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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2020. Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods. Washington, DC: The National Academies Press. doi: 10.17226/25866.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2020. Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods. Washington, DC: The National Academies Press. doi: 10.17226/25866.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2020. Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods. Washington, DC: The National Academies Press. doi: 10.17226/25866.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2020. Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods. Washington, DC: The National Academies Press. doi: 10.17226/25866.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2020. Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods. Washington, DC: The National Academies Press. doi: 10.17226/25866.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2020. Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods. Washington, DC: The National Academies Press. doi: 10.17226/25866.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2020. Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods. Washington, DC: The National Academies Press. doi: 10.17226/25866.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2020. Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods. Washington, DC: The National Academies Press. doi: 10.17226/25866.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2020. Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods. Washington, DC: The National Academies Press. doi: 10.17226/25866.
×
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2020. Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods. Washington, DC: The National Academies Press. doi: 10.17226/25866.
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2020. Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods. Washington, DC: The National Academies Press. doi: 10.17226/25866.
×
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Suggested Citation:"Chapter 1 - Introduction." National Academies of Sciences, Engineering, and Medicine. 2020. Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods. Washington, DC: The National Academies Press. doi: 10.17226/25866.
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3 C H A P T E R 1 The FHWA (n.d.) defines an alternative technical concept (ATC) as a request by a proposer to modify a contract requirement, specifically for that proposer’s use in gaining competitive benefit during the bidding or proposal process. An ATC must provide a solution that is equal to or better than the owner’s base design requirements in the invitation for bid (IFB for DBB) or request for proposal (RFP for DB) document.1 The past decade has been characterized by the pressing need to rapidly renew the nation’s deteriorating infrastructure, which has driven the increased use of alternative contracting methods (ACMs) for transportation and other infrastructure projects. State departments of transportation (DOTs) are using design-build (DB), construction manager/general contractor (CMGC) or construction manager at-risk (CMR), and public–private partnership (P3) con- tracts to take advantage of the design and construction industry’s ideas for alternative design and construction solutions for highway projects. The FHWA launched the Every Day Counts (EDC) effort to encourage the implementation of innovative processes and procedures aimed at “shorten­ ing project delivery, enhancing the safety of our roadways, and protecting the environment . . . it’s imperative we pursue better, faster, and smarter ways of doing business” (Mendez 2010, emphasis added). Including ATCs in the ACM pre-award procurement process has been shown to encourage innovative solutions for a variety of design and construction problems on a wide range of projects. The ATCs represent a smarter way of doing business by bringing the collective expe- rience and creativity, not only to the agency and its designers, but also to the construction contractor, to bear on a given project. However, many DOTs lack the legislative authority to award ACM projects and as such are unable to take advantage of the benefits of ATCs. DOTs in Alabama, Missouri, and Michigan have experimented with allowing ATCs on their tra- ditional design-bid-build (DBB) projects, and, as a result of their success, this guidebook includes information to facilitate the implementation of DBB ATC programs in other states if they so desire. Additionally, DOTs in Colorado, Michigan, and Utah have applied ATCs to CMGC projects. While CMGC is not generally accepted as a “true” ATC, this guidebook captures the processes, procedures, and lessons learned in these agencies and synthesizes them so that they can be used by other agencies interested in extending the ATC processes used on their DB and P3 projects to their CMGC projects. At this point, it must be noted that the aim of the guidebook is not to advocate the use of ATCs on every project regardless of delivery method. ATCs should only be applied to a specific project after careful thought and a determination that the project stands to benefit from the Introduction 1 IFB = Invitation for bid. DBB = Design-bid-build. RFP = Request for proposal. DB = Design-build.

