Implementing Alternative Technical Concepts in All Types of Highway Project Delivery Methods (2020)

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16 Chapter 4 Research Outcomes This chapter will provide an overview of the important outcomes of the Phase 2 research that led to the determination of what information was put in the Guidebook. The focus of Phase 2 was to identify and document ATC effective practices at both the program and project-level. The major data collection activity involved completing both DOT and single project case studies. These were obtained by either in-person or telephonic interviews with project participants with knowledge of the agency’s ATC process and how it was executed. The following sections are essentially summaries of the results for all case studies. The details of the Phase 2 effort can be found in Appendix C. It is important to note that despite high expectations for finding new information that was not obtained by the NCHRP Synthesis 455 report, that was not the case. As a result, the research team combined what was found in this study with the case study findings from the synthesis and used that population to determine the importance and breadth of usage of the effective practices identified in this study. 4.1 Case Study Summary Results Table 4.1 contains a summary of the case studies that were pursued in the research. All but one state were successful in obtaining most of the information. The team was unable to arrange to interview project participants. One state does not have a mature ACM program and those that are awarded are delivered using centralized project development and decentralized project execution. The knowledgeable field engineer had moved on and it was felt that a partial data collection on only the procurement process would not achieve the objective of the case study. That left the team with ten total case studies. Table 4.1 Case Study Population State Focus- Level PDM* Rationale Alabama Project DBB DBB ATC for the first time California Program DB/ CMGC/P3 Recent DB ATC program Colorado Project DB/CMGC/P3 Alternative Configuration Concept (ACC) Georgia Program DB/P3 P3 ATC program Minnesota Project DB/ CMGC Pre-approved Element (PAE) program Missouri Program DBB/ DB DBB ATC program + Conceptual ATC (CATC) North Carolina Project DB/P3 P3 ATC Ohio Project DB Geotechnical DB ATC (risk management tool) Rhode Island** Project DB Limited scope utility ATC DB Utah Project DB/ CMGC Proposed Technical Concept (PTC) CMGC Washington Program DB/ CMGC Long standing DB ATC program NOTE: Program level case studies also conduct a project-level case study. *These are the PDMs in use even if the agency may not be using ATCs with all PDMs. **Dropped when knowledgeable interviewees could not be found. 4.1.1 ATC Motivation The questionnaire shown in Appendix C provided 16 possible factors found in the literature that were cited as motivations for using ATCs. Interestingly, the case study interviewees only selected the following six reasons for implementing ATCs in their ACM programs: 1. Encourage innovation – 10 of 10 2. Manage project complexity – 6 of 10

17 3. Enhance quality – 6 of 10 4. Reduce project duration – 4 of 10 5. Project size – 3 of 10 6. Third party issues (permits, utilities, etc.) – 2 of 10 The above results indicate that the primary motivations for ATC usage lie in their potential for proposing solutions to project design, construction, and administrative issues that the agency may not have considered during the normal project development and procurement process. 4.1.2 Elements of the ATC Process The case study questionnaire contained a list of factors that had been identified in Synthesis 455 as common elements of the DOT ATC process. Interviewees were asked to rate the importance of each factor regarding its impact on the success of the DOT’s ATC program. The results are shown in Table 4.2 listed in order of importance as computed by an importance index (See Appendix C for the details of the computation). It is interesting to note that the table is roughly split in half with the most important factors having to do with confidentiality and acceptance of the process by both internal and external stakeholders. The lower half of the table are factors that represent technical and administrative constraints on the process. Table 4.2 Importance of ATC Process Factors. Factor Essential Important Not Important Importance Index Confidential one-on-one meetings 10 0 0 10.00 Ability to guarantee ATC confidentially 10 0 0 10.00 Ability to safeguard ATCs containing proprietary content 9 1 0 9.67 Industry buy-in to the ATC process 9 1 0 9.67 Agency buy-in to the ATC process 8 2 0 9.33 Confidentiality of pre-proposal communications between agency and contractors on matters other than ATCs 5 5 0 8.33 Ability to grant design criteria variances 5 5 0 8.33 Excluding ATCs that would exceed permitting constraints 3 6 1 7.33 Ability to measure the benefits upon project completion 3 6 1 7.33 Offering a stipend to use ideas from losing entities. 3 5 2 7.00 Incentives/disincentive schemes 1 6 3 6.00 Allowing ATCs that would exceed permitting constraints 0 7 3 5.67 Independent technical review of ATC designs 1 0 9 4.00 Independent review of ATC cost estimates 0 1 9 3.67 The top technical factor was the ability to grant design criteria variations. This factor speaks to the definition of the ATC, which must deviate from the baseline criteria in a manner that is not responsive to be deemed an ATC. The table also shows that having independent reviews of ATCs and their content is not considered a necessary aspect. It must also be noted that except for the bottom two factors, all the factors were rated as important or essential by most of the case study agencies. When the results of the NCHRP 08-112 case studies are combined with those reported in Synthesis 455, a total of 31 observations are available permitting a broader view of the same set of factors.

