Staffing for Alternative Contracting Methods (2018)

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41 Introduction This chapter builds on the findings from the literature review and the survey of the current practice in ACM staffing presented in the previous chapters. The main objective of this chapter is to document the case examples and practices related to staffing issues and needs from the trans- portation agencies that have experience in delivering ACM projects and programs. After explain- ing the selection of agencies for the case examples, this chapter provides readers with details to understand how DOTs develop and prepare for staffing levels to deliver their ACM projects. Selection of Case Examples The data from the national survey and literature review were used to select the state DOTs appropriate for further study. The research team used the following selection criteria: • Types of organizational structure; • Years of experience with ACMs, including D-B, CM/GC, and P3; • Number of ACM projects delivered; • Comprehensiveness and availability of ACM documents; and • Willingness of agency personnel to participate in the study, as determined by the survey responses. Based on these criteria, the research team initially selected 11 DOTs across the U.S. as case example candidates for this study. The research team solicited each DOT in person, by phone, and e-mail to inquire about participation in a case example regarding ACM staffing practices. Participation involved conducting a structured interview with a detailed questionnaire provided in advance, collecting ACM documents related to staffing practices, and reviewing the final analysis for accuracy. As presented in Chapter 3, most state DOTs use a combined organizational structure to deliver their ACM projects. The research team intended to include different types of DOT orga- nizational structure (centralized, decentralized, and combined) in the case examples. As a result, the following eight DOTs were finally selected and agreed to participate in this study: California, Florida, Georgia, Minnesota, Missouri, North Carolina, Ohio, and Virginia. Table 10 summarizes these eight agency case examples along with the organizational structure and ACM available for delivering transportation projects. The following sections present the details of each case example. A structured interview proto- col was used during discussions and data collection. Each DOT was interviewed using the same list of questions. The general categories for the questions are as follows: • General information and ACMs, • Organizational structure, C H A P T E R 4 Case Examples of Staffing for ACMs

42 Staffing for Alternative Contracting Methods • ACM staffing issues and needs, • ACM skill sets and training, and • Lessons learned. Appendix C provides the complete list of protocol questions. This chapter presents the find- ings in the same general order as the protocol for each case example. California Department of Transportation General Information and ACMs The California Department of Transportation (Caltrans) is responsible for maintaining 50,000 lane-miles of highway and roadways, including 24,000 bridges. Caltrans has more than 18,500 employees in its 12 districts and the Caltrans headquarters. With respect to staffing ACM project delivery, Caltrans’s distinguishing feature is its unionized professional engineering work- force and its history of performing nearly all design services using internal design assets. That characteristic prevented Caltrans from gaining the legislative authority to employ ACMs until 2009, when it gained enabling legislation for a D-B “demonstration” program and an unlimited number of P3 projects. It received authorization to use CM/GC in 2012. Currently, the legislative authority for P3 expired in January 2017 and is under consideration for reauthorization in the current legislative session. Lastly, the ability to cover personnel resource shortfalls by outsourc- ing work to private industry is severely constrained for Caltrans by statute. It is noted that the architectural and engineering (A&E) resources are constrained by the annual budget. Generally, Caltrans receives 10% out of the full-time equivalents (FTEs) as consultant resources. The state constitution limits the ability to contract out services typically provided by civil servants unless Caltrans can demonstrate that the resources are not available in state services or the work is specialized. Given the above discussion, implementing ACMs in California has been an extremely politi- cized process. However, Caltrans has persevered and, to their great credit, now possesses one of the nation’s most complete sets of internal ACM implementation policy and procedure docu- mentation, as well as one of the nation’s most rigorous ACM project performance measurement systems. An example is the department’s development of an ACM called “design sequencing” (DS), which is a means to accelerate project delivery using D-B-B and in-house design. This approach is a hybrid of the delivery method known as D-B-B Multi-Prime (Dongo et al. 2014). Caltrans initiated its DS project performance program while simultaneously measuring the per- formance of a parallel set of similar D-B-B “shadow” projects. The result is a nearly perfect State DOT ACMs Available Organizational Structure California D-B, CM/GC, P3 Combined Florida D-B, CM/GC, P3 Decentralized Georgia D-B, P3 Centralized Minnesota D-B, CM/GC Combined Missouri D-B, ATCs Decentralized North Carolina D-B, P3 Centralized Ohio D-B, P3 Combined Virginia D-B, P3 Combined Table 10. Summary of agency case examples.

Case Examples of Staffing for ACMs 43 “apples to apples” comparison of the impact of the new ACM. The outcome was that the depart- ment was able to make substantive recommendations regarding the value for money achieved by ACMs, providing factual information to its legislative initiative to expand its procurement toolbox by adding D-B, CM/GC, and P3. It is noted that the agency conducting a similar analysis on the 10 D-B demonstration program projects. The program is nearing completion, and the Caltrans interviewee indicated that when most of the D-B projects are closed out that the analy- sis will be undertaken. Organizational Structure Caltrans is one of the largest state DOTs in the U.S. and operates with a combined organi- zation structure consisting of 12 geographical areas called districts that have decision-making power for design, communications, and public engagement. California is also divided into 18 Metropolitan Planning Organizations (MPO) and Regional Transportation Planning Agen- cies (RTPAs). Caltrans must interface with these public agency stakeholders on a continuous basis on virtually all of its projects and often acts as the construction agent for MPOs and RTPAs for projects that are funded using local sources. Hence, its combined structure provides a means for keeping local public entities involved and satisfying the need to collaborate regarding the integration of local transportation objectives into the statewide program. It also creates a local base of institutional knowledge from which to address environmental issues, another conten- tious political issue affecting project delivery in California. Staffing Issues and Needs Each district within Caltrans functions as a self-contained unit of government, providing trans- portation engineering, construction, operations, and maintenance services within its assigned geographical area. Each ACM project has a designated ACM liaison for facilitating the develop- ment of the project. The Caltrans Headquarters (HQ) Division of Design includes the Office of Innovative Design and Delivery (OIDD), whose role is to furnish the necessary expertise and guidance to district ACM project development teams (PDTs), ensuring statewide continuity of ACM practices, procedures, and performance measurement. OIDD is staffed as follows: • Office Chief, • Three innovative contracting engineers, and • One value analysis engineer. The Caltrans ACM project selection process starts at the district where projects are submit- ted to OIDD as part of a formal nominating process. OIDD personnel then evaluate the pool of nominated projects and prepare a justification document for each project, which is then pre- sented to an HQ Innovative Contracting Steering Committee that has the authority to approve ACM delivery. Once the projects are approved, they are returned to OIDD for procurement. OIDD works with the district to complete the procurement. Once procured, OIDD turns the project back to each district. The district’s PDT, which may include MPO/RTPA personnel, then delivers the project with OIDD innovative contracting engineers providing assistance and oversight as required. ACM Skill sets and Training Caltrans has found that PDTs must be carefully staffed with people that are open to changing the way projects are routinely delivered. The major hurdle in D-B has been the transition from in-house design to oversight of the design–builder’s design consultant team. This culture shift was made marginally easier by the D-B ATC process. Skeptical Caltrans design personnel were

44 Staffing for Alternative Contracting Methods impressed with the creativity and innovation displayed in the many ATCs proffered during the D-B demonstration program, which were eventually credited with reducing the cost of the pro- gram by nearly 17%. Caltrans attempts to staff ACM projects with engineers that have excellent people skills as well as an understanding of changes in project management procedures found on their ACM projects. Caltrans does not hire outside consultants to augment their ACM PDTs. Before implementing the D-B demonstration program, Caltrans invested in an extensive D-B training program provided by the American Society of Civil Engineers in the following topics: • Pre-award D-B (16 hours): – Planning, – Preliminary engineering, – RFQ and RFP development, – Proposal evaluation, – ATCs, and – Procurement and award. • Post-award D-B (16 hours): – Partnering, – Design administration, – Construction administration, and – Quality assurance. • Executive-level DB (4 hours): – Caltrans D-B policy and procedures, – Upper management roles and responsibilities, and – Overview of D-B project performance measurement plan. The pre-award and post-award training was provided to Caltrans project teams and other technical and legal staff, as well as MPO/RTPA personnel for each of the 10 D-B demonstration projects. The primary value of this extensive training program was that it prepared management and staff for a different delivery method. In addition, training has prepared staff for the mind shift necessary to work on a D-B project as well as just understanding the delivery mechanism. The Caltrans interviewee indicated that there was some benefit in regard to standardization, but this was a minor benefit as they did not obtain the expected level of standardization. Caltrans is now developing a D-B guidance document to help obtain the standardization. An abbreviated version of the training was provided to Caltrans’ first CM/GC PDT by the Iowa State University research team as part of the NCHRP Project 10-85 AASHTO CM/GC Guidelines vetting process and was judged to be equally valuable. It must be noted that Caltrans implements CM/GC with in-house design personnel, who must now coordinate with the CM/GC contractor during the design phase. Lessons Learned While relatively new to the ACM arena, Caltrans uses a combined organizational structure to deliver D-B, CM/GC, and P3 transportation projects as well as to employ ATCs on D-B and P3. Caltrans’s recent experience resulted in the following lessons learned in staffing for ACM projects, summarized as follows: • DOT personnel cannot be expected to successfully implement new project delivery methods without sufficient training and a baseline understanding of how the process will be altered from that found on traditional D-B-B projects. • The Caltrans model of central ACM project planning and decentralized project execution provides for a standardized process that can then be tailored to meet the specific needs of a given project’s geography and local context.

