The following are recommendations based upon information gathered through-out the years of understanding procurement practices. The main overall recommendation is to go forward in developing these so-called innovative practices and realize that it will take time and cultural changes, especially if these are totally new concepts. Hopefully, the benefits will overtake the development cost and eventually out perform and add value to you experiences.
The first recommendation is to develop a strategy to include a portfolio of all main project delivery methods (DBB, DB, DBOM, DBFO and Alliance model - if possible). What this accomplishes is a stage of continual development and learning the detailed intricacies while maintaining the road construction industry. These should be developed in stages and understand that Design-Build is the foundation of the remaining models and should be considered as the first development model. What may happen is that only a few contractors will be able to maintain the development progression and the remaining industry will remain at the status quo level, which means that traditional models will still be needed and it is important to retain a reasonable market for road building. It cannot be stressed enough that Design-Build should be done with due diligence and one can learn from international studies and developments.
Design-Build (DB) seems to be the most widely used innovative model and the results have been quite good, with some exceptions. Also, some countries have decided that DB will be the preferred model of choice for procurement or at least from an overall project value figure. However, development of the DB model takes great effort and considerable time to develop. Changing the behavior of all the actors involved as well as developing the model as it was intended, is a significant task and is not easy to implement as quickly as desired.
In addition, DB has been successfully used for small projects, yet the overall practice for small projects has not significantly increased. This is difficult to understand and explain, but maybe due to the easy selection process of DBB, where there is lots of competition, and maybe the culture for small projects doesn't desire integration and teamwork type approach.
As a pre-requisite to the Design-Build model development, the following may be considered a sort of a guideline for progression
• Attain a teaming & partnering concept between Design consultants & Contractors
• Study and begin to apply national and international practices to fit your culture/society
• Begin developing performance-based specifications (goes hand-in-hand with DB model)
• Begin reducing design development and attempt to limit to < 30% if possible
• Learn how to accept & reject proposed Alternative Technical Concepts (ATC) - innovations
• Important to have good communications, develop trust, & transparency
• Make sure your road authority regional experts are included in the development process
Secondly, evaluate the results of any Design-Build pilot projects and have both internal and external evaluations. This will assist in determining whether the model can be applied successfully to future projects. Also, this should address the differences, benefits, and disadvantages as compared to the traditional model, a sort of benchmark. This should include marketing and working with upper management, regional offices & internal experts, involving the contracting industry, design professionals, and other important key stakeholders.
Once Design-Build is thoroughly understood by your procurement staff/experts, the third recommendation is to begin developing the DBOM and PPP models and prepare projects for pilot testing of these models. These models assume you have expertise in the Design-Build model, because DB is the foundation of the next progressive models. (See the subsequent suggestions on improving these models).
Some essential prerequisites for the DBOM model are as follows:
• Working with the contracting industry to determine if there is a market and willingness
• Should have some degree of expertise or practices in outsourcing maintenance activities. In other words what performance or service levels are required for each activity
• Risks should be an important part and may need to study risk analysis and allocation
• Developing Handback requirement for end of contract period
Some essential prerequisites for the PPP model are as follows:
• Same issues as mentioned in DBOM
• Having a legal framework for private finance (don't assume it already exists)
• Understanding all the issues, consequences, pitfalls, and important aspects of PPP model. May have to prepare a research study on PPP)
• Understand private finance and banking/financial requirements and consequences. (may need to hire financial professionals)
• Having approval at high governmental levels - Ministry of Finance
• Having a benchmark comparison - some form of Public Sector Comparator (PSC)
• How to develop a business case for projects
• Thorough understanding of risks and risk optimization. (May have to prepare a research study on risks and categorized via different models)
• Understanding different payment mechanisms & which ones provide better value
• Assigning a client PPP team that is continuously involved from the conception of PPP
Fourthly, evaluation of the DBOM and PPP models and attempt to compare these models with the traditional forms and against the DB model. This may need to be done during the pilot testing stage so that the data can be captured and analyzed and probably be done internally and externally.
The fifth suggestion should be to re-engineer all the models used and utilize as many as appropriate best practices into each model used. For example, one of the research studies as well as the application of risks that were revealed during PPP projects can now be potentially used into the other models as well as the traditional model. So a risk identification/matrix at tendering stage can be developed so that an equitable sharing of risks can already be made clear during tendering phases of a project. This would help minimize the costs of a project when the risks are identified as compared to traditional contracts where risks typically are priced into the contract or are billed as extra work or change orders.
The final suggestion is to trial the "Alliance model" but there should be significant background research and possibly gather data form a country that has practiced this model. If possible, it would be practical to meet with some of the clients to gather some lessons learned and determine the real implementation aspects. As with the PPP model, if should require extensive study and also determine if the contracting industry has the capability to use the "Alliance model".
According to the advertised benefits the alliance model seems to be one of the potential models for the future, and one key recommendation is to start the model as early in the planning process as possible. One of the great impacts of this model is the potential to reduce the planning process duration to only 6-8 months, which typically takes years to develop in many road authority organizations.