Legislative Update

With the state legislative session nearly over, it is already clear that 2009 represents a milestone. In the history of design-build, there has never been such a successful year in legislative terms. One hundred bills granting or expanding design-build authorization passed in state legislatures this year. This figure surpasses a previous high of 82 in 2005. What is remarkable, however, is not the number of bills that passed, but rather the high percentage of bills that passed — 62 percent.

The success rates of 2001 and 2003 can be attributed to the fact that so many owners were just discovering design-build; to them it was a relatively new delivery method and they were excited about the potential that it promised, particularly at the state level. By 2009, design-build had matured; nearly all states now have design-build authority of some kind and this was reflected in the type of legislation proposed. Only 52 percent of the design-build legislation today aims to expand state authority. Legislation dealing with state design-build authority was primarily focused on transportation. In January of 2009, 12 states still did not have authority for DOT projects. That number fell by half in October, as six states passed new legislation allowing design-build authority. In contrast, 48 percent of the design-build legislation in 2009 was focused on granting local design-build authority. City, county and regional governments were eager to get design-build authority to apply to their diverse portfolio of projects.

Some bills gave local governments project-specific design-build authority or limited it to a number of projects, but other bills were broad in the authority granted, allowing localities to use design-build on virtually any type of project they chose. Most of the local legislation focused on buildings, but the project types were diverse; everything from schools and health clinics to stadiums and courthouses. There is also a growing trend toward local design-build use on water/wastewater and transportation projects. A full third of the successful local design-build bills were focused in those areas.

Looking forward to 2010, these design-build growth trends are likely to continue, particularly at the local level. With federal and state governments focused on greater sustainability and efficiency, we can expect growth in the design-build building and water/wastewater sectors as our infrastructure ages and our demands increase. It appears that design-build is moving into a new era. Owners today are less inclined to talk about design-build’s potential; instead they focus on design-build’s results. We have over two decades of exceptional projects, and the more the design-build story is told, the more owners want to have this procurement tool in their toolbox.