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.
Â Â 13Â Â Chapter 3. Pre-Award Phase Administration 3.1 Introduction The purpose of this chapter is to introduce the pre-award phase and its underlying principles, which will help establish a foundation for the administration of the D-B contract. In general, this Guidebook focuses on post-award processes and tools for D-B contract administration, whereas the Recommended AASHTO D-B Procurement Guide (AASHTO 2008) describes D-B procurement activities in detail. Before getting into post-award contract administration in later chapters, this chapter highlights some of the key project delivery and procurement decisions that lay the foundation for effective contract administration. These include: ï· Project goals ï· Project delivery selection ï· D-B procurement ï· Betterments ï· Alternative Technical Concepts (ATCs). 3.2 D-B Pre-Award Activities that Impact Contract Administration The FHWA D-B regulations give DOTs wide discretion in identifying D-B projects (USDOT 2002). D-B delivery has been successfully applied on simple pavement overlays and complex corridor reconstructions. However, as stated in the D-B Procurement Guide (AASHTO 2008), not all projects are appropriate for D-B. If D-B project delivery is applied to an unsuitable project, the construction administration strategies and tools in this guidebook may not help to make a project successful. This section of the guidebook addresses a few key concepts from the D-B procurement stage that are important to project success. Project Goals D-B project delivery can provide advantages over D-B-B project delivery. These potential advantages can include shorter project durations, earlier schedule certainty, lower initial costs, earlier cost certainty, and better life-cycle solutions. However, these advantages all assume the agency has selected an appropriate project and has clearly defined its project goals. Clearly written project goal statements, which are included in the RFQs and RFPs for the design-builder, are one of the most important factors for D-B project success. They help guide the contract administration process. Table 3.1 provides example project goal statements that have been adapted from the AASHTO D-B Procurement Guide (AASHTO 2008).
Â Â 14Â Â Table 3.1: Mapping of D-B benefits to project goals Possible Design-Build Benefits Project Goals Schedule ï· Shorter duration ï· Earlier schedule certainty Cost ï· Initial cost savings ï· Earlier cost certainty ï· Less cost growth Quality ï· Equal or better quality ï· Quality in procurement Innovation ï· Better constructability ï· Less impact on the traveling public Schedule ï· Minimize project delivery time ï· Complete the project on schedule Cost ï· Minimize project cost ï· Maximize project budget ï· Complete the project on budget Quality ï· Meet or exceed project requirements ï· Select the best team Innovation ï· Provide innovative solutions ï· Minimize impact on the traveling public Agencies should be consistently referring to the project goals throughout all phases of the project. To help integrate the project goals into the contract administration phase, the agencies can explicitly include them in the 1 Kickoff meeting, 7 External stakeholder coordination plan, and 8 D-B specific partnering tools. Project Delivery Selection With a clear understanding of project goals in mind, agencies can select the most appropriate project delivery method. Some agencies provide criteria for project selection in their alternative contracting method guidebooks based on project goals, project constraints, and legislative authority (CDOT, 2014; WSDOT, 2016). Others make the decision on a case-by-case basis. To properly administer a project during the construction phase, agencies should be clear as to why they select D-B. The FHWA Next Generation Transportation Construction Management Pooled Fund study (University of Colorado Boulder, n.d.) developed a project delivery matrix to facilitate the project delivery selection process. The selection matrix was promoted by FHWA in the Every Day Counts initiative (FHWA, 2017b). The process promotes a project delivery workshop that is up to one day in length. The workshop gathers key project personnel to discuss the opportunities and obstacles of each delivery method around eight critical project issues. These issues are important for both project delivery selection and construction administration. ï· Delivery schedule â The overall project schedule from scope through design, construction, and opening to the public.
