At the other end of the spectrum of private involvement from long-term lease arrangements, the use of D/B as an alternative project delivery method has been successful in many recent highway projects. For example, the Utah Department of Transportation (UDOT) completed a $1.59 billion project to reconstruct approximately 17 mi of I-15 and associated facilities (including 142 bridges and the implementation of high-occupancy vehicle (HOV) lanes) through the Salt Lake Valley pursuant to a D/B contract. The reconstruction of I-15 was UDOT's first D/B procurement. UDOT has estimated that the project would have taken 10 years to complete under the conventional contracting approach. However, the D/B contractor completed the project in less than 5 years and $32 million under budget.40
The D/B method was selected by UDOT for the I-15 project because of the immense public and political pressure to complete the project in the shortest possible time period. This pressure was generated by the need to complete the work before the 2002 Winter Olympics in Salt Lake City and the need to minimize the duration of severe traffic congestion caused by necessary diversions from I-15 during construction. Under the D/B contract, construction began in April 1997 and was completed in May 2001, well before the start of the Salt Lake City games.
To use the preferred D/B approach, state legislation had to be enacted to authorize the use of D/B contracting and "best value" (as opposed to low-bid procurement). 41 In addition, because the project was funded in part with federal funds, UDOT had to obtain approval of the initiative from FHWA as a special experimental project under Special Experimental Project No. 14- Alternative Contracting (SEP-14), which is discussed in further detail in Section V.A. This FHWA approval permitted the use of D/B contracting and required some deviations from standard federal-aid requirements dealing with the selection of contractors and consultants.
The I-15 D/B contract provided up to $50 million in incentive bonuses for timely performance, quality of work, complying with project management requirements, and complying with requirements for community relations and maintenance of certain traffic levels during construction. In addition, UDOT estimates that it realized significant savings by using an owner controlled insurance program (OCIP) that provided comprehensive insurance coverage to all contractors working on the project. As a safety incentive, the D/B contractor received a share of all insurance premium rebates received by UDOT after completion of the project.42
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38 Id.
39 Id.
40 See Written Testimony of John R. Njord, Executive Director, Utah Department of Transportation, Before the House Subcommittee on Highways and Transit (Apr. 17, 2007) ("Njord Testimony").
41 Utah Code § 72-2-118, available at http://www.le.state.ut.us/~code/TITLE72/72_06.htm and http://www.le.state.ut.us/~code/TITLE72/72_06.htm.
42 For additional detail on the I-15 reconstruction project, see Case Study Prepared by FHWA Utah Division, available at http://www.tfhrc.gov/pubrds/pr97-12/p40.htm.