Construction Program Guide
Special Experimental Project No. 14 - Alternative Contracting
Learn about FHWA's 2021 Enhancing Highway Workforce Development Opportunities Contracting Initiative
Since 1990, the FHWA has been allowing the State DOTs to evaluate non-traditional contracting techniques which are competitive in nature but do not fully comply with the requirements in Title 23 United State Code. Federal-aid construction contracts that utilize a method of award other than the lowest responsive bid must be evaluated under FHWA's Special Experimental Project No 14 (SEP-14) - "Innovative Contracting". The non-traditional practices originally approved for evaluation were: cost-plus-time bidding, lane rental, design-build contracting, and warranty clauses.
Based on the generally positive experiences of State DOTs, on May 4, 1995, FHWA decided that cost-plus-time bidding and lane rental were techniques suitable for operational use. Warranties became operational through an interim final rule on August 25, 1995.
On December 10, 2002 in response to section 1307 of TEA-21, FHWA published the final rule which established regulations for design-build contracting as 23 CFR Part 636. Subsequent modifications required by section 1503 of SAFETEA-LU resulted in revisions published in a final rulemaking on August 14, 2007. Among the revisions made by SAFETEA-LU were the elimination of the dollar thresholds for "qualified" projects; and permission to release an RFP or award a design-build contract prior to completion of NEPA. Design-build procurement processes which deviate from the requirements of 23 CFR 636 may require an SEP-14 work plan and approval.
Since 2012, FHWA has decided that three additional practices are operational and no longer need SEP-14 approval: Alternate Pavement Type Bidding; Construction Manager/General Contractor (CM/GC) Project Delivery, and Alternative Technical Concepts (ATC) on design-build projects.
Authority/Legal Basis
Laws
- 23 U.S.C. 112 Letting of Contracts (2015)
- 23 U.S.C. 502 Surface transportation research, development, and technology (2012)
Regulations
- 23 CFR 635.413 Guaranty and warranty clauses (04/01/2013)
- 23 CFR 636 Design-Build Contracting; Final Rule (08/14/2007)
- 23 CFR 636 Design-Build Contracting
- 23 CFR 635 Contract Procedures; Bonus Payments; Rescission of Regulation (06/13/1984)
Policy
- Programmatic Approval of Alternate Pavement Type Bidding (11/08/2012)
- Innovative Contracting Practices Initiative and Special Experimental Project No. 14 (02/13/1990)
Guidance
- SEP-14 Briefing Paper
- SEP-14 FHWA/HUD Livability Initiative (archived)
- SEP-14 Local Labor Hiring Pilot Program (archived)
General Information
- Current SEP-14 Project List
- FHWA's Design-Build home page includes links to several documents concerning the FHWA's design-build rule making process, State DOT design-build legislation, State DOT design-build web sites, sample RFQ/RFP/ITP documents, etc.
- Alternative Contracting Information
- Transportation Research Board/National Research Council Circular 386: Innovative Contracting Practices (1991)
- NCHRP Synthesis #379: "Selection and Evaluation of Alternative Contracting Methods to Accelerate Project Completion" (2008) (.pdf)
- Caltrans - April 2008 Alternative Procurement Guide
- Colorado DOT Innovative Contracting
- Florida DOT - Alternative Contracting web page
- Michigan DOT - Innovative Construction Contracting Guide (updated March 5, 2015)
- Minnesota DOT - Innovative Contracting Methods
- Ohio DOT - Innovative Contracting Manual
- Oregon DOT - Design-Build Decision Matrix
- Design-Build Institute of America
- University of Colorado Boulder Project Delivery Selection Matrix
- Finnish Road Enterprise – Innovative Project Delivery Methods for Infrastructure: An International Perspective