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Analyze Benefits and Challenges of Proposer and Proposal EvaluationP

rocu

rem

ent

Met

ho

d S

elec

tion

Make Two Critical Decisions:

• Decision about the Basis for Proposal Evaluation

• Decision about Whether the Procurement Should be One-phase or Two-phase

Select an Appropriate Procurement Method from the Authorized Procurement Methods for

the Design Build Project

Recommended Guide for Next Generation of Transportation Design-Build Procurement and Contracting in the State of Georgia

Systematic Approach to Evaluate the Appropriateness of the Design-Build Project Delivery System

for a Transportation Project

ConclusionsThis research project resulted in development of a best practices guidebook to improve the efficiency of DB selection and implementation for GDOT highway projects.

A DB selection tool was developed that helps GDOT perform the following:

• Determining suitability of DB for projects

• Assessing whether project risks can be managed if DB is selected for a project

• Evaluating authorized procurement methods and selecting the most appropriate method

• Transparent and consistent DB implementation

Implementation and Value of ResearchA post-research workshop was held to facilitate adoption of DB contracting in Georgia. The workshop participants were guided through various steps of this systematic approach as described in the DB selection tool.

GDOT is currently using the DB selection tool to achieve transparent and consistent implementation of DB.

Additionally, the following legislation updates have occurred:

• Effective July 1, 2012, Georgia legislators raised the cap for Design-Build by 50% (in dollars), based on the total amount of construction projects awarded in the previous fiscal year.

• Effective July 1, 2013, Georgia legislators revised the Design-Build code to allow for Best Value Design-Build contracting.

These changes were made possible, in part, by solid Design-Build project suitability assessments that this research enhanced for future use.

AcknowledgmentsThe research project was sponsored by the Georgia Department of Transportation through Research Project Number 10-23. We would like to appreciate the efforts of the following people who shared their knowledge and experience on the application of Design-Build Project Delivery System and helped us throughout the progress of this research project.

Significant Factors Identified in the Literature for DB Selection:

Procurement Method Selection

Baabak Ashuri, Ph.D., DBIA, Hamed Kashani, Ph.D., and Kia Mostaan

Economics of the Sustainable Built Environment (ESBE) Lab

Georgia Institute of Technology

Introduction Research ApproachFollowing tasks were done to achieve the Research objective:

I. Conducted a comprehensive review of academic and professional literature to identify:

• Benefits of DB from the state DOT’s standpoint

• Significant factors in the selection of DB for a project

• Existing processes for the assessment of project delivery systems

II. Conducted a scanning process on several state DOT websites regarding documented state of practice related to DB

III. Conducted several structured interviews with representatives from CDOT, FDOT, MDOT, NCDOT, UDOT, VDOT, and WSDOT to identify and analyze the approach of these state DOTs for selecting DB for their transportation projects

Design-Build (DB) is a Project Delivery System under which one entity, the DB Team, is contractually responsible for both design and construction phases of the project. DB offers state DOTs the opportunity to accelerate critical phases of projects and deliver transportation projects more cost-effectively.

Nevertheless, DB is not appropriate for every transportation project. State DOTs should select DB for projects only if it is expected to produce the best outcomes.

Objective: The overall objective of this research project is to develop a Transportation Design-Build Guidebook for use by the GDOT to improve on efficient use of Design-Build contracting in highway construction programs.

The most appropriate procurement method is selected from a list of available methods:

Mr. Darryl VanMeter Georgia DOT

Mr. Mike Dover Georgia DOT

Ms. Supriya Kamatkar Georgia DOT

Mr. David Jared Georgia DOT

Ms. Georgene Geary Georgia DOT

Mr. Robert Lewis HNTB

Mr. David Hannon HNTB

Design-Build suitability score is determined based on the

combined SWOT Analyses in the seven areas

Research Objective

Research Background

Major Reasons specified by state DOTs for using Design-Build

Author and Year of

PublicationStudy Purpose

Gordon (1994) A flowchart-based project delivery system selection

Molenaar and

Songer (1998)A formalized selection model for public-sector DB projects

Oyetunji and

Anderson (2001)

A structured procedure to assist owners in selecting appropriate

project delivery system

Touran et al. (2009)A decision process for selecting appropriate project delivery systems in

airport projects

Love at al. (2012)A process that utilizes qualitative and quantitative analyses for project

delivery system selection that generates better value for money

Molenaar et al.

(2012)

A risk-based decision support tool called the Project Delivery Selection

Matrix (PDSM) to assist transportation agencies in selecting an

appropriate project delivery system

Proposer Evaluation (One-phase or two-phase procurement?)

A sample SWOT matrix for the assessment of the area of Project Delivery Schedule

Key Findings of the State DOT Scanning Process

Initial Risk Allocation

Alhazmi, T., and McCaffer, R. (2000). “Project Procurement System Selection Model.” Journal of Construction Engineering and Management, 126, 176–184.

Chan A., Ho D., and Tam C. (2001). “Design and Build Project Success Factors; Multivariate Analysis.” Journal of ConstructionEngineering and Management, 127, 93-100.

