Staffing for Alternative Contracting Methods (2018)

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23 Introduction This chapter presents current practices of staffing for ACM projects. To collect the most updated information on the use of ACMs and staffing for ACMs in transportation projects, a web-based survey was distributed to the voting members of the AASHTO Subcommittee on Construction, which includes representatives from all 50 state DOTs. The findings presented in this chapter are based on 46 state DOT respondents. In addition, the content analysis results of DOT manuals, guidelines, and relevant documents obtained from the survey are also included to support the findings. The chapter begins with reporting the general findings on the use of ACMs, including D-B, CM/GC, and P3 across state DOTs in the nation. It then discusses the current practice of staffing for ACMs. Finally, the chapter summarizes unique staffing issues and typical lessons learned on effective staffing practices for ACMs. It is impor- tant to note that the 46 state DOT respondents were not required to respond to all questions in the survey. As a result, the sample size (n) of each question varies. The following sections discuss the key findings from the survey in detail. General Findings on ACMs The authority to use ACMs varies among state DOTs. Out of 46 responses, most state DOTs (93%) reported that they have authority to use D-B; 21 state DOTs (46%) have authority to use P3; and 18 state DOTs (39%) have authority to use CM/GC. Three state DOTs from the survey do not have authority to use ACMs: Oklahoma, Iowa, and North Dakota. Figure 4 graphically illustrates the current authority to use ACMs in transportation projects. Overall, state DOTs have more experience on delivering D-B projects than CM/GC and P3 projects, as shown in Figure 5. Specifically, 21 state DOTs (54%) reported that they have delivered more than 15 D-B projects, while only two state DOTs (11%) have delivered more than 15 CM/GC projects. None of the state DOTs that responded to the survey have deliv- ered more than 15 P3 projects. Most DOT respondents have delivered fewer than five CM/GC and P3 projects: 56% and 63%, respectively. State DOTs often use ACMs for large projects. The survey results show that most state DOTs (more than 50%) have used ACMs less than 5% in terms of number of projects, but their ACM projects have accounted for more than 10% of dollar volume in their annual construction program. Figures 6 and 7 summarize the use of ACMs in the annual construc- tion program. C H A P T E R 3 Current Practices of Staffing for ACMs

24 Staffing for Alternative Contracting Methods 39% 46% 93% 0% 20% 40% 60% 80% 100% CM/GC P3 D-B Frequency mentioned Figure 4. State authority to use ACMs (n = 46). 15% 21% 10% 54%56% 28% 6% 11% 63% 31% 6% 0% 0% 20% 40% 60% 80% 100% 1 to 4 5 to 10 11 to 15 >15 Fr eq ue nc y m en tio ne d Number of Projects D-B (n=39) CM/GC (n=18) P3 (n=16) Figure 5. Number of projects delivered by ACMs. 29.70% 46% 13.50% 8.10% 0% 2.70% 0% 20% 40% 60% 80% 100% <1% 1% to 5% 5% to 10% 10% to 15% 15% to 20% >20% Fr eq ue nc y m en tio ne d ACMs to construction program in terms of number of projects Figure 6. ACM projects in annual construction program (n = 37).

Current Practices of Staffing for ACMs 25 Organizational Structure for ACMs Most state DOTs use a combined structure (e.g., centralized procurement and decentralized administration and execution) to deliver their ACM projects. As shown in Figure 8, 27 out of 38 DOT respondents (71%) reported that they use a combined structure for their D-B projects; 13 out of 18 respondents (72%) use a combined structure for their CM/GC projects; and six out of 15 respondents (47%) use a combined structure for their P3 projects. Only two state DOTs (Florida and Missouri) reported that they use a decentralized structure to deliver their ACM projects. MoDOT noted that although they use decentralized structure, they have one dedicated full-time staff working on the ACM program. The results of case examples presented in Chapter 4 will discuss the staffing issues for ACMs in these two state DOTs in detail. Figure 8 summarizes the use of organizational structure for each ACM (e.g., D-B, CM/GC, and P3). It is noted that state DOTs appear to use a centralized structure more frequently for P3 than D-B and CM/GC projects. Figure 9 displays a map of state DOTs across the nation regarding the use of organiza- tional structures to deliver ACM projects. 41.60% 30.50% 13.80% 0.00% 5.70% 8.40% 0% 20% 40% 60% 80% 100% <10% 10% to 20% 20% to 30% 30% to 40% 40% to 50% >50% Fr eq ue nc y m en tio ne d ACMs to construction program in terms of dollar volume Figure 7. ACM dollar volume in annual construction program (n = 37). 7% 47% 47% 11% 17% 72% 8% 21% 71% 0% 20% 40% 60% 80% 100% Decentralized Structure Centralized Structure Combined Structure Frequency mentioned D-B (n=37) CM/GC (n=18) P3 (n=15) Figure 8. Organizational structure for ACMs.

