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Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects (2014)

Chapter: Chapter 3 - Design Management Under Design-Build

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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
×
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
×
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
×
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
×
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
×
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
×
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
×
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
×
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
×
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
×
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
×
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
×
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Suggested Citation:"Chapter 3 - Design Management Under Design-Build." National Academies of Sciences, Engineering, and Medicine. 2014. Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects. Washington, DC: The National Academies Press. doi: 10.17226/22273.
×
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13 This section provides guidance for effectively shaping DM functions under D-B. Initial research included a survey to determine how many state agencies have used D-B and when they began to implement it. This survey found that about 80% of state agencies have already used D-B. However, it also showed that many agencies have still not adopted this delivery method. Additionally, among the agencies that have used D-B, about half have used it sporadically and for fewer than ten projects. In the light of these findings, the purpose of this section is twofold: while focusing on providing DM guidelines under D-B, it also summarizes the results of previous research on D-B implementation in general, so that all agencies can benefit from the experience of agencies around the country. Subsection A gives agencies DM-specific self-assessment guidance that they can use to select the most appropriate DM approach for D-B projects. Subsection B provides two sets of guidelines: one for implementing D-B, based on previous research findings (see note below); and the other for implementing DM under D-B, based on the current research effort. Subsection C synopsizes several case studies of D-B programs or projects. The reader can use these brief case studies to learn how some of the guidelines have been put into practice. In addition, Appendix A presents full narratives of many of the case studies. Note: One of the authors previously studied D-B implementation issues and has produced a broad implementation framework that is available in the literature in its full version (Migliaccio 2007) and in a compact version (Migliaccio et al. 2008). The same study also produced a large collection of D-B lessons learned (Migliaccio et al. 2006; Gibson et al. 2006). If an agency is interested in learning implementation issues and practices beyond DM, they can refer to these resources. This section integrates results of NCHRP Project 15-46 research activities with some of the results of these previous studies. A: Self-Assessment Background This subsection provides guidance on the self-assessment process for selecting the most appro- priate DM approach. While some agencies pursue D-B implementation through programmatic initiatives, others adopt a project-by-project approach. This section addresses both cases. For instance, it offers program managers who are designing or reviewing a program two different levels of information about potential constraints: (1) at the agency D-B program level; and (2) at the D-B project level. Using this information, program managers can conduct brainstorming self-assessment sessions to identify and analyze any issue or constraint that could affect DM for their D-B projects or programs. All key individuals involved in D-B implementation should attend this session, focusing on how the identified constraints may manifest themselves, as well as on whether any additional constraints may be present. In the case of a single project imple- mentation, the Project Manager (PM) would take the same approach, leading this constraint C H a P T E r 3 Design Management Under Design-Build

14 Guide for Design management on Design-Build and Construction manager/General Contractor Projects identification and brainstorming process. However, at the project level, the stakeholders would only include people on the project staff or in project support (e.g., DOT design division or district staff). Note: Some of the constraints discussed herein are specific to DM, but the majority will affect D-B implementation in general. Thus, this section can also help anyone learning to implement D-B. The discussion covers issues and constraints encountered on past projects and draws on the case studies. It also reflects research team members’ personal experience on projects and/or their previous research. Agency/Program Self-Assessment Level The agency self-assessment identifies elements within the agency that could hinder the successful D-B implementation. This assessment is particularly useful to agencies that only recently have adopted or are considering adopting an innovative project delivery method, since it allows them to address certain issues before experiencing their effects on projects. It also benefits agencies already using this delivery method to help them identify issues they might previously have overlooked. Agency Culture One of the most difficult questions an agency can ask is whether it is prepared to adopt and implement an innovative project delivery approach, since it forces the agency to face the reality of its organizational culture. Because the decades-long use of the DBB method has so funda- mentally shaped employee perceptions and organizational structures and practices, implementing a new delivery approach constitutes a major paradigm shift for the state agencies adopting it (Miller et al. 2000). Early studies have found that “as agencies attempt D-B for the first time, they are constrained by the low-bid culture in their organizations” (Molenaar and Gransberg 2001). The U.S. DOT has acknowledged these difficulties, reporting that “states not accustomed to this method of procurement can find it difficult to oversee these types of projects” (USDOT-FHWA 2004). Moreover, although the D-B method’s combined procurement of services is expected to reduce transactional costs for delivering a project (Pietroforte and Miller 2002), this approach usually prompts state personnel to spend considerable time experimenting and developing new organizational routines to support the change (USDOT-FHWA 2004). This extra time is often justified by a wider concern that safeguards embedded in traditional approaches will be lost in the change process (USDOT-FHWA 2004). However, these concerns often appear with respect to the agency’s approach to DM under D-B, since losing control of design is one of the major agency concerns when D-B is implemented for the first time. Effective implementation thus requires agencies to determine how change should occur, in order to establish new working relationships with contractors, suppliers, and consultants. Such challenges to changing the project delivery approach are common when an agency adopts any innovative delivery method (e.g., D-B or CM/GC) and often depend on an agency’s formal and informal cultures. When an agency is procedurally rooted in traditional means and methods, it is likely to face varying degrees of opposition to innovative delivery approaches. Instead, the agency’s formal culture should be open to innovation, risk-taking, and improvement of the status quo. Similarly, the agency’s informal culture must support an innovative project delivery method for it to succeed fully. Informal culture consists of the way an agency actually gets work done, apart from procedures and policies. It is often a response to gaps in these existing guidelines and is a result of the need to adapt them to change. Agencies To effect meaningful organizational change, agencies must address their formal and informal cultures alike. Without attention to aligning these two organizational realities, agencies are likely to see opposition to new processes.

Design management under Design-Build 15 should never underestimate the impact—positive or negative—of the informal culture on the implementation of new delivery methods. In one case involving the Utah Department of Trans- portation (UDOT), the successful implementation of D-B for the I-15 Corridor Reconstruction project created a positive environment for evaluating and adopting innovative contracting methods. Other agencies have encountered significant challenges in their initial D-B projects, with mixed results. Within these agencies’ informal organizational cultures, an initial negative perception of D-B slowed down or stopped its use. None of the selected case studies presented herein relate such failures, but the research team is aware of such situations in the industry. Sometimes, initial lack of success, or even failure, was caused by specific issues (e.g., statutory exclusions of procurement methods other than low-bid, or lack of D-B knowledge within the local contracting community). After having resolved these issues, the agencies overcame the informal cultural resistance and successfully restarted their D-B implementation processes. Personnel/Staff The successful implementation of innovative delivery methods requires the support of in-house personnel and staff. Several staffing issues may affect effective DM and can be grouped into five categories: (1) personnel assignments, (2) staff availability, (3) staff capability, (4) training, and (5) utilization of consultants. Personnel Assignments. When using D-B, an agency often relies on Design-Builder innova- tion to provide the best value to the public. Thus, project personnel must be innovative and open to new ideas in order to help advance the application of the methodology. Agencies must select individuals enthusiastic about such programs, instead of people who will resist participation, even when they are assigned to administer them. Often, at the outset of a project, the project manage- ment will need to determine the level of expertise needed, in order to select personnel in time. For example, UDOT provides guidelines on assembling the project team; these guidelines are discussed below in the case study on the UDOT D-B program. Staff Availability. D-B projects tend to be fast-paced and require more of a time commitment from staff, particularly in terms of the design review process. Therefore, as a Design-Builder’s design production rate rises and falls, the agency’s design review load fluctuates with it. Indeed, an agency may be forced into accommodating the Design-Builder’s pace if the contractual agreement does not regulate the review flow. (See Processes and Standards.) Staff Capability. D-B projects need personnel who can manage the issues and complexities unique to the D-B method. To succeed in their respective D-B roles, staff should be able to work under pressure, be flexible, and multi-task as needed. Because the D-B schedule is accelerated, the staff often needs to be knowledgeable in project control practices. And, since agency staffs on D-B projects are often smaller in size, individuals with high levels of expertise in their respective technical areas may be required to perform independent design reviews or oversee consultants involved in the review process. Agencies also often create units dedicated to supporting D-B implementation on individual projects. Such units are staffed with agency personnel experi- enced in D-B. Even in the absence of a D-B unit, individuals with D-B experience are used on an as-needed basis for D-B projects. For example, several of the Washington Department of Transportation (WSDOT) employees assigned to the SR 99 project had been involved in other critical D-B projects. (See SR 99 Case Study.) Training. Staff may need additional training during DM to understand and perform the duties required of public owners managing D-B projects. Promptly assessing these needs and training these individuals are crucial requirements of a successful DM implementation on a D-B project. For example, if an agency is allowing submission of Alternative Technical Concepts

16 Guide for Design management on Design-Build and Construction manager/General Contractor Projects (ATCs) for the first time, staff must be trained on the confidentiality issues that attend this approach to DM during procurement. Utilization of Consultants. If an agency does not have the required in-house resources to develop and/or manage a D-B project, it may need to consider hiring outside consultants. Since this is a common approach to staff DM functions, a set of associated issues is described in detail below. Consultant Utilization The agency may opt to use private consultants on a variety of tasks as part of the D-B delivery method. The agency should address the following questions to determine which roles should be filled by consultants: • Will the general engineering consultant role be outsourced to a private engineering company to manage the D-B process for this program/project? • Will the agency utilize consultants as external reviewers of the design packages? • Which roles will these consultants perform in defining the methodology used on a project? • Will the consultants use a standard already in place, or is the owner/agency expecting them to deliver/develop a new standard? • With respect to roles and responsibilities, is the agency willing to accept the major changes inherent to adopting an innovative delivery method? To manage the Oregon Transportation Investment Act (OTIA) III State Bridge Delivery Program, the Oregon Department of Transportation (ODOT) selected Oregon Bridge Delivery Partners, a joint venture of two large contractors. ODOT and Oregon Bridge Delivery Partners (OBDP) collaborated closely to develop a comprehensive project delivery toolbox. This toolbox included DBB, D-B, and CM/GC for the program. The Bundle 401 project case study discussed below exemplifies how ODOT addresses issues related to consultant utilization. Consultant utilization issues can be summarized for a generic project into three groups: (1) engineering methodology; (2) D-B process; and (3) roles and responsibilities. Engineering Methodology. The agency must decide whether to use an established engineering standard, allow the consultants to develop their own, or to customize some established standard. Involving the consultants in this task is a great way to find effective and unique approaches to innovative delivery methods. However, utilizing multiple consultants will likely result in multiple methodologies. Caution should be taken, and strong agency leadership will be required to ensure success and prevent confusion. D-B Process. Project resources contributed by private firms can help agencies that are new to a process advance its use on one or more projects. If an agency already has processes and pro- cedures in place, the consultant will simply execute them on a given project. This practice allows an agency to develop and advance its policies and procedures in a real-time fashion on an existing project. However, in the absence of established procedures, the outside firm will likely apply its own approach to the project. Agencies new to the implementation of D-B (or CM/GC) should be cautious when utilizing different consultants on different projects, since the agency is likely to get differing versions of each methodology from the various firms chosen. For example, utilizing three or four firms to assist with several D-B projects could result in not one D-B methodology for the agency, but three or four. This profusion of D-B approaches will confuse in-house staff and D-B firms alike. As for engineering methodology, managing multiple firms on as many projects is acceptable, but requires strong agency leadership. Roles and Responsibilities. When implementing innovative project delivery methods, agencies must be prepared for major changes in their roles and responsibilities. Project roles and

