By Bruce Jervis
It is understandable, and laudable, that public entities at all levels of government are experimenting with alternative methods of procuring construction services. Some of the methods may offer greater value and speed than the traditional design, bid and construct technique. Frequently, however, these methods clash with longstanding public procurement practices and procedures.
The new VA medical center in suburban Denver is a glaring example. The Department of Veterans Affairs used, for the first time, an “integrated design and construct” contract, which is similar to a “construction manager at risk” contract in the private sector. Internal agency communication warned this was risky because it ran counter to VA procurement culture.
The VA did not get it right. Funding was fixed and the design was 50% complete when the contract was awarded, depriving the contractor of a meaningful opportunity to construct the project at the target price. The VA breached the contract and work stopped. It has now resumed on a cost reimbursement basis.
Procurement laws and regulations have been modified to accommodate new procurement methods. It is more difficult to change attitudes and culture. What do you think? Are alternative methods of public construction contracting doomed to failure by entrenched bureaucratic bidding practices?
