to use a best value procurement process for design-build contracts. Before obtaining such enabling authority, CO DOT contracted for a few smaller design-build projects (less than $50 million) on Interstate rehabilitation projects using a low bid selection process. CO DOT used its best value selection process for the first time in 2001, awarding the $1.186 billion design-build contract for the T-REX project, a major highway reconstruction and light rail transit project.

The T-REX project involves improvement of approximately 17 miles of Interstate 25 and Interstate 225 in the Denver metropolitan area and adds approximately 19 miles of new light rail transit line, including 13 new stations and improvements to the existing Broadway station. The proposers were also requested to price various options including additional bridge replacement and pedestrian overpasses and bus plazas.

CO DOT was advised of concerns about design-build on the part of both contractors and consultants during the legislative process and also the rule-making process. The concerns included fears that all projects would utilize design-build, that smaller contractors would not have the opportunity to compete, that larger out-of-state contractors would take over, and that contractor/consultant relationships and DBE involvement would be adversely affected. Most of the concerns were addressed through the formal rule-making process, which established task groups including participation from external stakeholders (contractors and consultants). Allowing those stakeholders to participate in the process and to assist in developing the rules helped address most of the issues raised.

In accordance with FHWA's Special Experimental Project Number 14 (SEP-14), and Colorado Code of Regulations 2 CCR 601-15, CDOT has issued Policy Directive 504.0 and Procedural Directive 504.1 in May 2006 allowing the usage of design-build contracting for transportation projects and identifying the Design-Build Manual as the "implementing strategy and procedure for developing Design-Build Contracts." In the past 15 years, CDOT has used the design-build project delivery method on some projects, but the two major design-build projects recently completed are TREX ($1.6 B), in the Denver Metro area, and COSMIX ($ 130 M), in Colorado Springs.

In the absence of mega projects, CDOT is currently attempting to normalize the design-build project delivery method for small to medium size projects (less than $50 million). Currently, CDOT has two design-build projects in the works in Region 6, and two additional modified Design-Build projects in Regions 4 and 5. Unlike Design-Build projects where the award criteria is generally based on "Best Value", the award criteria for modified design-build projects is based on "low price and technically acceptable".

CDOT has had relative success and has reaped some major benefits by using design-build: Accelerated project delivery, innovation, improved quality, improved project control, better risk management, single source accountability, partnering, and value based project feedback. However, more is needed especially when it comes to educating the public, the contractors and CDOT internal staff about the processes and techniques of design-build, particularly in project goal development, risk allocation, and the selection process. Whatever the case may be, CDOT is continuously working closely with FHWA and the contracting community in order to promote and continually improve all aspects of design-build.

Federal Highway Administration (FHWA) (Jan 2002)

The Federal Lands Highway Division of FHWA used design-build for a roadway project in Yosemite National Park, using the "two-phased" Design-Build selection process permitted under the Federal Acquisition Reform Act of 1996. FHWA says that design-build provides the following benefits:

  • Single point responsibility for design and construction to mitigate conflicts between the contractor and the designer
  • The ability to fast-track the delivery of a completed project
  • Potential to lower overall costs
  • Earlier use of the completed facility
  • Reduction in contract growth potential by shifting risk and partial control to contractor.

The Federal Lands Highway Division of FHWA has experienced very little opposition to its use of design-build, and has experienced only learning curve issues.

Florida Department of Transportation (FDOT) (April 2009)

The Florida Department of Transportation (FDOT) obtained legislative authorization to use design-build a number of years ago, and also received programmatic authorization from FHWA to use design-build for federally funded projects. In starting their program, they found the main opposition was centered around change. Contractors were reluctant to move away from low bid. Consultants disliked the idea of having to bid or negotiate for their services with a contractor rather than the Department. The agency did a lot of talking and working through their concerns and started with a few pilot jobs. They now have an extensive program managed by the individual districts, with over 100 design-build projects to date. Design-build is used as one of the tools in the toolbox to cut project delivery time, reduce/eliminate cost overruns/claims, gain efficiency in processes, and improve professionalism/quality. Design-build has allowed FDOT to cut project delivery time by 1/3, with very few claims. They believe that the products are higher quality, and report more enjoyable working relationships with the industry.

