National Academies Press: OpenBook

Competition Requirements of the Design/Build, Construction Manager at Risk, and Public-Private Partnership Contracts—Seven Case Studies (2012)

Chapter: I. THE REGULATORY AND STATUTORY FRAMEWORK FOR ALTERNATIVE PROJECT DELIVERY

« Previous: CONTENTS
Page 3
Suggested Citation:"I. THE REGULATORY AND STATUTORY FRAMEWORK FOR ALTERNATIVE PROJECT DELIVERY." National Academies of Sciences, Engineering, and Medicine. 2012. Competition Requirements of the Design/Build, Construction Manager at Risk, and Public-Private Partnership Contracts—Seven Case Studies. Washington, DC: The National Academies Press. doi: 10.17226/14639.
×
Page 3
Page 4
Suggested Citation:"I. THE REGULATORY AND STATUTORY FRAMEWORK FOR ALTERNATIVE PROJECT DELIVERY." National Academies of Sciences, Engineering, and Medicine. 2012. Competition Requirements of the Design/Build, Construction Manager at Risk, and Public-Private Partnership Contracts—Seven Case Studies. Washington, DC: The National Academies Press. doi: 10.17226/14639.
×
Page 4
Page 5
Suggested Citation:"I. THE REGULATORY AND STATUTORY FRAMEWORK FOR ALTERNATIVE PROJECT DELIVERY." National Academies of Sciences, Engineering, and Medicine. 2012. Competition Requirements of the Design/Build, Construction Manager at Risk, and Public-Private Partnership Contracts—Seven Case Studies. Washington, DC: The National Academies Press. doi: 10.17226/14639.
×
Page 5
Page 6
Suggested Citation:"I. THE REGULATORY AND STATUTORY FRAMEWORK FOR ALTERNATIVE PROJECT DELIVERY." National Academies of Sciences, Engineering, and Medicine. 2012. Competition Requirements of the Design/Build, Construction Manager at Risk, and Public-Private Partnership Contracts—Seven Case Studies. Washington, DC: The National Academies Press. doi: 10.17226/14639.
×
Page 6
Page 7
Suggested Citation:"I. THE REGULATORY AND STATUTORY FRAMEWORK FOR ALTERNATIVE PROJECT DELIVERY." National Academies of Sciences, Engineering, and Medicine. 2012. Competition Requirements of the Design/Build, Construction Manager at Risk, and Public-Private Partnership Contracts—Seven Case Studies. Washington, DC: The National Academies Press. doi: 10.17226/14639.
×
Page 7
Page 8
Suggested Citation:"I. THE REGULATORY AND STATUTORY FRAMEWORK FOR ALTERNATIVE PROJECT DELIVERY." National Academies of Sciences, Engineering, and Medicine. 2012. Competition Requirements of the Design/Build, Construction Manager at Risk, and Public-Private Partnership Contracts—Seven Case Studies. Washington, DC: The National Academies Press. doi: 10.17226/14639.
×
Page 8