Â Â 15Â Â ï· Project complexity and innovation â The need for applicability of new designs or processes to resolve complex and technical issues. ï· Level of design â The percentage of design completed at the time of the project delivery procurement. ï· Initial project risk assessment â The process of quantifying the preliminary risk events to ensure the selection of a delivery method that properly addresses them. ï· Cost â The financial process related to meeting budget restrictions, ensuring accuracy of cost estimation, and controlling project costs. ï· Staff experience and availability â The experience and availability of the ownerâs staff to execute the project delivery methods under consideration. ï· Level of oversight and control â The level of and manner in which the owner exercises control over design and construction processes. ï· Competition and contractor experience â The level of competition, experience, and availability in the marketplace and its capacity for the project. Evaluating these issues will allow for the selection of appropriate strategies and tools for agency contract administration. Design-Build Procurement D-B has two distinctly different procurement methods: best-value and low-bid. The choice of procurement method will impact the manner in which the agency administers construction. Therefore, agencies should develop their construction administration processes to be consistent with their choice of procurement methods. Agencies typically employ low-bid procurement only on smaller, non-complex D-B projects. FHWA data shows that agencies most frequently use this method on projects between $2 and $10 million in value (FHWA 2017). They provide a high level of design in the RFP, typically greater than 60%, and award the project to the lowest bidder who meets the technical minimums. Therefore, D-B low-bid construction administration is similar to D-B-B construction administration. Quality assurance and quality control processes are typically similar to D-B-B processes. Design reviews and lump-sum payment procedures are different from D-B-B in D-B low-bid. Agencies employ best-value procurement on larger, more complex D-B projects. FHWA data shows that agencies most frequently use this method on projects over $10 million in value (FHWA 2017). Best-value D-B projects contain a lower amount of design in the RFP, typically less than 30 percent. Awards are made on a combination of technical proposal and price. The technical proposal is then scored and a cost-technical tradeoff is made with price (Molenaar & Tran, 2015). The following are some general categories that agencies use for best-value selection: ï· Schedule â Time to design and build project.
Â Â 16Â Â ï· Proposed Design Approach â Design-builder designs to meet the technical performance requirements set forth by the agency. ï· Quality Management Plans â QA/QC plan prior to award. ï· Project Management Plans â Plans for logistics, material management, equipment, public relations, etc. ï· Key Personnel â Experience and qualifications of key personnel. ï· Subcontractors Information â Subcontracting plan including small business utilization. ï· Safety Record and/or Plan â Corporate safety record and plans for specific safety hazards. It is imperative that agencies carry the best-value technical proposals into construction administration. Design-build teams will frequently propose more than the minimum agency requirements to win the project. Agencies frequently call these proposal items âbetterments.â It is important to recognize that a betterment should be an improvement, not merely a change, to the basic configuration. A betterment is distinguishable in that it adds improvements to the project requirements. Betterments must be identified during the proposal evaluation stage, carried forward into the contract, and implemented during construction administration. Agencies have developed some tools to assist with understanding the full scope of the procurement and the transition to design and construction. Some agencies use a 19 Scope validation period, or a similar tool, to prevent a misunderstanding of project scope in the handoff from procurement to design and construction. Teams can also gain beneficial scope management through the use of 15 Independent party design review, as long as the design reviewers have a clear grasp of the original project scope. Betterments During procurement, D-B proposers can suggest betterments, which add an improvement to the project beyond the given scope. Betterments are a way for D-B teams to demonstrate the value they can bring to a project. If a betterment is accepted by the agency, it is included in the contract and becomes a required deliverable. Some agencies use a 19 Scope validation period, or similar tool, to clarify betterments in the handoff from procurement to design and construction. 9 Continuity of team members is also a helpful tool to coordinate betterments across the project delivery process. Alternative Technical Concepts Alternative Technical Concepts (ATCs) are design-builder proposed changes to agency supplied basic configurations, project scope, design, and/or construction criteria. These changes provide a solution that is equal or better to the requirements in the RFP. ATCs provide flexibility to the proposers in order to enhance innovation and achieve efficiency. (AASHTO 2018, Gransberg et al. 2015).