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Suggested Citation:"Chapter 2 - ATC Procurement Considerations." 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 2 - ATC Procurement Considerations." 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 2 - ATC Procurement Considerations." 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 2 - ATC Procurement Considerations." 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 2 - ATC Procurement Considerations." 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 2 - ATC Procurement Considerations." 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 2 - ATC Procurement Considerations." 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 2 - ATC Procurement Considerations." 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 2 - ATC Procurement Considerations." 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 2 - ATC Procurement Considerations." 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 2 - ATC Procurement Considerations." 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 2 - ATC Procurement Considerations." 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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15 C H A P T E R 2 This chapter’s objective is to identify the potential legal issues associated with procurements involving ATCs. Topics include • Conducting a proper procurement • Protecting the confidentiality of ATCs during the procurement process • Making the “equal to or better than” decision NCHRP Synthesis 455 included a thorough review of construction case law conducted by an attorney experienced with alternative project delivery. The synthesis summarized the conclu- sions drawn from its legal analyses as follows (Gransberg et al. 2014): • 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. • No definitive case law has been developed that relates specifically to ATCs. • 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. • 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. 2.1 Conducting an Open and Transparent Procurement One of the practical challenges of ATCs is that they can create a risk of protest if the agency is not thoughtful about how to approach consideration of ATCs. Therefore, it is prudent to review the process used to implement ATCs with regard to the potential for protest risk. While there have been few, if any, ATC-related protests as of this writing, the risk is evident by consid- ering the following hypothetical situations: • An unsuccessful proposer that submitted a number of ATCs that were not approved could argue that the selection was premised upon a meaningless factor since the agency failed to give it the opportunity to benefit competitively by disapproving its ATCs. • In areas where the construction industry is opposed to ACMs, an unsuccessful proposer could raise political arguments about the use of non-price selection factors, such an “innovation,” “creativity,” and “equal to or better than.” • A basis for a protest could be that the agency treated the proposers differently in their evaluation process. • An unsuccessful proposer’s ATC is rejected, while a competitor’s slightly different ATC is accepted. • An unsuccessful proposer believes it was discouraged from submitting an ATC, while a competitor was “coached” and encouraged to submit a similar, but slightly different ATC. Protest risk is best mitigated by ensuring that the selection process is completely transparent and then following it exactly as published in the solicitation. The practice of holding an ATC Procurement Considerations

16 Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods industry outreach meeting prior to advertising an ATC project to explain the specifics of the ATC review and approval process for the given project is a risk mitigation tool used successfully by a number of DOTs. Normally, agencies have broad discretion in making procurement decisions, but most, if not all, procurement laws require that an agency treat all proposers fairly. A court considering a bid protest is likely to be concerned if a proposer can demonstrate that it was either misled or unfairly evaluated. One other major procurement risk to consider is the longstanding principle of government contract law, which prohibits an agency from making a “cardinal” (i.e., substantial) change to a procurement without starting a new procurement. The question of how this applies to an ATC that could be interpreted as making a cardinal change is as yet unanswered. An unsuccessful proposer could make the argument that an ATC represented a cardinal change in a case where a competitor offered an ATC requiring a cardinal change to the contract, and the agency’s acceptance of this ATC led to the competitor being awarded the contract. There is no case law that addresses this issue, which means agencies should be mindful of the risk. One possible option to mitigate this specific risk would be to constrain the scope of potential ATCs to those areas where the agency believes they would be most valuable. Hence, all competitors would be notified that the agency expected to change the technical scope in the named areas, making the cardinal change