A Guidebook for Selecting Airport Capital Project Delivery Methods (2009)

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TRANSPORTAT ION RESEARCH BOARD WASHINGTON, D.C. 2009 www.TRB.org A I R P O R T C O O P E R A T I V E R E S E A R C H P R O G R A M ACRP REPORT 21 Research sponsored by the Federal Aviation Administration Subject Areas Aviation A Guidebook for Selecting Airport Capital Project Delivery Methods Ali Touran NORTHEASTERN UNIVERSITY Boston, MA Douglas D. Gransberg UNIVERSITY OF OKLAHOMA Norman, OK Keith R. Molenaar UNIVERSITY OF COLORADO Boulder, CO Payam Bakhshi NORTHEASTERN UNIVERSITY Boston, MA Kamran Ghavamifar NORTHEASTERN UNIVERSITY Boston, MA

AIRPORT COOPERATIVE RESEARCH PROGRAM Airports are vital national resources. They serve a key role in trans- portation of people and goods and in regional, national, and inter- national commerce. They are where the nation’s aviation system connects with other modes of transportation and where federal respon- sibility for managing and regulating air traffic operations intersects with the role of state and local governments that own and operate most airports. Research is necessary to solve common operating problems, to adapt appropriate new technologies from other industries, and to introduce innovations into the airport industry. The Airport Coopera- tive Research Program (ACRP) serves as one of the principal means by which the airport industry can develop innovative near-term solutions to meet demands placed on it. The need for ACRP was identified in TRB Special Report 272: Airport Research Needs: Cooperative Solutions in 2003, based on a study spon- sored by the Federal Aviation Administration (FAA). The ACRP carries out applied research on problems that are shared by airport operating agencies and are not being adequately addressed by existing federal research programs. It is modeled after the successful National Coopera- tive Highway Research Program and Transit Cooperative Research Pro- gram. The ACRP undertakes research and other technical activities in a variety of airport subject areas, including design, construction, mainte- nance, operations, safety, security, policy, planning, human resources, and administration. The ACRP provides a forum where airport opera- tors can cooperatively address common operational problems. The ACRP was authorized in December 2003 as part of the Vision 100-Century of Aviation Reauthorization Act. The primary partici- pants in the ACRP are (1) an independent governing board, the ACRP Oversight Committee (AOC), appointed by the Secretary of the U.S. Department of Transportation with representation from airport oper- ating agencies, other stakeholders, and relevant industry organizations such as the Airports Council International-North America (ACI-NA), the American Association of Airport Executives (AAAE), the National Association of State Aviation Officials (NASAO), and the Air Transport Association (ATA) as vital links to the airport community; (2) the TRB as program manager and secretariat for the governing board; and (3) the FAA as program sponsor. In October 2005, the FAA executed a contract with the National Academies formally initiating the program. The ACRP benefits from the cooperation and participation of airport professionals, air carriers, shippers, state and local government officials, equipment and service suppliers, other airport users, and research orga- nizations. Each of these participants has different interests and respon- sibilities, and each is an integral part of this cooperative research effort. Research problem statements for the ACRP are solicited periodically but may be submitted to the TRB by anyone at any time. It is the responsibility of the AOC to formulate the research program by iden- tifying the highest priority projects and defining funding levels and expected products. Once selected, each ACRP project is assigned to an expert panel, appointed by the TRB. Panels include experienced practitioners and research specialists; heavy emphasis is placed on including airport pro- fessionals, the intended users of the research products. The panels pre- pare project statements (requests for proposals), select contractors, and provide technical guidance and counsel throughout the life of the project. The process for developing research problem statements and selecting research agencies has been used by TRB in managing cooper- ative research programs since 1962. As in other TRB activities, ACRP project panels serve voluntarily without compensation. Primary emphasis is placed on disseminating ACRP results to the intended end-users of the research: airport operating agencies, service providers, and suppliers. The ACRP produces a series of research reports for use by airport operators, local agencies, the FAA, and other interested parties, and industry associations may arrange for work- shops, training aids, field visits, and other activities to ensure that results are implemented by airport-industry practitioners. ACRP REPORT 21 Project 01-05 ISSN 1935-9802 ISBN 978-0-309-11804-0 Library of Congress Control Number 2009937631 © 2009 Transportation Research Board COPYRIGHT PERMISSION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB or FAA endorsement of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. NOTICE The project that is the subject of this report was a part of the Airport Cooperative Research Program conducted by the Transportation Research Board with the approval of the Governing Board of the National Research Council. Such approval reflects the Governing Board’s judgment that the project concerned is appropriate with respect to both the purposes and resources of the National Research Council. The members of the technical advisory panel selected to monitor this project and to review this report were chosen for recognized scholarly competence and with due consideration for the balance of disciplines appropriate to the project. The opinions and conclusions expressed or implied are those of the research agency that performed the research, and while they have been accepted as appropriate by the technical panel, they are not necessarily those of the Transportation Research Board, the National Research Council, or the Federal Aviation Administration of the U.S. Department of Transportation. Each report is reviewed and accepted for publication by the technical panel according to procedures established and monitored by the Transportation Research Board Executive Committee and the Governing Board of the National Research Council. The Transportation Research Board of the National Academies, the National Research Council, and the Federal Aviation Administration (sponsor of the Airport Cooperative Research Program) do not endorse products or manufacturers. Trade or manufacturers’ names appear herein solely because they are considered essential to the clarity and completeness of the project reporting. Published reports of the AIRPORT COOPERATIVE RESEARCH PROGRAM are available from: Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet at http://www.national-academies.org/trb/bookstore Printed in the United States of America

