“If we can prevent the government from wasting the labors of the people, under the pretence [sic] of taking care of them, they must become happy.” In 1802, Thomas Jefferson was fixated on an issue that still preoccupies the United States 210 years later: government waste. One prominent area of government spending, particularly since the passage of the American Recovery and Reinvestment Act of 2009, is highway financing. Large projects, like interstate highway construction, feature many moving pieces. Consequently, these projects contain many opportunities for inefficiencies that lead to waste.
One potential area for waste within transportation construction projects is in the initial procurement. The traditional method of procurement for transportation projects, known as “Design-Bid-Build,” requires two separate phases: an award for design and an award for construction. As the inefficiencies of the Design-Bid-Build process have come to light, alternative processes have emerged. One such alternative method is “Design-Build.” Design-Build, unlike Design-Bid-Build, combines the bidding processes for the design and construction phases and packages the entire project into one contract that is let once. In doing so, Design-Build removes many of the inefficiencies of the traditional Design-Bid-Build process.
Recognizing the inefficiencies of the predominant Design-Bid-Build process, Congress endorsed “innovative project delivery methods” such as Design-Build when it passed the Moving Ahead for Progress in the 21st Century Act (MAP-21 Act) in 2012. However, states have not uniformly embraced the method, and others have not incorporated it into their procurement statutes at all. As a result, there are differing approaches throughout the United States for how to use project delivery methods to reduce procurement waste in highway projects.
This article will evaluate the current status of Design-Build in America by examining the effectiveness of section 1304 of the MAP-21 Act when applied to the existing statutory framework of states. In doing so, this article seeks to establish Design-Build as an effective solution to the problems of Design-Bid-Build, and will offer possible solutions for how states can take advantage of Design-Build and in the process, reduce government waste.
Part II compares Design-Build as a method of procurement to Design-Bid-Build, as well as provides background on section 1304 of the MAP-21 Act, and explains the current status of Design-Build in the states. Part III analyzes the effectiveness of section 1304 by applying a hypothetical request for bids on a contract (i.e. a letting) to the Design-Build statutes of three different states. This Part analyzes the economic benefits each state realizes or forfeits based on its ability to use Design-Build for the hypothetical letting. Part IV provides two recommendations for how to solve the issues raised by the results in Part III. Finally, in conclusion, it is suggested that the waste associated with highway projects is avoidable through a combination of creativity and the willingness of a state to statutorily sanction alternative methods, such as Design-Build.