National Academies Press: OpenBook

Staffing for Alternative Contracting Methods (2018)

Chapter: Chapter 1 - Introduction

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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2018. Staffing for Alternative Contracting Methods. Washington, DC: The National Academies Press. doi: 10.17226/25211.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2018. Staffing for Alternative Contracting Methods. Washington, DC: The National Academies Press. doi: 10.17226/25211.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2018. Staffing for Alternative Contracting Methods. Washington, DC: The National Academies Press. doi: 10.17226/25211.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2018. Staffing for Alternative Contracting Methods. Washington, DC: The National Academies Press. doi: 10.17226/25211.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2018. Staffing for Alternative Contracting Methods. Washington, DC: The National Academies Press. doi: 10.17226/25211.
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4 Introduction State departments of transportation (DOTs) are facing a challenge of developing and maintain- ing adequate levels of qualified staffing to meet the oversight, stewardship, and documentation requirements for delivering transportation construction projects. One of the critical components attributable to this challenge involves the greater use of alternative contracting methods (ACMs), including design–build (D-B), construction manager/general contractor (CM/GC), and public– private partnership (P3), which shift more responsibility to industry for delivering and managing transportation construction projects. NCHRP Synthesis 450: Forecasting Highway Construction Staffing Requirements found that an accelerated project schedule is the first factor out of 14 fac- tors that influence DOT staffing requirements for highway construction projects (Taylor and Maloney 2013). NCHRP Report 787: Guide for Design Management on Design–Build and Con- struction Manager/General Contractor Projects concluded that the successful implementation of ACMs requires the support of in-house personnel and staff. NCHRP Report 787 also identified five staffing issues that are critical to the success of ACMs, including: (1) personnel assignments, (2) staff availability, (3) staff capability, (4) training, and (5) staff flexibility through utilization of consultants (Minchin et al. 2014). A recent study on strategies for improving transportation project delivery performance for the Connecticut DOT found that “regardless of the size of the ACM program, it is important to build a team with members who have diverse backgrounds and an attitude of innovative problem solving” [Connecticut Academy of Science and Engineering (CASE) 2016]. Staffing needs and organizational structure for traditional design-bid-build (D-B-B) projects are well established. State DOTs have historically employed and maintained substantial levels of technical and administrative staff to perform design and construc- tion activities for their projects. Inspection and testing for construction projects was traditionally performed by the DOT staff. However, the staffing needs and organizational structure for ACMs have not been adequately documented and understood, although hundreds of ACM transportation projects have been completed across the nation. There is a lack of research that explores adequate and efficient staffing practices for delivering and managing ACM projects. Reviewing and document- ing the state of the practice for organization and staffing needs of ACM projects is the goal of this synthesis. One of the challenges for this synthesis is that current staffing prac- tices for ACMs vary widely among DOTs. The practices acceptable for one DOT may not be for another, and may vary even within different DOT districts or regions. ACMs are affected by project and program C H A P T E R 1 Introduction Among the common characteristics of effective ACM structures are the need for a departmental champion, staff familiarity—though not necessarily expertise—with ACMs, and a culture of adaptability and flexibility. Agency- wide training opportunities and communications will be imperative for instilling such culture. (CASE 2016)

Introduction 5 size and type, staffing availability, organizational structure preferences, and project delivery decisions, among other factors. Some state DOTs have created a separate innovative contract- ing program that centrally administers and manages their ACM projects. Other state DOTs retain the decentralized approach to delivering and managing their ACM projects based on geo- graphic areas, while some other state DOTs may prefer using a combined organization structure approach/hybrid model to deliver ACM projects. Synthesis Scope, Goals, and Objectives The scope of this synthesis is to use information collected from the literature review, national survey questionnaires, and case-based interviews to establish the current state of the practice regarding approaches to staffing for ACM projects. This synthesis focuses on three main ACMs, including D-B, CM/GC, and P3. The overarching goal of this synthesis was to summarize and document current practices for organization and staffing needs of ACM projects. The goal was achieved by accomplishing the following objectives: • Identifying agency organizational structures to deliver ACM projects; • Determining critical staffing/teaming needs such as skill sets, experience levels, or number of full-time equivalents required for ACMs; • Identifying unique staffing issues for the primary ACMs (e.g., D-B, CM/GC, P3); • Documenting staffing utilization processes throughout project life from a scoping phase to design, construction, operation, and maintenance phases; and • Identifying staffing issues related to the ACM project closeout phase. In recent years, federal agencies and state DOTs have made advancements in improving project delivery by using ACMs (e.g., D-B, CM/GC, and P3) and other innovation techniques to accelerate critical phases of a project, enrich outreach efforts, and improve the commu- nication among stakeholders. In fact, ACMs are a significant part of the FHWA Every Day Counts initiative because they are seen as tools that can be used to improve project delivery. Most state DOTs have implemented ACMs in varying degrees and with varying degrees of success. There have been hundreds of ACM transportation projects completed across the nation. However, little research has explored and documented the organizational structure and staffing requirements when an ACM is used. This synthesis will help state DOTs and transportation agencies adopt new practices, affirm the effectiveness of practices being used, or develop an effective strategy for organization and staffing needs to successfully deliver ACM projects. In addition to a rigorous literature review, the synthesis is based on new data from a survey of state DOTs, a set of structured interviews, case examples, and a content analysis. A general sur- vey on staffing for ACMs provided responses from 46 state DOTs. The content analysis included ACM manuals and guidelines, organizational structure, and relevant staffing documents from state DOTs. Finally, eight case examples from different states were conducted to furnish specific information on organization and staffing needs for ACM projects. Key Definitions It is noted that the research literature contains little to virtually nothing specific regarding organization and staffing needs for ACM projects. To help the reader gain a full understand- ing of the meaning of this report, this synthesis will use a number of ACM and staffing key terms. It is recognized that each state may have its own unique definitions of technical terms

