Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.
OCR for page 14
2 but design-build contracting comprises only a small portion and Asphalt Pavement Warranties European Study Tours. of the U.S. highway industry. Concepts falling within the A rigorous literature review has been conducted specifically for general definition of best-value procurement found in the best-value procurement (see Appendix A). highway industry are further described in Chapter 2. With this information, the research team developed initial definitions of best-value procurement that encompassed the concepts and variations currently used in the industry and any 1.3 Scope of Study new or innovative approaches considered. Using these defini- Best-value procurement is increasingly being recognized in tions and concepts, an electronic survey was developed to gather the highway construction industry as a way to incorporate additional information regarding the state of practice in the quality and other important factors in the procurement highway industry and related industry sectors and as a second process and enhance the long-term performance and eco- phase to obtain additional case study project information. nomic value of the work. The researchers have developed the The next step was to conduct a survey to collect data that following products as part of this research project: was specifically targeted to the objectives of this research. To accomplish this step, the team developed a two-phase survey. · Recommended best-value procurement strategies for use in The first survey, shown in Appendix C, was essentially a filter- awarding competitively bid highway construction projects, ing tool to identify those agencies or construction owners that · Screening criteria for selecting projects that would be are using or considering the use of a best-value procurement appropriate for best-value procurement, and process in the highway sector consistent with the definitions · Strategies for overcoming barriers to implementation. in the survey form. The survey also identified any potentially new best-value concepts that were not reflected in the litera- The first phase of this research effort clarified what best- ture or the existing database. value procurement means for the industry and evaluated the The second phase consisted of a more focused data collec- effectiveness of the various approaches used or proposed for tion survey concerning best-value project results. This survey, use. In the final phase, the research team developed practical, also included in Appendix C, was targeted to the respondents fair, and flexible criteria/procedures to implement the most that have experience with various forms of best-value procure- practical best-value procurement approach in the context of ment based on the results of the initial survey. The survey asked the traditional low-bid system. The findings of this effort are respondents for detailed information regarding the evaluation described in detail in Chapters 2 and 3. and selection process and the criteria used for screening and selection. Respondents were also asked to provide performance outcomes for projects using best-value procurement, in some 1.4 Research Approach cases compared with traditional low-bid selection. The products of the Task 1 identification of best-value The approach taken for this project, apart from report procurement methods included a common definition and preparation under Tasks 3 and 8, encompassed six tasks and conceptual framework for best value; identification of the several subtasks as follows: universe of parameters, evaluation criteria, award algorithms, and rating systems used for best value; and a baseline of Task 1--Identify best-value procurement projects and compendium of case studies from which to eval- methods that have been uate the effectiveness of the various methods. The best-value considered, developed, or used for procurement definitions and conceptual framework are awarding construction contracts. discussed in Chapter 2. The literature review and case studies Consider methods in the United can be found in Appendix A and Appendix D, respectively. States and internationally. As a first step, the team reviewed its existing database Task 2--Critically evaluate the effectiveness and survey information and conducted a literature review of of the best-value procurement existing research databases, project-specific bidding and methods identified in Task 1. request for proposal (RFP) documents, and other sources of information related to contracting and project delivery The critical evaluation task initially analyzed concepts that approaches that incorporate best-value concepts. To supple- have been used on actual best-value projects to develop the ment current information regarding best-value procurement, necessary background to recommend a best-value selection the research team gathered data from other construction methodology. Based on the examination of the literature, case industry sectors, and procurement practices from other coun- studies, survey, and performance results, the critical analysis tries studied during the most recent Contract Administration addressed the advantages and disadvantages of each major
OCR for page 15
3 component of best-value procurement and developed a results at several industry conferences and solicited feedback coding structure relating parameters to evaluation criteria. from participants. Using the combined results of data collection The analysis further assessed the frequency of use of the efforts and feedback from stakeholders, the research team com- specific evaluation criteria in the total case study population. pleted the critical analysis of those systems currently in use by In addition to the completed case studies, the research state agencies, federal agencies, and the international highway team collected and analyzed objective performance data construction organizations. from the team's project database. This effort started by sepa- The initial performance results and survey information were rating the projects currently on-hand in the project database not conclusive in terms of ranking the effectiveness of the into those procured by traditional low bid and those deliv- different best-value procurement methods. In fact, the pre- ered using some other method like multi-parameter bidding liminary results indicated that all of the best-value methods or best-value procurement. A series of project performance will potentially achieve favorable results in terms of project metrics were created to measure each dataset and allow com- performance compared with design-bid-build projects, partic- parison. The typical metrics were ularly for those performance measures that directly relate to the specific best-value selection parameters. Though the existing · Award growth, meets technical criteria--low bid appears to be the simplest and · Cost growth, most compatible with the traditional low-bid, design-bid-build · Time growth, process--the preference for a more flexible approach to com- · Construction placement, and bining best-value parameters in an award system required that · Average contract value. the team explore variations on the other existing algorithms or potentially new algorithms for award. Next, the non-traditional projects were separated and Task 4 thus further refined the best-value model, assessing compared by procurement method type using the same set of whether it was possible to reduce the number of variables in the metrics. This allowed the research team to quantitatively rank best-value procurement system or develop and evaluate a new the impact of different best-value elements. For example, the approach or approaches to a best-value procurement system. performance of A+B bid projects to low-bid projects would allow a comparison of the effect of including time as a factor Task 5--Develop practical, objective criteria in the procurement process and permitting the construction and processes (including a scoring contractor rather than the owner to establish the project system) to be used in quantifying schedule. The use of warranty provisions on projects would best-value elements of a provide an indication of the effect of including quality criteria construction bid. in the procurement process on end-product performance. Lastly, interviews were conducted with the expert advisory The results of Tasks 2 and 4, project performance bench- panel to validate the results of the initial surveys and provide marking and the case study project content analysis, were a "reality check" against these preliminary results. The results used to develop a proposed best-value procurement frame- of the critical evaluation are presented in Chapter 2. work from which the remainder of the study was completed, and through which the practical, objective criteria and processes (including a scoring system) were developed. The Task 4--Develop best-value procurement results of the national transportation agency survey were used methods for use in awarding to validate the proposed framework. highway construction projects. The first step in deriving a proposed best-value procure- ment framework was to map the final results of the best-value Task 4 required that the research team further develop project case study content analysis to the best-value parame- best-value procurement method or methods to address the ters and evaluation criteria. To do this, the research team shortcomings of strategies evaluated in Task 2, make final determined that the best measure of potential success for a recommendations for development of best-value methods, and given generic evaluation criterion was repetitive use by those if appropriate, explore, develop, and recommend new variations agencies that have experimented with best-value procure- of best value. This task was essentially a continuation of the Task ment. Accordingly, the following standard was developed for 2 critical evaluation to obtain follow-up information from high- selecting a given best-value evaluation criterion to be recom- way industry users and refine the recommended best-value sys- mended for use in the proposed framework: tem. The research team distributed the second survey to obtain quantitative and qualitative information from the highway To be recommended, a criterion must appear in 50% of the industry regarding performance outcomes of their best-value sample population solicitations, or, if none are 50%, the single projects. The research team also presented preliminary research highest occurrence will be used.