Even as a potential recession dampens the enthusiasm for commercial spending
plans, the public sector continues to advance large, complex projects of record breaking magnitude. This is partially because public officials have many funding
options, and they are faced with critical infrastructure needs. Many are using
alternative funding and innovative methods to deliver infrastructure projects of all
types. The support for these more collaborative methods of delivery is now
pervading every level of government.
The U.S. Army Corps of Engineers (USACE) announced a new Public-Private
Partnership (P3) Program three years ago to accelerate delivery of large,
revenue-generating infrastructure projects. The program works with non-federal
project sponsors to deliver infrastructure upgrades estimated to cost more than
$50 million. The program provides federal support that includes coordinating
action items, developing project management tools and streamlining
collaboration among stakeholders. It also allows USACE to provide support to 10
projects each year that use the design-build-finance-operate-maintain (DBFOM)
method of delivery. Currently, four designated pilot projects are underway this
year.
The most recent projects (announced in March 2023) involve restoring 719 acres
of ecosystem along the Los Angeles River in California. In addition to a 119%
increase in habitat, the project will provide benefits to surrounding disadvantaged
communities such as improved water quality, new recreational assets and an
overall improvement in quality of life. With $253 million in estimated federal
support, the project is projected to create 14,000 construction jobs and attract
new visitors to the area. The procurement phase is tentatively scheduled to
launch at the end of 2023.
In a recent report, the Texas Department of Transportation’s (TxDOT) Alternative
Delivery Division highlighted updated procurement timelines for several multi billion-dollar design-build projects in various stages of development. The report
notes that four design-build projects—some of the state’s largest and most
complex transportation investments—are slated for procurement beginning in
2024. At least three of these alternative delivery projects will take place in the
Houston district. Two of the projects will deliver a reconstructed network of
freeways that loop around the city’s downtown district.
TxDOT officials suggest that procurement for the $1.29 billion phase will begin in
the first quarter of 2024. In 2025, the division expects to begin procurement for
the project’s subsequent phase which carries an estimated price tag of $1.43
billion. Justification for these alternative delivery projects involves better
management of congestion, enhanced safety features, broadened multi-modal
support and improved operational efficiency. Both projects are also scoped to
include managed lanes.
In Missouri, state officials continue to encourage alternative delivery methods for
large transportation projects. Currently, Missouri state law limits the use of
design-build contracting to no more than 2% of the total number of construction
contracts awarded annually. As the agency advances two large design-build
projects through procurement, it is already identifying the next slate of potential
design-build projects.
One project that officials have identified for potential design-build delivery
involves reconstructing an interchange between Interstate 70 and I-64 in St.
Charles County. The project is scoped to address the interchange’s outdated
design which is a major source of congestion. State transportation officials are
scaling the project to include components that target enhanced safety, increased
roadway capacity, modernized corridor design and improved mobility. An initial
budget estimate for the project puts the price at approximately $122 million.
South Carolina Department of Transportation will use design-build contracting to
accelerate delivery of a $331.5 million bridge project in the township of Santee.
Initial preparations are underway to replace a major bridge carrying I-95 across
Lake Marion. The project will be launched in 2024.
The Oregon Department of Transportation (ODOT) is pursuing design-build
delivery of a new I-5 bridge project with a price estimated somewhere between
$450 million and $550 million. The existing Boon Bridge in Clackamas County
carries I-5 traffic across the Willamette River and is a critical link between the
state’s major urban centers of Salem and Portland. A design-build-deliver model
will provide a wider, more seismically resilient version of the bridge that includes
additional northbound and southbound auxiliary lanes as well as a new exit ramp.
Alternative delivery methods are also helping city and county officials deliver
some of the costliest and most technically nuanced local projects. Two years
ago, local leaders in King County, Wash., launched an initiative to explore
alternative methods of delivery that encourage collaboration for large-scale
capital projects involving multiple stakeholders. Three projects that have been
identified for alternative delivery methods are now in various stages of
development. One project involves renovating the Wastewater Treatment
Division’s West Point Treatment Plant to accommodate changes in electrical
feeds. It will also replace approximately 125 electrical assets within the plant.
Officials will continue to analyze the $123 million project’s design alternatives
through 2023.
The rampant adoption of design-build contracting is especially clear in New York
City. Last year, a new position was created within its Department of Design and
Construction (DDC) to oversee the expanding design-build pipeline. Several
design-build projects are included in the DDC’s $5.9 billion capital improvement
plan for 2024. Later this year, the department will request qualifications from
design builders for the planned renovation of the Queens Farm Museum. Then,
early in 2024, the DDC will request qualifications from potential design-build
teams for a sequence of projects to improve comfort stations in public parks
throughout the city. Budgets for both projects are still being finalized.
It is always wise to remember that recessions, uncertainty and even economic
concerns rarely impact government spending. The nation’s infrastructure of every
type must be maintained and goods and services for U.S. citizens will always
continue. The wisdom and the path to a competitive advantage lies in knowing
who has the funding, how it will be spent and what the timelines are.
Mary Scott Nabers
President/CEO – Strategic Partnerships, Inc
Author – Collaboration Nation – How Private Ventures Are Revolutionizing The Business Of Government and Inside the Infrastructure Revolution – A Roadmap for Rebuilding America
Phone: (512) 531-3900 www.spartnerships.com ; www.maryscottnabers.com
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