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Right-of-Way Design/Build

Design/Build Contracts and Right-of-Way Activities

May 2000

Background

The design/build approach is an innovative construction technique which allows a single procurement for the design and construction of projects. It is one of four innovative contracting practices which are being explored and evaluated in the FHWA Special Experimental Project No. 14 (SEP 14). The design/build approach has been used successfully by many States, typically on bridge projects. Twenty-six states, several municipalities and local public agencies have utilized design/build to advance projects.

The design/build concept allows the contractor maximum flexibility for innovation in the selection of design, materials and construction methods. Under the design/build concept, the contracting agency identifies the end result parameters and establishes the design criteria minimums. The prospective bidders then develop proposals which optimize their construction capabilities. Design/build opens up a new degree of flexibility for innovation. Allowing the project design to be tailored to a contractor's advantage provides flexibility to compensate for cost increases in one area through efficiencies in another. This concept allows the contractor to optimize his work force, equipment and scheduling.

However, along with the increased flexibility, the contractor must also assume greater responsibility and risk. Because both design and construction are performed under the same contract, claims for design errors or delays are not allowed and the potential for other types of claims are greatly reduced. In addition, when right-of-way (R/W) activities are involved, special attention should be given to the anticipated construction schedule. The prime contractor should be cognizant of the risks associated with lengthy relocations and court cases. From a state highway agencies' perspective, the potential time savings is a significant benefit and sometimes outweighs the risks.

Recently, design/build projects have been authorized to include (R/W) acquisition in addition to design and construction, creating a "turnkey" project for the State. Prior to this authorization, necessary R/W for design/build projects was typically provided by the State or local transportation agency. To include R/W acquisition services as part of the design/build approach, it must be allowed by State procedures for procurement of such services.

Design/build projects including R/W acquisition are expected to increase nationwide. With the increase in funding provided by TEA-21, many States are turning to design/build contracting to advance projects. Section 1307 of TEA-21 expands and clarifies the circumstances under which design/build projects may be advanced (amended 23 USC Section 112 by adding design/build contracting for any ITS project over $5 million and any other project over $50 million). It also dictates that regulations will be developed in consultation with AASHTO. In the interim, States interested in advancing projects utilizing design/build contracting will continue to be approved under the SEP 14 program.

With generous cooperation from the states of South Carolina and Virginia, and the Transportation Corridor Agency, Orange County, California, the Office of Real Estate Services reviewed several design/build projects. We interviewed officials from the State and FHWA Division offices, along with key individuals from the prime contractor's team, to determine "best practices" and the extent of any problems associated with these projects. The following information is provided for your use in advancing design/build projects.

Unique Characteristics of Design/Build Projects


Recommendations and Best Practices for Design/Build Contracting

R/W must be acquired and cleared in accordance with the Uniform Relocation and Real Property Acquisition Policies Act of 1970, as amended, and State DOT R/W procedures. Actions which create an undue hardship for property occupants must be minimized to the greatest extent practicable or avoided altogether. Staging of R/W acquisition, adequate relocation lead time, coordination with construction activities, and creation of hold off zones related to occupied properties are all critical to integrating R/W acquisition activities into the design/build concept. The following is provided for consideration in utilizing design/build contracting to advance projects including R/W activities. Not all of the items are applicable to all projects; however, each one should be analyzed for relevance to a particular project.

Design/Build Proposals - Essential Considerations

Recommended Design/Build Contract Requirements

Right-of-Way Best Practices to Consider in Design/Build Projects

For additional information, refer to the following FHWA resource:

www.fhwa.dot.gov/ipd/finance/default.aspx

or the following private sector resource: The Design/Build Institute of America http://www.dbia.org

Updated: 05/28/2014
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