18 Table 4.3 displays the combined results and shows that the top five factors are unchanged. However, the order of the lower factors does vary a bit. In both tables the “excluding ATCs that exceed permitting constraints” factor is rated in the lower half, but that may be because of agency policy to not risk schedule delays due to an ATC triggering a re-review of a permit. The MoDOT interviewee mentioned that a permit review may also threaten the confidentiality of the process as the ATC must be disclosed to the permitting authority over which the agency has no control. Table 4.3 Importance of ATC Process Factors including Synthesis 455 Results. Factor Essential Important Not Important Importance Index Confidential one-on-one meetings 26 5 0 8.80 Ability to guarantee ATC confidentially 27 3 1 8.80 Ability to safeguard ATCs containing proprietary content 27 3 1 8.80 Industry buy-in to the ATC process 24 7 0 8.60 Agency buy-in to the ATC process 24 7 0 8.60 Confidentiality of pre-proposal communications between agency and contractors on matters other than ATCs 17 13 1 7.80 Ability to grant design criteria variances 9 20 2 6.90 Incentives/disincentive schemes 8 20 3 6.70 Ability to measure the benefits upon project completion 8 18 5 6.50 Offering a stipend to use ideas from losing entities. 8 17 6 6.40 Excluding ATCs that would exceed permitting constraints 5 14 12 5.50 Independent technical review of ATC designs 5 12 14 5.30 Allowing ATCs that would exceed permitting constraints 2 15 14 5.00 Independent review of ATC cost estimates 2 11 18 4.60 Looking at Tables 4.2 and 4.3 leads one to conclude that confidentiality is essential to a successful ATC program. Therefore, it becomes prudent for the agency to view all aspects of its ATC solicitation, review, approval, and implementation program through the lens of the impact on the confidential nature of the process. A breach of confidentiality may have an adverse effect on the agency’s future ATC program. Thus, given the benefits reported in both the literature and this report, protecting the veil of confidentiality could easily be viewed as paramount to achieving the overall objective of any ATC program: enhancing the overall project’s value by providing a means to assess possible solutions that were not previously contemplated during the project development and delivery process. 4.1.3 ATC Program Practices Again, a list of commonly observed practices from NCHRP Synthesis 455 was included in the case study interviews. The interview output and the corresponding results from the synthesis are shown in Table 4.4. The practices are listed in order of the number of observations. One case from the synthesis was not complete and dropped from the analysis. Hence the table shows 30 data points for each practice. .

19 Table 4.4. Common ATC Practices. ATC Practices NCHRP 08-112 (10) Synthesis 455 (20) Total (30) Confidential one-on-one meetings are held 10 20 30 The contractor may choose to include or not include any of its approved ATCs in its proposal. 10 19 29 Stipends are paid and permit the agency to use ATCs proposed by entities other than the winner. 9 15 24 ATCs submitted for approval must include an estimate/statement of schedule impact 9 14 23 Design concepts/standards/specifications from other states/agencies are permissible. 10 12 22 ATCs submitted for approval must include an estimate/statement of cost impact 8 13 21 ATCs are reviewed and approved by the project evaluation, selection, or award panel. 8 13 21 If required, the agency can refer an ATC to a third party for technical review. 4 16 20 ATCs can be used to propose changes to the special provisions to the contract. 3 17 20 The scope of what can be submitted as an ATC can be limited. 7 12 19 ATCs submitted for approval must include a statement of quality impact 8 10 18 The features of work where changes from ATCs may be proposed is specified. 4 11 15 ATCs can be used to propose changes to the general provisions to the contract. 3 12 15 If the ATC is a design change, the contractor must prove that it has been reviewed by an engineer licensed in the agency’s state. 4 6 10 The number of ATCs submitted by a single entity is limited. 4 5 9 ATCs are reviewed and approved by personnel other than the project evaluation, selection, and/or award panel. 5 3 8 Cost estimates from ATCs are reviewed by an independent cost estimator 0 2 2 Use of formal risk allocation techniques to draft contract provisions regarding ATCs 2 0 2 The results of Tables 4.3 and 4.4 also show the change in the ATC process over time as agencies became more experienced. The data for Synthesis 455 was collected in 2014, four years before the current case studies. One noticeable change is that a greater percentage of the current case study agencies limited the number of ATCs they would consider (4 of 10) as opposed to the previous study (5 of 20). Six of the case study agencies stated that internal resource constraints were a factor in deciding whether to allow ATCs on DB projects, a fact which seems to be validated by the increased tendency to limit the number of ATCs that will be considered. Eight of the ten cases allowed the project’s proposal evaluation team to also evaluate the ATCs. Minnesota and Washington required a separate ATC evaluation panel. Additionally, three DOTs reported that they have occasionally empaneled a separate ATC evaluation team, but only for projects that had highly specialized ATCs that required a particular technical expertise. One of the areas of distinct disagreement between DOTs in both studies was whether cost data was appropriate as part of the ATC submittal. Roughly two-thirds of the sample require some indication of cost savings as part of the ATC submittal. In several cases, the agency also stipulates that ATCs

