RECOMMENDED GUIDE FOR NEXT GENERATION …

1 GEORGIA DOT RESEARCH PROJECT RP10-23 FINAL REPORT RECOMMENDED GUIDE FOR NEXT GENERATION OF transportation DESIGN BUILD PROCUREMENT AND CONTRACTING IN THE STATE OF GEORGIA GDOT Research Project No. RP10-23 Final Report RECOMMENDED GUIDE FOR NEXT GENERATION OF transportation DESIGN BUILD PROCUREMENT AND CONTRACTING IN THE STATE OF GEORGIA By Baabak Ashuri, , DBIA Hamed Kashani, Georgia Institute of Technology Contract with Georgia Tech Research Corporation September 2012 The contents of this report reflect the views of the author(s) who is (are) responsible for the facts and the accuracy of the data presented herein. The contents do not necessarily reflect the official views or policies of the Georgia Department of transportation or the Federal Highway Administration. This report does not constitute a standard, specification, or regulation. 1. Report No.

2 : FHWA-GA-12-1023 2. Government Accession No.: 3. Recipient's Catalog No.: 4. Title and Subtitle: RECOMMENDED GUIDE for Next GENERATION of transportation Design Build Procurement and Contracting in the State of Georgia 5. Report Date: September 2012 6. Performing Organization Code: 7. Author(s): Baabak Ashuri, Ph. D., DBIA Hamed Kashani, 8. Performing Organ. Report No.: 9. Performing Organization Name and Address: Economics of Sustainable Built Environment (ESBE) Lab School of Building Construction Georgia Institute of Technology 280 Ferst Drive, 1st Floor Atlanta, GA 30332-0680 10. Work Unit No.: 11. Contract or Grant No.: 0010223 (RP 10-23) 12. Sponsoring Agency Name and Address: Georgia Department of transportation Office of Research 15 Kennedy Drive Forest Park, Georgia 30297-2599 13. Type of Report and Period Covered: Final; September 2010 -September 2012 14. Sponsoring Agency Code: 15.

3 Supplementary Notes: 16. Abstract: The overall objective of this research project is to develop a systematic approach that evaluates the appropriateness of Design Build Project Delivery System for a transportation project. State DOTs can benefit from this systematic assessment approach and better implement the Design Build Project Delivery System in highway construction programs by selecting the projects that are the most appropriate candidates for Design Build. The authors initially analyzed and documented state of practice of Design Build across State DOTs in the United States. Several structured interviews with representatives from three State DOTs (CDOT, VDOT, and FDOT) were also conducted to further enhance understanding about the state of practice in using Design Build Project Delivery System in these DOTs. The detailed interviews of these three State DOTs helped the research team understand that a systematic, transparent, and consistent approach towards the application of Design Build Project Delivery System is critical in the success of Design Build programs in State DOTs.

4 The most pertinent findings of this research are: 1. A systematic approach that evaluates the appropriateness of Design Build Project Delivery System for a transportation project; 2. A systematic high-level risk allocation for Design Build projects; 3. A systematic approach that evaluates the appropriateness of procurement methods for a Design Build project; and 4. A Design Build Guidebook that describes the process of evaluating the appropriateness of Design Build Project Delivery System, initial risk allocation in Design Build contracts, and assessment and selection of procurement methods for Design Build projects. 17. Key Words: Innovative Project Delivery Systems, Design Build, Procurement Method, Risk Management 18. Distribution Statement: Classification (of this report): Unclassified 20. Security Classification (of this page): Unclassified 21. Number of Pages: 275 22.

5 Price: iv TABLE OF CONTENTS LIST OF V LIST OF VII LIST OF ABBREVIATIONS .. VIII ACKNOWLEDGMENTS .. XI CHAPTER 1 EXECUTIVE SUMMARY .. 1 CHAPTER 2 INTRODUCTION .. 6 CHAPTER 3 LITERATURE REVIEW .. 14 CHAPTER 4 STATE OF PRACTICE OF DESIGN BUILD IN COLORADO, FLORIDA, AND VIRGINIA DEPARTMENTS OF transportation ..52 CHAPTER 5 A SYSTEMATIC APPROACH TO EVALUATE THE APPROPRIATENESS OF DESIGN BUILD PROJECT DELIVERY SYSTEM FOR A transportation PROJECT ..157 CHAPTER 6 A SYSTEMATIC APPROACH TO DEVELOP INITIAL RISK IDENTIFICATION, ASSESSMENT AND ALLOCATION MATRICES FOR transportation DESIGN BUILD PROJECTS ..179 CHAPTER 7 A SYSTEMATIC APPROACH TO EVALUATE THE APPROPRIATENESS OF PROCUREMENT METHODS FOR transportation DESIGN BUILD PROJECTS ..206 CHAPTER 8 CONCLUSIONS AND RECOMMENDATIONS FOR FUTURE RESEARCH .. 230 REFERENCES .. 238 APPENDIX I .. 248 APPENDIX II .. 258 APPENDIX III .. 261 v LIST OF FIGURES FIGURE Design Build State Laws For transportation Project In 2005, 2010 And 2012.