26 Staffing for Alternative Contracting Methods Figure 9. A map of organizational structure for ACMs. The survey results also found that 19 out of 39 state DOTs (49%) reported that they have separate units for management of ACMs. For example, the Vermont DOT has a separate unit in its finance and administration division dedicated to ACM projects. GDOT has the Office of Innovative Delivery (OID) dedicated to managing innovative programs in transportation projects deliv- ered through P3, D-B, and other alternative delivery methods. VDOT has the Alternative Project Delivery (APD) Division that is responsible for developing, advertising, and managing their D-B projects. VDOT also has the Office of Public-Private Partnerships (P3 Office) that is responsible for identifying, evaluating, developing, procuring, and delivering Virginia’s P3 transportation projects. ACM Staff Experience Among the three primary delivery methods of ACMs, state DOTs have been using D-B longer (more experience) than CM/GC and P3. More than 63% (24 out of 38) state DOTs A variety of organizational structures have been used successfully by DOTs to accommo- date ACMs, including various combinations of centralized and decentralized project devel- opment and execution, as well as outsourcing project development and/or program man- agement. The optimum ACM organizational structure depends on a DOT’s existing organi- zational structure, the number of ACM proj- ects per year to be implemented, and the ex- perience the DOT has in implementing ACMs. Typically, the organizational structure evolves as the DOT staff gains experience with ACMs. Independent of the organizational structure, two critical common elements are having an ACM champion and having staff trained who are familiar with ACMs. (CASE 2016)

Current Practices of Staffing for ACMs 27 have been using D-B for more than 10 years, while only 11% (2 out of 18) have been using CM/GC for more than 10 years and 29% (4 out of 14) have been using P3 for more than 10 years. None of 38 respondents have used D-B less than two years. Figure 10 shows the number of years that ACMs have been used in state DOTs. The survey results found that 32 out of 39 responding state DOTs (82%) reported that their staff have less than 15 average years of experience in ACMs. Only seven state DOTs (18%) have staff with more than 15 average years of experience in ACMs, but 23 state DOTs (62%) have staff with more than 15 average years of experience in general transportation con- struction (e.g., construction administration, estimating, and scheduling). None of the state DOTs have staff with more than 25 years of experience in ACMs on average. Figure 11 compares the staff average years of experience between ACMs and general transportation construction. 0% 13% 24% 63% 17% 44% 28% 11%14% 36% 21% 29% 0% 20% 40% 60% 80% 100% < 2 3 to 5 > 106 to 10 Fr eq ue nc y m en tio ne d Time (years) D-B (n=38) CM/GC (n=18) P3 (n=14) Figure 10. ACM implementation timeline. 38% 59% 3% 82% 18% 0% 0% 20% 40% 60% 80% 100% < 15 15 to 25 > 25 Fr eq ue nc y m en tio ne d Years General Construction Experience (n = 37) ACM Experience (n = 39) Figure 11. Average years of staff experience.

28 Staffing for Alternative Contracting Methods ACM Staffing Needs and Strategies The survey respondents were asked to answer whether their agencies have any strategic approaches to staffing needs for implementing ACMs. Out of 39 survey responses provided, 13 state DOTs (33%) reported that they have a strategic approach to ACM staffing (Figure 12). For example, the Indiana DOT uses a risk-based method of staffing for the various work items of D-B projects. The risk-based inspection protocol the Indiana DOT uses includes a list of pay items that are used to estimate inspection staff. CTDOT has started the process of forming an ACM group that will act as subject-matter experts and assist the members of the Design and Construction Units to deliver ACM projects. The Oregon DOT noted that they have a limited number of permanent staff with the required experience and expertise and therefore utilize outsourcing for program and project development and delivery on an as-needed basis. Some strategic approaches to ACM staffing from agencies with mature ACM programs are discussed briefly as follows: The Utah DOT noted that staffing of ACMs is typically a combination of internal and exter- nal resources. Program management staff is typically outsourced, but project management staff (e.g., the Project Manager) is typically internal. Quality management staff is mostly out- sourced, although some projects are internally done. Overall oversight of the ACM process is handled from a centralized group. The region where the project is located determines the staffing strategy. The North Carolina DOT highlighted that they have a specialized multidisciplinary group of about 12–15 engineers that handle all procurements, ATCs, and design reviews for all best value D-B projects. They have another small group of staff that is dedicated to procurement and design reviews for low-bid D-B, which is referred to as the Express Design–Build Program. This specialized multidisciplinary group is handling the procurement and design reviews for their first implemented P3 project. This group also would handle piloting other ACM proj- ects. The specialized multidisciplinary group serves as an incubator for ACMs. MoDOT explained their strategic approach as follows. For D-B projects, some specific author- ity of the Chief Engineer is granted to the Project Director. The Project Director acts as the proj- ect decision maker to expedite the decision-making process and create trust with the industry (contractor has confidence when a decision is made by the Project Director and that decision is final). The Project Director also helps to develop one team with the contractor. The core project 33% 67% Yes No Figure 12. Strategic approach to ACM staffing (n = 39).