theory moot. 2.2 Maintaining Confidentiality During the Procurement Process To invest the time and resources necessary to develop a truly innovative ATC, a contractor must be able to trust that its intellectual property will be protected in the evaluation process and that its competitors are not going to be given the benefit of the idea. Most agencies conduct pre-proposal, one-on-one meetings with interested proposers. The meetings themselves provide an excellent opportunity to gain the contractors’ perception of the bid documents and discuss a range of procurement issues, including ideas on how to enhance the procurement process and/or to improve the project. Many agencies that use proprietary meetings create a formal, con- fidentiality agreement among all participants to such meetings. An example of a fairly simple one used by the Metropolitan Washington Airports Authority for its DB ATCs is found in Appendix E. The nondisclosure agreement’s language is intended to create an obligation on the indi- vidual who signs it to honor its terms. Hence, if that individual violates the nondisclosure agreement and wrongfully discloses details of an ATC, he/she faces potential damages that result from wrongful disclosure. Nonetheless, reliance solely upon a nondisclosure agree- ment may not be sufficient to preserve confidentiality. Past experience suggests that it is neces- sary to also ensure that the agency explain the reason confidentiality is critical to the integrity of the specific proposal process. One of the bigger challenges with confidentiality is dealing with third-party stakeholders who may have an interest in a particular element of the design. While these entities may not be attendant at proprietary meetings, they may become privy to proposed changes. It is critical for the agency running the procurement to manage this risk, either by having confidentiality agreements signed by the stakeholders or by deciding not to disclose the proposed ATC to the stakeholder during the procurement. Some agencies have decided that the risk of confi- dentiality breaches is so significant (i.e., the stakeholder cannot be trusted to honor confidenti- ality) that they chose not to use an ATC process and instead use post-award value engineering processes with the successful proposer.

ATC Procurement Considerations 17 The agency’s project manager should also include the principles employed to maintain confi- dentiality with each proposer at the beginning of each one-on-one ATC meeting. The industry commonly thinks that the risk of a wrongful disclosure comes from the owner. However, that is not always the case. Competing ACM contractors must consult with their supply chain as well as specialty subconsultants and subcontractors who may very well be offering their services to more than one of the competitors. Industry competitors should keep in mind that these entities are in a position to unintentionally disclose confidential information and, thus, the industry competitors should take appropriate steps of their own. 2.2.1 The Impact of Governmental Disclosure Requirements The ATC’s confidentiality can also be impacted by the various federal, state, and local agency record disclosure requirements, often called “sunshine laws,” that create transparency around information in the hands of the government. These requirements reflect a general presumption that the public has a right to access material and records used by the government in conducting its affairs and informing its decisions. While the obligation to disclose governmental records is quite broad, there are some common exemptions to this obligation. For ATCs, the most relevant exemptions relate to (1) trade secrets and commercial or financial information that is privileged or confidential and (2) records that reflect the “deliberative process” of a governmental decision and that would not be available to a party in litigation with the agency. There are literally hundreds of federal and state courts that have considered these two exemp- tions, and an in-depth discussion here would not be appropriate, particularly since there has yet to be a specific “open records” case that has addressed ATCs. However, in summary, these two exemptions address the following (Gransberg et al. 2014): The ‘trade secret and commercial information’ exemption is intended to encourage those submitting a proposal to an agency to voluntarily furnish useful commercial or financial information, with an assurance by the government that it will be safeguarded from the competitive disadvantages that could result from disclosure. While there are many tests that have to be passed to qualify for this exemption, the ‘confidential’ component is generally satisfied if it can be shown that disclosure of the information is likely to: (1) impair the government’s ability to obtain necessary information in the future; or (2) cause substantial harm to the competitive position of the person from whom the information was obtained. The ‘deliberative process’ exemption is intended to encourage frank discussion between subordinates and managers concerning the administrative aspects of a decision. While there are also many tests