TECHBRIEF

Research, Development, and 

Technology

Turner-Fairbank Highway 

Research Center

6300 Georgetown Pike

McLean, VA 22101-2296

www.fhwa.dot.gov/research

Alternative Contracting 

Method Performance in U.S. 

Highway Construction

FHWA Publication No: FHWA-HRT-17-100

FHWA Contact: Richard Duval, HRDI-20, (202) 493-3365, 

richard.duval@dot.gov

This document is a technical summary of the Federal 

Highway Administration report Alternative Contracting 

Method Performance in U.S. Highway Construction 

(DTFH61-13-C-00024).

Objective

The findings presented in this TechBrief are based on 

empirical data from the Federal Highway Administration 

(FHWA) national study Quantification of Cost, Benefits 

and Risk Associated with Alternative Contracting Methods 

and Accelerated Performance Specifications.(1) The study 

includes documented lessons learned associated with 

alternative contracting methods construction manager/

general contractor (CM/GC) and design–build (D-B). D-B 

is broken down into D-B/low bid (D-B/LB) and D-B/best 

value (D-B/BV), the latter being projects procured using 

selection factors in addition to cost. Additionally, the 

study includes lessons learned associated with the use of 

alternative technical concepts (ATCs), which are defined 

by the National Cooperative Highway Research Program 

(NCHRP) Synthesis 455 as “a request by a proposer to 

modify a contract requirement, specifically for that proposer’s use in gaining competitive benefit during the bidding or proposal process.”(2)

The FHWA national study collected a first-of-a-kind 

dataset from 291 completed highway projects. The data 

currently form the largest empirical database of 

project information exclusive to highway construction. 
2

The findings provide guidance for State 

departments of transportation (DOTs) to 

assist in determining when to use alternative contracting methods to maximize project objectives relating to cost, schedule, and 

intensity performance metrics. Intensity 

is a critical metric of project performance 

because projects with a greater intensity 

can have a shorter impact on the traveling 

public. This TechBrief addresses the following questions:

• What is the state of practice in the use 

of alternative contracting methods?

• For what project size, complexity, and 

risk characteristics are agencies applying alternative contracting methods?

• How do alternative contracting methods affect cost certainty and cost 

growth?

• How do alternative contracting methods affect project delivery speed and 

schedule growth?

• How do alternative contracting methods affect the production rates or project intensity (i.e., dollars/day of work 

in place)?

Introduction

History of Alternative Contracting 

Methods on Federally Funded Highways

Contracting methods create an environment for successful project delivery. There 

are three primary contracting methods for 

federally funded highways: design–bid–

build (D-B-B), D-B, and CM/GC. The vast 

majority of the U.S. highway system was 

built with the D-B-B delivery method. The 

use of D-B delivery began in the 1990s; 

CM/GC delivery began after 2005.(3) By the 

end of 2014, the number of State DOTs 

using D-B had grown to 35 and the number 

using CM/GC to 17.(3) Potential benefits of the 

two alternative contracting methods, D-B 

and CM/GC, include saving project costs, 

lowering operational costs and/or project 

lifecycle costs, improving constructability, 

enhancing innovation, reducing risk, expediting project delivery, and shortening construction schedules. Notwithstanding these 

potential benefits, the two alternative contracting methods can create challenges for 

both agencies and industry.

Definitions of Project Delivery Methods

Figure 1 provides a graphic depiction of the 

project delivery methods explored in this 

study, which are defined as follows:

• D-B-B. This is the traditional delivery 

method where the agency contracts 

separately for design and construction 

services, the bid is based on complete 

(100 percent) plans and specifications, 

and design and construction occur 

sequentially. D-B-B is typically a unitpriced contract, but it can also include 

lump-sum items.

• CM/GC. The agency procures 

professional services on a qualifications or best-value basis from a 

construction manager during the 

design phase to offer suggestions 

on innovations, cost and schedule 

savings, and constructability issues. 

Upon completion of the design or 

individual design packages, the 

contractor and agency negotiate a 
3

price for the construction contract, and 

then the construction manager acts 

as a general contractor to complete 

construction. The contract can 

employ a guaranteed maximum price 

administered on a cost-reimbursable 

basis, unit price, or lump-sum contract.

• D-B. The agency contracts with one 

entity to complete the design and 

construction of a project under a single 

contract, typically a lump sum with 

allowances or unit cost items to address 

risk. D-B has been implemented using 

various procurement approaches, 

including qualified low bid (LB) and 

best value (BV).

Data Collection

To lend objectivity to this study, alternative 

contracting method projects were randomly 

selected from agencies actively engaging in 

D-B and/or CM/GC methods. Corresponding 

D-B-B projects were then selected according 

to set criteria; ideally, the contract signing/

award date and the award cost of the D-B-B 

projects were within plus or minus 2 years 

and plus or minus 25 percent, respectively, 

as compared to D-B or CM/GC projects. 

Attempts were also made to have projects 

that were similar in scope and types of 

work where possible. Despite this rigorous approach to data collection, limitations 

existed in the data because there were large 

D-B and CM/GC projects for which no comparable D-B-B projects were available from 

the respective agencies.