Current Practices of Staffing for ACMs 29 team often includes five to 10 individuals that participate in the development of procurement documents, selection of the D-B contractor, and oversight of the work. Team members rep- resent the disciplines that are important to the project. To the extent possible, it is important for project team members to locate together and meet at least weekly to manage the delivery of the project. MoDOT’s project teams for ACMs must hold the following core values: (1) goal oriented, (2) flexible, (3) confidential, and (4) empowered. GDOT noted that the main responsibility of their ACM unit is an advisory role for suitabil- ity, procurement, technical concept development, procurement design/execution, and overall project management. Consultant services can be scaled up or down to augment staff and provide expertise when appropriate. GDOT also uses consultants to provide training and support to DOT staff to foster integration with department subject-matter experts. VDOT highlighted that they have two separate offices within the DOT: one for D-B and the other for P3. These central offices have staff highly qualified to develop, procure, and pro- vide support to districts for implementation of ACM projects. VDOT also has a wide variety of professional and nonprofessional consultants available for 5-year periods for “horsepower” on projects needing documentation or technical and financial analyses. The survey respondents were asked to indicate the role of various staff in the typical phases of ACM projects. Table 4 summarizes the results of this question. The staff in the central office were found to be mostly involved in the procurement phase (92%) followed by the scoping phase (66%), and then the environmental phase (57%), while least involved in the construction phase (24%). The staff in district offices were found to be almost equally involved in all phases of ACM projects except for the procurement phase (29%). The staff in the project office were found to be heavily involved in the construction phase (59%) and the project closeout phase (61%). Table 4 also indicates that the consultant staff are typically involved in the design phase (73%), construction phase (57%), and environmental phase (51%). Consultants are less involved in the scoping, procurement, and closeout phase of ACM projects. To compare the staffing needs between ACM and traditional D-B-B projects, state DOTs were asked to rate the overall staffing requirement for D-B-B versus each primary ACM (e.g., D-B, CM/GC, and P3). One can observe from Figure 13 that 26 out of 36 state DOTs (72%) believe that D-B has less staff or no difference in comparison with D-B-B. Only 7 out of 36 state DOTs (16%) believe that D-B would need more staff than D-B-B. For CM/GC, most state DOTs (15 out of 17 or 88%) believe that CM/GC has no difference or needs more staff than D-B-B. For P3, the trend in staffing needs is not clear. Eight out of 19 state DOTs (42%) believe that P3 projects would need less staff than D-B-B projects; five out of 19 state DOTs (28%) believe that P3 would have no difference or need more staff than D-B-B; and six state DOTs out of 19 (32%) stated that they do not know if a difference exists. Phases District Office Agency Staff Central Office Agency Staff Project Office Agency Staff Consultant Staff Scoping 65.7% 47.3% 26.4% 31.6% Environment 56.7% 40.6% 16.3% 51.4% Procurement 92.0% 28.9% 28.9% 34.2% Design 48.6% 46.2% 37.8% 73.0% Construction 24.4% 51.5% 59.4% 56.8% Closeout 36.8% 55.3% 60.5% 36.8% Table 4. ACM staffing needs across project development phases (n = 37).