4 Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods design-builder’s, the developer/concessionaire’s, or the construction contractor’s2 pre-award input to the project’s design. In most cases, this means that an agency has found that there are several promising options for design solutions or for optimizing the final design for the contractor’s means and methods that will add value to the final project, once identified. Having the information before award could conceivably accrue benefits in terms of cost and/or time savings. An example would be designing the size and length of bridge members based on a contractor’s actual reach and pick constraints for a barge-mounted crane. A second aspect of the ATC method that was found by those DOTs that used it is that the decision to include ATCs should be made as early in the project development process as is practical. Ideally, the decision would be made before the project’s National Environmental Policy Act (NEPA) clearance and other state-level permits are completed in order to mini- mize the chance that the technical commitments made during the NEPA process will reduce potential ATC benefits or stifle them altogether. In essence, a project with a high potential for beneficial ATCs must pass through the NEPA process with as much flexibility of final design configuration as possible. This constitutes a shift in the environmental permitting process, away from the current mode of “be as specific as possible,” to a less restrictive mode that provides an agency as much latitude as possible while remaining in full compliance with the laws of both the state and the federal government. The net result is that agency personnel must be jointly involved in the ATC inclusion decision at the earliest point—when the project scope is defined. 1.1 A Bold Approach The Missouri DOT (sometimes referred to as MoDOT) presented its motivation for including ATCs in the DBB project to replace the Hurricane Deck Bridge over the Lake of the Ozarks to interested contractors at an outreach meeting in 2011. In addition to the boldness of allowing ATCs on a DBB project, several bold ATCs were proposed by competing contractors, including two ATCs that proposed to change the bridge’s alignment from the baseline alignment approved as the NEPA-preferred alternative. The low bidder’s ATC realignment permitted it to bid $8.1 million below the lowest bid for the base- line design after a NEPA reevaluation was completed. Two of the five bidders did not propose ATCs, and their bids were roughly $10 million more than the low bid. This project is an excellent example of how allowing the construction contractor to make substantive input to a project’s final design accrued tangible benefits. Across the United States, members of the construction and consulting industries have expressed concern about protecting proprietary and sensitive business practices during the ATC proposal process. This has led agencies to work directly with their industry partners to develop contract award procedures that are both equitable and transparent, to treat all competitors fairly, and to provide a documented ATC approval process (Smith 2012). Previous research (Carpenter 2012, Coblentz 2012, Hitt 2012, and Horn 2010) has shown that ATCs used in DBB, DB, and P3 projects have accrued significant benefits in terms of cost savings, increased constructability, and schedule reduction. ATCs have been a part of the DB delivery process since its inception and therefore is well- understood by those that have employed the approach. However, to adapt the ATC process to 2 Since the entity holding the “prime contract” has a different title in each delivery method, the term “ACM contractor” will be used in the remainder of the guidebook to indicate the entity that has direct contract privity with the owner. This is done in the interest of providing a concise reference document on the topic. “BOLD Approach = Industry + MoDOT = One Team = Best Value” (Missouri DOT 2011)

Introduction 5 other ACM projects, an agency must adjust its current business model in a manner that enables early design input from competing industry teams through ATCs. To succeed, the project personnel must have a good grasp of the mechanics of all available project delivery methods and be able to synchronize current procurement procedures to incorporate meaningful ATC input. Further, each agency has a unique procurement environment, making the writing of “one size fits all” guidelines tenuous at best. Thus, the next section will briefly describe the common project delivery methods and provide the common context in which this document is written. 1.2 Project Delivery Methods The Associated General Contractors of America (AGC) (2004) defines a project delivery method as The comprehensive process of assigning the contractual responsibilities for designing and constructing a project . . . a delivery method identifies the primary parties taking contractual responsibility for the performance of the work. Each method is differentiated from the others by the manner in which the contracts between the owner, the designer, and the builder are formed and the technical relationships that evolve between each party inside those contracts. 1.2.1 Design-Bid-Build The DBB delivery method has been traditionally used to deliver transportation projects in which the project’s design is developed by either an in-house or consultant designer. Upon the completion of the design, the owner then solicits bids from construction contractors, using an IFB. The project is typically awarded to the lowest, responsive bidder, and there is no contrac- tual relationship between the designer and contractor. Although the DBB method has been in use for many years and has worked well for many projects, it has many known issues. For example, the use of DBB gives no opportunity for contractor involvement in the design phase. The overall project schedule is linear, creating longer overall project durations. The use of DBB sometimes creates adversarial relationships among the parties involved. Figure 1 shows that the owner holds individual contracts with the designer and the builder in the DBB delivery system. As a result, the owner “owns” the details of design during construc- tion, making it liable for the cost of errors or omissions found during construction. There is no contractual incentive for the builder to minimize cost growth in this delivery system. In fact, there can be an opposite effect, as a builder who has submitted a low bid may look to post-award changes as a means to make a profit on the project after bidding the lowest possible margin to win. 1.2.2 Construction Manager/General Contractor CMGC3 projects are characterized by a contract between an owner and a construction manager, who will be at risk for the final cost and time of construction, as shown in Figure 2. “. . . adopting an alternative delivery method that provides contractor design involvement, such as ATCs, enables the project team to reap a number of . . . benefits.” (West 2012) 3 The term CMGC has various forms depending on the state, agency, and other factors. In this guidebook, the term CMGC will be used. Common terms and acronyms for the same basic concept include construction manager/general contractor (CMGC, CM-GC, CMGC); construction manager at risk (CMGC, CMAR, CMR, CM@R); and general contractor-construction manager (GCCM, GC-CM, GC/CM).