Design management under Design-Build 17 responsibilities should be defined clearly to prevent duplication of effort. Another important issue is the difficulty some agencies have in “letting go” of responsibilities traditionally handled “in-house.” Inspection and testing are well-known examples of this issue, but the approach to structuring the design review process and performing design reviews are other examples. To ensure the successful performance of such duties, agencies must address issues of trust in the industry. Processes and Standards When an agency implements an innovative delivery method, it will often need to re-examine and adjust its processes and standards. To determine what needs to be changed, the agency should ask itself the following question: • Does the agency really engineer and construct its projects to its standards, or are there “personal preferences” involved that define expectations? Issues at stake can be grouped into two categories: (1) processes and (2) standards. Processes. Processes should be adjusted to accommodate innovative delivery methods. For example, agencies may need to adopt new design review procedures, such as the “over-the- shoulder review” for D-B projects, or Independent Cost Estimate (ICE) for CM/GC projects. To accommodate such new procedures, UDOT created the Office of Innovative Contracting and Project Controls within its Project Development Division. This office fosters the implementation of innovative project delivery methods by developing guidelines and supporting agency staff during the procurement and contract execution phases. For D-B projects, UDOT developed several documents describing the appropriate implementation procedure, from the beginning of the process to the issuance of the RFP. Similarly, after being authorized to use CM/GC in 2012, the Minnesota Department of Transportation (MnDOT) staff composed a document compiling recommended CM/GC processes—including issues with ICE selection and use—and submitted this document to management and the CM/GC Advisory Committee. Standards. Many agencies go through a “self-discovery” process with respect to their stan- dards when they first use innovative methodologies such as D-B and CM/GC. They find that, over time, their engineering expectations have been driven by preferences more than by the basic standards. Because the expectations of such agencies are grounded in preference, this shift toward compliance with the higher standards stipulated in the contract places the Design-Builder at odds with the agency. To limit this conflict, agency expectations should be clearly defined in advance. To this end, agencies must acknowledge the existence of this tension and take steps to mitigate it. To that end, the agency must either accept their defined standards and redefine their expectations based on years of personal preferences, or adjust their stipulated standards to better convey their expectations. Participation and Communication Each D-B program/project requires the agency to adapt to its specific context, which includes external stakeholders, such as the public, elected officials, utilities, local governments and their agencies, and industry providers. Acceptance by these stakeholders is often crucial to the suc- cessful management of D-B projects in general and to the performance of DM functions in particular. Issues at stake can be grouped into two categories: (1) stakeholders and (2) proposers. Stakeholders. The agency should ensure that all stakeholders necessary to the design process are involved early, since any lack of communication may delay the project schedule before and/or after the proposal due date. Moreover, the agency should develop a plan for cultivating buy-in from stakeholders who will not have contractual relationships with the contractor but are crucial

18 Guide for Design management on Design-Build and Construction manager/General Contractor Projects to project success. For the I-15 Core project, UDOT signed a master utility agreement with all utility owners affected by the project. This effort began prior to contract award and was concluded after contract award. The Design- Builder was responsible for developing the supplemental utility agreements and for coordinating all design and construction activities with utility owners. For the SR 99 project, the Design-Builder understood that other stake- holders may review design submittals. In this case, WSDOT entered into several MOAs with the City of Seattle, detailing oversight requirements and expec- tations. These MOAs were needed, since much of the project work was on and under City of Seattle property and, thus, might have affected city-owned infrastructure. But, the MOA conditions complicated design review timelines and expectations because the Design-Builder had to coordinate with many stakeholders within the city and its utility subsidiaries. It was also necessary to meet City of Seattle standards for certain work efforts and WSDOT standards for others. Proposers. It is important to be upfront and honest with proposers during the procurement phase. This transparency allows the proposers to provide products with the best possible design and construction. Q & A. A process should be in place to allow proposers to present and resolve any questions and issues that emerge. Innovation. A process should also be in place allowing proposers to present innovative design and/or construction ideas for agency approval and reward. Agencies must be prepared to accept innovative ideas and concepts (e.g., ATCs), as well as the risks that attend them. Agencies should also take care to avoid the “not invented here” bias when considering innovative ideas. Project Self-Assessment Level Agencies should use the project constraint assessment section to identify project-specific issues and constraints that may prevent successful D-B implementation. Whereas these issues may be relevant to D-B aspects other than DM, this section only addresses issues pertinent to DM. Project Information/Data Collection Key Information. Providing the same information to all proposers will make for even competition and elicit better technical and price proposals. Design-relevant information is often crucial, since typical information includes design surveys, environmental permits, geotechnical investigations, and assessments of utilities, easements, and ROW. For the I-15 Core project, UDOT was responsible for procuring ROW. To allow the proposers to design the facility and develop the project schedule effectively, the agency detailed the properties it would acquire based on the existing preliminary design and also provided a property acquisition schedule during the procurement phase. Moreover, UDOT allowed the proposers to identify additional properties through the ATC process. However, UDOT limited any risk associated with the acquisition of these additional properties through the following contractual language: “In the event that imple- mentation of an ATC will require additional real property or utility work, the Design-Builder shall have full responsibility for paying for any such real property and any related costs, including any necessary environmental approvals, or performing any such utility work without the right to a change order.” Data Collection. To take full advantage of schedule advancement, prevent delays, and limit design rework, the agency/owner should provide all critical information (e.g., concerning ROW, Early involvement by stakeholders is key to maintaining critical communication both before and after bid; cultivating buy-in from non-contractual stakeholders— e.g., utility companies and members of the public—is also crucial to preventing delays.

Design management under Design-Build 19 easements, utility relocation, contamination remediation, or environmental permits). In fact, by providing the information ahead of time, it also will prevent duplication of efforts during the design pursuit phase. In the OTIA III State Bridge Delivery Program, ODOT hired several external consultants to perform data collection tasks. Specifically, one consultant led the efforts to collect environmental data, develop performance standards, establish the mitigation banking program, train agency staff, and implement the National Environmental Protection Act (NEPA) approach, whereas two others led the efforts to collect the engineering data. Project Scope. Data availability will facilitate the development of project scope, which is crucial to design development. This issue has two dimensions that should be explored: (1) clarity and (2) complexity. Clarity. A well-defined scope is necessary to the selection of a contract method. It also guides the design process and helps the project team determine construction costs. The successful completion of some of the projects discussed in the case studies is probably attributable to many merits but, especially to a well-defined scope. Complexity (Low and High). Projects with very simple scopes (e.g., Resurface, Restoration, and Rehabilitation [RRR], mill/resurface, or sidewalk projects) may not provide enough oppor- tunities for innovation to realize the benefits of the D-B method. However, its use can provide significant schedule advantages and, with a well-defined scope, can eliminate project risks and delays. On highly complex projects, proposers can provide a more innovative design and construction approach for schedule advantages and cost savings. Design and/or Construction Restrictions Design. The agency should clearly state/define any restrictions to design, e.g., the prohibition of any modifications to typical sections, pavement design, or bridge lengths. If these restrictions are included in the RFP document, the proposers can assess the consequences of these restrictions and develop their proposals accordingly. Even if a restriction is clearly stated in the RFP document, a proposer could still submit ATCs and suggest lifting it, as long as its removal is shown to yield significant value to the agency. On the other hand, adding restrictions after a contract is in place may cause conflict. Construction. The agency should clearly state/define any restrictions in construction approach, e.g., prohibitions on the use of certain construction methods and materials. As with design restrictions, it is important to understand how the timing of the communication of these restrictions affects the Design-Builder (i.e., pre-award versus post-award). Construction Costs Selection Method/Bid Type. Cost of construction is key to determining whether to use the D-B method and which type of selection approach to use (e.g., best value or low-bid). Agencies must perform initial scoping to determine probable cost of construction. Multi-criteria evalua- tion based on the determination of the best value is a very common approach to awarding D-B contracts, as shown in the case study discussions. However, other approaches may be preferable in other circumstances, as in the case of the I-15 core project, in which UDOT adopted a fixed price/best design approach. Bidding Contingencies. D-B projects may only have conceptual drawings, as opposed to full construction plans, and may be missing much of the data needed to determine a bid price.

20 Guide for Design management on Design-Build and Construction manager/General Contractor Projects Proposers tend to compensate for this by adding contingencies in their price proposal. The more data provided prior to bid, the better price the agency can expect (See the Project Information section). Setting and reviewing contingencies are two of several risk management processes that should be continuously monitored on D-B projects. In some cases, agencies rely on external review panels for these reviews. For instance, for the Alaskan Way Viaduct and Seawall Replace- ment Program, which included the SR 99 project, WSDOT relied on an expert review panel. This panel performed extensive program reviews, including ones of overall program management, risk management, budget and contingency plans, availability of financial resources, stakeholder and partner agency relationships and interfaces, and mitigation of public and political issues (See the SR 99 case study). Project Schedule Schedule Determination. The agency should determine the contract time for a D-B project, noting that the availability of certain critical information will greatly affect the design schedule (See the Project Information section). Schedule as a Selection Criterion (Key and Non-Key). The agency needs to determine whether the contract time is a key criterion for the bid, since it can help determine (or be determined by) the type of bid used. Projects for which contract time is a key criterion may include project schedule in the bid to reward bidders for a shorter contract time (This criterion can be utilized in maximum price bids). When an early completion is not required, the agency may fix the schedule and use a low-bid method, or a best-value approach that is based on technical merit and price. Criteria and Factors for Selection The agency should determine which factors and criteria to use for selecting the Design-Builder. For complex projects, agencies typically include time and cost savings, innovative approach, and value-added construction methods and materials as selection criteria, in addition to contract time and bid-price considerations. For simple and less schedule-driven projects, bid price is often the most important factor. To select Design-Builders for the OTIA III State Bridge Delivery Program, ODOT and its consultants conducted a comprehensive evaluation of the technical proposals to score each D-B team (See the ODOT case study). Criteria can also be assigned for the qualification step. In its request for qualifications, the UDOT D-B program lists “experience with formal partnering activities” as a selection criterion (See the UDOT case study). B: D-B Implementation Framework and Templates for Organizing Design Management under Design-Build Taking the discussion in Section A of constraints at the agency/program and project levels as a point of departure, this section initially summarizes a previously developed process frame- work for D-B implementation (Migliaccio 2007). It then provides guidance on DM under D-B, providing DM template guidelines for different phases, including project planning and procure- ment, and design development. Design-Build Implementation Framework Migliaccio (2007) developed the Changing Delivery System (CDS) framework to help agen- cies implement changes in their project delivery strategies. This framework was validated for D-B projects through a series of detailed case studies and by an expert panel. This subsection

