Florida Rules Changes Could Be a Setback for Design-Build

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Florida Rules Changes Could Be a Setback for Design-Build

by Richard Thomas | November 3, 2014

For years, the Florida Department of Transportation (FDOT) has been considered a leader in the implementation of design-build best practices. Few states have the broad design-build authority that FDOT possesses or have been as aggressive in using the delivery method. However, proposed changes to the Florida Administrative Code (FAC) Chapter 14-91 are likely to tarnish the state’s reputation as a design-build leader.

The proposed rules will change design-build in several ways. They will incorporate new definitions for Factored Design-Build, Adjusted Score Design-Build and Low Bid Design-Build into the new rules. Factored Design Build will be used on non‐complex projects defined as those projects in which the plans have been developed to at least 90 percent design, are not located in urban areas, do not involve complex maintenance of traffic schemes, and have limited options for innovation and specialized engineering. FDOT does not intend to pay stipends on these Factored Design Build projects. The Adjusted Score method of procurement will be incorporated and department short‐listing of design-build teams based on letters of interest will be added to the rule.

As one would expect, these new rules have created a lot of controversy in the Florida design-build community. The sustained integrity of FDOT’s design-build process is vital to communities and taxpayers served throughout the state of Florida so industry professionals are extremely concerned with the changes being proposed to the FAC. Design-builders are also concerned that there has been a rush to enact the changes without fully vetting them with key stakeholder groups.

While DBIA members understand the need to implement revisions to language that provide for the use of FDOT’s Adjustable Score Design-Build Projects, they are very concerned with the proposal as it is currently structured.

Our primary concerns can be characterized in the following areas:

  1. We believe strongly in reinforcing the benefits of best practices in design-build to achieve time and cost savings in the state of Florida rather than encouraging the use of Low Bid Design-Build or the Proposed Factored Design-Build. These limit innovation and reduce the value of using the design-build delivery method. In the past, FDOT has done a good job documenting the benefits of using best value design-build methods on their design-build projects. DBIA guidelines on best practices have been supported by numerous transportation agencies, including Federal Highways Administration (FHWA). DBIA best practices were assembled with the help and assistance of many design-build experts and vetted industrywide, including through FDOT. We would like to work more closely with FDOT and their local industry representatives to help educate those seeking to become successful in design-build, and explain the reasons for the use of best practices.
  2. While a formal shortlisting process is preferred, the use of adjusted score design-build shortlisting or adjusted score self-shortlisting is satisfactory as long as the process is clear and allows for the use of innovations that can be scored directly by the Technical Review Committee.
  3. The proposed category of Factored Design-Build by FDOT is concerning and adversely affects the very essence of the delivery method. The success of design-build delivery is tied to a top tier qualified team applying unique skills to develop innovative solutions that save time and provide efficiencies that uniquely benefit the owner and taxpayers of Florida. The acceptance of 90 percent designed plans is also certain to drive up project costs. DBIA feels strongly that FDOT should not proceed with establishing this new category until there has been a proper vetting of the proposed changes and additional revisions to the proposal.
  4. Stipends are an important best practice in design-build. Stipends enhance both competition and quality on design-build projects. The current stipends paid by FDOT do not come close to covering the cost of pre-award efforts on FDOT design-build projects. They do, however, help offset the expense of producing a high quality design-build proposal and enable small and mid-size firms to compete on an even playing field. While the FAC changes still provide for the use of stipends, the expanded categories and multiple project procurement types make it difficult to fully understand the intent or how these changes will affect stipend payments. For reference, view DBIA’s position paper on the effective and recommended use of stipends to offset costs on design-build projects.
  5. Lastly, we are greatly concerned that many key stakeholders – those who will be impacted the most by these proposed changes – have not been consulted. While FDOT has been providing industry outreach to other industry societies, these organizations represent the broader mass of representatives who may not have the experience using best practices on design-build projects. As the only organization that defines design-build best practices and represents the interests of those contractors, sub-contractors, suppliers and designers that provide specialized services for FDOT on design-build projects, DBIA should have been included in this vetting process. The use of best practices is extremely important to sustain the integrity of the current FDOT program and Florida’s position as a leader in design-build project delivery. DBIA should be included in further FDOT discussions on the topic.

It is DBIA’s hope that FDOT will reconsider moving forward with these changes until there has been a broader and more transparent vetting process that includes broader stakeholder participation, especially with those that are impacted the most by these proposed changes. However, it is quite likely that this situation will require a legislative solution when lawmakers return next year. For more information or to get involved you can contact me at rthomas@dbia.org.