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Utility Involvement in South Carolina Design-Build Projects


South Carolina is the 11th fastest growing State in the country, outpacing the nation overall in terms of major economic indicators. Recognizing that the State's economic performance is strongly linked to its transportation network, the South Carolina Department of Transportation (SCDOT) in recent years has been faced with the challenge of how to keep pace with its transportation needs. In addition to meeting demands for new roads to serve growing areas of the State, SCDOT maintains the fourth-largest highway system in the U.S., which includes 42,000 miles of State highways and 800 miles of Interstates. Traditional highway funding sources on a pay-as-you-go basis have been insufficient to finance needed highway improvements.

27 In 7 Program

South Carolina could not wait for years or decades until it could afford to pay for projects on its long-range transportation plan. Using an array of innovative financing concepts, SCDOT is advancing 27 years of road and bridge projects in just seven years. They are doing this by putting aside conventional ways of doing business and embracing innovative financing. This includes public/private partnerships, financial partnerships with local planning organizations, and new ways of leveraging future Federal dollars.

Prominent projects benefiting from the 27 in 7 program include:

  • Conway Bypass. $387 million; 28.5 miles; 4-lanes from U.S. 501, 10 miles north of Conway, to the Carolina Bays Parkway, and 6-lanes from there to U.S. 17 in the Myrtle Beach area. Now open to traffic.
  • Greenville Southern Connector. $219 million; 16 miles; toll road; 4-lane southern loop around the city of Greenville linking I-85 and I-385. Now open to traffic.
  • Cooper River Bridges. $531 million; Arthur Revanel Jr. Bridge will replace Charleston's Cooper River Bridges and connect the historic Charleston peninsula with the growing town of Mount Pleasant; 2.8 miles of structures that include two interchanges, a pedestrian and bicycle facility, and a 1,546-foot cable-stay span over the shipping channel.
  • Carolina Bays Parkway. $232 million; 6-lanes from US-501 to SC-9, north/south highway intersecting the Conway Bypass in the Myrtle Beach area.
  • SC-170 Widening Project.$105 million; 12.5 miles; widening to 4-lanes west of the City of Beaufort from east of the SC-462 to just west of S-761 (W.L. Alston Drive) and the replacement of bridges over the Chechessee and the Broad Rivers.

All the above projects are design-build projects that were financed primarily by the State Infrastructure Bank, except for the Greenville Southern Connector toll road that was financed primarily by private investors.

Under the 27 in 7 Program, SCDOT is also accelerating improvements to the Interstate System. They are financing this work using State Highway Bonds and Federal funds, with future debt service on the highway bonds funded through future Federal funds. The program includes the following widening and interchange improvement projects:

  • Interstate Widening Projects:
    • I-26 in the Charleston area. $40-65 million; 10 miles; 6-lanes.
    • I-85 in the Greenville area. $80-110 million; 15 miles; 6 lanes, 7 bridges.
    • I-77 in the Charlotte, N.C. area. $25-40 million; 5 miles; 8 lanes; 1 bridge.
  • Interstate Interchange Improvement Projects:
    • I-26/US-78 (University Avenue, Exit 205) near Charleston. $10-15 million.
    • I-26/US-378 (Sunset Boulevard, Exit 110) in Columbia. $8-13 million.
    • I-20/SC-6 (South Lake Drive, Exit 55) in Columbia. $5-10 million; ROW only.
    • I-26/US-176 (Broad River Road, Exit 101) in Columbia. $15-20 million.
    • I-385/S-55 (Fairview Road, Exit 27) in Greenville. $20-25 million.
    • I-85/SC-14 (Exit 56) near Greenville area. $17-22 million)
    • I-85/SC-11 (Floyd Baker Boulevard, Exit 92) in Gaffney. $18-23 million.

State Infrastructure Bank

The cornerstone of SCDOT's accelerated program is the State Infrastructure Bank (SIB) created in 1977 by the General Assembly to assist in financing major projects. South Carolina was one of the first 10 states selected by the U.S. Secretary of Transportation to participate in the SIB pilot program established under Section 350 of the National Highway System Designation Act of 1995 (Public Law 104-59). The South Carolina SIB is unique in several ways. It is focused on funding larger transportation projects - those exceeding $100 million; it is one of two SIBs nationally that is currently leveraging its capital through bonding; and it provides grants as well as loans for project financing. Major sources of revenue include $66 million from the State General Fund as a one-time source of capitalization and State recurring monies that include a share of a one-cent per gallon gas tax (approximately $22 million annually). Other sources include contributions from borrowers who have received SIB funding in the form of loan repayments and additional contributions from SCDOT.