The research team ultimately collected valid 

data from 291 completed projects. Figure 

2 shows the distribution of data collected 

throughout the United States. The research 

team achieved a diverse set of data from 

all regions of the country. Florida contributed the most projects, coinciding with their 

long-term use of alternative contracting 

methods. Utah, Arizona, Colorado, Oregon, 

and Maine all contributed D-B-B, CM/GC, 

and D-B projects. 

Figure 1. Diagram. Project delivery methods.
4

Results and Discussion

This TechBrief begins with a discussion of 

the population characteristics in terms of 

the proportions of the project contracting 

methods, complexity, risk, procurement 

methods, ATCs, and payment methods. It 

then describes costs in terms of overall 

project size and the application of alternative contracting methods on small projects. 

A discussion of overall project duration 

and the timing of cost certainty and project 

intensity follows. The TechBrief concludes 

with a discussion of how the traditional and 

alternative contracting methods relate to 

cost and schedule growth.

Data collection for this study took almost 

18 months, and data validation lasted an 

additional 6 months. The research team is 

indebted to the agency personnel for their 

generous time and thoughtful completion 

of the project questionnaires. As shown 

throughout the results and discussion, 

some project representatives were unable 

to report certain data, and therefore not 

all data points were available from every 

project. The team reported the maximum 

number of data points available, excluding extreme outliers where applicable, for 

the various variables/metrics as noted in 

each table and figure (e.g., procurement). 

Consequently, the reader should expect 

some variance in the number of projects between analyses of these variables/

metrics.

Contracting Methods

D-B-B projects comprise the largest proportion of the study data (47 percent). CM/

GC projects make up the smallest proportion (12 percent)—CM/GC being the newest 

contracting method—with only 14 agencies 

Figure 2. Illustration. Summary of States contributing data (n = 291).
5

stating that they were working on CM/GC 

projects at the time of this study. Another 

reason for the low number of CM/GC was 

that many agencies were still working on 

their first projects during data collection, 

and the study required that only completed 

projects qualified for analysis. Many D-B 

projects were available because agencies have been using this method for a 

long time. This large number of D-B projects allows for a comparison of D-B/LB and 

D-B/BV, which comprise 14 percent and 

27 percent of the dataset, respectively. 

Figure 3 displays the proportions of projects by contracting methods.

Level of Project Complexity

Each project was classified on the basis of 

complexity definitions found in the NCHRP 

Report 574.(4) As shown in figure 4, the 

majority of projects belong to the Most 

Complex category with 48 percent. Figure 4 

also shows that 38 percent and 14 percent 

of projects are in the Moderately Complex 

and Non-Complex categories, respectively. 

Figure 5 through figure 8 show the proportions of each level of complexity within the 

contracting methods. The D-B/LB projects 

are less complex than the D-B/BV projects, 

and the CM/GC projects have the highest 

proportion of Most Complex projects.

Project Risk and Delivery Methods

By conducting a thorough literature review 

and through discussions with agencies, 

engineers, and contractors, the research 

team developed a list of 31 risks that could 

affect project delivery performance. For 

each project, agencies were asked to rate 

the impact of these risk factors on the cost 

and schedule performance of the project 

on a scale from 1 (insignificant cost or time 

impact) to 5 (more than a 10-percent cost 

increase or schedule delay). To rank the 

risks in terms of impact on project performance, the research team calculated the 

scores of 31 risk factors associated with 

each delivery method. The risk score, or 

Figure 3. Pie chart. Proportions of projects by contracting methods (n = 284).
6

Figure 4. Pie chart. Overall project complexity (n = 282).

Figure 5. Pie chart. D-B-B project complexity (n = 133).

Figure 6. Pie chart. CM/GC project complexity (n = 34).
7

Figure 7. Pie chart. D-B/LB project complexity (n = 39).

Figure 8. Pie chart. D-B/BV project complexity (n = 76).

criticality, of each risk factor was calculated 

using the equation below.

Where:

ri = rating of each risk factor.

ni = total number of responses associated with the rating ri

.

In examining the top risks among the project delivery methods, the following eight 

risk factors were perceived by questionnaire respondents to have a high impact 

on project performance regardless of the 

delivery method (D-B-B, CM/GC, D-B/LB, or 

D-B/BV):

1. Delays in completing railroad agreements.

2. Project complexity.

(1)
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3. Uncertainty in geotechnical investigation.

4. Delays in right-of-way process.

5. Unexpected utility encounter.

6. Work zone traffic control.

7. Challenges to obtain environmental 

documentation.

8. Delays in delivery schedule.

Two additional risk factors were found 

to have a substantial influence on D-B-B 

delivery: scope definition and construction 

sequencing/staging/phasing. Three additional risk factors were found to have a substantial influence on CM/GC delivery: constructability in design; delays in procuring 

critical materials, labor, and equipment; and 

construction sequencing/staging/phasing. 

Two additional risk factors were found to 

have a substantial influence on D-B/LB and 

D-B/BV delivery: environmental impacts 

and difficulty in obtaining other agencies’ 

approvals. Agencies should consider these 

risks when selecting delivery methods, and 

they should explicitly address them in the 

procurement and contract documents. The 

Project Delivery Selection section of this 

TechBrief provides guidance on how these 

risks relate to project delivery selection.