6 Staffing for Alternative Contracting Methods describing project delivery, procurement, and contract actions as well as staffing needs. How- ever, to maintain consistent definitions throughout the report, the following terms are used in this synthesis: ACM Key Terms Alternative Contracting Methods (ACMs): ACMs are viable delivery options for highway con- struction projects to accelerate project delivery, encourage the deployment of innovation, and minimize unforeseen delays and cost overruns. These options include design-build (D-B), construction manager/general contractor (CM/GC), public–private partnership (P3), and other innovation techniques (NCHRP Synthesis 504, Tran et al. 2017). Best Value: An award method that utilizes cost and other management and/or technical factors to select the winning bidders (e.g., cost-plus-time bidding, qualifications, design approach) to minimize impacts and enhance the long-term performance and value of construction (NCHRP Report 561, Scott et al. 2006). Construction Manager/General Contractor (CM/GC): A project delivery method in which a construction manager is selected to provide input during project design and then becomes at risk for the final cost and time of construction (NCHRP Synthesis 402, Gransberg and Shane 2010). Design–Build (D-B): A project delivery method that combines the design and construction phases of project delivery under a single contract (AASHTO 2008). Public–Private Partnership (P3): A P3 is a contractual agreement formed between public- and private-sector organizations, which allows more private-sector participation in heretofore public endeavors. The agreements usually involve a government agency contracting with a private company to finance, renovate, construct, operate, maintain, and/or manage a facility or system (U.S. DOT 2004). Qualification-Based Selection: An award method that focuses on qualitative criteria such as expertise, experience, and past performance as the basis for selection. Price is not considered as a part of the selection process (AASHTO 2006). Staffing Key Terms Ability Statements: The power to perform an observable activity at the present time. This means that abilities have been evidenced through activities or behaviors that are similar to those required on the job (NCHRP Report 693, Cronin et al. 2012). Centralized Organizational Structure: A hierarchy decision-making structure in which a project is procured and administered through the headquarters offices (CASE 2016). Combined Organizational Structure: A hierarchy decision-making structure in which a project is procured through the headquarters offices and administered through the district offices (CASE 2016). Competency: A combination of skills, knowledge, performance behaviors, and personal attri- butes that contribute to improved employee performance and organizational success (e.g., conceptual thinking, innovation) (Strategic Staffing Guidebook, Minnesota Department of Employee Relations 2016). Decentralized Organizational Structure: A hierarchy decision-making structure in which a project is procured and administered through the district offices (CASE 2016). Knowledge Statement: An organized body of information usually of a factual or procedural nature which, if applied, makes adequate performance on the job possible. A body of infor- mation is applied directly to the performance of a function (NCHRP Report 693, Cronin et al. 2012).