Construction And Resource Managers (CRM)

Partnerships with the private sector and local governments have been important in the advancement of projects in the 27 in 7 program. As one example, SCDOT has entered into a public/private partnership with two firms providing construction and resource management services that will help SCDOT complete about 200 construction projects in seven years, approximately 20 years sooner than might have otherwise been expected.

The two CRMs are:

  • Fluor Daniel, headquartered in Greenville, S.C. (responsible for the western part of the State).
  • Parsons Brinckerhoff/LPA, headquartered in New York with offices in Columbia, S.C. (responsible for the eastern part of the State).

These CRMs will act as an extension of SCDOT, and both will report to SCDOT on projects they have been assigned to help manage. By partnering with the CRMs, SCDOT avoids having to hire an estimated 500 employees to handle the additional workload. The Federal Highway Administration (FHWA) has worked closely with SCDOT to administer this partnership and a number of other innovative financing programs.


The FHWA is involved in several initiatives under Special Experimental Project No. 14 (SEP-14) to encourage the use of nontraditional innovative contracting practices that have the potential to enhance the quality of highways and minimize negative impacts to road users. One of these initiatives is design-build.

The design-build concept gives the contractor maximum flexibility for innovation in the selection of design, materials and construction methods. With design-build procurement, the State DOT identifies the end result parameters and establishes the design criteria. The prospective bidders then develop design proposals that optimize their construction abilities. The submitted proposals may be rated by the State DOT on factors such as design quality, timeliness, management capability, and cost, and these factors may be used to adjust the bids for the purpose of awarding the contract.

South Carolina has utilized design-build on several major highway projects. Their design-build program has utilized both the adjusted bid method and the highest composite score (combination of cost and qualifications) to select successful proposers. The following criteria were used in the selection process on one project -- cost of the project (55%), qualifications of the proposer (25%), and time of completion (20%).

By allowing the contractor to optimize its work force, equipment and scheduling, the design-build concept opens up a new degree of flexibility for innovation. However, along with the increased flexibility, the contractor must also assume greater responsibility. Since both design and construction are performed with one procurement, construction can begin before all design details are finalized. But, since both design and construction are performed under the same contract, claims for design errors or construction delays due to design errors are not allowed and the potential for other types of claims is greatly reduced. In the same manner, utility relocations can begin at any time the contractor desires, but the contractor is responsible for any utility-related construction delays that may occur.

Section 1307 of the Transportation Equity Act for the Twenty First Century (TEA-21) requires FHWA to develop design-build regulations within three years of the date of enactment (June 9, 1998). The regulations are to include criteria for design-build projects and are to be developed in consultation with AASHTO and affected industries.

The FHWA published a Notice of Proposed Rule Making (NPRM) for design-build contracting in the October 19, 2001, Federal Register. Written comments were requested on or before December 18, 2001. A copy of the proposed regulation is available at the U.S. DOT Docket Management web site:http://dms.dot.gov/. Comments can also be viewed at this site (reference Docket No. FHWA-2000-7799).

The proposed regulation will not mandate the use of design-build contracting, but will allow State DOTs to use it as an optional technique in addition to traditional contracting methods. After the final rule is issued, Intelligent Transportation System (ITS) projects of $5 million or greater, and other projects of $50 million or greater may be approved by FHWA Division Administrators without Headquarters approval. Prior to the final rule, and for projects outside these limits, FHWA will continue evaluation and approval procedures under SEP-14. Section 1307 also requires FHWA to report on the effectiveness of design-build within five years of the date of enactment. The FHWA will work with the appropriate AASHTO and TRB design-build task forces to develop a scope of work for this effort.

Under SEP-14, 24 States and several local transportation agencies have design-build projects approved or underway. The State DOT's include: Alabama, Alaska, Arizona, Colorado, Delaware, Florida, Georgia, Hawaii, Indiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Utah, Virginia and Washington.

Utilities In Design Build

Even though many States DOTs have used design-build, only a few have included utilities. The SCDOT is one of those few DOTs that has included utilities in its design-build projects. The results have been very good. The SCDOT has tried several approaches and arrived at some conclusions as to how best to involve utilities. These conclusions will be included in the "Lessons Learned" section below.