Design management under Design-Build 21 presents this framework for implementing D-B at both the program and project levels. Figure 2 illustrates how this approach acts as a strategic map for the general D-B implementation guide- lines. The CDS framework relies on three concurrent processes, each rolling out through four subsequent implementation phases. First, the Implementation Process facilitates implementation of D-B by identifying significant decisions to correctly implement D-B, and by aligning project D-B practices with organizational strategy. Two concurrent processes support the implementation process. The Knowledge Building Process manages D-B knowledge and facilitates acceptance among stakeholders (e.g., public, elected officers, industry providers, utilities, and/or local agencies) and among agency staff by collecting, verifying, storing, and disseminating lessons learned on the implementation effort, and by identifying sources of information on D-B. Finally, agencies often also need to assess D-B accomplishments through the Implementation Assessment Process. This process promotes continuous improvement by providing internal and external benchmarking, and by providing feedback on D-B implementation progress to organizational decision makers. All these elements of the CDS framework were fully validated through a consensus of industry experts. However, several of them suggested that boundaries between each of the processes and phases should not be taken as absolutely defined, because they may have different overlaps, depending on the agency. In addition, the expert panel produced a set of 30 guidelines. Twenty- three of these guidelines were validated with moderate to strong consensus. The remaining seven guidelines were only suggested, since they produced a weaker consensus, and, therefore, they may be applicable only to specific situations. General Design-Build Implementation Guidelines Tables 1 to 4 summarize these general D-B implementation guidelines by phase. Design Management Guidelines by Phase of Implementation Lifecycle This section organizes the research results in a series of short guidelines for DM under D-B. These guidelines address each of the following phases: (1) planning (pre-procurement); (2) D-B contract procurement; and (3) D-B contract administration, since the preparatory phase would be at too high a level for DM considerations. Figure 2. D-B implementation (adapted from Migliaccio 2007).

22 Guide for Design management on Design-Build and Construction manager/General Contractor Projects Table 1. Preparatory phase D-B implementation guidelines (adapted from Migliaccio 2007). Obtain legislative authority. Validated Strong Consensus Description: Legislative authority to use D-B is obtained by a change in the legislative framework. A transportation agency needs legislative authority before instituting changes to its procurement and finance strategy to allow D-B. Changes to the regulatory framework occur at different levels (federal/state), and affect different aspects including the following: (a) allowed degree of project services that can be outsourced; and (b) allowed project delivery methods. An absence of legislative authority constitutes a barrier to change. Recommendations Work with and educate industry providers and elected officials. Inform the general public. Advocate for legislative authority. Draft legislation. Be sure that change to the agency’s delivery is driven by a clear need to change. Validated Strong consensus Description: Needs/reasons for changing the agency’s approach to project delivery (by allowing D-B) can be found at different levels: context (opportunities/constraints), organizational (funding), and project (schedule). Potential reasons include: (a) cost, (b) schedule, (c) financing, (d) commitments, and (e) benefits to transportation users and taxpayers. Without a motivating factor for change, it is difficult to obtain authorization or resources to implement the change necessary to successfully implement D-B. Moreover, in order to substantiate the action plan, agency staff needs to know why a change is necessary. Seek support from and promote acceptance by industry providers. Validated Strong consensus Description: Industry providers need to promote and/or support change that would introduce D-B as an option for delivering projects. Participation from industry providers is crucial for a successful implementation. If industry providers support the change, they will lobby elected officials and drive public perceptions. Conversely, their opposition will hinder a truly competitive bid environment. An absence of support by industry providers constitutes a barrier to change. Recommendations Have a champion for the cause. Seek and maintain credibility on change actions. Involve key industry groups early in the process (e.g., Associated General Contractors [AGC], American Road and Transportation Builders Association [ARTBA], or other organizations). Update industry providers on change initiative (e.g., through workshops, websites, or other media). Seek input from industry providers on risk allocation strategy. Partner during project implementation. Seek support from elected officials. Suggested Weak consensus Description: Political support can be vision-driven (i.e., promoted by political champions with a vision) or environment- driven (i.e., promoted through the lobbying of groups or as a result of public perception). Having political support is important because a transportation agency needs support from elected officials to effect a change to the legislative framework. In addition to providing legislative authority, elected officials have the power to support the change by controlling funds, attracting media coverage, and driving public perception of a project. An absence of support by elected officials constitutes a barrier to change. Recommendations Develop a clear and concise message explaining need. Assess opposition. Dialogue with and educate leaders.

Design management under Design-Build 23 Promote acceptance by other relevant parties. Suggested Weak consensus Description: Other relevant parties affected by change in delivery need to accept D-B. Other parties involved in the project delivery (e.g., local agencies, other governmental agencies, utilities, environmental groups, railways, real property owners, cities, counties, or other entities) are not believed to provide active support for a change initiative, but their resistance to D-B and its processes may hinder the implementation effort. A lack of acceptance by these parties constitutes a barrier to change. Recommendations Develop a plan for third party input early in the project development process. Educate on the change initiative. Use partnering and role-making during project implementation. Promote acceptance by the public. Suggested Weak consensus Description: The public is not believed to support a change in delivery such as introducing D-B. However, public opposition to D-B may endanger the effort because the actions of elected officials are believed to be driven by public perception. Support from the public is more likely to occur if agency staff provides a clear, concise, and consistent message on the benefits of implementing D-B. A lack of acceptance by the general public constitutes a barrier to change. Recommendations Develop a clear and concise message explaining the need for the change. Assess opposition and develop a strategy to mitigate it. Employ experts to conduct public workshops to promote dialogue and educate the public. Table 1. (Continued). Be sure change in delivery is supported and promoted by the agency’s executive management. Validated Strong consensus Description: A change to an agency’s project delivery and finance strategy affects all the elements of the D-B delivery system (i.e., procurement, contracting, financing, payment, and administration). Support by upper management is crucial to the success of the change initiative in many ways. Recommendations Champion necessary for legislative changes. Seek support by legal counsel on legislative actions. Set clear objectives for the change. Mandate needed internal adjustments (e.g., recruitment, outsourcing, or creation of additional organizational units). Provide resources for implementing the change (i.e., monetary and staff resources). Proclaim a commitment to the agency’s community (to mitigate agency’s internal resistance). Manifest a commitment to knowledge building (e.g., measures, time, and money). Manifest a commitment to implementation assessment (e.g., measures, time, and money). Monitor change implementation. Be sure that using a new delivery method on a project is driven by a clear need to change the agency’s usual approach. Validated Strong consensus Description: Needs/reasons for changing the agency’s approach to project delivery (by allowing D-B on a specific project) can be found at different levels: context (opportunities/constraints); organizational (funding); and project (schedule). Potential reasons include: (a) cost, (b) schedule, (c) financing, (d) commitments, and (e) benefits to transportation users and taxpayers. Without a motivating factor for change, it is difficult to obtain authorization or resources to implement the change necessary to successfully implement D-B on a project. Moreover, in order to substantiate the action plan, agency staff needs to know why a change is necessary. Table 2. Project planning phase D-B implementation guidelines (adapted from Migliaccio 2007). (continued on next page)

24 Guide for Design management on Design-Build and Construction manager/General Contractor Projects Train agency staff on newly introduced approaches. Validated Moderate consensus Description: A thorough understanding of newly introduced approaches by agency staff will contribute to both a reduced resistance to change and a more efficient implementation. Recommendations Allocate specific human and monetary resources to staff training. Train staff before implementation. Focus training on procedural aspects of activities under the new approach. Make sure agency staff is available for implementing D-B. Validated Moderate consensus Description: Agency staff is available for implementing D-B at the organizational level. Allocating insufficient resources to implement a new delivery method constitutes a barrier to its implementation. This problem may be due to: (a) a lack of upper management support; (b) a chronic lack of resources within the organization; or (c) non-availability of staff to participate in the implementation effort. Recommendations Identify expert individuals. Establish an organizational unit focused on innovative delivery methods. Allocate dedicated staff. Use this unit’s expertise to develop a consistent programmatic approach. Use this unit’s expertise to support the implementation of newly introduced delivery methods at the project level. Put in place a method for matching projects with delivery methods. Validated Strong consensus Description: Introducing a new project delivery method like D-B introduces a set of new options to the organization. Using the wrong delivery method on a project may hinder the implementation process by fostering cultural resistance. Recommendations Carefully select pilot projects to avoid endangering the entire change initiative. Employ expert consultants. Seek advice from other agencies that previously underwent the change. Promote acceptance of change by agency staff. Validated Strong consensus Description: A widespread resistance to change by agency staff may also hamper the D-B implementation. This problem may be due to: (a) cultural bias against change in general or D-B in particular; (b) feelings of loss of control; (c) tradition; and (d) fear of the unknown. Recommendations Develop organizational knowledge on newly introduced approaches. Use pilot projects to build consensus. Communicate information on the status of implementation. Empower change through leadership actions. Table 2. (Continued).

Design management under Design-Build 25 Communicate intent of using D-B to affected external parties. Validated Strong consensus Description: External parties affected by D-B are informed on the effort to implement it on a given project (e.g., industry providers, utilities, or local agencies). A lack of information constitutes a barrier to D-B because it may trigger misinformation about the new approach and thereby generate resistance. Recommendations Identify procedures necessary to inform all interested parties. Establish a schedule of letting dates to build up credibility within the community of industry providers. Assess the outcome of implementing D-B. Validated Strong consensus Description: A lack of assessment constitutes a barrier to change because, without solid examples of success with the new process, doubts about the new approach may result. Recommendations Promote internal benchmarking. Compare the performance of other organizations that underwent the change. Develop a comprehensive implementation plan at the organizational level. Suggested Weak consensus Description: There is a clear, timely, and comprehensive implementation plan at the organizational level. A lack of organizational planning on D-B implementation constitutes a barrier to change because it may hinder the D-B implementation process. Recommendations Define requirements (i.e., what needs to be accomplished by changing the delivery strategy). Identify boundaries (i.e., which practices are not being changed). Outline a process for implementation. Define procedures for evaluating change implementation. Define procedures for building organizational knowledge. Define procedures for improving implementation process. Redesign staffing procedures Suggested Weak consensus Description: Agency procedures and policies for staffing are redesigned to facilitate the D-B implementation. Teams working on D-B projects require a different set of skills. Keeping staffing procedures unchanged may constitute a barrier to implementation. Recommendations Use flexible allocation of staff. Build project teams with technical, management, and financial expertise. Select staff with knowledge of the new approach or a positive attitude toward adoption. Provide career incentives to believers in the new approach. Use incentive strategies to promote a proactive approach to internal bureaucracy. Appoint expert program advisors (with D-B experience) external to the transportation agency’s organization, to monitor the implementation. Use consultants with D-B experience for both training of staff and staffing of project teams. Table 2. (Continued).