FDOT's design-build contracts have resulted in accelerated project delivery schedules and very few price changes, according to a 1991 University of Florida study of the agency's pilot design build program which determined that costs were slightly higher in design-build, although road user delays and business impacts due to time overruns were not taken into account. The agency believes that over time, they should become better at scoping jobs (clearer outcomes) and the industry should become more comfortable with the risks, and that as a result prices should come down.

Greenville County , South Carolina (Jan 2002)

This local agency successfully uses design-build for the implementation of its annual road improvement program, now in its 5th year, as well as for the construction of several public buildings, including a courthouse, courthouse expansion, parking garage, detention center, library, parking lot, and forensics lab renovation. The County's road program has included paving of more than 800 roads, correction of associated drainage, improvement of intersections, installation of speed humps, repair of sidewalks, building new sidewalks, and installation of guardrails. Also, through the road program, four bridges, six intersections, two major road widenings, and four minor widening projects have been developed using design-build. Greenville's decision to use design-build was based in part on a desire to minimize staff workload so that it could continue to provide other services without staff size increases. The County uses design-build to move away from money as a sole selection factor, using a form of best value selection by evaluating technical/quality factors, which include factors for scope and time, within a fixed, stipulated sum price. The County lists a number of projects to be completed and negotiates with proposers regarding which projects will be performed for the stipulated price. The contract is awarded to the proposer who will perform the greatest amount of work for that price.

The County has faced opposition to its use of design-build, including lawsuits brought by a retired contractor challenging the need for design-build. It has also had unsuccessful contractors express concerns to elected officials regarding the selection process.

Design-build has helped the County to meet its goals. It has largely used one contractor. The program has saved time by avoiding the need to develop separate procurement packages and select separate firms for multiple design and construction projects, since a single firm coordinates all projects elements (design, utility coordination, right of way acquisition, and construction). The County also says that it has lowered costs by utilizing value engineering with 100% of the savings returned to the County to be used on other projects.

LADOTD (May 2009)

The Louisiana Department of Transportation and Development has been using design-build to implement selected projects since 2005. LADOTD has completed two projects, including an emergency project resulting from Hurricane Katrina damage. The procurement phase of another project has been completed and construction is currently underway. LADOTD is using design-build to accelerate two more projects, which will include ARRA funding. Procurements for these two projects are scheduled to be complete by the end of 2009.

  • I-10 Twin Span Bridge (2005) - LADOTD utilized design-build in order to "fast track" the $40 million emergency repair of the bridge over Lake Pontchartrain between New Orleans and Slidell. The Twin Spans were severely damaged by Hurricane Katrina and the primary factor in using design-build was to accelerate the project schedule in order reopen I-10 to traffic as quickly as possible.
  • John James Audubon Bridge (2006) - LADOTD's next design-build project includes a 2.44 mile long four-lane bridge structure and approximately 12 miles of approaches connecting La. 1 at New Roads east of Hospital Road and U.S. 61 south of La. 966 and St. Francisville. The project is scheduled to be complete by late 2010. Factors for choosing a design-build approach included the price assurance of a single lump sum fixed price contract as well as the desire to gain experience with alternative project delivery methods. The project is budgeted for $348 million.
  • I-12 Widening (2008) - This project involves the widening of 17.87 lane miles of I-12 to 6 lanes and includes the replacement of two bridges over the Amite River. The LADOTD established a fixed price budget of $100 million with the proposers bidding on the amount of lane miles which could be improved within the established budget.
  • I-10 Widening (2009) - This project includes the widening of the I-10 from four lanes to six lanes in both directions from the Siegen Lane Interchange to southeast of the Highland Road interchange in Baton Rouge. The RFQ for this design-build project was issued in May 2009. Contract award is expected for December 2009 with construction to begin in early 2010.
  • US90 at LA 85 Interchange (2009) - This new project will replace an existing at-grade interchange with a grade-separated diamond interchange in Iberia Parish. The RFQ for this design-build project was issued in May 2009. Contract award is expected for December 2009 with construction to begin in early 2010.
Maryland State Highway Administration (MDSHA) (August 2008)

