Public Construction Contracting: Research Supporting the Development of a Virtual Charette Model for Reducing Regulatory Barriers to the Development of Public Housing, to Allow Alternative Contracting Techniques

Author: Valerie Riecke Smith

Dissertation School: Georgia Institute of Technology

Pages: 43

Publication Date: 10/2005

Availability:
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Access Number: 5012

Abstract:

As governmental funds become increasingly constrained, public, not-for-profit, and private construction professionals (public owners) are constantly seeking new ways to ensure that projects adhere to both deadlines and budgets. Many experts believe the project delivery method is the key to a project's success. Historically, federal, state, and local laws restricted public owners to use a traditional design-bid-build using separate-prime (or multiple-prime) bidding method or a design-bid-build using single-prime bidding method for project delivery. These methods obligate public owners to award contracts based on the lowest, most responsible, and responsive bidder. Recently, government agencies have seen the benefit of awarding contracts based on evaluation factors in addition to cost, known as performance criteria. Two project delivery methods exist that use performance-based criteria during the selection process. These methods are construction manager at-risk and, most recently, design-build. Today, a handful of states do not authorize design-build's application, and almost half of all states require legislative enactment to authorize design-build. The relevance of performance-based selection criteria in construction project delivery methods such as design-build for public housing authorities is that housing authorities are not allowed to use them. Public housing authorities must follow state laws, thus creating regulatory barriers restricting any benefits of design-build.

Research for this paper supports the viability of further exploration and development of a model procurement system for the public housing industry. This paper provides a fuller understanding of the organization of the design-build project delivery method, a comprehensive update of regulatory restrictions of design-build in the 50 states, a study documenting the positive perception of design-build in a state that requires legislative enactment to authorize it, and an exploration of research into a parametric estimating system software used by the military to support testing of the future model procurement system.

This research found that 6 states do not allow design-build and another 22 states only allow design-build on a case-by-case basis, restricting its use to legislative approval. The study in North Carolina, a state that only allows design-build on a case-by-case basis, indicates that there are perceptions that design-build is proven to save costs, reduce the schedule, lessen the administrative burden, and still produce a quality project--strengthening the case for further research in this area. This research also indicates that PACES may be a viable option for testing the future model procurement system.

This paper finally proposes future research in expanding contracting alternatives for public housing authorities by identifying potentially legislative impediments. The culmination of the future study is to design a model procurement system that acknowledges legislative impediments and allows for the use of alternative contracting methods. A parallel hypothesis of the research is that lessened legislative barriers will make public housing more affordable by reducing the cost of construction. This reduction in cost may be a result of lower costs, faster processes, shorter schedules, less adversarial relationships, fewer change orders, or other interrelated variables in the design and construction process. This research intends to use public housing legislation to analyze the effectiveness of using alternative contracting techniques such as the design-build project delivery method. Because the major problem in any project delivery method is sufficient program definition, and this problem is exacerbated in design-build in that the public owner does not have the design reviews that are common in design-bid-build, the goal is to design a model procurement system for public housing that acknowledges legislative issues, proposes reduction in legislative or regulatory barriers, and design recommended language and clauses for public agency use in creating more affordable housing.

Through a virtual charette, the model procurement system will define what program information is critical to meet the legal requirements for expanding contracting alternatives. In theory, it will save time and money because this model will be used to determine key information that previously was developed with funds expended during the design process. More importantly, the model procurement system will provide structure and consistency to the existing virtual charette process. Research for this paper supports the viability of further exploration and potential development of a virtual charette process to create a model procurement system for the public housing industry.

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