Asphalt Sustainability – Contracting mechanisms, project delivery methods and green public procurement

Dr. Chait Bhat, Ph.D., LCACP is the Sustainability Engineer for the Asphalt Institute.

Part 1 – Fundamentals

As a civil engineer and a certified life cycle assessment practitioner (LCACP), I understand the concept of “green public procurement” comes with a question of appropriate construction contracting mechanisms and accompanying project delivery methods for its successful implementation.

Specifically, “what contracting mechanisms would harness the true potential of green public procurement by applying life cycle assessments (LCAs)/ environmental product declarations (EPDs) at the appropriate decision-making level?” This is an important policy-related question that has huge implications for decision-making. Having the appropriate project procurement/management processes will complement the successful application of pavement-level LCAs and EPDs.

This is a complex topic that will need to be covered in multiple articles. In this article, I discuss some fundamentals of project delivery methods and provide a brief explanation of how they can be applied to a pavement-level LCA/ EPD. In future articles, I will delve deep into understanding the relationships between different contracting mechanisms and the implementation of green public procurement practices.

Pavement project and procurement process

An example plan for processes involved in a road construction project and associated procurement phases is detailed in Figure 1¹. The activities involved in a typical construction project range from initial planning/preparation all the way through to construction and maintenance. Even though maintenance is listed as a single item in Figure 1, this stage may be broken down into sub-activities such as assessing the need, design, and implementation of various maintenance activities. To conduct a project, owners (e.g., federal/state departments of transportation) must procure workforce/ associated services as well as material/ equipment needed to build and maintain the roadway. Hence, items listed under the “procurement phase” map the relevant stakeholders involved in the respective “project processes.”

Contracting mechanisms and project delivery methods

Depending on project complexity, budget, time and other factors, different contracting mechanisms/ project delivery methods may be utilized as listed below^1,5,6:

1. Design-Bid-Build (DBB): The majority of the highway system within the United States has been constructed using DBB. The contracting authority (e.g., state DOT) contracts separately for design services and then construction. The construction bid is based on a complete set of plans and specifications. The design and construction occur sequentially. The contractor is chosen through a tendering process involving multiple competitors (prepared by the contracting authority).

2. Construction Manager/General Contractor (CM/GC): The contracting authority holds contracts with two parties: the design consultant and the construction manager/general contractor (CM/GC) firm. The CM/GC is involved early during the design phase, provides input during design, and controls the entire construction phase. CM/GC is at higher risk under this mechanism as the Guaranteed Maximum Price (GMP) for the project is negotiated during the design phase itself and the CM/GC is responsible for paying any additional construction costs that may exceed GMP during the project execution.

3. Design-Build (D-B): The main contractor is responsible for both design and construction and the contract is awarded based on a tender prepared in accordance with the project brief from the contracting authority. DB has been implemented either through qualified low-bid criteria or through best-value criteria that would involve not only cost, but several additional factors that could include factors such as long-term performance and environmental impacts.

4. Multi-Prime: This contracting method is a variation of design-bid-build in which the contracting authority utilizes multiple contractors to construct a project. Specifically, the contracting authority has several contracts with different contractors that perform specific aspects of the construction.

5. Design-Sequencing: This contracting method allows for early contractor involvement where the contracting authority sequences design activities of various construction phases. This allows for the start of some construction phases while further phases are being designed.

6. Public-Private-Partnerships (PPP): This type of contracting allows for greater private contractor participation in the delivery and financing of a construction project. PPPs can be implemented through either design-build (D-B), design-build-operate-maintain (DBOM), design-build-finance (DBF), and design-build-finance-operate-maintain (DBFOM) mechanisms. In the D-B type of contract, the maintenance and operation activities would be procured under separate contracts. In the case of DBOM, DBF or DBFOM, the operation, maintenance and project financing activities are embedded as part of a single contract.

Application of LCAs/EPDs

After discussing LCAs and EPDs and their development process in previous issues, a logical next step is to discuss the application of LCAs/ EPDs for different scopes. For example, LCAs/EPDs can be developed for a single material or for a complex road network.² To be consistent with the scope of the article, let us focus on the development and application of LCAs/EPDs at a project level involving phases detailed in Figure 1.²

A project-level LCA or EPD can provide insights into the differences in the potential environmental impacts from various designs as well as project sequencing scenarios. LCA/EPD can be developed/applied at different project phases detailed in Figure 1 with varying levels of data availability and accuracy. For example, a preliminary LCA/EPD can be conducted using historically available data at the planning phase before information is available on final pavement design, construction, and maintenance.³ A more refined LCA/EPD can also be developed once the pavement design is finalized by utilizing more accurate and detailed information from contractors/sub-contractors on their construction activities, materials, equipment, etc.

Assessing and employing alternative contracting mechanisms is not a new topic in the United States. In fact, the Federal Highway Administration (FHWA) led a delegation to examine the European context on this topic in 2003⁴ and continues to make progress⁵. For a systemic inclusion and successful implementation of green public procurement, it is critical to build on the existing body of knowledge around alternative contracting mechanisms. Assessing different contracting mechanisms will play a key role in deciding how LCAs and EPDs can be developed or employed.