26 Guide for Design management on Design-Build and Construction manager/General Contractor Projects Be sure that change to the agency’s delivery and finance strategy is driven by a clear need to change. Validated Strong consensus Description: Needs/reasons for changing can be found at different levels: context (opportunities/constraints), organizational (funding), and project (schedule). Potential reasons include: (a) cost, (b) schedule, (c) financing, (d) commitments, and (e) benefits to transportation users and taxpayers. Without a motivating factor for change, it is difficult to obtain authorization or resources to implement the change. Moreover, in order to substantiate the action plan, agency staff needs to know why a change is necessary. Often, it is useful to convey these drivers to the proposers, to create early alignment. Adopt a clear and fair approach to managing project risks. Validated Strong consensus Description: The agency has developed a clear strategy for identifying, allocating, sharing, and managing project risks. Some potential problems include the following: (a) unreasonable allocation of risk with resulting high bid prices; (b) unwillingness to manage risk; and (c) unclear contractual language. Recommendations Elicit input of industry associations on master contracts. Develop risk allocation matrices for projects. Have industry providers review the risk allocation during the procurement phase. Develop a risk management plan with a selected provider. Control quality of contractual documentation. Validated Moderate consensus Description: Arriving at the project procurement stage with contractual documents that are not ready or are not suitable for the new approach may result in inefficient pricing. Some potential problems include the following: (a) use of onerous specifications; (b) incomplete D-B proposals; (c) contractual terms that are not aligned with project goals; (d) use of documents from other projects that do not meet local practice or site needs; (e) unclear contract language; and (f) excessive reference to design manuals (which were not written as contractual documents). Recommendations Keep contractual document aligned to project goals. Adopt realistic requirements in request for proposals. Use clear contract language. Seek acceptance by project parties. Validated Strong consensus Description: There is a general acceptance of the new approach by all project personnel (both owner and industry providers). The implementation of the new approach at the project level may encounter resistance from certain project parties. Potential problems include the following: (a) unwillingness of individuals to compromise; (b) unwillingness of industry providers to adapt; (c) opposition from people with hidden agendas; (d) conflicting agendas between agency and service providers; (e) insincere commitment to partnering; (f) adversarial attitude; and (g) fear of loss of control by agency personnel. Recommendations Procure buy-in from both provider and agency personnel on the implementation process. Have project personnel (both owner representatives and consultants) who are able to work as a team and to compromise for the good of the project. Have only project personnel who are committed to the success of the project. Table 3. Contract procurement phase D-B implementation guidelines (adapted from Migliaccio 2007).

Design management under Design-Build 27 Promote competitive participation in the procurement of qualified industry providers. Validated Strong consensus Description: A main problem may be the industry’s inability to assess redistribution of risk. Recommendations Allocate project risks clearly. Adopt an unambiguous contract award method. Seek input on draft contract documents by industry providers. Seek industry providers who appoint project personnel who are expert in the new approach. Design an efficient procurement process. Validated Strong consensus Description: There is an efficient procurement process designed for the new approach. Lengthy and inefficient project procurement processes may hinder agency credibility and result in lower industry competition. Recommendations Identify procedures to improve the accuracy of pre-advertisement cost estimate. Customize the process to meet project needs. Identify a method for awarding contracts. Develop a realistic schedule that allocates an adequate amount of time for procurement. Use shortlisting to select providers with the ability to perform the project. Acknowledge the need for extended timeframes. Adequately staff owner project team. Validated Strong consensus Description: The owner project team is adequately staffed to manage the procurement process and to administer the contract under the new approach. Some potential problems with owner teams include the following: (a) an inexperienced PM; (b) lack of staff; (c) lack of professional assistance; (d) presence of personnel in oversight roles outside their area of expertise; (e) absence of clear understanding of new processes; and (f) inconsistent direction to industry providers. Recommendations Appoint an expert team leader who is empowered to make decisions. Hire owner project personnel who are experienced, familiar, or adaptable to the new process, and have prior experience working as a team. Use professional consultants experienced in the new approach, to fill team requirements. Establish performance measures for team evaluation early on. Develop a comprehensive implementation plan at the project level. Suggested Weak consensus Description: There is a detailed and comprehensive master plan for the implementation of D-B at the project level. Potential problems include the following: (a) delays from incomplete preliminary work (e.g., environmental clearance, ROW issues, utility agreements, and public hearings); (b) incorrect estimation with resulting budget crises; and (c) initiation of procurement on a project without adequate funding. Recommendations Define project goals, expectations, objectives, and constraints early on. Keep consistent project goals throughout the life of the project as much as possible. Perform due diligence to leverage public funding. Promote public support. Assess the status of early milestones (e.g., early decisions, environmental clearance, or public outreach/involvement). Establish agreements with local agencies and third parties. Obtain cost data for the new approach from expert consultants or other agencies that have undergone the change. Table 3. (Continued).

28 Guide for Design management on Design-Build and Construction manager/General Contractor Projects Seek acceptance by project parties. Validated Strong consensus Description: There is a general acceptance of D-B by all project personnel (both owner and industry providers). The D-B implementation at the project level may encounter resistance from certain project parties. Potential problems include the following: (a) unwillingness of individuals to compromise; (b) unwillingness of industry providers to adapt; (c) opposition from people with hidden agendas; (d) conflicting agendas between agency and service providers; (e) insincere commitment to partnering; (f) adversarial attitude; and (g) fear of loss of control by agency personnel. Recommendations Buy-in from both provider and agency personnel on the implementation process. Employ project personnel (both owner representatives and consultants) who are able to work as a team and to compromise for the good of the project. Employ project personnel who are committed to the success of the project. Implement contract administration procedures to facilitate D-B. Validated Moderate consensus Description: Contract administration procedures are tailored to the selected D-B approach. Arriving at the contract administration phase without having designed procedures suitable for D-B also constitutes a roadblock. Recommendations Seek input from selected provider and other agency personnel on project implementation and contract administration. Keep the administration of the contract consistent. Adhere closely to contractual documents. Develop and maintain a comprehensive schedule. Adequately staff owner project team. Validated Strong consensus Description: The owner project team is adequately staffed to manage the D-B procurement process and to administer the D-B contract under the new approach. Some potential problems with owner teams include the following: (a) inexperienced PMs; (b) lack of staff; (c) lack of professional assistance; (d) assignment of personnel in oversight roles who are operating outside their areas of expertise; (e) absence of a clear understanding of new processes; and (f) inconsistent direction to industry providers. Recommendations Appoint an expert team leader who is empowered to make decisions. Employ owner project personnel who are experienced, familiar, or adaptable to the new process, and who have prior experience working as a team. Use professional consultants experienced in the new approach, to fill team requirements. Establish performance measures for team evaluation early on. Design the project’s communications to facilitate the new approach. Validated Strong consensus Description: A lack of communications at the project level also constitutes a barrier to a successful implementation of the new approach, because poor communication may result in lower project performance and lower industry competition. Recommendations Promote continuous participation/collaboration of project parties. Inform project stakeholders, including public and third parties (e.g., cities, utilities, metropolitan planning organizations, and other entities). Keep the entire team aligned with project goals. Identify partnering/dispute resolution procedures. Table 4. Contract administration phase D-B implementation guidelines (adapted from Migliaccio 2007).

Design management under Design-Build 29 Project Planning Phase Understand the Importance of the Project Planning and Procurement Phases. The agency must understand that D-B is a more sophisticated project delivery method than DBB. The more work the agency performs up front, the less likely it is that issues and disputes will occur after contract award and during design reviews. This early work is what would be needed to perform design reviews and, therefore, would be highly dependent on how many design reviews are performed and how. At a minimum, an agency should carefully define the project scope and develop contractual documents while involving all relevant project stakeholders in this process, including local government, public agencies, and utility companies. Perform a Risk Analysis. The agency should perform a comprehensive risk analysis to identify project risks and allocate each risk to the entity that can best manage it (i.e., the agency or Design-Builder). While this is true for all projects, construction contracts under DBB have been tested and revised to the extent that only minor changes to the risk allocation can be made. On the other hand, the integration of design and construction services (and sometimes ROW acquisition and utility relocation) makes the risk allocation process under D-B more fluid. Therefore, the agency should proactively control this changeable process by performing an initial analysis of risks. This information should be used to develop a draft risk allocation that will undergo an industry review phase or be included in the RFP. In regard to DM, the Design the project’s organizational structure to facilitate the new approach. Validated Strong consensus Description: The agency should customize its team’s organizational structure to the new approach. Recommendations Allocate adequate resources to the project, beginning at the procurement phase. Define roles and responsibilities. Make individuals accountable. Develop a comprehensive implementation plan at the project level. Suggested Weak consensus Description: The agency has developed a detailed and comprehensive master plan for the implementation of D-B at the project level. An absence of planning may delay and endanger the implementation effort at the project level. Potential problems include the following: (a) delays from incomplete preliminary work (e.g., environmental clearance, ROW issues, utility agreements, and public hearings); (b) incorrect estimation with resulting budget crises; and (c) initiation of procurement on the project without adequate funding. Recommendations Define project goals, expectations, objectives, and constraints early on. Keep consistent project goals throughout the life of the project as much as possible. Perform due diligence to leverage public funding. Promote public support. Assess the status of early milestones (e.g., early decisions, environmental clearance, and public outreach/involvement). Establish agreements with local agencies and third parties. Obtain cost data for the new approach from expert consultants or from other agencies that have undergone the change. Table 4. (Continued). Because D-B is a more sophisticated approach to project delivery, it requires more planning; up-front work on D-B projects prevents design- and scope-related disputes and issues.

30 Guide for Design management on Design-Build and Construction manager/General Contractor Projects agency should evaluate the risks associated with performing and overseeing the design phase as carefully as it would evaluate construction risks, due to the significant impact they can have on the schedule. Educate the Agency and All Project Stakeholders About the D-B Process That Has Been Adopted by the Agency. In general, D-B is a project delivery method. In practice, agencies can take different approaches to implementing D-B. Some agency departments—such as regional offices—and some project stakeholders—such as local government, public agencies, and utility companies—may not be familiar with D-B in general or with the way the agency is implementing it in particular. Thus, the agency must actively involve all interested agency departments and project stakeholders as soon as possible, to educate them about D-B procedures and peculiarities. For instance, contrary to the DBB approach, the project scope of a D-B project must be defined clearly before the design phase. Therefore, the stakeholders willing to change the delivery method must decide before the RFP is issued. Build a Streamlined Process for Pre-Award VE by Proposers. The agency can greatly ben- efit in terms of quality improvement, cost savings, and/or schedule reduction from pre-award VE concepts submitted by proposers. When these innovations are outside the scope outlined in the RFP documents, they are submitted as ATCs. Furthermore, pre-award VE allows the agency to retain all cost savings while the cost savings from post-award VE generally are shared with the Design-Builder. However, the process for soliciting and handling pre-award VE concepts should be transparent and should not detract from the objectivity of the competition. Thus, the agency should develop a process that supports the proposers in developing and proposing innovations. This process should not be cumbersome or too prescriptive in terms of required documentation; otherwise, proposers would be discouraged from participating in the process. As part of this process, some agencies hold multiple one-on-one meetings with the proposers to discuss the proposed inno- vations before a formal proposal is submitted. However, an agency should analyze the pros and cons of this step—in terms of procurement process objectivity—and take countermeasures. Similarly, some agencies hold one-on-one meetings with proposers to request clarifications on the submitted ATCs. An agency should not disclose any innovation proposed by a proposing team—or even one that has simply been discussed—even through the one-on-one information meetings. When at least two teams propose the same ATC, some agencies issue an addendum to the RFP. However, when an agency decides to change the RFP to allow the incorporation of an innovation, this change should be done in a way that does not reveal the innovation, if possible. For instance, UDOT reserved the right to modify the RFP for the I-15 Core project if, based on a proposed ATC or on another type of proposal, its staff determined that the RFP contained an error, ambiguity, or mistake. However, since proposers usually invest resources into the development of innovations, knowing that their innovations might be disclosed and, there- fore, shared with the other proposers could prevent them from proposing any innovation at all. Finally, some agencies use a three-way rating of ATCs: (1) rejected, (2) conditionally approved, and (3) approved. These agencies allow the proposers to include conditionally approved ATCs in the proposal. Proposers often see this approach as a burden because it would require additional time and resources, without any guarantee of reward. If the agency selects a proposal that includes conditionally approved ATCs—even if the proposer has not been able to meet the conditions by the proposal due date, it stands to retain risks associated with the implementability of the ATC under the given conditions. As a result, proposers may often decide not to pursue additional efforts on conditionally approved innovation, nor to include them in their proposals. While it is difficult to outline an alternative approach to conditionally approving ATCs and, at the same time, to request that all conditions be met by the proposal due date, doing so will limit such uncertainties in the design process.