Use of Procurement Methods

Table 1 shows information collected on 

the procurement methods for each delivery method. As expected, the vast majority 

of D-B-B projects were procured through 

low bid. However, there were exceptions, 

primarily in the use of A+B procurement. 

Procurement for CM/GC projects was split 

between best-value and qualificationsbased selection. The D-B project procurements were split between best value and 

low bid. Thirty-nine D-B projects used price as 

the only procurement factor and were 

classified as D-B/LB. The other 77 D-B projects used at least one non-price factor in 

addition to cost and were classified as D-B/BV.

Alternative Technical Concepts

Soliciting ATCs during procurement is a 

method to invite early contractor input on a 

project. Agencies can benefit from industry 

experience and expertise through design 

and construction proposals determined to be 

equal to or better than the base scope in the 

Request for Proposal (RFP). Research shows 

that ATCs can improve constructability, 

Procurement Procedure D-B-B (n = 134) CM/GC (n = 34) D-B/LB (n = 39) D-B/BV (n = 77)

Low bid 80% 0% 100% 0%

A+B (cost + time) 13% 0% 0% 18%

Best value 1% 47% 0% 61%

Qualifications-based 1% 41% 0% 0%

Other or not classified 5% 12% 0% 21%

Table 1. Procurement procedure.
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enhance innovation, shorten schedules, 

reduce risks, and ultimately save costs on 

a case-by-case basis. However, no studies 

have examined the application of ATCs at 

an aggregate level.

Table 2 shows the use of ATCs on the projects in this study. The FHWA Every Day 

Counts (EDC) program promotes ATC in all 

contracting methods. The data collection for 

this research found that ATCs are used primarily by agencies in D-B/BV. However, the 

vast majority of these projects were completed prior to the EDC initiatives; this could 

explain the lower use on D-B-B projects. The 

lack of ATC use on CM/GC projects resulted 

because the construction manager portion 

of the contract provided contractor input 

with no ATC process; this phenomenon was 

confirmed through agency interviews after 

data collection. The lower use of ATCs on 

D-B/LB projects is attributable to the smaller 

size and less complex nature of the projects 

in this pool.

Table 3 shows a trend toward the use of 

ATCs on more complex D-B/BV projects. 

As revealed in interviews with project personnel, agencies employ ATCs in the Most 

Complex projects to minimize cost and 

maximize contractor innovation. Further 

discussion of the impact of ATCs on engineering estimates and cost growth is presented later in this TechBrief.

Use of Payment Methods

The use of payment methods (i.e., the form 

of contract) correlates with the selection 

of the delivery method. Table 4 summarizes the payment method results. D-B-B 

predominantly uses unit price, while both 

D-B/LB and D-B/BV projects primarily use 

Categories ATCs No ATCs

D-B-B (n = 123) 2 121

CM/GC (n = 34) 0 34

D-B/LB (n = 38) 2 36

D-B/BV (n = 74) 40 34

Categories Non-Complex

(%)

Moderately Complex

(%)

Most Complex

(%)

D-B/BV with ATCs (n = 40) 0 30 70

D-B/BV without ATCs (n = 34) 2 44 44

Table 2. The use of ATCs across project delivery methods.

Table 3. D-B/BV complexity with and without ATCs.
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lump-sum payment methods. CM/GC predominantly uses unit price or guaranteed 

maximum price; this choice appears to 

be based solely on the preference of each 

agency.

Project Cost

Because the studied projects were completed between 2004 and 2015, it was important to adjust them for inflation. FHWA’s 

National Highway Construction Cost Index 

was used to convert all project costs to 

equivalent costs in June 2015. This conversion allowed a fair comparison of project 

costs at the same point in time.

At the aggregate level, the average award cost

for projects from all contracting methods

was $27,140,363. These projects ranged in 

award cost from a minimum of $69,108 to 

a maximum of $357,760,287. Table 5 shows 

the average project cost by contracting 

method. It should be noted that contractor design costs are included for the D-B 

projects; no design costs are included for 

the D-B-B and CM/GC projects.

Publicized success of large, high-profile D-B 

and CM/GC projects gives the impression that 

alternative contracting methods are applicable only to larger projects. The data collected 

for this study show that alternative contracting methods are widely applied on small 

projects. As shown in table 6, more than half 

of the CM/GC and D-B/LB projects are under 

$20 million in value, and more than half of 

the D-B/LB projects are less than $5 million in 

value. On average, D-B/BV is used on larger 

projects; however, 45 percent of the D-B/BV 

projects are less than $20 million in value. 

Agencies appear to use alternative contracting methods on projects of all sizes. 

Average Project Duration

Agencies frequently choose alternative contracting methods to shorten project durations; the data from this study show that they 

are achieving this objective. Table 7 shows 

Payment Method D-B-B (n = 134) CM/GC (n = 34) D-B/LB (n = 39) D-B/BV (n = 77)

Lump sum 2% 3% 85% 91%

Cost reimbursable 2% 0% 0% 0%

Unit price 93% 38% 5% 0%

Guaranteed maximum price 0% 56% 0% 4%

Other or not classified 3% 3% 10% 5%

Contract Method Mean Cost Median Cost Standard Deviation Minimum Cost Maximum Cost

D-B-B (n = 134) $20,286,637 $12,438,075 $28,422,651 $183,202 $252,052,326

CM/GC (n = 34) $36,328,010 $19,167,399 $51,451,029 $1,390,828 $235,936,099

D-B/LB (n = 39) $10,646,348 $4,384,177 $14,534,668 $69,108 $68,826,264

D-B/BV (n = 77) $43,364,854 $22,127,526 $63,149,386 $622,317 $357,760,287

Total (n = 284) $27,140,363 $13,949,364 $43,922,075 $69,108 $357,760,287

Table 4. Payment method.