Chan, C. T. W. (2007). “Fuzzy Procurement Selection Model for Construction Projects.” Construction Management and Economics, 25 (6), 611–618.

Design-Build Institute of America (DBIA). 2012. “Design-Build State Laws for Transportation.” http://www.dbia.org/advocacy/state/Pages/default.aspx.

del Puerto, C., Gransberg, D., and Shane, J. (2008). “Comparative Analysis of Owner Goals for Design/Build Projects.” Journal of Management in Engineering, 24(1).

Gordon, C. M. (1994). “Choosing Appropriate Construction Contracting Method.” Journal of Construction Engineering and Management, 120(1), 196-210.

Love, P., Edwards, D., Irani, Z., and Sharif, A. (2012). “Participatory Action Research Approach to Public Sector Procurement Selection.” Journal of Construction Engineering and Management, 138(3), 311–322.

Mafakheri, F., Dai, L., Slezak, D., Nasiri, F. (2007). “Project Delivery System Selection under Uncertainty: Multicriteria Multilevel Decision Aid Model.” Journal of Construction Engineering and Management, 23(4). 200-206.

Mahdi, I. M., and Alreshaid, K. (2005). “Decision Support System For Selecting The Proper Project Delivery System Using Analytical Hierarchy Process (AHP).” International Journal of Project Management 23, 564–572.

Molenaar, K. R., Harper, C., and Tran, D. (2012). “Guidebook for Selecting Project Delivery Systems and Alternative Contracting Strategies.” Next-Generation Transportation Construction Management (TCM) Transportation Pooled Fund Program Study TPF-5(260), Technical Memorandum No. 1, Available at: http://www.colorado.edu/ceae/TCM.

Molenaar, K. R. , and Songer, A. D. (1998). “Model for public sector design-build project selection.” Journal of Construction Engineering and Management, 124 (6 ), 467-479.

Oyetunji, A. A., and Anderson, S. D. (2001). “Owner’s Tool for Project Delivery and Contract Strategy Selection.” Research Summary Report No. 165-1, Construction Industry Institute, The University of Texas at Austin, Austin, Texas.

Potter, K., and Sanvido, V. (1994). “Design/Build Prequalification System.” Journal of Management in Engineering, 10(2).

Songer, A.D. and Molenaar, K.R. (1997). “Appropriate Project Characteristics for Public Sector Design-Build Projects.” Journal of Construction Engineering and Management, 123(1), 34-40.

Tookey, J. E., Murray, M., Hardcastle, C., and Langford, D. (2001). “Construction Procurement Routes: Redefining the Contours of Construction Procurement.” Engineering, Construction and Management, 8 (1), 20-30.

Touran, A., Gransberg, D.D, Molenaar, K.R, and Ghavamifar, K. (2011). “Selection of Project Delivery System in Transit: Drivers and Objectives.” Journal of Management in Engineering, 27(1).

Vesay, T. (1991). “A Project Delivery Selection System.” Technical Report, 26, Computer Integrated Construction Research Program, Pennsylvania State University, University Park, Pa.

Warne, T. R., & Beard, J. L. (2005). “Project Delivery Systems Owner's Manual.” Washington DC: American Council of Engineering Companies.

Contact Information:

Baabak Ashuri, Ph.D., DBIA

Assistant Professor and Chair of Integrated Project Delivery Systems| Director, Economics of the Sustainable Built Environment (ESBE) Lab, School of Building Construction, Georgia Institute of Technology, 280 Ferst Drive, 1st Floor Atlanta, GA 30332-0680

Phone: (404) 385-7608 | E-mail: baabak.ashuri@coa.gatech.edu | Web: http://www.esbe.gatech.edu

References

Mr. Nabil Haddad Colorado DOT

Mr. Alan Autry Florida DOT

Mr. Christian Youngs Michigan DOT

Mr. Rodger Rochelle N. Carolina DOT

Ms. Michelle Page Utah DOT

Mr. Shailendra Patel Virginia DOT

Mr. Derek Case Washington State DOT

Design-Build State Laws for Transportation Projects in 2012 (Copyright of DBIA 2013)

BidFinal DesignPreliminary Design ConstructionDesign-Bid-Build

Procurement

Construction

Preliminary Design Final DesignDesign-Build0 5 10 15 20 25 30

Overcome Environmental Challenges

Manage Project Risk

Maximize Avaliable Funds

Manage Technical Complexity

Deliver Projects Not suitable for DBB

Enhance Quality

Reduce Cost

Facilitate Innovation

Expedite Delivery

Number of States

Price Consideration Only Price & Technical Considerations

Adjusted Score

Meets Technical

Criteria- Low Bid

Weighted

Criteria

Fixed Price Best

Proposal (Fixed Price

Best Design; Design

Build Maximum Price;

Design Build with

Options)

Meets Technical Criteria-

Low Bid (often

combined with

shortlisting where

permitted)

Technical Considerations

Variations of Best Value1

A+B

Tw

o-P

hase

(RF

Q &

RF

P)

Sin

gle

-Ph

ase

(RF

P)

