According to a recent internal study conducted by the Florida Department of Transportation (FDOT), the design-build project delivery method provides significant cost and time savings as compared to the traditional design-bid-build delivery method. The study examined FDOT contracts from 2008 to 2012 that were valued between $30 million and $70 million, a group of contracts that included 11 design-build contracts and 47 design-bid-build contracts. Looking in particular at a $55 million, 814‑day design-build project, the study found that the use of design-build results in a total cost savings of $6.4 million and a total time savings of 656 days.
Lowest Price Not Always Best Value
The study also compares best value selection to low bid selection to determine what value FDOT and the traveling public receive when the winning proposal for a project is not the lowest-priced proposal. Although a design-build firm’s price proposal reflects the price of the design and construction of the project, the FDOT study finds that this price does not fully encapsulate the value that FDOT and motorists receive. Often times a winning design-build firm’s technical proposal includes innovative elements that provide additional value which should be taken into account.
Secondary Benefits Often Provide True Value
Between January 2012 and January 2014, FDOT received proposals for 42 design-build projects. Out of these 42 projects, 31 were awarded to the proposer with the lowest bid price and lowest adjusted score. Eleven of the 42 projects were awarded to design-build firms that did not provide the lowest-priced proposals. The proposals for these 11 projects often included design features that were better than the minimum acceptable design. These improved design features were often made possible by secondary benefits in cost and time savings to the design-build firm and by the design-build firm’s willingness to take on risks that FDOT would not typically assume in the design phase of a design-bid-build project procurement.
The innovative elements of these 11 projects included design features that provided speedier project delivery, savings on future maintenance costs, and greater operational safety or service level as compared to the minimum acceptable design customary in design-bid-build procurements. In some cases, the proposers provided warranty periods that were longer than what FDOT already requires or warranties for elements where FDOT does not presently have warranty requirements at all.
The report of the study contains several examples of innovative elements from some of the design-build contracts that FDOT has awarded to firms that did not provide the lowest-priced proposal. These examples, and the report in full, can be found here.
Patrick Harder, chair of Nossaman's Infrastructure Group, is widely known for leadership in the field of public-private partnerships (P3s) and other innovative project delivery methods such as design-build and construction ...
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