20 that are not estimated to reduce the cost by a given amount will not be entertained. This is an effort to reduce the required resources for reviewing and approving ATCs and intersects with the point made in the previous paragraph regarding limiting the number of ATCs due to resource constraints. Taken together, it leads to the conclusion that the agency must evaluate whether the potential benefits that might be accrued via ATCs are greater than the internal transaction costs to accept, evaluate, and approve ATCs. This conclusion led the research team to include the resource assessment in one of the tools contained in the ATC Implementation Toolkit detailed in Chapter 6. 4.2 Case Study Programmatic Outcomes As was shown in Table 4.1, four of the case studies focused on at the program level. This section will furnish the details on the results achieved by each of these four DOTs. 4.2.1 California DOT Caltrans implemented ATCs on its DB program and believes it to be a valuable tool for encouraging innovative solutions to complex design and construction problems. Caltrans’ enabling legislation for DB required it to report on the program’s performance to the California Transportation Commission. As a result, it began the program with a proactive plan for gathering the necessary data to measure the relative difference between DB and DBB project performance and that data included ATCs. This makes it unique in the nation where many agencies realize the value of performance measures after the program has begun and must retroactively assemble the necessary performance data. It also makes the Caltrans results particularly authoritative because they are the output of a deliberate, proactive process designed specifically to measure performance. Table 4.5 provides a snapshot summary of the Caltrans DB ATC program as of 2013. The diversity of projects on which ATCs were proposed in California is notable. Caltrans requires proposers to estimate the value of a proposed ATC as part of the submittal process. That estimated value is not binding for incorporation into the bid since many ATCs are approved with conditions that would ultimately affect the final value of the approved ATC. The ATC value is also not validated by Caltrans. Hence, it is possible that ATCs values may be overstated to make them more attractive to the evaluation team. The actual value is buried in the final DB proposal’s price. Hence, it is impossible to accurately determine hard dollar savings. As a result, Caltrans measures the estimated values of those ATCs that are actually incorporated into the final project. This can include ATCs taken from nonwinning proposers who accepted the stipend. Caltrans summarizes the outcome from the first six projects shown in Table 4.5 as follows: “Among the 109 approved ATCs, 62 were incorporated in proposals including the unsuccessful proposals. Some of the approved ATCs from the same proposer were mutually exclusive and therefore couldn’t be incorporated. In other cases, the conditions attached by Caltrans may have made the ATC less attractive than originally anticipated by the proposer. On the other end, 79 ATCs representing 38.4% of the total ATC submitted were rejected for various reasons, mostly because those alternatives were determined by Caltrans of not being equal to or better than the contract requirements. Twenty-nine (29) ATCs representing 14.1 % of all submitted ATCs or 26.6% of the approved ATCs were used on the projects. There is no way to account for those ATCs found not to be ATCs and which may or may not have been incorporated as innovative alternatives without deviation from the project requirements” (Tritt 2013).

21 Table 4.5 Caltrans ATC Program Example (Adapted from Tritt 2013). Proj- ect # Pro- pose DBr # Sub Sub ($M) # App App ($M) # In Pro In Pro ($M) # On Proj On Proj ($M) Sti- pend ($K) Win- ner ($M) SM 101 Ramp Meter 3 A* 0 $0 0 $0 0 $0 0 $0 $0 $10.6 B 0 $0 0 $0 0 $0 0 $0 $25 C 0 $0 0 $0 0 $0 0 $0 $25 0 $0 0 $0 0 $0 0 $0 $50 Fre- mont 180 Braid- ed Ramps 5 A* 1 $1.6 0 $0 0 $0 0 $0 $0 $40.7 B 0 $0 0 $0 0 $0 0 $0 $0 C 2 $1.2 0 $0 0 $0 0 $0 $25 D 6 $4.9 0 $0 0 $0 0 $0 $25 E 2 $2.0 2 $2.0 0 $0 0 $0 $25 11 $9.7 2 $2.0 0 $0 0 $0 $75 LA I- 10/ I- 605 Inter- change 4 A* 5 $9.5 3 $8.8 1 $7.8 1 $7.8 $0 $46.2 B 9 $13.3 4 $6.9 4 $6.9 0 $0 $65 C 5 $1.5 2 $1.5 2 $1.5 0 $0 $65 D 8 $8.3 5 $6.2 5 $6.2 0 $0 $0 27 $32.6 14 $23.4 12 $23.4 1 $7.7 $130 I- 805 N HOV/ BRT 6 A* 5 $3.6 1 $1.3 1 $1.3 1 $1.3 $0 $71.9 B 4 $2.2 4 $2.2 1 $0.7 0 $0 $75 C 6 $1.3 6 $1.3 3 $0.9 1 $0.7 $75 D 2 $2.6 1 $0.8 1 $0.8 0 $0 $0 E 4 $7.7 4 $7.7 4 $3.8 0 $0 $75 F 0 $0 0 $0.0 0 $0 0 $0 $0 21 $17.4 16 $13.3 10 $7.4 2 $1.9 $225 Gerald Des- mond Bridge 4 A* 38 $251.3 22 $119.0 18 $108.2 18 $108.2 $0.00 $649.5 B 17 $44.6 9 $35.9 0 $0 0 $0 $1,000 C** 19 $56.2 9 $31.2 0 $0 0 $0 $0 D 37 $401.9 13 $179.9 0 $0 0 $0 $1,000 111 $754.0 53 $366.0 18 $108.2 18 $108.2 $2,000 I-15/I- 215 Inter- change 4 A* 10 $49.3 9 $28.4 8 $24.6 8 $24.6 $0.0 $208.2 B 2 $8.8 2 $8.9 1 $8.6 0 $0 $250 C 14 $68.4 7 $38.6 7 $38.6 0 $0 $250 D 10 $26.9 6 $22.5 6 $22.5 0 $0 $250 36 $153.5 24 $98.4 22 $94.3 8 $24.6 $750 Cajon Pass 3 A* 1 $22.1 1 $22.1 1 $22.1 1 $22.1 $0 $113.6 B 6 $61.7 6 $61.7 6 $61.7 0 $0 $75 C 4 $40.2 3 $38.2 1 $18.2 0 $0 $0 11 $124.0 10 $122.0 8 $102.0 1 $22.1 $75 Sacra- mento 5-50 Via- duct 4 A* 8 $10.0 4 $3.5 4 $3.5 4 $3.5 $0 $17.9 B 2 $0.5 1 $0.25 0 $0 0 $0 $40 C 0 $0 0 $0 0 $0 0 $0 $0 D 3 $2.4 2 $41.8 2 $1.9 0 $0 $40 13 $12.8 7 $5.6 6 $5.4 4 $3.5 $80 Total 44 230 $1,101 125 $625.9 73 $310.8 35 $164.0 $3.385 $1,158 * Winning Proposer; **Design-builder chose to not submit a final proposal; DBr = Design-builder; Sub = Submitted; App = Approved; Pro = Proposal; Proj = Project; M = millions; K = thousands Roughly $3.39 million in stipends were paid on a total value of $625.9 million of approved ATCs. Of the approved ATCs, $310.8 million worth were ultimately incorporated in the winning

