Practices for Developing Transparent Best Value Selection Procedures (2015)

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NAT IONAL COOPERAT IVE H IGHWAY RESEARCH PROGRAM NCHRP SYNTHESIS 471 TRANSPORTATION RESEARCH BOARD WASHINGTON, D.C. 2015 www.TRB.org Research Sponsored by the American Association of State Highway and Transportation Officials in Cooperation with the Federal Highway Administration SubScriber categorieS Administration and Management • Construction • Highways • Maintenance and Preservation Practices for Developing Transparent Best Value Selection Procedures A Synthesis of Highway Practice conSultantS Keith R. Molenaar University of Colorado Boulder and Daniel Tran University of Kansas Lawrence

NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM Systematic, well-designed research provides the most effective approach to the solution of many problems facing highway administrators and engineers. Often, highway problems are of local interest and can best be studied by highway departments individually or in cooperation with their state universities and others. However, the accelerating growth of highway transportation develops increasingly complex problems of wide interest to highway authorities. These problems are best studied through a coordinated program of cooperative research. In recognition of these needs, the highway administrators of the American Association of State Highway and Transportation Officials initiated in 1962 an objective national highway research program employing modern scientific techniques. This program is supported on a continuing basis by funds from participating member states of the Association and it receives the full cooperation and support of the Federal Highway Administration, United States Department of Transportation. The Transportation Research Board of the National Academies was requested by the Association to administer the research program because of the Board’s recognized objectivity and understanding of modern research practices. The Board is uniquely suited for this purpose as it maintains an extensive committee structure from which authorities on any highway transportation subject may be drawn; it possesses avenues of communications and cooperation with federal, state, and local governmental agencies, universities, and industry; its relationship to the National Research Council is an insurance of objectivity; it maintains a full-time research correlation staff of specialists in highway transportation matters to bring the findings of research directly to those who are in a position to use them. The program is developed on the basis of research needs identified by chief administrators of the highway and transportation departments and by committees of AASHTO. Each year, specific areas of research needs to be included in the program are proposed to the National Research Council and the Board by the American Association of State Highway and Transportation Officials. Research projects to fulfill these needs are defined by the Board, and qualified research agencies are selected from those that have submitted proposals. Administration and surveillance of research contracts are the responsibilities of the National Research Council and the Transportation Research Board. The needs for highway research are many, and the National Cooperative Highway Research Program can make significant contributions to the solution of highway transportation problems of mutual concern to many responsible groups. The program, however, is intended to complement rather than to substitute for or duplicate other highway research programs. Published reports of the NATIONAL COOPERATIVE HIGHWAY 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 NCHRP SYNTHESIS 471 Project 20-05, Topic 45-02 ISSN 0547-5570 ISBN 978-0-309-27169-1 Library of Congress Control No. 2014959836 © 2015 National Academy of Sciences. All rights reserved. COPYRIGHT INFORMATION 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. 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The report was reviewed by the technical panel and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the Governing Board of the National Research Council. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transportation Research Board, the National Research Council, or the program sponsors. The Transportation Research Board of the National Academies, the National Research Council, and the sponsors of the National Cooperative Highway Research Program do not endorse products or manufacturers. Trade or manufacturers’ names appear herein solely because they are considered essential to the object of the report. 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The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished schol- ars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and techni- cal matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Acad- emy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achieve- ments of engineers. Dr. C. D. Mote, Jr., is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Victor J. Dzau is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Acad- emy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. C. D. Mote, Jr., are chair and vice chair, respectively, of the National Research Council. The Transportation Research Board is one of six major divisions of the National Research Council. The mission of the Transportation Research Board is to provide leadership in transportation innovation and progress through research and information exchange, conducted within a setting that is objective, interdisci- plinary, and multimodal. The Board’s varied activities annually engage about 7,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transporta- tion, and other organizations and individuals interested in the development of transportation. www.TRB.org www.national-academies.org

TOPIC PANEL 45-02 STUART D. ANDERSON, Texas A&M University, College Station JOHN E. CARLSON, Sundt Construction, Inc., San Antonio, TX JON M. CHIGLO, Minnesota Department of Transportation, St. Paul LISA B. CHOPLIN, Maryland State Highway Administration, Baltimore STEVEN D. DeWITT, Parsons Brinckerhoff, Raleigh, NC ROGER DRISKELL, Illinois Department Transportation, Springfield FREDERICK D. HEJL, Transportation Research Board RAYMOND S. TRITT, California Department of Transportation, Sacramento CRAIG M. ACTIS, Federal Highway Administration (Liaison) RICHARD DUVAL, Federal Highway Administration (Liaison) SYNTHESIS STUDIES STAFF STEPHEN R. GODWIN, Director for Studies and Special Programs JON M. WILLIAMS, Program Director, IDEA and Synthesis Studies JO ALLEN GAUSE, Senior Program Officer GAIL R. STABA, Senior Program Officer DONNA L. VLASAK, Senior Program Officer TANYA M. ZWAHLEN, Consultant DON TIPPMAN, Senior Editor CHERYL KEITH, Senior Program Assistant DEMISHA WILLIAMS, Senior Program Assistant DEBBIE IRVIN, Program Associate COOPERATIVE RESEARCH PROGRAMS STAFF CHRISTOPHER W. JENKS, Director, Cooperative Research Programs CHRISTOPHER HEDGES, Manager, National Cooperative Highway Research Program EILEEN P. DELANEY, Director of Publications NCHRP COMMITTEE FOR PROJECT 20-05 CHAIR BRIAN A. BLANCHARD, Florida DOT MEMBERS STUART D. ANDERSON, Texas A&M University SOCORRO “COCO” BRISENO, California Department of Transportation CYNTHIA J. BURBANK, FHWA (retired) CYNTHIA L. GERST, Ohio Department of Transportation MALCOLM T. KERLEY, Virginia Department of Transportation (retired) JOHN M. MASON, JR., Auburn University CATHERINE NELSON, Salem, Oregon RANDALL R. “RANDY” PARK, Utah Department of Transportation ROGER C. OLSON, Minnesota Department of Transportation BENJAMIN I. ORSBON, South Dakota Department of Transportation ROBERT L. SACK, New York State Department of Transportation JOYCE N. TAYLOR, Maine Department of Transportation FRANCINE SHAW WHITSON, Federal Highway Administration FHWA LIAISONS JACK JERNIGAN MARY LYNN TISCHER TRB LIAISON STEPHEN F. MAHER

