Background:
AGC members continually report that federal agencies misuse the design-build procurement process to contractors and the taxpayers’ detriment. Specifically, federal agencies have: (1) used one-step design-build procurement for mega-projects (over $25 million); and (2) select far more than 5 team finalists for the short list in the two-step design-build procurement process. In both cases, design-build teams consisting of contractors and designers risk large sums of money on full, technical proposals with slight changes—or not even knowing their chances—of winning the contract award. This drives away competition and innovation.
AGC Message:
One-Step Design-Build Procurement Process Reduces Competition, Impacting the Price to Taxpayers.
- Design-build teams considering one-step design-build procurements cannot judge their prospects for success. Competition suffers because many qualified teams don’t want to be responsible for the large costs to submit expensive and technical proposals where perhaps 20 teams or more can offer. When competition decreases, price to the taxpayer increases.
One-Step Design-Build Procurement Process Delays the Government Procurement Process.
- Under one-step design-build procurement, a federal agency could see as many as 20 proposals. Before final selection, the agency must thoroughly review and evaluate all 20 proposals, some of which may be from unqualified teams.
One-Step Design-Build Procurement Disproportionately Discourages Small Business Participation.
- Small businesses cannot afford to risk their limited proposal dollars on technical and expensive design materials. The unpredictability of one-step design-build competitions drives small businesses away.
Federal Agencies Sometimes Abuse the Second-Step of the Two-Step Design-Build Process.
- A federal agency may select as many finalists to enter the second round as they want. Selecting too many finalists for the second round will limit competition – as with the single-step process. Federal agencies must reasonably limit second-step finalists to allow a predictable procurement process that encourages competition.