Case Examples of Staffing for ACMs 45 • Caltrans has found implementing CM/GC using in-house design assets to be a very effective method for providing early contractor involvement to achieve highly constructible designs. The recent San Francisco–Oakland Bay Bridge Marine Foundation Removal CM/GC project (Figure 21), which involved underwater demolition of a huge pier, was cited as being particu- larly successful in providing the Caltrans design staff with the means, methods, and technical constraints for this highly specialized endeavor. Florida Department of Transportation General Information and Alternative Contracting Methods The Florida Department of Transportation (FDOT) is responsible for maintaining 122,659 miles of highway and roadways, including 12,262 bridges. FDOT has more than 5,800 employees throughout the seven districts, the Florida Turnpike Enterprise (FTE, or sometimes referred to as District 8), and the FDOT headquarters. FDOT was one of the first state DOTs to adopt Design–Build (D-B) to deliver transporta- tion projects and began its first D-B project in 2000. Since that time, FDOT has completed over 470 D-B projects all across the state. In addition to using D-B and traditional con- tracting methods, FDOT has the authority to use Construction Manager/General Contractor (CM/GC) and Public-Private Partnerships (P3), though it has implemented fewer CM/GC and P3 projects compared to D-B. Currently, FDOT has 13 P3 projects completed or in the maintenance and operations phase, two P3 projects currently under construction, and one P3 project in procurement. For CM/GC, FDOT has used this delivery method for several trans- portation projects when early contractor involvement was needed, such as the Atlantic Boule- vard and SR5 Bascule Bridges projects in Broward County and the Sanibel Island bridges project east of Fort Myers (Figure 22). A main driver for FDOT to use ACMs in lieu of a traditional D-B-B method is the timing and ability to capture funding. Specifically, FDOT moves quickly as funding typically has restric- tions on when it is spent. When this happens, ACMs are the options for projects that are plan ready, but funding is not available. In addition, FDOT is flexible in determining the appropriate delivery method for a project. FDOT strives to determine the project delivery method as early as the beginning of the planning phase. However, the delivery decision can be changed as the project progresses based on project complexities, risk exposure for the department, funding, and feedback from industry partners (contractors and consultants). Figure 21. San Francisco–Oakland Bay Bridge Marine Foundation Removal CM/GC Project using underwater explosive implosion.

46 Staffing for Alternative Contracting Methods Organizational Structure FDOT is one of the largest state DOTs in the U.S. and operates as a decentralized organiza- tion, in which FDOT has seven geographical areas called districts along with the “District 8,” the FTE, that have decision-making power for design, communications, and public engagement. In addition, FDOT has designated 27 metropolitan planning organizations (MPOs). MPOs having a population of over 200,000 are designated as Transportation Management Areas (TMAs). FDOT works with the MPOs to develop transportation improvement programs within each MPO area as well as to assist with developing the long-range transportation plan, which are then included in the Florida Transportation Plan (FTP) that FDOT develops and updates regularly. However, MPOs within Florida do not handle the day-to-day management of trans- portation, as that is the responsibility of the associated FDOT districts. In general, FDOT’s decentralized structure allows for improvements in public involvement and satisfaction as well as a better ability to address local environmental and social issues. In discussion with personnel from District 4, FDOT’s central headquarters develops the poli- cies and procedures that each district uses to guide their work. Although the district office would lead the procurement and management efforts for an ACM project, the headquarters works with the districts to create the request for proposal (RFP), develop the process for alternative techni- cal concepts (ATCs), and address any other aspects of procurement related to using ACMs (e.g., qualifications, technical aspects, etc.). At the district level, the received proposals are reviewed using at least two employees from the production side and two employees from the operations side. For the construction phase of ACM projects, FDOT includes staff with specific expertise and the districts lead the efforts to build the project. Staffing Issues and Needs With the decentralized organization structure, each district within FDOT operates as their own regional transportation agency that focuses on a specific geographical area of the state. In terms of ACM projects, none of the districts have a dedicated office for implementing D-B, P3, or CM/GC for a project. It is a common practice that FDOT staff are trained in different ACMs so they are allowed to grow and experience various methods of delivery for transportation proj- ects. As a result, although there is no specific ACM office or division within a district, employees Figure 22. Sanibel Island bridges project.

Case Examples of Staffing for ACMs 47 are coached to be flexible and understand the process and procedure of using ACMs in addition to traditional D-B-B methods. As a typical setup, each ACM project team has a technical evaluation committee, the core support staff, and technical and project experts, all of which are FDOT employees or agency owner’s representative consultant employees. The technical committee is often composed of design project managers, construction project managers, and specialty personnel selected based on the type of job. For example, a Class 2 bridge structure was a major part of the scope of work for a project in District 2. For this particular D-B project, a structural bridge engineer was appointed to the technical committee because this area of expertise was needed for the project. The core support staff includes individuals from the district such as the district construction engineer, the district design engineer, the district materials/geotechnical engineer, and the district bridge/ structural engineer. The core group participates in the procurement process, all Q&A meetings and sessions, and the ATC process throughout the project for consistency. From a QA/QC perspective, FDOT noted that construction QA does not vary too much between traditional D-B-B and ACM projects. Specific rules and policies dictate materials testing rather than the delivery method. However, for design quality assurance, FDOT acknowledges that the design review process is an area that FDOT may not have enough staffing or resources for ACM projects, depending on workload. FDOT design and construction project managers and engineers may not have time to perform thorough design reviews. To address this issue, FDOT has supplemented staffing by using an owner’s representative consultant to assist and sometimes lead the design review process. Regarding the use of consultants in ACM projects, FDOT asserted that they utilize consul- tants to supplement staff that FDOT does not have for an ACM project. Typically, FDOT has an external owner’s representative firm that essentially becomes a part of FDOT for the project. As for construction engineering and inspections (CEI), FDOT commonly hires an external CEI firm, which is then required to work together with the owner’s representative consultant and the ACM construction team throughout the project. Using consultants allows FDOT to oversee the process and rely on the consultants to do the heavy lifting. During the procurement phase of an ACM project, FDOT noted that it is common that FDOT staff participate in many meetings and sessions, such as the interviews with D-B firms, Q&A sessions, and public outreach meetings. Additionally, if ATCs are used, then more meetings and reviews are needed. All of these meetings and sessions, along with daily responsibilities is time consuming for FDOT staff. As a result, work is often redistributed internally to meet the demands of ACM projects, which stretches FDOT’s human resources to the limit. Currently, FDOT tries to remedy this situation by embedding consultants to supplement the staff needed for the peaks in work for ACM projects. This strategy seems to work since many consultants FDOT uses are former FDOT employees who are familiar with the FDOT system. Another concerning trend with FDOT’s ACM staffing is losing experienced staff to private firms. It is common for the private sector in construction firms to offer significantly higher pay than government-instituted salaries. Thus, FDOT staff with lesser experience and knowledge find ample opportunities to work on and handle ACM projects. This situation puts additional pressure on the experienced FDOT project managers, engineers, and supervisors, as FDOT relies more on these individuals for the complex and high-risk ACM projects. Another aspect of this situation is that FDOT relies more on the owner’s representative consultant, as mentioned above. ACM Skill Sets and Training Technical skills and relationship skills are key attributes that FDOT searches for when hiring personnel. FDOT ACM staff have leadership and communication skills along with a knowledge