MDSHA has completed 20 projects and 9 projects are in the construction phase. Three future projects are funded and to be advertised within the next two years. Our design-build program includes everything from intersection improvements to interchange construction to new highways on new alignment. Values range from $1.5 million to $40 million. MDSHA is also in the process of delivering Maryland's first mega design-build project, the Intercounty Connector, at a construction value of over $1.5 billion. This project has been broken into 5 construction contracts; the first three contracts are valued between $400 million- $520 million individually, and the last two contracts are valued between $50 - $80 million individually. Two of the contracts have been awarded, the third is in the procurement phase and the remaining two are in the preliminary engineering stage.

Massachusetts Highway Department (May 2009)

The Massachusetts Highway Department is considering additional use of design-build on its state-wide accelerated bridge construction program. After using design-build on the Route 3 North project in 2001-2004, MassHighway let a six-bridge design-build contract in 2009 and is now considering further use of design-build on the Whittier Bridge on Interstate 95 in Amesbury/Salisbury and the Pleasant Street Bridge in Grafton.

Michigan Department of Transportation (May 2009)

The Michigan DOT utilized design-build contracting in the 1990's on over 30 projects road, bridge and ITS projects. Michigan DOT chose design-build contracting for these projects in response to an increase in funding and a need to get a significant amount of work completed in a short time.

In 2008 Michigan DOT awarded 2 pilot design-build-finance projects. The finance component required the contractor to fund the project until substantial completion. At substantial completion Michigan DOT would begin making small incremental payments every three months, with the balance of the contract being paid in FY 2012.

Michigan DOT is currently developing contracts for additional design-build projects in response to the ARRA program. These projects include road, bridge and ITS projects.

Montana DOT (May 2009)

The Montana DOT's design build program began in 2004 with three pilot projects. The three pilot projects involved the design and construction of a new weigh station facility, safety improvements to an existing Interstate interchange, and reconstruction of approximately five miles of U.S. Highway 89. Montana's Legislature approved the use of design-build as a contracting method and drafted legislation for its use in 2007 after the pilot projects were complete.

Montana DOT has completed one additional design build project since the three pilot projects were completed. In 2007, Montana DOT utilized design-build to award a contract for the design and construction of a new bridge and roadway on MT Highway 200 over the Blackfoot River. Time savings was the critical factor in choosing design build procurement. Montana DOT is currently advertising a new rest area facility utilizing design build contracting and will be advertising two additional design build projects this year, another rest area project and a major rehabilitation of approximately 11 miles of Interstate 15.

Naval Facilities Engineering Command (NAVFAC) (Jan 2002)

NAVFAC responded to the survey providing a programmatic perspective including all the Military Construction (MILCON) projects for which NAVFAC is the design and construction agent. MILCON projects range in size from $750,000 to as much as $50 million or more, typically averaging around $5 million. The annual MILCON program averages approximately $1.2 billion. Projects include a broad spectrum of types of facilities, including operational, training, bachelor housing, community, utilities, and other infrastructure. Design-build has become an effective acquisition tool for NAVFAC, with positive effects on acquisition and construction time, project costs, administrative effort, construction quality, and has improved contractor innovation and use of emerging technologies. NAVFAC's use of the design-build acquisition approach has risen sharply the last several years. It currently represents 60% of the MILCON program (by number of projects), and is the agency's procurement strategy of choice. NAVFAC anticipates that design-build use will remain at that level or increase slightly for the foreseeable future. Design-build provides both the potential for saving time and money by having a single contractor provide both the design and construction in a one-stop process, and the potential to reduce claims by having a single entity responsible for coordination of plans, specifications, and submittals.

NAVFAC uses the procurement process authorized by the Federal Acquisition Reform Act of 1996 (but used design-build years before that legislation was passed).

