Guidebooks for Post-Award Contract Administration for Highway Projects Delivered Using Alternative Contracting Methods, Volume 1: Design–Build Delivery (2020)

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17 In‐Progress Design Workshops ................................................................................................. A‐71  18 Over‐The‐Shoulder Reviews ............................................................................................................ A‐74  19 Scope Validation Period ........................................................................................................... A‐78  20 Public Announcements .................................................................................................................... A‐83  21 Delegation of Authority .................................................................................................................. A‐90  22 Contractor‐Controlled Quality Control Testing ............................................................................... A‐93  23 Contractor Involvement in Establishing Quality Control Standards ............................................... A‐96  24 Incentive/Disincentive Program for Superior Quality ..................................................................... A‐99  25 Real‐Time Electronic Quality Management Information .............................................................. A‐108  26 Dual Construction Engineering Inspector (CEI) Roles .................................................................... A‐112  27 Witness and Hold Points ............................................................................................................... A‐118  28 Payment Checklist ................................................................................................................. A‐123  Appendix B: Glossary of Terms .......................................................................................................... B‐1  Appendix C: Case Studies .................................................................................................................. C‐1  Appendix D: References .................................................................................................................... D‐1  vii

1  Chapter 1. Introduction 1.1 Introduction This chapter provides an overview of the Guidebook for Post-Award Contract Administration for Highway Projects Delivered Using Design-Build (D-B) Delivery (the “Guidebook”). It identifies the Guidebook’s audience and describes how agencies can select strategies and tools for their D- B projects. For context, the chapter provides a brief history of D-B delivery for U.S. highway projects. It explains the connection and handoffs between the existing American Association of State Highway and Transportation Officials (AASHTO) Guide for Design-Build (D-B) Procurement (AASHTO 2008) and this Guidebook for post-award contract administration. It explains the industry need for contract administration guidance. The chapter introduces key terms. Additionally, the reader can find a more comprehensive glossary in the back of the Guidebook. After a brief explanation of the research approach, the chapter provides a list of tools that agencies can use to administer D-B contracts. Later chapters and appendices explain the tools in more detail. 1.2 Guidebook Overview This Guidebook provides a practitioner’s guide for construction administration on D-B projects. Whether your agency is using the D-B contracting method for the first time or has significant experience with the method, this Guidebook provides useful strategies and tools to support D-B project administration. Highway agency personnel are the audience for the Guidebook. As an AASHTO publication, the guidance must apply at a national level. Each agency will need to adapt the strategies and tools to their unique agency policies and practices. Ultimately, this Guidebook will help agencies incorporate contract administration into their D-B procedures manuals. 1.3 Design-Build Background The federal government takes a proactive position on advancing transportation in the nation. “Congress declares that it is in the national interest to promote the use of innovative technologies and practices that increase the efficiency of construction of, improve the safety of, and extend the service life of highways and bridges” (MAP-21 2012). The examples include alternative contracting methods (ACMs) such as D-B, and construction manager/general contractor (CM/GC). The Federal Highway Administration (FHWA) Every Day Counts (EDC) programs advanced the use of these ACMs through training and project support to enhance innovation and improve highway planning, design, construction, and operation. ACMs, especially D-B, have now become more common and FHWA is supporting them through its Resource Center programs (FHWA 2016e).

2  At the state level, the Florida DOT (FDOT) was the first state agency to attempt D-B in 1987, spurring FHWA to establish the Special Experimental Project Number 14 (SEP-14) – Innovative Contracting in 1990 which enabled states to experiment with ACMs (Ellis et al. 1991, FHWA 1996, FHWA 2016c). Due to the success of the D-B projects under SEP-14, the D-B Contracting Final Rule established 23 CFR 636 to provide the regulations for D-B (Federal Register 2002). D- B regulations were later updated in accordance with the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU 2007). D-B selection procedures are detailed in part 36 of the Federal Acquisition Regulation (FAR). 1.4 Industry Need for Guidebook The D-B contracting process requires significant procedural and cultural changes on the part of agency staff. Agencies are developing manuals on procurement guidance for these delivery methods. However, a review of current ACM manuals reveals the existence of only a few manuals addressing contract administration processes. The Recommended AASHTO D-B Procurement Guide (AASHTO 2008) primarily focuses on the pre-award phases of the process. This Guidebook specifically addresses the post-award phase; it provides effective tools for the post-award contract administration of D-B projects. 1.5 Key Guidebook Terms This section provides a short list of key Guidebook terms. Appendix B provides a more- comprehensive glossary. Alternative Contracting Method (ACM): The traditional contracting method is Design- Bid-Build (D-B-B). Alternative Contracting Methods (ACMs) include Design-Build (D-B), Construction Manager/General Contractor (CM/GC), and Alternate Technical Concepts (ATC). Other synonymous terms are innovative contracting method and alternative project delivery method. Design-Bid-Build (D-B-B): The traditional project delivery method for building highways and making highway improvements where the agency (or a consulting engineer working for the department) designs the project, solicits bids, and awards the construction contract to the lowest responsive bidder (construction contractor) to build the project (Molenaar et al., 2005). Design-build (D-B): A project delivery system in which both the design (some portion thereof) and the construction of the project are simultaneously awarded to a single entity. The main advantage of the design–build method is that it can decrease project delivery time. The innovative efforts of the highway agencies should not be underestimated. The D-B contracting process requires significant procedural and cultural changes.

