State Advocacy

DBIA is working to bring design-build to every state

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Busting Design-Build Myths

DBIA’s mission is to educate legislators, industry and the public about design-build. It’s important that all parties understand how design-build works to ensure it’s implemented using Design-Build Done Right best practices.

Here are a few of the common myths we hear about design-build:

MYTH: Design-build weakens competition when choosing the project team

FACT:

Just the opposite is true. With the traditional delivery method, design-bid-build, the primary, if not only, factor considered in the competition is price. The design-build selection process, conversely, puts in place a rigorous competition procedure that focuses on qualifications, experience, technical approach, price and other factors. This encourages a better competition that allows many qualified firms of all sizes to participate.

For example, in a typical design-build best value selection, the owner first issues a Request for Qualifications asking interested firms to submit their basic information, such as resumes of employees and experience with similar projects. This is a low-cost process that encourages firms of all sizes to apply. Then the owner uses their preferred selection criteria to identify 3–5 of the most qualified bidders to submit technical proposals. The successful proposer is selected based on a number of factors including past experience, ability to innovate, cost, and any other specific factor the owner chooses (e.g. the number of local sub-contractors used, the environmental approach, etc.). This competitive selection process is just one reason why owners are more likely to report high-satisfaction with design-build projects.

Design-Build Done Right™ encourages greater competition and focuses that competition to deliver superior projects.

MYTH: Design-build excludes smaller firms from leading projects

FACT:

Design-build can be used on projects of any size and type, and there are myriad examples of design-build project successes of all sizes. Further, nearly 80 percent of U.S. states grant local governments authority to use design-build on their small, local projects. Even when a larger project is procured as a design-build project, smaller firms often band together to create a project team that is more able to handle the demands of a larger project.

MYTH: The owner forfeits control in a design-build project

FACT:

In a design-build project, owners are completely engaged in the process because (unlike design-bid-build) reward structures in a design-build contract encourage owners to give thoughtful consideration to desired behaviors and the manner in which success will be defined. Additionally, there is a single point of responsibility on a design-build team making it easier for the owner to coordinate, convey concerns and make adjustments. Many owners across the United States are clamoring to have design-build as an option because they want to reap the benefits of increased innovation, less litigation and faster delivery speed.

MYTH: Factors beyond price lead to favoritism in the contract award process

FACT:

Favoritism or patronage is the opposite of design-build best practices. While design-build allows for the consideration of factors beyond just price — such as team qualifications and project innovation — this is done to achieve best value and superior projects. In fact, the consideration of these factors has been shown to drive down cost, since they ensure that the team is reliable and produces quality work; something that is virtually impossible to decipher from contract price alone.

MYTH: On large projects, out-of-state companies take work from local companies

FACT:

Actually design-build is better than design-bid-build at addressing this fear. Traditional large design-bid-build projects will see both in-state and out-of-state contractors submitting ridiculously low bids in order to win the project, then force their sub-contractors (which are often local) to lower their costs so they can meet the low-bid they offered. Because the primary focus is price, there is little incentive to truly collaborate with local firms.

On large design-build projects, big companies may compete for the job; however, it is most likely that they will form a partnership with local companies that have the local resources to build the project. The result: strong design-build teams that deliver high-quality projects and support the local economy.

State Legislation

Design-Build is the fastest growing project delivery method in the nation. Why? Because in virtually every state, design-build now delivers highly successful projects meeting and exceeding expectations for cost, schedule and innovation. Here is a look at DBIA legislative activities throughout the nation.

Legislative History

Each year there are hundreds of pieces of legislation impacting the delivery of public projects nationwide. Here is a compilation of design-build and related legislation passed by year.

2018

Pending

Illinois

Significant legislation has been introduced this session to authorize the Illinois DOT and State Tollway Authority to use design-build. While the bill limits design-build to comprise only 20% the Department’s multi-year highway improvement program for any 5-year period, passing this legislation would be a major step in achieving full, nationwide design-build authority.

Minnesota

Industry groups have discussed introducing legislation to gut MnDOT’s best value law and increase the consideration of cost in awarding design-build contracts. While the bill has not been introduced yet, we are working to oppose the proposal.

Missouri

HB 2730 would amend the design-build law that passed in 2015 to remove the requirement for political subdivisions to retain a design criteria consultant. Additionally, this bill would expand the definition of “design-build project” to include non-civil works projects valued less than $7 million. We are working closely with our region to support this legislation.

New Jersey

SB 584 would authorize design-build for the New Jersey Turnpike Authority and Department of Transportation. With a new Governor and the strong overtures for design-build authority in New York City, there is optimism for this legislation. The sponsor of this bill is a member of the Senate Transportation Committee.

