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October 20, 2014

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Interstate 15 project to test idea: Why wait for design to build?

The planned widening of Interstate 15 from the Spaghetti Bowl to Craig Road will be the first Nevada highway project to be designed and built simultaneously, a process that could result in faster completion but also raises questions about cost and government oversight.

When the so-called design-build highway project was proposed by then-Gov. Kenny Guinn's administration last year, the Nevada Department of Transportation estimated it would cost $210 million to widen I-15 from six lanes to 10 lanes from the Spaghetti Bowl to Lake Mead Boulevard, and to eight lanes from Lake Mead Boulevard to Craig Road, a section that now varies from four to five lanes.

But when Gov. Jim Gibbons and NDOT on Thursday awarded the design-build contract to the team of Las Vegas Paving Corp. and CH2M Hill, the project's cost jumped to $242 million. That price was negotiated between NDOT and the contracting team, which will go by the name of North Corridor Constructors.

The team is expected to begin construction within nine months and have the project completed in 2010.

NDOT spokesman Scott Magruder said Friday that any cost overruns from this point forward must be covered by North Corridor Constructors, which carries a performance bond to complete the job.

One reason for the difference between the initial estimated cost and the negotiated price of the project, he said, is skyrocketing oil and steel costs, which have affected highway work nationwide.

But Magruder said that doesn't diminish the positive aspects of design-build.

"This innovative approach will expedite the project by one-and-one-half to two years," Magruder said.

Traditionally, NDOT designs highway projects through its own engineers or consultants and then seeks paving companies to perform the construction work through a competitive bidding process known as design-bid-build.

The design-build concept, which has been used in the private sector for decades, has been used by other states for highway projects during the past 10 years and has been gaining popularity.

The concept involves the design engineers and the contractors working as a team so construction can begin while the design process is ongoing. Instead of competitive bids, the winning team - selected based on factors such as its proposed work timetable and cost of raw materials - negotiates the contract price with the government agency.

Proponents of design-build say the team concept saves money and expedites construction, while building trust between the designer and builder rather than producing the finger-pointing that often occurs when they operate separately.

An example of a successful design-build highway project is the 13-mile reconstruction of Arizona State Route 68 between Kingman and Bullhead City , a project that started in July 2000 and was completed in April 2002. The Arizona Department of Transportation concluded that the project took half the time to complete than it would have under the traditional design-bid-build process. Traffic delays were held to a minim um during the project.

A Federal Highway Administration report last year also praised design-build highway projects. From 1990 to 2002, there were 140 design-build highway projects completed nationwide. A survey of these projects found that on average they were completed 14 percent sooner and at 3 percent lower cost than if they had used the design-bid-build process, with no reduction in the quality of construction or design.

But critics of design-build argue that the process can lead to less government oversight and costly errors that increase taxpayers' cost.

Bruce Blanning, executive director of the 10,000-member Professional Engineers in California Government, said that design-build highway projects in that state have actually run behind schedule and cost more than similar design-bid-build work. He cited the example of an unfinished Orange County toll lane highway, a project whose projected cost has more than doubled from $270 million to $555 million.

"No-bid design-build work eliminates competition," Blanning said. "You'll get higher costs with no meaningful public oversight and the construction companies are free to do what they want."

Blanning said one of the biggest problems with design-build highway projects in California is that in most cases, the work is inspected by the design-contracting team, not the state.

But Magruder noted that NDOT retained the authority to inspect the highway as it is being widened and can compel repairs or work schedule changes to be made if necessary.

"If they say they want to work on three lanes during peak hours, that will be unacceptable if we think they should only be working on two lanes," Magruder said .

Employee-owned CH2M Hill, a global engineering firm based in Denver , participated in a problematic design-build project involving its design of a car-pool-lane bridge connecting the San Diego and Costa Mesa freeways in Southern California.

In 2005 the company agreed to pay the Orange County Transportation Authority $1.5 million to resolve a dispute, without admitting fault, after California transportation officials were alerted to an alleged design flaw in the bridge that caused cracking. Before the settlement and a separate agreement with the construction company, the transportation authority spent $3.5 million of its own money to repair the bridge, the Orange County Register reported.

But CH2M Hill has not encountered similar problems in other recent design-build projects for highways in Washington, Colorado, Virginia and Florida. It also participated in a Utah Transit Authority light rail design-build project that was completed nearly a year ahead of schedule.

During the past 10 years Las Vegas Paving has been Southern Nevada's most prolific public road builder in terms of the number of contracts won through NDOT, Clark County and municipalities. During that period, the company was awarded 109 contracts, nearly three times more than its nearest competitor.

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