Two of the first design-build projects in South Carolina where utilities were included were the Conway Bypass and the Greenville Southern Connector. A little bit about them is as follows:

Conway Bypass

Surpassing all of the expectations established by community leaders, state officials, environmentalists, and elected representatives, the new Conway Bypass highway near Myrtle Beach was opened to traffic on May 4, 2001, ahead of schedule, well under budget, with an industry-leading safety record, and with a refund to SCDOT. The design-build project began in March 1998. When it was finished, not only was it seven months early, but Fluor Daniel, the prime contractor, presented SCDOT with a check for $303,438.

The $387 million, 28.5-mile, Conway Bypass has a fully access controlled mainline roadway varying from 4-6 lanes, 6 interchanges, 17 mainline bridges that span wetlands and the Waccamaw River, and 14 grade separation bridges at major interchanges and over existing roads and railroad tracks. It was the first major public-private partnership project to be constructed in South Carolina and the first project funded by the State Infrastructure Bank. Other funding came from FHWA, SCDOT, and the Horry County hospitality tax.

The prime contractor, Fluor Daniel, an engineering company with offices in Greenville, was selected by SCDOT and entered into an agreement with SCDOT to design and construct the Conway Bypass. Fluor Daniel's team included local Horry County officials, three engineering firms, three earthwork contractors, two bridge contractors, two paving contractors, two geotechnical testing/inspection firms, and a land acquisition firm.

Flour Daniel was responsible for all utility work on the Conway Bypass. This included contacting all affected utilities, determining prior rights, entering into agreements, coordinating the work, and paying for eligible relocations. Eight utility companies were affected. The estimated cost to relocate utilities was $14 million. The SCDOT policies were followed, but Fluor Daniel did all the work.

The utility work went very well. This was primarily because Fluor Daniel used a very innovative approach. They brought the utility companies into the project development process at the very beginning as active members of the team. They also financed some of the necessary utility relocation activities upfront, thus ensuring superb cooperation, coordination, and communication.

Greenville Southern Connector

The Greenville Southern Connector was opened to traffic on February 27, 2001, about 8½ months ahead of schedule and under budget. The design-build project, which began in February 1998, had been a dream of Upstate South Carolina officials for some 30 years as they sought a way to relieve congestion on Interstate highways 85 and 385 and open up a significant portion of the southern part of the county to economic development.

The $210 million, 16-mile, Southern Connector toll road was built to Interstate standards and designated I-185. It is a fully access controlled 4-lane divided highway with 7 interchanges and 45 bridges. The route begins at I-85, extends in a southeasterly direction, and connects to I-385 at SC-276 interchange.

The Southern Connector was built as a public/private partnership, an innovative financing method that allows businesses and the government to work together to build needed infrastructure without using limited state funds or raising taxes. The construction of the road was paid for through the sale of bonds, which will be repaid with toll revenues. Once the bonds are retired, the operation and ownership of the road will be transferred to the State.

The Connector 2000 Association, a non-profit corporation, was established to oversee the financing and construction of the highway. They were able to sell bonds to the investment community to raise $193 million in toll revenue bonds to make the Southern Connector a reality. Other funding for the project included $5.6 million of FHWA demonstration funds for acquisition of two costly right-of-way tracts [Section 1107, Innovative Projects, ISTEA of 1991, PL 102-240, Project #138], and $17.6 million of SCDOT funds for a connector road to SC-153.

The prime contractor, Interwest Carolina Transportation Group (ICTG), a South Carolina-based team of engineers, builders, contractors and other experts, was selected by SCDOT and entered into an agreement with SCDOT to design and construct the Southern Connector. The ICTG team included Interwest Management for overall management and coordination; Wilbur Smith Associates, Inc. and Florence & Hutcheson, Inc. for preliminary engineering and design; Thrift Brothers for roadway and bridge construction; Kutak Rock LLP for legal matters; Mesirow Financial and Lehman Brothers for financial and investment services; and Pan Inc. for right-of-way acquisition.

Interwest Management was responsible for all utility work on the Southern Connector. This included contacting all affected utilities, determining prior rights, entering into agreements, coordinating the work, and paying for eligible relocations. Affected utilities included Duke Power, BellSouth, Western Carolina Regional Sewer Authority, Greenville Water System, several cable TV companies, and several small water and sewer companies.

There were no major delays created by utility relocations. This was primarily due to some innovative activities employed by Joan Peters who was coordinating all utility activities on the Southern Connector for Interwest Management. At the beginning of the project, Ms. Peters hosted a partnering session for utility company and SCDOT representatives. Since a private developer was managing the project instead of SCDOT there were unique issues that had to be addressed. The partnering session lasted four hours and addressed many issues regarding the scope of the project. This got things off to a good start. Then, during construction, bi-weekly utility meetings were held. Since it was a design-build project, it was possible to look forward and make changes to minimize impacts as well as clear areas for the contractor to work.

