Intermodal Transportation Safety Policy

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Intermodal Transportation Safety Policy

WHEREAS, the transportation construction industry has a vital interest in the design, construction, maintenance and operation of the nation’s transportation system, and;

WHEREAS, it is the goal of the transportation construction industry to deliver a safe, economical, environmentally-sound, and quality product to its customers, and;

WHEREAS, the low bid system has historically succeeded in achieving these goals in a competitive, open, fair, efficient, and cost-effective manner, and;

WHEREAS, FHWA has been experimenting since 1990 with "innovative" contracting methods under Special Experimental Project No. 14 (SEP-14), to evaluate practices such as cost-plus-time bidding, lane rental, warranty procedures and design-build procurement methods, and;

WHEREAS, the Transportation Equity Act for the 21st Century (TEA-21) mandates that FHWA establish regulations by June 2001 that will allow public owners to use the design-build procurement method without FHWA approval on ITS projects in excess of $5 million and other projects in excess of $50 million that utilize federal funds, and;

WHEREAS, FHWA has approved an increasing number of design-build projects in recent years under SEP-14 as more states have adopted design-build procurement methods, and FHWA intends to continue the use of SEP-14 on projects that fall outside of the guidelines mandated by TEA-21.

NOW, THEREFORE, BE IT RESOLVED that ARTBA continues to support and promote the low bid procurement process as the most favored project delivery system, which includes awarding professional services contracts through the qualification-based selection process, and construction contracts to the lowest responsible bidder, and;

BE IT FURTHER RESOLVED that in light of TEA-21’s limited adoption of design-build procurement methods, there may be well-defined projects that might be suited for design-build procurement methods. Such projects might include the need for unusual and/or innovative financing arrangements, certainty in pricing and/or scheduling, a need to address specific technical challenges, or other special circumstances, and;

BE IT FURTHER RESOLVED that the estimated contract amount of a project should not be the determining factor of whether or not a project is suited for design-build, and;

BE IT FURTHER RESOLVED that public owners should continue to make every effort to let projects through the traditional low bid system. ARTBA is firmly dedicated to advocating reforms that will shorten the project delivery time under the traditional low bid system and does not believe that "reformers" should only rely on "innovative" contracting methods to remedy project delivery delays, and;

BE IT FURTHER RESOLVED that state or local use of the design-build procurement method should not be mandated by the federal government; state and local authorities should be allowed maximum flexibility in determining their own procurement methods, and;

BE IT FURTHER RESOLVED that should a public owner elect to use the design-build procurement method for certain projects, that it do so in a manner that is consistent with this resolution. In addition, public owners should consider the following elements as part of their design-build procurement process:

A two-step procurement system where bidders on a project are qualified through a preliminary screening process, whether it be a pre-qualification process, a surety bond-based system, or an arrangement whereby a bidder demonstrates understanding of the technical requirements of the project, or any combination thereof. Such a system should be based solely on well-defined, objective, measurable criteria relevant to the project’s size, value, duration, technical features and complexity. The pre-qualification criteria and how the various requirements will be evaluated and what weight they will have in the final determination of the qualification shall unambiguously be communicated to the proposer/bidder in advance of bid preparation and shall be tailored to encourage participation by all proposers/bidders that meet the requirements.
Because the use of the design-build procurement method requires more resources in the preparation of the proposal/bid than the traditional low bid system, public owners should pay a fee to each unsuccessful but responsive and competitive proposer/bidder for their preparation work. This fee should be based on the size of the project and the complexity of the proposal/bid process.
The bid selection process should be objective, well defined, on the public record and as isolated from political influence as possible. The bid price should be the most significant factor in determining the final bid selection.

October 12, 1999