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Current Design-Build Practices for Transportation Projects
6. Project Management
The following is an overview of each agency's project management procedures. This information is based on responses to the questions in Section 5 of Appendix 3.
6.1. Reduced Level of Oversight
All agencies in the 2002 survey cited multiple meetings and communications sources for managing the project. In some cases, a program manager was hired; in other cases, the owner provided staff. FDOT stated that project management involved far less oversight than normal. They do not review design details. They just look to see that AASHTO criteria are met in design and that the contract is followed in construction. NAVFAC describes its role as follows: "The RFP, and any design included with it, is prepared either in-house or by outside consultants. Contractor proposals are evaluated by in-house resources. The subsequent review of the contractor's design is done by either NAVFAC or outside consultants. In-house resources perform construction oversight."
On Federal-aid design-build projects, the contracting agency should coordinate contract oversight and staffing issues with the FHWA Division Office in that state to assure consistency with the Division Office's Stewardship / Oversight Agreement.
6.2. Design Reviews
The survey included the following information relating to design reviews by the project owner:
AC/BC (Jan 2002)
Construction can proceed following approval of design by Contractor's Quality Assurance Manager; one DOT staff assigned to project for on-board review, design exceptions specifically reviewed and approved.
ACTA (Jan 2002)
3 - 4 submittals, reviewed by ACTA, comments reconciled. Because schedule was paramount, the contractor was allowed to proceed with construction without requiring all "i's to be dotted and t's crossed". However, this early construction is at the contractor's risk. If the construction is inconsistent with the final design requirements, the contractor is obligated to correct the construction work. (If the cost to correct is prohibitive an alternate remedy would apply; e.g., an asphalt pavement with low density may be left in place but with reduced or no payment for the work.) As of January 2002 (two months prior to the scheduled opening), final design had been approved for about two miles of the project.
AZ DOT (Jan 2002)
On site reviews; design-builder certifies final plans; goal to allow early construction; approved segmental plans required prior to start of construction.
FDOT (Jan 2003):
FDOT reviews the plans for compliance with the design-builder's technical proposal, as well as FDOT and AASHTO standards, without review of specific details. We are obligated to notify the design-builder if we identify discrepancies, but we are not obligated to find them. FDOT now requires plans to be stamped "released for construction" by FDOT before construction for that component can begin.
Greenville County , SC (Jan 2002)
Kickoff meeting held to discuss perceived problems and issues that need to be addressed. Concept plans (with alternatives) are developed with preliminary cost estimate. Staff reviews this concept and then a public meeting is held. Survey and preliminary design are completed. Field visit is made with design team, project manager, and County staff engineers. Final plans developed incorporating public comments and comments from County staff.
LADOTD (May 2009)
LADOTD separately procures an independent contract manager to perform Quality Assurance and oversight on the project. The QA consultant has primary responsibility for design reviews and makes a recommendation to the Department. LADOTD retains the right to comment on the design and has final decision making authority over whether to accept the plans as completed.
MDSHA (August 2008)
MDSHA contracts require a Design Quality Control Plan to be submitted and approved. SHA requires the contractor to be involved in the design reviews to ensure all constructability issues are being considered. Construction quality is still a function of the owner. Material testing and field testing is done by the owner. Corrections to both design issues and construction issues are resolved as either a "greenline revision" or documented as an "as-built" at the conclusion of the project.
Michigan DOT (May 2009)
Michigan DOT currently utilizes "over the shoulder" reviews as informal reviews of the design with formal review of the design at 30%, 70% and RFC plan stage. Accepted RFP plans are stamped to indicate Michigan DOT's acceptance of the RFP package.
Montana DOT (May 2009)
Montana DOT follows a similar procedure as FDOT. Montana DOT reviews the plans for compliance with the design-builder's technical proposal, as well as Montana DOT and AASHTO standards, without review of specific details. Montana DOT requires plans to be stamped "released for construction" by Montana DOT before construction for that component can begin.
NAVFAC (Jan 2002)
Submittals are required at 35%, 90%, and final design stages. NAVFAC does approve the design, but only in the sense of accepting the design as being in conformance with the RFP. A 100% (final) design is not always required before the start of construction. It can vary by project. They also employ "fast track" design and construction where parts of the design are approved and notices to proceed with construction of the approved system(s) are given prior to complete design acceptance. Occasionally they also utilize unrestricted notice to proceed where they give the contractor latitude to proceed with construction prior to any required NAVFAC design acceptance. In the latter case, NAVFAC still accepts the design ultimately, but the contractor is given the latitude to proceed at his own risk.