48 Staffing for Alternative Contracting Methods and understanding of project management to work on ACM projects. For consultants, FDOT looks for skills that can support the efforts by the FDOT team. The FDOT representative noted that in addition to technical skills, it is essential for ACM projects to have staff with excellent communication and leadership skills. These skills will allow FDOT staff to interact appropriately with the many and various parties involved. However, FDOT realizes that not everyone has both technical and communication skills. In a situation where an FDOT individual is an expert in some aspect of a project but has subpar communication skills, FDOT will ensure that other individuals on the ACM team can work to communicate with the expert to relay the information to the rest of the team in an appropriate manner. No one person is responsible for an entire project; people with expertise on the project team comple- ment each other. However, due to a lack of personnel and increases in the volume of ACM proj- ect work, FDOT may not be able to assemble a team of people that can complement each other efficiently. In these cases, FDOT relies on consultants to provide the needed skill sets. For the ACM training, some of the FDOT districts train staff by assigning them to an ACM team to go through the process before becoming an official member of the ACM team. As a training member, FDOT will assign a mentor to the trainee. This process allows FDOT per- sonnel to experience an ACM project in real time prior to being an ACM technical evaluation team member. Additionally, FDOT offers computer-based training that FDOT staff have to complete in order to work on a D-B project. Along with the computer-based training, FDOT has often conducted annual D-B/P3 workshops with FDOT personnel and industry consul- tants and contractors. At the workshop, industry partners work with FDOT staff to discuss what is working and what needs improvement. The FDOT representatives mentioned that the workshops provide necessary skill sets for FDOT staff to manage ACM projects, and since the industry is ever changing, ongoing training such as the ACM workshop needs to be conducted on a regular basis. Furthermore, FDOT has developed a standing statewide task team for ACM projects, call the Alternative Contracting Task Team, which is composed of FDOT staff and construction indus- try professionals with extensive knowledge and experience with ACM projects. The Alternative Contracting Task Team meets several times throughout the year to discuss projects, lessons learned, and any other specific aspects of ACM projects such as incentives/disincentives, pro- curement changes, and quality management. Lessons Learned FDOT has established itself as one of the decentralized state DOT organizations delivering transportation ACM (D-B, CM/GC, and P3) projects. Based on FDOT’s experience with ACMs, the main lessons learned in staffing for ACM projects are summarized as follows: • FDOT relies heavily on the construction industry (contractors and consultants) to design and construct ACM projects. Specifically, FDOT works hard to establish and sustain relationships with its industry partners by keeping information open between FDOT and consultants and contractors, and by including the industry in training and outreach sessions for the use of ACMs. FDOT conducts an annual workshop with the industry to discuss the current situation of ACM projects. • Scope development is crucial for ACM projects because it determines the commitment that FDOT will make for the procurement process. The developed scope of work allows FDOT to begin considering who will be on the FDOT team for a project. When staff being considered for an ACM project are tied up with other responsibilities, FDOT management can move responsibilities around for staff that would meet the project needs while balancing their work- load to promote professional development.

Case Examples of Staffing for ACMs 49 • Since the design of an ACM project typically is performed by a third-party entity, the role of FDOT changes from developing the design to providing the commitments, parameters, constraints, and scope of the design so that the designer can capture what is required. FDOT learned that scope definition is vital to relay the expectations the department has for an ACM project. FDOT experimented with their specifications by varying the amount of prescriptive and performance specifications in the design and scope of the project so that the design and construction of an ACM project is performed to the level FDOT requires. Georgia Department of Transportation General Information and Alternative Contracting Methods The Georgia Department of Transportation (GDOT) is responsible for maintaining 18,000 lane-miles of highway and roadways, including 6,671 bridges. GDOT has more than 4,100 employees in its 7 districts and the GDOT headquarters. GDOT utilizes dedicated ACM staff, a program management consultant (PMC), and general engineering consultants (GECs) throughout the ACM pre-award and post-award stages. In GDOT, district construction person- nel perform the oversight duties during the actual construction of the ACM project. The depart- ment received formal legislative authorization for D-B in 2004. Since that date, it has awarded 30 D-B and 2 P3 projects totaling $800 million and $1.6 billion, respectively. GDOT does not have authority to utilize CM/GC, and it does not plan to seek the authority at this writing. GDOT has no constraints on its ability to outsource engineering to private-sector consultants and has a long-standing, robust outsourcing program (Castro-Nova et al. 2017). Organizational Structure GDOT is split geographically into seven districts that have decision-making power for design, construction, and public engagement. The GDOT ACM program is staffed to furnish centralized ACM project development and contract execution. Figure 23, the department’s “staff augmenta- tion model,” shows that GDOT has contracts with both a PMC and a GEC. ACM project right of way (ROW) and utility coordination are the responsibility of the GDOT HQ. However, it is not unusual for GDOT to assign both ROW acquisition and utility coordination to the design–builder or P3 developer. As result, the agency enjoys a great deal of flexibility in the pre-award stage, as well as the ability to accelerate project delivery by shifting two major schedule risks, ROW and utilities, from the pre-award to the post-award stage of the contract if it makes sense for the given project. Figure 23. GDOT staff augmentation model.

50 Staffing for Alternative Contracting Methods GDOT is embarking on a Major Mobility Improvement Program (MMIP), which may involve as much as $11 billion worth of ACM projects over the coming decade. To meet this requirement, the Office of Innovative Delivery (OID) recently awarded the PMC contract for consultant assistance managing the MMIP and providing oversight and direction to GECs that will be brought on board on a project-by-project basis. Figure 24 shows how the GDOT staff augmentation model has been expanded to handle the needs of the MMIP. A third consultant group, Construction Engineering and Inspection (CEI), is added and the PMC itself is split into a group responsible for D-B project development and delivery and a group responsible for P3 projects. Additionally, a separate GEC will be retained to take over ROW and utility duties for the program. Staffing Issues and Needs Each district within GDOT functions as a semi-autonomous representative of GDOT and is capable of providing most of the necessary engineering, construction, operations, and mainte- nance services within its assigned geographical area using internal assets. The GDOT OID role is to manage ACM project delivery from cradle (pre-project) to grave (closeout of construction). Since 2016, OID is also responsible for all construction management for its projects, whereas in prior years the district forces provided this function. OID is staffed as follows: • Director of P3/Program Delivery, • Assistant P3 Division Director/State Innovative Delivery Administrator, • P3 Administrator and Procurement Officer, • Innovative Contract Technician, • Two Senior Design Build Project Managers, • One Design–Build Project Manager, • Two Program Delivery Managers—Major Projects, and • One Deputy Program Manager—Major Projects. Figure 24. GDOT MMIP staff augmentation model.

Case Examples of Staffing for ACMs 51 The GDOT ACM project delivery method selection process is based on assessing the following project characteristics, at a minimum: • Ability of ACM to help achieve strategic benefit for GDOT on the project, • Accelerated schedule for public benefit and to support economic development, • Complexity of construction issues, • Opportunity to realize benefit from innovative designs and enhanced constructability, • Ability to integrate the contractor and the designer to optimize value for money, • Maximizing the use of available funding, • Suitability/risk assessment, • In-house staff resources to manage and deliver, and • Completion of a strengths, weaknesses, opportunities, threats (SWOT) analysis. Once the delivery method decision is made and approved by the Chief Engineer, the proj- ect technical development is scoped and tasked to a GEC, who then completes the necessary preliminary engineering due diligence, develops the technical scope of the solicitation docu- ments, and provides technical assistance during the procurement and award phase. The D-B Project Manager and PMC drive the procurement design and strategic goal setting (scope, bud- get, schedule, and specific context and/or finance-driven objectives) for the overall project that are incorporated into the procurement and delivery process. GDOT is required to have fund- ing authorized prior to execution of an ACM contract, which usually translates federally to an approved National Environmental Policy Act (NEPA) environmental document prior to award. However, GDOT uses available flexibility in 23 CFR Part 636, depending on whether NEPA is completed before RFP issuance or is scheduled after approval. GDOT is permitted to release the RFP prior to or after final NEPA approval, as long as federally compliant where federal funds are used. For state-funded ACM contracts, the environmental (NEPA) document must be approved prior to construction activities, but authorization of funding is not restricted by NEPA approval. For projects that utilize any variation of multiyear funding, including P3 or D-B, GDOT part- ners with the State Road and Tollway Authority (SRTA) by an intergovernmental agreement to accomplish the project. GDOT will often shift some of the environmental permit preparation responsibility to the design–builder or developer team and at times will require the winning proposer to acquire ROW (Gad et al. 2015). GDOT also has an active ACM project performance evaluation system that is based on a standard form comprising a comprehensive inventory and evaluation of all major aspects of the ACM procurement. The process specifically captures outcomes due to innovations brought by the design–builder, as well as value engineering results where appropriate. The OID has respon- sibility for collecting, analyzing, and publishing the performance evaluation of ACM projects, which are made public by being published on the GDOT website. OID promotes the transpar- ency provided by this post-construction evaluation, as it enhances ACM credibility in the public works political arena, which in turn has made it easier to implement new variations on ACMs that have a public track record of success. It also promotes market interest by sharing knowledge with entities that have not in the past but may now be interested in participating in future ACMs. ACM Skill Sets and Training GDOT’s staff augmentation model requires that the state employees are able to work well with its partners in project planning, procurement, design, and construction industries. Hence, it requires the ACM program managers to be able to conduct industry outreach activities as well as to know when outside expert assistance is required. GDOT’s PMCs are required to have substantial ACM complex mega-project experience. GDOT also requires their supporting GECs to have ACM complex mega-project experience. By requiring experience with complex project management, GDOT has successfully used consultants for their ACM projects.