Table 5. Average project award cost.
11

the overall project durations with separate 

analyses of agency design and construction. 

These are final project durations that include 

all contractual changes and/or builder delays. 

Accurate duration data were more difficult to 

obtain than project cost data, particularly for 

agency design. As a result, the mean project durations in table 7 were calculated with 

fewer projects than in table 5 for project cost. 

Note that the mean project duration is longer 

than the sum of the design and construction durations because procurement times 

and other agency administrative tasks are not 

shown. Additionally, note that construction 

duration for D-B projects includes designbuilder design and construction duration 

(i.e., the D-B contract duration from award to 

completion).

When compared to D-B-B, the mean project

duration for the CM/GC projects was 48 percent shorter. The mean D-B/BV project duration was 15 percent shorter than D-B-B. These 

results are noteworthy considering that the 

mean project costs for CM/GC and D-B/BV 

projects are approximately twice that of the 

D-B-B projects. Essentially, projects that are 

twice as large are being built in half the time 

by using alternative contracting methods. 

The mean D-B/LB project duration was 

approximately 50 percent shorter than 

D-B-B, but the mean D-B/LB project cost 

was approximately half of the D-B-B 

projects’ mean.

The mean agency design durations in 

table 7 are notably shorter for CM/GC and 

D-B projects. The extremely short design 

Contract Method Contract Award 

Over $20M (%)

Contract Award 

Under $20M (%)

Contract Award 

Under $10M (%)

Contract Award 

Under $5M (%)

D-B-B (n = 134) 35 65 41 29

CM/GC (n = 34) 47 53 29 21

D-B/LB (n = 39) 18 82 72 51

D-B/BV (n = 77) 55 45 25 12

Total (n = 284) 39 61 39 26

Contract Method Mean Cost Mean Project

Duration (Days)

Mean Agency 

Design Duration 

(Days)

Mean Construction

Duration (Days)*

D-B-B (n = 74) $21,687,447 1,774 932 642

CM/GC (n = 24) $41,368,952 929 361 511

D-B/LB (n = 18) $12,249,585 889 268 435

D-B/BV (n = 21) $48,532,458 1,516 662 837

Total (n = 137) $28,010,219 1,470 710 620

Table 6. Use of contracting methods on small projects.

Table 7. Average project duration.

*Construction duration for D-B projects includes design-builder design and construction (i.e., the D-B contract duration).
12

duration for CM/GC is surprising because, 

with CM/GC, the agency brings the design 

to 100 percent completion—similar to 

D-B-B. This is likely because of multiple factors. Having the construction manager on 

the team allows the agency to fast-track 

the design. In addition to gaining contractor input, there is no need to develop full 

designs for competitive bidding, as in 

D-B-B. Moreover, there is no need to 

develop D-B RFPs, which are sometimes 

voluminous and often have long industry review periods. While not as short as 

CM/GC, the mean D-B agency design duration is shorter than that of D-B-B. The design 

percent complete at the RFP was reported 

to be less than 30 percent for more than 

75 percent of the D-B projects reporting 

this information. Although the RFP process 

can be complex, it can take less time than 

developing full designs.

D-B/LB and D-B/BV contract methods had 

the lowest and highest mean construction 

durations, respectively. The D-B/LB projects had the shortest construction duration, perhaps because of the smaller size 

of these projects and the higher level of 

design completion at the time of award. The 

longer D-B/BV mean construction duration 

was probably driven by two factors: D-B/BV 

methods had the largest mean cost, and the 

construction durations included the design 

builder’s design time and coordination with 

other agencies.

Because the mean costs of the projects 

in table 7 vary substantially, the research 

team analyzed two smaller pools of more 

projects. The first pool involved the smallest projects ranging from $2 to $10 million 

in award costs. Since D-B-B and D-B/LB are 

most frequently chosen for projects in this 

cost range, only these two methods were 

analyzed. Table 8 includes all projects from 

the data with verified project, design, and 

construction durations.

As shown in table 8, the mean costs of 

the D-B-B and D-B/LB projects are similar, allowing for a more accurate analysis of the project, design, and construction durations. The mean D-B/LB project 

duration was 49 percent shorter than that 

of D-B-B projects in this dataset. Agencies 

took approximately 77 percent less time 

for design for D-B/LB as compared to the 

mean D-B-B agency design duration on 

these projects. However, the mean D-B/

LB construction time, which included both 

the design-builder design and construction time, was nevertheless approximately 

25 percent shorter on average. D-B/LB 

appears to be delivering substantially 

shorter durations on projects in the $2 to 

$10 million range.