6 Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods The CMGC contract has two components: a preconstruction services contract, where the owner pays the construction manager to contribute ideas during project design, and construc- tion contract execution. Like DBB, the owner completes the design with its design staff or by outsourcing the design work to a consultant. Generally, the contractor is chosen either on a basis of best value, through an RFP process, or on a basis of qualifications (qualifications-based selec- tion), through a request for qualifications (RFQ) process. The project pricing structure in CMGC contracts varies among agencies. One common method uses a pricing provision in which the CMGC contractor stipulates a target price above which the owner is not liable for payment if the project’s scope does not change after the target price is established. If the owner chooses to incentivize the contractor by offering to split any savings with the contractor, a guaranteed maximum price (GMP) pricing provision is used. Some agencies utilize a standard lump sum or unit price contract pricing provision and rely on the CMGC contractor to furnish real-time pricing information during design development to keep the project’s final cost at or under the owner’s stipulated budget. Figure 2 shows the contractual relationships among the three parties. Unlike DBB, there is a contractual coordination requirement between the CMGC contractor and the designer that the design contract be modified to require the designer to collaborate with the CMGC contractor. One example is including a clause in the designer’s contract saying that the designer must respond to the CMGC contractor’s comments on the design documents. OWNER DESIGNER-OF- RECORD GENERAL CONTRACTOR Design Subconsultants Trade Subcontractors Figure 1. The DBB method. OWNER DESIGNER-OF- RECORD CONSTRUCTION MANAGER GENERAL CONTRACTOR Design Subconsultants Trade Subcontractors Preconstruction ConstructionContractual Coordination Requirements Figure 2. The CMGC method.

Introduction 7 1.2.3 Design-Build In DB, the agency procures both design and construction services in the same contract from a single, legal entity referred to as the design-builder. The method typically uses RFQ/RFP procedures rather than the DBB IFB procedures. There is a multitude of variations on the DB process, but all variations involve three major procurement components: 1. First, the owner develops an RFQ/RFP that describes essential project requirements in performance terms. 2. Next, proposals are evaluated. 3. Finally, with the evaluation complete, the owner engages in a documented process that leads to contract award for both design and construction services. The design-builder is at risk for all design and construction costs and typically provides a firm, fixed price proposal. Figure 3 shows that from the owner’s standpoint the project’s chain of responsibility is considerably simplified. As the owner no longer owns the details of design, its relationship with the design-builder is based on a strong degree of mutual professional trust. The design-builder literally controls this project delivery process after award. An emerging variation on the typical lump sum DB procurement is called progressive design- build (PDB). This variant uses virtually the same contract structure as CMGC, but the precon- struction services contract is with a design-builder and covers the cost of design completion. The construction cost is negotiated during preconstruction and mutually agreed upon before notice to proceed with construction is issued. The primary motivation for using PDB lies in the ability to negotiate the DB project’s risk profile during preconstruction and avoid paying the contin- gencies included in a regular DB project’s price that cover both realized and unrealized risks. 1.2.4 Public–Private Partnerships There is some debate in the industry as to the definition of a P3. Contract structures includ- ing “design, build, finance” (DBF) and “design, build, operate, and maintain” (DBOM), as well as other variations, are often cited within these varying definitions. For the purposes of this discussion, a P3 is defined as a contract structure where private entities (commonly referred to as either “concessionaires” or “developers”) contract with public owners to design; build; OWNER DESIGNER-OF- RECORD GENERAL CONTRACTOR Design Subconsultants Trade Subcontractors DESIGN- BUILDER Figure 3. The DB method.