52 Staffing for Alternative Contracting Methods GDOT has a well-developed set of ACM procedures and manuals, and its program manag- ers are charged with keeping those up to date based on recent experience. GDOT’s PMC for the MMIP will provide training to both GDOT and other consultant personnel in the application of complex project management leadership, processes, and tools, including the direct application of tools developed in the Strategic Highway Research Program (SHRP 2) R-10 project entitled Project Management Strategies for Complex Projects. GDOT was an early adopter of that SHRP2 product, successfully implementing it on the Northwest Corridor and the I-285/SR 400 Interchange D-B- Finance (P3) projects (Gransberg et al. 2013a). Lessons learned from those two projects have been captured and will be used to produce guidelines tailored specifically to the Georgia highway project environment and added to its already ample library of ACM guidelines, procedures, and manuals. Lessons Learned GDOT is one of the early adopters of alternative project delivery. GDOT’s recent experience resulted in the following lessons learned in staffing for ACM projects: • A champion who is also an ACM subject-matter expert is essential for successfully implement- ing ACM. • The GDOT model of central ACM project management and extensive use of outside consultants to furnish a robust programmatic approach to ACM projects has produced a streamlined, uniform methodology to accelerating the delivery of complex mega-projects using both D-B and P3 methods. • By committing to a robust training program for both in-house and outsourced ACM project delivery teams, GDOT has been able to institutionalize the lessons learned in its early ACM program and has codified those lessons in its ACM project delivery guidance documentation. • GDOT’s comprehensive ACM project performance evaluation program provides public trans- parency and enhances the department’s credibility with the political bodies from which it must gain permission and authorization to implement an aggressive ACM program like the MMIP. Minnesota Department of Transportation General Information and Alternative Contracting Methods The Minnesota Department of Transportation (MnDOT) is responsible for maintaining 33,000 lane-miles of highway and roadways, including 4,846 bridges. MnDOT has more than 4,800 employees in its 8 districts and the MnDOT headquarters. MnDOT utilizes dedicated ACM staff and general engineering consultants throughout the ACM pre-award stage and then hands the ACM project off to the appropriate district to execute the post-award ACM contract. The department was one of the first DOTs to employ D-B in 1996 with formal legislative autho- rization coming on board in 2001. Since that date, it has awarded 33 D-B projects. MnDOT received legislative authority to utilize CM/GC in 2012. It has no P3 authority at this writing. MnDOT also utilizes D-B-B–Best Value (DBB-BV) and Indefinite Delivery/Indefinite Quan- tity (IDIQ) contracts. Most of D-B–IDIQ contracts in MnDOT have been awarded for repeti- tive preventive maintenance work that has strong proprietary content such as traffic signals and ramp metering. D-B-B–BV and IDIQ projects are generally developed and awarded by the districts with oversight from a central office innovative delivery engineer whose responsibility is to ensure that the process is relatively uniform across the state. Organizational Structure The MnDOT ACM program is staffed to furnish centralized project development and decen- tralize ACM contract execution. MnDOT is split geographically into eight districts that have

Case Examples of Staffing for ACMs 53 decision-making power for design, construction, and public engagement. ACM project right of way (ROW) and utility coordination are the responsibility of the MnDOT HQ. However, it is not unusual for MnDOT to assign utility coordination to the design–builder or the CM/GC con- tractor. As a result, the agency enjoys a great deal of flexibility in the pre-award stage, as well as the ability to accelerate project delivery by shifting two major schedule risks, ROW and utilities, from the pre-award to the post-award stage of the contract if it makes sense for the given project. Staffing Issues and Needs Each district within MnDOT functions as a semi-autonomous agency and is capable of provid- ing most of the necessary engineering, construction, operations, and maintenance services within its assigned geographical area using internal assets. The MnDOT Office of Construction and Inno- vative Contracting includes the Innovative Contracting Director (ICD), whose role is to manage ACM project development up through award and furnish the necessary expertise and guidance to district ACM project delivery teams. Both D-B and CM/GC have been moved to the Office of Program Management to try to encourage earlier identification of projects utilizing ACMs. Upon award of an ACM project, the appropriate ACM program manager serves as the assistant project manager for the project. The Office of Innovative Contracting is staffed as follows: • Director, • Project Development Engineer responsible for IDIQ and D-B-B–BV, • D-B program manager (recently moved to the Office of Program Management), • CM/GC program manager (recently moved to the Office of Program Management), • D-B Bridge Engineer, and • Metro Alternative Delivery project manager for all ACM projects in the Metro District (Minneapolis/St. Paul metropolitan area). The MnDOT ACM project selection process starts with a half-day project delivery method selection meeting that uses the Colorado DOT’s delivery method selection matrix to determine the most appropriate ACM for the given project. The group evaluates the following elements of the project in question while making this decision: • Delivery schedule, • Design and staging complexity, • Cost and competition factors, and • Risk. Once the delivery method decision is made and approved by upper management, the project is turned over to a General Engineering Consultant (GEC), who then completes the necessary preliminary engineering, develops the solicitation documents, and provides assistance during the procurement and award phase. MnDOT currently has one GEC that covers D-B, CM/GC, and IDIQ projects if necessary. ACM Skill Sets and Training MnDOT is committed to maintaining a good relationship with its industry partners in both the design and construction industries. Hence, it requires the ACM program managers to be able to conduct industry outreach activities, as well as to know when outside expert assistance is required. It also requires supporting GECs to have ACM experience as a condition of employment. MnDOT has a well-developed set of ACM procedures and manuals and its program managers are charged with keeping those up to date based on recent experience. One notable aspect about the MnDOT ACM process is the fact that nearly all of its early D-B contract awards were protested. In every case MnDOT won the protest because of the consistent way it applies its published policies

54 Staffing for Alternative Contracting Methods and procedures. The most recent protest came on the emergency D-B project to replace the I-35W Bridge over the Mississippi River that unexpectedly collapsed in 2007 and is shown in Figure 25. The gist of the protest involved MnDOT’s D-B ATC procedures, which allowed the winning bid- der to change the baseline design criteria during procurement. The court ruled in MnDOT’s favor and, in doing so, confirmed the agency’s ability to take advantage of innovative ATCs that would not have been responsive if an ATC process had not been in effect (Lopez del Puerto et al. 2017). Before implementing its CM/GC program, MnDOT invested in an extensive risk analysis and year-long series of industry outreach meetings using its research program to procure academic experts to lead the effort (Schierholz et al. 2012). It took a similar approach to its IDIQ program, using the research and technology transfer program to conduct surveys of contractors, sureties, and MnDOT personnel regarding the concerns and constraints that needed to be addressed in the final program to ensure its success. In both cases, the research contracts served to provide training on the new ACMs to the MnDOT program managers as well as selected district person- nel (Rueda-Benavides and Gransberg 2016). Lessons Learned MnDOT is one of the early adopters of alternative project delivery. MnDOT’s recent experi- ence resulted in the following lessons learned in staffing for ACM projects: • A champion who is also an ACM subject-matter expert is essential for successfully implementing ACM. Figure 25. Collapsed and rebuilt MnDOT I-35W bridge.

Case Examples of Staffing for ACMs 55 • The MnDOT model of central ACM pre-award management and decentralized post-award project execution provides for a uniform process that is also responsive to local needs and preferences at the district level. • MnDOT has found conducting a rigorous industry outreach effort prior to implementing new ACMs pays dividends in the future success of each approach. Its model is to identify and address the concerns of its industry partners before requesting enabling legislation. Once those outreach efforts have identified the potential political roadblocks to gaining enabling legislation, the legislation is then drafted in a manner that provides a legal framework with which both MnDOT and its engineering and construction industry partners are comfortable. The proof of the efficacy of this approach can be seen in the unanimous approval of the Minnesota CM/GC legislation in 2012. • MnDOT’s comprehensive set of ACM policy and procedure manuals have created an environment that has permitted it to successfully defend itself against all protests on ACM projects. The success is primarily due to the fact that MnDOT’s BV selection system is transparent, its ACM solicitation documents describe exactly how it works, and MnDOT personnel follow it exactly as it is written. Missouri Department of Transportation General Information and Alternative Contracting Methods The Missouri Department of Transportation (MoDOT) plans, designs, constructs, and main- tains 33,873 miles of roadways, the seventh largest state highway system. MoDOT also has the responsibility of maintaining 10,394 bridges, including 53 major river crossings, which is more than any other state. MoDOT employs over 5,100 employees that work within one of the seven districts or the central office. Currently, MoDOT has the legislative authority to use D-B-B and D-B to deliver transporta- tion projects across the state. At the time of this writing, MoDOT is still working to adopt D-B on a much larger scale as they have only nine completed D-B projects, two D-B projects cur- rently under construction, three upcoming D-B projects, and one D-B project in development. The first three D-B projects completed by MoDOT were mega projects in terms of cost as each had a budget over $200 million. Recently though, MoDOT has been using D-B successfully for smaller-sized but critical projects, in the $20 to $30 million dollar range. MoDOT has contracted over $1.5 billion in D-B projects, which has saved DOT money on projects completed ahead of schedule. Along with D-B, MoDOT utilizes alternative technical concepts (ATCs) with D-B-B during project development and A+B or Cost + Time contracting. In fact, MoDOT was the first state transportation agency to successfully incorporate ATCs into a traditional D-B-B project. To use D-B, MoDOT project directors and executives require justification as to why D-B is better than traditional contracting methods. MoDOT determines use of D-B based on innovation, speed, efficiency, risk management, and complexity. As the statewide transportation improve- ment plan (STIP) is developed, MoDOT management identifies candidate projects for using D-B and adds the projects to the STIP. However, this does not guarantee that D-B will be selected. MoDOT has recently adopted a project delivery selection matrix (PDSM) from the Colo- rado Department of Transportation (CDOT) to assist with determining the optimal delivery system for a project. If a project can be optimally delivered using D-B, MoDOT performs a high-level risk assessment to resolve the major risks and determine if the D-B delivery system can help mitigate or reduce the identified risks. Once D-B delivery is justified for a project, that recommendation is made and passed on to the project director, who passes it on to the chief engineer, and then to the Missouri Highway and Transportation Commission to make the final

