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DBIA Milestone: Design-Build in Transportation

When design-build first started to proliferate, it was mainly a method to deliver buildings and other vertical projects. Today, design-build is also used extensively in the transportation sector. In fact, transportation is the fastest-growing design-build sector in the United States, with transportation design-build projects doubling in the past five years, both in quantity and value of projects.

In 1988, the Federal Highway Administration established an experimental project that would allow state transportation agencies to test and evaluate innovative contracting practices. This project was called the Special Experimental Project Number 14 (SEP-14). It allowed states to experiment with innovative contracting methods like design-build in order to determine if those benefits found in vertical construction would hold true in the transportation sector. The results of SEP-14 led to similar provisions in the TEA-21 transportation reauthorization in 1998. That act authorized design-build for projects that were more than $50 million. It also authorized Public-Private Partnerships (P3s). TEA-21 (Transportation Equity Act for the 21st Century) paved the way for design-build at the state level and further expansion in future reauthorization bills. Within five years, more than 20 states had some design-build authority. Subsequent reauthorization bills streamlined the design-build process and today 45 states, plus the District of Columbia, authorize design-build in some fashion.

In 2012, a new surface transportation bill was being debated and DBIA’s Advocacy team saw an opportunity for increased federal support for design-build. The new bill, known as MAP-21 (Moving Ahead for Progress in the 21st Century) would have a specific section on “innovative project delivery methods.” These are technologies, manufacturing processes, types of financing or contracting methods that improve the quality, extend the service life or decrease the long-term costs of highways and bridges. The bill increases to 100 percent the Federal share payable to projects that the Secretary of Transportation determines contain innovative project delivery methods. In a significant achievement for DBIA, we were able to add language defining design-build project delivery as an innovative project delivery method. The final bill also expanded the Transportation Infrastructure Finance and Innovation Act (TIFIA), which has become so important to financing public-private partnerships (P3s).

In 2014, MAP-21 will need to be renewed and DBIA is already working with industry partners and legislative staff on maintaining the above language. We’re also looking at other options to encourage federal funding for design-build projects.

To keep up with this news, check out Design-Build-Blog where we post legislative updates and other news on a bi-monthly basis.

 

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