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Final SEP-14 Report for Alternate Technical Concept (ATC) Bidding for the New Missouri River Bridge Project
March 25, 2010
Alternate Technical Concepts (ATC) is an alternate design development and contract procurement that utilizes contractor input on design to reduce costs in the design bid build process.
MoDOT has used a smaller scale version of the ATC process on several projects in the past two years. This process allowed contractors to confidentially submit an idea for an ATC. Along with the idea a total savings breakdown is given. MoDOT would review the idea to assure it provided an equivalent or better product. Also an estimate of the design cost is made to assure a savings will be achieved that is greater than the design cost. If the ATC was accepted the contractor would bid the plans knowing their ATC concept was approved. If the ATC bidder was the low bidder then MoDOT or its designer would design the ATC to final signed and sealed plans.
The MRB ATC plan was similar and was as follows:
Major means the contractor designs at his expense and becomes Engineer of Record for concept
Minor means the owner's designer will design at DOT's expense
What determined Major ATC?
Major concepts affect other aspects/details of the bridge than simply confined to the area targeted by the ATC proposal
Alternately, major concepts could be those determined to not to be economically feasible (i.e. Savings is less than estimated design cost).
There were certain criteria that the ATC could not affect.
The following is a look at some of the positives and negatives of the MRB ATC process. The purpose of the ATC process is to lower bid prices by allowing the contractors to utilize their innovation and expertise.
The MRB project consists of a relocated section of I-70. The roadway will have two lanes in each direction and includes a new Mississippi River Bridge. MoDOT is the lead agency for the corridor. However the Illinois Department of Transportation (IDOT) will administer construction projects in Illinois. The three projects the ATC process has been used on are the Missouri Approach, Main Span, and Illinois Approach. These sections are shown on the photo below. In addition we are anticipating using the process on the Missouri Interchange will be let in the spring of 2011. The plans for this project are already completed.
ATC's on the MRB Main Span Project:
MoDOT had prequalified four contractors for the ATC process on the main span contract. Two contractors submitted ATC proposals. These same two contractor teams were the only ones to submit bids. Both ATC proposals involved modifications to the river foundations. The proposals had anticipated savings of $7.5 million and $8.3 million in direct costs.
The owner's designer designed both ideas. The plans were developed to biddable quantities in coordination with the respective contractors. Both contractor teams bid their ATC concepts. Both teams post award believed the ATC benefited their bidding. The bidding advantage was with reduced quantities, less risk, and project timesavings.
One team had submitted a proposal to alter the tower to precast. The savings would come from a 5-month savings on project overhead. This translated into a net proposal savings of $1.5 million. Preliminary design was performed. The contractor ultimately retracted this ATC due to constructability concerns.
The successful bidders ATC was developed to signed and sealed drawings. Contract award amount was $229,450,505. Programmed amount was $190,000,000. The total design costs for ATC on the main span was $72,662. Based on the assumption that the $7.5 million was built in the bid the ATC direct savings would be $7,427,338. In addition there may have been some indirect saving for less risk in construction, time-savings, and increased competition due to the uncertainty of what their competitor may have been bidding.
ATC's On Missouri Approach Project:
There were 5 contractors that prequalified for the ATC process on the Missouri Approach. Four contractors submitted ATC proposals. Three submitted one proposal and one submitted three proposals. The project was programmed at $15 million. The award amount was $10,908,521.
One of the contractors had ATC plans developed for them but ended up bidding the baseline plans. The volatility in steel prices changed the savings from when the concept was developed and when the contract was bid.
The total cost of ATC's designs for the Missouri Approach was $326,275.05. The successful bidder did not bid an ATC.
ATC's on the Illinois Approach Project:
There were two accepted proposals on the Illinois Approach. They were both designed to biddable quantities. The Illinois Approach letting was transferred from the Missouri Department of Transportation to the Illinois Department of Transportation (IDOT) just prior to letting. IDOT believed their state statutes did not allow for the ATC bidding process. Therefore they will not allow ATC proposals to be bid. The cost of designing these two ATC proposals was $278,409.
There were some ATC submittals with savings of around $1,000. The cost of designing these would offset the proposed savings. The multiple ATCs that you get into with these small amounts make bidding preparation and documentation very complex. With the added administrative cost there is probably no advantage of accepting a small value ATC. Therefore there should be a minimum savings amount established for an ATC to be approved.
The ATC process requires that a disc be submitted for bidding instead of electronic bidding. Therefore addendums and especially last minute addendum are hard to make. All unique ATC Electronic Bid Set (EBS) files have to be sent to all ATC bidders. This makes the bidding execution more difficult and introduces the opportunity for more bidding errors. Extreme care must be exercised to not accidentally place the wrong ATC information in each bid package.
Caution must be used to make sure baseline designs are finalized prior to any ATC submittal on that design element. The designer is locked into that design at that point. Any significant alterations could affect the savings on the ATC design. Any changes could possibly be construed as co-opting the contractor's proposal.We did not utilize any major ATC's on our project. There were discussions with contractors on how this may work. There were significant
issues on who the designer of record would be. This also required the contractor to obtain professional liability insurance and possible additional risk. The major ATC process would require much more legal research on the designer of record issue. This would be a significant impediment to implement it. Contractors would also be hesitant to extend large expenditures on design work. No stipends were paid. If a stipend were paid it would lead to concerns that the project would be close to a design build project.
The consensus from contractors who participated in the ATC process thought it was good. Contractors would not be very likely to participate if the design would have to be performed at their expense. The contractors liked having the opportunity to be innovative and utilize it to be more competitive.
The consultant designer thinks the process leads to the most economical design possible.
It appears the foundation of ATC's can be a valuable tool to save money. It may not be a good candidate for all jobs though. Some smaller jobs and if there are numerous bidders may not be the best candidates. But on certain types and sizes of projects it can introduce the competition to drive down bid prices. The use of ATC's should be evaluated on a project by project basis.
This report is a summary of the ATC procurement process as required by the SEP- 14 agreement. A second report will be submitted upon project completion to include the ATC process on the Missouri Interchange project and any ATC-related issues during the construction phase.
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