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Alternative Contracting

Alternative contracting methods and tools provide additional options for unique, complex, or schedule critical projects. When considering alternative contracting for a project, the selection of the right method or tool is critical to the success of the project.

When can alternative contracting methods be used?

Oregon law requires the use of low-bid procurement for highway construction (ORS 279C.300), but allows exemption from this requirement if required findings provided in an exemption order are approved (ORS 279C.335).

Alternative contracting methods that require an exemption include:

  • Design-Build,
  • CM/GC,
  • Best Value Multi-Parameter (A+C+D), and
  • Cost + Time (A+B).

Alternative Contracting Projects List

Contact the Office of Project Letting

4040 Fairview Industrial Drive SE, MS 1
Salem, Oregon 97302
Phone: 986-4040

Program Contact

Phone: 503-986-3759

Alternative Contracting Methods

​Construction Manager/General Contractor (CM/GC) contracting method utilizes an integrated "team" approach applying modern management techniques to the planning, design, and construction of a project in order to control time and cost, and to assure quality for the project owner. The "team" consists of the agency, an architecture and engineering firm (retained by the agency), and the CM/GC. The CM/GC method includes both pre-construction and construction phase services.

The traditional linear approach to managing transportation projects is used with either the Design-Bid-Build (low bid) or Design-Build processes. These systems work very well on conventional transportation projects that do not require complex, innovative approaches to the design and construction phases of the projects. There are certain types of projects that require a unique approach to construction management; projects that are better managed in a non-linear approach. These types of projects can be identified by the following criteria:

  • Innovative funding scenarios, where multiple owners may dictate final project criteria;
  • Complex construction phase, where the contractors timely input is invaluable;
  • Projects where limiting budgets threaten the delivery of the project and where CM/GC alternatives can help to contain costs; and
  • Other projects where construction input is required during early phases of project design.

The A&E is selected utilizing the standard consultant selection process.
The CM/GC is selected using a qualification-based, Request for Proposal (RFP) process.

For more information regarding the CM/GC delivery method, contact the ODOT Office of Project Letting.

ODOT uses unique and dedicated GM/GC General Provisions boilerplates that are specifically written to provide the terms and conditions under which the bidding requirements, evaluation, and award are conduced, and the pre-construction phase services and construction phase services for all CM/GC projects are performed. The CM/GC General Provisions replaces ODOT’s Standard Specifications Part 00100s.

Design-build is a procurement method in which ODOT contracts with a single entity with needed design and construction capability to perform the project, including all design, construction, and contract administration. The agency retains oversight of the design-build contract. This type of contracting can be advantageous in a number of instances, with one of its main strengths being its ability to effectively implement schedule critical projects.

The agency invites contracting entities to submit proposals for the design and construction of the project. The agency will perform approximately 15 to 30 percent of the initial design, and may provide some conceptual plans in order to accurately relay the intent of the contract. The design-build proposers submit proposals for design, construction, time, and cost to perform all aspects of the project. The proposals are evaluated based on quality and price, and the best value proposer is awarded the contract. The agency then provides oversight during design and construction.

The design-build procurement method is very complex and requires additional staff time to draft and manage additional procurement documents and perform proposal evaluations and scoring.

ODOT uses unique and dedicated design-build general provisions (DB General Provisions) boilerplates that are specifically written to provide the terms and conditions under which the bidding requirements, evaluation, and award are conducted, and the design and construction work for all design-build projects are performed. The DB General Provisions replace the ODOT Standard Specifications part 00100s.

ODOT utilizes the following DB General Provisions, Standard Specifications and Special Provisions for its design-build program:

  • DB General Provisions Boilerplate: Consists of sections 110 through 199
  • DB Standard Specifications: Consists of parts 00200 through 03000 of the Oregon Standard Specifications for Construction
  • DB Standard Special Provisions: Consists of ODOT-supplied additions and revisions to the DB Standard Specifications

Design-Build Low Bid provides a more streamlined means for delivery than is presently available in Design-Build Basic. The primary differences between DB Basic and DB Low Bid are the allocation of responsibility and risk, and the award criteria. DB Low Bid places more responsibility on the agency in regard to quality, environmental permitting and compliance, and third party conflict resolutions.

DB Low Bid provides flexibility to do more projects with less cost and/or the potential for “fast-tracking” the delivery. DB Low Bid should be easier and less expensive for the designer, the contractor or builder and ODOT.

Contractor Special Pre-qualifications may be required in addition to the mandatory General Pre-qualifications (also known as Prime Contractor Pre-qualification) when the elements of a particular public improvement project require specialized knowledge or expertise.

