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Progressive Design-Build Gaining Traction in Highway Construction
Progressive Design-Build Gaining Traction in Highway Construction
Progressive Design-Build (PDB) contracts have become increasingly popular as infrastructure agencies pursue more complex projects while also seeking to maximize the use of federal and state funding. These projects offer opportunities for DBE firms ready to capitalize on this emerging contracting method. However, preparing for these opportunities requires businesses to understand how the PDB process varies from traditional design-build or design-bid-build procurements.
The PDB delivery method increases cooperation and collaboration between project owners and the design-build team selected to complete a project. In a PDB agreement, the owner chooses a design and construction team using a qualifications-based procurement process at the beginning of project development, and the two parties work together to complete the project. The owner makes the selection based on the team's expertise, experience, and overall qualifications without considering the project’s price.
The PDB method differs from a traditional design-build process, where design-build teams are shortlisted after an initial selection. The shortlisted teams then utilize partially developed project plans to propose a strategy to complete the project for a predetermined price. The owner typically selects a winning team based on the lowest price or best value, which includes pricing in the determination.
The PDB process brings the owner, architects, engineers, and the construction contractor together at the beginning of the project to determine the optimal design based on input from all team members. This strategy expedites the project and is expected to create a better result. “Design-build projects save money, save time, and produce higher quality,” Lisa Washington, executive director and CEO of the Design-Build Institute of America, said. “The Progressive DesignBuild method creates greater collaboration because the key players are at the table earlier in the process.”
Greater collaboration allows the owner and design team to work through design issues and address challenges efficiently because all parties involved in the project’s completion work together from the beginning and arrive at a final design and budget together.
“According to research, the design-build contracting method is 102% faster than a traditional design-bid-build process,” Washington said. She expects future research on PDB contracting to show an even greater increase in project delivery speed.
Although PDB contracts have existed for several years, they are gaining traction in delivering highway transportation projects nationwide. PDB projects are under development in several states, including Ohio, Kentucky, Indiana, California, and Virginia. For instance, the Ohio Department of Transportation (ODOT) and the Kentucky Transportation Cabinet (KYTC) are in partnership to complete the $3.6 billion Brent Spence Bridge Corridor Project. The project will improve approximately eight miles of Interstates 71 and 75 through Kentucky and Ohio, including adding a new companion bridge west of the existing Brent Spence Bridge, which connects Cincinnati, Ohio, and Covington, Kentucky.
ODOT and KYTC selected a team led by Walsh Construction and Kokosing Construction to complete the project under a PDB contract. “The progressive design-build process is the right delivery approach based on the complexity of this project,” said KYTC Secretary Jim Gray. “Working in collaboration with the contractor during the design process will bring more innovative design ideas to the table and improve the project overall.”
PDB Benefits for DBEs
DBE firms, primarily consulting firms, can benefit by participating in PDB projects. One benefit comes from the opportunity to become involved in the project from its earliest phases as a part of the design-build team, including participation in the marketing, proposal writing, and interviewing process to win the project since the entire team is comprised in the evaluation process by the owner. DBEs involved in winning the project gain valuable exposure and awareness of the owner’s procurement process and requirements, which is beneficial if the team successfully wins the contract.
Once a contracting team wins the project, DBE firms are at the table as a part of the design-build team, collaborating with the owner to develop the project plans from the initial stages. This opportunity allows the firm to build deeper relationships with its team members and the agency owner. It enables the DBE to learn about developing a significant infrastructure project.
The PDB method may also likely increase the size of contracts for DBE firms because the contracting team typically handles the design and construction throughout the project. This opportunity provides an opportunity to increase capacity and experience on the project and acquire additional capabilities through close collaboration with the project owners and design-build team.
DBIA recognizes the opportunities for underutilized business enterprises on design-build projects and strives to prepare more firms for these contracts. “Forty-two percent of all construction spending is completed using design-build, and this amount will grow to 46% by 2026,” Washington said. DBIA added 150 underutilized businesses to its membership last year. It launched a new Industry Match Portal to connect diverse companies with project owners and prime contractors pursuing design-build opportunities. “We want to educate underutilized businesses so they can play a role in this growing industry.
DBE Challenges
Although the benefits of PDB opportunities outweigh the risks, there are some considerations for DBEs when deciding to pursue contracts on a PDB project. The first consideration is marketing costs for the pursuit. DBEs asked to become members of a PDB team will need to set aside time, energy, and budget for efforts to win the contract. The contract pursuit may take several months without assurance that the team will win the contract. Marketing efforts may include various activities, from participating in outreach/community meetings, working on the proposal document, practicing, and participating in interviews and other marketing activities.
Another risk may be the requirement for a DBE firm to dedicate itself to only one contracting team. DBEs can often submit proposals to several teams pursuing a contract. However, in a PDB procurement selection based on the best qualifications, DBEs may be required to commit to one particular team, especially if the DBE firm will participate in the marketing and proposal writing activities.
Finally, a DBE firm may need the capacity and financial strength to ramp up to meet the team’s needs, including providing staffing wholly dedicated to the project if the team wins the contract. This risk includes having the ability to attract and retain the talent required to perform contract requirements and having the financial resources to cover payroll and other contract expenses while working with the project team. Although the lead companies in the project team may negotiate favorable contract terms with sub-consultants, these considerations are not guaranteed. They should be a part of the DBE firm’s planning process.
