Best Value Approach to Highway Projects: Transparency and Innovation

Abstract

Highway construction projects have historically been delivered using low bid procurement . Even though this method of contracting has fostered competition among the proposers, many industry stakeholders question whether it has achieved best value or not for the amount of dollars spent on the project. Best value procurement is one of several alternate procurement methods used by the highway industry to overcome the shortcomings of low bid procurement. Best value procurement requires the subjective evaluation of technical proposals, and combines the technical factors with price to select the proposer who offers best value to the owners. It is the subjective evaluation of these technical factors that causes transparency issues in the selection process. The aim of this thesis is to explore the use of best value and identify the best practices for developing transparent best value selection procedures in highway projects. This thesis utilized a survey, content analysis of best value Request for Qualification (RFQ)/ Request for Proposal (RFP) documents, interviews, and various case examples to fulfil the research objective. The thesis follows a two - paper format. The first paper focuses on identifying the current state of practice of best value procurement in the highway industry. The content analysis performed for this thesis helps identifies the most common evaluation criteria, award algorithms, and debriefing procedures that promote transparency in best value procurement. In the first paper seven case studies were compiled with the State Department of Transportations (DOT) that have most experience using the best value procurement in the first paper. These seven cases provide a clear description of the best value selection procedure and the steps taken to achieve transparency. The second paper focuses on the use of best value procurement on design-bid-build highway projects. The four case studies presented in the paper describe the best value procedure of the state agencies on their design-bid-build projects. The results of the second paper show that best value procurement can be applied to design-bid-build projects successfully with minor adjustments to the selection process. The thesis results show that providing simple, clear, easy to understand, and project specific evaluation criteria increases the transparency of the best value selection process. This thesis also identifies the various award algorithms and debriefing procedures that increase the transparency of the selection process.