A Guidebook for the Evaluation of Project Delivery Methods (2009)

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Introduction and Purpose The objective of this guidebook is to help transit agencies evaluate and choose the most appropriate project delivery method for their projects. This guidebook will also help in docu- menting the process of decision-making and in preparing the outcome in a Project Delivery Decision Report. The project delivery method is a process by which a project is comprehensively designed and constructed for an owner and includes project scope definition; organization of design- ers, constructors and various consultants; sequencing of design and construction operations; execution of design and construction; and closeout and start-up. In some cases, the project delivery method may encompass operation and maintenance. Currently available project delivery methods have moved far beyond the traditional design-bid-build (DBB) method. Due to changes in procurement laws, public agencies now share the ability of their private-sector counterparts to acquire construction services via alternative project delivery methods, such as construction management, design-build, and other hybrid systems. In some instances, methods (such as design-build) may include operations and maintenance as well as multiyear warrantees. The approach to developing a project delivery selection system presented herein was to review and analyze relevant literature on project delivery methods and previous work on developing decision support systems for project delivery selection. In addition, an extensive questionnaire was developed for a face-to-face, structured interview with several transit agencies. A list of tran- sit projects was developed and approved by the project oversight panel (see Table 1.1). The authors traveled to the selected project sites and interviewed project directors. The results of the interviews were then analyzed and summarized. Based on the outcome of the literature search and the structured interviews, a set of pertinent issues was identified and studied. These perti- nent issues were ones that were thought to have a profound effect on the choice of project deliv- ery method. These issues, in turn, were used to develop the project delivery selection system described in this guidebook. Selection System Framework The selection of the project delivery method is a decision that is based on a multitude of issues. In this guidebook, these issues are called “pertinent issues” and have been categorized according to the following groups: project-level issues, agency-level issues, public policy/regulatory issues, lifecycle issues, and other issues. The research team has identified and verified these pertinent issues through a literature search, extensive interviews with various transit agencies across the United States, and discussions between the research team and the project oversight panel. 4 C H A P T E R 1 Overview

Based on these pertinent issues, the team has developed a three-tiered project delivery selec- tion system that consists of the following tiers: • Tier 1—Analytical Delivery Decision Approach, • Tier 2—Weighted-Matrix Delivery Decision Approach, and • Tier 3—Optimal Risk-Based Approach. The Tier 1—Analytical Delivery Decision Approach (Tier 1 approach) provides a framework for agencies to use in defining project goals and examining the advantages and disadvantages of each delivery method within the context of these project goals. The aim of this approach is to help agencies understand project delivery method attributes and determine whether their spe- cific project goals align with the attributes of a particular delivery method. The Tier 1 approach also provides a “go/no-go” review to determine whether one or more project delivery methods should be excluded from the examination. After completion of the Tier 1 approach, an agency may not have a single, clear, and logical choice for a project delivery method. If this is the case, the agency is advised to move to the Tier 2—Weighted-Matrix Delivery Decision Approach (Tier 2 approach) with the best project deliv- ery method options and create a more detailed analysis to select the final project delivery method. The Tier 1 approach is designed as a simple and straightforward selection method. Any owner, no matter what their level of experience with alternative project delivery methods, will be able to use this tier. The Tier 2 approach provides a means for the agency to further examine and document a proj- ect delivery decision for an individual project. If a project delivery method was not found in the Tier 1 approach, the Tier 2 approach can be used to select a delivery method by prioritizing proj- ect objectives and selecting the delivery method that best aligns with these objectives. The Tier 2 approach is based on successful project delivery decision tools developed by academics and pro- fessionals over the past 20 years. With the Tier 2 approach, the user concentrates on a few key Overview 5 Table 1.1. List of transit projects for which project directors were interviewed. Case # Project Agency/Location Project Delivery Method 1 T-REX (Southeast Corridor Light Rail) Regional Transportation District/ Denver, CO Design-Build 2 Weber County Commuter Rail Utah Transit Authority / Salt Lake City to Ogden, UT Construction Manager at Risk 3 University Line Utah Transit Authority/ Salt Lake City, UT Design-Build 4 Medical Center Extension Utah Transit Authority/ Salt Lake City, UT Design-Build 5 Greenbush Commuter Rail Massachusetts Bay Transportation Authority/ Boston, MA Design-Build 6 Hudson-Bergen Light Rail New Jersey Transit Hudson, NJ Design-Build- Operate-Maintain 7 Silver Line Project Massachusetts Bay Transportation Authority/ Boston, MA Design-Bid-Build Multi-Prime 8 Portland Mall Project TriMet/ Portland, OR Construction Manager at Risk 9 I-205 Light Rail Extension Project TriMet/ Portland, OR Design-Build

