Dive Brief:
- A Texas State Auditor report has determined that at least $8 billion of the state's transportation design-build projects could be at risk of cost overruns because there are no standard administration procedures in place for them, according to the Houston Chronicle.
- The report pointed to what it called a lack of "procurement and bidding" oversight at the Texas Department of Transportation for high-profile projects like the $930 million Harbor Bridge replacement in Corpus Christi.
- TXDOT officials said they are working to address the auditor's concerns, which include a written policy for how to conduct the bidding process for a design-build project when the scope of work changes significantly.
Dive Insight
There is no indication from the state that taxpayers have had to pay more for any TXDOT design-build project thus far, according to the Chronicle.
The design-build method has become increasingly popular with large projects — infrastructure undertakings included — as a way to streamline the construction process and reduce the need for future change orders. Proponents say that designers can benefit from contractor input at the very outset of a project, and vice versa. In fact, New York Gov. Andrew Cuomo announced in June that three construction teams were in competition to for a design-build contract for the $1 billion expansion of the Jacob K. Javits Center in New York. This project marks the first time that New York has allowed the design-build method as an option for state-funded projects.
However, because the design-build process is still not ubiquitous, other states have also faced pushback from lawmakers concerned about lack of transparency and accountability with the newer method. In New York, Cuomo has pushed for expanded use of design-build for more state projects, but he has met resistance from some New York officials, such as state Comptroller Thomas DiNapoli who said that not enough is known about how the method might impact different types of projects.
In the case of the Boston Green Line light-rail extension project for the Massachusetts Department of Transportation and the Massachusetts Bay Transportation Authority, those agencies decided to change the project's contracting method to design-build after a series of cost overruns and schedule delays almost scuttled the extension altogether. The project was approximately $1 billion over budget when the agency fired all its lead contractors, including the joint venture of White-Skanska-Kiewit. Since then, the MBTA has decided to move forward with a $2.3 billion, "scaled-down" version of the original. Given that the MBTA blamed the project's woes on the previous contract and procurement methods, it said staff would be fully trained on design-build.