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

3 COMPETITION REQUIREMENTS OF THE DESIGN/BUILD, CONSTRUCTION MANAGER AT RISK, AND PUBLIC-PRIVATE PARTNERSHIP CONTRACTS—SEVEN CASE STUDIES By Anthony D. Songer, Ph.D., Boise State University; Michael J. Garvin, Ph.D., P.E., Virginia Polytechnic Institute and State University; and Michael C. Loulakis, Esq., Capital Project Strategies, LLC I. THE REGULATORY AND STATUTORY FRAMEWORK FOR ALTERNATIVE PROJECT DELIVERY Introduction In the post–World War II era, the delivery mecha- nisms that drove the nation's early infrastructure de- velopment lay dormant as the country's method of pro- curing infrastructure evolved to rely upon a single system, design-bid-build (DBB).1 Over roughly the last 20 years, however, many public owners have rediscov- ered the potential value of other delivery systems such as design-build (DB), construction-manager-at-risk (CMAR), and a variety of options that are considered public-private partnerships (PPP), such as design-build- operate-maintain (DBOM) and build-operate-transfer (BOT). Arguments for these choices include opportuni- ties to leverage private-sector expertise and capital, to predict operational funding requirements, and to real- ize life-cycle cost reductions through the integration of delivery activities and private-sector efficiencies that are honed in competitive markets. Many within the engineering, procurement, and con- struction community in the United States have recog- nized the limitations of a strategy designed to support a single delivery method, and shifts are underway across all infrastructure sectors. Those searching for real solu- tions to their infrastructure problems have employed a variety of means to fulfill the demand for vital infra- structure services. Still, public-sector experience in the use of such delivery systems remains immature, and public agencies are generally unprepared to execute workable arrangements with the private sector. Despite the recent resurgence of alternative project delivery methods, many within the construction industry con- tinue to misunderstand the characteristics and implica- tions of each system. The intent of this digest is not to provide guidance with respect to the choice of one deliv- ery method over another for transit projects. Instead, the digest primarily investigates the statutory basis for the use of alternative delivery methods and how transit agencies have legally procured and priced the services associated with alternative delivery methods. Readers interested in guidance on delivery method selection are referred to TCRP Report 131: A Guidebook for the Eval- 1 J. B. Miller et al., Towards a New Paradigm: Simultane- ous Use of Multiple Project Delivery Methods, JOURNAL OF MANAGEMENT IN ENGINEERING 16 (3), at 58 (2000). uation of Project Delivery Methods.2 The examination of the seven projects that are included in this digest dem- onstrates how the private contractors and the govern- ment agencies involved in each project were successful, to varying degrees, in utilizing a wide variety of pro- curement and delivery methods, to meet the problems encountered in each situation. This section provides a broad discussion of the pro- curement issues associated with alternative project de- livery on DB, CMAR, and PPP projects. It will consider historical issues associated with these delivery systems and examine some of the approaches states have taken to implement these programs. Design-Build Historical Review While the origins of the DB method of project deliv- ery are traced back to ancient Mesopotamia, the process was thought to be virtually abandoned by modern de- signers and constructors.3 For years, the design and construction industry in North America functioned un- der the traditional method, DBB. However, with the advent of the post–World War II building boom in North America, construction owners sought alterna- tives to the fragmented responsibilities, cost issues, and limited flexibility of DBB. This was particularly the case during the inflationary periods of the 1970s, where both public- and private-sector owners found the DBB process to provide less than satisfactory results because of extended project delays and a growing “cottage” in- dustry of construction claims litigation. By the late 1980s and early 1990s, another trend emerged—both private-sector firms and public agencies began restruc- turing their organizations to reduce or eliminate staff not directly associated with their core goals. All of this led to procurement policies that not only helped intro- duce different forms of construction management, but also reintroduced DB as a viable delivery system.4 As the use of DB began accelerating in the 1990s, many believed that it could be effectively used only in 2 A. TOURAN ET AL., A GUIDEBOOK FOR THE EVALUATION OF PROJECT DELIVERY METHODS (Transit Cooperative Research Program Report 131, 2009). 3 DBIA, www.dbia.org/about/designbuild/default.htm? PF= 1. 4 JEFFREY L. BEARD, MICHAEL C. LOULAKIS & EDWARD C. WUNDRAM, DESIGN BUILD: PLANNING THROUGH DEVELOPMENT 2 (2003).