Contract Method Mean Cost Mean Project

Duration (Days)

Mean Agency 

Design Duration 

(Days)

Mean Construction

Duration (Days)

D-B-B (n = 19) $4,958,329 1,506 795 508

D-B/LB (n = 10) $4,745,533 773 181 380

Total (n = 29) $4,884,951 1,253 584 464

Table 8. Average duration for D-B-B and D-B/LB projects between $2M and $10M
13

For larger projects, the data provided a 

natural grouping of projects from $10 to 

$50 million in size, as shown in table 9. D-BB, CM/GC, and D-B/BV are included in this 

analysis because these contracting methods are most frequently used in this cost 

range. Table 9 includes all projects from the 

data with verified project, design, and construction durations.

Table 9 summarizes the D-B-B, CM/GC, 

and D-B/BV projects in the $10 to $50 million cost range. Although the mean cost 

of the CM/GC projects was approximately 

11 percent higher than D-B-B and 22 percent higher than D-B/BV, the mean CM/GC 

project duration was 69 percent and 43 percent shorter than D-B-B and D-B/BV, respectively. Shorter CM/GC mean durations were 

observed in both design and construction. 

A shorter CM/GC construction duration is 

likely—at least in part—because of contractor involvement in project design processes. D-B/BV also showed substantially 

shorter mean durations with 33 percent, 

44 percent, and 22 percent shorter project, 

design, and construction durations, respectively, as compared to D-B-B; these results 

are consistent with findings from 2 decades 

of studying project delivery methods. Like 

CM/GC, this shorter construction duration 

is likely because of contractor involvement 

with the design. The duration is also notable considering its inclusion of time for 

design-builder design. These results suggest that agencies are gaining substantial 

time savings by using alternative contracting methods.

Overall Schedule and Point of Cost 

Certainty

Table 7 through table 9 display the substantial time savings in project duration from 

the use of alternative contracting methods. 

Alternative contracting methods also provide agencies with much earlier cost certainty, which is the point at which the agency 

has a reliable project cost. Agencies value 

cost certainty for both project and program 

management. Table 10 shows the point of 

cost certainty based on mean design duration (refer to table 8) and procurement duration for D-B-B and D-B/LB projects from $2 

to $10 million. In D-B-B, the initial contract 

cost (i.e., point of cost certainty) is known 

after the design is complete. In D-B/BV, the 

initial contract cost is known at the point 

of design-builder selection. For D-B-B and 

D-B/LB projects in this pool, D-B/LB cost 

certainty is known more than 60 percent 

earlier. For these smaller projects, early cost 

certainty has value for planning, programming, and letting schedules.

Contract Method Mean Cost Mean Project

Duration (Days)

Mean Agency 

Design Duration 

(Days)

Mean Construction

Duration (Days)

D-B-B (n = 34) $21,188,585 2,130 1,139 818

CM/GC (n = 10) $23,912,981 662 281 349

D-B/BV (n = 10) $18,604,503 1,420 638 639

Total (n = 54) $21,214,569 1,726 904 699

Table 9. Average duration for D-B-B, CM/GC, and D-B/LB projects between $10M and $50M.
14

Table 11 shows the point of cost certainty 

based on the mean design duration (refer to 

table 9) and procurement durations for D-BB, CM/GC, and D-B/BV projects from $10 to 

$50 million. The explanation for the point of 

cost certainty in D-B-B and B-B/BV projects 

was previously explained. The point of cost 

certainty for CM/GC projects is known after 

the cost for the last construction package 

has been agreed upon, as CM/GC projects 

may have one or more construction packages. When compared to D-B-B, the average point of cost certainty for CM/GC is 

more than 60 percent earlier for the projects 

in this study. The point of cost certainty for 

D-B/BV in this range is approximately 40 percent earlier than for D-B-B.

Project Intensity

Project intensity is a measure of how much 

money is spent per day on a project.

A high project intensity means putting more 

work in place faster. Projects with a greater 

intensity can have a shorter impact on the 

traveling public. With so much highway 

design and construction occurring in urban 

settings (i.e., reconstruction and renewal), 

intensity is an excellent measure of how 

agencies are serving the traveling public. 

Table 12 provides the project intensity metrics for each delivery method. The shorter 

project duration and higher contract cost of 

the CM/GC and D-B/BV projects, as shown 

in table 7 through table 9, result in a much 

higher project intensity than D-B-B. The 

lower project intensity of D-B/LB can be 

attributed to the smaller project size.

Award Growth (Engineer’s Estimate to 

Award)

Award growth is one measure of project 

cost performance; the more common costgrowth metric is discussed later in this 

TechBrief. Award growth is the ratio of the 

difference between the contract award cost 

Contract Method Mean Timing of Cost Certainty (Days) Mean Project Duration (Days)

D-B-B (n = 19) 802 1,506

D-B/LB (n = 10) 297 773

Contract Method Mean Timing of Cost Certainty (Days) Mean Project Duration (Days)

D-B-B (n = 10) 1184 2,130

CM/GC (n = 10) 329 662

D-B/BV (n = 10) 765 1,420

Table 10. Timing of cost certainty for D-B-B and D-B/LB projects between $2M and $10M.

Table 11. Timing of cost certainty for D-B-B, CM/GC, and D-B/BV projects between $10M and $50M.