56 Staffing for Alternative Contracting Methods recommendation. This decision-making process is also used to select the design–builder during procurement. Organizational Structure MoDOT is a decentralized organization, in which the seven districts of MoDOT have the authority to make decisions to move projects forward. Each district is locally focused, which allows each MoDOT district to establish and maintain relationships with local and regional governments. Along with the seven districts, Missouri has 26 metropolitan planning organizations (MPOs) and regional planning commissions (RPCs) across the state, The MPOs and RPCs represent local-, city-, and county-level transportation agencies that MoDOT works with to develop long-range transportation plans. As with many other states, MPOs and RPCs are not involved in the day-to-day tasks of maintaining the state highway and roadway system as that is the responsibility of MoDOT. Although MoDOT operates in a decentralized structure, the use of ACMs, specifically D-B, requires authorizations from the chief engineer and the Missouri Highway and Transportation Commission, which operates from the central office. The Missouri Highway and Transportation Commission is a six-member bipartisan group that oversees all of the department’s activities from the central office, which receives recommendations from the chief engineer on the use of D-B for a project and for the selected design–builder. The Commission then has the final deci- sion on whether to use D-B for a project and whether the selected design–builder can provide the best value for the project. Once the Commission approves the selection(s), the project is passed back to the district project director to lead the design and construction of the project. Staffing Issues and Needs Each of the seven districts within MoDOT operate as their own transportation agency that focuses on a specific geographical area of the state. In terms of ACM projects, none of the dis- tricts have a dedicated office for implementing D-B. As MoDOT has completed a dozen D-B projects, each district has a varying degree of experience with D-B. MoDOT has a D-B coordi- nator, which is an individual that assists with the D-B process from identifying potential D-B projects all the way through to project closeout. The D-B coordinator is also a project director managing a D-B project. Once more MoDOT staff gain experience in the use of D-B, the plan is to establish combined design and construction divisions within each district to handle D-B projects right along with D-B-B projects on a regular basis. Once the decision is made to use D-B, a district project director is assigned to the project. Typically, the project director is an individual with experience leading various types of projects for MoDOT. The project director is a decision maker and possesses extensive skills for the spe- cific project scope of work, such as bridges/structures and traffic control. The project director is responsible for assembling a team from the district based on the project’s scope of work to manage and assist with procurement, project development, and construction. The project team will include individuals that support and complement the project director’s skills and knowl- edge. Additionally, the project director can select a deputy project director for a project. The deputy project director is to supplement knowledge and skills that the project director may not fully possess. For example, the project director may have strong skills and experience on the con- struction side, but may not possess extensive knowledge on the design side. Since a D-B project requires knowledge and experience in design and construction, the project director will look to select a deputy project director with design skills and experience. ATCs are typically proposed during confidential one-on-one meetings with the MoDOT project team members and the proposing contractor to provide feedback on how the solutions

Case Examples of Staffing for ACMs 57 provided will meet the project goals. Ideally, MoDOT will assign one project engineer who has the responsibility to manage the ATC process for the project team. This project engineer will col- lect requests for clarifications (RFCs), additional applicable standards (AASs), and design excep- tions from proposing contractors during the ATC procurement process. The project engineer then provides a summary of the proposed RFCs, AASs, and design exceptions to the project team for review. Then, the project engineer works with the proposing teams based on if an ATC was accepted or not. The drawback for this process is that MoDOT does not always have a project engineer available to handle the ATC process. When using D-B, MoDOT in-house engineering staff has had to adjust its role in the devel- opment of the project design. In-house engineering mostly operates in an oversight manner to verify the design for quality and acceptance. Working in the oversight role allows MoDOT staff to focus on high-risk items, which vary from project to project. The MoDOT interviewee noted that MoDOT staff is trending toward dropping many years of experienced employees to third-party private firms as well as to other local city and county transportation agencies. Most of the experienced MoDOT employees leave for city and county transportation positions that offer more compensation than MoDOT, while some leave for pri- vate consulting and construction firms. Losing experience and the downsizing of the department has meant that MoDOT relies on consultants to assist with the work. MoDOT is strategic in the use of consultants as MoDOT retains the decision-making abilities, but consultants are used to support preliminary engineer- ing tasks, such as assistance with surveys, utilities, traffic modeling, and geotechnical investiga- tion. MoDOT has slowly began to work consultants into the delivery and procurement of the project, but still has only limited experience with consultants working in the procurement pro- cess. Finally, MoDOT does understand that for the D-B program to grow, additional resources will be needed, which may mean more use of consultants with roles and responsibilities expanded beyond what MoDOT uses today. ACM Skill Sets and Training MoDOT looks for project directors to lead D-B projects that are well rounded with a variety of knowledge, skills, and experience. Not only are technical skills needed, but MoDOT relies on the contractor and consultant industry to help construct the projects, so “soft” skills are also necessary for the project director. Leadership and the ability to coordinate with others is a required skill of the project director, while communication is a skill that MoDOT expects from the entire project team members. ACM training for MoDOT staff often involves embedding staff for a period of time on a current D-B project to learn the process and the changes in roles and responsibilities that occur during design and construction of a D-B project. The concept is that the project director and their support staff can coach the embedded staff on the processes used and walk them through some of the major activities found in a D-B project, such as procurement and design verification. However, beyond experiencing a D-B project as training, MoDOT does not currently offer any additional formal or informal training to staff or to the local and regional construction industry. The MoDOT interviewee noted that some type of formal training for D-B and ATCs will be developed in the future. The D-B coordinator is currently developing training material, but it has not been used at the time of this research. Lessons Learned MoDOT is a decentralized state transportation agency that has only conducted a handful of ACM projects, all of which were D-B projects, ATCs with D-B-B, and A+B contracting. From

58 Staffing for Alternative Contracting Methods discussions with the MoDOT personnel and investigation of literature from MoDOT, the lessons learned in staffing for ACM projects are summarized as follows: • One of the main reasons that MoDOT pursues D-B is to “do more with less.” As with many state DOTs, MoDOT downsized the department and lost staff to other entities. With D-B, MoDOT has the ability to fast track projects, which utilize incoming funds faster and gets the project done sooner. As a result, resources are used in the most efficient manner on D-B projects. • Project teams for D-B projects have individuals with leadership and management skills along with specific technical skills based on the scope of the project. The project director selects project team members from staff within the district where the project is located, and this team is responsible for the performance of the project. • The project team members for a D-B project are assigned to the project task based on their expertise to allow the team to fully concentrate on that particular job. This setup has resulted in successful D-B projects in MoDOT. MoDOT has a plan is to develop dedicated staff to perform ACM projects. North Carolina Department of Transportation General Information and Alternative Contracting Methods The North Carolina Department of Transportation (NCDOT) is one of North Carolina’s largest government agencies and is responsible for maintaining approximately 80,000 miles of roadways, of which 15,000 miles are primary highways and 65,000 miles are secondary roads. NCDOT is also responsible for over 13,500 bridges and 4,500 culverts all across the state. NCDOT employs more than 5,000 employees in the central headquarters in Raleigh and across 14 divisions throughout the North Carolina. NCDOT utilizes traditional delivery methods and ACMs to design and construct transporta- tion projects throughout the state. NCDOT has the authority to use design–build (D-B) and public–private partnerships (P3). The first D-B projects were conducted in the late 1990s, and NCDOT has now completed well over 15 D-B projects across the state. P3 projects are still a fairly new process for NCDOT, with the first major P3 project initiated about two years ago to address major traffic congestion along a 26-mile stretch of I-77 in the Charlotte area using the concept of express/managed lanes (Figure 26). For NCDOT, determining the method to deliver a project involves understanding the money that is available for projects. When an influx of funds becomes available, NCDOT has the objective to use that money quickly and effectively on much-needed projects. To do so, D-B Figure 26. Layout of NCDOT’s I-77 P3 project.