22 proposals for the projects shown in Table 4.5. The stipend represents 0.29% of the contract amount. Approved ATCs and incorporated ATCs represent 54% and 14% of the same total respectively. Taking the approved ATC amount as the value of the intellectual property transferred to Caltrans in exchange for the stipend, the benefit-cost ratio would be 185 to 1. The benefit-cost ratio for ATC incorporated into the DB projects is 48 to 1. Put another way, Caltrans received $48.00 in ATC cost savings for every dollar it spent on stipends. The I-15/I-215 Interchange at Devore DB project in San Bernardino County is an excellent example of how the Caltrans ATC program was implemented. This project was the first DB project let by Caltrans and as a result, the agency was also implementing ATCs for the first time. Table 4. 6 contains the complete list of ATCs received on the project. One can see that the approach used by Caltrans not only generated a large number of ATCs but also yielded a wide variety of proposed innovations. The winning proposal (Design-builder A) incorporated eight of its nine approved ATCs into the final project. These were worth $24.6 million of savings. The agency paid a total of $750,000 in stipends to the three non-successful proposers. That results in a benefit-cost ratio for the project of 32.8:1. Table 4. 6. Caltrans Devore Interchange DB Project ATC Summary Design- builder ATC # Description Proposed Savings Decision Approved Conditionally Approved Not Approved Not an ATC: can be used A 1 Southbound Truck Continuity $20,930,000 X 2 Wireless Vehicle Detection $880,000 X 3 Optimized Braid $17,105,000 X 4 Northbound Route Continuity $365,000 X 5 Devore SB Diamond $2,480,000 X 6 Vertical Concrete Aesthetics Treatments $515,000 X 7 Precast Bridge Superstructures (Bulb-T or I-Girder) $1,880,000 X 8 Northbound Bridge at Kenwood $610,000 X 9 Extended Ramp Closures $760,000 X 10 Reduced Impacts at Cajon Creek $3,740,000 X Total $28,335,000 B 1 Revise location of Truck Lane diverge $8,591,000 X 2 Relocate Debris Basin $276,000 X Total $8,867,000

23 Table 4.6(cont.) Caltrans Devore Interchange DB Project ATC Summary Design- builder ATC # Description Proposed Savings Decision Approved Conditionally Approved Not Approved Not an ATC: can be used C 1 Extended Ramp Closures $1,500,000 X 2 Extended Closure of Mainline Lanes $3,500,000 X 3 Use of precast girders $2,300,000 X 4 Use of precast girders - Kimbark Canyon Bridge $4,200,000 X 5 55-hour closures $600,000 X 6 Northbound I-15 connector extended lane closure $750,000 X 7 Use of HMA Type for base $5,255,000 X 8 Relocate Kenwood Avenue Braid $25,000,000 X 9 2-lane exit to a 1-lane exit $6,800,000 X 10 Change location of future managed lane corridor $12,000,000 X 11 Spread footings in lieu of pile foundations $1,500,000 X 12 Eliminate Debris Basin $3,500,000 X 13 Use of permanent steel deck forms $700,000 X 14 Use of stained concrete in lieu of Sculpted Rock Shotcrete Texture $825,000 X Total $56,430,000 D 1 Proposed Spread Footings $6,501,000 X 2 Precast Concrete Girders $11,000,000 X 3 Long-term closure of Kenwood Avenue on- ramp No costs provided X 4 Long-term closure of Kenwood Avenue off- ramp No costs provided X 5 Location and Layout Changes to Bridges $5,000,000 X 6 Replace cut and fill with retaining walls $4,000,000 X 7 I-15 SB Mainline extended lane closure (weekday) 20% paving costs X 8 I-15 SB Mainline extended lane closure (weekend) 20% paving costs X 9 Modify temporary pavement design life to one-year $400,000 X 10 Air entrainment in precast pre-stressed girders No costs provided X Total $26,901,000 Table 4.6 Grand Total $120,533,000 1 23 11 1