for this exemption as well, the two that are most significant are that: (1) the document is so candid or personal in nature that public disclosure would likely stifle honest and frank discussion within an agency; and (2) the communications have occurred before the agency reached a final decision. The cases interpreting these two exemptions are highly fact dependent, with courts attempting to determine the harm that could arise from disclosure. Considering the purpose of these exemptions, it appears unlikely that ATCs, once agreed upon and part of the pro- posal, will be shielded from disclosure on the grounds of either trade secrets or confidentiality. The bigger question may be the timing of disclosure. Most jurisdictions permit an agency to safeguard “sensitive procurement information” until the procurement is complete, and the contract is awarded. 2.2.2 Ownership Rights Associated with ATCs Along with confidentiality protection, proposers on ATC projects need to protect any com- mercial investment made during ATC development. If the ATC results in the contractor get- ting the award, then the investment paid off. However, if the contractor is unsuccessful, it

18 Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods potentially wasted the money spent developing the ATC, as well as enhanced the position of its competitor—if the ATC in question is used by the agency with the winning proposer—based on the payment of a stipend. However, offering stipends to offset the costs of ATC development and to be able to capture good ideas in DBB ATC projects is possible and may eventually be demanded by industry. The Alabama, Missouri, and Michigan DOTs did not offer stipends on their DBB ATC projects, citing the need to not muddy the design liability issue. The Missouri DOT expressly reserves the right to adopt any ATC as standard practice or design consideration on future contracts, and it only makes an approved ATC public if it is the low proposer’s. The Alabama DOT felt that not offering a stipend reinforced the long-term post-award confidential- ity of approved ATCs proposed by nonwinning bidders. When an ATC is proposed and developed by a subconsultant or a subcontractor, it may be prudent for an agency to require the prime contractor to secure the rights to convey the ATC to the agency from the entity with the original idea. The most efficient way to do this is to have the stipend agreement that conveys the rights to the agency to use the proposer’s intellectual property specifically mention the proposer’s supply/design chain. Although no case has yet been reported on a situation like this, the failure to have the entity that created the ATC divest its ownership rights in the ATC may create problems for the agency. 2.2.3 Making the “Equal to or Better” Determination In developing a process to make the equal or better determination, it is helpful to revisit the definition of an ATC. The following is a definition used by the FHWA during its EDC II summits (emphasis added): An Alternative Technical Concept (ATC) is a request by a proposer to modify a contract requirement, specifically for that proposer’s use in the bidding or proposal process. The ATC must provide a solution that is equal to or better than the requirements in the IFB/RFP document. The two phrases “request by a proposer to modify a contract require- ment” and “equal to or better than the requirements” in the defini- tion are the operative concepts. First, there must be a modification of a contract requirement. Without the need to change the requirements of the solicitation, the proposed concept is not an ATC because it is permissible within the existing terms of the solicitation. Secondly, the proposed solution is the object of the “equal or better” review. The term “solution” implies something more far-reaching than just a change to a design detail. It is also important to remember that there is no federal statute that governs ATCs, so it is important to make the “equal or better” interpretation within the constraints of local statutes. The one place where ATCs are mentioned in federal documents is in 23CFR§ 636.209(b), which contains rules for using DB delivery for federal-aid highway projects. ATC usage reinforces the fundamental principles of practical design by providing a mechanism for the agency to consider nonstandard solutions to project design requirements. A number of states require ATC proposers to include a description that demonstrates, in their view, that the proposed solution is equal to or better than the requirements of their DB/P3 RFP, and it would seem that the same require- ment would work well in other ACMs. Such a requirement makes the contractor quantify its rationale for the ATC and provides the agency with a detailed description that it can then verify and evaluate. It also insulates the agency from accusations that it failed to consider all the positive aspects of a given ATC and provides an opportunity to raise the visibility of potentially subtle benefits like increased maintainability or reduced life-cycle costs. The Georgia DOT philosophy regarding “equal to or better than” is stated as follows: “Allow DB Firms the ability to suggest modifications to the RFP that would improve the project technically or reduce construction costs, thus allowing a better project without increasing its cost or to gain the benefit of a cost reduction without an adverse impact on project quality.” (VanMeter 2012)

