Importance of Noncost Criteria Weighing in Best-Value Design–Build US Highway Projects

Abstract

United States highway agencies use best-value procurement with a fixed price to select design-builders. This method enables public agencies to choose the best proposer by assessing several factors in addition to price. Theoretically, considering cost and non-cost factors in the selection enhances the probability of selecting the proposer that provides the best value for each dollar spent. However, bidding results from the last 15 years show that 80% of best-value procurements are awarded the proposer with the lowest bid. The selection seems thus to be biased towards price. This research explores the balance between cost and non-cost components in best-value procurement by identifying how weights and scores influence the selection. The goal of this analysis is to determine the ranges of weights that better balance cost and non-cost factors in the weighted criteria best-value procurement. This study characterized a first-ofa-kind dataset of 882 non-cost scores and 1,158 cost scores from 347 best-value highway projects. The study applied simulation to the weighted criteria award algorithm to explore the balance between cost and non-cost factors and derive recommendations about how to make non-cost factors more influential. The results show that weight of cost

Best-Value in the Procurement of Highway Projects: Lessons Learned from US Design-Build Projects

“…Results from the Montecarlo simulation indicated that including a second non-cost criterion varies the probability of awarding the contract to the lowest bidder between 21.48% and 2.78%, depending on the weights given to the different criteria. This result suggests that the number of non-cost criteria has an influence on the likelihood of the lowest bidder being awarded the contract, as it does the ranges of the weights and scores ranges applied to those criteria, according to previous research [11].…”

“…Thus, a total of 406 observations were analyzed from the 128 projects collected. Scores from different procurements and criteria were harmonized to a scale ranging from zero to one, as was considered by Calahorra et al [11].…”

“…The final score (FS) for each proposer is the result of the award algorithm formula in each case, as indicated by Eqs. (10) and (11).…”

“…After two decades of using best-value procurement in US transportation projects, research has shown that 80% of the projects procured using best-value were awarded to the lowest bidder [9,10]. Based on these findings, it might be argued that bestvalue leads to a low-bid selection-and not to a best-value selection [11].…”

Challenges in Engineering Estimates for Best Value Design–Build Highway Projects

“…Agency policy and legislation generally requires a low-bid approach in the traditional delivery method. Best-value procurement is preferred in design-build projects because it provides a balance between a low-bid procurement and qualification-based selection (Nguyen et al, 2018;Calahorra-Jimenez et al, 2020;Calahorra-Jimenez et al, 2021). In fact, many agencies require best-value selection for design-build projects because the price component corresponds to traditional low-bid selection of the builder and the qualification-based component corresponds to the traditional selection of the designer.…”