24 4.2.2 Georgia DOT The Georgia DOT case was focused on the programmatic use of ATCs with a P3 project. The agency is currently involved in the early stages of an $11.3 billion Major Mobility Improvement Program (MMIP). The program will deliver 11 complex urban projects in Atlanta, Macon, and Savannah. GDOT recently completed the Northwest Corridor (NWC) project a DB-Finance delivery in which ATCs played a key role in the project’s success. This project was the state’s first ATC project and worked so well that the process developed has been templated and now constitutes the official approach for the DOT for both DB and P3 ATC projects. GDOT uses a web-based ATC review process which serves to expedite the submission, review, and decision-making process through a central portal. This also furnishes the agency with the ability to maintain strict confidentiality of the information through a firewall/password system. Another unique characteristic of the GDOT ATC program is its willingness to entertain ATCs that increase the cost of construction if they demonstrate increased revenue generation or operational enhancements that impact long-term life cycle costs. GDOT also was willing to entertain ATCs that might require adjustments to the NEPA clearances with the agency assuming the schedule risk imposed by the need for a Record of Decision if it approved the ATC. GDOT invested in a thorough preparation effort which included the development of an ATC Handbook that laid out contract requirements, processes, roles, responsibilities, and confidentiality requirements. The document included the following salient elements: • 30-day review process that included a specific time allotment for each step in the review process. • Confidentiality established via confidentiality agreements, as well as the online password requirement to access web-based review process. • Confidential agreement prohibited the printing out of any ATCs to keep the information contained within the online system. • Proposers’ hardcopy ATC submittals were kept in a locked room throughout procurement process. • No formal minutes recorded for ATC one-on-one meetings and discussions. • A single ATC decision-maker was designated to provide consistency throughout the process. • GDOT reviewers come from a pool of designated subject matter experts for each technical area. • All personnel involved in the ATC review process were required to complete ATC training prior to being given access to the online review system. GDOT developed an ATC evaluation manual for the project that was shared with the competing developers in an effort to enhance the transparency of the ATC evaluation process, as well as to communicate to the competitors the essential elements of their ATC proposals. Additionally, a list of pre-approved ATCs was included in the RFP, providing a set of options to each competitor that could be exercised without the need to prepare and full ATC proposal. An example of this was a list of locations throughout the project site where either concrete or asphalt paving would be acceptable. The pre-approved ATCs also served to focus the available resources on evaluating those ATCs that could not have been easily foreseen. Figure 4.1 is the flow chart for the NWC project ATC process.

25 Figure 4.1 GDOT ATC Process Flow Chart. On P3 projects, the developer is brought into the project at an earlier point in development than in a standard DB project. Thus, there is an opportunity for the developer to influence both the final environmental permit and the specific right of way (ROW) acquisition process. ROW pre- acquisition activities commenced during procurement, and changes to the baseline ROW acquisition plan were allowed via the ATC process. GDOT maintained close coordination between the ROW group and the ATC evaluation group, which resulted in the ROW professionals delaying acquisition tasks for specific parcels that were impacted by proposed ATCs. The result was that a total of 15 parcels were either reduced or deleted from the baseline ROW acquisition plan by ATCs incorporated in the winning proposal. The NWC project received and processed 146 ATCs during procurement. GDOT estimated that it cost $900,000 to administer the process. The total savings accrued from approved, incorporated ATCs was estimated to be $60 million, which represents a benefit-cost ratio of about 60:1. ATCs were also credited with a reduction in schedule of nearly 5 months. Thus, intangible benefits of early opening and reduced work zone congestion can also be added to total. Lastly, the two lowest bids were less than 1% apart. GDOT attributes this to enhanced competition triggered by the aggressive ATC process and the sense that competitors had that in order to win, they had to enhance the value of final project through innovative ATCs. The following is a list of lessons learned by GDOT on the NWC project ATC process. • Provide adequate time to review individual ATCs P3/IPD Office Uploads ATC Submittal to DashPort Review Manager Completes Initial ATC Submittal Review In DashPort Advisory Group Review/Comment Period Technical Review Committee Review/Comment/ Recommend Period Chief Engineer Review/Comment/ Recommend Period P3 Office Notifies Proposer Proposer Submission to P3 Office