8 Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods OWNER DESIGNER-OF- RECORD GENERAL CONTRACTOR Design Subconsultants Trade Subcontractors DESIGN- BUILDER OPERATIONS & MAINTENANCE CONTRACTOR Developer/ ConcessionaireBanks/Lenders Project Sponsors/ Equity Providers $ Return on Equity $ Debt Service (Only If DBFOM) Figure 4. The P3 model. finance; and, if applicable, operate and maintain (DBFOM) projects. Typically embedded in the DBFOM structure is a DB contract, a long-term operations and maintenance contract, financing elements, along with other elements. Figure 4 shows the contractual relationships among the public project sponsor, the concessionaire, and the key project financial elements. The financing elements and resultant long-term obligations of a P3 concession bring unique challenges and opportunities to project delivery. P3 contracting brings into the process very different financial, legal, and commercial considerations. These additional elements, combined with the complexities of the P3 procurement, contract award, and implementation processes, require new sets of skills in public-agency and private-sector staff. P3 projects tend to be large, complex, and schedule driven. They also provide a means for signifi- cant risk transfer to the private sector—both financial and technical. For public agencies, the long- term obligations on the part of the concessionaire are a relatively dramatic departure from traditional public contracting models. In procurement, using ATCs in conjunction with long-term performance requirements and performance penalty systems are key elements of the P3 process and very different from other public owner procurement approaches. The risk transfer that is a key part of these contracts places many risks on the private sector that typically and historically have been retained by public owners. This risk transfer brings both challenges and opportunities for both parties. Ultimately, the concessionaire/ developer is at risk for final capital costs, long-term maintenance and operational costs, and schedule performance. The schedule perfor- mance includes not only ensuring completion of the DB portion of the contact but also ensuring that upon opening, the project provides the required “availability” for the public sector, with potentially severe financial repercussions for failure. On six Texas DOT DB and P3 projects: • 341 ATCs worth $2.9 billion were proposed • 142 ATCs worth $1.1 billion were accepted • 35 ATCs worth $210.8 million were implemented (R. L. Zapalac, “P3 Innovative Capture Opportunities,” unpublished presentation, Texas DOT, Austin, TX, 2013)

Introduction 9 1.2.5 Project Development Process Implementing ATCs requires an agency to evaluate its routine project development process and determine those points in the process where ATCs might impact the activities typically completed in each phase. It is recognized that each agency has a specific process with its own terminology. Therefore, to furnish a baseline for ATC implementation planning, see Table 1, a generic project development process timeline proposed in NCHRP Report 574: Guidance for Cost Estimation and Management for Highway Projects During Planning, Programming, and Preconstruction (Anderson et al. 2007). Table 1 provides standard termi- nology to understand the remaining sections in this guidebook in the context of the life cycle of a transportation project. 1.3 ATC Legal Matters Since each state has its own procurement requirements, it is important that agencies interested in implementing ATCs carefully review their requirements to ensure that their program is consistent with their own statutory or regulatory authority. Specifically, the issues of confidentiality, protection of proprietary information, and fair and open competi- tion requirements should be reviewed, and as appropriate, the contracting agency should seek concurrence or approval from the appropriate legal counsel before including ATCs in its projects. Development Phase Typical Activities ATC Considerations Planning Determine purpose and need, determine whether it's an improvement or requirement study, consider environmental factors, facilitate public involvement/participation, and consider interagency conditions Evaluate potential design alternatives for flexibility of staging and sequence of work Discuss implications with resource agencies, as well as internal design, construction, operations, and maintenance offices Programming and Preliminary Design Conduct environmental analysis, conduct schematic development, hold public hearings, determine right-of-way (ROW) (utilities/railroads) impact, determine project economic feasibility, obtain funding authorization, develop ROW (utilities/railroads) needs, obtain environmental clearance, determine design criteria and parameters, survey utility locations and drainage, make preliminary plans such as alternative selections and initial geometrics, and create initial bridge layouts Evaluate potential impacts (social, environmental, economic) during the environmental review process to integrate potential means and methods so that ATCs are not unintentionally eliminated Attempt to keep the NEPA-approved footprint/alignment as flexible as possible Consider the possibility of ATCs related to utility relocations and/or railroad agreements Final Design Acquire ROW; develop plans, specifications, and estimates (PS&E); finalize road, pavement, and bridge design; develop traffic control plans; and incorporate environmental commitments, utility drawings, hydraulics studies/drainage design, and cost estimates Evaluate potential design alternatives for the probability of means and methods ATCs Develop ATC scope limitations if required Discuss/develop ATC evaluation plan Determine stipend for project Advertise and Bid Prepare contract documents, advertise for bid, proposals Conduct ATC outreach meetings Execute ATC evaluation plan Construction Identify the selected bidder; initiate contract award; hold preconstruction/partnering workshop; conduct inspection and materials testing; administer contract; control traffic; and construct bridge, pavement, drainage, and other project assets Validate viability of approved ATCs Incorporate ATCs from competitors into awarded contractor’s construction contract Source: Adapted from Anderson et al. 2007. * Note: The details of the procurement phase are specific to each ACM. Therefore, it is not shown in the table. hold a pre-bid conference, and receive and analyze Table 1. Generic project development activity timeline.*

