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SEP-14 Waiver of FHWA requirements for ATCs in 23 CFR 636.209(b))


August 11, 2010

Mr. David Calabrese
Engineering and Operations Manager
Federal Highway Administration
315 W. Allegan Street, Room 201
Lansing, Michigan 48933

Dear Mr. Calabrese:

SEP-14 Waiver of Base Proposal

The Michigan Department of Transportation's (MDOT) design-build program utilizes one phase (low-bid) and two-phase (shortlist and final procurement) contracts. This letter outlines MDOT's proposed process for allowing each proposer on a design-build the opportunity to submit Alternative Technical Concepts (ATCs) for pre-approval and then to submit a proposal with or without A TCs. MDOT's method gives the contractor's team the flexibility to advance beyond the bare minimum approach, and offer the best plan for the money and provide the best value to the State of Michigan.

MDOT proposes to allow proposers to submit ATCs, consistent with 23 CFR 636.209, for review and approval (or disapproval) by MDOT during the pre-proposal period. The ATCs will be approved only if they meet certain requirements and are otherwise acceptable to MDOT. 23 CFR 636.209 permits ATCs for design-build procurements, but states, "Alternate technical concept proposals may supplement, but not substitute for base proposals that respond to the Request For Proposal (RFP) requirements." We understand that the concern underlying this requirement is to ensure fair and open competition, and to make sure that all proposers are competing for the same project.

MDOT hereby requests that the requirement to submit separate proposals for the "base" and "alternate" technical concepts be waived for all design-build projects, allowing each proposer the opportunity to submit A TCs for pre-approval and then to submit a single technical proposal with or without pre-approved ATCs and a single price proposal. MDOT has carefully crafted the procedure to avoid any potential unfairness. Pre-approval of deviations, from design requirements that otherwise would be deferred until after the contract is awarded, will be required as part of this process. The proposed ATC process gives MDOT the ability to factor the proposers' technical solutions into the selection process, allowing a true "best value" selection; and gives MDOT access to solutions from all proposers. It also gives the successful proposer a head start on implementation of its ATCs, and avoids unnecessary costs for proposers to advance a base design that ultimately will not be used.

Imposing a requirement for the proposers to submit separate proposals would impose an unnecessary burden on both the proposers and MDOT, and would likely deter proposers from submitting ATCs. MDOT has addressed the underlying concern regarding fairness by including minimum criteria for A TCs in the RFP. The deviations that will be allowed will not change the character of the project nor require any additional environmental approvals. MDOT therefore believes that a waiver of the requirement is appropriate.

Following is information supporting the waiver request:

  1. Review process and requirements. Enclosure 1 is an excerpt of the ATC provisions from the 9 Mile over 1-75 Bridge Replacement RFP. These provisions are standard in all MDOT design-build contracts.
    • Section 3.8 sets forth MDOT's rationale behind the use of ATCs-further opportunity for innovation and flexibility and to allow pre-approved concepts be part of the best value decision. It also lists the contract documents that contain the requirements against which alternate concepts may be proposed, and clearly cites the approval criteria of "equal to or better" and permitted by environmental approvals. The use of one-on-one meetings (if required) may be requested by the proposer to discuss proposed ATCs.
    • Section 3.8.1 lays out the specific submittal and review process for ATCs including timeframes, actions by MDOT, and are-submittal process. It also sets forth the detailed submittal requirements/contents of an ATC.
    • Section 3.8.2 clearly outlines the determinations that may be made by MDOT on submitted ATCs. It also clearly provides a notice to all proposers that approval of an A TC constitutes pre-approval of a deviation from requirements that would otherwise apply.

    Confidentiality is vital to the success of A TCs. Confidentiality is a critical issue with proposers, who need to be reassured that their innovative thinking and concepts will not be shared with other proposers. This section also authorizes proposers to incorporate preapproved A TCs into their proposals. Any proposer that incorporates an A TC must also provide a copy of the ATC approval letters, to facilitate MDOT's review of the as proposed concept for compliance with the ATC approval requirements.

  2. How the ATC will be considered in the best value determination. Each proposer submits only one technical and price proposal. The RFP does not distinguish between a proposal that does not include any ATCs and proposals that include A TCs. Both types of proposals are evaluated against the same technical evaluation factors, and a best value determination is made in the same manner. A pre-approved A TC may or may not result in a higher technical rating in a particular evaluation factor and may or may not result in a lower price. However, it is the intent in allowing ATCs that both the outcomes of higher quality and lower price will occur.
  3. How clauses assigning responsibility if an ATC is not feasible. The current contract documents include provisions making it clear that the design-builder is responsible for designing the project in conformance with all contract requirements (including ATCs included in its proposal) and is also responsible for obtaining all third party approvals required for A TCs. Provisions will be added to clarify that the design-builder must conform to the original RFP requirements if it is unable to obtain approvals or the concept otherwise proves to be infeasible.
  4. Timeline for ATC approvals. Please refer to the enclosed excerpts.
  5. Betterments. As noted above, MDOT wishes to encourage A TCs that will improve project quality as well as ATCs that reduce project costs without reducing quality. The evaluation process described above allows flexibility for the evaluators to consider quality enhancements.

MDOT is seeking your concurrence in the process outlined above. If you have questions, please contact me at 517-373-0030 or wieferichb@michigan.gov.

Bradley C. Wieferich, Engineer of Design


Kirk Steudle, MDOT
Greg Johnson, MDOT
Mark Van Port Fleet, MDOT
Wayne Roe, MDOT
Kathy Hulley, MDOT
Chris Youngs, MDOT
Kurt Zachary, FHWA

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Updated: 07/26/2017
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