Contractors and Architects Seek Reform of Federal Design-Build Contracting Process

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Current federal contracting laws are discouraging talented contractors and architects from competing for federal contracts, depriving government and, by inference, taxpayers of the best expertise available, according to representatives of the Associated General Contractors of America and the American Institute of Architects testimony presented on Capitol Hill.

AGC’s Randall Gibson—president of a federal small business, Whitesell-Green, Inc., testified before the House Oversight and Government Reform Committee on the federal government’s use of design-build contracting. In his testimony for the association, Mr. Gibson addressed the need for federal agencies to: (1) reasonably limit one-step design-build procurements; and (2) reasonably limit the second-step of the two-step design build process to three to five finalists.

On one-step design build procurements, design-build teams have no way to judge their prospects for success, as no team can be sure how many total teams are pursuing the project. Consequently, competition suffers because many qualified teams, especially small businesses, choose not to incur the large proposal costs to participate where perhaps 20 teams or more can offer. During the two-step design-build procurement process, where a federal agency can select an unlimited number of finalists to enter the second-step of the competition and submit full proposals with more complete—and more expensive—design materials and cost estimates,  the inability of contractors to determine the odds of success tends to reduce competition.

As such, at the hearing, AGC articulated its general support for H.R. 2750, the Design-Build Efficiency and Jobs Act of 2013, introduced by Rep. Sam Graves (R-Mo.), which would both limit single-step design-build procurements and limit the second-step of the two-step design-build process to three to five finalists. AGC will continue to work with the committee and other members of Congress to ensure that the construction industry’s priorities in this bill advance through the legislative process. Read More

Also testifying before Committee on Oversight and Government Reform, Charles Dalluge, Executive Vice President of Omaha, Nebraska-based architecture firm Leo A Daly, called for reform of the design-build contracting process so that more design and architectural firms can bid on federal contracts without fear of losing money in the process. The federal market has been a key for architecture firms’ survival in the recession, and increased competition costs have forced many firms from participating in federal contracts, Dalluge testified.

“According to a survey published by the AIA Large Firm Roundtable in 2012, between 2007 and 2011 architecture firms in teams that competed for public- and private-sector design-build projects spent a median of $260,000, by making detailed plans, models and other materials,” Dalluge said. In recent years, federal agencies have forced larger numbers of teams to compete against one another, reducing the chances that any one team can win.

“Due to the current economic climate, design firms face the dilemma of ‘betting it all’ on a contract they may not get, or self-selecting out of the federal design-build market,” Dalluge said, adding that it also costs taxpayers more money “when contracting officers spend increasing amounts of time reviewing a larger number of complicated design proposals.”  To reform the burdensome federal contracting process, Dalluge called on Congress to pass The Design-Build Efficiency and Jobs Act of 2013 (H.R. 2750), which was introduced by Rep. Sam Graves (R-MO) in July.

“H.R. 2750 requires contracting officers to provide a written justification to the head of an agency for requiring more than five finalists in the second stage of a design-build solicitation and agency approval of such justification,” Dalluge said. “H.R. 2750 will provide more certainty and opportunities for design firms of all sizes who wish to enter the federal marketplace. It will ensure that agencies have the ability to select the most qualified design-build team who will deliver the best buildings for agencies and the public. It also will limit federal agencies’ burdens in reviewing a large number of proposals.”  Read More.