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Chapter Five

Recommendations and Implementation

Recommendations

The construction management scan team was composed of Federal, State, local, industry, and academic members with more than 100 years of combined experience in the design and construction of highway projects in the United States. Through this focused research study, the team has gained a fresh perspective on how the U.S. highway industry can change to achieve more productive partnerships and alignment toward customer-focused goals. The recommendations of the team offer a challenge to highway construction professionals to change construction management practices that create adversarial relationships.

Align Team Goals to Customer Goals

Recommendations

  • Align team goals to customer goals.
  • Develop risk assessment and allocation techniques.
  • Strategically apply alternative delivery methods
  • Enhance qualification rating processes
  • Use qualifications in procurement
  • Pilot early Contractor iInvolvement
  • Apply alternate bids/designs in procurement
  • Conduct preproposal meetings
  • Apply more contractor quality management
  • Use appropriate alternative payment methods
  • Work toward warranties and life cycle responsibility

Develop procurement, contract provisions, and construction management methods that better align the goals of the customer, owner, and contractors. The industry must move to integrated teams that are formed early and focus on customer goals throughout the project development and construction life cycle. The process must begin with disciplined risk assessment and strategic project delivery decisions. These early decisions need to be supported through procurement and construction management techniques that support and incentivize the teams in achieving customer goals.

Develop Risk Assessment and Allocation Techniques

Develop more effective risk assessment processes that begin at the scoping process and continue through the construction management process. These processes should determine risks and assign them to the party best able to manage them. The Highways Agency Risk Management (HARM) tool, the Public Sector Comparator, and the Public-Private Comparator can be used as models for developing disciplined risk assessment and allocation techniques in the United States.

Strategically Apply Alternative Delivery Methods

Choose delivery methods that better align goals and allocate risk properly. The U.S. highway industry must evolve from the traditional one-size-fits-all project delivery method. A renewed focus should be given to alternative delivery methods that promote early industry involvement and life cycle design solutions to maximize the entire project team’s input in meeting customer needs.

Enhance Qualification Rating Processes

The team recommends development and implementation of consistent quality rating processes to facilitate quality-based selection. A number of U.S. States have begun to collect and track contractor qualification rating information. The mature processes in Ontario and Europe took many years to develop. A concerted effort among different agencies with a long-term implementation plan will be required if the process is to be as successful in the United States as it has been abroad.

Use Qualifications in Procurement

The team recommends greater use of best-value procurement, including considerations for price, qualifications, time, and technical approach. Many construction management techniques discovered on this scan work because agencies are able to track performance from one project to the next. The use of qualifications in procurement will encourage long-term relationships and the associated efficiencies that can be realized from these partnerships.

Pilot Early Contractor Involvement

Test a system of contractor qualification-based selection to deliver a project from the planning and/or environmental process through construction using a target price contract. The early contractor involvement process is a wholesale change from the current way of doing business in the United States, and it will take a longer-term strategic plan to test and implement the system. The system could deliver enormous rewards, but it must be developed with industry support, tested, and documented if it is to be successful. The system should be tested in a pilot study setting and the results should be disseminated widely.

Apply Alternate Bids/Designs in Procurement

The team recommends more use of alternate bids in a low-bid environment, provided the bidders are being evaluated on a fair and transparent basis. Alternative bidding procedures can potentially achieve better value for the money through the competition of innovative ideas in procurement. Alternative bidding processes can be established for design-bid-build, design-build, and other delivery methods observed on this scan.

Conduct Preproposal Meetings

When design alternates are being considered, conduct confidential preproposal meetings to allow proposers to validate acceptability for innovative concepts. This process is being used already on a limited basis in large design-build projects in the United States. These processes should be extended and refined for application to all methods of project delivery. Guidelines for discussions must be created with industry input and followed in practice to ensure that there is no impropriety in selection.

Apply More Contractor Quality Management

Use more contractor quality management systems with reliance agency assurance. Contractor-initiated quality plans can be competed during procurement and written into each project contract. On design-build contracts, provide designer assurance of critical construction components. Consider using quality management process certifications when appropriate. This competition in quality management will lead to innovative solutions for quality management issues, but it will take consistent owner auditing and noncompliance procedures.

Use Appropriate Alternative Payment Methods

Use alternative payment methods such as contractor invoicing, milestone payments, and lump-sum payments to align team goals and/or promote efficiency. A variety of methods should be available for different project types and customer goals. These alternative payment methods must be developed with industry to ensure that they do not limit competition.

Work Toward Warranties and Life Cycle Responsibility

Consider appropriate long-term warranties on critical components of appropriate projects to deliver better products, allow for more innovation, and eliminate redundant quality processes. Qualify items within the contractor’s control. All team members must have an understanding of the life cycle needs of customers, and these contract provisions can assist in the understanding and realization of these needs.

Implementation

Implementation

  • Expert technical group
  • Pilot studies
  • Conferences and focused workshops

The scan team is committed to implementing its recommendations with the industry in the coming months and years. Three critical tools to realize the team’s recommendations are described below.

Expert Technical Group

An expert technical group consisting of AASHTO and FHWA representatives will be formed to prioritize implementation steps, coordinate with various industry associations, designate lead States for implementation, and assist these States in developing guidelines, training programs, presentations, and information exchange programs. Funding commitments for this group have not yet been secured, but FHWA anticipates that this will be a multiyear effort.

Pilot Studies

Many of the innovative recommendations will require pilot studies in the United States. These pilot studies must be developed in conjunction with appropriate stakeholders and the results documented and disseminated if we are to learn from our experiences and promote appropriate change. Team members plan to pilot a number of these recommendations, but more participation is required.

Conferences and Focused Workshops

The team plans to disseminate this information at Transportation Research Board and AASHTO conferences. The team is also organizing focused workshops on the topics. For more information on these conferences and workshops, Click Here, or contact the team members listed in Appendix A.

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Page last modified on November 7, 2014
Federal Highway Administration | 1200 New Jersey Avenue, SE | Washington, DC 20590 | 202-366-4000