New York

Governor Cuomo’s budget has proposed an expansion of design-build authority to include the Dormitory Authority of the State of New York (DASNY), the New York State Urban Development Corporation, the Office of General Services, the Department of Health and the New York State Olympic Regional Development Authority. While we support this legislation, we are also working to have design-build authority for New York City and other local governments to be included in this legislation.

Pennsylvania

A coalition effort has begun in Pennsylvania to push SB 744 and HB 1529 to repeal the Separations Act that requires multiple-prime delivery for all state funded projects. Working with broad industry support, our coalition is hoping to have the legislation up for a committee hearing sometime later this year.

Resolved

Iowa

Legislation that would have authorized design-build for all state and local agencies (except for the DOT) missed the crossover deadline for the House State Government Committee and has died for this session. Our focus has shifted to opposition of legislation that would add barriers to the Board of Regents’ authority to use design-build. Currently the Board of Regents is the only state agency authorized to use design-build in Iowa.

Indiana

HB 1015 would have applied the state’s anti-indemnity agreement statute to design-build contracts. The bill would have prohibited agreements that require indemnification and defense of a promise for certain types of liability. The Senate Civil Law Committee amended the bill to study the issue of indemnity agreements in design-build next year, effectively killing the proposal for 2018.

Virginia

Legislation was reintroduced this session that would have put a $40 million threshold on design-build projects let by state institutions of higher education and local governments. After rallying our members, meeting with all the bill sponsors and committee members considering the bill, and testifying in opposition in the Senate, the bill was pushed back for consideration until 2019. This was the second year this bill has been introduced and we have successfully opposed it both times.

2017

Arkansas

Two major bills in Arkansas passed this session. First, legislation to authorize design-build for local municipal sewage systems (HB 1645) passed, authorizing the delivery method for sewage systems valued over $2 million. In addition, Arkansas authorized P3s for all state entities through the passage of SB 651.

Colorado

A funding bill was introduced with language that would have prohibited consideration of past experience for DOT projects funded by the $3.5 billion worth of bonds issued by the bill. HB 1171 (SB 205) specified that bid offerors on projects funded by the bonds could not be penalized during selection for a lack of experience. This bill has been postponed indefinitely and is not likely to pass.

Iowa

Legislation was once again introduced this year to strip the Board of Regents of their design-build authority. As in past years, we worked closely with DBIA’s Mid-America Region on ensuring this bill did not progress. We are happy to report that the bill failed and this authority was protected for another year.

Minnesota

Legislation to subject county governments to municipal consent law and thus limit their design-build authority was defeated once again this session. In addition, legislation to allow design-build on Trunk Highway projects while increasing their funding (HB 837) passed this session.

Montana

When legislation was introduced to curtail the use of Construction Manager at Risk contracts by the Transportation Commission, Montana made sure to protect their ability to use design-build in HB 92. In addition, HB 520 which also passed this session expanded design-build authority to include fire districts.

New York

The Governor’s budget bill this year reauthorized design-build for the Department of Transportation; the Office of Parks, Recreation and Historic Preservation; and the Department of Environmental Conservation for four more years. The bill also successfully included several project specific authorizations for several entities that had not been authorized to use design-build previously. Reauthorization of design-build was one of DBIA’s top legislative priorities.

Oklahoma

SB 430 created a Partnership Committee charged with the mission of reviewing public-private partnership (P3) proposals as well as serving as the review body for bids and selection of bidders on P3s. Local governments and state agencies with the exception of the DOT ​are now authorized to use P3s. While this bill specifies that the Department of Transportation (DOT) and Turnpike Authority are exempt from this act, it affords the DOT the ability to use P3 if they consult the Director of the Office of Management and Enterprise Services and receive approval from the Transportation Commission or Turnpike Authority.

Virginia

Legislation was passed expanding design-build authority to all local governments. Previously the use of design-build was limited to only those local governments with a population greater than 100,000 people (SB 1129 and HB 2366). Not only were we able to expand design-build authority, we were also successful in stripping provisions that would have placed price thresholds on design-build projects. The thresholds that would have limited the use of design-build to projects over $40 million were amended out of the final version. This was a major victory for DBIA and the state.

Washington

SB 5806 recommends the use of design-build on the new I-5 bridge. Washington has used design-build often and the Legislature’s recommendation of the delivery method reflects positively on design-build and its benefits.

West Virginia

With several project delivery sunsets facing the state in 2017, the West Virginia Legislature was able to extend and expand design-build and P3 authority across the board. HB 2721 extended P3 authority until 2023 and lowered the project threshold on these projects to $10 million. HB 2722 increased the spending limit for design-build projects by the Division of Highways from $50 million annually to $400 million for future fiscal years, while HB 2815 authorized design-build for state institutions of Higher Education.