NC DOT (Jan 2003)
NC DOT reviews design at 25% and 100% of completion. All submittals are reviewed and responded to within a ten-day period except for submittals involving temporary detour bridges (they have a 15-day turnaround). Submittals are accepted for portions of the project to expedite construction.
TCA (Jan 2002)
Review of 35, 65, 95/100 submittals; specific approval to release design for construction "at risk." Under California law, in order to preserve sovereign immunity for design defects, the design must have been approved by a public employee with discretion (or by the governing board of the agency).
UT DOT (Jan 2002)
On I-15: Co-location of designers, constructors and UT DOT staff; over-the-shoulder reviews/participation by UT DOT; design reviews and release for construction (both the responsibility of the design-builder) based on contractor's construction schedule; few formal submittals. Legacy Parkway: co-location of design and construction staff and UT DOT staff; milestone design review at critical points during the design process; formal agency approval prior to release for construction.
UTA (Jan 2002)
Co-location; Contractor-led design reviews at midpoint of completion and at release for construction stages; design approved with submittal and acceptance of as-builts.
VDOT (April 2009)
On most projects, VDOT assigns both Design and Construction quality assurance and quality control responsibilities to the design-builder. The design-builder is responsible for submitting a Quality Management Plan that meets VDOT's Minimum Requirements for Quality Control and Quality Assurance Plans on Design-Build Projects (VDOT QAQC).
VDOT is responsible for reviewing all right-of-way and construction plan submittals. All submittals are reviewed and responded to within a twenty-one day period. Submittals are accepted for portions of the project as determined by the design-builder to expedite construction.
WSDOT (Jan 2002)
WSDOT did not provide for at-risk construction. Design submittals for components had to be at 100% prior to beginning construction. All work had to be reviewed by WSDOT prior to being released for construction.
Reference - Design Submittals, Review and Approval special provisions: see the NCHRP Project No. 20-7 / Task 172, Recommended AASHTO Design-Build Procurement Guide (or the January 2008 AASHTO Guide for Design-Build Procurement), sample special provision Number 009-DSRA-01 Design Submittal, Review & Approval Arizona DOT 2000, 010-DSRA-02 Design Submittal, Review & Approval Washington DOT 2004 and 011-DSRA-03 Design Submittal, Review & Approval FHWA (U.S. DOT) 2001.
6.3. Construction Quality Assurance
One question in the original survey on the subject of construction Quality Assurance elicited significant response. Quality of the construction end product is a goal of every project and is the reason behind a proliferation of criteria, standards, procedures, and processes that attempt to ensure quality in design-bid-build. The culture that is the product of the traditional approach to QA/QC is very difficult to change and to accept the concepts of design-build that require a trust in the design-builder, combined with the assignment of responsibility to the design-builder to produce a quality product with agency acceptance. This is especially true of the organizational entities in the Departments of Transportation tasked with administering contracts for compliance and quality. It is significant then to note that almost all of the respondents to the original survey place Quality Control (QC) responsibilities on the design-builders, and most of the respondents place the responsibility of QA on the design-builder while retaining a level of QA oversight (in the form of on-site monitor staffs, auditing, and independent testing). A few still perform owner QA, and one agency shared QA with the design-builder. The respondents spoke also about the need for adequate staffing levels of the design-builder's QA organization, its independence, and, for one project (Legacy Parkway), its additional responsibility to the owner.
The FHWA's policy for quality assurance programs for Federal-aid design-build projects provides for flexibility in ensuring compliance depending upon specific contractual needs of the project contract provisions. See 23 CFR 637.207(b). The acceptance program may consider the use of design-builder quality control sampling and testing results in the acceptance process only if the test results are independently verified by the DOT.
See 23 CFR 637.203 for FHWA's definitions for the following terms: acceptance program, independent assurance program, proficiency samples, qualified laboratories, qualified sampling and testing personnel, quality assurance, quality control, random sample, vendor and verification sampling and testing.
The survey results included the following relating to construction quality assurance.
