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Mississippi Roadbuilders Association Design-Build Conference February 23, 2004

Design-Build in the Federal-aid Highway Program. Mississippi Roadbuilders Association Design-Build Conference February 23, 2004. Jeffrey W. Kolb, PE Assistant Division Administrator FHWA Mississippi Division Jackson, Mississippi (601) 965-4215 Jeff.Kolb@fhwa.dot.gov.

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Mississippi Roadbuilders Association Design-Build Conference February 23, 2004

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  1. Design-Build in the Federal-aid Highway Program Mississippi Roadbuilders Association Design-Build ConferenceFebruary 23, 2004 Jeffrey W. Kolb, PE Assistant Division Administrator FHWA Mississippi Division Jackson, Mississippi (601) 965-4215 Jeff.Kolb@fhwa.dot.gov

  2. Design-Build Contracting • Overview and Background • Characteristics and criteria • Advantages and Concerns • Conclusion

  3. Historical Background – The Low Bid Concept • Design-Build is not new! It is relatively new to transportation • Prior to mid-1800’s – “The Master Builder Concept” was frequently used. • Mid-1800’s - many States adopt “low bid” requirements to protect taxpayers from extravagance, corruption and other improper practices by public officials. • 1938 Federal Highway Act required competitive bidding • 1968 Federal Highway Act revised Title 23 USC to award construction contracts “ . . . only on the basis of the lowest responsive bid”

  4. Contract Administration“Before 1990” • One Size Fits All • 100% Complete Plans, Specifications, & Engineering • All Qualified Bidders • Award to Lowest Bidder • No Warranties

  5. TRB Task Force A2T51 – Innovative Contracting • Compile information on contracting practices • Assess how current practices affect quality, progress, and cost • Suggest measures for improving contracting practices and promoting quality in construction • December 1991 – TRB Circular #386 – Innovative Contracting Practices

  6. Special Experimental Project No. 14Innovative Contracting • Initiated 2/13/90 • Objective – Evaluate project specific contracting practices which • Maintain product quality • Reduce life cycle cost • Practices proposed for evaluation • Cost-plus-time Bidding (A+B Bidding) • Lane Rental • Warranty Procedures • Design-Build

  7. What is Design-Build? • When a single entity provides both design and construction through a single contract between the owner agency and the entity.

  8. TEA-21 Design-Build LegislationSection 1307 • Required FHWA to develop design-build regulations • New D/B regulations published in 12/10/02 Federal Register • States can now use design-build without HQ approval for “Qualified Projects” • ITS projects > $5 million • Other projects > $50 million • SEP-14 will continue for smaller projects • Flexibility within broad parameters • FHWA must report to Congress on the effectiveness of Design-Build

  9. Section 1307 Report to Congress • an assessment of the effect of design-build contracting on project quality, project cost, and timeliness of project delivery; • recommendations on the appropriate level of design for design-build procurements; • an assessment of the impact of design-build contracting on small businesses; • assessment of the subjectivity used in design-build contracting

  10. FHWA’s Design-Build Experience Under SEP-14 NYCDOT Reno ReTRAC DC TCA Nashville Milwaukee Texas Turnpike Authority

  11. SEP-14 Design-Build Projects December 2002 FHWA SEP-14 data http://www.fhwa.dot.gov/programadmin/contracts/sep14a.htm

  12. Critical Characteristics for Successful Public Sector Design-Build Projects • Well Defined Scope • Shared Understanding of Scope • Owner’s Construction Sophistication • Adequate Owner Staffing • Established Budget • Established Completion Date

  13. Suitability for Design-Build • NEPA and major ROW and utility issues must be clear • Should have a “strong design component” • Reasons for selection should not be: • Obligation of funds • Compensate for inadequate agency resources

  14. Design-Build Selection Procedures • Low Bid • Adjusted Bid • Highest Composite Score • Best Value • Best Value/Fixed Budget

  15. Procurement / Selection Spectrum Price Based Factors Best Value: Subjective, Qualitative and Quantitative Factors Subjective and Qualitative Factors Sole Source Negotiated Source Selection Low First Cost Bidding Bridging Weighted Criteria Two-Step Sealed Bidding Competitive Selection Fixed Budget / Best Design Brooks A/E Selection

  16. Why Owners Choose Design-Build* *University of Colorado/National Science Foundation survey (1=highest rank) 108 respondents, representing 90 owners, 1,683 projects, 83% buildings

  17. Utah’s Interstate 15 Reconstruction • 17 mile, $1.35 Billion, 4.5 year project • Completed on time and on budget • Estimated time savings of 4 years • Road user cost savings roughly estimated in the hundreds of millions

  18. FHWA EFLHD Design-Build in Mississippi • 2 Natchez Trace Parkway design-build projects • Awarded on price (30%) and non-price factors(70%); • The low bid is not necessarily the best-value • Bid cost and completion time • Both projects are currently on-budget and on-schedule • Project NATR 3X5 • $26.4 million – Hill Brothers (Falker, MS) • 2 other proposers – T. L. Wallace, Eutaw Construction • Low bid also best technical proposal

  19. FHWA EFLHD Design-Build in Mississippi Natchez Trace Parkway Project NATR 3P13 • $6.9 million – T.L. Wallace (Columbia, MS) • 2 other proposers – Angelo Iafrate, WG Yates & Sons • Low bid also best technical proposal

  20. Reported Advantages of Design-Build • Single Point of Responsibility • Quality/Innovation • Potential Time or Cost Savings • Improved Risk Management • Earlier Knowledge of Firm Costs • Lower Incidence of Claims • Reduced Project Administration

  21. Potential Concerns with Design-Build • Contracting Agencies • Fear of loss of control, significant change in business relationships • Construction Contractors • Increased risk, potential design liability, warranty/operational requirements, subjective selection process, impact on smaller contractors • Engineering Consultants • Changing business relationship with owners, more risk, increased emphasis on schedule, building trust

  22. Potential Concerns with Design-Build • Requires significantly more up-front effort and expertise by owner • Requires streamlined (flexible and responsive) “acceptance” organization by owner for oversight of Design and Construction activities

  23. General Lessons Learned To Date • Pick the right project • The scope of work MUST be clear!! • A two-step selection process is recommended • Prequalification to no more than 5 firms • Selection based on price and technical proposals

  24. 1980 Project Delivery Techniques Design-bid-build Current Project Delivery Techniques Design-Bid-Build Design-build DB, DBO, DBOM, FDBO, DBW, Concessions, etc. Other innovative integrated service contracts (SEP-14) Construction Manager at Risk, Performance contracts, best-value, etc. In conclusion . . . . Design-build - It’s another tool in the tool box!

  25. Additional Resources for Design-Build Contracting • FHWA HIPA-30 web page • http://www.fhwa.dot.gov/programadmin/contracts/d_build.htm • Utah State University web page • http://www.ic.usu.edu/ • AASHTO Design-Build Task Force • Current Practices Report • http://www.transportation.org/committee/design/tf_designbuild.html

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