Transportation agencies are increasingly implementing
alternative contracting methods (ACMs) to deliver their transportation
projects. It includes the use of project delivery methods such as design-build
(DB), construction manager at-risk (CMR) or construction manager/general
contractor (CMGC), and design-bid-build best-value, (DBB-BV), as well as emerging
contracting approaches like alternative technical concepts (ATCs), A+B bidding,
lane rental, incentive/disincentive provisions, and indefinite
delivery/indefinite quantity contracting. This movement has been spurred by the
FHWA’s Special Experimental Project No.
14 – Alternative Contracting (SEP-14) program, which allows the use of
federal funds to evaluate promising ACMs on selected projects. It has also
brought an increase in research initiatives on the use of ACMs. The problem is
that ACMs are usually individually studied disregarding the fact that they are
part of larger procurement strategies that combine multiple contracting methods.
The existing literature provides no guidance on how to combine ACMs at the
project level to optimize the benefits of these valuable tools and maximize
value-for-money. NCHRP Synthesis 473: Indefinite
Delivery/Indefinite Quantity Contracting Practices found that the lack of
guidance on this matter is considerably affecting DOTs’ ability to take full
advantage of the benefits provided by IDIQ contracting.
NCHRP Synthesis 473 also found that IDIQ techniques
can be used in conjunction with a wide range of ACMs to enhance and increase
the benefits usually attributed to this contracting approach. For example, the
acceleration of the project delivery period has been identified by most DOTs as
the most important benefit provided by IDIQ contracting, and it could be
reduced even more if IDIQ is combined with DB, as has been done by the
Minnesota and Florida DOTs. Likewise, contingent on the specific needs of each
Task Order (each project under the contract), an IDIQ contract might allow the
use of lane rental, incentive/disincentive, ATCs and other special provisions. Thus,
besides providing for an indefinite quantity of supplies or services on an as
needed basis, IDIQ allows DOTs to quickly customize provisions on a Task Order
basis according to the requirements of each project. However, the lack of
guidance on how to effectively combine ACMs on IDIQ contracts has led DOTs to
use standard sets of provisions equally applied to all Task Orders, limiting the
flexibility provided by this type of contracts and the contracting capabilities
of transportation agencies.
The federal government has executed IDIQ contracts for
delivering multiple DB, CMGC, and/or DBB-BV projects of a similar nature. In
fact, the US Naval Facility Engineering Command has awarded nationwide DB IDIQ
contracts with a capacity of over $200 million to design and build specialty
projects like medical or communications facilities with estimated Task Order
amounts of $20 million. These IDIQs provide contract offices with a pool of available
provisions to tailor Task Orders to meet specific requirements. Thus, there is
a base of experiential information that can be used to identify effective
practices at the federal level, which can be adapted to meet the needs of state
The DOT members of the NCHRP Synthesis 473 panel
indicated that there are a number of key procedural issues preventing many
states from taking full advantage of the ability of IDIQ to be combined with
other ACMs. The following are a few of the major issues identified in the
· Can agencies legally combine ACMs and IDIQ contracts?
· What is the industry perspective on combining ACMs and
· What types of repetitive projects are best suited for
IDIQ procurement with ACM delivery?
· How does the use of ACMs on an IDIQ contract impact
the NEPA and permitting process during Task Order project development?
The challenges demand a framework that assists the
agency to capture the benefits accrued by permitting ACMs on IDIQ contracts
without violating the public trust and commitments that may have been made
during project development. Ultimately, a sound business case must be made for
each ACM-IDIQ as well as when and where including an ACM provision in IDIQ
procurement is appropriate. This ultimately requires a methodology to identify
the costs associated with implementing ACM-IDIQs and a common approach to
identifying a return on investment so the agency can optimize their use across
each annual program.
proposed research should address the following questions:
ACMs are appropriate for use on IDIQ construction and maintenance contracts?
are the appropriate procedures for accepting, reviewing and evaluating design
submittals during IDIQ procurement?
are the appropriate practices in contractually implementing ACMs on IDIQ
there procedures for evaluating the optimal mix of ACM usage in IDIQ contracts?
impact does increased ACM-IDIQ usage have on the agency’s non-IDIQ program?
does an agency optimize its single project procurement program with an IDIQ
program to provide the best mix of each type of contract?
changes should be made to the project development life cycle to best benefit
from the optimal mix of project delivery methods including traditional DBB?