ATC Procurement Considerations 19 The third component of the decision-making process is provided by the baseline design, which constitutes the benchmark against which the ATC must be measured and found to be equal to or better than. The baseline is easy to determine in DBB projects because the design will be complete before the bids are open, and bidders are not obligated to propose ATCs. However, the baseline can be less clear in DB and P3 projects, depending, of course, on the breadth of the design provided by an agency in the RFP. It is helpful for an agency to develop a baseline condition that provides estimates for life-cycle costs, user disruption projections, and other performance factors that could potentially be improved by an ATC in all project delivery methods. Lastly, it is imperative that an agency ATC evaluation group have a consensus defini- tion of the baseline design performance before it begins accepting and reviewing ATCs. 2.3 Design Liability Arising from an ATC ATCs have been described as “pre-award contractor value engineering,” and that is a reason- able representation of the process in most projects (Hitt 2012). In DB and P3, the proposers recognize that they will have the ultimate design responsibility. Agencies intending to use DBB ATCs must determine the roles and responsibilities for completing the design and redesign that comes with an approved ATC. The decision is essentially determining to whom the liability for design performance will be assigned and how it will operate after award. The issue extends to the incorporation of ATCs from nonwinning proposals. This section will discuss the legal issues surrounding the decision to assign ATC design responsibility. An agency must carefully consider the issue of ATC design liability, i.e., who has the risk if the ATC does not perform as expected? Current understanding is based on the premise that the designer-of-record bears the responsibility for any defects in the design it provides. The risk to the agency seems remote under DB and P3, as the agency is not the designer-of- record. The question is not as clear in DBB. If the agency retains design responsibility, then the contractor would presumably not have the risk of the ATC not working as expected. However, this would likely change if the contractor has been delegated design responsibility for the ATC. It seems appropriate to deal with contractor-provided design under DBB in a similar manner to the way in which post-award, contractor-generated, value engineering change proposals are handled—recognizing that in ATCs, the value is accrued in the contract award price, not from a shared savings scheme. Given that an ATC must be reviewed and approved by the agency before it can be incorporated into a contractor’s final proposal/bid, the agency and/or its consultant designer-of-record would necessarily have to approve the proposed changes. Then, it would be incumbent on the agency to delineate where changes to the baseline design are made and how those changes will be promulgated in the final set of construction documents. Although it may seem impossible to cover every possible impact, it is practical to develop a stand-alone ATC design package, like a typical value engineering proposal, that will be coordinated into the overall design and for which the performance Lesson Learned: The Washington State DOT DB Manual requires that project goals be articulated in the DB RFP. Those goals are then used as the basis to make the “equal to or better than” comparison for proposed ATCs. “Generally speaking, the designer-of- record bears the responsibility for any defects in a value engineering proposal.“ (Gransberg et al. 2014)

20 Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods risk will be assigned to the contractor and its licensed designer-of-record. To do this formally, it would be prudent to seek guidance from the agency’s professional engineers licensing board regarding the details that must be addressed to efficiently and effectively convey the design liability to the contractor. A related question is what happens when both parties have presumed that an ATC will work, but, when the actual engineering is performed, it turns out to be impractical or impos- sible. Contract language will typically shift this risk to the contractor, but the “mutual mistake” theory could result in the risk being shared by both parties or, potentially, render the contract unenforceable. The remedy of the “mutual mistake” theory is not used indiscriminately by the courts, and it is likely that it would only be used in a case where the ATC was so significant as to make it unfair to require the contractor to perform the original baseline design based on its commercial terms for the ATC. 2.4 ATC Roles and Responsibilities This section is based on the ATC flowcharts contained in Chapter 1 (Figures 5 and 6). Tables 2 and 3 chronologically delineate the