6 10 FIGURE Number Of Design Build Projects Completed, Active and Proposed By State Dots as of 2007..11 FIGURE Main Factors that Motivate State Dots to Select Design Build Project Delivery System ..24 FIGURE Project Delivery System Selection Flowchart Adopted from Gordon (1994) ..39 FIGURE Project Procurement System Selection Model Developed by Alhazmi and McCaffer (2000) .40 FIGURE Project Delivery System Selection Procedure Proposed by Oyetunji and Anderson (2001) ..42 FIGURE Multi-criteria Project Procurement System Selection Model Developed by Ng and Cheung (2007)..45 FIGURE Conceptual Project Delivery System Selection Process Developed by Ibbs and Chih (2011) .46 FIGURE Overview of the Project Delivery Selection Process Proposed by Love et al. (2012) ..47 FIGURE Flowchart Describing the Project Delivery System Selection Process Proposed by Molenaar et al. (2012) ..48 FIGURE Example of the Forms That Can Be Used For the Analysis Opportunities and Obstacles (Top) as Well as the Evaluation Summary Form (Bottom).

7 58 FIGURE A Sample of the Opportunities and Obstacles Checklists That Are Used In Conjunction with the Evaluation ..59 FIGURE General Project Risk Checklist that Includes the Items to Consider when Assessing Risk ..60 FIGURE Number of Design Build Projects Procured Since 2008 ..63 FIGURE Contract Value ($ Million) of Design Build Projects Procured Since 2008 ..63 FIGURE Types Of Procurement Methods and the Frequency of Their Use ..64 FIGURE Shortlisting with Two-Phase Best Value ..65 FIGURE Stipend when Two-Phase Best Value is Used ..65 FIGURE Stipend Payment when Streamlined Design Build is Used ..66 FIGURE Number of Design Build Projects Procured Since 2000 Using Low Bid and Adjusted Score Procurement Methods ..93 vi FIGURE Contract Value ($ Million) of Design Build Projects Procured Since 2000 Using Low Bid and Adjusted Score Procurement Methods ..93 FIGURE Types of Procurement Methods and the Frequency of Their Use.

8 94 FIGURE Shortlisting when Two-Phase Best Value is Used ..95 FIGURE Stipend when Two-Phase Best Value is Used ..95 FIGURE Guidelines for Estimating Proposal Compensation Amounts for Design Build Projects ..107 FIGURE Number of Design Build Projects Procured Since 2003 Using Low Bid, Best Value and A+B Procurement Methods ..133 FIGURE Contract Value ($ Million) of Design Build Projects Procured Since 2003 Using Low Bid, Best Value and A+B Procurement Methods ..134 FIGURE Types of Procurement Methods and The Frequency of Their Use ..135 FIGURE Variations of Low Bid Procurement Method and the Frequency of Their Use ..135 FIGURE Variations of Best Value Procurement Method and the Frequency of Their Use ..136 FIGURE Shortlisting when Two-Phase Best Value is Used ..136 FIGURE Stipend when Two-Phase Best Value is Used ..137 FIGURE Sample of Combined Technical and Price Proposal Scores ..146 FIGURE An Overview of the Proposed Systematic Approach.

9 158 FIGURE Module 1 of the Proposed Systematic Approach ..161 Figure Module 2 of the Proposed Systematic Approach ..181 Figure Module 3 of the Proposed Systematic Approach ..209 FIGURE Categorization of Procurement Methods Based On (1) The Basis for Proposal Evaluation and Contract Award; and (2) The Number of Phases through which the Project is Procured ..216 vii LIST OF TABLES TABLE Summary of Reviewed Academic Literature on Selection Factors for Design Build Project Delivery TABLE Significant Design Build Selection Factors from the GDOT s Office of Innovative Program Delivery s Perspective ..51 TABLE Design Build Teams Technical Scores and Bid Prices in in the Meets Technical Criteria - Low Bid Selection ..218 TABLE Design Build Teams Proposed Schedule, Bid Prices and A+B Values ..221 TABLE Design Build Teams Technical Scores, Bid Prices, and Adjusted Bids ..223 TABLE Design Build Teams Technical Scores, Bid Prices, and Adjusted Scores.

10 225 TABLE Design Build Teams Technical Scores, Price Scores, and Total Scores in Weighted Criteria Selection ..227 TABLE Design Build Teams Technical Scores in Fixed Price Best Proposal Selection ..229 viii LIST OF ABBREVIATIONS AASHTO American Association of State Highway and transportation Officials ACC Alternative Configuration Concepts AN Advance Notification ARE Additional Requested Elements ASD Administrative Service Division ASDB Adjusted Score Design Build Bid Process ATC Alternative Technical Concepts BAFO Best and Final Offer CDOT Colorado Department of transportation CEI Certified Environmental Inspector CEQ Council on Environmental Quality CM at Risk Construction Manager-at-Risk CM/GC Construction Manager/General Contractor CMG Contracts Management Group DBIA Design Build Institute of America DDE District Design Engineer DOT Department of transportation EC Evaluation Committee EDC Every Day Counts FASTER Funding Advancement for Surface transportation and Economic Recovery FCO Fixed Capital Outlay FDOT Florida Department of transportation FEIS Final Environmental Impact Statement FHWA