10 Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods To justify the costs of developing an ATC, a contractor needs to truly believe that the intellectual property that it furnishes is going to be protected and that its competitors are not going to be given the ben- efit of the idea. “Confidentiality in the ATC process is very important for the success of the ATC process. Great care needs to be taken when exchanging files and emails” (Hitt 2012). State and local “sunshine” laws that require the disclosure of all government procurement infor- mation may make it seem problematic to develop meaningful ATCs due to the threat of unintentional or even mandatory disclosure. “Sunshine” requirements are based on a prevailing presumption of the public’s right to access material and records used by the government in conducting its procurements and informing its decisions. Actually, the timing of the disclosure is the most important factor. Most public procure- ment laws do not require information to be made public until after a contract is awarded. Thus, it would appear that the legality of maintaining confidentiality during the procurement process is not the real issue. The issue is whether or not the ATCs submitted by unsuccessful proposers become part of the record and are exposed to public scrutiny. This issue leads to the need to protect proprietary technical and sensitive business information. While the obligation to disclose governmental records is quite broad, there are some common exemptions to this obligation that apply to ATCs. These are exemptions related to • Trade secrets and commercial or financial information that is privileged or confidential and • Records that reflect the “deliberative process” of a governmental decision and that would not be available to a party in litigation with the agency. Agency legal personnel should specifically evaluate local statutes in these areas to determine their impact on the ATC process. Most state statutes require competitive sealed bids for construction contracts and award these contracts to the lowest responsible and responsive bidder. These laws are based on the premise that all bidders will be bidding on the same basis, using a complete set of plans and specifications. The statutes do not provide bidders with the authority to submit alternatives for consideration, nor do they allow contracting agencies to award contracts on a best-value basis, where price or other factors may be considered in the award of the contract. The statutes were developed on the concept of fair and open competition where all bidders would be bidding on the same scope of work. Hence, the use of ATCs in DBB and low-bid DB provides a signifi- cant departure from the traditional competitive sealed bid concept. The FHWA has allowed the use of ATCs on DBB and DB projects on an experimental basis under Special Experimental Project No. 14—Innovative Contracting (SEP-14). This experimen- tal use is based on the concept of providing all proposers with the same notice/bidding oppor- tunities and treating proposers fairly during the evaluation and award process. Using ATCs on DB projects no longer requires SEP-14 approval. The legal authority to use ATCs in ACM contracting requires two independent approvals. The first approval involves a legal opinion from the appropriate legal counsel that the use of ATCs is consistent with applicable state/local procurement policies. This documentation is a key component in establishing the appropriate standards, review criteria, contract provisions, and confidentiality agreements that will be used in the procurement process. If federal-aid funds are involved, the second approval is the FHWA’s approval of the concept under SEP-14. FHWA’s statutes do not explicitly allow for the use of ATCs on DBB or CMGC projects (unlike DB projects), making it necessary to receive SEP-14 approval on a project or programmatic basis. It should be noted that FHWA’s SEP-14 approval does not supplant or affect the state’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.” (Washington State DOT 2010)