agency and ACM contractor roles and responsi- bilities throughout the ATC process. The primary thrust of the early actions is to identify ACM projects that may benefit from ATCs and then execute the project development process in a manner in which ATC potential is considered at each phase of the project development process, ensuring that conceptual design decisions and commitments made in the NEPA process do not intentionally exclude potentially valuable ATCs. The rule of thumb for the early stage of ATC implementation can be described as follows— develop a baseline design that does not preclude potential ATCs that reflect potential com- petitors’ design approaches and construction means and methods without unintentionally excluding potential design modifications in the planning, permitting, and right-of-way (ROW) acquisition process. Table 2 shows that the ATC process begins at the corridor planning level, where the agency should conceptualize how it will stage the construction in the corridor as a series of individual projects and identify those that can accrue benefits by including ATCs in the project delivery process. Those projects are then flagged as ATC projects. As these projects proceed through the devel- opment and design process, agency personnel and their consultants, if applicable, are instructed to develop a baseline design solution flexible enough to potentially benefit from incorporating contractor-generated ATCs based on an individual contractor’s means and methods. The crux of this process is to begin generating performance-based design criteria wherever possible and carry those criteria through the NEPA process and into final design. Accomplishing the tasks shown in Table 2 requires an agency to train its personnel on the ATC process and on how their part in the project development process must support the deci- sion to seek alternative design approaches through contractor-generated ATCs. An agency may also want to include planning, design, geotechnical, environmental, ROW, third parties (including utilities/railroads), and other consultants that may be involved in the project devel- opment process. Training should not only include a discussion of how to proceed in an ATC project, but also the agency’s rationale for implementing ATCs and possible benefits accrued in the past by the agency and other organizations that successfully implemented ATCs on ACM projects.

ATC Procurement Considerations 21 Project Development Phase Action Agency Contractor Remarks Assess the flexibility for design options for projects in corridor plan. x The agency should have each project within a given corridor assessed and its level of flexibility identified. Brainstorm potential ATCs for each project. x x x The objective is to identify the requirements for more than one design option. Determine if ATCs on a given project are limited or full scope. x If project does not lend itself to allowing the full scope to be eligible for ATCs, the agency will determine the area(s) of project scope to be limited. Initiate environmental process with intent to minimize constraints and commitments that will reduce ATC potential submittals. x x This action is intended to look for options for being fully compliant with federal and state statutes while leaving the technical scope of approved work as open as possible to innovative design solutions. Public meetings held during this period should include a brief description of the ATC process and its benefits. Initiate ROW identification and acquisition process. x x The agency should evaluate ROW (including utility/railroad) impacts of possible ATCs developed in the brainstorming activity. Establish performance- based design criteria where possible. x x The result is to initiate design activities in a manner where there will be more than one acceptable design alternative for the baseline design features of work. x Announcement includes holding an outreach meeting Announce intention to accept ATCs on project. with industry to explain the specific ATC process to be used on the given project and hear concerns and issues. Post current version of project design documents in plans room. x x Documents will be marked “for information only—subject to change” and should convey enough design information to permit interested contractors to be able to understand the baseline design and begin generating CATCs. * (if applicable) Programming and Preliminary Design Agency Design Consultant* Table 2. Early roles and responsibilities.