Lessons Learned

The utility work has gone very well on all the design-build projects. The SCDOT has learned some things though that may be helpful to other States considering including utilities in their design-build projects.

  • Communication, coordination, and cooperation - early and often - are essential to a smooth operation. Fluor Daniel brought the utility companies into the project development process at the very beginning of the Conway Bypass project and made them active members of the team. Interwest Management did the same on the Greenville Southern Connector project.

    Flour Daniel, the CRM for the western portion of South Carolina, has acquired the services of J. Peters, Inc., a Greenville engineering company, to coordinate all 27 in 7 utility activities for which they are responsible. Joan Peters, president of the company, has made extensive efforts to involve the utilities and keep them informed of 27 in 7 highway projects that may affect them.

    Recognizing the great success Ms. Peters has had working with the utilities, SCDOT has put together a team that is holding meetings with utility companies around the State. The purposes of these meetings are to provide an update of the 27 in 7 highway improvement program; to provide utility owners short and long-term project listings and locations planning and budgeting purposes; to provide information resources for projects; and to receive feedback on partnering and communication efforts. Scheduled meetings are posted on the SCDOT web site (http://www.dot.state.sc.us/) under "doing business with SCDOT".

  • The process for handling utility agreements has evolved. On the Conway Bypass project the contractor prepared, negotiated, and entered into agreements with the utilities for utility relocation work. On the Greenville Southern Connector project the contractor also prepared and negotiated agreements, but the utilities did not want to enter into agreements with the contractor unless SCDOT was also involved. As a result SCDOT signed off on the agreements as a third party. On future design-build projects, SCDOT believes the best procedure will be for the contractor to prepare and negotiate agreements, but for SCDOT to be the sole party to enter into the agreements with the utilities. Even so, the contractor will still be responsible for coordinating the utility relocation work and for resolving any problems that may arise.
  • The funding process has also evolved. On the Conway Bypass and Greenville Southern Connector projects, the contractors were responsible for determining prior rights and for paying for the costs of eligible utility relocations. Utility relocation costs were items in the contracts. If they turned out to be more than the contractors estimated, the contractors were responsible, and if less, then the contractors saved some money. On some subsequent projects, however, such as the SC-170 Widening Project, even though the contractors have still determined prior rights and have coordinated and been responsible for all the work, SCDOT has been solely responsible for payments to the utilities for their actual expenses. This seems to be the preferred SCDOT method at the present time.
  • Champions are important. Two champions in particular - Marion Leaphart and Joan Peters -- have been instrumental in the successful inclusion of utilities in design-build projects.

    Mr. Leaphart has established a unique working relationship with the utilities over the years based upon honesty, openness, and a willingness to work together to solve problems. There is no way to measure the extent to which this approach has been responsible for resolving problems before they begin and advancing SCDOT's 27 in 7 program. He has also made it known to all utilities that design-build is an innovative approach that SCDOT needs to use to accomplish its goals, but that even so, SCDOT is still heavily involved in the process, providing sufficient oversight, and available and willing to help resolve any problems that may arise.

    Ms. Peters, as mentioned previously, has pioneered the process of communicating, coordinating, and cooperating with the utilities early and often. She has been willing to listen to the utilities' needs and problems, has helped resolve problems as soon as they arise, and has instilled a sense of partnership in the utilities and a desire to help advance SCDOT's 27 in 7 program. She has recognized that it is more effective in working with the utilities to work together as a team than to dictate policies and desires.

