Staffing for Alternative Contracting Methods (2018)

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1 State departments of transportation (DOTs) across the country increasingly use alterna- tive contracting methods (ACMs) in addition to the traditional design-bid-build (D-B-B) approach to deliver transportation projects and programs. The primary ACMs include design–build (D-B), construction manager/general contractor (CM/GC), public–private partnerships (P3), and other innovative techniques [e.g., alternative technical concepts (ATCs), A+B or Cost + Time contracting, a best-value approach to D-B-B projects, and others]. In fact, ACMs are a significant part of the Federal Highway Administration (FHWA) Every Day Counts Initiative because they are seen as tools that can be used to improve transportation projects and programs. Staffing needs and the organizational structure for traditional D-B-B projects are well under- stood. However, state DOTs are faced with more complex decision making regarding appro- priate levels and mix of staffing for their ACM projects. The staffing needs and organizational structure for ACMs vary widely among DOTs and have not been well documented. The DOT’s practices are affected by project and program size and type, staffing availability, organizational structure preferences, and ACM selection processes, among other factors. The goal of this synthesis is to identify and document the state of the practice in staff- ing for ACMs. The report identifies agency organizational structures to deliver ACM proj- ects, documents critical staffing/teaming needs (e.g., knowledge, skill sets, and experience) required for ACMs, and identifies unique staffing issues for the primary ACMs (e.g., D-B, CM/GC, and P3). The report also identifies and documents staffing training processes and staffing utilization throughout the project development process. The synthesis found three general ACM staffing approaches: 1. Centralized ACM delivery with separate “innovative contracting” divisions that centrally manage ACM projects. 2. Decentralized ACM delivery where DOT districts/divisions deliver ACM projects. 3. Centralized project development at the DOT level and decentralized project execution by districts/divisions. A web-based survey was developed and distributed to the members of the AASHTO Subcommittee on Construction, and forty-six responses were received (a 92% response rate). Among the 46 responses, 43 state DOTs reported that they have authority to use one of three primary ACMs (i.e., D-B, CM/GC, and P3). Additionally, most of the state DOTs use a combined organizational structure to deliver ACM projects. The content analysis involved documenting and analyzing state DOT manuals, guidelines, and templates relevant to staff- ing for ACMs from 21 agencies that have mature ACM programs. Finally, structured inter- views with eight selected DOTs provide case examples of organizational structure, staffing S U M M A R Y Staffing for Alternative Contracting Methods

2 Staffing for Alternative Contracting Methods needs, and key lessons learned on staffing for ACMs. The DOTs were selected based on type of organizational structure, experience with using ACMs, the comprehensiveness and avail- ability of ACM-related documents, and the availability to participate in this study. The synthesis results indicate that staff competency required for the traditional D-B-B approach does not directly apply to the implementation of ACMs. The successful implemen- tation of ACM projects often requires staff with different skill sets, knowledge domain, and competencies. The top five foremost knowledge domain and skill sets found to be critical for implementing ACM projects are summarized as follows: • Leadership and ability to coordinate other staff, • Risk identification and analysis skills, • Strong partnering and team-building skills, • Knowledge of project delivery and procurement procedure, and • Ability to analyze constructability reviews and project phasing. The top three “soft” skills essential for the success of implementing ACM projects are: • Strong commitment to successful outcomes, • Accountability and trust, and • Innovative problem solving attitude. The full list of important skill sets and knowledge domain is documented in Chapter 5. Other major prominent conclusions documented in the report are summarized as follows: 1. Organizational structure for ACMs: There is no favored organizational structure used by state DOTs for successfully implementing and integrating ACMs into their capital con- struction program. Some state DOTs (e.g., Georgia and North Carolina) indicate that the centralized organizational structure effectively produces a streamlined, uniform method- ology for implementing ACM projects. Other state DOTs (e.g., Florida, California, and Missouri) assert that the decentralized structure is effective to meet the specific needs of a given ACM project’s geography and local context. Other state DOTs (e.g., Minnesota, Ohio, and Virginia) specify that the combined structure is a suitable approach to imple- menting their ACM projects. 2. Establishment of an ACM entity/champion for ACMs: Implementing ACMs requires different knowledge, skills, management, and coordination efforts than traditional D-B-B projects. An ACM unit provides necessary knowledge, skills, and resources for state DOTs to successfully implement ACMs. The champion is primarily responsible for ACM projects, and their role varies based on the organizational structure that is established. More than 50 percent of the agencies studied in this synthesis have an organizational unit dedicated to administering and coordinating ACM projects. Most of the mature ACM programs in the nation have established ACM units or have full-time staff dedicated to ACMs. 3. Active involvement of key staff throughout the ACM project development process: ACM projects are typically large and complex projects that involve many agencies and stakeholders. It is critical to identify the key staff for ACM projects and have them engaged in the project development process as early as possible. The active involvement of key staff throughout the project life promotes consistent and timely communication and collaboration, enhances informed decision making by integrating valuable informa- tion between project phases, reduces project learning curves, and holds project teams accountable for their decisions. 4. Establishment of qualified project team: Having a dedicated project team with leadership complementary of each other is critical to the success of implementing ACMs. Selection of

Summary 3 project teams necessitates considering knowledge, experience, and skill sets in the imple- mentation of ACM effective practices, as well as having the leadership and collaborative skills to align the disparate interests of ACM project participants. The ability to truly foster partnerships, promote paradigm shift toward beneficial concept, and discourage adversarial relationships from project teams was found essential for the implementation of ACMs. 5. Use of consultants for ACMs: Most states use consultants in conjunction with their staff to deliver ACM projects. More than 90 percent of the agencies studied in this syn- thesis have used consultants to implement their ACM projects and programs. The level of outsourcing varies from state to state. State DOTs often selectively use consultants where specialized expertise is required for implementing ACMs or to supplement DOT staff. Consultants are often involved in the following typical aspects of ACM projects: preliminary engineering, contract document development, environmental reviews, and construction engineering and inspection. State DOTs often rely heavily on consultants during the early development of their ACM programs, but seek to internalize as agency staff gain more ACM experience. 6. Training: Training plays a pivotal role in the success of implementing ACMs. State DOTs cannot be expected to successfully implement ACMs without sufficient training. Almost 70 percent of the agencies studied in this synthesis provide ACM training to their staff. In addition to project-specific training, state DOTs often provide agency-wide training and peer-to-peer information exchanges [e.g., participation in FHWA, Design–Build Insti- tute of America (DBIA), or AASHTO forums]. Agencies report that it is important for the training program to be specific and project oriented as to how ACMs are developed and delivered in order to articulate and strengthen the DOT’s policies and procedures. The remainder of the less-prominent conclusions, effective practices, and recommenda- tions for future research are presented in Chapter 5. The synthesis suggests that further research be conducted in two areas. The first is research providing guidance on how to select an appropriate project organizational structure and staffing level (e.g., both agency staff and consultants) to effectively and efficiently deliver transportation projects and programs across all ACMs (e.g., D-B, CM/GC, P3, ATC, D-B-B Best Value, and others). The second area is the issue of how to attract and retain talented staff and committed core workforce with appropriate skills and competences for ACM implementation, which is vital for state DOTs. However, there is little information or guidance on this issue.