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State highway departments have yet to embrace design-build, although some are making preparations to begin testing the project delivery method.
The design-build method of project delivery has been an option for highway construction since the early 1990s, but south central states have hardly rushed to embrace it. The method was first authorized through provisions in the federally approved Intermodal Surface Transportation Efficiency Act and the Transportation Equity Act for the 21st Century.
Tennessee and Alabama have adopted a wait-and-see attitude, while Mississippi and Arkansas have established some guidelines so they can make design-build an option for state highway projects.
"The south central states are definitely behind the curve with regard to design-build," said Brian Perlberg, director of government affairs and general counsel with the Design Build Institute of America. He blamed a fear of the unknown.
"Objective studies indicate the benefits of design-build in highway construction," said Perlberg, citing a May study that Tom Warne and Associates LLC of South Jordan, Utah, prepared for the California Design Build Coalition and a study by the Construction Industry Institute.
"According to the CII, design-build saves 33 percent in project completion time, 6 percent in cost and it reduces litigation by 60 percent and significantly minimizes cost growth," he added. "You don't get a lot of change orders. Also, the quality goes up when you have more interaction with the owner throughout the process."
The Warne study evaluated 21 design-build transportation projects and concluded that the delivery method surpasses traditional design-bid-build in cost control, quality, delivery time and overall owner satisfaction, Perlberg added.
Delivery time is probably the greatest benefit of design-build.
"Time really is money and the longer things drag out the more costly they get," said Jennifer Gavin, spokeswoman for the American Association of State Highway & Transportation Officials. Design-build has typically been used on large projects, which some argue is its major drawback.
"We've been historically opposed to design-build from a standpoint of big versus small since this has the potential to hurt small contractors," said Ken Starwalt, executive vice president of Tennessee Road Builders Association. "The majority of highway contractors in every state, not just Tennessee, are small, family-owned construction businesses."
After the Tennessee Department of Transportation received approval from the Tennessee Legislature to let projects using the design-build delivery method, TRBA established a task force in July 2004 to explore the issue.
"Since the legislation is out there and TDOT is looking at building with that method, we wanted to look into it," Starwalt said.
Billy Norrell, director of the Alabama Road Builders Association Inc., said design-build is beneficial in certain circumstances, but it's not appropriate for his membership.
"In Alabama, design-build is geared toward large companies and we have a much greater collection of smaller, family-owned operations, some that have been going 60 to 100 years," Norrell added. "Most are not interested in tackling something that comprehensive. They aren't interested in taking on the risk of every aspect of the project."
The Alabama Department of Transportation, for its part, is not in any hurry to use the method.
"It's being talked about a lot and we have looked into it, but each time we've talked ourselves out of it," said Don Arkel, chief of ALDOT's design bureau. While ALDOT has experimented with design-build in the past, there are no immediate plans for its implementation.
Arkansas Highway Department is preparing a procedure manual for design-build projects that should be ready this month, said Bob Walters, chief engineer.
"We had legislation in our 2003 legislative session that authorized us to use the design-build method and we are trying to finalize the manual so that we have at our disposal another project delivery method," he said. "We don't know if it will be faster or cheaper, but we want to have options to address any situation that might arise."
John Suskie, executive director of Arkansas Asphalt and Pavement Association, said his membership is eager to have "another tool to build the roads and bring funding into the state.
"In Arkansas, we have a tremendous backlog of $16 billion worth of projects and I guess this is just another way we hope to get some of those out," he added.
Mississippi Department of Transportation is also establishing procedures so that design-build may be used, said David Foster, assistant chief engineer, pre-construction. MDOT received approval in the 2004 state legislative session to use the method and is trying to identify a suitable project on which to try it out, he said.
"MDOT asked for design-build authority," Foster added. "We feel like it gives us another tool in the toolbox to deliver a project."
The greater the complexity of a project, the more it lends itself to the design-build method, said Kirk Randolph, vice president, major projects group, APAC-Southeast Inc. The APAC group of companies is one of the largest transportation construction contractors in the United States and has used design-build in Texas, Florida, North Carolina, South Carolina and Virginia.
"The methodology lends itself more to larger projects because the opportunities for delivery in the time schedule increases with the complexity of a project, and you often can build in innovative, construction-friendly ideas that make the total project cheaper," Randolph said.
He added that departments of transportation will often restrict the use of design-build to large projects, which has the automatic effect of reducing the pool of competitive bidders.
"But it's normal for a $150 million project to have a different slate of competitors than a $5 million one anyway," he said.
Smaller contractors still stand to benefit from design-build projects if they partner with other contractors or bid for the subcontracts, said Dave Barton, executive director of Mississippi Road Builders Association.
"A lot of big and little contractors get involved in design-build projects because it's simply a fast way to build a project," Barton said. "I think it's good for our membership and the state."
Design Build Institute of America introduced a design-build amendment in the latest version of the Federal Transportation Bill that will eliminate the minimum-dollar stipulation that was originally attached to the method, Perlberg said. The amendment has been approved in both the House and Senate and is currently in conference committee.
"We did that because we believe design-build works for big, small and medium-sized projects," Perlberg said. "It's an effective project delivery method that should be considered for all type of projects and this language allows for greater usage of design-build."
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