26 • Provide sufficient time for proposers to develop and refine their ATCs • Ensure any and all “conditions” of approved individual ATCs are incorporated into executed contract • Assign dedicated staff for review of ATCs • Require proposers to specify clearly approved individual ATCs that have been incorporated in their proposals • Allow more time for negotiations with best-value proposer after selection and before finalization of contract documents • Define how to handle difference in cost savings between what the non-selected proposers ATC provided versus what the best-value proposer offered during negotiations • Consider right of way impacts resulting from ATCs either as increase or reduction in required right of way (VanMeter 2012). 4.2.3 Missouri DOT MoDOT has the nation’s most robust DBB ATC program. The program grew out of the success the agency found with alternate bidding of specific work items starting in 2003. The agency started formally soliciting ATCs in 2007 in both limited and full scope formats. The following is a summary of the evolution of MoDOT’s DBB alternate bidding and ATC program: • Alternate Paving since 2003 • 25% increase in bidders • Bid savings of 9% to 10% • Averaged 5.8 bidders since Oct 2003 • Alternate Pipes/Culverts since 2006 • 10% to 15% bid savings vs. historical RCP cost • Optional/Alternate Structures 2006-2008 • Mixed Results • Optional Grading/Staging ATCs since 2007 • 9% to 15% below program budget • Projects allowing ATCs for Entire Scope since 2007 • Mississippi River Bridge ($232M) – apparent $7.4 million savings • I-270/Dorsett/Page/Marine ($34M) - $9 million difference between low and 2nd low bidders • Route 141 St. Louis County ($54M) – 10% below budget • Route I-435/I-70 Jackson County ($29M) – Net savings of $968,000 • Hurricane Deck Bridge Camden County ($32M) – apparent 10% savings The agency cites the following specific advantages to employing ATCs: • Integrates contractor experience and innovation is an opportunity for MoDOT and allows industry to participate in a cooperative effort to find a best-value solution to our projects. • Allows contractor to mold a project to their specialties and methods allow each interested contractor to propose alternatives that best fit their operations which allows them to be in their ideal competitive position for the project. • Unknown competition by other contractors results in better bids.

27 • Contractors become more familiar with a project’s technical challenges earlier and can use the ATC process to mitigate or eliminate potentially costly risks. • Provides the ability to reduce a specific project's costs or completion time, and the ability to implement any developed alternative system wide for other applicable projects. • In addition, since the bidding process of awarding to the lowest responsive bidder is unchanged, this opportunity for flexibility does not eliminate traditional contractors from participating. • Partnering in the design process allows the ability to engage contractors more extensively and provides an avenue for their ideas to be moved forward to assist us in creating more efficient designs. • Integrating contractors’ experience and innovation during the pre-bidding process results in increased competition and lower bids.” The Missouri DOT is also careful to point out the following potential disadvantages of their program: • The ATC process carries a potential to increase the overall design costs for the project as the number and complexity of submittals may create multiple suitable alternatives, all of which could require additional design expense. However, these costs are minimized through the evaluation process for submittals which considers the increased design costs as a determining factor for approval. • Additionally, the potential increased costs are mitigated by MoDOT’s ability to use any approved ATC design concept on future MoDOT work, which allows MoDOT to implement the captured innovations and efficiencies throughout applicable projects on our system even if the ATC proposal is not bid or is not included with the low bid. • MoDOT chose to bear the redesign costs at an approved rate determined during the review process of the ATC to avoid a potential issue with design liability after award. In the event MoDOT determines a redesign cost for an approved ATC is not cost effective based on previous expenditures of the base design, the bidder may choose to move forward with the approved ATC by paying their own redesign costs rather than MoDOT. • The ATC process must be included in the project delivery timeline, allowing sufficient time to develop receive, evaluate and approve potential ATCS. • There is a potential for longer or more complicated delivery timeframes for a specific project. This can be managed by considering whether to include ATCs during the scoping process, identifying appropriate candidates early along with the type of ATC process and its duration. MoDOT currently uses three different types of ATCs: • Standard ATCs, • Specific Item ATCs, and • Pre-approved Alternative Design ATCs. The Standard ATC process seeks to apply value engineering principles in the pre-bid environment. Usually, most of the project technical work features are “open to the ATC process where contractors provide confidential feedback on design concepts to MoDOT staff in a two-tier approval process.” Figure 4.2 is a flow chart that depicts the process for a Standard full scope ATC.