22 Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods Table 3 illustrates the roles and responsibilities after the preliminary engineering on the baseline design has been completed. By definition, this period is focused on receiving, reviewing, evaluating, and either approving or disapproving contractor-initiated CATCs and ATCs. The rule of thumb for actions taken in this period is as follows—execute the project’s ATC process in an expeditious manner, making approval decisions as quickly as is practical to facilitate the timely award of the contract. Project Development Phase Action Agency Agency Design Consultant* Contractor/ Design-Builder/ Concessionaire Remarks Final Design Receive and evaluate CATCs from industry. x x x Confidential meetings with contractors with CATCs are held to allow a quick decision on whether or not the CATC will potentially be acceptable if advanced and submitted as a formal ATC. Receive, evaluate, and approve formal ATCs. x x x Evaluation process articulated in the solicitation should be followed without adjustment. Advance approved ATC designs to biddable quantities. x x x The ATC design can be completed by the agency, its consultant, or the contractor. The agency must have a process in place to ensure confidentiality if it chooses to take the design responsibility for ATCs. Close ATC period. x Normal process. x x Each contractor with an approved ATC may bid the project using quantities developed in the final ATC design or the baseline design. Award project. x Complete ATC- modified design if required. x x x Final construction documents are completed expressing the final scope of work as modified by approved ATCs. Amend permits as needed. Construction Monitor construction. x x x The agency should have a system in place to quantify actual benefits accrued with each approved ATC. * (if applicable) Advertise and Bid Table 3. Final roles and responsibilities. Lesson Learned: “If we properly consider the approach during the scoping process for the project such that appropriate candidate projects are identified early and the type of ATC process is appropriately identified, the increased or more complex timeframe should easily be accounted for in project [NEPA] commitments.” (Missouri DOT 2013)

ATC Procurement Considerations 23 2.5 Developing an ATC Project Scope of Work This section will discuss the major aspects of detailing the baseline design and ensuring that the ATCs change it in a meaningful fashion. It is important for the project development team to develop the project’s final scope of work in a manner that both stimulates ATCs from industry and allows expeditious completion of the review/approval process. Agencies have wide latitude in choosing the portions of a project to make eligible for modifi- cation by ATCs. The spectrum literally runs from as little as allowing contractors to develop and bid their own maintenance of traffic plan, as shown in Figure 5 in Chapter 1, or as much as permitting ATCs to alter the project’s alignment, as was done in the Missouri DOT Hurricane Deck Bridge project (Missouri DOT 2011). Additionally, the agency will decide whether to employ a full-scope or limited-scope ATC process. The two processes are defined as follows: • Full-scope ATC. The contractor can propose an ATC for any part of the project’s complete scope of work. An example would be an ATC that proposes a change in alignment. • Limited-scope ATC. The agency publishes those portions of the project’s scope of work for which it will accept ATCs. ATCs that fall outside the published areas of scope are rejected. An example would be limiting ATCs to traffic control plans only. 2.5.1 Allowable ATC Areas Determining what technical features of work can be modified with an ATC is an agency’s first decision in an ATC project. To reach this determination, the agency may consider the following questions: • Will the project as a whole benefit from allowing competing contractors to modify the design to be compatible with individual means, methods, and equipment? • Can time and/or cost savings actually be realized if the design is modified during the pro- curement process, or will the disruption and revision outweigh the potential benefits of the change? • What severable features of work can be modified by ATCs without adversely impacting the project’s function and delivery schedule? • If ATCs are included in the solicitation, are there means and methods-driven modifications that would attract contractors to investing the time and resources to propose ATCs? • Will including ATCs reduce the pool of eligible competitors by discouraging those that merely want to bid on the baseline design? • How much time will be added to the procurement schedule? • Are agency personnel available to support the ATC process? A partial list of major advantages and disadvantages of each option is contained in Table 4. Table 4 suggests that an agency can start small, with very limited change allowed, and then open its program as it gains experience with the ATC process. If the decision is made to include ATCs, the issue becomes determining whether to limit the scope and number of ATCs each contractor will be permitted to submit for agency con- sideration. Obviously, there is a point of diminishing returns where an agency could find itself overwhelmed with ATC review and lose the benefits it hopes to accrue to an unmanageable administrative situation or a potential delay in award. In the words of one solicitation, the agency chose to allow ATC submittal “to avoid delays and potential conflicts in the design associated with deferring of alternative technical concept reviews to the post-award period” (Massachusetts DOT 2012). The same solicitation goes on to limit the one-on-one meetings to a maximum of two, each of 2 hours duration, and to limit the number of ATCs per competitor to no more than three.