Design management under Design-Build 31 Incorporate a Degree of Flexibility in the Programmatic Environmental Permitting Processes. When an agency submits permit requests for a number of projects within the same program, it can benefit greatly from having developed a programmatic environmental permit- ting process. Nevertheless, such a permitting process has to be flexible enough to accommodate the specific characteristics of each construction site. Include Contingency Funds. Given the fast-paced nature of D-B projects, the agency should set up contingency funds to allow the agency’s project team to face changes promptly during each phase, including design. Contract Procurement Phase Determine the Correct Amount of Design Definition to Provide in the RFP. Developing a well-defined design package can help the agency communicate the project scope. However, too much design can be detrimental to innovation. Generally, proposers use the design provided in the RFPs as a starting point. Therefore, providing an excessive amount of design can hinder proposers’ efforts to propose innovations. If the process allows the submission of ATCs, this barrier to innovation can be mitigated, but it would still be present. The most successful D-B programs handle the innovations offered up by D-B teams in the pre-award phase. When these innovations are outside the scope outlined in the RFP documents, they are submitted as ATCs. Thus, the agency should develop a process that supports the proposers in developing and proposing innovations. This process should not be cumbersome or too pre- scriptive in terms of required documentation; otherwise, proposers would be discouraged from participating in the process. As part of this process, the agency could hold multiple one-on-one meetings with the proposers to discuss the proposed innovations, before a formal proposal is submitted. Since proposers usually invest resources into developing innovations, knowing that their innovations can be disclosed and, therefore, shared with the other proposers may prevent them from proposing any innovation at all. Finally, some agencies do not simply approve or reject a proposed innovation, but conditionally approve it and allow the proposers to include conditionally approved ATCs in the proposal. A further mechanism for innovation is the opportunity to benefit from all bidders’ ATCs: if the State Transportation Agency (STA) offers a compensatory stipend to unsuccessful bidders, a condition of their acceptance of the money is their assignment of their respective ATCs’ IP rights to the STA. This assignment of IP rights allows the agency to share the ATCs with the successful bidder for potential incorporation in the project. Clearly Communicate to the Proposers the Selected Payment Method and how it can Affect Design Activities. Since many proposers are constructors that contract out the design to design firms, they may not fully understand how the selected payment method can affect design activities. Sometimes agencies decide to pay each line of work only when it is 100 percent complete, while the proposer has not broken down the design activities into multiple lines of work to obtain payments consistent with the accomplished design activities. In such cases, the proposer and/or DPs have to finance some of the design activities. Since this may create an adversarial relationship with the agency or within the D-B team, the selected payment method should be spelled out clearly in the RFP documents. Moreover, its potential impact on design should be understood by the agency and communicated to the proposers during the procurement phase. Clearly State Whether the Agency is Retaining Any Risk Related to the Provided Design. The agency may provide conceptual design documents to simply convey the project scope. Thus, the agency must state clearly whether the proposers can use and reference the provided documents, or it should simply consider them as an outline for the project scope.

32 Guide for Design management on Design-Build and Construction manager/General Contractor Projects Provide Complete ROW Information. Agencies must clearly identify the properties that they are willing to acquire. Furthermore, given the importance of purchasing all necessary properties in a timely manner, the agency should secure properties that it is certain will be needed. In regard to other properties that may be needed or that may be affected by the project, the agency should develop a reliable forecast of when each property should be available for construction. Similarly, since proposers may need to access some properties while preparing the proposal, the agency should coordinate with property owners to ensure access. Provide Complete Utility Information. To support the proposers, the agency should collect as much information as possible about the utilities affected by the project. This is important particularly if the utility relocations are included in the Design-Builder’s scope of work. The more an agency makes information available, the less risk the proposers will retain and price. Coordinate with Utility Companies. Utility companies may have to participate in the design approval process. Therefore, the agency must start coordinating with them as soon as possible to prevent issues and delays after contract award. For instance, the agency may develop agreements with the utility companies (e.g., master utility agreements) that will be provided to the proposers as RFP documents. The information in these agreements should allow proposers to identify and assess the impact of utility relocations on the whole project schedule. Introduce Specific D-B Design Standards and Specifications. Design standards and specifications developed for DBB often are not usable for D-B projects. At best, they have to be adapted to D-B. Therefore, the agency has to allocate enough resources to adapt the existing stan- dards and specifications and/or develop new standards and specifications for D-B. For instance, to foster innovation, the agency could provide performance-based specifications rather than prescription-based specifications. However, performance-based specifications can be unclear if the agency does not properly develop them. Therefore, the agency has to detail the performance specifications clearly to avoid ambiguities and prevent disputes on performance expectations. Clearly Detail the Hierarchy of the Referenced Documents. To prevent issues and disputes after contract award, the agency must hierarchize the referenced documents affecting design activities, and consistently deploy this hierarchy in all contractual documents. Verify Information in RFP Documents. When assembling documents for the RFP package, the agency must verify that information in these documents is complete and has been updated correctly (e.g., updated property owner information and location of utilities). Define Co-Location Requirements. When feasible, co-location has produced great benefit to D-B projects. Nevertheless, its benefits can be limited if it is not properly implemented. In particular, the agency should require the Design-Builder to fully co-locate design and con- struction personnel at times when integrating these functions is crucial to project success. However, co-location may be costly and fruitless when project size and/or complexity do not demand full integration of the design and construction functions. Hold Meetings with the Proposers to Discuss RFP Draft Documents. To develop an RFP package that clearly conveys project scope and agency expectations, the agency can review the RFP documents with the proposers during general and/or one-on-one meetings. Some agencies interact with industry organizations (e.g., AGC) during this phase through industry reviews of draft RFPs. Develop the Project Scope in Accordance with the Procurement Method. When using a fixed price/best design procurement method, agencies may determine a minimal amount of work that the proposers are expected to complete within the contract price and asked to include

Design management under Design-Build 33 in the supporting RFP documentation. Nevertheless, proposers may submit proposals with an amount of work significantly larger than the agency minimum. As a result, the RFP documents can contain gaps that must be addressed after the fact, which then hinders the design process. To lessen the impact of this problem, the agency could include reasonable thresholds of minimal and the maximal amounts of work expected, in the project scope and supporting documentation— not only the expected minimum. Proposers could still use ATCs to go above and beyond this range in their proposals. Contract Administration Phase Build a Solid Partnering Relationship with the Design-Builder. Generally, D-B requires extensive and active coordination and integration between the agency and the Design-Builder. However, because design functions are often performed by a consultant to the D-B entity, the agency should require the Design-Builder to participate in formal partnering initiatives. Such efforts build trust and prevent adversarial relationships on design activities among all project participants. Support the Design-Builder in Interacting with the Utility Companies. Although the D-B entity may be charged with coordinating utility relocations after contract award, it does not have any contractual relationship with the utility companies. Oftentimes, this relocation period is the first and only time that the Design-Builder interacts with these utilities. Thus, the agency must actively support the Design-Builder to prevent or resolve any relocation issues and disputes that emerge. Ensure that Agency Employees and External Consultants are Knowledgeable about the D-B Process in General and about the D-B Project Requirements in Particular. Since D-B significantly differs from DBB, the agency must effectively train both its employees and the project’s external consultants. For instance, design reviewers who are usually designers for DBB projects must understand that in D-B projects, their role is to oversee rather than manage the design. This means that they should minimize preferences and opinions and focus their comments on design compliance with contractual requirements. Require the Design-Builder to Provide Design Definition Submittals for All Design Disciplines. The intent of design definition submittals is to complete enough design (e.g., 30%) to confirm that the initial design approach complies with contract requirements. These submit- tals clearly define the scope of the project alignment between the project stakeholders and the Design-Builder. Perform Over-the-Shoulder and Informal Reviews. Over-the-shoulder and informal reviews greatly improve the quality of the design packages prior to submission. Furthermore, a direct and informal line of communication between the agency and the Design-Builder can help solve issues and identify possible innovations in the design. Ensure that Design Reviewers Have a Comprehensive Understanding of the Project. It is likely that design submittals will reference one another. To avoid contradictory review com- ments, the Design-Builder must generate properly coordinated design submittals. Concurrently, the agency must ensure that the design reviewers have a clear and comprehensive understanding of the project. Furthermore, if a project is part of a program, it is likely to be sited in close prox- imity to other construction projects. Therefore, the agency must apprise the design reviewers of any interactions among all concurrent projects. For instance, if a utility has to be relocated, it is necessary to verify that the new location will not interfere with other projects in the program. Establish Efficient Design Package Submittal Processes and Review Guidelines. Generally, the agency must allocate and coordinate extensive resources for effective and timely review of