Introduction 7 Organizational Structure: The way in which an agency’s organizational responsibilities and reporting authority are aligned vertically and horizontally and made consistent with capabilities of its staff (Parsons Brinckerhoff et al. 2011). Outsourcing: Utilization of a consultant contractor to manage a contract for goods, services, or works, which includes monitoring performance, commercial aspects, delivery, improvement, complaints, and customer satisfaction (NCHRP Report 693, Cronin et al. 2012). Skill Statement: The declaration of proficient manual, verbal, or mental manipulation of data or things. Skills can be readily measured by a performance test or proficient manipulation of things where quantity and quality of performance are tested, usually within an established time limit (NCHRP Report 693, Cronin et al. 2012). Soft Skills: A broad set of interpersonal skills, competencies, behaviors, character traits, atti- tudes, career attributes, and personal qualities that enable people to effectively work well with others to achieve their goals (Lippman et al. 2015). Staffing: The process of finding the right people, with the right knowledge, skills, abilities, and fit, who may be hired, who already work for the department, or who may be trained or developed to acquire the right knowledge or skills (NCHRP Report 693, Cronin et al. 2012). Synthesis Methodology This report is the result of an intersection of the following four independent sources of information: • Literature review, • Survey of state DOTs using a web-based questionnaire, • Content analysis of relevant ACM and staffing documents, and • Case examples of staffing for ACMs. The research team conducted a comprehensive literature review of related ACM and staff- ing documents. An effort was made to seek not only the most current information but also archival information so that the change over time, if any, in staffing issues for ACM projects could be mapped and related to the current state of the practice. The team searched current academic literature, industry publications, state DOT websites, and government reports to find the most current trends and practices in organizational structure and staffing needs for ACMs. Based on the information gathered from the literature review and input from the NCHRP Topic 48-04 panel, the research team developed a questionnaire and conducted a survey of state DOTs. The survey questionnaire was distributed in web-based and paper-based forms to the members of the AASHTO Subcommittee on Construction, which includes members represent- ing all 50 state DOTs. After several follow-up requests, the research team received responses from 46 state DOTs (92% response rate). Next the research team conducted a content analy- sis of the DOT organizational structures as well as ACM documents, guidelines, and manuals from 21 state DOTs. A content analysis is defined as a technique for making valid inferences by objectively and systematically identifying specified characteristics of a message, written or visual, using a set of procedures (Holsti 1969, Neuendorf 2002). Finally, the case examples were conducted to supplement and validate the findings from the survey and obtain specific process examples of staffing practices for ACM projects. The research team used the case study method described by Yin (2009) as the basis for methodol- ogy for collecting the data from the case examples. Yin asserted that planning the process of accessing and collecting data is essential preparation for efficiently and accurately collecting cogent information. The case examples were selected based on the literature review and survey

8 Staffing for Alternative Contracting Methods responses indicating an agency’s willingness to participate in the research. Additionally, it is equally important to carefully select the cases that can capture different types of organiza- tional structures (decentralized, centralized, and a combination of centralized and decentral- ized) used to deliver ACM projects. As a result, eight case examples from different states were conducted to furnish specific information related to staffing needs for ACMs. Because there is little to no specific information related to organization and staffing needs for ACM transporta- tion projects available, the primary source of information in this synthesis is the analysis of the survey of state DOTs and case examples. Conclusions Rubric The criteria used in this report for drawing conclusions were based on the intersection of two or more lines of information from the survey, literature review, content analysis, and case examples. Findings that were discovered during the analysis of one method but not validated by a second method were reported but are not included as conclusions. This process was followed rigorously throughout the entire report. Synthesis Organization This report is composed of five chapters. The first chapter introduces the subject area and covers the scope, objectives, and study methodology. Chapter Two provides an overview of the most relevant issues to staffing needs and skill sets for ACMs. This chapter briefly discusses the different organizational structures used to deliver ACMs, staffing needs, and skill sets for ACMs, including D-B, CM/GC, and P3, and the use of consultants to implement ACM projects and programs. Chapter Three discusses current practices of staffing for ACMs in the transportation industry. This chapter presents key findings related to organization and staffing needs for ACM based on information collected from a national survey of state DOTs. Chapter Four presents eight case examples regarding staffing needs and skill sets for the success of implementing ACMs. This chapter discusses in detail issues related to organizational structure, staffing issues and needs, ACM skill sets and training, and typical lessons learned on ACM staffing. Finally, Chapter Five briefly summarizes the information presented in previous chapters and offers conclusions and suggestions for future research regarding the staffing practices and strategy for ACM projects and programs.

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TRB's National Cooperative Highway Research Program (NCHRP) Synthesis 518: Staffing for Alternative Contracting Methods documents current practices in state departments of transportation (DOTs) staffing and organizational structure for alternative contracting methods (ACMs). ACMs include design–build, construction manager/general contractor, public–private partnerships, and other innovative contracting techniques. ACMs shift more responsibility to industry for delivering and managing construction projects than traditional design-bid-build projects. As a result, DOTs must make decisions regarding the appropriate levels and mix of staffing for their ACM projects.

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