Best Value Procurement Methods for Highway Construction Projects

Best Value Procurement Methods for Highway Construction Projects

  • Market Segment: Highway & Bridge
  • Services Provided: Research
  • Client: Transportation Research Board
  • Location: Washington, DC
  • Project Value: N/A

Legislative requirements in most states require that highway construction contracts be awarded using a low-bid system. Under a low-bid system, contractors submit bids based on plans and specifications prepared by the highway agency or a private engineering firm hired by the agency, and, except under extraordinary circumstances, the contractor submitting the lowest bid is awarded the construction contract. In all but a few cases, experience levels of the contractor, quality issues, and other criteria are not taken into consideration in awarding these contracts. It is believed that this contract delivery method may affect efficiency and quality of construction projects.

In 2002, The National Cooperative Highway Research Program contracted Trauner to conduct a research study to develop guidelines for alternative contracting methods and “best-value” procurement.

Under a “best-value” selection process, the low-bid concept can be modified by adding quality issues to the bid evaluation process. During this selection process, the low-bid is weighted with other elements to determine a best value that reflects quality, as well as cost issues. Several governmental organizations, including the Army Corps of Engineers, have used the best-value concept to award construction contracts.

With this study, Trauner clarified what “best-value” procurement means for the industry, evaluated the effectiveness of the various approaches used or proposed for use, and developed practical and flexible procedures for the implementation of “best-value” procurement in the context of the traditional low-bid system.

During this research study, Trauner identified best-value procurement methods that have been considered, developed, or used for awarding construction contracts; critically evaluated the effectiveness of the best-value procurement methods; developed best-value procurement methods for use in awarding highway construction contracts; developed practical, objective criteria and processes (including a scoring system) to be used in quantifying best-value elements of a construction bid; developed screening criteria for selecting projects for application of best-value procurement methods; developed strategies to overcome institutional, legislative, industry-related, and other barriers to implementing the recommended best-value procurement methods; and submitted a report that documents the entire research effort.