4 the private sector, where owners enjoyed freedom in selecting delivery and acquisition strategies. At that time, the procurement laws for many federal, state, and municipal agencies made it difficult, if not impossible, to use DB, because of the differing requirements for selection of designers and contractors. A key problem was the Federal Brooks Architect-Engineer’s Act, passed in 1972, which mandated that design profes- sionals be selected based on qualifications, with the best-qualified firm negotiating with the government to reach a fair and reasonable contract price. Contracts for construction, however, had long been based on a com- petitive, open-bidding, low-bid selection process, with qualifications not being factored into the selection proc- ess. Each state had its own version of the Brooks Archi- tect-Engineer’s Act that imposed similar restrictions. Therefore, absent special legislation, this dichotomy between architect/engineer selection and contractor selection complicated the ability of an agency to procure a firm to do both design and construction. By 1994, a group of major trade and professional as- sociations formed the Design and Construction Pro- curement Coalition to promote the adoption of legisla- tion allowing federal agencies to have broader discretion to consider DB. Among the specific goals of the coalition was to codify a shortlist procedure through the use of a two-phase procurement process. In Febru- ary 1996, Congress passed what is now known as the “Clinger-Cohen Act,”5 sometimes informally called the federal “two-phase design-build act.” As its informal name suggests, the Act permitted the federal govern- ment to procure DB services using a two-phase selec- tion process. The impact of the Clinger-Cohen Act on public-sector DB has been substantial. In addition to creating a great deal of interest in DB, it provided, for the first time, a way for the federal government to eliminate marginal proposals and teams. The Clinger-Cohen Act also gave comfort to government contractors that they could, at very low expense, submit proposals to become part of the shortlist and, if they made the shortlist, that there would be a limited number of competitors, justifying the more substantial investment in time and money to re- spond to the request for proposals (RFP). The Act not only created a surge of interest by federal agencies in DB, but it also became the catalyst for many state and local governments to adopt similar two-phase legisla- tion, thereby increasing DB use in these sectors as well.6 Use of DB in State Procurement Before the Clinger-Cohen Act was passed, there were no state laws that allowed the use of DB for public- sector procurement. However, with the impetus from the federal sector, state legislative initiatives acceler- 5 Pub. L. No. 103-355, 108 Stat. 3243; Pub. L. No. 104-106, 110 Stat. 642, codified at 40 U.S.C. 1401 et seq. 6 DESIGN-BUILD FOR THE PUBLIC SECTOR 4-7 (Michael C. Loulakis ed., 2003). ated in the decade following its passage. By the early 2000s, several states had enacted legislation that ex- pressly allowed DB to be used on any project under- taken by the state or its associated agencies. The more common experience, however, was to have a state au- thorization of DB only for specifically designated pro- jects or agencies—in effect, allowing the state to “test the waters,” implementing it on selected projects to see what kind of results were obtained before broadening its use. It should be noted, however, that by the early 2000s, many states still expressly forbade the use of DB for public-sector construction projects.7 The following chart demonstrates how state pro- curement of DB has changed since 1993. It indicates by year the number of states (including the District of Co- lumbia) which fall into each category, with the informa- tion current as of the end of calendar year 2009. 7 Id.