Introduction 11 legal opinion. A state DOT or local public agency must comply with its own policies as a condi- tion of receiving FHWA’s financial assistance. The widespread use of ATCs on DB projects reinforces the idea that value for money can be obtained by having competing proposals that offer different design and/or construction solutions. Additionally, the successful implementation of SEP-14 programmatic and project- specific waivers led to the elimination of the 23 CFR 636.209(b) requirements to submit a base- line proposal and a proposal based on an approved ATC to demonstrate the “apples to apples comparison.” The FHWA found that a baseline proposal is not necessary for DB projects for the following reasons: • Confidentiality may be breached if the agency is required to amend the solicitation when it approves an ATC. • The cost of developing two proposals might discourage the spirit of innovation during project proposal preparation. • Only one protest was found in the 18 DB ATC case study projects detailed in NCHRP Synthesis 455 (Gransberg et al. 2014), and it was not lodged on an “apples to apples” basis. To the best of the authors’ knowledge, there is no case law on the ATC process despite the fact that it has been in use since at least 2002. Thus, the concern of possible protest on the grounds of not awarding on an “apples to apples” basis appears to be unfounded. 1.4 Characteristics of ATC Delivery Figure 5 shows the typical timelines for each project delivery method and correlates the ATC receipt, evaluation, and approval period with each method’s project delivery period. One can see that each method has a somewhat different opportunity in which to entertain ATCs. In DBB projects, the agency typically releases an interim design (Missouri DOT releases a 70% package) to the public well in advance of the formal IFB to provide competing contrac- tors the time to consider and prepare conceptual ATCs (CATCs) for the agency to review. Arrangements also need to be made for either the agency or the contractor to incorporate approved ATCs into the construction documents and advance the design changes to the overall scope to a point where biddable quantities of work are available by the letting due date. CMGC and PDB proceed along roughly the same timeline. However, the ATC process is merely a portion of the procurement process where CATCs [called “proposed technical concepts” (PTCs) by the Utah DOT] are evaluated and compose a portion of the final selection decision. On the other hand, DB and P3 projects require that ATCs be evaluated, approved, and priced prior to contract award. Hence, the ATC development effort is carried to a level of design sufficient to produce biddable quantities of work. The one aspect not shown in Figure 5 is the potential for incorporating attractive ATCs from nonwinning proposals. In all cases, these would be added to the final contract technical scope of work after the award of the contract to the entity that will ultimately complete the ACM project, regardless of project delivery method. The procedures for accomplishing this task are a work in progress and highly dependent on local procurement statutes. The list that follows is a brief synopsis of the constraints that will govern most agencies in this process: • A stipend clause must be included in the solicitation document that expressly states that accepting the stipend offered transfers ownership of the technical content of the proposal and any ATCs. • The unsuccessful proposer of the ATC must accept the stipend.

12 Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods ATC Submittal Periods De si gn -B id -B ui ld De si gn -B ui ld Pr og re ss iv e De si gn -B ui ld CM G C/ CM R P3 Project Delivery Period Design SelectRFQ Award Build Design SelectRFPRFQ Award Build Design BuildSelectRFP Award Design Advertise/Bid Award Build ATCs ATCs/PTCs ATCs ATCs/PTCs Design BuildSelectRFP Award Operate/Maintain ATCs RFQ Figure 5. Applying ATCs to the ACM process. • The agency has two options: – Issue a change order directing the winning proposer to incorporate the ATC in question into its final scope of work. – Ask the winning proposer if it would like to incorporate any of the ATCs from the unsuccessful proposals and negotiate the terms for adding unsuccessful proposers’ ATCs that are attractive to the winning proposer.

