Pre-Qualification of Teams, Followed by Submission of Competing Designs, Followed by Low-Bid Award for Phase II of Silver Line, Washington D.C. to Dulles

The Washington Post reports that Capital Rail Constructors / Clark Construction Group, LLC / Kiewit Infrastructure South Co. successfully submitted the low bid of $1.18 billion and looks to be on track for being awarded Phase II of the $5.5 million Metropolitan Washington Airport Authority (MWAA) Silver Line which will eventually extend to Dulles and beyond into Loudon County.

Bechtel has been constructing Phase I, which is slated for completion later this year.

Five teams were pre-qualifed for Phase II.   In order to encourage participation in the development of design  proposals and to encourage submission of bids from each of the qualified teams,  MWAA agreed to pay $1.5 million (one basis point of the engineer's estimate)  bid-preparation costs to each consortium.  Once the Authority was satisfied that it had five teams, each of whom would be qualified to perform the work, and that each had a design that was acceptable, Phase II of the project is being awarded on a low-bid basis.  

The five bidders were: 1) Fluor Enterprises, Tutor Perini, and Stacy and Witbeck, 2) Clark Construction and Kiewit Infrastructure, 3) Archer Western Contractors, PCL Civil Constructors, and Corman Construction, 4) Skanska USA, Granite Construction, G.A. & F.C. Wagman, Trumbull, and Facchina Construction, and 5) Bechtel Infrastructure, which built Phase I of the Silver Line from D.C. to Reston.

All bids were below the engineering estimate of $1.4 to $1.6 billion.

Martin Di Caro reports for New York Public Radio:

Once it was determined that the contractor teams' individual design proposals met the standards established in MWAA's design schematics, price became the only factor in deciding who will win the contract. Therefore, a bidding contractor with a superior design receives no advantage in the bidding process. [Patrick Nowakowski, the executive director of the Dulles Corridor Rail Project] says his office has been meeting with the competing contractor teams for months to ensure all the design proposals are sound.

"That's where the confidence level comes in, the amount of time we have spent working with them," Nowakowski said. "[We] make sure that the designs they produce meet the minimum standards that [we've] established in a specifications."

Critics say low bid invites trouble

Any number of issues can push a megaproject over budget, but the low-bid procurement process is particularly troublesome, critics say, because it entices a contractor to submit an artificially low bid with the intention of requesting change orders to drive up a project's final cost, paid for by the project's owner and into the contractor's pockets. In the case of the Silver Line, the owner is MWAA.

"The procurement on Phase II is not being done in an optimal way," said Brian Petruska, an attorney at the Laborers International Union of North America, one of the unions that supplied workers to build Phase I of the Silver Line. "For a contractor, the number one goal is to get the project."

Change orders usually occur in one of three ways: the project owner requests the change and then pays the contractor to include it; an unexpected problem arises in the construction process requiring a change for the project to proceed safely; or the contractor requests a change order from the owner. In the latter case, MWAA would have to approve any change orders that are requested by the general contractor.

"We've looked at projects such as the Wilson Bridge and the Springfield interchange where change orders were approved because the price of steel went up. You would think the contractor should factor in potential increases in the price of steel, so when they make the bid they take the risk," said Petruska.

MWAA insists its contract documents and oversight procedures will prevent unnecessary change orders and, therefore, stick to the Silver Line's budget.

"I worry about change orders from the day I sign the contract to the day I end it," Nowakowski said. "It's not a function of the low-bid procedure. It's a function of how well the contract documents were written and how well you manage the project from the day you start to the day you finish."