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Best-Value Alternative Bidding (A-D) Evaluation
October 21, 2008
On June 22, 2006, FHWA approved Iowa DOT's request to evaluate a Best–Value (A–D) Alternative Bidding technique under SEP–14. FHWA approved a two year trial of this technique (October 1, 2006 to September 30, 2008) with an analysis to be sent to FHWA by December 31, 2008.
In traditional low–bid contracting, the Contracting Authority has made pre–letting choices on their willingness to pay additional cost for one design or material over other designs or materials. The Contracting Authority must limit the choices the contractors may bid on without knowing if the actual cost differential between the alternative designs or materials. Due periods where material costs are rapidly fluctuating (such as they have over the past 3 years), the costs of key material components often change between the time of design and the bid letting.
Best Value Alternative Bidding Procedures
In Best Value Alternative Bidding, the Contracting Authority expands the choices of designs or materials it is willing to award, and includes the basis for low bidder selection of these designs and materials in proposal. This allows the designer to expand the number of options a contractor can bid, allowing the contractor to bid the options that are most economical for that contractor.
In Best–Value Alternate Bidding, the proposal has Alternative Sections. The proposal will also list a dollar value (Alternative Differential) that the Contracting Authority has pre–determined it will pay for each Alternative Section over the Base Alternative Section. For each set of alternatives, the contractor will be allowed to bid ONE Alternative Section (e.g. either the Base Alternative Section or Better Value Alternative Section. The basis for determining the low bidder for consideration for award will be the contractor who submitted the lowest Bid Total for minus the sum of the Alternative Differentials for that contractor (e.g. A – D) Bidding.
Best Value Alternative Bidding Usage
The Iowa DOT feels the Best–Value (A–D) Alternative Bidding procedure will provide a good tool for bidding projects in Iowa. In discussions with other state DOT we have discovered many states use a similar contracting method to bid PCC versus HMA since the large price increases for HMA Binder. Therefore the Iowa DOT is requesting permission that Best–Value (A–D) Alternative Bidding be allowed as an approved bidding technique for federal aid projects let by the Iowa DOT.