Its project funding comes from MILCON appropriations, which have a five-year life for incurring new obligations. MILCON design and construction funds are received as two separate appropriations from Congress. Appropriation law and DOD Financial Management Regulations stipulate that only construction funds can be used on a construction contract, and a design-build contract is considered a construction contract. Therefore, it had to readjust how it budgeted for construction funds for the design-build portion of their MILCON program in order to pay for the contractor's design cost (estimated to average approximately 4% of the estimated cost of construction) with construction funds. This change took several years to accomplish. During the interim it had to deal with a growing surplus of design funds and a corresponding burden on construction funds due to the unbudgeted contractor's design cost.

Design-build helped the Navy to achieve its goals of time savings, cost savings, and innovation while maintaining quality and not increasing in-house labor requirements. "... it is apparent that we have achieved dramatic time savings through design-build. Anecdotal data shows as much as two-thirds reduction in total time on some projects."

North Carolina Department of Transportation (NC DOT) (Jan 2003)

Prior to 2003, NC DOT had legislative approval to perform three design-build projects per year. In 2002, legislation was passed to allow ten design-build projects in 2003 and 25 projects per year for the next six years. NC DOT is currently identifying future projects and plans to use design-build for the number of projects allowed by the legislation each year. NC DOT currently has four design-build projects under contract. These contracts range in cost from $10 million to $135 million.

The types of projects under contract are urban widening, interstate widening, and new location. These projects involve all aspects of highway construction including grading and paving, bridges, box culverts, and retaining walls. Some of these projects require the contractor to handle the right-of-way acquisition and utility movements. In order to make the program as successful as possible, NC DOT selected projects for the design-build process that were expected to have few right-of-way and environmental permitting problems.

NC DOT initiated the design-build program to accelerate project delivery to the public. This process has allowed projects to be delivered one to two years quicker than the design-bid-build process.

Contractors and consulting firms have raised some concerns about the design-build process. These concerns have been addressed through forums with the contractors and consulting firms. NC DOT has also included the industry in the development of the design-build procedures. As stated above, NC DOT has only begun its design-build process, but it appears that the open approach with the industry and the types of projects that have been selected have contributed to the success thus far.

Orange County Transportation Corridor Agencies (TCA) (Jan 2002)

The San Joaquin Hills Transportation Corridor Agency and Foothill/ Eastern Transportation Corridor Agency (TCA) are joint-powers agencies formed by the County of Orange and various cities within the County of Orange to develop the first modern toll roads authorized in California, totaling more than 68 miles of transportation facilities at an estimated cost exceeding $3 billion. TCA has used design-build for four different roadway projects:

  • The San Joaquin Hills Transportation Corridor, an extension of the Corona del Mar Freeway (Route73) in Orange County, California, consisting of a six-lane, divided, limited-access highway of approximately 15 miles with related structures, equipment and systems. The project was completed with only a 2.2% increase in the contract price, notwithstanding a 14-month injunction affecting the middle section of the project.
  • Portions of the Foothill and Eastern Transportation Corridors (SR231, SR241 and SR261). The initial contract price for that project was $712 million and ended at $776.9 million. The 9% increase was due to scope changes (8%) and changed conditions (1%). Both of these projects were funded with toll revenue bonds.
  • The Foothill-South Transportation Corridor, a 16-mile project that will connect the Rancho Santa Margarita area with Interstate5 in San Clemente. The project was awarded prior to completion of the environmental review process and is still going through that process.
  • The Glenwood Pacific interchange, a project that needed to be modified in order to fit within a $7 million budget.

TCA's initial decision to use design-build was based on funding limitations. Its primary source of revenue to pay for the costs of developing its network is toll revenues, and it determined in mid-1990 that it would be able to issue project revenue bonds only after it had a contract in hand to design and build the project for a fixed price. The Agency's primary goals in using design-build were to obtain completion on or ahead of schedule without cost overruns. Design-build helped the Agency to meet its goals because the San Joaquin and Eastern projects could not have been financed and built conventionally. It analyzed schedule growth for various design-build and design-bid-build projects and found a significant time savings by utilizing design-build. For San Joaquin, although the price was higher than expected, design-build made the job financeable. For the Eastern toll road, according to the TCA, "... the price obtained was probably lower than the cost to design and build conventionally. (The contractor left $114 million on the table between the first and second bidder.)" The project also benefited from reduced interest expense due to accelerated delivery. Portions of the projects were phased due to funds not being available all at once.