FOREWORD PREFACE By Jo Allen Gause Senior Program Officer Transportation Research Board This synthesis examines practices related to the best value bid approach to procuring highway construction services. Best value procurement is a process to select the most advan- tageous offer by evaluating factors in addition to price. These factors may include schedule, technical merit, management solutions, and past performance. The report documents practices that enhance objectivity, fairness, and transparency of the selection process. Information used in this study was gathered through a literature review, a survey of state departments of transportation (DOTs), analyses of DOT requests for qualifications (RFQs)/ requests for proposals (RFPs), and follow-up interviews for case examples. Keith R. Molenaar, University of Colorado Boulder, and Daniel Tran, University of Kansas, Lawrence, collected and synthesized the information and wrote the report. The members of the topic panel are acknowledged on the preceding page. This synthesis is an immediately useful document that records the practices that were acceptable with the limi- tations of the knowledge available at the time of its preparation. As progress in research and practice continues, new knowledge will be added to that now at hand. Highway administrators, engineers, and researchers often face problems for which informa- tion already exists, either in documented form or as undocumented experience and practice. This information may be fragmented, scattered, and unevaluated. As a consequence, full knowledge of what has been learned about a problem may not be brought to bear on its solution. Costly research findings may go unused, valuable experience may be overlooked, and due consideration may not be given to recommended practices for solving or alleviating the problem. There is information on nearly every subject of concern to highway administrators and engineers. Much of it derives from research or from the work of practitioners faced with problems in their day-to-day work. To provide a systematic means for assembling and evalu- ating such useful information and to make it available to the entire highway community, the American Association of State Highway and Transportation Officials—through the mecha- nism of the National Cooperative Highway Research Program—authorized the Transporta- tion Research Board to undertake a continuing study. This study, NCHRP Project 20-05, “Synthesis of Information Related to Highway Problems,” searches out and synthesizes useful knowledge from all available sources and prepares concise, documented reports on specific topics. Reports from this endeavor constitute an NCHRP report series, Synthesis of Highway Practice. This synthesis series reports on current knowledge and practice, in a compact format, without the detailed directions usually found in handbooks or design manuals. Each report in the series provides a compendium of the best knowledge available on those measures found to be the most successful in resolving specific problems.

CONTENTS 1 SUMMARY 5 CHAPTER ONE INTRODUCTION Background, 5 Synthesis Goals and Objectives, 5 Synthesis Methodology, 5 Synthesis Organization, 6 7 CHAPTER TWO OVERVIEW OF BEST VALUE PROCUREMENT Introduction, 7 Key Definitions, 7 Overview of Best Value Procurement, 7 Transparency in Best Value Procurement, 8 Best Value Concepts, 8 Summary, 12 13 CHAPTER THREE CURRENT PRACTICES IN BEST VALUE PROCUREMENT Introduction, 13 Application of Best Value Procurement in Highway Agencies, 13 Best Value Procurement and Project Delivery Methods, 13 Evaluation Criteria and Transparency, 15 Evaluation Teams and Transparency, 15 Selection Methodologies and Transparency, 16 Industry Outreach Efforts, 18 Training, 19 Best Value Enabling Legislation, 19 Best Value Award Protests, 20 Summary, 21 22 CHAPTER FOUR BEST VALUE CASE EXAMPLES THAT SUPPORT TRANSPARENCY Introduction, 22 Selection of Case Examples, 22 California Department of Transportation, 22 Florida Department of Transportation, 25 Michigan Department of Transportation, 28 Minnesota Department of Transportation, 30 New York State Department of Transportation, 34 Oregon Department of Transportation, 39 Utah Department of Transportation, 44 Summary, 46

47 CHAPTER FIVE CONCLUSIONS AND FUTURE RESEARCH Introduction, 47 Conclusions, 47 Future Research, 48 49 GLOSSARY 50 REFERENCES 52 APPENDIX A NATIONAL SURVEY QUESTIONNAIRE 58 APPENDIX B CASE EXAMPLE QUESTIONNAIRE 60 APPENDIX C BEST VALUE ENABLING LEGISLATION 62 APPENDIX D BEST VALUE PROTEST CASE EXAMPLES PROTEST CASE 1: I-5 Willamette River Bridge, Oregon DOT, 62 PROTEST CASE 2: I-15 Utah Country Corridor Expansion, Utah DOT, 63 PROTEST CASE 3: LA I-10/I-605, Interchange Connector, Caltrans, 64 PROTEST CASE 4: I 35E MnPass D-B Project, MnDOT, 65