RECOMMENDED AASHTO DESIGN-BUILD PROCUREMENT …

1 project NO. 20-7/TASK 172 COPY NO. _____. RECOMMENDED AASHTO DESIGN-BUILD PROCUREMENT guide . FINAL REPORT. Prepared for National Cooperative Highway Research Program Transportation Research Board National Research Council Keith Molenaar, PhD, DBIA, University of Colorado Boulder, Colorado Douglas Gransberg, PhD, PE, DBIA, University of Oklahoma Norman, Oklahoma Sidney Scott, PE, Trauner Consulting Services, Inc. Philadelphia, Pennsylvania David Downs, PE, DOWNS Consulting, Inc. Castle Rock, Colorado Ralph Ellis, PhD, PE, University of Florida Gainesville, Florida August 2005. Acknowledgment This work was sponsored by the American Association of State Highway and Transportation Officials, in cooperation with the Federal Highway Administration, and was conducted in the National Cooperative Highway Research Program which is administered by the Transportation Research Board of the National Research Council. Disclaimer The opinions and conclusions expressed or implied in the report are those of the research agency.

2 They are not necessarily those of the Transportation Research Board, the National Research Council, or the Federal Highway Administration, American Association of State Highway and Transportation Officials, or of the individual states participating in the National Cooperative Highway Research Program. 20-07/Task 172 RECOMMENDED AASHTO . DESIGN-BUILD PROCUREMENT guide Table of Contents List of Figures and v v v Chapter 1: Introduction .. 1. guide 1. Definitions of critical DESIGN-BUILD concepts and terms .. 2. Relationship to AASHTO 4. Chapter 2: Understanding 5. Justification for DESIGN-BUILD .. 6. 6. Cost .. 8. 10. Innovation .. 11. DESIGN-BUILD project selection .. 11. DESIGN-BUILD PROCUREMENT process 13. DESIGN-BUILD programs vs. DESIGN-BUILD projects .. 14. Programmatic issues and documents .. 16. Strategic approach to DESIGN-BUILD programs .. 17. Chapter 3: Defining project 20. Importance of project goals .. 20. Identification and ranking of project goals.

3 23. Communication of goals .. 25. Chapter 4: Allocating project 27. Appropriate level of design in the 28. Risk 29. Discussion of critical DESIGN-BUILD risk elements .. 32. design Issues .. 32. Environmental Approval and Permitting .. 33. Right of 33. Local Agency, Utility, and Railroad Issues .. 33. 34. Force Majeure/Acts of God .. 34. Differing Site Conditions/Changed Conditions .. 34. Warranty .. 34. DESIGN-BUILD project risk allocation matrix .. 35. Appropriate risk-allocation strategies .. 38. Chapter 5: Evaluation Planning and 40. Evaluation plan 40. Subjectivity in 41. Rules for evaluation planning .. 42. Evaluation panel 42. Evaluation planning .. 43. Best-value contracting 44. Select Best-Value Parameters .. 45. Best-value rating systems .. 47. i 20-07/Task 172 RECOMMENDED AASHTO . DESIGN-BUILD PROCUREMENT guide Best-value award algorithms for DESIGN-BUILD projects .. 53. Implementing DESIGN-BUILD Best-Value Award Systems .. 55. Meets Technical Criteria Low-Bid.

4 57. Weighted 58. Fixed Price Best Proposal .. 61. Qualitative Cost Technical Trade-off .. 61. DESIGN-BUILD evaluation and award planning 64. Chapter 6: Drafting RFQ/RFP/Contract Documents .. 65. Critical RFQ and RFP 65. Announcement of project 66. project description .. 66. Mandatory requirements .. 67. PROCUREMENT schedule .. 67. Pre-qualification 68. Proposal 68. 69. Selection criteria and award 70. Technical criteria .. 70. Pre-submittal conference and evaluation interviews .. 70. 71. Identification of technical review committee .. 71. Submittal and deliverable 71. Contacts and communication 72. Forms .. 72. DESIGN-BUILD concepts and contract provisions .. 72. Basic Configuration .. 73. Alternative technical concepts .. 75. Betterments and extra work .. 76. Quality 77. design Submittal, Review and 80. design Commitment .. 81. Engineer of Record .. 82. Differing Site 83. Environmental 84. Right of 86. Utility 88. Order of Document Precedence.

5 89. design and Construction References .. 90. Ownership of Documents .. 91. Stipend .. 92. Payment 93. Progress Schedule .. 95. project 96. Non-conforming 97. Traffic Control .. 99. Warranty .. 100. ii 20-07/Task 172 RECOMMENDED AASHTO . DESIGN-BUILD PROCUREMENT guide APPENDIX A: Referenced DESIGN-BUILD Guidelines, RFQs and 1. APPENDIX B: DESIGN-BUILD Responsibility and Risk Allocation Matrix .. 1. APPENDIX C: Contractual Provision Examples .. 1. iii 20-07/Task 172 RECOMMENDED AASHTO . DESIGN-BUILD PROCUREMENT guide iv 20-07/Task 172 RECOMMENDED AASHTO . DESIGN-BUILD PROCUREMENT guide List of Figures and Tables Figures Figure : Approved SEP 14 DESIGN-BUILD Projects as of January Figure : guide Approach ..2. Figure : Comparison of Responsibilities and Contracts ..5. Figure : Sequence of project Activities by Contact Approach ..7. Figure : DESIGN-BUILD PROCUREMENT Process Model ..15. Figure : Agency Influence on DESIGN-BUILD Scope ..20. Figure : Illustration of Contract Basis for design -Bid- build and DESIGN-BUILD Figure : Best-Value Figure : Percent of design complete in RFP.