TCA's design-build program has been an absolute success. Without design-build the TCA would not have had a project. Benefits of design-build include expedited delivery plus cost certainty through transfer of risk and responsibility.

Utah Department of Transportation (UT DOT) (Jan 2002)

UT DOT has used design-build on very large (I-15 Reconstruction Project at $1.56 billion) and relatively small ($1 million US 6 slide remediation) projects that were time sensitive. DOT also has a $300 million freeway project (the Legacy Parkway) and a $6.5 million retaining wall project (US 189 Vivian Park in Provo Canyon) under contract

The I-15 project involved the reconstruction of approximately 17 miles of urban I‑15, and included widening the corridor from 6 lanes to twelve lanes, the complete construction of 144 bridges, a new downtown interstate interchange, reconstruction of 13 freeway interchanges and three interstate junctions, frontage road improvements, three railroad grade separations, and installation of an Advanced Traffic Management System throughout the metropolitan area. I-15 had an initial contract price of $1.36 billion and a final contract price of $1.325 billion. (The initial program cost estimate was $1.53 billion; final program cost was $1.50 billion.) UT DOT's goals were to minimize disruption to businesses and the traveling public, provide project delivery in a timely manner (prior to the 2002 Olympic Winter Games), minimize costs, and achieve a high quality highway project. One of the primary reasons for deciding to use design-build was the projected time savings. UT DOT's project managers estimated it would take eight years to design-bid-build the project; with design-build the time was shortened to four years and two months. The highly successful I-15 project was the first time that a major, publicly funded, interstate highway reconstruction project combined all of the following: the design-build delivery method, highway performance specifications (developed as part of the RFP preparation), shared risk, best value selection (using an adjectival rating method), long term maintenance (and warranty), ISO 9001 registration (required), an award fee incentive ($50 million), stipends (to unsuccessful proposers), design oversight (no design submittals to UT DOT), QA/QC performed by design-builder, and expedited payment (7 days).

The Department's second major design-build project is the Legacy Parkway, a four-lane, limited-access, divided highway extending approximately 13.5 miles from I-215 at 2100 North in Salt Lake City, northward to I-15 and U.S. 89 near Farmington City. This project crosses a highly sensitive wetland area and the contract includes numerous provisions to ensure that all required environmental mitigation measures are fully implemented. The contract was awarded in late 2000 and is currently the subject of an environmental injunction issued by the U.S. Court of Appeals, Tenth Circuit.

One of the major reasons for use of design-build is to respond to the public's demand that UT DOT minimize the time span and the resulting public impact of major projects. UT DOT uses design-build to be more responsive to the public, to have more control over costs, to deliver projects more quickly, and to obtain the best value for public dollars. UT DOT took the necessary time to educate everyone in the process, including the Governor, the State legislature, contractors, consultants, State employees, the public, et al. They consider the design-build program to be a success because they now have a high level of acceptance from the public. "They believe that we will do what we say we will do," said Carlos Braceras, Deputy Director of UT DOT.

UT DOT thinks that design-build project costs are lower than the cost of design-bid-build projects, because of the efficiency of all operations being under the control of one entity and economies of scale. On their two completed design-build projects there were no contract increases for the basic work included in the contract packages.

Utah Transit Authority (UTA) (Jan 2002)

UTA has used design-build to design and construct a critical light rail project -- the University Line project, which needed to be completed prior to the Olympic Winter Games of 2002 in Salt Lake City. UTA awarded a design-build contract in 2000 for this 2.3-mile project connecting the University of Utah community to the Salt Lake City central business district.

The initial contract price for the University line was $72 million. The final amount was slightly higher due to owner/stakeholder-directed changes for betterments and for incentive fees provided in the contract. The contract amount increased by approximately 2% due to contractor-initiated changes.