5 Design-Build State Public Procurement (Design-Build Institute of America 2009) 1993 2003 2004 2005 2006 2007 2008 2009 DB permit- ted by all agen- cies for all types of design and construc- tion 1 - - 17 18 17 20 22 Widely per- mitted - 22 22 13 12 15 12 13 Limited op- tion - 19 22 15 15 15 16 15 Not specifi- cally author- ized for public agencies 50 - - 6 6 4 3 1 State pro- curement laws do not permit the use of DB in the public sector - 10 7 - - - - - These changes are obviously the result of a signifi- cant amount of legislation being introduced and passed. In 2001, 49 bills regarding DB were introduced in state legislatures; 30 of them, or 61 percent, passed. In 2002, the number of bills introduced increased significantly, to 143, 36 percent of which passed. By 2003, the passing percentage had increased to 52 percent. In 2005, a re- cord 250 bills were introduced, with a record high of 82 passing. An arguably historic year for DB was 2009, in that a record high of 62 percent of the 160 DB bills introduced were passed. This translates into 100 bills granting or expanding DB authorization. Some of the more notable 2009 legislation is discussed in greater detail below.8 There are several potential explanations for this rise. In the early 2000s, legislative successes could be chalked up to the fact that many new owners were be- ing introduced to DB and were excited about its poten- tial, particularly at the state level. By 2009, DB had seemingly matured, with nearly all states having DB authority of some kind. This reality is reflected in the 8 Readers interested in learning about the legislation from 2010 and beyond should consult with the Design-Build Insti- tute of America, which regularly publishes tables chronicling legislative initiatives in the areas of design-build. Likewise, the National Conference on State Legislatures regularly pub- lishes annual updates of legislation affecting the transporta- tion sector. An update from 2010 can be found at http://www.ncsl.org/documents/transportation/PPPTOOLKIT- AppendE.pdf. types of legislation that were proposed in 2009—only 52 percent of the bills attempt to expand state authority. The legislation dealing with state DB authority was primarily focused on transportation. In January 2009, 12 states still did not have authority for Department of Transportation (DOT) projects. That number fell by half by October 2009, as six states passed new legislation allowing DB authority. In contrast, 48 percent of DB legislation in 2009 was focused on granting local DB authority. While some bills gave local government agencies pro- ject-specific DB authority (or authority for a limited number of projects), other bills were broad in the au- thority they granted, allowing localities to use DB on virtually any type of project they chose. Most of the lo- cal legislation focused on buildings—from schools to health clinics to stadiums and courthouses. The bills also showed a growing trend toward DB use on local waste/wastewater and transportation projects. A third of the successful local DB bills were focused on those areas, as noted below:9 • Alabama: House Bill (HB) 217 gives the new Ala- bama Toll Road Bridge and Tunnel Authority full au- thority to enter into DB, DBO, and DBOM contracts. (Alabama Code Sections 23-2-140 to 163.) 9 Design-Build Institute of America, www.dbia.org/about/designbuild/default.htm?PF=1.

