A case study : Michigan Intelligent Transportation System Center : use of a design/build/warranty contract

Procurement of Intelligent Transportation System (ITS) projects with Federal-aid funds can present challenges. ITS technologies are implemented as stand-alone projects, expansions of legacy systems, or incorporated as part of traditional roadway construction projects. ITS projects often involve the application of complex telecommunications, computers, software, sensing, and electronics technologies that are not familiar to many transportation agencies, making it very difficult to develop the appropriate specifications for bidding purposes. Conventional Federal-aid construction projects are procured using a two-step project delivery approach: first, a design contract is let to design the project, and then a construction contract is let to build the project. Under Federal-aid regulations, the design contractor can be selected using a qualifications-based approach, while the construction contractor must be selected based on low bid. In many cases, however, the requirements of ITS projects cannot easily be specified at the beginning of a project. This makes it difficult to establish realistic low bids and ensure product quality. Many ITS projects are stand-alone in nature, and do not have to be procured under rules for construction. The installation of field devices and communications infrastructure often meets the definition of construction. However, if a project involves the development of software for the purpose of integrating field devices, then it does not meet this definition. The purpose of this series is to show that other procurement options are available under Federal-aid regulations for projects that do not meet the definition of construction.