34 Guide for Design management on Design-Build and Construction manager/General Contractor Projects design submittals. To optimize their use, clear and effective design package submittal and review guidelines must be agreed upon and included in the contract. First, the agency should deter- mine the maximum duration of a design package review, in accordance with its resources and the Design-Builder’s needs. Since the design phase is generally fast-paced and integrated with the construction phase, the agency should establish a maximum duration that is as short as possible; setting such a threshold allows the Design-Builder to proceed as quickly as possible with design and construction. However, the design review duration should permit the reviewers to perform comprehensive reviews and allow the agency to compile them. Second, the agency should require the Design-Builder to provide a detailed schedule of design submittals to ensure efficient management of design review personnel. Third, the agency should set a limit on how many design packages can be submitted and/or reviewed concurrently. Furthermore, when several design packages are submitted simultaneously, the agency should require the Design-Builder to prioritize them. Be Clear in Providing Design Package Review Comments. Before submitting the design review comments to the Design-Builder, the agency should consolidate them into one document, revising any unclear, redundant, or incongruent comments, and eliminating any of the reviewers’ opinions/preferences. Accurately Coordinate DM Personnel. Agencies may need to employ a considerable num- ber of design reviewers in order to review design submittals in a timely manner. Thus, the agency should not only efficiently group them by design disciplines and/or task forces, but it should also oversee and coordinate these groups to avoid inefficiencies and inconsistencies (e.g., overlaps among design disciplines). Consider Reducing the Number of Design Package Submittals. To optimize design review efforts, the agency could eliminate the intermediate design package submittal (e.g., for packages at 60-percent design complete) for some of the minor elements (when three design submittals are required). Ensure that Design-Builder’s Design and Construction Personnel Coordinate after Contract Award. Design-Builders’ designers in different disciplines and/or design and construc- tion personnel may not fully coordinate during the design phase. Since this lack of alignment may increase the number of requests for design change during final design, the agency must monitor, support, and collaborate with the Design-Builder to minimize this issue. Educate All Project Stakeholders Involved in the Design Package Review About the Design Review Procedures. Generally, the agency should develop the design review procedures and only discuss them with the Design-Builder. Moreover, some project stakeholders may be unfamiliar with the newly adopted D-B process. For instance, a project stakeholder may not fully understand the importance of timely design submittal reviews under D-B. Therefore, the agency should educate all project stakeholders involved in the design package review process as soon as possible. Clearly Determine who is in Charge of Modifying Previously Obtained Permits. The agency may have to obtain some permits before contract award. Since they may require modifi- cation after contract award, the contractual documents must state clearly whether the agency or the Design-Builder will be in charge of preparing the related documentation. Utilize an Efficient Document Management System. Having an efficient document man- agement system is a critical issue on D-B projects. In particular, the system should be capable of interacting in a timely manner with all interested parties. For instance, when a design package

Design management under Design-Build 35 is submitted for review, everyone involved in the design package review should be promptly notified and given access to the submittal documents. Furthermore, the system should correctly track iterative versions of these documents and provide the latest version when required. Thus, the agency should require the Design-Builder to deploy a computer-based document manage- ment system and to share access to it with the agency. If the agency is using or planning to use D-B for future projects, it could develop a customized computer-based document management system that can be used for any D-B project. It could then require Design-Builders to use this system, and require their personnel to attend formal training sessions on it. Regardless of the type of document management system used, both the agency and the Design-Builder should assign one person to manage the system and act as a reference contact. Support the Design-Builder in Performing Post-Award VE. Although the agency will benefit more from including innovations prior to contract award, it should encourage the Design- Builder to propose innovations after contract award, allocate resources to support these efforts, and be willing to share the cost savings with the Design-Builder. Partner with the Design-Builder on Typical High-Impact Issues. Some types of projects can be significantly delayed by typical and recurrent issues, such as procuring items with long lead times, such as steel bridge bearings; or certain permits/authorizations. Generally, agencies do not retain the risks associated with such issues. Yet, a major delay in the delivery of a facility affects the public. Thus, agencies should approach the design review process with these issues in mind, providing comments to the Design-Builder to minimize them. C: Short Case Studies This subsection synopsizes a set of case studies on DM under D-B. Readers are encouraged to use these synopses to select DM approaches most appropriate to their respective organizations and projects. For readers seeking more detail on the selected approaches to DM, the appendices provide full case study narratives of the case studies. Program Case Studies Design-Build Program Case Study No. 1: Maryland State Highway Administration Since the successful completion of its first D-B project in 1998, the Maryland SHA has built almost 40 highway and bridge projects using the system. DOT Organization. SHA’s D-B projects all come under the purview of the Innovative Contracting Division. The Office of Highway Development (OHD) takes the lead in the procure- ment (pre-award) phase. The most important aspect of this process is its total transparency, a challenge for SHA because they involve neither a member of the contractor nor design profes- sional community in the selection of the Design-Builder. Between award and the completion of design, the regional district, through its Construction Office, shares responsibility with OHD, before taking the lead after design. This arrangement creates two PMs throughout the contract administration process (see Figure 3). Since D-B projects are let lump sum, the contractor is paid monthly. This was difficult to accomplish until the SHA went to a unit price-like system, creating 30 major pay items that include all project tasks, and paying each item, based on percent completed during the month. Collaborative Partnering. Partnering is one of the chief methods adopted for communi- cating internally on post-award design matters. Initially, Partnering Meetings are held monthly.

36 Guide for Design management on Design-Build and Construction manager/General Contractor Projects Every key stakeholder is invited and, initially, most attend. These include county personnel, the DP, SHA Environmental personnel, the contractor, the SHA project team, SHA design personnel, and the SHA Community Liaison. The meetings were typically led by the SHA Project Engineer. Often, specific design issues are discussed immediately after the Partnering Meeting, so non- interested parties can leave. Quality Management Plan. To ensure design package quality and compliance with contrac- tual requirements, the agency requires the Design-Builder to develop a comprehensive quality program, submitted for approval after contract award. The SHA is responsible for design quality control and ensures that the design quality plan is being followed. Design Reviews. The Design-Builder submits plans to the SHA Design and Construction sections. The Construction Section sees that all stake- holders receive the plans to review, but the final funding decision lies with the Design Section. Stakeholders have two weeks for review. Their input comes to the Lead Design PM, who compiles all comments into letter form and submits the letter, along with a set of marked-up plans to the Design-Builder. This process is controversial among contractors, designers and even SHA personnel. Most of the controversy revolves around bridge design reviewers. Many such reviews reject a design, or return plans with a long list of required changes, even though the design meets all RFP requirements. Designers that complain are told that they (the designers) have worked with the SHA long enough to know that the SHA prefers certain things and that the designers should change their designs to meet those preferences. Designers almost always comply, stating a preference to work with SHA in the future. Other Forms of Communication and Coordination. In addition to participating in the design reviews, the agency and the Design-Builder can communicate during: informal face-to- face meetings, electronic communications and phone calls; progress meetings to review and discuss the status of the project; weekly design management meetings; and task force meetings (i.e., meetings held when specific issues have to be solved). Figure 3. Schematic of project leadership throughout the project lifecycle. Partnering Meetings and Progress Meetings are often combined once the project matures and parties get to know each other. Once this happens, design issues are discussed more frequently.

Design management under Design-Build 37 Value Engineering. The contract does not have a VE clause. If Design-Builders identify ways to save money within requirements, they retain the savings. Environmental Permits. All environmental permits are handled in the same way as DBB projects. NEPA requirements are handled by the SHA; others are by the Design-Builder, including Erosion Control, and other permitting processes. The SHA tries to procure all environmental permits except Erosion Control and Storm Water Management before issuing the RFP. Design-Builders who make a change invalidating an acquired permit must modify and re-procure the permit. The Maryland Department of the Environment (MDE) process is perceived to be slower than it needs to be, requiring a higher degree of coordination between SHA and MDE. Right-of-Way. ROW activities are conducted by the SHA and acquisition begins at 30% completion. The RFP is issued immediately after ROW is acquired. Design-Build Program Case Study No. 2: North Carolina Department of Transportation Since letting its first D-B project in 1999, the North Carolina Department of Transportation (NCDOT) has let almost 90 highway and bridge projects using the D-B system. DOT Organization. By statute, NCDOT can sign a contract only with entities capable of providing the typical construction bonds and insurances. Generally, contractors provide those bonds and insurances while design consultants cannot. Thus, NCDOT “is forced” to sign the contract with a contractor that, in turn, subcontracts out the design to a design consultant. The D-B Group is part of the Transportation Program Management section. Figure 4 shows how responsibilities change during the project lifecycle between a design PM and a construction PM. Between award and the completion of design, the regional district, through its Construction Office, shares responsibility, before taking the lead after design completion. This arrangement creates two PM throughout the contract administration process who share responsibilities after contract award. Figure 4. Schematic of project leadership throughout the project lifecycle.

38 Guide for Design management on Design-Build and Construction manager/General Contractor Projects Collaborative Partnering. All projects adopt a partnering process. The frequency of the partnering meetings is left to the discretion of the regional district handling the project. Quality Management Plan. The D-B team submits no design quality management plan. NCDOT uses its own plan, and is responsible for design quality control and ensuring that its design quality plan is followed. Design Reviews. The design PM receives a hard-copy package with color-coded trans- mitted sheets used to stand out on somebody’s desk and stakeholders have 10 days to turn them around. Expediting begins with a phone call if they have not returned the package within eight days. NCDOT has become adept at turning plans around in a short period of time as well as at encouraging the D-B team to be innovative. In fact, the in-house Design office reports that they are at a distinct disadvantage when designing DBB projects, compared to a D-B team. In-house designers, that also review the D-B plans, say they could design DBB projects with as much innovation as D-B teams do, except for two elements. One is that they (the NCDOT designers of a DBB project) lack the contractor’s practical knowledge of the best way to build something and whether something could be built the way it was designed. But the main advantage over the NCDOT DBB design team is that each contractor has personnel with a unique set of knowledge, skills and capabilities. They also have a unique set of equipment, implements and materials sources, and can therefore generate a design best utilizing the unique abilities of the contractor doing the work. NCDOT fears that if the state’s DBB design team created a project design both innovative and prescriptive, contractors lacking the ability to pros- ecute the work in the most efficient way given the design could see themselves at a competitive disadvantage and file legal claims against NCDOT, contending the department was favoring the contractor(s) that possessed the personnel and equipment to build the project the way it was designed. Other Forms of Communication and Coordination. In addition to participating in the design reviews, the agency and the Design-Builder can communicate during bi-weekly/monthly progress meetings and ad hoc meetings. Value Engineering. VE is allowed in the post-award phase. The main steps in the VE process are: • NCDOT invites bidders to clearly state in their proposal what innovations were incorporated into their proposal and what innovations were considered but not incorporated. The agency evaluates only the incorporated innovations during the selection process. Therefore, bidders may prefer to avoid incorporating some innovations (e.g., more expensive innovations) to avoid jeopardizing their chances of being selected; • NCDOT also invites the bidders to price a few alternative items (e.g., different aesthetic rails on a bridge) that may or may not be included in the project. However, just one of the alter- native items is considered during selection; • After bidder selection, the agency evaluates the not incorporated innovations and the alter- native items previously priced, and decides about incorporating them in the project; • If the VE process results in savings, the savings are evenly split between the agency and the D-B team. Environmental Permits. Two situations are possible: • If NCDOT obtains all the permits before contract award, the D-B team is responsible for obtaining any additional permit due to changes in the design; or, • If NCDOT obtains only a few permits (e.g., NEPA) before contract award, the D-B team is responsible for obtaining all the other necessary permits.