Final Cost ($)

Actual Project Duration (days)

Project Intensity = 

(2)
15

of a project and the engineer’s estimate, 

calculated as shown in the equation below. 

This metric gives an indication of trends in 

the accuracy of agency cost estimating; it 

can also show projects that experience significant change in cost during procurement.

As shown in table 13, the mean award 

growth is lowest for D-B-B projects and 

highest for CM/GC projects. The data do not 

provide causes for these trends, but some 

logical hypotheses can be put forth. For 

instance, the low award growth in D-B-B 

projects could be a result of more competition and agencies’ use of historic unit pricing 

for estimates. Similarly, the positive award 

growth in CM/GC could result from less 

competition and the use of negotiated pricing. Notably, the CM/GC projects provide 

the most award certainty (i.e., the smallest standard deviation). Statistical tests for 

significance show that CM/GC has a higher 

average award growth when compared to 

each of the other three methods at a 95-percent confidence level, (p = 0.00 versus 

D-B-B, p = 0.03 versus D-B/LB, and p = 0.00 

versus D-B/BV). However, cost certainty is 

significantly more accurate for CM/GC than 

for the other three methods, as indicated by 

the narrower dispersion around the mean 

(standard deviation = 6 percent). From a 

statistical significance perspective, D-B-B, 

D-B/LB, and D-B/BV have no difference in 

means of award growth at the 95-percent 

confidence level. 

This study also examined the impact of 

ATCs on award growth. Analysis showed 

that the use of ATCs does not create a statistically significant difference on award 

growth, leading to the conclusion that it 

Contract Method Mean Cost Mean Project 

Intensity ($/Days)

Minimum Project 

Intensity ($/Days)

Maximum Project 

Intensity ($/Days)

D-B-B (n = 74) $21,687,447 12,802 269 123,566

CM/GC (n = 24) $41,368,952 46,450 3,618 159,031

D-B/LB (n = 18) $12,249,585 12,816 894 49,892

D-B/BV (n = 21) $48,532,458 28,527 1,930 204,341

Total (n = 136) $28,010,219 21,181 269 204,341

Table 12. Project intensity.

Contract Method Mean (%) Median (%) Standard Deviation (%) Minimum (%) Maximum (%)

D-B-B (n = 129) –9 –8 18 –51 42

CM/GC (n = 31) 3 3 6 –13 15

D-B/LB (n = 37) –5 –7 32 –58 104

D-B/BV (n = 71) –7 –7 22 –51 77

Total (n = 268) –6 –6 21 –58 104

Table 13. Award growth.

Award Cost – Engineer’s Estimate

Engineer’s Estimate

Award Growth = x 100 (3)
16

likely does not have an impact on the accuracy of engineers’ estimates. Award growth 

was found to be –7 percent and –6 percent 

for the D-B/BV projects with and without 

ATCs, respectively. While this study could 

not measure the savings achieved through 

ATC use, it did determine that ATCs are not 

correlated with award growth.

Cost Growth (Award to Final)

Cost growth—the cost at contract award 

compared with the final contract cost—is a 

key performance metric. In this study, cost 

growth is calculated by the formula below. 

Table 14 shows the results of cost-growth 

calculations with extreme outliers removed.

Table 14 displays the mean cost growth for 

each contract method along with statistics 

describing the dispersion of the data. The 

results from comparative statistical tests 

reveal that there is no statistically significant difference in cost growth between any 

of the contract methods at the 95-percent 

confidence level, which includes CM/GC, 

although the cost growth of the CM/GC 

projects is the lowest at 0.9 percent. Cost 

growth for the other delivery types ranges 

between 2.8 and 4.1 percent. In summary, 

agencies are expediting the overall project 

delivery time and gaining early cost certainty (as shown in table 10 and table 11) 

without witnessing additional cost growth 

in the construction contract. This is particularly notable given the early award of D-B 

and CM/GC projects. 

This study also examined the correlation 

between ATCs and cost growth. The use of 

ATCs did correlate with higher cost growth. 

Cost growth was found to be 6 percent for 

D-B/BV projects with ATCs and 2 percent 

for D-B/BV projects without ATCs, a difference that was statistically significant at the 

95-percent level. The higher cost growth 

could contribute to a variety of causes, 

including the higher project complexity (see 

table 3). Nonetheless, D-B/BV projects in the 

study pool with ATCs did experience higher 

cost growth, and this issue needs additional 

study. 

Change Orders

Table 15 shows the causes of changes within 

each contracting method as an average percent of the contract award amount. These 

causes were reported by the project managers in 162 of the projects in the database. 

Overall, unforeseen conditions have the 

largest change order impact across the 

Contract Method Mean (%) Median (%) Standard Deviation (%) Minimum (%) Maximum (%)

D-B-B (n = 129) 4.1 2.3 9.5 –21.8 33.1

CM/GC (n = 31) 0.9 0.8 6.0 –12.0 14.5

D-B/LB (n = 36) 2.8 0.7 5.7 –5.6 19.0

D-B/BV (n = 74) 4.0 1.9 5.5 –4.5 19.6

Total (n = 270) 3.5 1.9 7.8 –21.8 33.1

Table 14. Cost growth (award to final).