2016

*Indicates a statutory change that was so impactful, it changed the state’s designation on our map of design-build laws.

*Alabama

With the passage of SB 92 — sponsored by State Senator Arthur Orr — the Alabama Department of Transportation (DOT) is authorized to enter into design-build contracts for public roads, bridges, or tunnels, and related work under the jurisdiction of the Department of Transportation. This legislation is a huge win for the region and is an important step forward in expanding design-build authorization to all jurisdictions.

Louisiana

Legislation has been signed into law, authorizing the Louisiana DOTD to use P3s. S 195 passed both chambers and was signed into law on June 20, 2016 by Governor John Bel Edwards.

*Missouri

The bill DBIA supports (H 2376) and that we have been working to pass for three years has passed through the legislature and was signed by Governor Nixon on July 1. The legislation enables any local political subdivision to use design-build project delivery at their discretion and ensures that community development block grants are properly allocated to water and wastewater projects that are delivered using design-build.

*Nebraska

The Nebraska Department of Roads received a huge expansion of design-build authority through the passage of LB 960. The legislation also expanded infrastructure funding and was introduced on behalf of Governor Pete Ricketts who put transportation at the top of his priorities this session with design-build delivery as a key component.

New Hampshire

Legislation to authorize P3s on transportation projects has been enacted in New Hampshire. S 549, which was supported by DBIA, passed the Senate and House, and was signed by the Governor on June 16, 2016.

*New Mexico

HB 206 and SB 215 both passed the legislature and were signed into law on March 9 to give the New Mexico DOT authorization to use design-build on any project related to Federal-Aid Highways within the state. This is the first authorization granted for transportation projects in New Mexico.

New York

The New York budget bill included design-build authorization for yet another year. This year, the Governor and legislative leaders approved a deal that gave design-build authority to the New York State Urban Development Corporation and the New York Convention Center Development Corporation. These are the entities charged with undertaking some of the Governor’s most important infrastructure projects that will be done using design-build, which includes a major Penn Station renovation.

Ohio

H 180 and S 152 have passed this session and prohibit a public authority from requiring a contractor to employ a certain percentage of individuals from the geographic area of the public authority for the design or construction of a project. The bill has passed the House and Senate and was signed into law by Governor Kasich.

Virginia

Virginia Legislators approved a more nuanced aspect of Design-Build Done Right than general authorization. SB 465 authorized the use of Alternative Technical Concepts (ATCs) on all design-build projects. ATCs are an emerging trend in design-build project delivery and are a valuable tool for owners authorized to utilize them. For more information on ATCs and this bill, read this Thought Leadership article on the topic from our magazine.

2015

DBIA’s advocacy team worked in many states including Minnesota, South Carolina, New Mexico and Iowa, but the following is a list of some of the largest developments from 2015.

Washington

With the passage of HB 5997, the Washington Department of Transportation was authorized and encouraged to use design-build for projects over $2 million, reducing the price threshold after which design-build may be used from its previous limit of projects exceeding $10 million. The bill was introduced by Representative Curtis King who serves as Chair of the House Transportation Committee. The passage of this bill expands the opportunity for design-build to demonstrate how well it can work for smaller-sized projects.

Louisiana

Baton Rouge saw two design-build bills enacted this session to expand and extend design-build authority for regional transit authorities and ports within the state. With the sunset date for ports to utilize design-build set to expire in 2015, enacting an extension was a top legislative priority for DBIA this year. This goal was fulfilled by the passage of SB 66, extending the ports’ authority until 2020. The second bill, SB 159, authorized any regional transit authority to let a design-build contract for new ferries on the Mississippi River.

Texas

Passage of HB 1 and HB 20 in Texas removed the sunset date for the Texas Department of Transportation (TxDOT)’s design-build authorization. Together, the bills allow TxDOT to more easily plan for the future, and continue to successfully use the design-build project delivery method. Design-build has been a valuable tool for TxDOT to meet the growing transportation needs in Texas. Failure to reauthorize design-build legislation would have been a major setback for an agency that has had a very successful design-build program.

New York

DBIA worked with coalition partners, particularly the NYC DOT, to expand design-build authority for another two years. New York State first approved design-build authority in 2011 and has entered into dozens of design-build contracts since then, including one for the multi-billion dollar Tappan Zee Bridge replacement.

California

Passage of SB 785 culminates the longtime industry effort to standardize design-build laws in California, and it is the eighth bill passed in California in the past year expanding design-build authority. SB 785 streamlines California design-build laws and provides clarity and increased opportunity for project owners and practitioners.

