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Design-build delivers success everywhere (except Wisconsin)

Richard Thomas is director of state and local legislative affairs at the Design-Build Institute of America.

Richard Thomas is
director of state and local legislative affairs at the
Design-Build Institute of America.

If the state of Wisconsin was considering legislation to spend its scarce transportation dollars to pay contractors to build projects “without having to face any competition” in infrastructure “beauty contests” that only reward out-of-state “industry giants,” as described by The Daily Reporter in a recent editorial, then the state’s taxpayers should be very alarmed.

However, that description does not apply to design-build in any way. Design-build isn’t new and it’s not radical. It’s a proven method used successfully in almost every state, one of the few exceptions being Wisconsin.

Why? Because it works. The old approach is not collaborative, which means owners, architects, contractors and subs often end up at odds and taxpayers many times have to foot the bill for change orders and cost overruns.

Change is hard – especially in an industry accustomed to building infrastructure the same way for generations. As a native Midwesterner who grew up in a contractor family, I understand that better than most.

However, the state of Wisconsin, particularly it’s Department of Transportation, can’t afford to continue to sit on the sidelines while the rest of nation delivers collaborative, innovative and efficient design-build infrastructure projects each and every day. It’s hard for me to imagine why anyone believes Wisconsin is incapable of doing what 47 other states in the nation and the Feds do with great success. There’s no doubt that the small, yet vocal, group opposed to change in Wisconsin has portrayed the adoption of design-build as a virtual Armageddon for the state’s contractors and good governance.

They also offer zero evidence to support those claims. Here’s the truth about design-build:

MYTH: Design-build weakens competition in the selection of project teams.

FACT: Just the opposite is true. With Wisconsin’s current delivery method – design-bid-build – the primary, if not only, factor considered in the competition for a contract is price. The design-build process, conversely, puts in place a rigorous competition procedure that takes into account qualifications, experience, technical approach, price and other factors. This encourages better competition and allows many qualified firms of all sizes to participate.

MYTH: Design-build is best for larger projects, which excludes smaller firms from being able to lead projects.

FACT: Design-build can be used on projects of any size and type, and there are myriad examples of design-build project successes of all sizes.  Further, nearly 80 percent of U.S. states grant local governments authority to use design-build on their small, local projects. Even when a larger project is procured as a design-build project, smaller firms often band together to create a project team that is more able to handle the demands of a larger project.

MYTH: Design-build allows favoritism to enter into the contract-award process by including non-price factors in the basis for selection.

FACT: Favoritism or patronage is the opposite of design-build best practices. Although design-build allows for the consideration of factors beyond just price – such as team qualifications and project innovation – this is done to achieve best value and superior projects. In fact, the consideration of these factors has been shown to drive down cost, since it ensures that a team is reliable and produces quality work. This is something that is virtually impossible to decipher by merely looking at a contract price.

MYTH: On large design-build projects, big out-of-state companies will come into town and take work from local companies.

FACT: Actually, design-build is better than design-bid-build at mitigating this fear. Large design-bid-build projects will see both in-state and out-of-state contractors submitting ridiculously low bids in order to win the contract, then forcing their sub-contractors (which are often local) to lower their costs so they can meet the low-bid they offered. Because the primary consideration is price, there is little incentive to truly collaborate with local firms.

The state of Wisconsin can follow the lead of the rest of the nation and make hiring local firms a priority for their design-build teams.

As the Daily Reporter suggests, you can look to your neighbors to see the successes design-build is already delivering throughout the Midwest on projects of all sizes. Transportation officials from states throughout the region just recognized the top transportation sector projects at the 2017 Mid-American Association of State Transportation Officials Conference in Cleveland. Four out the five top award winners were delivered using design-build, including the U.S. 60 Rogersville Design-Build project in Missouri, Kansas’Johnson County Gateway Phase 2 Design-Build Project: I-435/I-35/K-10 and Missouri’s Columbia I-70 Bridges Design-Build project. These are just a few examples of how design-build delivers successful projects for state departments of transportation.

The Minnesota Department of Transportation, like the majority of states, uses design-build for all types of projects, large and small. MnDOT’s website provides detailed information on their design-build program, which delivers design-build projects with both low-bid and best value; ranging from a $3 million ADA improvement project to $200 million highway projects.

Claims that design-build leaves small local contractors out in the cold are simply untrue. Although generally larger firms in Minnesota compete for the large projects over $100 million, small and mid-size contractors are winning the small and mid-sized jobs. Consider the TH 2 Crookston Slope Design-Build Project let by MnDOT in 2014. That project received bids coming in the $6 to $7 million range, yet none of the top four shortlisted firms are among the nation’s top 400 firms. There are thousands of similar examples throughout the nation showing how design-build works for projects and construction firms of all sizes.

Moving too fast? Design-build has become increasingly popular since the 1990s, and Wisconsin is one of only three states with no design-build authority, lagging far behind the rest of the country. No one has suggested design-build is right for every project. And it’s not.

Design-build is an effective project-delivery tool that Wisconsin should have at its disposal. Without it, Wisconsin taxpayers will ultimately pay the price for continued delays and the refusal to embrace a time-tested method of project delivery.

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