6 • Arizona: HB 2396 allows PPPs on transportation projects; they can be DB, design-build-maintain (DBM), DBOM, or design-build-finance-operate-maintain (DBFOM) agreements. (Arizona Revised Statutes Sec- tions 28-7701, 28-7363 to 28-7365.) • California: Senate Bill (SB) 4 allows PPPs on transportation projects; Assembly Bill (AB) 729 extends the DB repeal date on transit projects from 2011 to 2015. (California Public Contract Code Sections 6800 et seq.) • Colorado: SB 108 authorized PPPs for transporta- tion projects on state and local projects; DB is permitted as the project delivery method. (Colorado Revised Stat- utes Sections 43-1-1404.) • Delaware: HB 52B expands the Delaware DOT’s DB authority from 7 to 12 projects. (2 Delaware Code Annotated, Section 2003; Delaware Laws, Chapter 329.) • Florida: HB 1021 authorized the Florida DOT to meet a goal of 25 percent of its projects delivered using DB by 2014 to add capacity. (Florida Statutes Section 337.11.) • Illinois: HB 372 repeals DB sunset provisions; SB 1609 repeals DB sunset provisions. (30 Illinois Com- piled Statutes Section 535/75.) • Louisiana: SB 351 authorizes DB on DOT projects. (Louisiana Revised Statutes Annotated, Sections 48:250.2 et seq.) • Massachusetts: SB 2087 authorizes PPPs for transportation projects using DBOM and DBFOM pro- ject delivery methods. (Massachusetts General Laws Annotated Chapter 6C, Sections 1 et seq.) • Minnesota: HB 1308 provides state DB authority to local governments for 10-project transportation pilot program; HB 2086 directs the Minnesota DOT to use DB on high-speed rail projects. (Minnesota Statutes Annotated Section 383B.158(3) and Section 473.3993.) • Missouri: HB 359 permits the Missouri DOT to use DB on up to 2 percent of its projects, up from a total of three projects. (Missouri Revised Statutes Section 227.107.) • Nevada: SB 245 creates regional transportation authorities and permits the use of private partnerships for transportation and related projects. (Nevada Re- vised Statutes Sections 277A.170, 277A.280.) • New Mexico: SB 345 grants DB authority for all American Recovery and Reinvestment Act (ARRA) pro- jects. (New Mexico Statutes Annotated Section 13-1- 119.2.) • North Carolina: HB 772 grants the City of Hun- tersville DB authority for buildings, parking, roads, streets, bridges, or any other type of construction pro- ject. (General Assembly of North Carolina 2009 Session Law 298.) • North Dakota: SB 2147 authorized the North Da- kota DOT to complete two DB pilot projects. (2009 North Dakota Session Laws, Chapter 236, or North Dakota Century Code Section 24-02-47 et seq.) • Texas: SB 882 authorizes regional toll authorities to give stipends on DB projects over $50 million. (2009 Texas General Laws, Chapter 770.) • Vermont: HB 438 authorizes the DOT to use DB on four projects in FY 2010. (Vermont Statutes Annotated Title 19, Section 2602.) • Washington: SB 5768 authorizes DB authority for State Route (SR) 99 (Alaskan Way Viaduct). (Washing- ton Revised Code 47.20.780–85.) • West Virginia: HB 2753 authorized the DOT to ex- pand its DB pilot program from 3 to 13 projects by June 30, 2011, and to spend up to $50 million per year for an aggregate of $150 million over 3 years. (West Virginia Code Section 17-2D.) DB Procurement and Selection Criteria It is beyond the scope of this digest to fully address all of the legislation that impacts each state’s DB pro- gram, or the DB legislation that impacts transportation projects. This information is available from several sources, including the 50-State Summary Survey of Transportation Agency Design-Build Authority that is published annually by Nossaman LLP.10 Appendix A provides a compilation of some applicable DB legislation in each state, along with Web site links. Suffice it to say that, based on the legislation that existed as of Decem- ber 2009, virtually every state gives the agency broad discretion to decide how to select the DB entity. For example, Arkansas allows the transportation agency to make an award “on a qualifications basis that offers the greatest value for the state.” (Ark. Code Ann. Section 27-65-107.) Arizona has one of the most pro- gressive procurement processes in the country for al- ternative project delivery. It allows an agency to use a one-step DB selection process, where the design-builder is selected only on qualifications—price is not a factor. Nevada, Missouri, and Colorado are among the states that use a two-phase selection process and require that price be a factor in selecting among the shortlisted DB proposers. Virginia and Minnesota authorize either a two-phase selection process, where best value is the basis for selection, or a one-phase selection process, where the agency can use best value or low bid. The 2009 California DB Transportation Statute Representative of the current influx of legislation af- fecting the DB transportation sector is California SB 4.11 This bill, signed into law on February 20, 2009, al- lows DB to be used for up to 15 transportation projects. The statute (California Public Contract Code Sections 6800 et seq.) gives the California Transportation Com- mission (CTC) authority to decide which projects to in- clude in the program. Local transportation entities (de- fined to include transportation authorities created by county boards of supervisors, transportation planning agencies, county transportation commissions, and cer- tain other agencies) have authority for up to five pro- 10 http://www.nossaman.com/50state-survey- transportation-agency-designbuild-authority. 11 Nancy Smith & Evan Caplicki, California Passes New De- sign-Build Law for Highway Projects, Apr. 1, 2009, Nossaman E-Alerts.

