The National Cooperative Highway Research Program (NCHRP) plans to award a contract for a study and report. Legal research reports sponsored by this project are published in NCHRP’s Legal Research Digest (LRD) series. Publications are made available to some libraries and to approximately 4,000 transportation lawyers and officials through the TRB distribution network.
Increasingly enabling legislation, rulemaking, and policy and implementation guidelines that allow for the greater use of best-value procurement in conjunction with alternative contracting methods including Design-Build (DB), Construction Manager/General Contractor (CM/GC), and Public-Private Partnerships (P3) for highway construction projects have been introduced. Best-value incorporates factors in the selection process, in addition to price, to better ensure that an offeror will provide the greatest overall value to the agency at optimal performance.
Prior research addressing best-value procurement considered the range of best-value procurement systems used for highway projects and recommended that best-value systems should allow for flexibility in terms of selection criteria, rating systems, and award algorithms. Further, projects should be screened to select candidate projects that would benefit most from best-value and implement them using a step-by-step process to select the most appropriate parameters, criteria, and award algorithms based on specific project objectives, characteristics, and risks.
From a legal perspective, issues have arisen in best-value procurements involving substantive and procedural due process such as:
Confidentiality during one-on-one meetings;
Pre-proposal discussions with proposers;
Transparency and fairness in evaluation processes;
Subjectivity and justification of selection decisions; and
Other fairness issues leading to bid protests.
There is not much case law among transportation agencies regarding best-value bid protests or disputes as most of these are settled before being litigated. However, sunshine laws in some states allow for freedom of information access to public records revealing the causes of best value protests and their resolution.
The Government Accountability Office (GAO) also keeps statistics on federal bid protests for best-value or source selection procurements. Examples of GAO or U.S. Court of Federal Claims decisions upholding bid protests included: (1) issues related to biased or unequal treatment of proposers; (2) failure of selection committees to strictly follow evaluation criteria; (3) unsupported evaluation and selection decisions; (4) trade-offs that ignored lower priced acceptable offers; (5) failure to adequately document selection decisions; and (6) ambiguous instructions to proposers. These decisions, while not for transportation projects, still are relevant to best-value procurement.
The objective of this research is to produce a legal research digest that includes the following:
1. An analysis of fairness issues in the best-value procurement process that may have resulted in formal bid protests or questions regarding reduced competition.
Note: These could relate to Alternate Technical Concepts (ATC) introduced during confidential pre-proposal discussions that may give an unfair advantage to a proposer. It also may relate to use of evaluation criteria or weightings that bias the evaluation and selection process towards one proposer over another, the improper make-up and conduct of the selection committee (i.e., organizational conflicts of interest or violations of non-disclosure agreements), rules relating to communications, and the lack of transparency or clarity in justifying and documenting the best-value selection decision.
2. A review and analysis of the existing federal, state, and local legislation focused on best-value procurement to determine whether the enabling legislation (i.e., degree of statutory prescription or other requirements) has resulted in bid protests, affected the level of competition, increased the cost of procurement, or resulted in other perceived procurement or project execution issues.
Note: Note that state legislatures have taken a range of approaches in their enabling legislation to implement best-value. One approach is to establish broad guidelines that empower a state highway agency to determine the specific best-value procurement processes. This would allow an agency to implement different best-value procurement processes depending on the project characteristics. The other approach is to define prescriptive rules and processes to address key aspects of procurement based on state law, policy, or local industry influence. For example, enabling legislation may define specific requirements related to project selection criteria, qualification of potential proposers, proposal evaluation procedures, makeup of the technical review committee, and the award process (i.e., two step best value based on adjusted score or low bid).
3. A summary of how best-value should be effectively implemented through law, contract provisions, and policy to minimize protests and preserve the integrity of the procurement process.
This research will be conducted in four tasks pursuant to a firm fixed price agreement.
The tasks will be as follows:
Task 1. Research plan and detailed report outline. The consultant will conduct background research and collect relevant material. Based on the initial but complete review of the source material, consultant will propose a detailed report outline. The outline should be about 8 to12 pages, include a proposed survey if one is to be used, and contain sufficient detail to inform the NCHRP project panel of what a 75- to 100-page report will contain. This outline should also contain the estimated pagination for each proposed section and/or subsection. This material will be submitted to NCHRP for consideration and approval.
Task 2. After approval of the work plan, the consultant should conduct additional research, and case and statutory/regulatory analysis.
Task 3. Draft report in accordance with the approved work plan (including modifications required by TRB).
Task 4. Revise report as necessary. The consultant should estimate that two revisions will be necessary. One revision may be required after review by the NCHRP staff and members of a select subcommittee. Additional revisions may be required after the full committee has reviewed the report.