28 Figure 4.2 Missouri DOT DBB Full Scope ATC Process Flow Chart Missouri DOT Design-Bid-Build ATC Process Pre-Advertising Conceptual Evaluation Approved Pr oj ec t D ev el op m en t a nd D el iv er y Ph as e Upcoming Project Evaluate for ATC Potential Advertise without ATCs Full or Limited ATC Scope? MoDOT Announce Intent to Include ATCs Contractor ATC Info Meeting Develop ATC Evaluation Process Develop ATC Scope Limitations Allowable ATC Scope Clause Full Scope ATC Evaluation Plan Post Current Plans in Plans Room Full Scope Baseline Design Limited Scope Baseline Design Potential High? MoDOT Receive Conceptual ATC *Contractor CATC One-on- One Meeting Proceed with CATC? Abandon CATC MoDOT Receive ATC Proposal Evaluate ATC *Contractor ATC One-on- One Meeting Qualifies as ATC? Min ATC Benefits Met? ATC Approved? Abandon ATC MoDOT Advances Approved ATC Design ATC Design w/ Biddable Quantities Contractor Bids ATC? MoDOT or Its Consultant Completes Approved ATC Design Final ATC- modified Design Build Project Incorporating ATC NO YES LIMITED FULL NO YES YES NO YES NO Contractor ATC Process Info Meeting Optional Contractor Clarification One-on-One Meeting * NOTE: There may be several one-on- one meetings with the contractors to clarify both CATCs and ATCs if required.

29 Conceptual ATCs (CATCs) include enough information that a rough estimate of the potential benefits, a view of possible drawbacks, and an estimate of the design and construction costs can be made for consideration against the published minimums and standards. The agency reviews the CATC and delivers a decision made on a pass/fail basis. Once a CATC is approved (a pass decision), the contractor may choose to pursue the ATC in more detail and submit it for final approval and inclusion in the bidding documents. For final ATC submittal, the contractor must submit the original approved CATC and enough supportive documentation for MoDOT to determine whether all approved and appropriate standards and contract requirements can be met, that all potential impacts have been considered and are acceptable, and that the resulting benefit/cost ratio as defined in the contract is acceptable. If determined acceptable, the ATC is approved, and the necessary redesign is undertaken in order to provide the specific contractor with a set of contract documents and plans to bid the project. Each contractor with an approved ATC can choose to bid the approved ATC or can bid the base design that has been provided for the project. The bids will be accepted and compared using the low bid process. To avoid design liability issues, MoDOT does not require the DBB contractor to produce the ATC- modified designs, but rather it has its own consultant advance the design to the point where biddable quantities are calculable. Table 4.7 is a list of the deliverables that the MoDOT consultant prepares for the ATC. Table 4.7 MoDOT Final DBB Standard ATC Documentation Deliverables List Document Document • Right of Way plans, if required • Utility plans, if required • Design exceptions with FHWA approval • Bridge layout memorandum • Navigation lighting plan and USCG approval • Special provisions • Location survey plats • Foundation recommendation report • Final engineering plans • Critical Path Method Schedule including design and construction activities • Electronic design data per MoDOT Engineering Policy Guide • Released for construction plans • Bridge and roadway component package submittal acceptable • As-built plans signed and sealed by Missouri Professional Engineer including as-built quantities The Specific Item ATC limits the scope of potential ATCs to areas specified in the solicitation. The optional grading/staging and optional/alternative structures ATCs listed above are examples of Specific Item ATCs. This type of ATC is reserved for projects where the agency believes that there is little potential for meaningful alternative concepts and where the resources required to evaluate full scope ATCs are constrained. The final type is the Pre-approved Alternative Design ATC. This version is the same as the Pre- approved element (PAE) described in Chapter 2 and detailed in Appendix A. These ATCs are required to be approved before the contractors’ bids are deemed responsive. All competing contractors are required to submit these during bid preparation. An example of this type is the submission of specific proprietary technology for signalization equipment, seismic components or bridge expansion joints. The alternative pavement bidding is an example of this approach, but it is

30 pre-approved in the solicitation; hence no submittal is required. This type has also been used for maintenance of traffic plans on urban freeway projects. 4.2.4 Washington State DOT WSDOT has been using ATCs from the very beginning of its DB program, and they are found on every DB project. Their primary benefit is “to maintain flexibility in the procurement process” (Carpenter 2012). In the WSDOT DB selection process, ATCs are proposed during technical proposal preparation. If an ATC is approved, the proposer is free to include or not include it in its final proposal. A key tenet of the WSDOT ATC program is the commitment to separate the ATC review team from the technical proposal evaluation panel, an effort meant to avoid any appearance of conflict of interest. WSDOT offers stipends for unsuccessful responsive proposals, and requires the proposers to relinquish ownership of the ideas found in the ATCs to the state for use at its own discretion per the following contract verbiage: “By submitting a Proposal in compliance with the ITP, all unsuccessful Proposers acknowledge that upon payment of the designated Stipend, all ATC’s incorporated into a Proposal, as well as any ATC’s that were approved by WSDOT but not included in the Proposal, shall become the property of WSDOT without restriction on use” (Carpenter 2012). Table 4.8 is an example summary of the WSDOT DB ATC program from 2009 to 2012, gleaned from an SEP-14 report. It shows the potential for achieving substantial savings by allowing competing DB teams to confidentially propose ATCs. It shows that during that period, eleven DB projects valued before award at over $3.2 billion were procured, and an apparent savings of $551.5 million from the engineers’ estimate were accrued. When the SR 99 project is removed, WSDOT logged an apparent savings of 27% from the engineers’ estimates. It must be noted that WSDOT does not directly attribute all the savings to the 152 approved ATCs. It is possible to argue that price competition in highway construction during the period contributed to apparent savings. However, looking at the I-5, Joe Leary Slough to Nulle Road Paving Project which had five bidders, one can see that the project was awarded at a price $4.1 million (38.6%) below the engineer’s estimate. Four of the five bidders submitted 21 ATCs of which 13 were approved. One of those requested to reuse portions of the existing guardrail rather than replacing all of it with new material as required in the RFP’s baseline design criteria. This ATC was given to the successful proposer and “provided a savings to the contract in both time and dollars along with a transfer of responsibility to the design-builder for evaluating which guardrail sections must be replaced and which could be reused” (Carpenter 2012). Thus, while competition on this project was high overall, there was a commensurate level of competition with ATCs as well. Additionally, the savings also included enhanced sustainability by reusing the guardrail material and effectively transferring the performance risk from the agency to the design-builder. Both are benefits which are not quantified in the apparent savings.