2014

Illinois

We supported efforts to pass SB 492, which extends the State Building Commission’s design-build authority until 2018. We were involved in this effort early and were proud to watch it pass and be signed into law in January.

Utah

We worked to pass SB 190, revising contract types and definitions for rulemaking that made design-build even easier to use.

Washington

We helped pass two significant bills that were both signed by the Governor in March. HB 2555 keeps proposals submitted for design-build projects exempt from public disclosure until the highest scoring finalist has been named or the selection process has been terminated. This is essential to ensuring that companies’ bids, methods and advantages remain confidential, increasing the competitiveness of the process. We also helped pass SB 6001 which provides funding for two design-build projects: the I-405 Kirkland Stage 2 widening project and the SR 167 Puyallup Bridge Replacement. The two projects are high-profile in the state, so the fact that the legislation mandates use of design-build is a testament to how reliably design-build delivers high-quality infrastructure.

Minnesota

We were successful in gaining passage of HB 677, a bill funding a new state legislative office building that specifically calls for using design-build to deliver the project. Following passage, however, there were nearly ten bills calling for new onerous requirements on design-build projects and repeal of HB 677. Thus far, we have worked to successfully block all of these bills or have the unnecessary requirements stripped out of the bill.

2013

West Virginia and Arkansas

Two states which had State Department of Transportation (DOT) pilot programs with strict limits on the number of allowed design-build projects. The bill passed in West Virginia (SB 553) would eliminate an expiration (or “sunset”) and the limitation on the number of design-build projects transforming the pilot program to a permanent program. Up to $50 million per year could go towards design-build projects and any unused portions could be rolled over to another year up to $150 million. Similarly, the Arkansas bill (HB 1702) eliminates the requirement that design-build could only be used on projects in excess of $50 million and ended limits on the number of design-build projects.

North Carolina

In a significant victory for DBIA, North Carolina passed HB 857 authorizing all local governments to use design-build and P3s including QBS. North Carolina has been the epicenter of local Qualification Based Selection (QBS) legislation. Before DBIA helped pass this law, North Carolina local governments had to receive legislative approval on a case-by-case basis to use design-build. The passage of HB 857 makes North Carolina one of the best states to do design-build projects.

Georgia, Kentucky and Illinois

These three were states with limited DOT design-build authority, only using design-build on a “low bid” basis. In Georgia’s case, its DOT had been very aggressive in its use of design-build but felt the low bid only option had its limitations. The newly enacted “best value” law, SB 70, will allow GDOT to take its design-build program to the next level, and choose design-build teams based on qualifications. Kentucky and Illinois took a more conservative approach: they introduced legislation calling for pilot programs allowing best value. The Kentucky bill (HB 445) was recently enacted and the Illinois bill is still pending.

Indiana

The Indiana legislature passed legislation giving airports authority to use design-build.

What is Progressive Design-Build?

Among design-build’s many advantages is its flexibility. It’s not a rigid process and can be adapted to fit projects of all types and sizes. The emergence of progressive design-build is one example of that evolution.

Learn more about this popular type of Design-Build

Progressive design-build is simply design-build utilizing a “progressive” procurement and contracting approach. PDB uses a qualifications-based or best value selection, followed by a process whereby the owner then “progresses” towards a design and contract price with the team (thus the term “progressive”). While procurement laws vary for public owners, some have the flexibility to implement a PDB procurement approach that essentially replicates that used by private sector owners.

PDB Resources:

Progressive Design-Build Primer
Progressive Deeper Dive
The Nuts and Bolts of Progressive — 3-part Webinar
Online PDB Courses — DBIA Library
What is Progressive DBIA Podcast
Progressive Design-Build Agreement for Water/Wastewater Projects

PDB Case Studies:

Claude “Bud” Lewis Carlsbad Desalination Plant
Veterans Memorial Bridge
Champion Pet Foods Kentucky


What are Public-Private Partnerships?

Design-build is the delivery method of choice for P3s

Learn more about Public-Private Partnerships

In the United States, the definition of a P3 varies and can encompass a broad range of approaches that involve a contractual relationship between the public owner and one or more private sector entities. Generally speaking, a P3 is a project delivery model that involves an agreement between a public owner and a private sector partner for the design, construction, financing, and often long-term operations and maintenance of one or more infrastructure assets by the private sector partner over a specified term.

Resources:

Public-Private Partnership (P3) Primer
P3 Deeper Dive
P3 State Statute Report
P3 Pending Legislation
P3 Webinar
P3 Online Courses — DBIA Library
DBIA P3 Committee

P3 Case Studies:

Elizabeth River Tunnels
Denver Union Station
Governor George Deukmejian Courthouse


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