30 Staffing for Alternative Contracting Methods When delivering ACM projects under the circumstance of staff shortfall due to workload peaks, the use of consultants is the most common strategy, with a response of 92% (35 out of 38). In addition, 23 out of 38 state DOTs (60%) reported that they place existing staff on overtime, and 22 out of 38 state DOTs (58%) temporarily assign staff from other business units to deliver ACMs. Figure 14 summarizes the typical strategies that state DOTs use to address staff shortfalls in delivering ACM projects. ACM Staffing at Project Closeout The survey results indicated that most state DOTs believe that there is no difference in staffing needs during the project closeout phase between ACM and traditional D-B-B projects. Specifically, Figure 15 shows that 21 out of 37 state DOTs (57%) reported no difference; 9 state DOTs (24%) believe that ACM requires less staff during the project closeout phase than D-B-B; however, 5 state DOTs (14%) believe that ACM requires more staff during the project closeout phase than D-B-B. 39% 19% 33% 8% 0% 41% 47% 12% 42% 16% 11% 32% 0% 20% 40% 60% 80% 100% Less Staff More Staff No Difference Don't Know Fr eq ue nc y m en tio ne d D-B (n=36) CM/GC (n=17) P3 (n=19) Figure 13. ACM vs. D-B-B staff requirements. 3% 3% 8% 18% 21% 58% 60% 92% 0% 20% 40% 60% 80% 100% Other Reduce Inspection Requirements Assign Non-Construction Personnel to Construction Duties Use Risk-based/Statistical Inspection Methods Hire Additional Staff Temporary Reassignments of Staff from Other Business Units Place Existing Staff on Overtime Outsource to Consultant Staff Frequency mentioned Figure 14. Strategies to address staff shortfall in ACMs (n = 38).

Current Practices of Staffing for ACMs 31 The respondents were asked to explain the staffing issues related to the closeout phase of ACM projects. The typical findings are summarized as follows: • The California, Maine, Idaho, Michigan, North Carolina, and Utah DOTs noted that while the process of closing out ACM and D-B-B projects is different, they have not experienced any particular staffing issues with ACM projects. • The Connecticut, Florida, and South Carolina DOTs indicated that the closing-out activities of ACM and D-B-B projects are similar. The main staffing issues for ACM projects involve transferring warranties to appropriate parties (e.g., subcontractors) and receipt of accurate and timely as-built drawings from the contractors/D-B teams. The Ohio DOT noted that additional staff is needed for verifying as-built drawings, material certifications, and Dis- advantaged Business Enterprise (DBE) monitoring. • MoDOT noted that the closeout phase was a challenge for their first 10 projects because of their project partners and staff leaving for other jobs. Their current approach to the ACM project closeout phase is to have two or three key staff from the agency working with their partner. VDOT also has knowledgeable staff working the project closeout phase for ACMs. The Oregon DOT uses consultants due to legislative staffing level constraints. • GDOT highlighted that understanding of the project’s unique Quality Management Plan is important for ACM projects. It is essential for staff to have strong sense of what is fair between the contracting entity and actual contract terms. Good judgment is needed at ACM project closeout because contract language is generally customized and, as such, can be ambiguous. ACM Staff Skill Sets To determine the skill sets that are critical to the success of implementing ACMs, state DOT representatives were asked to identify five out of 25 knowledge domain and skill sets based on their own experience and knowledge. Tables 5, 6, and 7 summarize the top 10 knowledge domain and skill sets that are critical to successful implementation of D-B, CM/GC, and P3, respectively. One can observe from Tables 5, 6, and 7 that the six knowledge domain and skill sets that are critical across all three main delivery methods of ACMs are: • Leadership and ability to coordinate other staff, • Risk identification and analysis skills, 24% 14% 57% 5% 0% 20% 40% 60% 80% 100% Less Staff More Staff No Difference Don't know Fr eq ue nc y m en tio ne d Figure 15. ACM vs. D-B-B project close-out staff requirements (n = 37).

32 Staffing for Alternative Contracting Methods Rank Knowledge and Skill Sets Frequency n = 24 1 Leadership and ability to coordinate other staff 100% 2 Risk identification and analysis skills 96% 3 Strong partnering and team-building skills 83% 4 Knowledge of project delivery and procurement procedure 75% 5 Knowledge of construction contract administration 63% 6 Knowledge of highway materials and construction means and methods 46% 7 Understanding of project management principles 42% 8 Knowledge of quality assurance principles for ACMs 38% 9 Ability to analyze constructability reviews and project phasing 25% 10 Excellent written and oral communication skills 25% Table 5. Top 10 staffing skill sets for D-B. Rank Knowledge and Skill Sets Frequency n = 13 1 Leadership and ability to coordinate other staff 100% 2 Risk identification and analysis skills 100% 3 Strong partnering and team-building skills 77% 4 Knowledge of construction contract administration 46% 5 Understanding of project management principles 38% 6 Knowledge of project delivery and procurement procedure 38% 7 Ability to analyze constructability reviews and project phasing 31% 8 Knowledge of change management 23% 9 Strong background in the preconstruction process and planning 23% 10 Excellent written and oral communication skills 43% Table 6. Top 10 staffing skill sets for CM/GC. Rank Knowledge and Skill Sets Frequency n = 10 1 Leadership and ability to coordinate other staff 100% 2 Risk identification and analysis skills 90% 3 Knowledge of project delivery and procurement procedure 80% 4 Knowledge of construction contract administration 70% 5 Strong partnering and team-building skills 70% 6 Knowledge of quality assurance principles for ACMs 50% 7 Knowledge of finance, accounting, and cost management 40% 8 Ability to analyze constructability reviews and project phasing 30% 9 Understanding of federal and state environmental approvals 20% 10 Familiar with federal transportation project finance structuring 20% Table 7. Top 10 staffing skill sets for P3.

