Evaluation of the Design-Build Delivery Process for a State Department of Transportation Pilot Project

Ernzen, James; Albelda, Craig; Knutson, Kraig

doi:10.1061/40475(278)67

Cited by 1 publication

(2 citation statements)

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“…Literature is split on a stipends' impact on the offerors level of effort in bid preparation. Ernzen et al (2000) and Shane et al (2006) claim that a stipend can impact the resources a contractor will spend on a proposal.…”

Section: Stipends Impact On Offerors Proposing Mentalitymentioning

confidence: 99%

“…Industry and agency guidance cite the existence of this benefit. Five guidance documents suggest that a stipend and/or its value has a positive relationship with the contractor's level of effort (Wundram 1996, Ernzen et al 2000, Gransberg et al 2006, OMB 2016, DBIA 2017. Eleven of the agency manuals state that stipends aid in receiving innovation, provide better risk mitigation, and/or produce more comprehensive proposals.…”

Section: Stipends Impact On Offerors Proposing Mentalitymentioning

confidence: 99%

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Characteristics of Stipends and Their Value-Adding Potential in Design-Build US Highway Construction

Alleman

Stanford

Papajohn

et al. 2020

J. Leg. Aff. Dispute Resolut. Eng. Constr.

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A best practice tool to enhance design-build best-value procurements are stipends, yet there is very little literature dedicated to this topic. Cited benefits of stipends include incentivizing the level of effort put forth by proposers in preparing their technical proposal, encouraging the number of proposers and thereby increasing competition, and mitigating risk. This paper presents cross-validated findings from literature, agency policies, survey of 53 US design-build projects, six agency representative interviews, and thirteen design-build industry professional interviews. This paper investigates four aspects of stipends: (1) stipend value and calculation processes; (2) impact on a contractor's decision to propose; (3) impact of stipend amount on an offeror's proposal development, and (4) stipends' ability to aid agencies in achieving best value for highway construction projects. All sources agree that stipends are a necessary process to achieve best value as they increase competition and often can increase the quality of a proposal based on the stipend amount. Stipends typically cover one-third to one-half of a contractor's proposal costs. Agencies should use stipends when proposal costs are expected to be high and should estimate the stipend amount on a project-by-project basis. Properly valued stipends demonstrate that an agency is serious about going forward with the project, understands the work required,

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Section: Stipends Impact On Offerors Proposing Mentalitymentioning

confidence: 99%

Section: Stipends Impact On Offerors Proposing Mentalitymentioning

confidence: 99%