Case Examples of Staffing for ACMs 59 becomes a real option for projects. In addition, the same stands true for private money coming from private entities. When private funds can be infused into a project via P3 delivery, NCDOT goes after the funds to offset the lack of funds for critical projects. Therefore, when private entities show interest in providing funds to a project, NCDOT strongly considers it. During the planning stages of projects, NCDOT makes the decision on whether or not to use D-B. This decision is based on a number of project type and scope factors, such as Interstate projects, projects with multiple bridges and crossings, and projects that require complex traffic control. Other factors that NCDOT considers is the value that the project and DOT can gain from having a design–builder on board early in design. NCDOT has the responsibility for deter- mining if D-B or P3 can provide the best value for the dollar, and which method has the ability to bring in innovation and alternate techniques to complete the project more efficiently. Organizational Structure NCDOT uses a central procurement–central delivery organizational structure for ACM proj- ects. This centralized organization structure relies on the central office to control and perform most of the nonconstruction maintenance work, including design, environmental analysis, and project programming. One advantage of the centralized organizational structure that NCDOT finds to be effective is having in-depth expertise and human resources centralized, as this reduces the duplication of responsibilities and improves program delivery. The ACM offices (the D-B and P3 group) are located at the NCDOT headquarters in Raleigh, which procure and manage the delivery of D-B and P3 projects while working with NCDOT personnel from the division where the project is located. The ACM offices also work with other centralized units, such as bridges, ITS, and maintenance, to develop the scope and manage the project. The D-B manager is a centralized employee that assigns the project engineer to lead the project. The project engineer is also typically a centralized employee. Staffing Issues and Needs With a centralized organizational structure, the D-B group and P3 group at NCDOT have a set number of employees, regardless of the amount of work. To supplement staff when the work load for alternative contracting project increases, the ACM groups will work with other NCDOT offices and divisions to help develop the scope of work and to assist in the design review process. However, the human resources available in the ACM office and in the divisions is limited; there- fore, NCDOT relies on consultants to perform the work. In terms of hiring individuals to work in the ACM offices and on D-B and/or P3 projects, the alternative contracting offices prefer to hire personnel from within NCDOT that have many years of experience and can provide expertise in one or a few areas of a project. Currently, the alternative contracting offices employ several structural engineers, hydraulic engineers, roadway engineers, railroad experts, and traffic control engineers. By having a mix of different experts and disciplines, the ACM team has a wide variety of experiences and skills, which helps NCDOT improve the overall performance of ACM projects. For specific aspects of a project, if the ACM offices do not have a particular expert as a part of their staff, they typically reach out to staff in other divisions throughout the state. This is crucial, as the ACM office does not have the ability to hire staff on an as-needed basis. The NCDOT interviewee noted that ACM offices utilize the resources available within the department to supplement the lack of an expertise. In general, NCDOT will utilize internal resources for staff- ing based on the specific need. If internal resources cannot be found, then NCDOT considers hiring third-party consultants as a last resort.

60 Staffing for Alternative Contracting Methods The number of in-house engineers has decreased in recent years, which has left NCDOT with fewer human resources on the preconstruction side of a project. However, with D-B and P3, the in-house engineers change their roles from providing the detailed engineering and design input throughout the design phase to providing mainly the initial bridging documents dur- ing the early stages of the design phase. Once the transfer of information occurs, the in-house engineers workload decreases, as typically NCDOT handles the design reviews within the ACM offices and does not require the use of in-house engineers. Although NCDOT experienced downsizing of the department as did most other DOTs, the NCDOT interviewee noted that the ACM offices have seen a slight increase in the number of employees since its inception. However, the increase has not offset the huge increase in the vol- ume of ACM work. There are more projects that use D-B and P3 than in the past, which reveals a shortage in human resources. To complicate this further, NCDOT is currently experiencing the loss of qualified staff to private-sector companies. Private-sector companies, particularly on the preconstruction side of a project, are pulling employees away from public agencies with better offers. The NCDOT interviewee noted that competing against private-sector businesses to retain experienced staff is challenging for a state DOT. To supplement needed staff, NCDOT occasionally uses consultants for specific aspects of proj- ects. NCDOT prefers to use internal resources first before looking to supplement the work out- side the agency. For D-B projects, the majority of the project development and management of construction is performed by NCDOT staff, and consultants are brought in for specific purposes, such as evaluation of ATCs. The NCDOT interviewee noted that P3 projects use more consul- tants than D-B projects because of the complicated funding situation found in P3 projects. The NCDOT interviewee also explained that with the implementation of P3, many in the ACM offices now feel like they have to be part lawyer. As a result, NCDOT prefers outsourcing the legal aspects of P3 projects. For QA/QC purposes, in D-B projects, NCDOT typically handles construction engineering and inspection (CEI) with in-house staff and rarely uses a third-party CEI firm. The reason behind this is that most of the ACM projects in NCDOT include funds from the federal govern- ment. Federal funding for a transportation project has many requirements and regulations to follow that have to be recorded, documented, and completed correctly. NCDOT has a better comfort level using in-house staff for completing the federal requirements and regulations. One major difference between D-B and P3 projects is that P3 contracts include a portion for operations and maintenance once the construction work is complete. Therefore, the con- cessionaire is responsible for operating and maintaining the project for a set period of time. As a result, for P3 projects NCDOT now performs reviews rather than the actual maintenance. NCDOT has the division maintenance engineer lead the review and oversight process for a P3 project. The NCDOT interviewee mentioned that NCDOT has not seen any major changes or increase in staff for the maintenance and operations phase of a P3 project. ACM Skill Sets and Training NCDOT looks for combination of skills for employees that includes technical knowledge, project management skills and experience, and leadership and communication skills. Of these knowledge and skill sets, NCDOT acknowledges the importance of soft skills, such as leader- ship skills, written and oral communication skills, and partnering and team-building skills. Of the skill sets shown, the ability of leadership to coordinate other staff is one of the most important skill sets that NCDOT expects from its staff for ACM projects. D-B and P3 projects typically involve complexity, high risk, or a large volume of work. This means that many different players will be involved in a project. As the owner of the project, it is NCDOT’s job to manage and

Case Examples of Staffing for ACMs 61 lead the project. Leading a project requires not only technical knowledge, but also tacit knowl- edge that allows gaining the attention of others and providing guidance that moves a project forward. Leadership is a skill that NCDOT looks for in potential employees on a regular basis. NCDOT also believes that communication skills are key in D-B, and even more so in P3 proj- ects. For example, someone working on an NCDOT ACM project may have to collect informa- tion outside of their experience in and then not be able to communicate that same information to someone that can interpret it. This is not much of a concern on a traditional D-B-B project, where roles and responsibilities are clear and well understood. However, it is an issue for D-B projects and is intensified for P3 projects, which brings in financing and legal aspects. For training, NCDOT encourages staff to watch videos and offers seminars online that relate to ACMs and transportation construction to further their skills. In terms of formal ACM train- ing, NCDOT offered training on D-B in 2010 to the 14 divisions when the D-B program was expanding. At that time, only approximately half of the divisions across the state had experience with D-B. The divisions and staff with ACM experience provided training to expand the D-B program to the entire state. However, this particular training has not occurred in recent years, as NCDOT now has knowledgeable staff across the state that can train incoming hires. Furthermore, NCDOT does not offer formal training to the contractors and consultants in ACM projects. However, NCDOT has many mechanisms in place to help contractors with the new processes found in D-B and P3 projects. NCDOT is committed to setting up all contractors for success because the agency believes that if the contractor can be successful, then NCDOT will be successful. In addition, NCDOT participates in industry forums to request feedback from contractors on a regular basis on what is working well and what NCDOT can work to improve. NCDOT may offer training for contractors in the future if the market warrants such training and if it will be a benefit to the department. Lessons Learned NCDOT has established itself as a centralized organizational structure that uses D-B and P3 to deliver its transportation projects. Based on NCDOT’s extensive experience with ACMs, a collection of the major lessons that NCDOT has learned for staffing of ACM projects is sum- marized as follows: • The upper management support as well as buy-in from the entire department helped to grow the D-B and P3 groups into efficient and effective teams. NCDOT has the ability to complete tremendous amounts of work using a limited, albeit experienced and knowledgeable, staff. • By selecting a delivery method as early as possible, NCDOT has the ability to better forecast the staff needed for a project. The NCDOT D-B and P3 groups are committed to coordinating internal staff effectively before using consultants. • The centralized organizational structure allows NCDOT to use its ACM-experienced personnel to their fullest potential and provides NCDOT the ability to effectively utilize resources through- out the state. A more efficient process results from centralized procurement and delivery and helps NCDOT reduce duplication of staff when administering and executing ACM projects. Ohio Department of Transportation General Information and Alternative Contracting Methods The Ohio Department of Transportation (ODOT) is an administrative department for the state of Ohio government responsible for developing and maintaining the seventh-largest state highway system, excluding the Ohio Turnpike, with an annual budget of around $5 billion.

62 Staffing for Alternative Contracting Methods The roadway system in ODOT contains 43,000 miles of state and federal highways, with 14,071 bridges that carries the fifth-largest traffic volume and the fourth-largest in commercial freight in the U.S. Ohio DOT employs around 5,000 employees annually within the central office and corresponding 12 transportation districts across the state. Currently, ODOT has the authority to utilize design–build (D-B) and public–private partner- ships (P3), in addition to traditional D-B-B to deliver highway construction projects. ODOT has conducted 320 D-B projects and is currently constructing the first P3 project within the state (Fig- ure 27). ODOT has three primary versions of D-B. In low-bid D-B, the design–builder is selected based on the lowest cost (and responsive) bidder from any pre-qualified bidder teaming up with a pre-qualified consultant. In a two-step low-bid D-B, the design–build teams (builder and design consultant) are shortlisted based on qualifications, and the project is ultimately awarded based on the lowest responsive bid. In value-based D-B, the design–builder firm is selected based on the best value score, which is based on bid price and a technical qualifications assessment. Determining the use of an alternative contracting method (ACM) for a project occurs as early as possible in project development and includes analyzing the risks involved, funding availabil- ity, schedule constraints, and innovation. • If a project needs to be delivered in a constrained timeframe or needs to be delivered quickly, ODOT has had success with delivering projects faster using D-B. • If a project does not have the allocated budget to be constructed, then ODOT can seek outside financial support and consider P3 for the project. • If ODOT sees an opportunity to use an ACM, which will result in the transfer of risk to a third party, then ODOT will consider D-B or P3. • If a project is highly complicated and ODOT realizes that innovative ideas and processes would be necessary, ODOT experience shows that D-B projects tend to implement more innovation than traditional projects due to the teaming of a contractor with a designer. Organizational Structure ODOT divides the state of Ohio into 12 transportation districts. Each district executes and manages the design and construction of projects. The central office, located in Columbus, sets the policy, handles the funding, conducts the procurement, and develops the contract pack- age. The Office of Alternative Project Delivery in the Division of Construction Management in the central office is in charge of procurement and contracting for D-B projects, leading in the development of RFQs and RFPs, and participating in the review of statement of qualifications Figure 27. Construction work for the Southern Ohio Veterans Memorial Highway (P3 project).