Pro

po

ser

Evalu

ation

Proposal Evaluation

Adjusted

Bid

Single-Phase Selection

Benefits Challenges

o It provides the Department with the opportunity to

attract a large pool of Design Build teams by allowing

all interested teams to respond to RFPs

o It allows the Department to expedite the selection

process

o …

o It may reduce the Department’s ability for the in-depth

evaluation of Design Build teams’ qualifications

o A large number of participants may discourage some

Design Build teams to participate due to low odds of

winning

o …

Two-Phase Selection

Benefits Challenges

o It allows the Department to use shortlisting in order to

encourage highly qualified Design Build teams to

participate (the odds of winning is greater when

shortlisting is practiced)

o The two-phase procedure reduces the industry’s overall

cost of preparing Design Build proposals

o …

o It requires the Department to assemble a project-

specific team for evaluating Design Build teams’

qualifications and possibly shortlisting most qualified

teams

o It requires the Department to establish a set of

objective criteria for evaluating (and possibly

shortlisting) Design Build teams

o …

Identify the Department’s Strategic Objectives and Assess the Institutional Alignment with

Design Build Project Delivery System

Conduct Qualitative Assessment of Design Build for the Project Using SWOT Analysis

(Seven areas of assessment: project delivery schedule, innovation, level of design, project

delivery cost, quality, staff experience, and marketplace conditions, competition, and design

build team experience)

Evaluate Deal-Breaker Issues that Hinder the Implementation of Design Build

Define Project Characteristics and Specify Project Goals

Des

ign

Bu

ild

Pro

ject

Del

iver

y S

elec

tio

n

Conduct Initial Risk Identification and Perform Qualitative Risk Assessment

Conduct Risk Allocation for the Design Build Project

Ris

k A

llo

cati

on

Design Build Suitability Score Ranges/Assessment

Excellent Design Build candidate; Design Build risks have been properly

assigned and mitigated80-100

Good Design Build candidate; some mitigation measures should be

considered to ensure successful delivery60-80

Mediocre Design Build candidate; Design Build Project Delivery System

is risky or another Project Delivery System may be more suitable 50-60

Poor Design Build candidate; Another Project Delivery System may be

more suitable40-50

Not suitable for Design Build Project Delivery System Below 40

Design-Build

Selection

Factors

Vessay

(1991)

Potter &

Sanvido

(1994)

Songer &

Molenaar

(1997)

Alhazmi

&

McCaffer

(2000)

Chan

et al.

(2001)

Oyetunji

&

Anderson

(2001)

Tookey

et al.

(2001)

Warne

& Beard

(2005)

Mahdi &

Alreshaid

(2005)

Mafakheri

et al.

(2007)

Chan

(2007)

del

Puerto

et al.

(2008)

Touran

et al.

(2011)

Love

et al.

(2012)

Molenaar

et al.

(2012)

Time

Cost

Quality

Complexity

Risk

Management

Flexibility

Owner’s

Experience &

Competency

Innovation

Size

DB Team’s

Experience &

Competency

Scope

Claim

Management

Safety &

Security

Level of Design

Best-Value

Selection

Regulatory

Requirements

Single Point of

Responsibility

Early

Involvement

Processes identified in the literature for DB selection:

Proposal Evaluation (What should be the basis of award?)Selection Based on Price Consideration Only

Benefits Challenges

o It promotes competition and a fair playing field on the

basis of price

o Price-based selection is easy-to-understand for

contractors

o Price-based selection is most suitable for noncomplex

Design-Build projects where the opportunity to innovate

is limited

o …

o The Design-Build team’s approach in the technical

proposal is not critically examined in the selection

process, which may result in schedule and technical

issues

o It may encourage contractors to implement cost-cutting

measures instead of quality enhancing measures

o …

Selection Based on Price and Technical Considerations

Benefits Challenges

o It provides the Department with a flexible method for

detailed evaluation of the Design Build team’s proposed

technical approach with respect to project-specific

goals (e.g., cost, schedule, innovation, quality, & safety)

o It is most compatible with complex transportation

projects where the Department should evaluate several

technical aspects of the project besides the cost

o …

o It can be effectively used when the Department’s

expectation and requirements can be clearly defined

o It requires the Department to assemble a project-

specific evaluation team for Design Build proposals

o It may be difficult for Design Build teams to understand

the Department’s approach for technical proposal

evaluation

o…

Design Build Project Delivery System Evaluation Considering Project Delivery Schedule

Strengths Weaknesses

o The single point of responsibility (i.e., one

contract) reduces the procurement time

o Project delivery can be shortened due to

concurrent design and construction processes

o …

o The Request for Proposal (RFP) development

process can become lengthy due to the time

required to define technical requirements and

expectations

o …

Strengths Scores: 0-10 Weaknesses Scores: (0-10)

Opportunities Threats

o It enables the Department to maximize the use

of available funds

o It enables the contractor to start working on early

construction activities, such as construction

mobilization, prior to detailed design completion

o …

o Undefined events or conditions found after

procurement, but during design, can impact

schedule

o …

Opportunities Scores: 0-5 Threats Scores: (0-5)Total Score

Conceptual comparison of Design-Build and traditional Design-Bid-Build Project Delivery

DB has gained widespread acceptance among several state DOTs.