7 jects, which may include local street or road, bridge, tunnel, and public transit projects. The California DOT (Caltrans) has authority for up to 10 projects, which may include state highway, bridge, or tunnel projects. The law also permits DB for certain other types of pub- lic projects and allows the use of PPPs for transporta- tion projects. The procuring agency for a DB project authorized under the law may use either a best-value or a low-bid selection process, as approved by the CTC. The CTC must ensure that use of low bid and best value is bal- anced among the approved projects, so that the costs and benefits of each method can be assessed. Procure- ments under the statute involve two steps: prequalifica- tion based on a standard questionnaire prepared by the procuring agency, followed by a request for proposals issued to the prequalified firms. In determining wheth- er a firm is prequalified, the agency must consider technical design and construction expertise and skilled labor force availability. The process for selecting a design-builder will de- pend on whether the CTC authorizes the procuring agency to use competitive bidding or a best-value proc- ess. For procurements involving competitive bidding, bidders would be required to provide sealed bids includ- ing lump sum prices, and award would be made to the lowest responsible bidder amongst the prequalified bid- ders. Procurements using a best-value process would call for an RFP that must specify the criteria to be used to evaluate proposals. Criteria must include price, tech- nical design, construction expertise, and life-cycle costs. The best-value procurement process under the Califor- nia law may include negotiations with responsive bid- ders. Upon conclusion of a best-value procurement process, the contract would be awarded (if at all) to the responsible bidder offering the best-value proposal. The award must be publicly announced, along with a list identifying the rankings of the top three proposers and a written decision supporting the award. Construction Management Historical Review Construction management emerged in the 1960s as a direct way to address some of the major challenges of the DBB system. While the term “construction man- agement” as applied to project delivery systems can be a very broad term, its public-sector use has generally come to mean one of two forms: Agency Construction Management (Agency CM) or At-Risk Construction Management (known by many labels, including CMAR and CM/GC). For clarity, this report refers to any At- Risk Construction Management as CMAR. Under Agency CM, the construction manager is pro- viding a professional service and is an agent of the owner relative to specifically identified matters—be it procurement, constructability reviews, or supervision of trade contractors. Agency CM is not a delivery system per se. Rather, it is a management approach that is used with other delivery systems, including DBB, DB, and multiple prime contracting. Agency CM is widely used in the public sector and has a long history of suc- cessful use in the transportation and transit industry. Unlike Agency CM, CMAR is a unique delivery sys- tem. Under this system, the owner hires a designer and contractor using separate contracts, just as in the DBB method. However, these two services are generally hired nearly simultaneously, well before the design is advanced, and usually as soon as the project is ap- proved. Unlike the contractor in a DBB process, the CMAR firm provides preconstruction services—such as design input, constructability reviews, value engineer- ing, and estimating and scheduling support—on a pro- fessional basis. At some point, the CMAR firm will stipulate to a guaranteed maximum price (GMP) above which the owner is not liable for payment. Often these contracts include incentive clauses in which the CMAR and owner can share any cost savings realized below the GMP. The CMAR firm contracts directly with trade firms and takes on performance risk (cost and schedule commitments) for the project, although, unlike DB, it does not take design risk. A key difference between DBB and CMAR is how the contractor is selected. Using the DBB method, all con- struction firms are assumed to be equally capable and are judged only by price. In contrast, the CMAR method recognizes that each construction firm has unique skills and experience, and the contractor is selected through the same qualifications-based selection process used to select the designer. Because the design phase is not yet complete when the contract is executed, establishment of a firm final price is accomplished later in the design phase. CMAR has long been associated with private sector construction—virtually every commercial office building across the country has been delivered through this sys- tem. In recent years, as public owners have considered alternatives to DBB, they have considered using CMAR. In many respects, this has been prompted by owners who like the idea of collaboration between the design and construction teams, but prefer to hold the contract with the designer instead of using a DB proc- ess, where the collaboration takes place within the con- text of a contract between the contractor and designer. Use of CMAR in State Procurement While the use of public sector DB has been substan- tial, CMAR’s use in the public sector is much more lim- ited. Appendix B provides a compilation of some appli- cable CMAR legislation in each state, along with Web site links. This information is valid as of December 2009. The Associated General Contractors of America (AGC) and the National Association of State Facilities Administrators recently collaborated on a survey of state-by-state information on CMAR. They concluded that many states are still determining how to approach CMAR, and this can result in a lack of clear and precise information. In fact, unlike DB, where there is legisla- tion throughout the states, many states are silent on