Case Examples of Staffing for ACMs 63 and proposals for the larger, complex D-B projects. The Division of Innovative Delivery evaluates potential projects for P3 feasibility and assists in the development of RFQs, RFPs, and financial evaluations, as well as participates in the review of statements of qualification and proposals. These two offices perform similar roles, but the Division of Innovative Delivery focuses on proj- ects, which may contain private financing options. Staffing Issues and Needs The D-B and P3 divisions in the central office assist in the assembly of a project management team for a D-B or P3 project based heavily on personnel availability. Ultimate staffing decisions are made by the districts. Unlike other state DOTs, ODOT does not have a dedicated staff work- ing just on D-B and P3 projects, except for a select few individuals. To determine project staffing, ODOT will look at potential project management staff that would fit with a project based on past experiences. Once availability is reviewed, the project team can ultimately be put together. This focus is primarily centered on the project management team, but supplementary staffing utilized for inspection and support is also considered. Another consideration for staffing an ACM project is the experience and knowledge a person has with D-B and P3 processes. Roles are changed in an ACM project as compared to a traditional D-B-B project. ACM staff have knowledge in many different areas and have a good understanding of the design and construction process. Flexibility and tacit knowledge are also attributes ODOT looks for to staff a D-B or P3 project. ODOT is a transportation agency that relies on consultants to augment needed resources for an ACM project. ODOT, like many other DOTs, experienced downsizing in recent years. Many of the D-B projects within the last 6–7 years have grown substantially in size and complexity as compared to past projects, even further straining staffing numbers. Most of the manage- ment aspects of an ACM project remain in-house, such as the procurement process. However, ODOT does not have the internal staff to cover all project aspects. ODOT utilizes consulting as an extension of staff in specific areas of an ACM project, such as financing (specifically for P3 projects), design review, independent quality assurance, and construction inspection. They also utilize consultants to assist in proposal reviews. A drawback ODOT faces with using consultants (sometimes as much as 60%–70% of project staff) occurs after project completion. As consultants leave as the project is completed, the loss of the gained experience and knowledge is an unavoidable consequence. These experiences are not retained within the agency, further continuing the stress on staffing. Without a large dedi- cated staff (central office and district office) solely working on D-B and P3 projects, ODOT loses crucial experience and knowledge when consultants leave. For in-house engineering personnel, the roles change from the typical design process in a D-B-B project to an oversight verification role, ensuring the design–builder is developing a design fitting the requirements of the project. As ODOT stated and is typical in the industry, they transfer project-specific design risk to the design–builder. The oversight performed is not investigating the fine details but rather verifying the overall design concept and scope require- ment. The modified role of in-house engineers requires individuals who are flexible with their time and efforts, have understanding and experience of design and construction, can handle the increased intensity during specific aspects of the project such as design review, and understand that design and construction occur concurrently requiring reviews of partial plan sets. The loss of experience and limited individual employee availability are considerable con- cerns. ODOT has a limited core group of individuals focusing on D-B and P3 projects. To complicate matters, ODOT has a shortage of experience and knowledgeable staff in the 10 to

64 Staffing for Alternative Contracting Methods 15 years of experience range, as many of these individuals have left the department for other positions. Therefore, ODOT realizes that there is an anticipated gap in experience and knowl- edge within the department that may result in ODOT relying even more on consultants for ACM projects. ACM Skill Sets and Training Skills and knowledge necessary for D-B or P3 projects range from technical skills to tacit knowledge in order to manage and lead many different individuals and organizations involved in an ACM project. First, ACM staff have knowledge and possibly experience with working on a D-B or P3. Second, ACM personnel have a strong set of soft skills since most ODOT staff working on a D-B or P3 project will be involved with many different stakeholders and project participants. ODOT ACM staff are flexible in working with the rest of the project participants as a team, understanding the accelerated nature of an ACM project and how to lead the efforts, working through uncomfortable situations and issues, and having the confidence to make decisions. As for department training in D-B and P3, ODOT has provided project manager training and ACM-specific training modules for D-B, P3, and other ACM approaches (such as A + B or Cost + Time, and BV procurement). ODOT also provides project-specific training and guidance on proposal evaluations and scoring technical qualifications. Beyond these training items, most of the training occurs by being a part of an ACM project. No specialized training exists at ODOT, although staff is encouraged, but not directed, to seek out training seminars and webinars from the National Highway Institute (NHI) or other similar organizations. ODOT’s approach to training and informing the construction industry is to disseminate information on D-B, P3, or specific ACM projects through seminars and sessions at transporta- tion conferences. The sessions involve discussing the proposal evaluation process as contractors seem to be interested in the scoring process. However, ODOT has not provided training to the industry on ways to manage the design and construction as a contractor on a D-B or P3 project; this is left to the contractor to figure out. Lessons Learned ODOT is a combined organized transportation agency with a history of implementing D-B and P3 for delivering critical transportation infrastructure projects across the state. Lessons learned from ODOT in terms of staffing for ACM projects are summarized as follows: • During project closeout of construction for a D-B and P3 project, ODOT has learned to include a materials specialist from within the department. A materials specialist assigned to an ACM project can review and document the outcomes on the materials side of a project that may be difficult for a project manager or general engineer. • ACM projects tend to be time intensive and accelerated. Therefore, ODOT looks for indi- viduals who are project oriented and are willing to put in the time necessary to complete the project successfully. D-B and P3 projects raise the expectations placed on the project team as compared to many traditional projects, and ODOT has seen many teams who may not be able to manage those time-intensive requirements. Management must remain cognizant of the very possible scenario of replacing project personnel. • It is critical to identify personnel who will be involved in the construction phase of the project and have them engaged as early as possible. ODOT realized having internal construction staff involved during preliminary engineering/design allows the team to work together early on in the development of the project. Being a part of design gives the construction phase staff the

Case Examples of Staffing for ACMs 65 knowledge of the project, the reasons the project was scoped the way it is, and ways to con- struct the project before construction begins. Using this approach allows construction staff to make decisions in a more informed manner. • It is critical to staff the project with management members who are not only empowered by upper management to make critical project-level decisions, but are also willing to make those decisions. While incorrect decisions have been occasionally made, ODOT believes it has ben- efited more with timely decision makers versus projects that have had more tentative manage- ment. ODOT has found that staffing with people who are decisive ensures project progress, offsetting the cost of any judgment errors. Virginia Department of Transportation General Information and Alternative Contracting Methods The Virginia Department of Transportation (VDOT) is the state transportation agency responsible for building, maintaining and operating roads, bridges, and tunnels throughout the Commonwealth of Virginia. Virginia has the third-largest state-maintained highway sys- tem in the U.S. with 57,867 miles of state maintained roadways, including 1,118 Interstate miles, and 12,603 bridges. VDOT is governed by the Commonwealth Transportation Board governs, which is a 17-member panel that the governor appoints to oversee and properly dis- tribute funding for transportation projects across the state. Currently, VDOT steadily employs approximately 7,500 people. VDOT is a state transportation agency with a history of using ACMs to deliver critical trans- portation projects, including the use of design–build (D-B), which the Virginia General Assem- bly authorized in 2001. VDOT also was one of the first state DOTs to gain authority for using public–private partnerships (P3), based on the Virginia Public–Private Transportation Act of 1995 and the Public–Private Education and Facilities Act of 2002. Currently, VDOT does not have the authority to use construction manager/general contractor (CM/GC). The use of either D-B or P3 is risk-driven, meaning that VDOT staff realize the potential benefit for risk allocation or risk transfer. VDOT can accelerate projects using D-B due to the overlapping of design with construction. For P3, the infusion of private funding is a prime factor that allows VDOT to deliver projects that may not have been built due to lack of fund- ing. Additionally, VDOT uses a process called SMART SCALE, which is a legislative process to prioritize the right transportation projects for funding to ensure the best use of limited tax dollars. Selecting the right project begins with an evaluation of the project using a needs- based assessment to make the business case that a project is a high priority to the state and stakeholders. Projects are scored based on an objective and outcome-based process that is transparent to the public and holds decision makers accountable to taxpayers and stakehold- ers. Once a project is advanced as a priority, the next step includes estimating the cost of the project. If the estimated cost of the project is more than available funds, VDOT has two options: (1) remove the project from the potential project list, or (2) consider using an alterna- tive delivery method. Figure 28 outlines the SMART SCALE process. Traditionally, VDOT tends to use alternative delivery for large-sized projects in terms of cost and scope as well as complicated and complex projects. Complexity and innovation become factors for VDOT to consider using D-B. Cost becomes more of a factor when available fund- ing cannot cover the cost of a project (in most cases mega-projects), so private financing and P3 delivery is then considered. Yet VDOT performs a detailed screening of a project and can simultaneously consider design-bid-build (D-B-B), D-B, and P3, as these are the three contract- ing methods available for VDOT to use on transportation projects.