Current Practices of Staffing for ACMs 33 • Strong partnering and team-building skills, • Knowledge of project delivery and procurement procedure, • Ability to analyze constructability reviews and project phasing, and • Knowledge of construction contract administration. In addition to the knowledge and skill sets essential for the implementation of ACMs, state DOTs were asked to identify and rank the “soft” skills relative to the success of ACM proj- ects. The ranking scale varied from 1 through 5: 1 = Not Important; 2 = Slightly Important; 3 = Important; 4 = Very Important; and 5 = Extremely Important. Table 8 shows the results of the responses from the 34 state DOT representatives. Table 8 shows that the “strong commitment to successful outcomes” tied with “account- ability and trust” skills are ranked first; the “innovative problem solving attitude” tied with “flexibility and open to new concepts” skills are ranked second. The “responsible and reflective” and “diverse background” skills are ranked third and fourth, respectively. Use of Consultants for ACMs The survey result found that almost all state DOTs utilize consultants to implement their ACMs. Figure 16 indicates that 89% of 38 state DOTs that responded to this question have used consultants for D-B; 79% of 14 responding state DOTs have used consultants for CM/GC; and 94% of 16 responding state DOTs have used consultants for their P3 projects. As many state DOTs rely upon consultants to develop and manage ACM project activities or to cope up with staffing shortfalls, the respondents were asked whether their agencies have "Soft" Skills Scale Measure Weighted Average Rank 1 2 3 4 5 Strong commitment to successful outcomes 0 0 0 12 22 4.6 1 Accountability and trust 0 0 0 13 21 4.6 1 Innovative problem solving attitude 0 1 1 14 18 4.4 2 Flexibility and open to new concepts 0 0 3 13 18 4.4 2 Responsible and reflective 0 2 9 14 9 3.9 3 Diverse backgrounds 2 6 16 7 3 3.1 4 Table 8. Typical “soft” skills for ACM implementation (n = 34). 94% 6% 79% 21% 89% 11% 0% 20% 40% 60% 80% 100% Yes No Frequency mentioned D-B (n=38) CM/GC (n=14) P3 (n=16) Figure 16. Use of consultants for ACMs.

34 Staffing for Alternative Contracting Methods legal constraints placed on outsourcing of services. As Figure 17 summarizes, most state DOTs (25 out of 39 or 64%) reported that there are no legal constraints placed on the outsourcing of services for which they have the capacity to perform in-house. Figure 17 shows that eight state DOTs (21%) indicated that they have legal constraints on outsourcing. For example, MoDOT noted that they are required to perform a fiscal review and demonstrate the inadequate internal resources prior to any external contract. To use consultants for ACM services, the review also must show that performing the service with in-house staff is not feasible or less cost effective than outsourcing the service. The Massachu- setts DOT pointed out that their Collective Bargaining Agreement requires the state agency to demonstrate that expertise is not available in-house before outsourcing services. Similarly, Caltrans echoed that some work cannot be outsourced unless it can be shown that there are inadequate resources available within the civil service. The North Carolina DOT reported that a certain amount of preconstruction planning and design work must be outsourced as mandated by current law. However, the calculation of this amount is complex and varies project by project. The survey results presented in Figure 18 indicated that the two main factors that state DOTs consider in making the outsourcing decision involve the lack of in-house staff availability (94%) 16% 21% 64% 0% 20% 40% 60% 80% 100% Don't Know Yes No Frequency mentioned Figure 17. Legal constraints on outsourcing (n = 39). 21% 94% 74% 12% 0% 20% 40% 60% 80% 100% Others Lack of Availability of In-House Staff Lack of Qualifications of In-House Staff Cost Savings Frequency mentioned Figure 18. Factors influencing ACM outsourcing decision (n = 34).

