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

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46 C H A P T E R 5 Implementing ATCs on ACM projects merely alters the baseline design during the procurement process and results in a post-award change to the advertised baseline scope of work. There- fore, virtually no changes are made to the agency’s construction project administration pro- cess, except revising the baseline documents to reflect the contractual requirements of approved ATCs. While some full-scope ATCs may cause the revision to be a major undertaking, the effort results in the contractual details of the project’s final scope of work. Once the ACM contractor is selected, typical project administration processes are normally followed, except for incorpo- rating ATCs from unsuccessful proposers in the project as directed or approved by the agency. 5.1 Incorporating ATCs from Unsuccessful Proposals As mentioned in Chapter 1, most stipend clauses require unsuccessful proposers to relin- quish ownership rights to the intellectual contents of their proposals to an agency if they accept a stipend. This practice allows an agency to incorporate attractive features from unsuccessful proposals into a final project’s design and/or construction process. To maximize the benefits of this practice, an agency needs to be mindful that it purchased the intellectual property found in the unsuccessful proposals, which makes it an asset that can be leveraged for the benefit of the state. Using these ideas represents enhanced value for money, and even if they are not applied to the given project, they can be fed back into the system for future use on other projects where they would be appropriate. While the principle of using the attractive elements of unsuccessful proposals is simple in theory, it can be both tedious and difficult in practice. Based on the case study interviews con- ducted in this research, the major barrier is gaining the successful proposer’s support to change its preferred project approach and adjust its ATC-modified design to include an ATC that it did not contemplate in either its technical proposal or price. Stated differently, many successful proposers want nothing to do with incorporating some- one else’s ATC into their design and having to rethink their own design and execution plans. It is not uncommon for the winning contractor to refute the benefits claimed by its competitor that made a given ATC attractive to agency personnel. It has also been found that there is an additional cost associated with making someone else’s design change, especially in DBB ATC projects. As a result of the variation in the information gained on incorporating a competitor’s ATC into a project design, it is impossible to provide definitive guidance on how to incorporate unsuccessful ATCs into a winning proposal. Nevertheless, the results do permit the enumera- tion of a set of principles that might govern this process: 1. Stipend included. A stipend clause must be part of the solicitation document. The clause should expressly state that accepting the offered stipend transfers ownership of the technical content of the proposal and any ATCs. Project Administration

Project Administration 47 2. Stipend acceptance. The unsuccessful proposer of the ATC in question must accept the stipend when offered for an agency to share the unsuccessful proposer’s approved ATCs with the winning proposer. 3. Winner’s support. The winning proposer should be willing to incorporate the ATC in question into its final scope of work. Depending on the ATC and the ACM in question, the agency should explore whether an additional cost to change the winning price proposal is in order. 4. Design liability delineated. Issues regarding design liability for performance of the ATC in question should be mutually agreed upon and codified in the final contract using an appro- priate legal instrument such as an amendment to the RFP technical scope of work, a contract change, etc. 5. Impacts determined. Any impacts on third-party stakeholders, permitting, utility coordina- tion, and so forth should be identified and quantified before deciding to incorporate the ATC in question. Additionally, potential impacts to the planned sequence of work and the delivery schedule should also be addressed. 6. Pricing determined. Any impact of the newly incorporated ATC on the contract price should be mutually agreed upon and codified as appropriate in the contract. It is suggested that agencies review the six principles listed above and develop their own written guidance that matches the constraints of their enabling statutes and regulations regarding ATCs. 5.2 Project Oversight/Inspection The major change to be incorporated into the oversight/inspection process is to institute procedures for verifying that the agency indeed realizes the proposed cost and time benefits. Since the contract award amount will have been revised to reflect the winning proposer’s ATCs, the existing progress payment system will suffice to document any cost savings. Thus, standard contract administration procedures for measurement and payment will not change. Promised time savings can be easily included in the contract as well by using the same proce- dures to establish the contract completion date as are commonly used in cost plus time bidding (A+B). In essence, the ACM contractor’s proposed number of working days becomes the period after which LD are assessed. However, it is possible that an ATC will apply to a feature of work that is not on the proj- ect’s critical path. Thus, no overall project time savings will be accrued. The Michigan DOT US-10 project provides a cogent example. The ATC used on the project reduced the period of road closures from two seasons to one season. Thus, the project completion date remained unchanged, but the roadway work was accelerated. In such a case, an agency has two options. First, it can establish an intermediate completion date or milestone for the work associated with the ATC and assign incremental LD to that portion of the contract if the approval of that ATC was largely based on the savings in time. The agency can also make the business decision not to apply incremental LD to the ATC work. The second option is to include an incentive/ disincentive (I/D) completion provision for the ATC work itself. If the second option is chosen, additional oversight to verify and document actual as-built construction time will be required to compute the I/D payment/deduction at the end of the project. 5.3 ATC Payment Provisions Post-award payment provisions should not change from routine procedures for CMGC, PDB, DB, and P3 projects. However, DBB projects require explanation regarding measurement and payment provisions due to their low bid award mechanism. An agency has two options regarding payment for ATC-related construction. The first is to incorporate the ATC into the