31 Table 4.8 WSDOT ATC Program 2009- 2012 (Adapted from Carpenter 2012). Contract Name # Pro-posers Pro- poser ATCs Sub- mitted ATCs Ap- proved Engineer's Estimate (millions) Winning Proposal Amount Apparent Savings (Loss) Percent Savings from EE I‐405, NE 8TH ST TO SR 520 ‐ Braided Ramps Interchange 3 A 5 5 $175.1 $107.5 $67.6 38.6% B 2 2 C 4 4 I‐405, NE 195th St to SR 527 ‐ Auxiliary Lane 4 A 1 1 $30.0 $19.3 $10.7 35.8% B 3 3 C 2 2 I‐5 ET ALL, Active Traffic Management System 2 A 5 3 $37.9 $34.6 $3.5 9.2% B** 1 0 C 8 3 SR 520 Pontoon Construction 3 A 11 6 $600.0 $367.3 $232.7 38.8% B 5 4 C 1 1 SR 520, Eastside Transit and HOV Project 3 A 27 15 $422.1 $306.3 $115.8 27.4% B 24 13 C 27 13 SR 99, Bored Tunnel Alternative 2 A 8 4 $1,056.9 $1,089.7 ($32.8) -38.6% B 18 14 I‐5, Joe Leary Slough to Nulle Road Paving 5 A 9 7 $18.6 $14.5 $4.1 38.6% B 4 0 C 5 3 D 0 0 E 3 3 SR 520 Evergreen Point Floating Bridge and Landings 3 A 17 12 $640.8 $586.5 $54.3 8.5% B 18 4 C 62 27 US 2, Rice Road ‐ Safety Improvements 3 A 1 0 $2.75 $2.17 $0.58 21.1% B 9 3 C 1 0 I‐405, NE 6th to I‐5 Widening & Toll Lanes 4 * * * $249.9 $155.5 $94.4 37.8% SR 9/SR 92 - Intersection Improve. 3 * * * $3.90 $3.35 $0.55 37.8% TOTALS 281 152 $3,238.1 $2,686.6 $551.5 17.0% * Contract not executed at this writing. Details not available. **Nonresponsive 4.3 Case Study Summary As previously stated, no significant new information was revealed by the outcome of the case study research. As a result, the outcomes of this study’s findings were combined with the results published in NCHRP Synthesis 455 and used to validate the conclusions listed in Chapter 7 of this

32 report. The case study research did uncover three divergent practices among case study participants that are worth noting and may be areas in which further research might add value. Those practices are as follows: 1. Composition of ATC evaluation panel: MnDOT and WSDOT assign separate ATC and technical proposal evaluation panels to avoid an appearance of conflict of interest. Others do not, citing resource constraints. 2. Inclusion of cost data in ATC submittals: WSDOT specifically excludes cost details from its ATC submittals, as do MassDOT and several others found in the synthesis, based on the premise that the “equal to or better than” determination is a purely technical decision and the inclusion of cost data could unintentionally influence the decision. Whereas, Caltrans, MoDOT, and GDOT, to name a few, all require ATC submittals to reflect the potential cost savings. In fact, several DOTs state that ATCs that do not demonstrate a cost savings of a published minimum are not considered. 3. Permissibility of non-ATC related clarifications: The “level playing field” doctrine is the basis for the differences in this practice regarding the content of the confidential one-on- one meetings. Some DOTs restrict the one-on-one communications to the proposed ATCs; whereas, others, like Caltrans, stipulate that the one-on-one meetings are held to not only discuss proposed ATCS but also to provide clarification to questions about the intent of the RFP scope of work. All three of the above issues are questions of interpretation of local procurement statutes and reflect both agency preferences and local industry concerns with the fairness and transparency of the procurement process. Therefore, they become agency business decisions for which the research cannot provide definitive guidance. It is worth noting that WSDOT, which has one of the most mature ATC programs, also has the most conservative interpretations of the above three issues. On the other hand, Caltrans, whose ATC program is one of the newest, has availed itself of the broadest set of interpretations. Both have demonstrated consistent success in their ATC programs, a finding that reinforces the conclusion that these issues are not structural but rather business decisions.