Current Practices of Staffing for ACMs 35 and the lack of in-house staff qualification (74%). Only 4 stated DOTs (12%) reported the cost saving of using consultants in ACM projects. Additionally, some state DOTs noted they have used consultants for different reasons. For example, the North Carolina DOT pointed out that they use consultants to assist on commercial and legal items on their P3 projects and General Engineering Consultants (GECs) to assist as needed for D-B projects. MoDOT mentioned they utilize consultants to support specific disci- plines that are needed (survey, utilities, and traffic) for D-B projects. GDOT indicated that the magnitude of their ACM program is increasing, whereas experienced in-house staffing level is decreasing. Thus, in order to provide expected responsiveness with scalable resources, GDOT uses consultants when necessary. Figure 19 summarizes the typical outsourcing activities in ACM projects. The top three activi- ties that consultants do to help agencies staff ACM projects include (1) preliminary engineering design, (2) development of RFQ/RFP and contract document, and (3) environmental reviews and document preparation. Among these typical activities presented in Figure 19, some state DOTs noted that they use consultants for other activities. For example, North Carolina indi- cated that consultants typically serve as supplemental staff for D-B projects and as commercial and legal advisors for P3 projects. Among other activities, GDOT uses consultants in ACMs for specialized estimating, cost forecasting, and strategic project planning. ACM Staff Training Training is a key programmatic tool to transfer knowledge, lessons learned, and essential skills to DOT staff for implementation of ACMs. Out of 39 valid responses, 27 state DOTs (69%) reported that they provide ACM training for their staff. In addition to project-specific training, state DOTs often provide agency-wide training on ACMs to their staff. Figure 20 shows typical types of training related to ACMs. 18% 24% 33% 44% 44% 50% 56% 68% 85% 88% 0% 20% 40% 60% 80% 100% Other ACM Assessment and Selection Providing ACM Training to Agency Staff Developing ACM Practices and Documents Project Management in Procurement Technical Proposal Assessment Project Management in Construction Environmental Reviews and Document Preparation RFP/RFQ and Contract Development Preliminary Engineering Design Frequency mentioned Figure 19. Outsourcing activities in ACMs (n = 34).

36 Staffing for Alternative Contracting Methods Some state DOTs use other approaches to ACM training. For example, GDOT uses their alternative contracting in-house staff to conduct one- or two-hour workshops to train other offices in fostering acceptance of ACMs. The training often involves select individuals who have successfully managed ACM projects to promote broader ACM “buy-in” and to focus mission activities for the ACM Unit. Additionally, the AHTD highlighted: Each individual assigned to the procurement, evaluation, or monitoring during the Procurement Pro- cess should be required to attend training. . . . The training should educate individuals on their respective roles and responsibilities as developers and evaluators and review procedures for each phase of the D-B Procurement. . . . The Department should develop a training curriculum that is available to all individuals prior to their involvement in the Procurement Process, preferably prior to the issuance of the RFQ. . . . As part of the training, the primary risk elements should be discussed as well as how the Procurement Team has allocated and attempted to mitigate the Project risks, which will be important to fully understand during the evaluation of the SOQ and Proposals. (AHTD 2015) CTDOT mentioned that they developed ACM programs and provided training to certain general groups as well as all design and construction units working on ACM projects. Junior staff working ACM projects in CTDOT are encouraged to access all available training to both build in-house capabilities and promote organizational culture change. CASE (2016) found conduct- ing joint training plays an important role in the development of ACM programs in Connecticut. Training creates a “neutral environment” where both internal staff and industry members can voice their concerns in a setting where there is no turf to defend and no perceived consequences for speaking out against the proposed changes. (CASE 2016) State DOTs with mature ACMs have typically instituted some type of formal training pro- gram. For example, the Colorado, Ohio, and Virginia DOTs have developed D-B training mod- ules that address project development, procurement and contracts, and post-award contract administration. Similarly, the Florida DOT conducts training for district and project engineers on specific D-B topics each year through their D-B Task Force. Some state DOTs noted that they have used peer-to-peer information exchanges (e.g., participation in FHWA, DBIA, or AASHTO forums) as a training process to promote ACMs. Scott et al. (2016) highlighted that it would be helpful to develop a formal training program on fundamental ACM principles affecting pro- curement, contracting, and project execution. It is important to develop a training program that is not generic, but specific to how ACM projects are developed and delivered to articulate and reinforce the DOT’s current policies and procedures. 22.20% 37% 44.40% 51.80% 0% 20% 40% 60% 80% 100% Others Project-Specific Training for Every Project Agency-Wide Training Project-Specific Training for Some Projects Frequency mentioned Figure 20. Types of ACM training (n = 27).

