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.
1 The International Air Transport Association estimates that about $1.5 trillion will be spent globally on airport infrastructure by 2030 (International Air Transport Association 2018). Most of that enormous amount of money will be spent on projects that must be constructed without disrupting airport operations. The cost of disruption can be high, making âairport projects . . . schedule drivenâ (Pinilla 2018). The liquidated damages for a scheduled 14-day runway rehabilitation at the Oakland International Airport were $10,000/day and for other work that was done during scheduled maintenance periods was $7,500 per 15-minute period, e.g., $30,000 per hour for disrupting normal operations. Additionally, the pace at which airport construction must be completed creates the potential for quality issues that may increase the cost of follow-on maintenance and produce higher future operational disruption than found in projects built for other transportation modes. Given the focus on schedule and the cost of failing to complete the construction during the periods of planned outages, the need for a highly qualified construction contractor with a proven record of timely and quality production is key to the success of airport projects across the globe. Thus, to award an airport project that has the potential to disrupt operations to the lowest bidder that can furnish the requisite performance and payments bonds may be a risky proposition. To manage this risk, airports have turned to alter- native contracting methods (ACMs) that include a qualifications/ past performance element. The intent is to enhance the probability that the winning con- tractor will be both competent and able to build the project within the operational, security, and other constraints that differentiate airport construction from typical building and infrastructure projects elsewhere. The objective of the synthesis was to benchmark the state of the practice with respect to the use of qualifications-based selection (QBS) to award construction projects. The use of QBS for professional services contracts for engineering and design is well understood in the aviation industry and therefore was specifically excluded from the synthesis content. The study identified a few scattered instances of construction-only contracts awarded with QBS, but these were associated with very small projects and emergency work. Thus, the first conclusion reached is that QBS award of construction contracts by public airport agencies is extremely rare and does not represent a well-established practice. On the other hand, the use of ACMs such as designâbuild (DB), construction manager- at-risk (CMR), and publicâprivate partnerships (PPPs) all include the evaluation of qualifications and past performance as part of the procurement process that leads to the final award decision. In fact, progressive designâbuild (PDB) and CMR are routinely S U M M A R Y Value, Benefits, and Limitations of Qualifications-Based Selection for Airport Project Delivery Qualifications-based selection is defined as a procurement process where price is not considered as a part of the selection process. FAA 2014
2 Value, Benefits, and Limitations of Qualifications-Based Selection for Airport Project Delivery awarded on a QBS-only basis with the airport negotiating the final construction price, schedule, and risk allocation after the contract is executed. Additionally, indefinite delivery/ indefinite quantity (IDIQ) contracts (also called job order contracts, on-call contracts, master contracts, etc.), in which contractor qualifications and past performance consti- tute the major decision criteria, are regularly awarded. There are many variations on the contracting and award structure for each ACM that range from QBS alone to some form of best value (BV) award. This led the authors to develop and apply a working definition for QBS awards to the findings of the synthesis. That working definition is as follows: A QBS award uses a procurement process that does not put weight on pricing factors. It does not exclude the submittal of pricing information if the award decision is made without reference to the submitted pricing information. The results discussed in this report are drawn from a comprehensive review of the litera- ture, a content analysis of solicitation documents that included a QBS component, survey responses from 26 airports, and interviews with knowledgeable practitioners at six airports. The conclusion can be reached that data collection verified that there is experience at air- ports in awarding CMR, PDB, and IDIQ contracts that contain some qualifications-based selection of construction contractors. In addition, the use of a QBS that does not consider pricing information that may have been submitted during procurement is a well-accepted practice in the aviation industry. The findings that support this conclusion are as follows: â¢ QBS awards in CMR, PDB, and IDIQ contracts are expected to facilitate project success by decreasing the risk that a marginally qualified contractor with a less than satisfactory record of past performance would win an airport project. â¢ Responding airports perceived tangible benefits associated with selecting well-qualified contractors with a record of satisfactory performance. â¢ The same respondents believed that challenges posed by implementing a QBS award were not insurmountable. â¢ The major constraints faced by airports regarding the implementation of QBS of con- tractors are associated with the conditions that come with Federal Airport Improvement Program grants and state funding, such as that a mandated price be included in the award decision. â¢ QBS delivery was found to be used successfully on all types of typical airport projects. â¢ When QBS is used, IDIQ is the preferred method to deliver small projects, and ACM delivery is preferred for large projects. â¢ Nine of the 24 airports indicating DB authorization responded that they did not know if their authorization extended to PDB, indicating a local need to examine enabling legislation. The case example interviews found that the most important reasons for QBS use by airports are â¢ Project complexity, â¢ Complicated sequence of work, â¢ Impact of operations during construction, and â¢ Need for early contractor involvement. The study also looked at the content of a QBS evaluation plan and found that most airports include criteria assessing the following factors: â¢ Qualifications, experience, and past performance of proposed key personnel. â¢ Companyâs experience with relevant projects and past satisfactory performance on those projects.
Summary 3 â¢ Contractorâs capacity and availability. â¢ Contractorâs safety record. The primary resource document on the topic of QBS and ACM usage in the aviation industry is ACRP Report 21: A Guidebook for Selecting Airport Capital Project Delivery Methods (Touran et al. 2009a). A future suggestion from this synthesis includes updating ACRP Report 21 to provide guidance for the use of PDB, IDIQ, and PPP delivery and reflect state of the practice.