Design-Build and Save

My colleague Joe Miller recently published his paper on funding the Missouri Department of Transportation. In it, he refers to a successful program called design-build project delivery:

Currently, eight large highway projects either have been completed or are in progress using design-build project delivery, including KCicon and the new I-64/US 40. This process has resulted in significant savings for MoDOT and has improved project delivery.

Design-build differs from the traditional design-bid-build method we’ve been using for years. In design-bid-build, the design work is completed before the construction ever begins. Only after the design is finished—often by MoDOT’s own engineers—is the project bid out to contractors. While this ensures that MoDOT has complete control of the design phase, it often leads to additional expenses in time and potential change orders. MoDOT says so itself.

Design-build allows MoDOT to bid out the design and the construction at the same time. This means construction can start much sooner, and that while MoDOT has overall control of the design work, it may not all be completed before the project begins. The biggest benefit of design-build, however, is the significant cost savings.

A 2006 study by the Federal Highway Administration found that design-build projects were completed with significant time savings with little or no change orders and lower administrative costs. In Texas, design-build saved taxpayers 22 percent in costs over six years, and projects were completed 14 percent faster.

Allowing MoDOT to use design-build more often would require a change in statute. According to Missouri statute, MoDOT may use design-build sparingly and only until the middle of 2018:

The total number of highway design-build project contracts awarded by the commission in any state fiscal year shall not exceed two percent of the total number of all state highway system projects awarded to contracts for construction from projects listed in the commission's approved statewide transportation improvement project for that state fiscal year. Authority to enter into design-build projects granted by this section shall expire on July 1, 2018, unless extended by statute.

If the legislature wants to help MoDOT help itself by saving money, it ought to consider increasing the cap on design-build projects and extending them for much longer than 2018.