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Title:

Design–Build Stipends and Their Impact on Highway Project Innovation

Accession Number:

01664284

Record Type:

Component

Abstract:

Design-build delivery requires agencies to select contractors based on best value versus lowest bid. A tool to enhance 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. Stipends reviewed in this study range from 0.1% to 0.8% of the total awarded cost. 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, understands the design-build process, and sets a tone for collaboration during the construction phase of the project.

Supplemental Notes:

This paper was sponsored by TRB committee AFH15 Standing Committee on Project Delivery Methods.

Report/Paper Numbers:

18-02766

Language:

English

Authors:

Alleman, Douglas
Stanford, Matthew "Scott"
Papajohn, Dean
Molenaar, Keith R

Pagination:

17p

Publication Date:

2018

Conference:

Transportation Research Board 97th Annual Meeting

Location: Washington DC, United States
Date: 2018-1-7 to 2018-1-11
Sponsors: Transportation Research Board

Media Type:

Digital/other

Features:

References; Tables

Uncontrolled Terms:

Stipends

Subject Areas:

Administration and Management; Construction; Highways; Planning and Forecasting

Source Data:

Transportation Research Board Annual Meeting 2018 Paper #18-02766

Files:

TRIS, TRB, ATRI

Created Date:

Jan 8 2018 10:40AM