Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods (2020)

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6 Chapter 2 Benchmarking Report Synopsis This chapter will synopsize the Phase 1 Benchmarking Report and solicitation document content analysis completed as part of the Phase 1 Task 1.1: Literature Review, Task 1.2: Develop Phase 2 Workplan, and Task 1.3: Annotated Guidebook Outline and Interim Report. Further details are contained in Appendix A. 2.1 Synthesis 455 Literature Review Update The Synthesis 455 documented various methods by which agencies have successfully implemented the ATC highway contracting process. As an update to the Synthesis 455 the research team gathered more recent information through a literature review of relevant publications post Synthesis 455. This updated literature review includes a list of the newly obtained publications and highlights notable features of ATCs with regards to issues such as submittal/evaluation procedures, ATC policies/procedures and the use of ATCs to manage risks and improve financial viability. 2.2 ATC Solicitation and Program/Policy Document Content Analysis To update the Synthesis 455 our research team solicited information from DOTs that did not use ATCs at the time of the Synthesis 455 and from agencies that were previously nonresponsive. Collectively, 34 states/agencies were contacted to update the Synthesis 455 and the information obtained provides an up-to-date perspective on the agencies that are now using ATCs and on the use of ATCs in DBB, CMGC, DB or P3 project delivery. 2.3 Update Synthesis 455 Case Law Review Synthesis 455 presents information on the legal and contractual issues associated with ATCs and primarily focused on four of main challenges, namely: • Maintaining confidentiality of ATCs, • Ownership rights associated with ATCs, • Conducting a proper procurement, • Design liability arising from the implementation of an ATC. Despite a thorough search in 2017, there continues to be no existing case law that specifically discusses ATCs. The case law that will operate in litigation/disputes where an ATC is involved is that specific to the issue in dispute. In other words, if the dispute involves design responsibility for changes effected by an approved ATC, then the general case law regarding design-build design liability will probably constitute the underpinnings to which the court will refer while making its decisions. Similarly, if the dispute is an award protest alleging an improper procurement, then the courts will look to previous award protest case law for guidance. Consequently, before a public transportation agency can develop its own ATC program, it must carefully look at its local restrictions and legal framework, and then determine how to apply such restrictions and framework to a procurement using ATCs. Hence, the conclusions drawn from Synthesis 455 shown below remain the ATC state-of-the-practice:

7 1. Most of the legal issues associated with ATCs, including confidentiality, criteria for consideration and acceptance, and protest rights, are identified in the procurement documents for a given project. 2. No definitive case law has been developed that relates specifically to ATCs and interprets the potential issues associated with them. 3. Traditional procurement practices of fairness, objectivity, and transparency will all apply to ATCs regardless of the project delivery method by which a given project is delivered. 4. Legal issues associated with ATCs are specific to each local jurisdiction, and legal counsel familiar with the jurisdiction will be the best source for advice on how to proceed with ATCs. The Commonwealth of Virginia passed Senate Bill 465 in March 2016 which specifically addressed the use of ATCs for both DB and P3 projects. The advent of this statute may signal that ATCs will become more directly regulated than in the past. Many, if not most, of the states that have been using ATCs in DB do so relying on enabling legislation that indirectly authorizes ATCs by including the evaluation of “innovations” as part of the best value or low bid award decision. 2.4 ATC Implementation, Intellectual Property, NEPA, and Programmatic Issues Figure 2. 1 shows the updated status of ATC usage. Figure 2. 1. ATC Usage Map.

8 2.4.1 ATC Implementation Initiatives The major initiative post Synthesis 455 regarding ATC implementation remains the FHWA Every Day Counts 2 program (FHWA 2016a). In that program, a task order was issued to Applied Research Associates, Inc. that resulted in the following deliverables being developed and submitted to FHWA for dissemination: • ATC Implementation Guide for DBB Projects – (FHWA 2014). • ATC Case Study Briefs (2 pages)  Missouri DOT DBB Full Scope ATCs  Michigan DOT DBB Limited Scope ATCs  Minnesota DOT DB ATCs • FHWA Tech Briefs  ATC Fundamentals and Applications  Lessons Learned with NEPA and ATCs  Alternatives to DBB ATCs  Getting Buy-in for ATCs  The “Equal to or Better Than” ATC Decisions  DB RFP ATC Clauses  ATCs on Federal-Aid Projects • ATC Webinars  ATC Industry Outreach  ATCs on P3 Projects  ATCs on CMGC Projects  ATC Legal Issues • ATC Peer to Peer Exchanges.  ATC-DBB Process  ATC DB Process • ATC Workshop. The team had copies of all the written products of the above events. Most were developed for FHWA by Dr. Gransberg, the principal investigator (PI), from material published in Synthesis 455. 2.4.2 ATC Intellectual Property Issues There was no observed change in intellectual property (IP) issues from the publication of Synthesis 455. It appears that most IP issues are addressed by offering stipends with the stipulation that the agency gains ownership of the ATC IP if the stipend is accepted. Missouri DOT (MoDOT) does not offer a stipend in its DBB ATC program. However, if MoDOT wants to use the ATC of a contractor who did not win, it will negotiate a payment for the wining contractor to use the ATCs in the final project design. 2.4.3 ATC NEPA, Environmental Permitting, and Right of Way Issues The major operational issue regarding ATCs is commitments made during the National Environmental Policy Act (NEPA), environmental permitting, and right of way (ROW) acquisition processes that unintentionally constrain contractor means and methods, preventing some lucrative opportunities for ATC savings because of the need to re-review environmental clearances. Depending on the level of environmental documentation, it may require a new environmental