Final Contract Cost – Awarded 

Contract Amount

Awarded Contract Amount

Cost Growth = x 100 (4)
17

contracting methods; this finding coincides 

with other change order studies. No delivery 

method seems to be immune to the effect 

of unforeseen conditions on change orders. 

However, agencies could be transferring 

some of the risk for unforeseen conditions 

to the contractors through alternative contracting methods, as reflected in the lower 

change order trend with the D-B and CM/GC 

methods.

Agency-directed change orders have the 

second greatest impact on change orders. 

D-B/BV projects have the highest level of 

agency-directed change orders; CM/GC 

projects have the lowest. Higher levels of 

agency-directed change orders could be 

expected in D-B because of the lower level 

of design at the time of award. However, 

agency changes can have either negative or 

positive impacts on project goals. Negative 

impacts occur with incomplete scopes or 

lack of clarity in the RFP. Positive changes 

can add value to a project that was awarded 

below budget. Moreover, more than half 

of the agency-directed change orders in 

the database occurred in projects in which 

the project award was lower than the engineer’s estimate. Many of the owner-directed 

changes could have added value to the project within the budget.

Increases due to plan quantity changes, 

plan errors, and omission changes agree 

with what would be expected between 

delivery methods. D-B-B has the largest 

percentage of plan quantity changes, which 

is likely attributable to the designs being 

performed by the agency and the pricing 

being predominantly unit price. Plan errors 

and omissions are also highest in D-B-B. 

CM/GC plan errors and omissions should 

be lower because of the early involvement 

of the general contractor. D-B plan errors 

and omissions should be lower because the 

risk for this change is primarily transferred 

to the design builder. 

In the “other” category, respondents provided qualitative descriptions of the reasons for change orders. The most common 

responses were value engineering by the 

contractor, changes directed by non-agency 

stakeholders, and negotiated settlements of 

multiple claims.

Schedule Growth

Due to the difficulty in obtaining reliable 

planned, agency-designed start data, only 

Change Orders D-B-B (n = 65) CM/GC (n = 19) D-B/LB (n = 21) D-B/BV (n = 57) Total (n = 162)

Agency directed 1.2% 0.7% 1.6% 1.9% 1.5%

Plan quantity changes 1.1% 0.3% 0.6% 0.2% 0.6%

Unforeseen conditions 2.4% 1.5% 1.8% 1.8% 2.0%

Plan errors and omissions 0.9% 0.6% 0.1% 0.5% 0.6%

Other 0.1% 0.2% 0.8% 0.3% 0.3%

Total impact as a percentage 

of award cost* 5.8% 3.4% 5.0% 4.7% 5.0%

Table 15. Impact of change order categories as an average percentage of contract value.

*Total impact as a percentage of award cost differs from the cost growth in table 14 because of the smaller sample size of 

projects with detailed change order data available.
18

49 of the 291 projects were available for 

this analysis. The project schedule growth 

findings were that 31 D-B-B projects had 

an average of 8-percent growth and 8 CM/

GC projects had an average of 2-percent 

growth. Because the dataset included only 

three D-B/LB and three D-B/BV projects that 

submitted the required data to make this 

analysis, their findings are not presented. 

Given the early procurement of alternative contracting methods, higher schedule 

growth might be expected, but D-B-B has 

the highest mean project schedule growth. 

However, there are not enough data to make 

any substantial conclusions.

Mean construction schedule growth data 

were more readily available than overall 

project-schedule growth data because the 

start date for construction relates to the 

contract time. Reliable mean construction 

schedule data were available for 146 projects as shown in table 16. Construction 

schedule growth is calculated as follows:

Construction schedule growth showed a 

wide range of results for all contracting 

methods. For all the projects in this pool, 

there were time savings of up to 71 percent and delays of up to 199 percent. D-B/

LB was the only contracting method with 

an average construction time savings 

(mean and median). CM/GC had the largest 

mean construction schedule growth, but 

this was because of a few projects with 

extremely high growth. The median construction schedule growth for CM/GC was 

0 percent. D-B-B similarly had a median 

construction schedule growth of 0 percent. 

D-B/BV had a schedule growth of 15 percent and 7 percent for mean and median, 

respectively. Unfortunately, the data collection did not address the reasons for construction schedule growth in a similar manner to change orders. However, it can be 

assumed safely that some of the construction schedule growth for D-B/BV and CM/GC 

occurred because of value-adding changes. 

These results should be viewed in light of 

the substantial time savings that are realized from alternative contracting methods. 

The time savings shown in table 7 through 

table 9 are measured from actual project durations, which include construction 

schedule growth.

Contract Method Mean (%) Median (%) Standard Deviation (%) Minimum (%) Maximum (%)

D-B-B (n = 63) 10 0 38 –65 118

CM/GC (n = 13) 31 0 76 –30 199

D-B/LB (n = 20) –11 –6 18 –44 19

D-B/BV (n = 50) 15 7 31 –71 81

Total (n = 146) 11 0 40 –71 199

Table 16. Construction schedule growth (award to final).