Introduction 13 • Issues regarding design liability for performance of the ATC in question should be mutually agreed and codified in the final contract using an appropriate legal instrument such as an amendment to the RFP technical scope of work, a contract change, etc. Figure 6 provides a general flowchart for the receipt, evaluation, and approval of ATCs in all project delivery methods. This flowchart provides the detail for the brackets labeled “ATCs” in Figure 5. Figure 6 also introduces the idea of early receipt of CATCs. A CATC contains the minimum amount of information necessary to permit the agency to determine whether the CATC is feasible and could be approved. The CATCs are discussed in confidential, one-on- one meetings and followed by formal ATC submission, evaluation, and approval. If the ATC Solicitation Issued Confidential One-on-One Meeting(s) CATC Approved ATC Approved Confidential One-on-One Meeting(s) YES End End Proposals Evaluated Conceptual Formal ATC Received Proposals with Approved ATCs ReceivedNO YES-With Conditions NO NO YES Optional Stipend Offered to Unsuccessful Proposers Successful Proposal Selected YES YES Accepted EndNO ATCs from Unsuccessful Proposals Added to Contract (if desired) Final Contract Scope with ATCs ATCs (CATCs) Received Figure 6. ATC receipt, evaluation, and approval process.

14 Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods is approved, the proposer then advances the ATC-modified design to a point where it can be priced. In most cases, the ATC proposer retains the option to bid the DOT-furnished baseline design or its own approved ATC-modified design. In a DBB project, the successful low bidder’s ATC-modified design must be advanced to yield a complete set of final construction documents. In DB and P3, approved ATCs will be incorporated into the final technical proposal with final design being completed as part of the normal project execution process. In CMGC and PDB, the CATCs are replaced with PTCs for evaluation during the procurement process, and final approval/incorporation takes place after the award of the preconstruction contract. 1.5 How to Use This Guidebook This guidebook is intended for agencies interested in implementing ATCs in conjunction with alternative project delivery methods. Variations on the ATC process, according to the dif- ferent agencies participating in this research, are shown throughout the guidebook. Every agency has a slightly different model to use when delivering projects. Since this guidebook is intended to be used by many transportation agencies, the most general terms have been used herein. The guidebook is organized as follows: • Chapter 1: Introduction. The introduction has three purposes: (1) to provide the background for the guidebook, (2) to define ACM considerations required for ATC implementation, and (3) to provide a basic understanding of how to use the guidebook. • Chapter 2: ATC Procurement Considerations. Chapter 2 has two primary purposes: (1) to provide the background necessary to understand the implications of adding ATCs to the ACM procurement process and (2) to provide guidance regarding how to solicit and evaluate ATCs and how to keep ATCs confidential. • Chapter 3: Accounting for ATCs in Design. Chapter 3 provides guidance on four main topics: (1) changes to consultant design contracts that will solicit ATCs, (2) baseline scope development, (3) design deliverable packaging with ATCs, and (4) approaches to deal with environmental and permitting constraints during design with ATCs. • Chapter 4: Agency Review and Evaluation of ATCs. Chapter 4 is devoted to documenting the mechanics of the ATC review, evaluation, and approval process. A thorough discussion of ATC purpose and evaluation factor development is offered including standard definitions for the various components. The process for modifying the contract scope of work as a result of an approved ATC is detailed, including checking of NEPA commitments and determining whether an approved ATC requires modification of the solicitation. • Chapter 5: Project Administration. Chapter 5 covers common ATC project administration practices. The chapter is not intended to be a comprehensive guide to design and construc- tion administration in general. The emphasis is on what is different in the project adminis- tration system for a project that has been modified by an approved ATC. • Chapter 6: ATC Implementation Toolkit. Chapter 6 describes the ATC Implementation Toolkit, which is an interactive spreadsheet that guides the user through the ATC decision and implementation process. The ATC Implementation Toolkit can be found on the TRB website by searching on “NCHRP Research Report 937”. Lesson Learned: ATCs can be and have been successfully implemented in all ACMs.

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The past decade has been characterized by the pressing need to rapidly renew the nation’s deteriorating infrastructure, which has driven the increased use of alternative contracting methods for transportation and other infrastructure projects.

The TRB National Cooperative Highway Research Program's NCHRP Research Report 937: Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods is designed to help guide alternative technical concepts (ATCs) in the state highway project delivery process. The ATC process—used with design-build highway project delivery—solicits design modification ideas offered by respondents during the bidding process. These modifications aim to encourage innovation and improve design requirements while giving the respondent a competitive advantage.

The report is accompanied by an Excel-based ATC Implementation Toolkit and an associated publication, NCHRP Web-Only Document 277: Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods.

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