48 Guidebook for Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods contract payment provisions as a lump sum and treat it as a stand-alone pay item. The second is to require the proposing contractor to include a revised bill of quantities for those pay items impacted by the approved ATC. Obviously, the technical composition of the ATC itself will drive the selection as to which option best applies. 5.4 Change Orders on ATC Projects When developing the post-award contract ATC modifications, an agency should be careful to spell out the differences between liability for compensable changes to the baseline design and liability for non-compensable changes due to ATCs. The clause should also address issues about schedule. Again, local statutes will govern. The Washington State DOT’s DB ATC contract contains a provision titled “Matters Not Eligible for Change Orders,” which seems to be generally applicable to all project delivery methods. The following list contains some of the exclusions found in ATC solicitation documents reviewed in the research: • Delays due to obtaining, or failure to obtain, third-party agreements. • Costs and/or time increases associated with implementing the given ATC. • Differing site conditions encountered as a result of the ATC that would not have been encoun- tered in the baseline design. • Utility relocations required to implement the ATC. • Constructive acceleration due to implementing ATC activities that drive the start of baseline activities. • An infeasible ATC that requires the technical scope of work to revert to the baseline. The previous list is not all inclusive, but it does demonstrate the principle that the ACM con- tractor that proposed an approved ATC should be held responsible for its impact on the project if it does not go as anticipated. Lastly, most ATC contracts also contain language requiring the contractor to execute the baseline design with no increase to the contract’s original cost or time if it decides to abandon the ATC after award. 5.5 ATC Impact on Quality Assurance Procedures The major impact that ATCs have on the quality management process is to create a need to apply quality assurance (QA) to the ATC design review process. The Hurricane Deck Bridge project case study provides an example of this new requirement. This alignment-changing ATC required agency reviewers to evaluate a structural design solution for its impact on the NEPA clearance obtained for the baseline design. The state also had to review and determine the avail- able ROW necessary for the new footprint. Both of these acts constituted design QA activities directly related to the ATC. There was no mention of ATC-driven changes to the construction quality management process in any of the solicitation documents reviewed in the research. 5.6 ATC Impact on Agency Resources In an ideal world, the final approval of a given ATC would include consideration of all ancil- lary requirements for additional agency resources, and those requirements would not vary after contract award. However, given the dynamic nature and complexity of most transportation projects, it is possible that not all impacts of implementing a given ATC were identified at the time of contract award. Hence, agencies must remain alert to the possibility that ATC modifi- cations to the design will generate unforeseen requirements for the agency to bear the cost of additional support tasks for coordinating the details of the changed design with third-party stakeholders such as property owners, utility companies, and others.

Project Administration 49 The contract clause discussed in Section 5.4 is one approach to mitigating the risk that addi- tional costs will be borne by an agency to implement ATCs in its program. Another common approach is to specifically identify agency cost and resource requirements during the ATC evaluation process, as described in Chapter 4. Lastly, provisions could also be made to include this risk when developing the contingency for the given project. 5.7 The Future for ATC Implementation The continued use of ATCs in the future is dependent on the process an agency implements to capture lessons learned and feed them back into the project planning and development process. By definition, ATCs provide alternatives to longstanding agency design criteria, and if ATCs are found to be successful, they should be incorporated into the agency’s standard specifications and designs for use on future projects. ATCs provide factual performance information to challenge agency design preferences and biases and create a mechanism for continuous improvement of the project development process. Developing a process for capturing lessons learned from an ATC leverages the benefits of one ATC for the agency’s overall project development and delivery program. The following is a list of those areas that might be targeted for capturing lessons learned during the implementation of an agency’s ATC process: • Information gained from pre-bid industry outreach on ATC process. • Issues found during project development. • Issues regarding ATC constraints imposed by the NEPA clearance process. • Issues encountered during the procurement process. • Problems encountered regarding confidentiality and their resolution. • Issues resolved during the ATC design review and approval process. • Issues identified during contract award. • Issues with incorporating unsuccessful proposers’ ATCs into the winning proposal. • Issues that caused specific ATCs to be declared infeasible after award. • Successful ATC design deviations. • Successful ATC constructability enhancements. Lesson Learned: A formal program for capturing ATC lessons learned is main- tained by the Ohio DOT. It maintains the Ohio Alternative Technical Concepts, Value Engineering and Value Engineering Change Proposals Resource Databases (see Appendix F for web link) as “a resource for ATC ideas which have been proposed and chosen on state level projects in Ohio.” The fact that they are available to the public further enhances their value as a means to communicate to industry those types of ATCs that have been approved on past Ohio DOT projects.