DESIGN BUILD NATIONAL PERSPECTIVE by Dwight Horne FHWA

WHAT IS DESIGN-BUILD ?? PROCUREMENT METHOD RISK SHARING TECHNIQUE INNOVATION QUALITY BASED SELECTION WARRANTY OPTIONS FINANCING OPTIONS

Design-Build - Why is it Experimental? Design-Build 23 USC 112 (b)(1) Competitively Bid (Low bid) Construction Contracts 23 USC 112(b)(2) Qualifications based Selection, Engineering / Design Services

STATE DOT CHALLENGES FEWER STATE DOT EMPLOYEES MORE $$ HIGHER PUBLIC EXPECTATIONS –MORE CUSTOMER FOCUS –MORE INNOVATIVE CONTRACTING

Design / Build NOTIF NOT WHEN HOW

Design-Build Selection Procedures Low Bid Modified Design-build Adjusted Bid Highest Composite Score Best Value Best Value / Fixed Budget

Procurement Strategy

Advantages of Design-Build (from Owner Perspective) Single Point of Responsibility Quality / Innovation Potential Time or Cost Savings Improved Risk Management Earlier Knowledge of Firm Costs Lower Incidence of Claims Reduced Project Administration

Advantages of Design-Build to Industry INNOVATION CONSTRUCTABILITY DESIGN TO STRENGTHS BETTER SCHEDULING MORE COST AWARENESS SHORTER DECISION TIME

DESIGN / BUILD State & Local Governments Private Companies Federal Agencies

FHWA Design-Build Philosophy Give same Flexibility & Protection offered by FEDERAL ACQUISITION REGS. Allow D-B contracting techniques allowed under STATE LAW Comply with other Federal-aid Provisions Preserve the NEPA process Determine best entity to manage risk Protect the Public $$ –Competition - Best Value - Quality

States Currently Using Design-Build

SEP-14 Design-Build Contract Amounts

TEA-21 Design-Build Legislation Section 1307 By June 2001 FHWA must develop regulations It will allow states to use D/B without HQ approval for : –ITS projects > $ 5 million –Other projects > $50 million Existing SEP-14 will be used in the transition period SEP-14 will continue for smaller projects

ISSUES For Consideration when Structuring Procurement For FHWA Consideration in Rulemaking

NEPA COMPLIANCE? RFP Release? Issue When should the RFP be released relative to the conclusion of NEPA? Public perception - bias for build/preferred alternate if RFP prior to ROD Contingencies Federal investment / risk Trade-off - time vs. risk of increased costs

Procurement Issues Issue Basis of evaluation and award Low-Bid Two-Phase Process Best Value Decision based on %, design complete, risk, project uniqueness

Procurement Issues - Weight of Price Issue Weight of price in the selection process Relative weight How to compare Consideration of other factors

Standardized Changed Condition Clauses Issue For traditional Federal- aid construction projects, 23 CFR applies. However, TEA-21 Section 1307(b) indicates SCCC are not necessary for design- build. Owner delays Differing site conditions Significant changes in character

FHWA Authorization / Approvals Issue Timing of authorization Involvement in project approvals Timing relative to NEPA Prior to release of RFQ, RFP, Concurrence in award Existing stewardship agreements Clean Air Implications

Conflict of Interest Issue Owners consultant? Owners subconsultants? Same consultant / different teams post award team changes /enhancement Competition Unfair advantage Bid shopping? Minimum team requirements/ enhancement?

Owner Oversight Issue What is the appropriate level of owner oversight? Owners role Verification Applicability of 23 CFR 637 (acceptance testing, IA testing) Warranties

Time Table NPRM - Fall 00/Early Winter Published in Federal Register Final Rule - Spring of 01 Published in Federal Register + 30 Days - Effective

Additional Resources on SEP-14 Design-Build Projects FHWA HIPA-30 web page – racts/d_build.htm Utah State University web page – ng/ICSearchpage.html –Run query for design-build projects WSDOT Design-Build Process for Highway Projects – ake

GIVE US YOUR COMMENTS On THESE and OTHER DESIGN/BUILD ISSUES Important to you IN WRITING –as an Association –as a Company –as an Individual TO FHWA 400 SEVENTH STREET WASH. DC 20590