ACTA (Jan 2002)
The design-build contractor was responsible for QC and QA. ACTA required proposed staffing levels to be included in the proposal. Those staffing levels were the subject of discussions during pre-award negotiations.
ACTA reserved the right to conduct owner assurance testing and QA oversight, and in fact placed several field engineers on site to oversee the contractor's QA/QC efforts. Lack of contractor inspection, failure to issue non-conformances, and inappropriate approval of "use as is" were common, but manageable issues.
In general, ACTA believed the contractor's personnel did a good job on testing, but there was a lapse in documenting. ACTA also had some concerns regarding an apparent reluctance by the contractor to provide direction to subcontractors relating to problems with quality control and assurance.
Lessons learned: "We required the contractor to use an independent firm for quality assurance. The firm proposed was relatively small. We now believe we would be better off with a large firm having responsibility, and in fact would prefer the primary designer to play that role. We would also like to have the Engineer of Record provide a certificate at the end of the job regarding conformity of construction to the final design."
In general, ACTA believed it is not necessary for the owner to provide inspection as is done on traditional construction project, but that owner oversight is unavoidable. Transfer of inspection to the owner may result in re-design by the owner's inspectors and can also lead to claims.
AC/BC (Jan 2002)
Originally the contractor was given responsibility for QA/QC - following award the owners initiated a change order and the third party consultant performing QA/QC services became a subconsultant to the owner's project manager.
AZ DOT (Jan 2002)
Arizona DOT handles construction QA/QC as follows:
CDOT (Jan 2002)
As documented in the draft SEP-14 report on the T-REX Project, the Contractor will be responsible for construction QA and QC. The T-REX team will audit the contractor's QA and QC processes and provide independent verification of materials incorporated during construction.
The CDOT/Regional Transportation District (RTD) has the right to perform oversight to assure that the contractor is complying with contract requirements. CDOT/RTD will use an audit approach, a technique of checking on a sampling basis, to determine whether the work is complying with the contract documents. The auditing will include:
During the preparation of the RFP, additional audit specialists were brought onto the owner's management team to coordinate an audit program, and to assist in the implementation of Compliance Auditing Services (CAS). The Work Breakdown Structure (WBS) developed for the project was extended to additional levels to identify deliverables, sub-deliverables, activities, requirement groupings and requirements. These were used to make up the sampling plan for the audit process. The owner's management team performed a risk assessment of the design-builder's activities to assign risk factors of levels 1 through 3, which range from an activity that may result in imminent unsafe conditions to activities associated with workmanship and appearance. Along with the risk, the activities were rated for sampling frequency, scope, and timing. A database containing the activities, risk assessment, and other information was created in Excel and later imported to the CAS database. From the database, auditing records will be generated, on which the auditors can verify activity requirements. These records will be the basis of ensuring compliance with the contract and recommending payment to the contractor.
Members of the T-REX team that will be auditing the T-REX project attended accredited audit training and received certification under the International Register of Certified Auditors (IRCA) Quality Management System (QMS) Auditor Certification Scheme. The training gave the team an understanding of the principles and practices of audits of quality systems for compliance with ISO 9000:2000 Series Standard.
FDOT (Jan 2002)
QA/QC program is part of design-builder's technical proposal. "The firms are responsible to provide their game plan. The inspection team, whether they work for FDOT or contractor, identify shortcomings and work with firm to fix. Resolve issues thru good communications."
Greenville County , SC (Jan 2002)
The design-builder's geotechnical firm provides inspectors for each project and at each site where some type of paving operation is taking place. The design-builder's design firm has a special construction engineer on staff that makes periodic inspections and addresses field problems if they arise. County staff will meet with the construction engineer, geotechnical inspector, and Project Management QC person to resolve issues that arise in the field.
LADOTD (May 2009)
LADOTD places QC responsibility on the design-builder. QA is performed by a separately procured independent consultant
MDSHA (August 2008)
MDSHA requires the contractor to be involved in the design reviews to ensure all constructability issues are being considered. Construction quality is still a function of the owner. Material testing and field testing is done by the owner. Corrections to both design issues and construction issues are resolved as either a "greenline revision" or documented as an "As-Built" at the conclusion of the project.
