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42 Dispute Resolution ment, as indicated by recent research into best-value While the norm in all of the cases, alternative dis- procurement.33 pute resolution methods varied. The following summa- Best-value procurement methods employed in the cas- rizes the methods employed in the cases: es still showed a preference for "fixed" pricing. Pricing strategies for design, preconstruction services, and con- · BART Extension: Partnering arrangement coupled struction work remained oriented toward fixed pricing. with an optional DRB. This is not necessarily unusual in DB or DBOM solici- · DART Green Line: DRB. tations, but the two CMAR cases studied went to sub- · Dulles Metrorail: Escalating dispute resolution stantial lengths to establish unit prices for preconstruc- process--negotiations (field level with DTP and MWAA tion or construction items of work. The unit prices representatives); elevated negotiations (DTP and proposed served as both a means to award the contract MWAA Senior Representatives); independent expert; and as the basis of pricing or negotiating the price for submission of certified claim (recommendation by task orders or work items. This strategy, while poten- MWAA representative, DTP has 30 days to agree or tially advantageous to the owner, creates a significant seek further action); mediation; legal proceedings. burden to properly identify and characterize these · Largo Extension: Initially DRB; subsequently, par- items. While this initiative did not uncover evidence of ties could propose and agree to any form of alternative issues related to this strategy, the proper interpretation dispute resolution. of these items by proposers/contractors is clearly corre- · Portland Mall Segment: Tiered dispute resolution lated with the merit of the corresponding prices. followed by mediation. Indeterminate pricing prior to award poses a sub- · River Line: Partnering arrangement; consent to ju- stantial risk to the contracting community if the owner risdiction of Courts of New Jersey and waiver of trial by seeks to obtain a fixed/lump-sum price through competi- jury. tion. Owners in the case studies that provided prelimi- nary design and geotechnical information in the RFP documents, and then attempted to distance themselves X. CONCLUSION AND KEY FINDINGS from the accuracy of such information, had mixed suc- This digest explores the nature of alternative deliv- cess. This approach clearly created conflict between the ery methods for U.S. transit projects. The use of alter- contractor and the owner when problems surfaced, and native delivery methods such as DB, CMAR, and PPP the contractor was able to recover some monies in the techniques (like DBOM) has been steadily increasing cases reported. over the past 20 years. Although use of alternative The use of allowances appears to be an effective way methods has grown, the specific characteristics and of addressing the challenges of pricing long-duration implications of the various methods remain largely pro- projects. There are times when the extended duration, ject-specific. There has yet to emerge a universally- or other characteristics, of a project will lead to ineffi- accepted or institutionalized framework for implement- ciencies in using a pure fixed-price contracting ap- ing alternative procurement methods. proach with the contractor. The Dulles Metrorail pro- Based on the statutes and projects studied, several ject (and the AirTrain JFK project to some extent) key findings are noted: provides an excellent example of how to creatively use Substantial flexibility exists with respect to project allowances to avoid excessive contingencies and have a delivery methods nationally. The review of the statutory direct role in the procurement of major subcontractors. authority for using delivery methods other than DBB Plans for the inclusion of DBEs in proposals were ei- for transportation projects indicates clearly that many ther a condition of responsiveness or an evaluated crite- public agencies across the nation may use methods rion. Proposers in the cases studied had to demonstrate ranging from DB to CMAR to unsolicited proposals that compliance with the project's DBE requirements during include private investment. The cases reviewed are a procurement. Typically, proposals were not considered reflection of this flexibility, which has grown substan- responsive unless an appropriate DBE plan was pre- tially over roughly the last decade. sented. In one case, the DBE plan was an evaluation Procurement methods are evolving from fixed price criterion. During project execution, one case used a liq- awards to best-value approaches. Chronologically, the uidated damages provision in the event that the se- BART extension to SFIA was the earliest case studied. lected contractor fell out of compliance with the pro- Its award was based significantly on the price proposed. ject's DBE participation goals. Little to no evidence was The DART Green Line and the Portland Mall Segment uncovered to suggest that the projects were unable to cases were the most recent awards. These procurements achieve their DBE participation goals. had multiple phases where qualifications and qualita- Alternative dispute resolution mechanisms were var- tive, technical, and price criteria were assessed for the ied among the cases, but they were the norm. The cases award of the contract. In both of these cases, rather demonstrated a variety of alternative dispute resolution complex point-scoring systems were used to select the preferred contractor. While best-value procurements 33 S. SCOTT ET AL., BEST-VALUE PROCUREMENT METHODS are growing in popularity, a word of caution is war- FOR HIGHWAY CONSTRUCTION PROJECTS 24 (National Coopera- ranted. Scoring systems can prove difficult to imple- tive Highway Research Program Report 561, 2006).
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43 approaches from hierarchical interpretation/negotiation ante establishment of DRBs. All cases, however, in- with owner representatives followed by mediation to ex cluded an alternative dispute resolution mechanism.