9 document, supplemental document to the environmental impact statement (EIS), etc., a process which might require months of additional review, analysis and documentation related to NEPA requirements. In 2015, the AASHTO Subcommittees on Construction and Design co-sponsored an NCHRP Research Problem Statement that was subsequently funded as NCHRP Project 10-99: Framework for Implementing Constructability Across the Entire Project Development Process: NEPA to Final Design (https://apps.trb.org/cmsfeed/TRBNetProjectDisplay.asp?ProjectID=4191). This project is aimed at keeping both the final environmental clearance and the final design as flexible as possible to permit a wider range of ATCs to be approvable as circumstances permit. That research has not yet commenced. 2.5 “Better than or Equal To” Assessment The Synthesis 455 found that the definition of “equal to or better than” was truly a work in progress with many official and unofficial interpretations which ranged from a quantitative analysis of life cycle costs to a mandate that reducing quantities of work did not qualify as an ATC, to a policy that left the details of the determination to the ATC evaluators. While Synthesis 455 found a number of other areas in which definitive ATC guidance was missing, none was so badly in need of a definitive approach as the “equal to or better than” determination. At this point, the determination is made in several different manners. The unpublished FHWA Tech Brief (2016) on the “equal to or better than” issue cited above details the current set of alternatives. It also points to the two controlling philosophies pertaining to the equal to or better than concept as follows: • “Apples to apples” comparison. • “Level playing field” competition. The Washington State DOT (WSDOT) addresses the “apples to apples” comparison as follows: “An ATC must be deemed, in WSDOT’s sole discretion, to provide a project that is “equal or better” on an overall basis than the project would be without the proposed ATC. Concepts that simply delete scope, lower performance requirements, lower standards, or reduce contract requirements are not acceptable as ATC’s. Any question that may arise regarding conducting an “apples to apples” comparison of Proposals is resolved by requiring the ATC to meet the “equal or better” standard.” (WSDOT 2010) The level playing field philosophy is impacted by the need to maintain strict confidentiality during the ATC proposal, evaluation, and approval process. The result is that each competitor can potentially be bidding a different ATC revised design, and this creates the issue with potential protest of award. The Florida DOT’s solution is to determine the source of the ATC proposal and determine whether information brought to the agency’s attention warrants an amendment to the solicitation. This involves deciding whether the ATC’s origin is an error, omission, or ambiguity in the solicitation. The assertion is confirmed in the Florida DOT DB manual when it states: “The Department reserves the right to disclose to all Design/Build Firms any issues raised during the ATC meetings, except to the extent that FDOT determines, in its sole discretion, such disclosure would reveal confidential or proprietary information of the ATC” (FDOT 2011; italics added).

10 Therefore, the FDOT rule of thumb might be described as follows: if a proposed change to the technical scope is the result of a design error, omission, or ambiguity then the solicitation must be amended, and all offerors must be given the chance to repair their proposals in accordance with the correction to the solicitation. In doing so, the agency met its statutory responsibility to maintain a level playing field. A critical assessment of the “equal to or better than” standard was conducted during Phase 1. That assessment can be found in Appendix B. 2.6 Phase 1 Findings The following are the findings of the Phase 1 Benchmarking Report regarding the use of ATCs: 1. Across the US agencies refer to the ATC process by different terminology, some of these discovered include: a. Innovative Technical Concepts (ITC) used by the US Army Corps of Engineers on P3 projects. Also used during CMGC selection as a weighted evaluation criterion. b. Proposed Technical Concept during initial ATC use in CMGC evaluation criteria by Utah DOT; c. Pre-approved Elements (PAE) used by the Minnesota DOT. d. Conceptual ATC (CATC) used by Missouri DOT to describe the initial submission of an idea for a cursory review and decision. 2. Delaware DOT has an interesting informal ATC process. It is characterized as follows: a. Completely informal and very flexible process. It is not formally referred to as ATC but same objective. b. No program/policy and absolutely no language of ATC or ATC evaluation process or confidential meetings in RFPs. c. Agency hosts confidential meetings to entertain proposed ideas for developing ATCs. d. Agency does not assess conceptual "ATCs" vs base design. 3. Puerto Rico’s P3 Authority’s P3 Regulations document describes distinctly separate ATC and Alternative Financial Concept (AFC) processes. 4. Colorado DOT Design-build Manual (2006) describes distinctly separate ATC and Alternative Configuration Concept (ACC) processes 5. On the issue of separating the ATC evaluation team from the full proposal evaluation team DOT personnel express that there is a gross lack of resources to facilitate this separation. Some also feel it is unnecessary because they incorporate features to reduce potential biases during evaluation of full proposals, such as double-blind submission reviews. 6. Not many DOTs require the formal submission of preliminary/conceptual ATCs; however, all DOTs facilitate some form of pre-approval before the submission as a formal ATC within a bidder’s full proposal. Notably, the submission of formal ATCs always precedes

11 the deadline for submission of bidders’ full proposals, thus, facilitating DOT review for approval/rejection of ATCs. 7. The Georgia DOT takes a unique approach by preparing an "ATC Handbook" and an "ATC Evaluation Manual" which are both project-specific documents only for mega projects. Recognizing that new prospective bidders may not be familiar with GDOT’s ATC process the agency prepares the ATC Handbook to share with prospective bidders in advance of RFP solicitation and the ATC Evaluation Manual is shared internally to agency personnel. 8. The use of ATCs on DBB remains spotty outside the Missouri DOT program. The Alabama Minnesota, and South Carolina DOTs joined the Michigan DOT in experimenting with limited scope DBB ATCs that were restricted to temporary works and maintenance of traffic plans. All three states recorded quantifiable time savings benefits for their efforts.