24 Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods 2.5.2 Timing of ATC Review This section focuses on the relationship between the amount of time given to ACM contrac- tors to generate ATCs and the value of those ATCs. Its primary message is that the decision to include ATCs should be made as early as possible in the design process to ensure that the agency will be comfortable with potential changes. When an agency decides to implement the ATC method on a specific project, it must verify the procurement schedule and ensure sufficient time for the development of ATCs by Issue Full-Scope ATC Limited-Scope ATC Advantages Disadvantages Advantages Disadvantages Project delivery schedule Large number of options to save time. ATC review process might delay award. ATC review process minimized. May not be able to improve schedule due to scope limitations. Construction cost Large number of options to save money. Difficult to verify potential savings before award. Focus on cost savings in a critical feature of scope. May not be able to realize savings due to scope limitations. Confidentiality before award — Large number of ATCs increases the efforts to maintain confidentiality. Reduces active efforts to maintain confidentiality. May drive all competitors to the same ATC solution if limitation is too narrow. Environ- mental commitments Expands opportunities to implement innovative protection measures. Requires a thorough analysis to ensure commitments are not impacted. Reduced chance of unintentional violation of commitments. — ROW acquisition May reduce the amount of ROW required. Approving an attractive ATC may require additional ROW. May reduce the amount of ROW required. Approving an attractive ATC may require additional ROW. Utility and railroad coordination May reduce the amount of utility/ railroad coordination and relocation required. Approving an attractive ATC may require additional utility/railroad coordination/ relocation effort. May reduce the amount of utility/railroad coordination and relocation required. Approving an attractive ATC may require additional utility/railroad coordination and/or relocation effort. Maintenance of traffic Makes the entire project eligible to modification to optimize maintenance of Baseline maintenance of traffic design may not be compatible with some ATCs. Easier to measure impact to maintenance of traffic due to highly focused scope of ATCs — Construction staging Makes the entire project eligible for modification to optimize staging. — — Can only optimize staging within ATC scope limitations. Design liability for ATC performance Agency can choose to share liability as a condition of ATC approval. Complicates the potential legal issues with post- award liability for performance. Focuses liability on limited areas in scope. — Competition Provides sophisticated contractors the opportunity to gain a competitive edge through innovation. May discourage less sophisticated contractors from bidding. May attract contractors with unique means and methods to leverage their advantage. May discourage contractors that are unable to obtain unique means and methods from bidding. NOTE: All of the advantages and disadvantages listed in this table are dependent on the specifics of the ATCs proposed before award and the specific ACM to which they will be applied. traffic Table 4. Advantages and disadvantages of full-scope versus limited-scope ATCs.

ATC Procurement Considerations 25 the industry and the subsequent review by the agency. The time frames are highly dependent on the scale of the project and the type of project, as well as individual agency and ACM contractor capabilities. The research found that the average bidding period for ACM projects ranged from 21 to 55 days (3 and 8 weeks) with an average of 40 days (6 weeks) for all types of projects. Looking at typical ATC procurement periods, the researchers found that the average period to prepare and submit ATCs for DB projects after RFP release was 47 days (6 to 7 weeks) within an overall final proposal submittal period of 90 days (13 weeks). Some states extended the time for proposers to consider potential ATCs to 168 days (24 weeks) by releasing a draft DB RFP prior to the final RFP release. Table 5 provides an example of the difference between a full-scope DBB ATC project and a full-scope DB ATC project. By way of contrast, Table 6 compares DBB and DB limited-scope ATC processes. It shows that the Michigan DOT merely extended its bidding period from 6 weeks to 8 weeks for limited-scope ATC DBB projects to provide bidders additional time for analysis and the DOT extra time to review the submitted ATCs. On the other hand, the Minnesota DOT project was the emergency replacement of a collapsed Interstate highway bridge and, as such, illustrates the extreme condition for applying ATCs to a DB project. It must be noted that the ATC/ pre-approved element (PAE) process in this project was not an