Michigan DOT (May 2009)
The FHWA - Michigan Division requires Michigan DOT to have the same level of construction oversight on design-build projects that is utilized on traditional design-bid-build projects unless Michigan DOT develops and incorporates a long term performance warranty in the project instead of the typical materials and workmanship warranty. The party performing QA and QC is essential the same on design-build and design-bid-build projects.
Montana DOT (May 2009)
QC for design and construction is the design-builder's responsibility. QA and IA are conducted by Montana DOT.
NAVFAC (Jan 2002)
The contractor is responsible for providing a construction quality control (CQC) process. Enforcement is through government quality assurance. In general, we have not experienced any appreciable change in either design or construction quality, but we have experienced a significant reduction in conflicts and disputes.
NC DOT (Jan 2003)
NC DOT provides for quality control (QC) in one of three ways on its design-build projects. In the first option, the contractor, through a CEI firm as part of the design-build team, provides QC. In the second option, NC DOT staff provides QC. In the third option, a CEI firm selected by NC DOT provides QC. The first two options have been tried and appear to be successful thus far. NC DOT plans to use the third option on a 2003 design-build project. So far, NC DOT staff has performed all QA. The QC documenting required on NC DOT design-build projects is the same as on conventional projects.
TCA (Jan 2002)
Contractor QA/QC with owner's Construction Engineering Manager (CEM) providing 20% independent QA testing and oversight inspection. In a few cases CEM testing was used for acceptance where the contractor testing failed.
In general, the contractor was good at testing but not inspection. The number of inspectors on the job was a frequent topic of discussion. There were never enough people, and they were inevitably under-qualified.
For future projects, TCA would have the contractor perform testing, but would change to owner agent inspection.
If TCA had responsibility for maintenance of the project following completion, it would consider requiring the contractor to perform long-term maintenance, and to pay lane rental for repair/replacement work during the maintenance period.
TCA's former Director of Design and Construction reports that the cost of construction QC should be somewhere between 6-8% of the D-B price. QA should be roughly 4%. That is why the TCA's contracts include a provision that allows the owner to shut down the contractor if they don't have sufficient staffing levels in the QC department.
UT DOT Legacy Parkway (Jan 2002)
Contractor is responsible for all quality control. The design-builder's Independent Quality Firm (IQF) is responsible for QA activities with QA oversight by UT DOT. Of special note, the IQF Managers report day-to-day to the design-builder's project manager, but also have direct access to the design-builder's senior management and to UT DOT's project director, as well as directly providing them weekly reports. Some quality issues with construction have occurred. Quality summit meetings were held with all UT DOT/FAK(design-builder) personnel and jointly resolved the issues.
UTA (Jan 2002)
The contractor supplied both QA and QC. The QA reported directly to the joint venture's management. A quality plan was developed by the contractor and approved by the owner. The owner then audited compliance with the quality plan in the areas of design, construction, and public involvement. Several issues arose in construction quality. Generally these were observed by the contractor and corrected without comment. When identified and noticed by the owner, the corrections occurred without issue. Construction QA, including QA sampling and testing, was conducted by an independent firm retained by the contractor. One of the project stakeholders (UT DOT) performed verification sampling and testing and independent assurance functions for UTA.
VDOT (April 2009)
On most projects, VDOT assigns both design and construction quality assurance and quality control responsibilities to the design-builder. The design-builder is responsible for submitting a Quality Management Plan that meets VDOT's Minimum Requirements for Quality Control and Quality Assurance Plans on Design-Build Projects (VDOT QAQC). VDOT still performs independent assurance and independent verification monitoring. VDOT has retained construction quality assurance and quality control responsibilities on smaller projects (less that $2,000,000).
6.4. Partnering and Disputes
Several agencies in the original survey mentioned partnering as the solution to different types of problems. Many agencies include partnering as the first step in resolution of disputes. UT DOT pointed out the importance of holding a Quality Summit and using partnering to resolve issues as they arise.
Some respondents have created Dispute Review Boards (DRBs) to assist in resolution of disputes where partnering has failed. DRBs are more commonly found on larger, more complex projects. For a few projects the DRB is given binding authority to decide smaller disputes (in which case the documents usually provide that the DRB chairman must be an attorney). However, in most cases DRB's are advisory only.