Design management under Design-Build 39 Right-of-Way. Two situations are possible: • If NCDOT acquires the properties before contract award, the D-B team is responsible for purchasing additional ROW due to design changes; or, • If NCDOT does not acquire any property before contract award, the D-B team is responsible for the ROW process (i.e., the D-B team hires a ROW firm that performs appraisal, negotiation, etc.). However, the actual purchase price is paid by the agency. Benefits of Innovation. One of the criteria NCDOT uses to select D-B Projects is the opportunity for innovation. Depending on the project, the weight assigned to the innovation criteria varies, but typically ranges between five and ten points, out of 100 available points. Additionally, the maximum Quality Credit percentage used to determine the “best value” D-B Team may also be influenced by a project’s opportunity for innovation. For example, complex projects offering a lot of opportunity for innovation typically have a maximum Quality Credit percentage between 25%–30%, while projects with little opportunity for innovation or flexibility typically have a maximum Quality Credit percentage of 15% or lower. Furthermore, D-B Projects with limited opportunity for innovation and a narrow scope of work are procured as Express D-B Projects not requiring a Technical Proposal submittal. One example of a project team that took full advantage of the opportunity to innovate was the D-B team working on the I-485 Interchange project in Mecklenburg County. This project entailed the construction of a new interstate-to-interstate interchange between I-85 and I-485. The successful D-B team submitted a price proposal in the amount of $92,162,250, approximately 26% below the Engineer’s Estimate, and committed to a final completion date approximately four months prior to the department’s required final completion date. The selected D-B team received the highest overall technical score partially due to its conversion of a four-level stacked interchange to a two-level turbine interchange. This change eliminated approximately 2 million cubic yards of borrow and an I-85 detour required to hang steel during construction of a four-level interchange. The turbine interchange lowered the roadway embankment heights by approximately 40 feet, minimizing the potential closures during icy conditions that might be required for a four-level interchange. The resulting cost savings was approximately $30 million. Additionally, while the turbine interchange increased the number of bridges approximately three-fold, the smaller simpler bridges reduced future maintenance and widening costs. Design-Build Program Case Study No. 3: Utah Department of Transportation Starting with the successful implementation of design-build (D-B) for the I-15 Corridor Reconstruction project (1996–2001; $1.6B), design-build has been institutionalized and exten- sively used by UDOT. This case describes the programmatic effort of UDOT in implementing D-B for highway projects. In addition to analyzing UDOT documentation about the program, four D-B projects were analyzed: (1) Pioneer Crossing, Lehi—15 American Fork Interchange (2008–10; $175M); (2) SR-154 Bangerter at 7800 S, 7000 S, and 6200 S (2010–12; $40M); (3) I-15 at 11400 South Interchange (2008–11; $245M); and (4) I-15 South Layton Interchange (2009–11, $95M). DOT Organization. UDOT created the Office of Innovative Contracting and Project Controls to lead the implementation of innovative project delivery methods by developing guidelines and supporting the agency’s staff during the procurement and contract execution phases. UDOT developed several documents describing the procedure for implementing D-B from the beginning of the process to the issue of the RFP. Among the development steps, UDOT provides guidelines on how to assemble the project team. First, UDOT indicates that the project The successful D-B team submit- ted a price proposal approximately 26% below . . . (e)stimate, and committed to a . . . completion date . . . four months prior to the department’s required final com- pletion date.

40 Guide for Design management on Design-Build and Construction manager/General Contractor Projects team should be consistent throughout the whole D-B process. Second, UDOT requires the project team to be led by a UDOT employee acting as Project Manager (PM). The State of Utah has four administrative regions, each managed by a regional office overseeing the administration, construction, and maintenance of the highway infrastructure in its region. The PM is generally selected from among regional office personnel in charge of the project. Third, the PM has to be supported by a team capable of managing the different technical areas of the projects. Team members can be from the UDOT central office (e.g., Innovative Contracting); UDOT regional offices (e.g., design and construction staff); or external consultants. Fourth, UDOT requires a dedicated project team for large projects. Collaborative Partnering. UDOT strongly believes in building an effec- tive formal partnering relationship with Design-Builders. For instance, UDOT suggests “experience with formal partnering activities” as a selection criterion for potential parties to a D-B contract. The agency specifies two main strate- gies to obtain an effective relationship such as co-location and adoption of a formal partnering process that is organized, implemented, and managed by the Design-Builder. Quality Management Plan. To ensure design package quality and compliance with contrac- tual document requirements, the agency requires the Design-Builder development of a compre- hensive quality program to be detailed in a Quality Management Plan (QMP). Design-Builders must submit this for approval after contract award and UDOT lists several requirements for the development of the QMP in the contractual documents. Design Reviews. UDOT implements different types of design reviews such as Interim Over- sight, Milestone, Release for Construction, and Completed Design Reviews. Figure 5 shows when these reviews occur during the design development process. Interim Oversight Reviews can take place at any level of design (of a design package). They can be requested either by the Design- Builder or the agency. Although these reviews are usually conducted using a less formal over–the- shoulder approach, they may follow a formal process. Milestone reviews are required at 30% and 60% design complete. The Release for Construction Reviews are performed at the end of design package development. The Completed Design Review is performed when the design of the entire project is complete. Regardless of the type of review, revisions and comments provided by agency personnel may also contain constructability considerations. Other Forms of Communication and Coordination. In addition to design reviews, the agency and the Design-Builder can communicate during: informal face-to-face meetings, electronic communications, and phone calls; progress meetings to review and discuss the status Figure 5. Design reviews during design development. DESIGN DEVELOPMENT 30% Milestone Review Design Package Completed Interim Oversight Reviews Interim Oversight Reviews Interim Oversight Reviews 60% Milestone Review 0% Release-for- Construcon Review Project Design Completed Completed Design Review UDOT likes “experience with formal partnering” as a selection criterion for Design-Builders.

Design management under Design-Build 41 of the project; weekly design management meetings; and, task force meetings (i.e., meetings held when specific issues have to be solved). Value Engineering. Alternative Technical Concepts are accepted in the pre-award phase, while Value Engineering Change Proposals are accepted in the post-award phase. Environmental Permits. UDOT is responsible for obtaining the environmental permits for permanent construction elements, such as Environmental Studies and Stream Alteration Per- mits. Design-Builders may be required to provide this information. If the agency is in charge of a permit related to tasks and/or activities under the Design-Builder’s responsibility, the Design- Builder must prepare the necessary permit application documents and submit them to the agency for approval. Right-of-Way. UDOT is responsible for managing right-of-way procedures during the pre- and post-award phase. If possible (e.g., small projects), the agency identifies and purchases all the properties prior to contract award. Project Case Studies Design-Build Project Case Study No. 1: Bundle 401/ODOT Bundle 401 was one of the bundles awarded during the delivery of the OTIA III State Bridge Delivery Program. This bundle consisted of five replace- ment concrete bridges on Oregon Route 38 between Elkton and Drain. Oregon Route 38, also known as Umpqua Highway No. 45, is a state highway connect- ing the city of Reedsport on the Pacific coast with Interstate 5. The total bundle cost was $46,390,721. The Notice to Proceed (NTP) for D-B procurement was issued in November 2005 and the project was completed in June 2009. DOT Organization. To implement the bridge delivery program, ODOT substantially changed its project delivery approach in terms of internal orga- nization and use of in-house vs. external consultant personnel. First, ODOT created a new department, called the Bridge Delivery Unit (BDU), with 22 staff members to oversee program delivery. Several external consultants were then hired as the Bridge Standing Implementation Team. Finally, ODOT selected OBDP, a private joint venture, to manage the program as owner representative. Project Delivery Process. ODOT and OBDP collaborated to develop a comprehensive pro- gram project delivery toolbox that included DBB, D-B, and CM/GC. Further, ODOT developed a D-B project delivery process consisting of a series of steps (Figure 6). The agency determined that OBDP had to support ODOT in developing procurement documents, but could not participate in the selection process or execute a contract. However, once a NTP was issued, OBDP would take over as the project manager while being closely supported by ODOT. Collaborative Partnering. OBDP closely collaborated with all program stakeholders. In the early stages of the program, OBDP held numerous alignment meetings with the BDU, ODOT regional offices staff members, and all other program stakeholders. Further, OBDP co-located with the BDU during the program. However, ODOT and OBDP could not co-locate with the Design-Builders because several projects were performed simultaneously. Thus, ODOT and OBDP agreed to a project kick-off meeting with each Design-Builder. Amount of Design Provided in the Request for Proposal. Before issuing the RFP for a bundle, the agency prepared an engineering baselines report for each bridge, to identify and mitigate ODOT collaborated with state and federal agencies to develop a programmatic environmental permitting process, based on a set of environmental performance standards.

42 Guide for Design management on Design-Build and Construction manager/General Contractor Projects major risk areas, such as environmental permits, right-of-way (ROW), utility relocation, and railroad interferences. These were available to the bidders together with additional information such as reports about the current bridge structure. Further, the agency provided supplementary information on the RFP, such as the available ROW, specifications, geotechnical information, and LADAR data. However, no conceptual design was provided. Design Milestones. The agency required the Design-Builder to prepare the following design milestones for each design package: (1) Concept Plans (i.e., plans submitted by the Design- Builder and the results of contractual negotiations); (2) Definitive Design (i.e., preliminary design at less than 30% design complete); (3) Interim Design (i.e., 30% and 60% design complete); (4) Readiness-for-Construction; (5) Working Plans (e.g., erections details; plans for shop fabri- cation); and (6) As-Constructed. Design Review. The Design-Builder had to develop a schedule of all the design milestone submittals (except concepts plans). ODOT also required a review at each milestone according to the following steps. First, a checker (i.e., a peer of the DP or originator of the document) verifies that plans and specifications are correct and complete. Second, the Design Quality Manager verifies that plans and specifications are correct and complete; and certifies that plans and speci- fications meet contractual requirements. Third, after receiving the design package and the Design Quality Manager certifications, the agency Project Manager, supported by OBDP staff and other stakeholders interested in the package, performs the design package review. Fourth, the Design- Builder addresses the comments in the Review Comment Form and incorporates them in the design package. Value Engineering. Alternate Technical Concepts (ATCs) were allowed in the pre-award phase and Cost-Reduction Proposals in the post-award phase. Although ODOT authorized the proposers to include approved ATCs in their proposals, ODOT retained the right to disclose any approved ATCs to all the bidders before contract award. This approach may have hindered contractor-induced innovation during procurement as none of the proposers submitted an ATC. Environmental Permits. Given that hundreds of bridges were to be replaced under the OTIA III Bridge Replacement Program, ODOT collaborated with state and federal agencies to Figure 6. Role of ODOT bridge delivery unit, OBDP, and ODOT during D-B Steps and project lifecycle. 1. B un dl e D ev el op m en t 2. D at a Co lle ct io n / Co nc ep t D es ig n 3. R eq ue st fo r Q ua lif ic at io ns / D ra ft R FP 4. R eq ue st fo r P ro po sa l 5. D es ig n- Bu ild F ir m Pr op os al P re pa ra tio n 6. S co ri ng a nd S el ec tio n of D es ig n- Bu ild T ea m 7. C on tr ac t N eg ot ia tio ns an d A w ar d 8. P ro gr es s 0% -5 0% 9. P ro gr es s 50 % -1 00 % 10 . P ro je ct C lo se ou t DESIGN-BUILD STEPS ROLE Support Lead ODOT OBDP ODOT-BDU ODOT-BDU OBDP ODOT Procurement OperationsDesign & Construction PROJECT LIFECYCLE