When Special Pre-qualification is required, notice of the Request for Contractor Special Pre-qualification will be published through ODOT's website and in the Daily Journal of Commerce for projects with an estimated cost over $125,000.

Qualifications are submitted by contractors prior to bid opening. An evaluation committee determines pass/fail results. Only contractors with a passing submittal will be specially pre-qualified and allowed to submit a bid on the project. The contract award is by low bid.

The Contractor Special Pre-qualifications qualifies the prime contractor, but only for the team submitted, including subcontractors and individuals who were used to meet the pre-qualifications requirements. The contractor team used to meet the requirements, and only that team as a whole, is pre-qualified. Prime contractors may not select subcontractors that were listed on other teams, if not included in their own team. Therefore, any subcontractors or individuals who were used to enable the contractor to meet the pre-qualifications requirements will be required to perform those functions in the performance of work on the proposed project, if that prime contractor is awarded the contract for the project.

ODOT uses unique and dedicated special provisions boilerplates that are specifically written to modify the terms and conditions parts of the ODOT Standard Specifications Part 00100s under which the bidding requirements and award are conducted on projects delivered by Design-Bid-Build.

Best Value Contracting, also known as source selection or Multiple-Parameter Bidding, is a procurement method that presents an alternative to the traditional low-bid method of contracting. BVC awards projects to the contractor offering the best combination of price and other factors, instead of solely to the contractor with the lowest bid. When properly designed and administered, BVC rewards high-performance contractors who have trained, skilled workers and other essential qualifications for performing high quality projects in a safe, timely and cost-efficient manner.

BVC is typically used in acquisitions for high risk projects. Public safety, minimal disruption, unusual technical complexity coupled with a need for specialized construction/expertise and highly coordinated work scheduling are issues that may justify the need for a BVC approach.

When using BVC, the factors, crucial to the success of the project, are identified as:

  • A=Cost,
  • B=Time,
  • C=Qualifications,
  • D=Approach,
  • E=Sustainability, and so on.

These factors can be anything that impact the success of the project and may include, but are not limited to: cost; project approach; time; relevant project experience; project management; personnel and subcontractors; disadvantaged business participation; safety initiative; law compliance; and, other criteria unique to the specific project.

Performance specifications describe the required work in terms of operational characteristics or ultimate use. The performance characteristics are designed to predict or monitor performance over time.

Unlike method specifications, performance specifications tend not to include:

  • Instructions that dictate or suggest methods.
  • Material definitions.
  • Material processing.
  • Time and temperature controls.
  • Constituent properties.
  • Construction equipment descriptions.
  • Similar prescriptive elements.

The term performance specification can be used as an umbrella term to capture several types of specifications:

  • End-result specifications.
  • Quality assurance specifications.
  • Performance-related specifications.
  • Performance-based specifications.
  • Performance warranty provisions.

ODOT uses unique and dedicated special provisions boilerplates that are specifically written to modify the terms and conditions parts of the ODOT Standard Specifications Part 00100s, under which the bidding requirements and contract award are conduced. The special provisions include functional performance criteria for design and construction work performed by the contractor for a project.

​Incentive/Disincentive (I/D) contracting is an industry standard practice typically used to maintain construction completion dates, encourage innovation in work sequencing, and accelerate project delivery. The decision to accelerate a project involves the consideration of many factors, such as:

  • Political pressures;
  • Legal constraints;
  • Legislative priorities;
  • Community interests;
  • Project goals;
  • Context sensitivities;
  • Funding availability;
  • Staffing capacity;
  • Mobility issues;
  • Project complexity;
  • Social and physical environment;
  • Any other factors impacting scope, schedule and budget.

Implementation of I/D contracting includes several decision-making processes throughout the life of the project:

  • Identification of goals and needs for a “fixed completion” date and/or the opportunity to benefit from accelerating a project schedule;
  • Evaluation of project suitability for I/D methods;
  • Selection of the contract type;
  • Determination of key project parameters and context;
  • Preparation of specifications;
  • Procurement; and
  • Contract administration.

ODOT uses unique and dedicated special provisions boilerplates that are specifically written to modify the terms and conditions parts of the ODOT Standard Specifications Part 00100s which compensates the contractor a certain amount of money for each day identified critical work is completed ahead of schedule and assesses a deduction for each day the contractor overruns the I/D time on Design-Bid-Build unit price construction projects.

Resources

 Many volumes of information exist for alternative and innovative contracting. The information provided here is a starting point: 

Alternative Contracting Document’s Available Upon Request:

  • Schedule, Procurement and Contract Templates/Examples
  • Findings of Fact for Exemption Templates/Examples
  • FHWA Special Experimental Projects No. 14 Templates/Examples
  • Strategy and Process Documents and Manuals

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