The initial schedule for the project was 27 months. One proposer withdrew prior to submitting a proposal because they felt that 27 months was too aggressive. The successful proposer completed the work in 18 months.

UTA had a tight budget with a small contingency. It is the UTA's belief that the University Line was more expensive per mile than the previous design-bid-build rail project the UTA had recently completed. As a result, the perception is that the University Line cost more to develop as a design-build project than it would have cost using a conventional delivery methodology. However, the University LRT project had more stringent maintenance of traffic and access requirements, included significantly more public/community relations work, and was working on a tighter completion schedule to finish before the Olympics Winter Games (the project could not have been completed in time for the Olympics using the traditional, design-bid-build delivery method), all of which drove the cost up. Nevertheless, the project was within UTA's budget. "Design-build provided additional assurances to the UTA in meeting program cost goals." (Michael Allegra, Director of Transit Development, UTA) The goals for the project were: (1) the project was to be completed in a very short period of time (prior to the beginning of the 2002 Olympic Winter Games), (2) program costs needed to remain below $118 million, and (3) the quality of the project was to be at a level equal to the previous rail projects completed by the UTA. All of these goals were met. The project is considered a great success.

Washington State Department of Transportation (WSDOT) (Jan 2002)

WSDOT has used design-build on one pilot project utilizing a best value approach and is in the process of negotiating a design-build contract for the Tacoma Narrows Bridge. (WSDOT had previously entered into an agreement with a firm to finance, design, build and operate the bridge, in response to a proposal submitted under WSDOT's public-private partnership law. The developer had entered into a design-build contract with a joint venture. The project is now being restructured for the facility to be publicly financed, owned, and operated.) WSDOT's pilot project was a $22 million grade separation. The legislative goal on the pilot project was to minimize budget and time. WSDOT "feels that the goal of minimizing total project delivery time will be realized." Preliminary estimates show that initial cost was higher than a design-bid-build project, but cost growth to date has been lower than for a standard project. The project was funded out of the safety improvement program, but future large corridor projects will require special funding sources.

WSDOT will likely utilize design-build for corridor level projects in the Seattle-Area (projects ranging from $200 million to $2 billion). Enabling legislation was required, and they recently received legislative authority to utilize design-build on publicly funded transportation projects. WSDOT feels that design-build is an important tool in the delivery of their transportation program. The two primary benefits that WSDOT anticipates from design-build are a faster delivery timeline coupled with a lessened WSDOT staff requirement.

2.2. Criteria Used to Identify Projects Appropriate for Design-Build

The agencies participating in the September 2002 survey cited accelerated project delivery as a major factor in the decision to use design-build. Schedule acceleration is possible due to a number of factors, including: (a) the ability to start construction work before the design is 100% complete; (b) input by construction personnel into the design process (allowing the designer to incorporate the constructor's innovative ideas, skills, equipment, etc., into the design, thus expediting the construction process); and (c) use of a single procurement process for selection of both the designer and the constructor.

Cost certainty was listed as a major factor for using design-build. Perhaps the most significant reason why design-build results in greater cost certainty is that it involves a single point of responsibility for both design and construction. Design-builder claims against project owners, based on design defects, are essentially eliminated. Many agencies transfer additional risks and responsibilities to design-builders in order to further reduce the opportunity for claims and enhance cost certainty. This approach could result in a higher overall project cost since the design-builders will include a contingency in the proposal price to account for this risk. The design-builder would be paid the full contract price even if the risk fails to materialize. This approach is commonly used for project revenue-financed projects such as toll roads, where the need for cost certainty is intertwined with the plan of finance and is therefore worth the potential additional cost.

