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INFRASTRUCTURE OUTSOURCING: - page 16 / 46

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RPPI

C. Legislation

Trends in the practice of outsourcing are reflected in legislation. The last few years have seen a growth in enabling legislation that promotes infrastructure outsourcing. For example, California’s government code (section 5956, chapter 14) and Georgia’s code (section 36-10-2) enable a broad range of infrastructure project outsourcing, and Florida, New Jersey, and Minnesota have passed similar laws in recent years.

(California’s law applies only to local governments, not to state agencies.)

Arizona is considering expanding the design-build pilot program of th

e Arizona Department of

Transportation (DOT) via house bill 2274. The bill will allow design-build projects for structures, facilities, and other specified building types. Arizona DOT construction engineer Ron Williams sees consultant involvement in infrastructure design as inevitable. “When you don’t have the people, you’ve got to go outside

to get them.”

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Williams cites declining college enrollment in civil-engineering programs and the ability of

private-sector companies to offer civil-engineering graduates more-lucrative salaries as factors contributing to dwindling resources that leave state agencies unable to keep up with infrastructure demand.

D. Project Delivery Methods

The new climate of outsourcing has created several new project delivery models, rooted in traditional modes:

2.

Engineering. Often, engineering consultants are called in on a project to address special concerns in areas where public-sector agencies do not have expertise. Again, contracts range from single project delivery to yearly contracts to retain staffing levels.

3.

Construction. In traditional methods of design-bid-build, the private sector played an integral role—a role it still maintains. More recent and innovative practices call for the integration of design/engineering and construction phases into design-build (DB) by a single firm (or consortium).

4.

Maintenance. Similar to construction services, private-sector firms have been contracted to maintain public infrastructure for years. Now they are being asked to play a more integral role by actually guaranteeing maintenance services when the project is built. DBM (design-build-maintain) and DBOM (design-build-operate-maintain) are contracting alternatives that shift greater risk and responsibility to the private sector.

5.

Operation. A long history exists between private firms and municipalities in the outsourcing of municipal services. However, as with maintenance, operation is increasingly integrated with design and construction—DBO (design-build-operate) contracts are more prevalent now than ever.

6.

Turnkey. These are usually combinations of the above, often in the form of BOT (build-operate- transfer), BOOT (build-own-operate-transfer), and the like. With a turnkey project, the private sector delivers a complete project ready to operate, or even owns and operates it for a set time before transferring it to the government.

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single

project

delivery

to

from

Design. Contracts to use architectural and specialty designers retaining staffing levels over a specified contract period.42

range

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Ron Williams, ADOT construction engineer, interview with author, March 2000.

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Both design and engineering service contracts that seek to retain expertise to rapidly respond to contingencies are usually called indefinite-delivery/indefinite-quantity, or ID/IQ, contracts.

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