8 CMAR, and not all states use the same definitions for the categories of construction.12 Specifically, the survey revealed that 11 states per- mit CMAR in five areas (state building construction, K- 12 education, higher education, local government, and horizontal nonbuilding DOT projects). It showed that in seven states, CMAR is not allowed in any of those five areas; in 32 states, it is allowed in some of those areas. The American Institute of Architects also produced a summary of state-by-state CMAR laws.13 Broadly speaking, the most prevalent use of CMAR in the public sector is in the western states, which have created legislation that allows the liberal use of the process. For example: • Arizona. As noted above, Arizona has one of the most progressive alternative project delivery statutes in the United States. As is the case with DB, Arizona law allows an agency to use CMAR to procure construction services on a qualifications basis, with price not a fac- tor. • Oregon. The Oregon CMAR process has a long his- tory of successful use on a variety of public projects.14 Similar to Arizona, it does not require price as a factor, and relies on qualifications and interviews for selecting the successful firm. • Utah. In October 2006, the Utah DOT and the Fed- eral Highway Administration entered into an agree- ment to implement and evaluate a program of projects utilizing the Construction Manager/General Contract contracting method. Twenty-four projects have been authorized under this process, and the annual report for 2008 provides helpful guidance on the success of the program.15 Public-Private Partnerships PPPs are contractual agreements between a public agency (federal, state, or local) and a private sector entity. Through this agreement, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public. In addition to the sharing of resources, each party shares in the risks and rewards po- tential in the delivery of the service and/or facility.16 PPPs are being used in a variety of industry sectors, including transportation, water/wastewater, urban de- 12 Associated General Contractors of America Web site, www.agc.org. 13 American Institute of Architects Web site, www.aia.org/advocacy/state/aias078882. 14 Oregon Public Contracting Coalition Guide to CM/GC Contracting, http://www.agc-oregon.org/public/resource_ center/publications/CM_GC_Guide_05.pdf. 15 Utah DOT Annual Report on the Use of CMGC, http://www.udot.utah.gov/main/uconowner.gf?n=113504002204 9311030. 16 National Council for Public-Private Partnerships, www.ncppp.org. velopment, energy, financial management, and schools.17 As of the writing of this digest, approximately 20 states have some form of PPP-authorizing legislation. Appendix C provides a compilation of some applicable PPP legislation in each state, along with Web site links. As can be noted in the compilation, as well as through several of the case studies included in this report, sev- eral states have allowed BOT and DBOM concessions through their PPP legislation. Florida DOT is using its PPP legislation to obtain fi- nancing for some of its projects that would otherwise not be able to be developed. For example, its I-75 project is a nearly $430 million project on a heavily-traveled section of Interstate highway that carries up to 85,000 vehicles per day. The project involves widening I-75 from four to six lanes from Golden Gate Parkway in Naples to Colonial Boulevard in Fort Myers. It also in- cludes interchange upgrades. This PPP is using DB as its delivery model, with the joint venture acting as the design-build-financer. The joint venture will provide "gap" financing, which allows Florida DOT to imple- ment the project in advance of its planned program, and pay out the contract monies to the design-build-financer over time.18 The design work began in May 2007, with completion anticipated in summer of 2010. While it is beyond the scope of this digest to review the attributes of PPP legislation across the country, it is worth observing several major points about this proc- ess. The first issue is legislative: does the agency have the statutory right to execute a contract that does not have a fixed price for construction services? Some states, like Virginia, have addressed this directly. Vir- ginia’s Public Private Transportation Act of 1995 (PPTA) gives the Commonwealth of Virginia, acting through the Virginia DOT (VDOT), broad abilities to contract on terms that it deems to be in the best inter- ests of the public. This legislative authority, for exam- ple, recently resulted in VDOT executing a Comprehen- sive Agreement with Capital Beltway Express, LLC, a venture between Transurban and Fluor, for the financ- ing, design, construction, and operation of 14 mi of new high occupancy toll facilities on the Capital Beltway in Northern Virginia. This project reached financial clo- sure in December 2007 and is currently under construc- tion. It involves an 80-year toll concession and is ap- proximately a $1.5 billion project. The PPTA was also the vehicle by which the Dulles Metrorail Project (dis- cussed in detail subsequently) was procured on a DB basis and funded entirely by public monies. Another timely PPP issue involves the requirement for performance and payment bonds. Projects performed under many PPP statutes are not required to follow the state’s procurement statutes, giving the agency flexibil- ity in how it will secure performance of the private 17 Id. 18 Florida Department of Transportation (2009), http://www.dot.state.fl.us/financialplanning/Finance- Work%20Program.pdf.

Next: II. BART EXTENSION TO SAN FRANCISCO INTERNATIONAL AIRPORT »
Competition Requirements of the Design/Build, Construction Manager at Risk, and Public-Private Partnership Contracts—Seven Case Studies Get This Book
×
MyNAP members save 10% online.
Login or Register to save!
Download Free PDF

TRB’s Transit Cooperative Research Program (TCRP) Legal Research Digest 39: Competition Requirements of the Design/Build, Construction Manager at Risk, and Public-Private Partnership Contracts—Seven Case Studies explores the use of various project delivery methods, including design-build, construction management at risk, and a number of options considered public-private partnerships, through the examination of seven separate construction projects in various parts of the United States.

The examinations of the seven selected projects are designed to show how particular, and often unique, problems were addressed in each project by utilizing a wide variety of procurement and delivery methods.

  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook, NAP.edu's online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  6. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  7. ×

    View our suggested citation for this chapter.

    « Back Next »
  8. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!