66 Staffing for Alternative Contracting Methods Organizational Structure VDOT utilizes a combined organizational structure, which entails that the central office, located in Richmond, is responsible for screening of possible alternative delivery projects, devel- opment, procurement, and the contract for the project, while the district in which the project is located implements the design, construction, operations, and maintenance of a project. VDOT has nine highway districts: Bristol, Culpeper, Fredericksburg, Hampton Roads, Lynchburg, Northern Virginia, Richmond, Salem, and Staunton. With contracting and procurement housed within the central office, VDOT does not have to duplicate these efforts in each district across the state. Consistency in procurement and contracting has lead VDOT to having very few issues with the construction industry today. Within the central office, VDOT has two separate offices to handle D-B and P3 projects. The Alternative Project Delivery (APD) Division office is responsible for developing a list of potential D-B candidate projects, developing, and advertising the request for qualifications and request for proposals for D-B projects, short-listing and interviewing potential contractors, and awarding the D-B contract. The Office of Public–Private Partnerships (P3 Office), similar to the APD Division office, is responsible for developing, procuring, and implementing a statewide transportation program for project delivery using P3. The P3 Office is also responsible for providing long-term support to the districts for implementing and operating/maintaining P3 projects in Virginia. Staffing Issues and Needs VDOT’s organizational setup allows the APD Division office and the P3 Office to staff the procurement and contracting team from the central office, which consists of VDOT personnel with experience and knowledge of alternative delivery processes. However, although VDOT centralizes development and procurement for ACM projects, it is not performed in a vacuum. In most cases, district personnel will assist the development and procurement team with the project scope, local coordination efforts, and participate in the proposal review panel. The P3 Office also provides personnel for project development, procurement, and financing with assistance from other divisions such as financial planning, environmental, and from dis- trict personnel. Financing becomes a critical part of a P3 project and requires essential staff with technical and financial knowledge. Once the contract is in place, central office staff support the district project manager to implement the design and construction and to lead the project with a team from the district. One area of staffing concern at VDOT is the loss of experienced and skilled personnel. VDOT experienced downsizing of the department during the 2000s and lost quality individuals to pri- vate firms, which can offer more in terms of compensation and responsibilities. To complicate matters, when VDOT loses experienced and knowledgeable staff, new hires to replace these individuals often do not have the same level of experience required for a project. As a result, Eligibility / Funding Project Application Project Screening Evaluation / Scoring Prioritization / Programming Figure 28. VDOT’s SMART SCALE five-step process.

Case Examples of Staffing for ACMs 67 VDOT relies on consultants to supplement human resources for specific tasks, such as engi- neering, inspections, and financing. VDOT typically works with the same four or five consul- tants, which has allows each party to build a trustworthy and open relationship and results in very few issues between VDOT and the consultant community. Quality control and quality assurance are the responsibility of the hired design–builder. Typically, the contractor can either perform quality control with in-house staff or a consultant. On the quality assurance side, the design–builder is required contractually to hire an independent consultant firm that does not have any ties to the design–builder firm. VDOTuses independent assurance and independent verification (IAIV) for oversight, which provides a tool to check that the project is being constructed in adherence to any FHWA requirements and to verify payment. VDOT has four P3 projects in the operations and maintenance phase, which is the respon- sibility of the concessionaire for a set number of years ranging from 30 to 75. With long-term contracted maintenance, the concessionaire handles the day-to-day maintenance and opera- tions of the P3 project, while VDOT has adjusted its normal maintenance procedures to more of an oversight and verification role. The P3 Office has internal staff with operations and main- tenance experience, but most of the maintenance oversight for a P3 project is handled by the districts. Currently, VDOT is considering changing the maintenance oversight process for P3 projects by containing the operations and maintenance within the central office. By central- izing the maintenance and operations oversight for long-term contracted maintenance, VDOT would have one standard approach for consistency as well as the ability to develop a legacy of knowledge that can be passed along to future staff. ACM Skill Sets and Training Both the APD Division office and the P3 Office look for specific individuals to work on ACM projects. As VDOT personnel stated, selected staff have substantial sets of expertise and knowl- edge that complements the rest of the team. For example, the APD office brings together staff with diverse skill sets such as geotechnical, construction, rural design, structure and bridge design, hydraulics, and environmental. The P3 Office includes personnel with the same expertise and knowledge as D-B, along with additional individuals serving as technical advisors with skills in financing, regulation, and maintenance and operations. The P3 and D-B offices highlight the importance of soft skills such as leadership, coordinating the team, and team building. Also men- tioned as a critical skill set for ACM project staff is flexibility, being open to other’s ideas, and working as a team to a workable solution. Training staff for D-B and P3 projects is a shadowing process in which VDOT personnel can be assigned to a D-B or P3 team to shadow the project manager and learn development and procurement processes. In addition, VDOT has in the past conducted information sessions for each district on the fundamentals of D-B and P3 when these were new to the department. For D-B projects, the APD Division has been using a legal consultant since 2005 to conduct annual training to approximately 30 people. The attendees of the annual training include not only central staff, but also anyone that may be involved in or manage a D-B project. This exposes a new set of VDOT personnel to D-B. No formal construction industry training is offered on a regular basis. VDOT conducted training with contractors in the past for D-B, but interest waned as the experienced D-B contrac- tors were unwilling to share D-B information with other contractors. However, the centralized offices for D-B and P3 projects work with industry on a regular basis to keep communica- tion open and to discuss any issues and advancements in terms D-B and P3. The centralized approach to communicating with industry provides contractors and consultants one place to discuss issues and ask questions rather than having to do this at the district level.

68 Staffing for Alternative Contracting Methods VDOT also participates in the Virginia Transportation Construction Alliance (VTCA) Annual Meeting. The VTCA represents the transportation construction industry in Virginia, and VDOT understands that it is crucial to maintain a working relationship with VTCA. At the annual meeting, VDOT shares current information and emerging ideas that can benefit the construction industry and VDOT. VDOT has also participated in specific D-B and P3 breakout sessions at the VTCA Annual Meeting. Lessons Learned VDOT is the primary transportation agency for Virginia, conducting over $5 billion worth of work annually, including $1.8 billion in construction. To deliver this work, VDOT has the authority to use traditional and alternative delivery methods to complete much-needed projects. In conducting dozens of D-B and several P3 projects across the state, the following represent the lessons that VDOT has learned in terms of staffing ACM projects: • VDOT acknowledges that in-house engineering staff must change their role when working on a D-B or P3 project. Instead of providing day-to-day design activities for projects, in-house project engineers perform design reviews by working alongside the design–builder. It is impor- tant that project engineers understand the change in their role and what the expectations are from the in-house engineers for D-B and P3 projects. The large number of D-B and P3 projects involving engineering staff centrally and in the districts has led to this mindset virtually becom- ing the norm. It’s not “innovative” anymore. • VDOT uses consultants on ACM projects to supplement VDOT staff. VDOT loses experienced and skilled individuals to downsizing, retirement, and other firms. The legal and financial aspects P3 project contracts require expertise that VDOT may not possess internally; VDOT often relies on consultants for these tasks. • In order to implement the shadowing process for staff to learn about D-B delivery on an actual project, the APD Division categorizes staff as A1 and A2 personnel. A2 personnel are the senior engineers and managers that have extensive knowledge and experience with D-B projects, while A1 personnel are individuals that the D-B office hopes to train for moving eventually to A2 status. • The P3 Office utilizes the “shadowing” process to bring new staff from deputy P3 project man- agers to P3 project managers. However, because of the diverse skills and expertise frequently needed on P3 projects, most of the P3 Office are involved periodically in current P3 projects. Summary This chapter presented key findings on ACM staffing from the case examples of eight state DOTs. The DOTs included in this chapter have a wide variety of experiences in delivering ACM projects. The California, Florida, and Missouri DOTs use a decentralized organizational structure to deliver their ACM projects. The Georgia and North Carolina DOTs use a centralized organi- zational structure. The other three state DOTs (Minnesota, Ohio, and Virginia) use a combined organizational structure for their ACM projects. Almost all of these eight state DOTs have more than 10 years of experience on ACMs and have delivered more than 15 ACM projects. Each of the eight case examples was discussed in detail in terms of general findings on ACMs, organizational structure, ACM staffing needs and issues, ACM staffing skill sets and training, and key lessons learned on ACM staffing. The findings presented in this chapter provide the most current effec- tive practices on staffing utilization for ACMs from the experienced state DOTs across the nation.