design build national perspective by dwight horne fhwa

DESIGN BUILD

NATIONAL PERSPECTIVE

byDwight 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 basedSelection, Engineering /Design Services

Capitol Outlay

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STATE DOT CHALLENGES

• FEWER STATE DOT EMPLOYEES

• MORE $$• HIGHER PUBLIC

EXPECTATIONS– MORE CUSTOMER

FOCUS

– MORE INNOVATIVE CONTRACTING

Design / Build

• NOT “IF”

• NOT “WHEN”

• “HOW”

Design-Build Selection Procedures

• Low Bid

• Modified Design-build

• Adjusted Bid

• Highest Composite Score

• Best Value

• Best Value / Fixed Budget

Procurement StrategyProcurement 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-Buildto 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

15

18

24

710685

0%

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> $100 M$ 50 - 100M$20 - 50 M$ 10 - 20 M$ 5 - 10 M$ 2 - 5 M$ 1 - 2 M$ 0 - 1 M

TEA-21 Design-Build LegislationSection 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 635.109 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• Owner’s consultant?• Owner’s

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?

• Owner’s 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– http://www.fhwa.dot.gov/infrastructure/progadmin/

contracts/d_build.htm

• Utah State University web page– http://www.utaht2.usu.edu/projects/innovativecontracting/

ICSearchpage.html

– Run query for design-build projects

• WSDOT Design-Build Process for Highway Projects– http://www.wsdot.wa.gov/designbuild/db/index.htm#Stake

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