Contracting Strategies

In traditional highway construction contracting (design-bid-build), cost is generally the one criterion that determines the winning bid. Since the 1990s, FHWA has been supporting the use of innovative contracting methods. As state and local agencies strive to meet customer needs, factors, other than cost have emerged as important: quality, delivery time, social and economic impact, safety, public perceptions, life-cycle costs, and use of improved technologies. Some of the innovative contracting strategies used today are: Design-Build, A+B Bidding, Lane Rental and Warranty Clauses.

Reference Documents

New 10/29/08 NCHRP Synthesis 379: Selection and Evaluation of Alternative Contracting Methods to Accelerate Project Completion (PDF, 3.16MB) - TRB's National Cooperative Highway Research Program (NCHRP) Synthesis 379: Selection and Evaluation of Alternative Contracting Methods to Accelerate Project Completion explores the process for selection of alternative contracting methods that can potentially accelerate project completion. The report also examines factors associated with selecting one type of alternative contracting technique over another.
Quality Assurance in Design-Build Projects (PDF, 3.76MB) - TRB's National Cooperative Highway Research Program (NCHRP) Synthesis 376: Quality Assurance in Design-Build Projects examines how state transportation agencies have successfully approached quality assurance for design-build, including in procurement, design, construction, and post-construction operations and maintenance.
Evaluation of Alternative Contracting Techniques on FDOT Construction Projects (PDF, 1.3MB) - This report explores the performance of various Florida DOT roadway construction projects delivered with alternative contracting techniques. Project performance was evaluated with regard to time, cost, contractor performance, and value.
Ohio DOT Innovative Contracting Manual - 2006 Edition (PDF, 281KB) - This manual describes ways to select innovative contracting methods. The manual contains a matrix that shows what innovative methods would be appropriate for various typical project types.
Best-Value Procurement Methods for Highway Construction Projects - The Transportation Research Board's National Cooperative Highway Research Program (NCHRP) Report 561: Best-Value Procurement Methods for Highway Construction Projects examines procurement methods, award algorithms, and rating systems for use in awarding best-value highway construction contracts. The report also explores screening criteria for selecting projects for application of best-value procurement, implementation strategies, and a model best-value specification.
The Impacts of Design-Build on the Public Workforce (PDF 407KB) - The University of Southern California's Keston Institute for Public Finance and Infrastructure Policy has released a report that explores the impact of design-build project delivery on a state department of transportation's professional workforce. The findings of the report indicate that implementing design-build contracting by a department of transportation that is new to the delivery method will not have a negative effect on its public engineering workforce. When applied to the appropriate projects, design-build can be more efficient than the traditional design-bid-build method.
Performance Effectiveness of Design-build, Lane Rental, and A+B Contracting Techniques (PDF, 436KB) - This Minnesota DOT (MnDOT) report, published in March 2006, compares the effectiveness of different innovative contracting methods to each other. This study resulted in 15 recommendations for improving management practices in the use of innovative contracting for transportation projects. These recommendations are also intended to help MnDOT determine which contract method is likely to be most effective.
AASHTO Primer on Contracting for the 21st Century (PDF, 348KB) - This primer, published in 2006, describes various contracting and contract administration techniques that are currently being used by contracting agencies in their transportation programs and provides contacts within these agencies for use in obtaining additional information.

Examples

Incentives Speed Construction in Arizona - This article in the December 2007 issue of Innovator describes how innovative contracting methods, extra safety measures and careful construction sequencing will speed the work and make it safer for drivers and workers on a $50 million highway reconstruction project in Arizona.

Additional Resources

FHWA Contract Administration Web Site - This web site provides a number of contract administration resources, including forms, reference manuals, and regulations.
Utah Local Technical Assistance Program (LTAP) Innovative Contracting Web Site - This web site provides information on various contracting strategies and includes a document library of innovative contracting resources, searchable by state.
FHWA Alternative Contracting Community of Practice - This web site is intended to provide FHWA, State and local agency staff with a forum for sharing alternative contracting methods, processes, experiences and other information that may aid in the delivery of highway construction projects nationwide.
Helping Roadway Contractors Fulfill Public Expectations - Article in the March/April 2006 issue of FHWA Public Roads.

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