afterthought. It was described as the “centerpiece of the procurement process,” and the post-mortem analysis of project perfor- mance found that the competing DB teams “relied” on the process to validate their decisions to deviate from the baseline scope of work in their final technical and price proposals. DBB Milestone – Missouri DOT Hurricane Deck Bridge Full-Scope Process Timing DB Milestone – Minnesota DOT Hastings Bridge Full-Scope Process Timing ATC information meeting Day 0 — — Base design confirmation Day 21 — — 30% plans posted Day 36 RFP issued Day 0 Start one-on-one meetings Day 39 ATC submittal due Day 60 60% plans posted Day 107 PAE submittal due Day 90 Last day to submit ATCs Day 165 Clarification submittal due Day 104 ATC biddable plans to contractor Day 255 Technical proposal due Day 120 Bids due Day 350 Price proposal due Day 145 PAE = Pre-approved element Table 5. Example DBB and DB full-scope ATC procurement milestone schedules. DBB Milestone – Michigan DOT US-10 Rehabilitation Limited-Scope Process Timing DB Milestone – Minnesota DOT I-35W Bridge Replacement Limited- Scope Process Timing 70% Plans posted Day 0 - - Mandatory ATC pre-bid meeting Day 1 RFQ issued Day 0 Start one-on-one meetings Day 1 SOQ received/shortlist published Day 4 Last day to submit CATCs Day 14 RFP issued Day 19 Last day to submit ATCs Day 23 One-on-one meetings commenced* Day 20 Last day to submit pre-bid deliverables Day 30 ATC/PAE submittals due Day 35 ATC-modified bid due Day 42 Technical and price proposal due Day 42 *One-on-one meetings were held daily by teleconference and twice weekly face-to-face. SOQ = Statement of qualifications Table 6. Example DBB and DB limited-scope ATC procurement milestone schedules.

26 Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods The juxtaposition of the two projects and their results is stark. In the Michigan project, the ATCs were limited to only the maintenance of traffic plan, which resulted in the period of traffic disruption being reduced to a single construction season instead of the two shown in the baseline. The Minnesota project was opened to traffic 415 days after the collapse, and per- haps more significantly, survived a protest lodged on the propriety of the ATC process itself. Both had 42-day procurement periods, and both benefited significantly from the ATC process, which introduced baseline changes that reaped both cost and time benefits. Lastly, Table 7 provides a comparison of two P3 ATC projects. It must be noted that in both cases, draft RFPs were issued with follow-on one-on-one meetings with the competing conces- sionaires to confidentially discuss the technical and financial terms and conditions. In both cases, the consideration of ATCs began after the baseline requirements were finalized. Table 7 shows that both projects were procured in less than 6 months. The obvious conclusion is that entertaining full-scope ATCs requires a longer procure- ment period than limited-scope ATCs to provide the competing ACM contractors sufficient time to physically develop ATC design alternatives and for the agency to receive, review, and approve them. Additionally, as the baseline scope of work becomes less prescriptively defined, the universe of responsive alternatives to meet project performance requirements is increased, which should reduce the opportunity for alternatives that would materially change the baseline requirements enough to qualify as an ATC. P3 Milestone – Texas DOT US-North Tarrant Express Limited-Scope Process Timing P3 Milestone – Pennsylvania DOT Rapid Bridge Replacement Limited-Scope Process Timing Final RFP issued Day 0 Draft RFP issued Day 0 ATC/AFC one-on-one meetings commence Day 11 ATC one-on-one meetings commence Day 25 Last day to submit Initial RFP questions Day 25 Draft Final RFP issued Day 34 Last day for Texas DOT response to Initial RFP questions Day 53 Final ATC one-on-one meetings Day 46 Last day to submit ATCs/AFCs Day 65 Last day to submit ATCs Day 74 Last day for Texas DOT response to ATCs/AFCs Day 79 Final RFP issued Day 75 Final one-on-one meetings Day 128 Last day for Pennsylvania DOT response to ATCs Day 89 Final proposals due Day 165 Final proposals due Day 124 Total period from issuance of 1st draft RFP 165 days Total period from issuance of 1st draft RFP 178 days AFC = Alternative financial concept Table 7. Example P3 limited-scope ATC procurement milestone schedule. Lesson Learned: The agency needs to make plans available as soon as practical to give industry as much time as possible to understand the project, providing: • More time to hold meaningful one-on-one meetings and iron out any ambiguities induced by the agency or the ACM contractor. • More time for ATC review and evaluation.

Next: Chapter 3 - Accounting for ATCs in Design »
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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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