As previously discussed, traditionally, a State department of transportation enters into separate contracts for the design and construction of a project.[150] After approving the design, the agency solicits bids through an open competition for construction.[151] It generally awards the contract to the qualified bidder who offers to complete the project according to the exact specifications at lower cost.[152] The FHWA and some State governments have begun to move away from the traditional competitive bidding process and allow the use of design-build in certain circumstances.
According to a study prepared by a law firm involved in projects using design-build, 32 States have laws allowing the use of design-build, and 28 of these allow its use in highway projects.[153] (See Appendix F) However, the laws in 4 of these 28 States limit the use of design-build to pilot programs or to a very small number of projects.[154] Florida is a specific example of a State that has adopted changes to its procurement and licensing statutes so that design-build by public agencies is legal.[155] A Florida statute also provides specific agencies, such as the Department of Transportation, the express authority to use design-build, at least for certain projects.[156] New York is an example of a State in which design-build has been found to be incompatible with the State's procurement and/or licensing statutes; however, legislation has been proposed to address the issue.[157]
Despite the fact that 28 States have taken legislative action to accommodate the use of design-build, State procurement laws continue to be an impediment to using the design-build project delivery method in the public sector. In ZweigWhites's 2003 Design-Build Survey of Design and Construction firms, nearly half (46 percent) of the survey respondents report that procurement laws in their States have effectively shut them out of acquiring public-sector design-build work.[158] This percentage is the highest in the six years that ZweigWhite has conducted the Design-Build survey.[159]
In the 1997 edition of the survey, firms projected a median 80 percent increase in the gross revenue they would derive from design-build projects in the following three years.[160] However, the 2000 survey found that firms see a more moderate 25 percent increase in the gross revenue they expect to derive from design-build work in the next three years.[161] The 2000 survey attributed these results to design-build's sluggish expansion into public sector work, an area that many companies consider to be a source of future growth for design-build.[162] The percentage of firms that reported procurement laws in their State effectively shut them out of acquiring public sector design-build work increased from 35 percent in 1998 to 41 percent in 2000.[163]