North Carolina Embraces Design-Build

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North Carolina Embraces Design-Build

by Richard Thomas  |  September 6, 2013
This year marks DBIA’s 20th Anniversary and one can’t help but be amazed at how far design-build project delivery has come since 1993. A perfect example is the state of North Carolina. 
When I was hired at DBIA, in 2009, design-build was a not only a limited option in the Tar Heel state, it was one of the only states that required local governments to go to the state legislature on a project by project basis to get permission to use design-build. In four short years we were able to work with legislators, local industry professionals, and advocacy groups to help North Carolina emerge as a design-build leader in the U.S.

When we began to focus more of DBIA’s efforts on North Carolina, design-build was already being used pretty extensively by the state’s Department of Transportation (DOT). In less than a decade, they completed 76 projects worth $3.7 billion dollars and had 12 additional projects (worth $1 billion dollars) under contract. These projects were badly needed, as the state’s unprecedented growth has led to excess demands on its transportation infrastructure. Design-build helped the DOT to meet the challenge by delivering innovative road, rail and bridge projects on budget much faster and without sacrificing quality.  
Other state agencies and local governments saw this and began to clamor for their own design-build authority, particularly at the local level. When local governments first gained design-build authority they had to get legislative approval for each project. This process had a major flaw…timing. The number one reason owners choose to use design-build is the urgency of the project. Design-build projects are completed 33 percent faster on average than the traditional delivery method, but seeking legislative approval takes months, nearly negating that benefit. 
For some owners, this made design-build too difficult, but others thought the many benefits of design-build (less administrative burden, greater innovation, lower chances of litigation, fewer change orders) were worth a few months wait. The legislature usually granted these requests, but there was a growing consensus that there had to be a better way.  DBIA and other industry groups like the American Institute of Architects worked with local governments to try to convey to legislators that design-build was growing quickly and that a comprehensive solution was needed if North Carolina was going to stay competitive with other states. This point was driven further home as neighboring states like Georgia, Virginia, South Carolina and Florida expanded or maintained design-build authority.
As the legislative session moved forward, legislators began to look not only at a comprehensive design-build bill, but inclusion of public-private-partnership (P3) provisions as well. The resulting bill (HB 857) authorized all state and local governments to use design-build and P3s, including qualifications based selection (QBS). The QBS provisions were particularly important to DBIA, as more and more local governments have recently included QBS provisions in their local design-build bills, predominantly on water/wastewater projects.  Inclusion of these provisions gave owners the kind of discretion they needed to select the best qualified teams to deliver their projects. 
Through providing research, giving presentations and mobilizing grassroots support DBIA played a large role in passing HB 857, which was signed into law by the Governor just a few weeks ago. The passage of this game-changing legislation places North Carolina in an elite group of only four other states in the U.S. with comprehensive QBS authority: Virginia, Florida, Colorado and Arizona.
The next few years in North Carolina promise to be interesting ones. The legislation will allow private capital to be brought to the table giving owners better options to fund projects, which in turn will present more opportunities for big and small firms alike to deliver those projects. And, with design-build now serving as a major project delivery option, North Carolina is sure to match their impressive growth with impressive infrastructure projects.