3  Strategy: A plan of action for accomplishing specific goals. In this Guidebook, strategies address goals relating to D-B administration, such as team alignment, construction quality, or construction efficiency. Tool: A tool is used to perform an operation. In this Guidebook, it is a tactic or process relating to D-B contract administration, such as checklists, spreadsheets, guidelines, and structured meetings. 1.6 Guidebook Development This practitioner’s Guidebook is based on D-B contract administration practices used by a wide cross-section of transportation agencies. It was developed through a review of current literature and agency manuals, case studies, and interviews with agency personnel. Ultimately, more than 100 practitioners contributed to this Guidebook in the case studies, tool validation and calibration, and guidebook testing. A brief summary of the research follows. The corresponding research report provides a detailed description of the work. State-of-practice reviews – 31 transportation agencies’ ACM manuals and documents relevant to post-award ACM contract administration served to identify contract administration tools for D-B contract administration. Process model development – A detailed process model of the D-B contract administration process was developed to aid in data collection and Guidebook layout. The process model revealed the D-B contract administration phases of Alignment, Design, Construction and Closeout. Project case studies – A diverse set of 19 D-B projects were the subject of case study interviews. The team interviewed and collected data from 13 state Department of Transportation (DOT) agencies and Central Federal Lands, all with active or recent D-B highway projects at the time of the research. Seven of the projects had a total project cost greater than $50 million (including design and construction), six were between $10 million and $50 million, and six were less than $10 million. Tool effectiveness evaluation and calibration – 28 tools appropriate to D-B contract administration were identified through the case studies and state-of-practice reviews. A survey approach was used to calibrate the effectiveness corresponding to project size, level of complexity, and phase of contract administration.  Guidebook development and testing – In addition to a thorough NCHRP panel review, the research team met with agencies from across the country to test the Guidebook on ongoing and completed projects.

4  1.7 Overview of Post-Award Phases and Tools The D-B project delivery process offers the opportunity to enhance performance in areas such as cost, schedule, and quality through stronger alignment, constructability input, innovation, and single point of contact. Ultimately, D-B delivers a project that meets at least the same technical standards and levels of quality as the traditional D-B-B process. The contract administration process ensures this end result. Due to the inclusion of design within the construction contract, D-B contract administration processes are different from D-B-B. At times, the processes, roles and responsibilities of the agency, engineer and constructor for D-B differ from D-B-B. While D-B process modeling for this guidebook revealed that D-B contract administration processes vary from agency-to-agency, and even within agencies, key D-B processes were found on all projects. D-B projects proceed through four overlapping phases from the agency’s perspective of contract administration:  Alignment Phase;  Design Phase;  Construction Phase;  Closeout Phase. A key distinction of D-B is the involvement of the design-builder in design under what is essentially a fixed-price construction contract. This distinction requires different roles and responsibilities for the agency. Ultimately, the agency performs administrative tasks during all four phases that are also critical to project delivery. Agencies have developed a number of tools to help accomplish the administrative tasks in these four phases and with these key distinctions. Table 1.1 lists the tools and describes the phases for use. Chapters 4–7 describe the application of these tools across the four phases. Tools for agency contract administration vary depending on the phase of project development, the specific task, project complexity, and project size. Just as objectives and tasks change across phases, so too do the tools used for contract administration. Agencies apply some tools during one phase only, and apply others across multiple phases. It is not necessary to use all of the tools in this Guidebook to have a successful project. During tool selection, agencies should consider project goals, project complexity, project size, and project phase. Chapters 4–7 detail the effectiveness of tools across varying levels of complexity, size, and phase. Appendix A provides full information about each tool with advice for application and examples from the agency case studies. The D-B contracting process shifts traditional roles and responsibilities, but the contract administration process ensures that all quality and contracting requirements are met.