6 28. Figure : DESIGN-BUILD project Risk Allocation Matrix ..36. Figure : Risk Sharing Figure : Evaluation Planning Model ..44. Figure : Best-Value Figure : The Best-Value Evaluation Rating System Continuum ..46. Figure : Typical Direct Point Scoring System ..51. Figure : Implementing Best-Value PROCUREMENT for DESIGN-BUILD Projects Figure : Two-Step Meets Technical Criteria Low-Bid DESIGN-BUILD PROCUREMENT Flow Chart ..58. Figure : Two-Step Weighted Criteria Best-Value PROCUREMENT Flow Chart ..60. Figure : Two-Step Qualitative Cost-Technical Trade-off Best-Value PROCUREMENT Flow Chart ..63. Figure : Illustration of Basic Configuration, Alternative Technical Concept and Figure : Basic Components of the Quality Management Provision ..78. Figure : design Figure : Environmental Permitting ..85. Figure : Variations of Contract Documents Relating to Tables Table : Schedule Growth by Contract Type ..8. Table Overall Agency Satisfaction by project and Contract Table : Mapping of DESIGN-BUILD Benefits to project Table : Examples of DESIGN-BUILD project Table : Summary of Best-Value Parameters and Corresponding Evaluation Criteria.

7 46. Table : Modified Satisficing Examples ..48. Table : Example Adjectival Rating for Three Different Evaluated Table : Direct Point Scoring Based Upon Adjectival Table : Summary of Best-Value Award Algorithms ..54. Table : RFQ/RFP Elements ..66. Table : Table of Table : Implications of design Commitment ..82. v 20-07/Task 172 RECOMMENDED AASHTO . DESIGN-BUILD PROCUREMENT guide vi 20-07/Task 172 RECOMMENDED AASHTO . DESIGN-BUILD PROCUREMENT guide Chapter 1: Introduction guide overview This DESIGN-BUILD PROCUREMENT guide ( guide ) is intended to assist state highway agencies in the DESIGN-BUILD PROCUREMENT process including the preparation of requests for qualifications and requests for proposals and the selection of the successful proposer. DESIGN-BUILD procedures are rapidly evolving concurrently within individual states and significant experience is concentrated in only a few agencies. As of January 2003, more than 30 states had used or were considering the use of DESIGN-BUILD project delivery on federal aid highway construction projects.

8 However, significant experience is concentrated in only a few states. Only three of these states, Florida, Ohio, and Pennsylvania, had experience with more than 50 projects. Conversely, 17 states have experience with less than five projects as shown in Figure 1. 1 Although comprehensive federal DESIGN-BUILD contracting regulations do exist, there is no single document to provide guidance regarding basic PROCUREMENT procedures and contractual issues inherent in a process that includes both design and construction services with a single source. The AASHTO Joint Task Force on design - 2. 2. build commissioned an NCHRP research 2. 2. MA-1. project to develop this guide . 2 The guide 1 1 3. 11. NJ- 12. 50. includes guidelines for DESIGN-BUILD 1. 7 7. 52 DE-1. PROCUREMENT , along with sample RFQ and 4. 6 5. DC- 5. RFP documents. The contents of this guide 6. 1. 7. 7. MD- 8. 2. are based upon best practices from AK- 4. 1. 6. experienced state highway agencies and 1.

9 66. other public sector agencies. The guide is HI- 1. intended to be flexible for varying project VI- 1. types, sizes, and PROCUREMENT requirements. Number of approved States with approved SEP-14. DESIGN-BUILD projects DESIGN-BUILD Projects Finally, the guide promotes a common DESIGN-BUILD vocabulary for better dissemination of lessons learned and Figure : Approved SEP 14 design - incorporation of continuous improvement. build Projects as of January 20033. It is important to note that this guide is not intended to be a procedures manual. While a procedures manual provides a step-by-step detailed description of a process, this guide supplies an overarching description of the strategies and methods for successful DESIGN-BUILD implementation. Each State has its own laws and regulations that cause significant differences among agencies in executing DESIGN-BUILD . Therefore, the guide is written more generically for broad application, but it also offers concise examples of agency practices to assist with process implementation.

10 The guide is also written with a focus on those highway agencies that have less 1. FHWA (2004). DESIGN-BUILD project Approvals under SEP-14, , January, 2004. 2. National Cooperative Highway Research Program, project 20-07/Task 172, FY 2004, RECOMMENDED AASHTO . DESIGN-BUILD PROCUREMENT guide .. 3. FHWA (2004). 1. 20-07/Task 172 RECOMMENDED AASHTO . DESIGN-BUILD PROCUREMENT guide experience. However, the guide does provide advanced details on selected critical topics so it can be a valuable supplement to experienced readers as well. Figure provides an overview of the guide 's approach to writing a successful DESIGN-BUILD DESIGN-BUILD PROCUREMENT guide Request for Proposal (RFP) and forms the basis for Step 1. the guide . While the four step approach of defining Define project Goals project goals, allocating risk, planning the evaluation, and writing the contract documents may Step 2. seem overly simple, these four elements, and the Allocate Risks Appropriately order in which they are performed, are critical to project success.