 =

Actual Const. Duration – Planned 

Const. Duration

Planned Const.Duration

x 100

Construction 

Schedule 

Growth (5)
19

Project Delivery Selection

To assist agencies in selecting delivery 

methods, the results of this study have been 

integrated into a Project Delivery Selection 

Matrix (PDSM) that was developed through 

the FHWA and Colorado DOT’s NextGeneration Transportation Construction 

Management Pooled Fund Study.(5) The 

PDSM provides a formal approach for 

selecting project delivery methods for highway projects. The process uses a series of 

evaluation worksheets and forms to guide 

agency staff and project team members 

through a project delivery selection workshop. The result is a brief Project Delivery 

Selection Report that matches the unique 

goals and characteristics of each individual 

project. The primary objectives of the PDSM 

are as follows: 

• Present a structured approach to assist 

agencies in making project delivery 

decisions.

• Assist agencies in determining if there 

is a dominant or optimal choice of a 

delivery method.

• Provide documentation of the selection 

decision.

The PDSM tool can be downloaded at 

http://www.colorado.edu/tcm/projectdelivery-selection-matrix.

Summary

The information presented in this TechBrief 

provides an up-to-date perspective on the 

types of alternative contracting method 

projects ongoing in the U.S. highway industry. Agencies are using alternative contracting methods on projects of all sizes to reap 

potential benefits, as illustrated by the high 

frequency of use of the CM/GC, D-B/BV, and 

D-B/LB methods on projects valued under 

$20 million. As expected, agencies are saving substantial time in project delivery, with 

40- to 60-percent savings over D-B-B average project durations. They are also greatly 

accelerating the point of cost certainty in the 

project development process. Contrary to 

intuition, the alternative contracting methods do not seem to have an impact on cost 

growth when compared to the traditional 

D-B-B method or among themselves. With 

regard to project intensity, the alternative 

contracting methods are facilitating project 

delivery at a faster pace in terms of the rate 

of resources invested in the project per day. 

In summary, this study found that alternative contracting methods are shorter in 

duration, have an earlier cost certainty, and 

have a higher project intensity. In essence, 

agencies are getting more work in place 

with less disruption to the traveling public. 

Agencies are also using alternative contracting methods on projects of all sizes and 

do not appear to be seeing any significant 

cost-growth issues. With the use of alternative contracting methods increasing nationwide, the analysis of empirical project data 

in this study provides insightful results 

that can help agencies select appropriate 

project delivery methods. However, agencies must realize that the results shown in 

this TechBrief are based on average performance from many projects. Any single 

project can perform substantially better or 

worse than the average. Contracting methods provide the environment for success, 

but they by no means guarantee it.
20

APRIL 2018 FHWA-HRT-17-100

HRDI-20/04-18(200)E

Researchers—This study was performed by University of Colorado Boulder, University 

of Kansas, and Hill International, Inc. for FHWA Contract No. DTFH61-13-C-00024.

Distribution—This TechBrief is being distributed according to a standard distribution. Direct 

distribution is being made to the FHWA divisions and Resource Center.

Availability—This TechBrief is available in print and online at 

http://www.fhwa.dot.gov/research.

Key Words—Alternative Contracting Methods, Project Complexity, Risk, Procurement 

Methods, Alternative Technical Concepts, Project Duration, Cost Certainty, Project Intensity, 

Award Growth, Cost Growth, Change Orders, Schedule Growth, Project Delivery Selection

Notice—This document is disseminated under the sponsorship of the U.S. Department 

of Transportation (USDOT) in the interest of information exchange. The U.S. Government 

assumes no liability for the use of the information contained in this document. The U.S. 

Government does not endorse products or manufacturers. Trademarks or manufacturers’ 

names appear in this document only because they are considered essential to the objective 

of the document.

Quality Assurance Statement—The Federal Highway Administration (FHWA) provides 

high-quality information to serve Government, industry, and the public in a manner that promotes public understanding. Standards and policies are used to ensure and maximize the 

quality, objectivity, utility, and integrity of its information. FHWA periodically reviews quality 

issues and adjusts its programs and processes to ensure continuous quality improvement.

References

1. Federal Highway Administration. 

(2013). “Quantification of Cost, Benefits 

and Risk Associated with Alternative 

Contracting Methods and Accelerated 

Performance Specifications.” Federal 

Highway Administration, Washington, 

DC.

2. National Cooperative Highway Research 

Program. (2014). NCHRP Synthesis 

455: Alternative Technical Concepts 

for Contract Delivery Methods. 

Transportation Research Board of the 

National Academies, Washington, DC.

3. Federal Highway Administration. (2015). 

Every Day Counts, EDC-2 Final Report,

pp. 22–25 and 69–72, Federal Highway 

Administration, Washington, DC. 

Available online: https://www.fhwa.dot.

gov/everydaycounts/reports/edc-2-finalreport/, last accessed June 10, 2016.

4. National Cooperative Highway Research 

Program. (2007). NCHRP Report 574: 

Guidance for Cost Estimation and 

Management for Highway Projects 

During Planning, Programming, and 

Preconstruction. National Cooperative 

Highway Research Program of the 

Transportation Research Board, 

Washington, DC.

5. Transportation Construction Management Pooled Fund. (2014). “Alternate 

Contracting Methods.” (website)

Available online: http://www.colorado.

edu/tcm/projects/alternate-contractingmethods, last accessed October 11, 2016.