Sami Soufi, Vice President and Program Manager for Rail and Transportation at Hill International, a program management firm based in Mt. Laurel, New Jersey, shares his insights on alternative delivery methods (AD) in transportation infrastructure. His opinions reflect his own experience in the industry.

"I first encountered alternative delivery methods in the mid-90s while working as a structural engineer on the design-build of the Corridor-H highway project in West Virginia. Since then, AD has evolved significantly, both in complexity and its models," Soufi explains.

Before AD, owners predominantly used the design-bid-build (DBB) model, relying on "prescriptive specifications" that dictated design, materials, and methods. As demand for quicker project delivery grew, owners started focusing on "performance requirements," specifying the desired outcomes for the asset. This shift has propelled the evolution of AD models.

Today, three AD models are widely recognized in construction contracting:

Construction Manager at Risk (CMAR)

‍In this model, also known as Construction Manager/General Contractor, the owner hires both a design consultant and a construction manager. The construction manager collaborates with the design consultant, providing estimating services during procurement. Afterward, the final scope, price, and schedule are agreed upon. "A guaranteed maximum price reduces the owner’s risk," Soufi points out. However, CMAR requires specialized contractor expertise, and the availability of such expertise can limit project delivery.

‍Design-Build (DB)

‍In this approach, the owner selects a design-builder based on the best value proposal that encompasses approach, design, construction, and price. It’s a two-step process that adds time to procurement but minimizes the owner’s involvement during design development. "The DB contractor assumes all the risk of delivering the project at the agreed-upon price, which reduces risk but increases upfront costs for the owner," Soufi explains.

Progressive Design-Build (PDB)

‍A one-step, qualifications-based procurement process with two phases, PDB allows the owner to be more involved with the contractor during design development. There’s no commitment to a contract until a specified level of design is reached. "The owner and the PDB contractor collaborate to move forward with design and construction within the 'targeted cost and schedule,'" Soufi says. PDB also reduces procurement time and is well-suited for emergency situations, as shown by the Maryland DOT’s use of PDB for the reconstruction of the Francis Scott Key Bridge after a vessel collision in March 2024.

The decision on which procurement method to choose depends on several factors, including local market conditions, resources, and risk levels. "Owners may prefer certain AD models based on their own experience or that of a sister agency," says Soufi. For example, the Washington Metropolitan Area Transit Authority used CMAR for the successful rehabilitation of the Metro’s Yellow Line in 2022, influencing Amtrak’s choice of CMAR for the Frederick Douglass Tunnel project in Baltimore.

The COVID-19 pandemic and the Infrastructure Investment and Jobs Act have put additional pressure on supply chains, pushing up material prices and limiting engineering and construction resources. "This has led to contractors gaining more leverage and being more selective in project bids," Soufi notes. Larger contractors are also negotiating better terms and requesting upfront payments, shifting more risk onto the owners.

Soufi also highlights the changing appetite for risk: "As leading contractors face challenges in making a profit on multibillion-dollar DB contracts, many firms now hesitate to bid on projects over $500 million without favorable terms."

A Word on P3s

‍Alternative delivery methods can also help owners meet the rising demand for transportation infrastructure, especially when regulatory approval or funding is a bottleneck. "The financial feasibility of projects has led private equity firms to partner with public agencies, financing underfunded projects through public-private partnerships (P3s)," Soufi explains.

Strictly speaking, P3 is a funding model, not a delivery method. It involves multiple private partners agreeing to design, build, and operate a public infrastructure project for a specified concession period. "Because P3 projects require fast delivery, the procurement often follows AD methods, with complex contracts for the duration of the concession," Soufi clarifies. Examples include the Express Lanes on I-66 and I-495 in Northern Virginia and the Purple Line light rail in Maryland. "Private contributions tend to speed up regulatory approvals and funding due to the perceived financial feasibility," Soufi concludes, predicting that this trend will continue.

Originally reported by Sami Soufi in Construction Dive.