Current Practices of Staffing for ACMs 37 Quality Management Staff for ACMs The Code of Federal Regulation (CFR), Title 23, CFR, Part 637 requires state highway agen- cies to establish a Quality Assurance (QA) Program. For D-B projects, the CFR includes three additional provisions to the QA program as follows: • Reliance on a combination of contract provisions and acceptance methods; • Reliance on quality control (QC) sampling and testing as part of the acceptance decision, provided that adequate verification of the design–builder’s QC sampling and testing is per- formed to ensure that the design–builder is providing the quality of materials and construc- tion required by the contract documents; and • Contractual provisions that require the operation of the completed facility for a specific time period. The final report of NCHRP 20-07/Task 349, “Guidelines for Developing Materials Acceptance Plans for Alternative Contracting Methods,” found that although current materials acceptance practices for ACMs vary widely from state to state, greater responsibility and control for quality management and materials performance is often shifted to industry (Jones et al. 2016). Table 9 summarizes the results of the survey regarding quality management staff for ACM proj- ects. One can observe from Table 9 that agency staff are primarily involved in most of the QC and QA tasks in ACM projects. Two tasks that agency staff are less involved in are the quality control testing and establishment of horizontal and vertical control. More than 50% of 36 DOT respon- dents reported that the agency’s consultant staff typically involve the following QC and QA tasks: • Technical review of construction shop drawings, • Report of nonconforming work or punch list, • Checking of pay quantities, • Routine construction inspection, and • Approval of construction post-award QA/QC. QA/QC Tasks Agency Staff Designer's Consultant Staff Contractor's Construction Staff Contractor's Consultant Staff Agency's Consultant Staff Approval of construction post-award QA/QC 94.4% 8.3% 11.1% 94.4% 50% Testing verification 72.2% 2.7% 22.2% 27.7% 47.2% Independent assurance testing/inspection 88.9% 0% 2.8% 19.4% 38.8% Approval of progress payments for construction progress 97.2% 2.8% 2.8% 94.4% 36.1% Technical review of construction shop drawings 78.4% 46% 35.1% 51.4% 56.8% Technical review of construction material submittals 86.5% 10.8% 37.8% 43.2% 46% Report of nonconforming work or punch list 83.4% 13.9% 36.1% 38.9% 58.3% Checking of pay quantities 88.9% 2.8% 38.8% 19.4% 55.5% Routine construction inspection 83.4% 2.8% 41.7% 33.3% 63.9% QC testing 43.24% 0% 65% 54% 32.4% Establishment of horizontal and vertical control 33.4% 11.1% 83% 55.6% 19.4% Table 9. Quality management staff for ACMs (n = 36).

38 Staffing for Alternative Contracting Methods Similarly, more than 50% of 36 DOT respondents reported that a contractor or contractor’s consultant staff typically perform the following QC and QA tasks in ACM projects: • Approval of construction post-award QA/QC, • Technical review of construction shop drawings, • QC testing, and • Establishment of horizontal and vertical control. Table 9 also indicates that the contractor or contractor’s consultant staff are often involved in the QC and QA tasks listed below (approximately 40%): • Technical review of construction material submittals, • Report of nonconforming work or punch list, • Checking of pay quantities, and • Routine construction inspection. ACM Staffing Issues and Lessons Learned The survey aimed at seeking information on unique staffing issues and lessons learned on the implementation of ACMs. The typical staffing practices and issues associated with each primary ACM (i.e., D-B, CM/GC, and P3) are synthesized as follows: The typical staffing practices and issues provided by DOT survey participants pertaining to D-B are as follows: • Having self-motivated and goal-oriented staff, less dependent on the D-B process but more dependent on how to achieve primary goals of a project, is important for D-B. • Additional staff time is required during the procurement phase (e.g., developing RFQ/RFP, contract documents, and evaluation and selection processes). However, it is difficult to have staff ready when submittals/proposals come in. This often requires dedicating specific staff for the submittals/proposals. • It is challenging to find staff that have both a strong technical background and excel in the art of procurement documents. Not everyone is the right fit for D-B. • The rapid pace in D-B can result in personnel “burnout.” • The specific mindset for D-B is not easily transferred between D-B-B and D-B cultures. Excep- tional team players are required. • Experienced project manager and construction resident engineer personnel are required, and it can be problematic if experienced staff has left the agency. • Staff needs to be able to work with subject-matter experts within the agency not only to get prompt responses to submittals, but also to foster relationships within the agency on the D-B fundamentals that help open channels for innovation in regular programs and current/future D-B programs. • Training is important because specialized skill sets and innovative thinking have not fre- quently been taught in engineering programs or other related transportation professions. The typical staffing practices and issues provided by DOT survey participants pertaining to CM/GC are as follows: • Preconstruction phase staffing is key to success. Construction staff needs to take part in the preconstruction phase. Need staff that understand how contractors bid/price/schedule jobs during the negotiation of GMP. • While the number of staff may remain the same, the number of working hours for each staff is typically higher due to the interactions with the CM. • Need staff who understand bottom-up cost estimating for an effective cost reconciliation process.