Six out of 13 agencies responding to the original survey did not escrow pricing documents from design-build teams. The seven agencies that used escrowed pricing documents, on the other hand, believed they were valuable. ACTA said: "Proposal documents were delivered into escrow on the Proposal Due Date. Prior to award ACTA representatives reviewed the selected proposer's documents to determine whether they were complete. Following award the documents were delivered to ACTA to be held in a locked file cabinet (with the key held by the Contractor). The documents have been helpful re: disputes regarding scope, pricing of work. They help to discourage unjustified claims. For future contracts, we would want to require pricing data for major subcontracts, and conduct a preliminary review as the pricing data are provided, similar to the pre-award review of the contractor's data described above."
TCA described its process as follows: "The documents were initially delivered to an escrow company and following award were kept in a locked file cabinet in a locked room in the Agency's offices. They were reviewed on multiple occasions for both the San Joaquin and Eastern contracts, for the purpose of determining whether certain items were included in the original bid and for the purpose of determining a reasonable price for added or deleted work. For San Joaquin, on two occasions a review of the escrowed documents resulted in a determination that the contractor had provided for the work in question in bidding the job."
On the topic of disputes involving third parties, ACTA said: "We would want to consider ways to avoid disputes regarding compliance with third party agreements. The contract documents included agreements with local agencies serving to establish the procedure to be followed by the contractor in design and construction of improvements that would be owned by the local agencies. Provisions in these agreements were interpreted differently by the contractor and the local agencies (such as the meaning of the phrase "in substantial accordance with"). We might want to include a provision regarding the philosophy underlying the contractor's dealings with third parties - requiring the contractor to satisfy the agency's requirements, and limiting the contractor's recourse if it disagreed with the agency."
LADOTD (May 2009)
LADOTD uses partnering as a first step in resolving disputes. The agency has had success using a neutral third-party facilitator early in the process.
Depending on the project, LADOTD has used either a DRB or "issue escalation" as the next step in the dispute resolution process. This step is nonbinding but is a prerequisite to litigation.
Issue escalation involves elevating the consideration of the dispute to higher ranking officials in the Department, if it is not resolved at the staff level. Often it also involves elevating the dispute to higher ranking officials within the contractor's organization as well. Issue escalation allows individuals within the Department who are not involved on a day to day basis to bring fresh perspectives to the dispute.
6.5. Agency Handling of Quality Assurance
Almost all the agency responses revealed an understanding that the basic responsibility for quality should rest with the design-builder, who is also responsible for both the design and the construction. The agencies' biggest challenge appears to be how best to transfer the responsibility for quality through contractual commitments or performance standards, while at the same time ensuring public due diligence. Almost all of the agencies recognized that quality control is best realized when placed in the hands of and managed properly by the producer - the design-builder. However, a more significant difference of opinion was apparent among the agencies over who should be responsible for quality assurance . Although a few agencies view quality assurance as the sole responsibility and purview of the owner, some owners are moving towards placing quality assurance responsibility in the hands of the design-builder, while retaining an oversight role through monitoring and/or auditing and independent assurance testing. Agencies that have experienced quality problems on projects are retaining quality assurance responsibility. This approach to quality assurance is occurring for a combination of reasons. First, owners are looking for single source responsibility in their design-builders. Second, the more control the owner retains (i.e., inspection and approval to proceed with work), the more risk for quality and schedule is retained by the owner and the less is transferred to the design-builder. This is true for quality assurance in both design and construction. Third, owners are no longer able to hire or retain staff or are under pressure to reduce staff. Additionally, as a lesson learned, one of the agencies (ACTA) stated that they would prefer the primary designer to perform the quality assurance and would also like to have the Engineer of Record provide a certificate at the end of the job regarding conformity of construction to the final design.
The National Cooperative Highway Research Program, Synthesis Report No. 376 - "Quality Assurance in Design-Build Projects" documents the current state of practice for quality assurance programs in design-build.
Reference - Quality Management Plan special provisions: see the NCHRP Project No. 20-7 / Task 172, Recommended AASHTO Design-Build Procurement Guide (or the January 2008 AASHTO Guide for Design-Build Procurement), sample special provision Number 006-QM-01 Quality Management Florida DOT 2000, 007-QM-02 Quality Management Maine DOT 2003 and 008-QM-03 Quality Management Washington DOT 2000.
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