parameters that affect the choice of project delivery method, assigns appropriate weights to each parameter, and calculates a score for each competing delivery method. The user can use the material presented in Appendix F for guidance in assigning weights to each parameter. The Tier 3—Optimal Risk-Based Approach (Tier 3 approach) leverages the current, risk-based, cost-estimating methods that have emerged in transit and highway agencies in the past few years. Most project delivery method decisions will be made through completion of the Tier 1 and Tier 2 approaches. The Tier 3 approach will be applied only when a decision has not been made after completing the Tier 1 and Tier 2 approaches and when a formal risk management process for the project is already in place. It is important to note that the level of effort involved in using the Tier 3 approach (especially the quantitative approach) is considerably greater than the effort required to use the Tier 1 or Tier 2 approaches. Organization of the Guidebook This guidebook includes seven chapters and Appendices A and B. Appendices C through H are available on the TRB website at http://trb.org/news/blurb_detail.asp?id=10054. This first chapter provides an overview of the work accomplished and a road map for the user of the guidebook. Chapter 2 describes the characteristics of transit projects, presents the results of the literature search, and provides clear definitions of various project delivery methods. Dis- tinguishing characteristics of each delivery method, its advantages and disadvantages, and legal precedence in project delivery method use are described in Chapter 2. Also, a summary is provided of the existing methodologies for selection of appropriate project delivery methods. In addition, recommendations are made for the appropriate point in the project lifecycle to adopt various delivery methods. Chapter 3 describes pertinent issues affecting the choice of project delivery method and the advantages and disadvantages of each project delivery method in relation to these issues. There are numerous issues that transit agencies need to consider when selecting a project delivery method. In this research, issues were identified through a literature search, personal experience, case studies, and interviews with project directors of case study transit projects. Pertinent issues are categorized as follows: • Project-level issues, • Agency-level issues, • Public policy/regulatory issues, • Lifecycle issues, and • Other issues. These issues and their interactions with different project delivery methods are presented in the form of a descriptive pro/con analysis. The analysis is based on the trends found in the research team’s interviews with construction directors at various transit agencies and is supported by quo- tations from relevant literature. Chapters 4, 5, and 6 describe the Tier 1, 2, and 3 approaches of the project delivery selection framework, respectively. In order to facilitate and streamline the application of the approaches in these tiers, blank versions of the tables from these chapters are reproduced in Appendices C, D, E, and G, which are all available on the TRB website at http://trb.org/news/blurb_detail.asp?id=10054. The idea is that the user will download/print these blank tables and use them to go through the three tiers in sequential order. Other appendices contain support material for the guidebook. Appendix A contains a list of sources referenced in this guidebook. Appendix B contains a glossary of important terms used in the guidebook. Appendix F describes various methods of assigning 6 A Guidebook for the Evaluation of Project Delivery Methods

numerical weights to competing parameters. This material will be useful to the guidebook user in applying the Tier 2 approach. Appendix H contains the application of the project delivery selec- tion system to a hypothetical project. It is the authors’ belief that this guidebook is a comprehensive resource for a transit agency trying to select the most appropriate project delivery method and to document the selection process and ultimate decision in a concise and easy-to-understand format. It is recommended that transit agencies use industry professionals from outside the agency to facilitate the imple- mentation of the methodology contained in this guidebook. These professionals should have a thorough understanding of and experience with the type of project that the agency is evaluating, the various project delivery methods that the agency is considering, the potential risks associated with the type of project the agency is evaluating, and the various project delivery methods being considered. The use of such professionals will ensure that the appropriate expertise and experi- ence is incorporated into the process. Facilitation of the process by outside professionals should also foster an objective selection of the most appropriate project delivery method, thereby min- imizing the likelihood of a predetermined outcome. Overview 7