Companion Guide to Video August 2012

www.fhwa.dot.gov/federal-aidessentials

For many years, design-bid-build has been the 

preferred contracting method for Federal-aid 

projects. In design-bid-build, the agency or owner 

contracts with separate entities for design and 

construction of a project. But there are now 

additional contracting options, with the leading 

alternative being design-build. Design-build has 

been used on many types of projects, from 

roadway resurfacing to complex bridge 

construction. This alternative contracting method 

allows local public agencies, or LPAs, to combine 

design and construction into one contract, 

accelerating project delivery. Design-build requires 

less administration and can reduce project 

duration and cost by sharing risk with the 

contracting community. 

Keep in mind that design-build laws vary from 

State to State, so check with your State 

department of transportation (State DOT) to 

determine which specific design-build 

requirements apply. 

Applying these requirements helps determine if 

design-build procurement is appropriate for your 

project. If you choose design-build, there are 

accepted practices you should consider.

Design-build projects, like design-bid-build projects, 

have specific Federal-aid requirements that the 

LPA must follow. To retain Federal eligibility, you 

should be aware of some critical elements of the 

Federal-aid requirements. Design-build projects 

have additional procurement requirements that 

impact design-build team selection, the project 

development process, and the relationships of the 

parties. 

In other modules in this library provide detailed 

information on each of the requirements we just 

mentioned.

Now that you’re familiar with some of the 

requirements, let’s look at a typical method of 

solicitation – the two-phase procurement process.

Project Construction and Contract Administration

Project Management

Design-Build Procurement

Following the Federal requirements for the selection process for 

design-build ensures fair competition and opportunity for 

innovation
Federal-aid Essentials for Local Public Agencies

Phase one is centered on the request for 

qualifications and phase two focuses on the 

request for proposal. 

In phase one, three major steps occur: We start 

with the request for qualifications, or RFQ. This is 

the agency's first opportunity to share its vision of 

the project and the first chance for potential 

bidders to respond with how their experience can 

meet that vision. Next is the evaluation of 

statement of qualifications, or SOQ. In this step, 

the agency evaluates the SOQ based on preestablished criteria to determine the most qualified 

teams. Then, there is the short-listing of eligible 

teams. Typically three to five teams are chosen to 

be included in the short list and move forward in 

the process.

At this point, the agency moves into phase two of 

the procurement process. In the request for 

proposals, or RFP, the agency provides contract 

requirements to short-listed teams so they can 

prepare technical proposals and estimates.

During evaluation and selection, the agency 

develops a cross-cutting evaluation team to score 

the technical proposals based on a weighted 

criteria.

Finally, we get to design and construction. Once 

the design-build team has been chosen, it can 

begin construction immediately while the design

continues to develop. The LPA is providing 

oversight and review of design components and 

construction operations. 

Now that we have seen the key steps, let’s look at 

an example, to see how we may apply the 

process. 

During phase one, our LPA – called Hometown 

LPA -- solicits letters of interest from prospective 

companies. Hometown then develops and issues a 

request for qualifications, or RFQ, to the teams that 

responded. The RFQ contains the description of 

the project scope and required work, a statement of 

qualification, instructions for completing the 

application and forms, and criteria for how the 

responses will be evaluated and scored. It is 

usually at this stage that companies form legal 

partnerships and develop project specific designbuild teams. In our scenario, Quality Inc., 

Construct-It Inc., and Design-It Inc., respond to the 

RFQ by submitting their completed statement of 

qualifications. They also ask questions of the LPA 

for clarification. As interested teams, they are 

allowed to inquire about project details, such as 

scope, output or quantity of product, and the LPA’s 

receptiveness to innovative ideas.

After receiving the completed statements of 

qualification from the design-build teams, 

Hometown LPA responds to the teams’ questions. 

Hometown LPA uses the evaluation criteria defined 

in the RFQ to determine a short-list of eligible 

teams that will receive a request for proposal. The 

typical list of eligible teams is three to five, but it 

can vary depending on project requirements. In our 

example, Hometown LPA determines that Quality 

Inc. and Design-It Inc. are both eligible teams.

During phase two of the design-build solicitation 

process, Hometown LPA prepares and issues a 

request for proposal, or RFP, that goes to the list of 

eligible teams – in our case, Quality and Design-It. 

The request package includes the proposal 

document and the preliminary design. The two
Federal-aid Essentials for Local Public Agencies

eligible teams are invited to a pre-proposal 

meeting to discuss the project and may also 

conduct a field visit to the project site. Hometown 

LPA follows the communication rules as 

established in the RFP when responding to 

specific questions from either team, and can 

revise the RFP package as needed to maintain 

consistency in the proposals. 

Quality Inc. and Design-It Inc. respond to the RFP 

with two parts – the price proposal and a technical 

concept, the design that shows how the team 

intends to complete the proposed work. Quality 

Inc. also provides an alternate technical concept 

that adds to, but doesn’t replace, the original 

design requirements. Hometown LPA evaluates 

the proposals using the established criteria. 

Hometown can also allow oral presentations to 

clarify information or discuss questions from the 

competing teams. Price proposals are opened 

only after evaluation of the technical proposals.

Hometown LPA can use a variety of techniques to 

determine the best value proposal. It chooses to 

use a best-value technique, which divides the 

price by that team’s technical score to get an 

overall score for each proposal. These overall 

scores are arranged from lowest to highest and 

the best value design-build team is selected. 

Hometown LPA selects Quality, Inc. to be the 

design-build contractor for this project primarily 

because they demonstrated a 20-percent 

reduction in construction time that increased their 

technical score. 

Hometown LPA awards the contract to Quality Inc.

and notifies Design-It Inc. that it was not selected. 

Since Design-It Inc. was not selected, a stipend is 

offered as reimbursement from Hometown LPA for 

a portion of the proposal development cost. 

Including a stipend is allowable – but not required 

– under Federal rules and its use is at the 

discretion of the project owners. When Design-It 

accepts this reimbursement, Hometown LPA takes 

ownership of the conceptual designs submitted 

and can incorporate those ideas into the project. 

Quality Inc. begins construction on the project while 

still developing the design. Hometown USA 

provides overview of both the construction and the 

design as the project progresses.

From our example, you can see that design-build 

incorporates a two-phase process that allows you –

the LPA – to select the best value firm. Using 

design-build allows you to combine design and 

construction into one contract and accelerate 

project delivery. Remember, you need to follow the 

design-build procurement process required by your 

State DOT to ensure your use of Federal-aid funds 

is not jeopardized. 

So, be sure to check with your State 

DOT for additional information and 

guidance before using a designbuild procurement process. 
Federal-aid Essentials for Local Public Agencies

The content of this 

document is not a 

substitute for 

information obtained 

from State departments 

of transportation, 

appropriate FHWA 

Division Offices, and 

applicable laws. 

Scenarios have been 

simplified for emphasis 

and do not necessarily 

reflect the actual range of 

requirements applicable 

to the scenario or this 

topic. This document

was created under 

contract number 

DTFH61-11-D-00023 by 

the Federal Highway 

Administration, U.S. 

Department of 

Transportation, and is 

offered to the public to 

heighten and focus 

awareness of Federal-aid 

requirements within the 

local public agencies 

community and 

reinforces the 

importance of these 

necessary policies, 

procedures, and 

practices.

This Companion Resource 

is the script content for 

the video production of 

the same name. 

Additional Resources

• Links to regulations and guidance on design-build project delivery

 http://www.fhwa.dot.gov/construction/cqit/desbuild.cfm