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Suggested Citation:"V. CONCLUSION." National Research Council. 2023. Best Value Procurement for Highway Construction: Legal Issues and Strategies. Washington, DC: The National Academies Press. doi: 10.17226/27175.
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Page 35
Page 36
Suggested Citation:"V. CONCLUSION." National Research Council. 2023. Best Value Procurement for Highway Construction: Legal Issues and Strategies. Washington, DC: The National Academies Press. doi: 10.17226/27175.
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Page 36

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NCHRP LRD 90 35 As shown by the table in Appendix A, state laws may dic- tate the use of specic algorithms to award best value contracts. ese requirements typically result from input provided by con- tractors accustomed to low bid procurements, who want the agency to tell them exactly what the project needs and exactly how the selection process will work. Even where the statute may allow greater exibility, some agencies have adopted policies and procedures requiring the use of formulas or other algorithms that limit the agency’s discretion. is does help to reduce the opportunity for favoritism in contractor selection, thereby mak- ing proposers more comfortable with the process, reducing opportunities for protest, and enhancing competition. How- ever, the algorithms dictated by the legislature may not always be in the agency’s best interest. e primary issue is that, for best value procurement, it is dicult for the agency to know what innovative ideas may be proposed until the proposals come in the door. As discussed infra, there are examples of projects where the agency believed, for legitimate reasons, that the top- ranked proposer under a formulaic algorithm was not the best contractor for the project. An example of this comes from the Texas law that dictates weighting of technical versus price, which makes it dicult for a higher priced proposal to win. As a result, dictating an approach that serves to make the process more transparent may present issues, requiring the agency to make a Hobson’s choice whether to deviate from the formulaic result in making the selection decision, re-procure the contract, or accept a proposal that, in the agency’s view, does not oer the best value to the public. Regardless of the legislative model used, to avoid opening the door to procurement challenges, agencies must carefully re- view the enabling statutes and regulations and take appropriate steps to ensure compliance as they develop and implement best value procurement procedures. V. CONCLUSION e use of best value procurement has gained considerably more use with local and state transportation agencies over the last 20 years due to its ability to consider evaluation factors beyond just cost and the increased use of alternative project delivery methods, such as DB, CMGC, and PPP. ese typically require the evaluation of factors other than cost in the selection process. Additionally, in recent years, agencies have desired to use best value for DBB projects. While best value selection pro- curement oers agencies material benets, it comes with its own challenges that need to be addressed to mitigate any legal issues related to complaints and protests in the selection process. Due to the greater complexity of best value procurements and the additional details and thought required in preparing a best value proposal to address non-price factors, contractors spend considerably more time and money on best value pro- curements and proposal preparation than in low bid procure- ments. As a result of the increased resources invested, any per- ception by an unsuccessful proposing rm that the best value procurement evaluation and selection process was improperly conducted, or the results were skewed, may trigger a bid protest. Where the state legislature used the Model Code as the basis for the procurement law, the statute typically provides signi- cant exibility to procuring agencies to use competitive sealed proposals for their contracts, with the detailed procedures es- tablished through formally promulgated regulations, manuals, and other written procedures. Some states have adopted a simi- lar approach with respect to best value procurements without adopting the Model Code. is approach benets the procur- ing agencies as they can develop procurement procedures based on their specic needs. Another benet is that they are able to gain a better understanding of the statutory foundation for their procurements based on a long procurement history and experiences of multiple agencies relying on the same enabling authorization—thus reducing the potential for protests based on failure to comply with the law. Even where the general procurement law is based on the Model Code, it is not uncommon for agencies to obtain separate enabling legislation for specic alternative delivery methods. In most cases, these new laws serve to expand rather than re- place the agency’s existing authority. For example, Maryland is a Model Code state, and its state agency DB contracts are awarded under the general procurement law’s competitive sealed proposal process.85 However, state agencies rely on a separate law for P3 procurements that avoids the application of certain requirements of the general procurement law that are not well- suited for public-private projects.86 In some cases, best value enabling legislation includes ex- tensive, detailed requirements that agencies must conform to in conducting best value procurements. is approach presents a number of issues for procuring agencies, particularly where the requirements contain internal conicts or are inconsistent with the agency’s goals. As one example, the California legislature has adopted a piecemeal approach to its procurement law, with dif- ferent agencies subject to dierent requirements. Agencies that wished to use DB but were subject to competitive bidding re- quirements would seek special legislation and, if they succeeded in obtaining authority, it was subject to constraints and sunset provisions. Statutory constraints included requirements such as giving specic factors a minimum weight in procurements (thus limiting the agency’s ability to weight other factors appro- priately), using trained labor (in eect precluding open shop contractors from proposing), and using forms not yet in exis- tence, to be developed by another agency. A number of glitches in the multitude of statutes were cleaned up through consoli- dated legislation adopted in 2014, but the process of enacting agency-specic statutes started again almost immediately, and it remains dicult to parse through the requirements applicable to specic agencies and projects. 85 General Procurement Law of the State of Maryland as set forth in Division II of the State Finance and Procurement Article of the Maryland Annotated Code (SFP) and implemented by Title 21 of the Code of Maryland Regulations (COMAR). 86 Some of the issues addressed by the P3 law (§§ 10A-101 through 10A-402, and § 11-203(h) of the State Finance and Procurement Article of the Annotated Code of the State of Maryland) include the ability to accept unsolicited proposals and engage in pre-award negotiations.

36 NCHRP LRD 90 e importance of a well thought out procurement process cannot be understated as there are many possible bases for protest by an unsuccessful proposer, including unclear require- ments or errors in the procurement package, agency deviations from the evaluation plan, the possibility that the selection deci- sion was inuenced by bias, lack of transparency, leaking of con- dential information during the pre-proposal period or during discussions following receipt of proposals, the agency’s deci- sions to waive (or not waive) procurement requirements, fail- ure to properly document the basis for evaluation and selection decisions, agency noncompliance with applicable legal require- ments, and a belief that the agency’s decision was wrong. As evident from the literature reviewed, when these issues occur, a proposer that expended considerable resources on the procure- ment and was not selected may decide to le a protest against the transportation agency and the selection decision. e con- struction and consulting industries have expressed concerns about the best value process related to transparency and fair- ness. When protests occur, there is a cost to the agency in re- sponding to and potentially litigating the protest. ere is also a risk that the protest will necessitate canceling the procurement and re-procuring the project, resulting in additional costs and delays to project implementation. erefore, agencies need to identify potential situations that may give rise to protests in best value procurements so that they can take appropriate measures to reduce the risk and ensure that the procurement process pro- ceeds as planned.

Next: APPENDIX A: SURVEY OF TRANSPORTATION AGENCIES ON BEST VALUE AUTHORITY »
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Best value procurement is becoming more popular with transportation agencies because it allows them to consider factors other than cost. However, best value procurement is also more complex and can lead to protests if not conducted properly.

NCHRP Legal Research Digest 90: Best Value Procurement for Highway Construction: Legal Issues and Strategies, from TRB's National Cooperative Highway Research Program, addresses the best value procurement systems used for highway projects and notes the flexibility regarding selection criteria, rating systems, and award algorithms.

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