Expedited Procurement Procedures for Emergency Construction Services (2012)

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SUMMARY EXPEDITED PROCUREMENT PROCEDURES FOR EMERGENCY CONSTRUCTION SERVICES “In both federal and state law, the use of emergency procurement procedures allows for limited competition in selecting a contractor… however, this limitation must be carefully utilized and fully documented” (Perry and Hines 2007, italics added). Herein lies the crux of the source selection issue in expediting procurement procedures during a crisis. Although the law allows state transportation officials to do what it takes to resolve the emergency, they are expected to maintain an extremely careful balancing act between expeditiously resolving the crisis and abusing their authority to circumvent the routine full and open competition process using the emergency as justification. The ability to waive standard procedures comes with the requirement to use that authority both sparingly and wisely. In the words of the New Mexico Department of Transportation (NMDOT) procedures manual (2007), “Lack of planning does not constitute an emergency.” Another author writing on the subject of emergency procurement puts it this way: “Perhaps a good rule of thumb is, ‘when in doubt, bid it out’” (Houston 2011). The past decade provided a seemingly endless series of natural and man-made catastro- phes that resulted in the loss of a major component to the national highway network. From the devastation wreaked by Hurricane Katrina to the Gulf Coast and Interstate 10 to the sudden collapse of the Interstate 35W Bridge over the Mississippi River in Minnesota, state DOTs have had to step into the spotlight and implement expedited procurement procedures to restore vital links in the transportation network, with the media scrutinizing their work every night on the evening news. Although high-profile emergency projects are well known to the traveling public, the more common case is the loss of a culvert on a farm-to-market road as a result of flash flooding or a freeway overpass damaged and closed because of a traffic accident. These mundane local emergencies sometimes go unmentioned in the news, but are every bit as critical to the traveling public in the area and require just as much haste to restore service and remove threats to life and property. The difference between the two is often industry’s willingness to accept a change in routine rules for free and open com- petition. In major disasters, the publicity brings with it a “do whatever it takes” attitude because of the emotions surrounding the event that are not usually present in the local inci- dents. Nevertheless, DOTs across the nation have been able to resolve both large and small emergency interruptions to highway network service on an ongoing basis. The purpose of this report is to collect, analyze, synthesize, and publish the collective national experience with expedited procurement procedures to deliver both design and construction services for emergency highway projects. The synthesis is based on a comprehensive literature review; a survey of the state DOTs that received responses from 42 states and three Federal Lands Highway Divisions (a response rate of 80 percent), and an emergency procedure document content analysis from 42 states plus the FHWA. Structured interviews were conducted with five design consul- tants and five construction contractors to gain the industry perspective on expedited pro- curement procedures. Finally, the synthesis furnishes three legal case studies (Minnesota, Pennsylvania, and South Carolina) on cogent emergency procurement legal issues, and

2 emergency project case studies from California, Florida, Maine, Minnesota, Missouri, Mon- tana, New York, Oklahoma, and Utah that illustrate methods successfully used by transpor- tation agencies on emergency projects. The major finding of the synthesis is that most agencies use expedited procurement pro- cesses with which the agency is familiar and experienced to procure emergency design and construction. In most cases, this will be an accelerated version of traditional design-bid- build project delivery, which helps mitigate risk. Every research instrument supports this conclusion. Additionally, the use of a familiar project delivery method complies with the legal concept of allowing as much competition as time and circumstances permit to reduce the probability of a substantive protest. Put another way, familiarity equals confidence, and confidence permits DOT procurement, design, and construction personnel to accelerate the delivery of an emergency project while making the hard, time-sensitive decisions required with less fear that they may be in violation of procurement laws and regulations. The other notable conclusions drawn from the review and discussed in the report’s body are as follows: 1. Delegating the authority to waive routine contracting constraints from routine central control to the emergency project level is necessary to achieve a quick response and mitigate the overall impact on the public. For instance, a number of states give the DOT senior maintenance engineer the authority to declare an emergency for small- scale, high-frequency accidents whose repair will fall under a specific monetary cost. 2. The fastest way to react to an emergency is to anticipate it and make provisions in advance. The Montana DOT’s rockfall remediation project, the Missouri DOT’s “nested” design-build contract to repair landslide damage during construction, and the New York State DOT’s Statewide Emergency Bridge indefinite delivery/indefinite quantity contract are all examples of developing the capacity to react to an emergency without the need to expedite procurement procedures. 3. Establishing indefinite delivery/indefinite quantity contracts in anticipation of the need for emergency services is the surest contractual means to minimize the impact of an emergency. 4. Investing in a preliminary consultant contract to quantify the scope of emergency design and construction work adds value to the expedited procurement process. 5. Emergency procurements can be executed by using traditional procedures to the greatest extent practical and adjusting them to account for the higher priority owing to the emergency nature of the procurement. 6. A standing list of prequalified designers and contractors, willing to quickly deploy to react to an emergency, is an effective means to expedite procurement procedures. It provides one way for the DOT to manage the increased exposure to risk that accom- panies a crisis situation. Additionally, the use of a prequalified list has been shown to be an effective measure to reduce the potential for a formal protest or a lawsuit. 7. Careful review of emergency permits helps ensure that the agency has clearly docu- mented its rationale for shortcutting or bypassing the routine process based on an urgent need to protect life and property. The most commonly used practice is a standing list of prequalified design consultants and construction contractors. The practice reduces the time needed to identify qualified sources of design and construction services as well as materials and equipment. It also reduces the

3 risk of executing an emergency contract with a designer or contractor who does not have the technical and financial wherewithal to deliver the needed services. Finally, it acts as a protest avoidance measure by maximizing the amount of competition that can be permitted in a crisis situation to a predetermined level. Chapter seven contains the remainder of the conclusions, effective practices, and rec- ommendations for future research.