Sample Scope Of Work For Design-Build Utilities Work

  • The CONTRACTOR shall have the responsibility of coordinating the project construction with all UTILITIES that may be affected.
  • The CONTRACTOR shall be responsible for the cost of utility coordination. Coordination shall include, but shall not be limited to, contacting each UTILITY to advise of the proposed project, obtaining copies of plans for existing utility facilities (if available), and determining requirements for the relocation of facilities.
  • The DEPARTMENT and/or the UTILITY shall be responsible for the cost of utility relocation, based on prior rights, and in accordance with the DEPARTMENT's "A Policy for Accommodating Utilities on Highway Rights of Way" and the Code of Federal Regulations, Title 23, Chapter 1, Subchapter G, Part 645, Subparts A and B.
  • The CONTRACTOR shall design the project to avoid conflicts with UTILITIES, and minimize impacts where conflicts cannot be avoided.
  • The CONTRACTOR shall initiate early coordination with all UTILITIES located within the project limits.
  • The CONTRACTOR shall provide UTILITIES with design plans as soon as the plans have reached a level of completeness adequate to allow them to fully understand the project impacts. The UTILITY will use the CONTRACTORS design plan for preparing Relocation Sketches. If a party other than the UTILITY prepares Relocation Sketches, there shall be a concurrence box on the plans where the UTILITY signs and accepts the Relocation Sketches as shown.
  • The CONTRACTOR shall coordinate and conduct a preliminary review meeting with the UTILITIES to assess and explain the impact of the project. The DEPARTMENT's Project Manager, Resident Construction Engineer (RCE), and Utilities Manager (or designee) shall be included in this meeting.
  • The CONTRACTOR shall research the prior rights of each UTILITY's facilities. If there is a dispute over prior rights with a UTILITY, the CONTRACTOR shall be responsible for resolving the dispute. The CONTRACTOR shall meet with the DEPARTMENT's RCE to present the prior rights information gathered. This information must be sufficient for the RCE to certify the extent of the UTILITY's prior rights. The DEPARTMENT shall have final approval authority as to the CONTRACTOR's determination of whether the UTILITY has prior rights.
  • The CONTRACTOR shall prepare and submit to the DEPARTMENT a Preliminary Utility Status Report within 120 days of the Notice to Proceed that includes a listing of all UTILITIES located within the project limits and a recommendation as to the extent of each UTILITY's prior rights. This report shall include copies of easements, plans, or other supporting documentation that substantiates any prior rights of the UTILITIES. The report shall also include a preliminary assessment of the impact to each UTILITY.
  • The CONTRACTOR shall be responsible for collecting the following from each UTILITY that is located within the project limits: Relocation Sketches including letter of "no cost" where the UTILITY not have a prior right; Utility Agreements including cost estimate and relocation plans where the UTILITY has a prior right; Letters of "no conflict" where the UTILITY's facilities will not be impacted by the Project.
  • The CONTRACTOR shall review all Relocation Sketches and Utility Agreements to ensure that relocations comply with the DEPARTMENTs "A Policy for Accommodating Utilities on Highway Rights of Way" and the Code of Federal Regulations, Title 23, Chapter 1, Subchapter G, Part 645, Subparts A and B. The CONTRACTOR shall also ensure that there are no conflicts with the proposed highway improvements, and ensure that there are no conflicts between each of the UTILITY's relocation plans.
  • The CONTRACTOR shall prepare and submit to the DEPARTMENT all Relocation Sketches, Utility Agreements, and Letters of "no conflict," as set forth above for the project. The CONTRACTOR is expected to assemble the information included in the Utility Agreements and Relocation Sketches in a final and complete form and in such a manner that the DEPARTMENT may approve the submittals with minimal review. The CONTRACTOR is expected to meet with the DEPARTMENT's Utilities Office within 45 days of the Notice to Proceed to gain a full understanding of what is required with each submittal. The UTILITIES shall not begin their relocation work until authorized in writing by the DEPARTMENT.
  • Each Utility Agreement and Relocation Sketch submitted must be accompanied by a certification from the CONTRACTOR stating that the proposed relocation will not conflict with the proposed highway improvement and will not conflict with another UTILITY's relocation plan.
  • The CONTRACTOR shall be responsible for coordinating the work of its subcontractors and the various UTILITIES. The resolution of any conflicts between UTILITIES and the construction of the project shall be the responsibility of the CONTRACTOR. No additional compensation will be allowed for any delays, inconveniences, or damage sustained by the CONTRACTOR or its subcontractors due to interference from utilities or the operation of relocating utilities.
  • At the time that the CONTRACTOR notifies the DEPARTMENT that the CONTRACTOR deems the Project to have reached Final Completion, the CONTRACTOR shall certify to the DEPARTMENT that all UTILITIES have been identified and that those UTILITIES with prior rights or other claims related to relocation or coordination with the project have been relocated or their claims otherwise satisfied or will be satisfied by the CONTRACTOR.
  • The CONTRACTOR shall accurately show the final location of all utilities on the as-built drawings for the project.


27 IN 7 Peak Performance, SCDOT, Office of Communications, PO Box 191, Columbia, SC 29202. Web Page: http://www.scdot.org/inside/financing.html

Innovative Finance Primer, Federal Highway Administration, 2002, Publication No. FHWA-AD-02-004

South Carolina DOT Web Site: http://www.dot.state.sc.us/

FHWA Web Site: https://www.fhwa.dot.gov/

FHWA Utilities Web Site: https://www.fhwa.dot.gov/programadmin/utility.cfm

Updated: 06/27/2017
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