National Academies Press: OpenBook

Best-Value Procurement Methods for Highway Construction Projects (2006)

Chapter: Appendix G - Barriers and Solutions to Implementation of Best-Value Process

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Page 186
Suggested Citation:"Appendix G - Barriers and Solutions to Implementation of Best-Value Process." National Academies of Sciences, Engineering, and Medicine. 2006. Best-Value Procurement Methods for Highway Construction Projects. Washington, DC: The National Academies Press. doi: 10.17226/13982.
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Page 186
Page 187
Suggested Citation:"Appendix G - Barriers and Solutions to Implementation of Best-Value Process." National Academies of Sciences, Engineering, and Medicine. 2006. Best-Value Procurement Methods for Highway Construction Projects. Washington, DC: The National Academies Press. doi: 10.17226/13982.
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Page 187
Page 188
Suggested Citation:"Appendix G - Barriers and Solutions to Implementation of Best-Value Process." National Academies of Sciences, Engineering, and Medicine. 2006. Best-Value Procurement Methods for Highway Construction Projects. Washington, DC: The National Academies Press. doi: 10.17226/13982.
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Page 188
Page 189
Suggested Citation:"Appendix G - Barriers and Solutions to Implementation of Best-Value Process." National Academies of Sciences, Engineering, and Medicine. 2006. Best-Value Procurement Methods for Highway Construction Projects. Washington, DC: The National Academies Press. doi: 10.17226/13982.
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Page 189

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G-1 A P P E N D I X G Barriers and Solutions to Implementation of Best-Value Process

G-2 Barriers Description Level to address Possible solutions Probability of solution without legislative restructuring Comments Competitive bidding requirement applicable to federal-aid construction contractors 23 U.S.C. § 112(b) requires use of competitive bidding for federal-aid construction contracts FHWA regulatio ns track federal legislative requirements Congress or FHWA Revise federal statute or adopt rules allowing alternative procurement process Either the law or regulations must be changed, or both 23 U.S.C. § 112(b) allows the Secretary to approve alternatives to competitive bidding. FHWA has determined that A+B bidding is permissible based on this authority and should therefore be able to permit other best-value concepts to be generally used without a statutory modification. State law Laws in many states require construction work to be competitively bid, subject to certain exceptions Individual state legislatures Revise state law as necessary To be determined state by state States have adopted laws permitting use of best-value procurement based on the MPC State regulations Individual states Revise regulations as necessary To be determined state by state Regulations implementing statutory requirements cannot be modified unless underlying law is changed Local law Local agency charters/ ordinances often require construction work to be competitively bid, subject to certain exceptions Governing bodies or individual agencies Revise local law as necessary To be determined agency by agency In some states charter cities may have the ability to use best-value procurement despite general legislation requiring competitive bidding, under the “home rule.” Local regulations Regulations typically track legislative requirements Individual agencies Revise regulation as necessary To be determined agency by agency Resistance to change within transportation agency Belief that low-bid system works well; culture of avoiding discretionary procurement decisions; difficulties associated with changing paradigms in general Agency management and staff Training; communication regarding successes; participation in workshops; sessions at TRB, AASHTO, ARTBA and other conferences N/A Level of investment required for startup Investment in staff training; acknowledgment that initial projects will not be easy Agency management Acknowledge that investment is necessary N/A

G-3 Barriers Level to address Possible solutions Probability of solution without legislative restructuring Comments Opposition by contractors Many contractors have a preference for low-bid procurement, some due to concerns regarding favoritism, others due to belief that past performance requirements will lock them out of best-value contracting due to lack of experience or because their past performance will be problematic Agency and contractor management Build safeguards into the process to avoid opportunities for favoritism; continue using low- bid procurements to allow contractors an entrée; involve industry representatives in development of the process N/A Small contractor opposition Many small contractors believe that they will be locked out of best-value contracting Agency and contractor management Build safeguards into the process to ensure an appropriate mix of large and small contracts; continue using low-bid procurements to allow contractors an entrée; involve industry representatives in development of the process N/A Opposition by engineering firms Engineering firms may object to design-build and other types of contracts that modify their traditional role in development of public works projects Agency management and engineering firm management Education regarding benefits of best-value contracting; communicate to engineering firms that this approach will not adversely impact contracting opportunities for them N/A Description

Barriers Description Level to address Possible solutions Probability of solution without legislative restructuring Comments Opposition by unions Unions may object to level of discretion involved in the selection process, and may be concerned that the process will allow owners to select non- union contractors Agency management and union management Education regarding benefits of best-value contracting; build safeguards into the process to avoid opportunities for favoritism N/A Unions may ask for provisions to be added to legislation to protect labor, including requirements for prequalification relating to past performance in areas of concern to labor interests. However, from a public policy standpoint there does not appear to be any reason why different rules should apply to best- value contracts and low-bid contracts in determining whether a contractor is responsible, and it would therefore be more appropriate for such requests to be addressed in the context of general modifications to procurement requirements for public works contracts, rather than addressing them as an add-on to best-value legislation. G-4

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TRB’s National Cooperative Highway Research Program (NCHRP) Report 561: Best-Value Procurement Methods for Highway Construction Projects examines procurement methods, award algorithms, and rating systems for use in awarding best-value highway construction contracts. The report also explores screening criteria for selecting projects for application of best-value procurement, implementation strategies, and a model best-value specification.

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