The National Academies

NCHRP 10-61 [Completed]

Best-Value Procurement Methods for Highway Construction Projects

  Project Data
Funds: $299,952
Research Agency: Trauner Consulting Services
Principal Investigator: Sid Scott
Effective Date: 4/1/2002
Completion Date: 10/14/2005
Comments: NCHRP Report 561: Best-Value Procurement Methods for Highway Construction Projects

The findings of research conducted under this project are presented in NCHRP Report 561: Best-Value Procurement Methods for Highway Construction Projects.

Legislative requirements in most states require that highway construction contracts be awarded using a low-bid system. Under a low-bid system, contractors submit bids based on plans and specifications prepared by the highway agency or a private engineering firm hired by the agency, and, except under extraordinary circumstances, the contractor submitting the lowest bid is awarded the construction contract. In all but a few cases, experience levels of the contractor, quality issues, and other criteria are not taken into consideration in awarding these contracts.

The low-bid system makes no allowances for awarding construction contracts to the best-performing contractors who deliver the highest quality projects. Various elements can be considered in selecting a contractor on the basis of performance. Objective elements include contractor experience with similar projects, completion within schedule, compliance with material and workmanship requirements, timeliness and accuracy of submittals, and record of safety. Subjective elements include effective management of subcontractors, proactive measures to mitigate impacts to adjacent properties and businesses, training and employee development programs, corporate commitment to achieving customer satisfaction, and client relations.

These elements not only affect the ultimate performance and overall cost of the completed facility, but also contribute to the efficient execution of the work. Efficiency is very important to contracting authorities that are interested in a high level of public acceptance. It is also recognized that, because of constrained staffing and budgets, it is not possible for state agencies to "inspect" quality into the work. Therefore, a procurement process is needed that considers value-related elements in awarding contracts.

Under a "best-value" selection process, the low-bid concept can be modified by adding quality issues to the bid evaluation process. The low-bid concept is still a part of this selection process, but it is weighted with other elements to determine a best value that reflects quality, as well as cost issues. Several governmental organizations, including the Army Corps of Engineers, have used the best-value concept to award construction contracts.

Public-sector organizations using the low-bid procurement process face constant pressure for improved quality, faster turnaround, and reduced overhead costs associated with project delivery. At the same time, private-sector organizations are recognizing the need for improved quality in their products in order to remain competitive. A best-value bid award system can provide a means for both public- and private-sector organizations to achieve common objectives and to include quality in the competitive procurement process. These provisions would be of interest to all organizations in the highway industry that are committed to providing a quality product.

Research conducted under this project resulted in the development of:

(a) Best-value procurement methods for use in awarding highway construction contracts,
(b) Screening criteria for selecting projects for application of best-value procurement methods, and
(c) Strategies for overcoming barriers to implementing best-value procurement methods.

Status: Research is complete.

Product Availability: The findings of this research are presented in NCHRP Report 561: Best-Value Procurement Methods for Highway Construction Projects.

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