CRP STAFF FOR ACRP REPORT 21 Christopher W. Jenks, Director, Cooperative Research Programs Crawford F. Jencks, Deputy Director, Cooperative Research Programs Gwen Chisholm Smith, Senior Program Officer Eileen P. Delaney, Director of Publications Ellen M. Chafee, Editor ACRP PROJECT 01-05 PANEL Field of Administration Rudolph R. Mueller, III, Hillsborough County Aviation Authority, Tampa, FL (Chair) Steven B. Cornell, San Diego County Regional Airport Authority, San Diego, CA Kitty P. Freidheim, Freidheim Consulting, Chicago, IL Frank Giunta, Hill International, Inc., Marlton, NJ Michael Kenig, Holder Construction Company, Atlanta, GA Daniel Molloy, City of Atlanta Department of Aviation, College Park, GA Steve Riano, Bechtel Civil/Global Aviation Engineering, San Francisco, CA Loren W. Smith, DMJM Aviation, Tampa, FL James Szczesniak, Chicago, IL Emily M. Underhill, Lee County Port Authority–Southwest Florida International Airport, Ft. Myers, FL Ken Jacobs, FAA Liaison T.J. Schulz, Airport Consultants Council Liaison AUTHOR ACKNOWLEDGMENTS The research herein was performed under ACRP Project 01-05 by a team led by Northeastern Uni- versity. The team consisted of Dr. Ali Touran of Northeastern University, who was the Principal Investi- gator, and two independent consultants, Dr. Douglas D. Gransberg of the University of Oklahoma and Dr. Keith R. Molenaar of the University of Colorado at Boulder. Payam Bakhshi and Kamran Ghavamifar of Northeastern University were research assistants and worked on various parts of this guidebook. C O O P E R A T I V E R E S E A R C H P R O G R A M S

ACRP Report 21: A Guidebook for Selecting Airport Capital Project Delivery Methods describes various project delivery methods for major airport capital projects. The guidebook also evaluates the impacts, advantages, and disadvantages of these various project delivery methods. The project delivery methods discussed include design-bid-build (DBB), con- struction manager at risk (CMR), and design-build (DB). The guidebook offers a two-tiered project delivery selection framework that may be used by owners of airport projects to eval- uate the pros and cons of each delivery method and select the most appropriate method for their project. Tier 1 is an analytical delivery decision approach that is designed to help the user understand the attributes of each project delivery method and whether the delivery method is appropriate for their specific circumstance. Tier 2 uses a weighted-matrix deliv- ery decision approach that allows users to prioritize their objectives and, based on the pri- oritized objectives, select the delivery method that is best suited for their project. The report will be helpful to airports with determining the most appropriate project delivery methods (e.g., DBB, DB, or CMR) for various types of airport capital projects. With the increasing number of major airport projects (planned and underway) and the variety of project delivery methods available to complete those projects, guidance is needed to assist airport owners and operators with determining the most appropriate project deliv- ery method. The objective of ACRP Project 01-05 was to develop a guidebook to help airports evalu- ate and select the most appropriate project delivery method for major capital projects and evaluate the pros and cons of a contract for the project delivery method. To accomplish the project objective, the research team identified and described pertinent issues related to air- port project delivery and provided analysis of the interactions of these pertinent issues with each project delivery method. The research team also interviewed project directors and financial planners at nine airports to learn how each project delivery method had been implemented on actual airport projects and to collect data relevant to each airport’s project delivery and procurement process. In addition, the researchers developed a decision matrix to guide decision-makers on selecting the most appropriate project delivery and contract- ing method(s) in various airport environments. A companion publication to this report, ACRP Web-Only Document 6: Evaluation and Selection of Airport Capital Project Delivery Methods reviews pertinent literature and research findings related to various project delivery methods for airport projects. It contains defini- tions of project delivery methods and discusses the existing selection approaches commonly used by airports. ACRP Web-Only Document 6 can be found on the TRB website (www.trb.org) by searching for “ACRP Web-Only Document 6”. F O R E W O R D By Gwen Chisholm Smith Staff Officer Transportation Research Board

1 Summary 3 Chapter 1 Overview 3 Introduction and Purpose 4 Selection System Framework 5 Organization of the Guidebook 6 Chapter 2 Literature Review and Definitions 6 Distinguishing Characteristics of Airport Projects 9 Evolution of Current Alternative Delivery Methods in Airport Projects 10 Definitions of the Delivery Methods 16 Legality of Delivery Methods in Various States 17 Existing Selection Approaches for Project Delivery Methods 19 Timing of Project Delivery Method Selection 20 Chapter 3 Advantages and Disadvantages of Each Project Delivery Method 20 Introduction 20 Project-Level Issues 28 Airport-Level Issues 33 Public Policy/Regulatory Issues 37 Other Issues 39 Conclusion 40 Chapter 4 Tier 1—Analytical Delivery Decision Approach 40 Introduction 42 Application of the Project Delivery Selection System 43 Step 1. Create Project Description 44 Step 2. Define Project Goals 45 Step 3. Review Go/No-Go Decision Points 48 Step 4. Review Project Delivery Method Advantages and Disadvantages 72 Step 5. Choose the Most Appropriate Project Delivery Method 73 Step 6. Document Results 74 Conclusion 75 Chapter 5 Tier 2—Weighted-Matrix Delivery Decision Approach 75 Introduction 77 Step 1. Define Selection Factors 78 Step 2. Weight Selection Factors 79 Step 3. Score Project Delivery Methods 82 Step 4. Choose the Most Appropriate Project Delivery Method 82 Step 5. Document Results 83 Conclusion C O N T E N T S

84 Chapter 6 Conclusion 86 Appendix A References 89 Appendix B Definitions of Terms 91 Appendices C Through F