Design management under Design-Build 43 develop a programmatic environmental permitting process. This process was based on a set of environmental performance standards. Right-of-Way. If ODOT acquires the properties before contract award, the D-B team is responsible to purchase any additional ROW due to changes in the design; or, if ODOT does not acquire any property before contract award, the D-B team is in charge of the ROW process (i.e., the D-B team hires a ROW firm that performs appraisal, negotiation, etc.). However, the actual purchase price is paid by the agency. Design-Build Project Case Study No. 2: I-15 Core/UDOT In 2004, UDOT initiated the process to expand I-15 in Utah County. In March 2008, the Legislature authorized funding for the project and directed UDOT to complete the project scope and assemble a management team. Due to the 2008 financial crisis, the Legislature lowered the budget from $2.63 billion to $1.73 billion. The legislature also mandated that UDOT reconstruct I-15 from American Fork Main Street to Provo Center Street (roughly 15 miles). To meet these requirements, UDOT selected D-B as the project delivery method and fixed price/best design as its procurement approach. The agency established the contract value, challenging proposers to submit a design providing the highest value, while meeting the schedule deadline and minimiz- ing inconveniences for the public. The fixed price/best design procurement approach proved extremely successful. The selected Design-Builder proposed to reconstruct 24 miles of the cor- ridor, whereas the agency only expected reconstruction of 15. Construction operations began in April 2010 and concluded December 2012, 2 years ahead of schedule. DOT Organization. Project Delivery Team leaders were selected from UDOT and con- sultants’ personnel. Per the agency’s procedures, an Executive Steering Committee was also appointed. This committee made the major project decisions, such as the procurement charac- teristics, and oversaw the project delivery team, while providing general oversight. The commit- tee included the UDOT Executive Director, Deputy Executive Director, Region 3 Director, and the Operations and Project Development Director. Furthermore, the team was supported by the agency’s central office and Region 3 office staff. Collaborative Partnering. UDOT implemented two main strategies to foster successful project delivery, facilitate timely completion, allow effective col- laboration and communication among project participants, and to minimize and solve problems. First, UDOT and the Design-Builder’s staff co-located. Second, UDOT required a formal partnering process involving all project stakeholders. The contract mandated periodic follow-up seminars/workshops during the project. The cost associated with partnering, agreed to by both parties, did not affect the contract amount, and was shared equally between the two parties. Quality Management Plan. Per agency procedures, UDOT required the Design-Builder to collect all the quality program procedures in a QMP. Furthermore, UDOT required the Design- Builder to submit the QMP for approval in two stages: Stage 1 for all non-construction-related activities; and, after Stage 1 approval, Stage 2 for all construction-related activities. Quality Oversight (QO). UDOT performed QO during the project to ensure Design-Builder compliance with QMP and additional requirements, and to identify areas of improvement. The QO staff performed audits, reviews, interviews, inspections, and tests. Design Reviews. The Design-Builder determined design review frequency, timing, con- tent, and format; and performed four reviews for each design package, at 30%, 60%, and 90%, Construction began in April 2010 and concluded December 2012, two years ahead of schedule.

44 Guide for Design management on Design-Build and Construction manager/General Contractor Projects and release for construction. Although UDOT did not review all design packages, the contract required that the agency be invited to a minimum of two separate reviews for each package; the reviews had to occur prior to issuing construction documents; and, at least one review had to be performed prior to 70% design completion. Table 5 shows the UDOT Design Submittal Require- ments. However, these submittals did not need agency approval. Other Forms of Communication and Coordination. In addition to these reviews and activi- ties, the parties could communicate during: informal face-to-face meetings, weekly and monthly progress meetings, weekly technical work groups focused on a specific discipline, and area meetings to discuss issues pertaining to different locations. Value Engineering. ATCs were accepted in the pre-award phase, while Value Engineering Change Proposals were accepted in the post-award phase. Right-of-Way. UDOT was responsible for procuring necessary properties. To allow the pro- posers to design the facility and effectively develop the project schedule, the agency detailed the properties it was going to acquire based on the existing preliminary design, and provided a property acquisition schedule during the procurement phase. Moreover, UDOT allowed the proposers to identify additional properties through the ATC process. Design-Build Project Case Study No. 3: SR 99 Bored Tunnel Alternative/WSDOT The Alaskan Way Viaduct is a two-mile-long, double-deck, elevated section of State Road 99. Second in traffic volume to only I-5 in the state of Washington, the viaduct is a major north-south corridor through downtown Seattle carrying about 110,000 vehicles per day. In January of 2009, WSDOT, King County, and the City of Seattle agreed to replace the Viaduct with a single bored tunnel under downtown Seattle, the SR 99 Tunnel. The procurement process started in Situation and Layout Plans Provide Situation and Layout plan sheets for all bridges, box culverts, rigid frame drainage structures, retaining walls, and noise walls, in accordance with the Situation and Layout Checklist in Structures Design and Detailing Manual. Assign a structure number to each structure. Released for Construction Documents These shall constitute all documents issued for the purposes of construction. All Released for Construction Documents shall meet the following requirements: Design all Work, including modifications to the Work, under the direct supervision of a Professional Engineer with a current Utah license. Indicate the timing of submission of these documents in the Project Schedules. Prepare plans similar in appearance to the UDOT Plan Sheet (Development) Standards and Structures Design and Detailing Manual. Prepare specifications in accordance with the UDOT Specification Writer’s Guide. Variations are anticipated as a result of D-B delivery. Meet with the Department to obtain Approval of any variations in plan content and format. Final Design Documents These shall meet the requirements of the Released for Construction Documents and the following additional requirements: Fully completed Released for Construction Documents, except for necessary field design changes, for a geographic area organized by discipline. Include design information from the most current version of Released for Construction Documents and all design back-up information, including design plans, shop drawings, calculations, reports, specifications, and electronic MicroStation data. As-Built Documents These shall meet the requirements of the Final Design Documents and reflect the actual condition of the final constructed Work. Table 5. Sample of UDOT design submittals requirements provided in the contractual documentation.

Design management under Design-Build 45 October 2009. In December 2010 WSDOT awarded the contract to build the SR 99 Bored Tunnel Alternative for over $1.089 billion. WSDOT awarded the contract before obtaining a Record of Decision (ROD). Since DOTs cannot approve any final design and construction activities before obtaining an ROD, WSDOT issued a first NTP for the preliminary design while waiting for the ROD. After obtaining the document in August 2011, the agency issued a second NTP for the final design and construction. Construction activities started at the end of 2011 and are expected to finish by the end of 2015. DOT Organization. WSDOT established a PM Team consisting of a Design Engineer, who is the leader of the design phase, a Geotechnical and Utility Engineer, an Environmental Manager, a Tunnel Construction Engineer, a Contract Administrator, and a Program Manager. WSDOT also hired numer- ous external consultants to compensate for a lack of in-house expertise on tunnel construction. Therefore, while all team members except the Program Manager are WSDOT employees, only 50% of the support staff are such. To mitigate numerous risks, WSDOT also utilizes a Strategic Technical Advisory Team (STAT). This team is technically oriented and consists of experts in fields such as PM, geology and geotechnical engineering, construction, tunnel engineering, law, and risk and organizational management. They supported development of the RFP and procurement and selection activities. Their support continues during design review and construc- tion through oversight of and support on technical challenges related to the tunnel and project construction. In 2011, the state legislature required that an expert review panel be convened to conduct extensive reviews of the project, including examination of overall management, risk management, budget and contingency plans, availability of financial resources, stakeholder and partner agency relationships and interfaces, and mitigation of public and political issues. This panel consists of three members with expertise in mega-project management, underground construction and risk management, and large project financing. Collaborative Partnering. To foster successful project completion, minimize issues and disputes among project participants, and better manage risks, WSDOT relies on collaborative relationships among project participants. In particular, the contract requires the parties to par- ticipate in a team building workshop conducted by a third party facilitator; coordinate respective roles, responsibilities and expertise; and foster open communications, non-adversarial interac- tions, and fair and transparent decision making and idea sharing. Design Review. Per contractual agreement, the Design-Builder had to prepare three submittals for each design package (see Table 6). Two review stages were conducted for each submittal: (1) a Design-Builder internal review; and (2) a review by WSDOT and other project stakeholders, WSDOT relies on collaborative relationships . . . (and) requires the parties to participate in a team- building workshop conducted by a third-party facilitator. . . . Submittal Description Design Definition Since WSDOT provides concept plans in the RFPs that are at most 30% design complete for the different design disciplines, the intent of this submittal is to ensure that all the design disciplines are 30% design complete to confirm that the initial design approach is consistent with the contract requirements. Preliminary Design The intent of this submittal is twofold. First, it supports the agency in completing the permitting process. Second, it allows project stakeholders (e.g., affected local governments and utilities) to ensure that the design is progressing appropriately; the plans follow the requirements; and there are no major issues within a discipline or between disciplines. Final Design This submittal consists of plans and specifications that are 100% design complete. After approval, the Ready for Construction (RFC) design package is prepared. Table 6. Design submittals.

46 Guide for Design management on Design-Build and Construction manager/General Contractor Projects including the City of Seattle. After the Design-Builder releases a design, WSDOT and its consultants review it. In particular, WSDOT established 14 task forces, which, at the time of the Case Study, had reviewed 777 submittals (i.e., 63 design definitions, 202 preliminary designs, 273 final designs, 173 release for construction packages, and 66 notices of design changes), consisting of an aver- age of 150 pages each. In addition, WSDOT reviewed 171 material submittals and construction procedures, and 800 Requests for Information (RFI). To allow WSDOT to effectively coordinate design reviews, the submittals were incorporated into the project schedule. Value Engineering. Proposers were encouraged to submit ATCs in the pre-award phase, while the selected Design-Builder could initiate change proposals in the post-award phase. Right-of-Way. WSDOT executed property acquisitions after receiving the ROD and, there- fore, after contract award. Thus, the agency retained the risks associated with their acquisitions. To allow the proposers to design the facility and effectively develop the project schedule, WSDOT provided to the proposers a property acquisition schedule during the procurement phase. This document was based on the preliminary design developed by the agency and detailed the intended property acquisitions and their timeframe. Moreover, WSDOT allowed the proposers to identify additional properties through the ATC process. In addition to the properties directly affected by the facility, the agency and the Design-Builder closely collaborated to obtain temporary easements necessary for construction activities. Furthermore, given the necessity to monitor any possible building foundation settlements precipitated by the tunnel construction, the agency and the Design-Builder had to obtain right-of-entry for the buildings above the tunnel in order to install the necessary monitoring instrumentation.

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TRB’s National Cooperative Highway Research Program (NCHRP) Report 787: Guide for Design Management on Design-Build and Construction Manager/General Contractor Projects presents guidance for transportation agencies on design management under construction manager/general contractor and design-build project delivery. The guidance includes case studies of projects successfully developed using these alternative procurement strategies.

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