Megaproject procurement: breaking from tradition; Looking beyond design-bid-build to find another project delivery method that's right for the megaproject

Public Roads, July-August, 2004 by Gerald Yakowenko

"Overall, design-bid-build was the right solution for the project as a whole," says Lewis, "but we would have benefited if the whole spectrum of delivery options had been available to us to use on individual project components with unique challenges."

Another Option: Design-Build

With the design-build project delivery method, the project owner selects an organization to complete both design and construction under a single contract. Specifically, once the contracting agency identifies the end result parameters and establishes the design criteria, the prospective design-builders develop proposals that optimize their construction abilities. The contracting agency then typically conducts a best value analysis, based on cost and technical factors, such as design quality, timelines, and management capability. Once the contract is awarded, the design-builder becomes responsible for completing the design and all construction at the contract's fixed price, usually on a lump sum basis.

Design-build enables owners to fix total project costs earlier in the project development process and may simplify and expedite project administration because design and construction are completed by a single entity. By fostering collaboration between designers and contractors, construction knowledge can be incorporated into design. Additionally, by giving the contractor more flexibility in the selection of design, materials, and construction methods, this method allows the design-builders to provide innovation in the preliminary design.

The first major project to seek and win SEP-14 approval to use design-build was the Interstate 15 Corridor Reconstruction Project (I-15 Project) in Salt Lake City, UT. This $1.59 billion project included the reconstruction and expansion of 27 kilometers (17 miles) of interstate, 144 bridges, and 3 major interchanges. Originally, a consulting firm hired by the Utah Department of Transportation (UDOT) estimated that the project would require between 8 and 10 years to construct using the design-bid-build contracting method. Six years later, in January 1996, after opinion surveys had indicated that the public preferred timelier construction (with more traffic disruption in less time rather than less traffic disruption over more time), and after Salt Lake City had been awarded the 2002 Winter Olympic Games, UDOT decided to use design-build instead.

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"Utah needed to shorten the overall project duration and also hoped to promote innovation and improved performance," says Michael Morrow, field operations engineer at FHWA. "Design-build appeared to be the only contracting tool to get the job done."

UDOT provided proposers with "30-percent plans"--meaning that the entire job was designed to the 30-percent draft stage--which included alignment of the I-15 Project and extensive geotechnical investigations. This work enabled UDOT to identify conflicts with utilities and railroads and determine the additional right-of-way clearances that would be needed. The agency selected the team whose proposal was considered to be the best value.