At some point prior to the physical construction of a federal aid highway
project
a decision is needed regarding how to complete the construction work in the
most efficient and cost-effective way.
Federal law requires that federal aid contracts be awarded using a competitive
contracting method with allowances for other options only in special
circumstances.
Since federal aid projects can be constructed with a limited variety of
contracting methods,
making this decision early during project design will ensure your project
doesn't encounter unnecessary delays.
Since the beginning of the federal aid highway program
competitive low bid awards have been the required method of engaging contractor
services.
One of the most basic tenets of federal aid contracting
is that construction contracts are to be awarded using fair and open competition
to a responsible contractor
who submits the lowest responsive bid.
A responsible contractor is one who has the capability,
both financially and physically, to undertake and complete the contract.
A responsive bid is one that meets all the requirements of the advertisement
that invited contractors to bid.
Since the early 1990s other innovative competitive contracting
methods, such as Design/Build, Alternate Bid,
and Warranty contracts
have also been used to secure contractor services.
The Federal Highway Administration, FHWA, has evaluated many
alternative contracting methods
and now considers these three to be acceptable for federal aid highway
projects.
All methods of construction other than competitive low bid contract awards
must have project specific approval by the State Department of Transportation
or FHWA as the oversight agency
prior to use in a federal aid project.
Design/Build contracts, however, do not require cost-effectiveness justification.
Normally, with the exception of Design/Build,
evaluation of such a request will consider a cost-effectiveness finding
and any special circumstances noted by the local public agency.
Since the approval procedures vary from state to state,
you are encouraged to refer to the stewardship and oversight agreement
between the State Department of Transportation and FHWA for
clarifications.
Competitive bidding is the preferred method used to award federal aid
contracts.
However, there are occurrences when construction can be completed using
methods other than competitive contracting
and the project remains eligible for federal aid reimbursement.
In certain situations the competitive bidding requirement for federal aid
contracts can be waived by the oversight agency.
Two alternative methods to the bidding requirement are negotiated contracts
and agency force account.
Negotiated contracts are an option that should be considered only in very rare
circumstances,
such as during the time of a natural disaster.
Getting work started immediately to save lives or to protect the infrastructure
from impending damage
may be reasons to negotiate with a contractor to perform work without
having a competitively awarded contract in place.
Under certain circumstances, projects can be completed using agency force account
procedures.
This means that the construction work is performed using the labor, equipment,
materials, and supplies that are under your control, without the use of a
private contractor.
Possible reasons to consider this method of construction are when there is a lack
of competition within a bidding process or unacceptable bids have been received.
This method also might be used when it is more cost-effective to do the work
using agency personnel and for emergency situations.
If you choose to use agency force account procedures, submit documentation
to the oversight agency that supports your agency's ability to satisfactorily
complete the proposed construction work.
The purpose of the documentation is to show: evidence of satisfactory completion
of similar work,
the personnel or other resources are available to do the work,
the personnel can achieve the acceptable quality that is normally expected within
the federal aid highway program,
the work can be completed within a reasonable time frame,
and the cost effectiveness of using agency forces.
All agency force account work is still expected to meet the standards of
quality and workmanship of normal contracting methods.
Remember, get the approval of the oversight agency
prior to performing construction work using agency personnel.
Emergency repair work can often be completed by using either of these
non-competitive methods. The waiver of competitive bidding would only cover the
short-term temporary work for the immediate event.
Contracts for permanent repairs must be considered and awarded through a
competitive process.
Check with your State Department of Transportation for the detailed
procedures related to emergency project administration
and the FHWA Emergency Relief Program.
During the design phase of your project, select either a competitive or
non-competitive method of construction that best suits your federal aid project.
Get concurrence from your oversight agency on the selected method of
construction.
Your choice of the method of construction will affect the plans,
construction specifications, and cost estimate package that must be approved
prior to advancing to construction.
The method of construction you choose will also determine whether the project's
construction costs are eligible for federal aid funding.
Federal aid projects may be constructed with a limited variety of competitive or
non-competitive methods.
Any method of construction other than low bid competitive bidding must be
approved
by the oversight agency.
Your State Department of Transportation, DOT,
provides guidance and is responsible for the oversight of your agency's program.
If you need assistance the State DOT can assist you with selecting
an appropriate method of construction
for your project.