Current Practices of Staffing for ACMs 39 • Need an excellent Project Manager who is able to manage the designer and contractor (e.g., holding the CM/GC responsible for suggestions that are made throughout the design phase). • Need staff with certain skill sets for CM/GC including estimating final construction cost. • Additional staff time required for developing procurement and contract documents. The typical staffing practices and issues provided by DOT survey participants pertaining to P3 are as follows: • Need staff with the ability to manage consultants and understand project risk profile. • Staff are often required to preserve proper decorum in engaging private partners at various stages of procurement and contract execution. • P3 may be highly expensive to pursue, so the agency needs to have empowered high-level individuals to provide thoughtful answers to proposers’ ideas without jeopardizing integrity of procurement, undermining of agency concerns, or creating poor perception of agency engagement on innovative ideas. • Several state DOTs noted that most of staffing issues in D-B would apply to P3, but they have not yet reached to the D-B level of experience. The typical lessons learned on ACM staffing practices are summarized as follows: • The key is to identify qualified staff: strong and experienced project personnel is needed for ACM projects. They have to have the ability to think outside the D-B-B world and understand the differences between the various methods. ACM is usually a foreign concept, and some can be resistant to change. Staff must have the ability to make decisions for the good of the project rather than be legalistic. • Having staff with flexible and responsive skill sets to the fast pace is essential for ACMs. Dedi- cated staff to facilitate the ACM process is critical. • Staff have the ability to foster partnerships and discourage adversarial relationships, promote paradigm shift toward beneficial concepts, and be decisive and calm amid enormous pressure and expectations. Respect for others’ perspectives is important. Creating the change that is needed to be successful is a key success trait. • It is important to have parties involved with the project to be on board at the very start and fol- low the project throughout the procurement. The staff needs to remain open to the contract- ing process and able to keep personal preferences out of the contract. The Project Manager is key through all phases of ACM projects. • It can be a challenge to attract individuals to a high-paced, intensive, and a unique work environment that ACMs introduce. In addition, the ACM program must be mature enough to ensure that there is always ample workload to keep these experienced and qualified staff interested. • Having a dedicated project team with leadership experience complementary of each other is critical to the success of ACMs. For example, the team can include the Project Director and the Deputy Project Director having different disciplines (construction and design). This team also has support staff of Project Engineers (generally 3–5) dedicated to the project. • Having staff with the knowledge and background to understand the contract quality management plan, roles, and responsibilities with material testing is important for ACM projects. ACMs often require the same number of field staff as to similarly sized D-B-B projects. • It is important to have available qualified staff to appropriately manage consultants in ACMs. • Training plays a pivotal role in the implementation of ACMs. Training programs that are spe- cifically designed to articulate and reinforce the department’s current policies and procedures on ACMs prove successful.

40 Staffing for Alternative Contracting Methods Summary This chapter describes the current practices of ACM staffing through the analyzing responses of 46 DOTs to the national survey distributed to 50 state DOTs. The chapter first presents gen- eral findings on the use of ACMs, such as ACM state authority, the use of procurement methods in conjunction with three main ACM methods, and the volume of ACM projects in the con- struction program. Next, the chapter discusses the survey results of staffing issues and needs for ACMs in detail. This includes the use of organizational structures for ACMs, staff experience and training, ACM staffing needs and strategies, use of consultants for ACMs, and quality manage- ment staff for ACMs. Finally, the chapter explains unique staffing issues related to implement- ing each primary ACM, including D-B, CM/GC, and P3. Key lessons learned on ACM staffing practices are synthesized at the conclusion of this chapter.