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

"The best value selection process allowed UDOT to select the proposal that would create the most long-term value for its constituency," says Thomas Warne, former executive director of UDOT during the construction of the I-15 Project and current president of a management and marketing consulting firm. "The process creates an environment where contractors provide additional or enhanced work products for an equal or lower price."

In 1997, after the State obtained almost 400 right-of-way clearances and passed special legislation to use design-build, the project was awarded to a joint venture design-build firm.

To provide appropriate design services for the I-15 Project, the contractor subcontracted with more than 20 other firms to provide specific portions of the design services. To expedite construction, the contractor used a fast-track process that allowed partially completed design plans and specifications to be released for construction. The design-builder also was able to incorporate more innovative approaches into design and construction than would have been used under the traditional project delivery system.

"Design-build unleashed the creativity of the contractor to use construction methods previously not considered," says UDOT Executive Director John Njord. The company improved the seismic design criteria, for example, "and used new techniques to accelerate, reduce, or eliminate settlement," says Njord.

In the end, the I-15 Project was completed ahead of schedule and under budget. Use of design-build instead of design-bid-build saved the public an estimated 60 million vehicle hours of delay between 1996 and 2010.

"For the I-15 Project, design-build was clearly the right choice," says Njord. "UDOT gained a higher level of respect from the public by completing the work ahead of schedule and under budget."

Although design-build was right for the I-15 Project, it is not necessarily right for every project. Some projects, such as those with major unknowns in scope, unresolved environmental or permitting issues, or third party concerns that are not resolved, may not be suitable candidates for design-build. "Design-build isn't for every project," says Warne. "But where there are schedule issues, opportunities for innovation, or cost concerns, design-build may be the delivery system of choice."

The design-build project delivery method currently is available as an approved method for all contracting agencies in the Federal-Aid Highway Program. New regulations released by FHWA in December 2002 now allow the use of design-build contracting for transportation infrastructure projects. FHWA's final rule on design-build contracting, which was required by the Transportation Equity Act for the 21st Century (TEA-21), was published in the December 10, 2002, Federal Register. TEA-21 defined "qualified projects" as those whose total estimated costs exceed (1) $5 million for intelligent transportation system projects and (2) $50 million for all other projects. In the final rule, FHWA allows contracting agencies to use design-build for nonqualified projects under SEP-14, and the FHWA division offices are delegated this approval authority.