LADOTD (May 2009)

LADOTD does not have written criteria for selecting projects appropriate for design-build. Each project is evaluated on a case-by-case basis to determine which procurement approach is the most advantageous. Like many other agencies, both schedule acceleration and cost certainty have been major factors in LADOTD's decision to use design-build. Schedule acceleration was a particularly important factor for the repair and replacement of the I-10 Twin Span since the need to get I-10 back into service as fast as possible was a primary objective of the project. Cost certainty was the primary factor in LADOTD's decision to use design-build on the I-12 Widening Project. LADOTD had a fixed budget of $100 million and used the proposed functional length of the roadway improvements in each proposal as part of the evaluation criteria. Rather than awarding the contract based on a price proposal alone, the competition among the proposers was based on the greatest functional proposed miles of roadway improvements for the established fixed price, as well as the evaluation rating on technical factors and schedule.

MDSHA (August 2008)

MDSHA looks for projects where there are opportunities for innovation; projects that have complex maintenance of traffic and the funding is in place so time commitments can be met. However, this is not the only criteria that is evaluated. SHA evaluates utility relocation complexities, and environmental sensitivity/permitting challenges. Projects do not need to meet every criterion to be designated as design-build. SHA's goal is to maintain our design-build program at its current level.

The FHWA design-build regulations give contracting agencies wide discretion in identifying projects that are appropriate for the design-build project delivery method. See 23 CFR 636.105.

NAVFAC (Jan 2002)

NAVFAC provided the following description of the process that it follows in deciding whether to use design-build. NAVFAC reviews each project to formulate an acquisition plan based on the specific circumstances of that project. It stated that its experience indicates design-build can be a successful strategy when all or most of the following are true:

  • Project scope is well defined;
  • Project requirements for the most part can be stated as performance specifications;
  • Project value is sufficient to attract competition;
  • Project location, security requirements, or other factors will not overly restrict competition;
  • Little or no design is required in order to advertise the design-build contract;
  • Completing NEPA requirements will not significantly delay contract award;
  • A different acquisition method would not produce better pricing, life cycle cost, or overall time;
  • There are no acceptable plans and specifications from another similar project that can be re-utilized with minimal effort;
  • The (internal Navy) client is on board with using this approach.
Florida DOT (2008)

Florida DOT's Design-Build "Project Selection Guidelines" provide a list of the types of projects that are suitable for design-build and examples of projects that may not be good candidates for design-build. Also see section 20.1 - "Select the Appropriate Project."

VDOT (April 2009)

VDOT has set objective criteria for selecting projects that must include one of more of the following: expedited schedule, established budget, well defined scope, favorable risk analysis, prequalification of design-build firms and use of a competitive bidding process (best-value, low-bid, and fixed-price). VDOT may include, but is not limited to, the following types of projects for design-build contracts:

  • Emergency and repair projects;
  • Projects directly impacting public safety;
  • Projects directly supporting economic development/enhancement;
  • Projects using specialty or innovative designs and construction methods or techniques;
  • Projects to maximize the use of available funding (i.e. Federal, Bonds, FRANS, etc.); and
  • Projects deemed by VDOT to have expedited scheduling requirements.

2.3. Criteria Used to Identify Projects that may be Inappropriate for Design-Build

This topic was not covered in the original survey, but was considered to be of interest to those agencies that have not yet worked on a design-build project or who are unclear as to when this project delivery method may not be advantageous.

LADOTD (May 2009)

LADOTD does not have formal criteria for identifying projects that may be inappropriate for design-build. A more traditional approach might be used when plans have already been more fully developed, the project is not too technically challenging and the Department is interested in receiving the lowest initial price.

NC DOT (Mar 2003)

North Carolina DOT suggested that projects where design-build may not work well include:

  • projects where there are a lot of third-party constraints, such as right-of-way, utilities, etc.;
  • projects where there are especially sensitive environmental (including both natural and human) issues; and
  • projects that are too specialized to attract competition.
FDOT (Mar 2003)

Examples of projects that may not be candidates for design-build contracting include:

  • major bridge rehabilitation/repair with significant unknowns;
  • rehabilitation of movable bridges; and
  • urban construction/reconstruction with major utilities, major subsoil, right-of-way, or other major unknowns.
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Contact

Jerry Yakowenko
Office of Program Administration
202-366-1562
E-mail Jerry

 
 
Updated: 04/04/2011
 

FHWA
United States Department of Transportation - Federal Highway Administration