Short Course: Progressive Design-Build for Transportation Projects

Aug 12

Written By Southern Plains Transportation Center

Nils J. Gransberg PhD, DBIA, AC

VP for Operations, Gransberg & Associates, Inc.
Adjunct Instructor
Gallogly College of Engineering | Lemon Construction Science Div.
The University of Oklahoma

Wednesday, September 11

8:00 A.M. - 4:00 P.M. (CT)

Flyer

This short course on Progressive Design-Build (PDB) provides an introduction to the fundamental characteristics of the delivery method as compared to other traditional and alternative delivery methods in order to understand the unique project characteristics that align with this delivery method. A review of the current state of practice provides an overview of the experiences of other state DOTs that have implemented PDB, followed by an introduction to developing a negotiated Guaranteed Maximum Price (GMP). The final course module looks at opportunities and challenges associated with PDB to better understand both the strengths and potential benefits as well as its inherent shortcomings and difficulties associated with the transfer of design liability.

Progressive Design-Build (PDB) is an alternative method for delivering complex public projects that has been increasingly adopted by owners across the public infrastructure sector. "Traditional" Design-Build delivery methods that require the Design-Builder to advance the design to roughly 30% and fix the total price of the project as part of a competitive procurement has been problematic, typically requiring the inclusion of excessive contingencies due to uncertainty in the final scope or underestimating the value of the final scope, leading to cost overruns and other impacts. A study conducted by Traveller's in 2021 looking at 17 years of Design-Build transportation mega projects found that the design risk associated with fixing the total price prematurely resulted in significant losses to the Design-Builder, with roughly 50% of DB projects failing to earn any profit. The study also looked at PDB and Construction Manager/General Contractor delivery methods and characterized the design risk associated with the timing of setting the price of the scope as "Low" as compared to Design-Bid-Build which was "Moderate", and Design-Build & Public-Private Partnerships (P3) as "High".

PDB's approach is to select the Design-Builder earlier in the planning process, fixing their markup (fee, overhead, general conditions, profit, etc.) without requiring them to advance the design independently or fix the total price prematurely. The owner's staff and the PDB entity then collaboratively negotiate the project scope and agree to the price using open-book estimates. This allows the owner to express more of their desires and preferences during the design while reducing the negotiation of the cost of the scope to essentially materials and quantities, having already agreed to the markups at the time of procurement. From the Design-Builder's perspective, this model allows for a more appropriate apportionment of scope risk that enables more consistent results enabling the contractor to achieve budget and schedule objectives while earning an acceptable return.

ABSTRACT

Progressive Design-Build (PDB) is an integrated team approach to delivering large, complex projects that has seen a rise in popularity among DOTs looking to deliver technically challenging, major infrastructure projects within significant schedule and budget constraints. ODOT recently secured a $124M Federal grant for the Roosevelt Bridge project (the largest grant in the department’s history) that includes consideration of innovative project delivery methods, like Progressive Design-Build, which provides a distinct opportunity for both the State of Oklahoma and its heavy-civil transportation market.

This SPTC short course will allow attendees to gain an understanding of how PDB works, case studies from other US DOTs, how PDB teams can be assembled, and the opportunities and challenges associated with this delivery method. The course will be delivered in a hybrid format with the opportunity to attend in-person or remotely (via Teams) and will consist of the following modules (2x AM & 2x PM), with an hour break for lunch:

Module 1: Introduction to Progressive Design-Build

Module 2: State of the Practice: DOT Implementation of PDB

Module 3: Developing a Negotiated GMP

Module 4: Opportunities & Challenges for PDB