Design-Build Legislation - Design-Build for Water and Wastewater Projects - page 42

a controversy that arose in 2010 when the Ohio Inspector General challenged ODOT's
use of stipends. These honoraria are paid to unsuccessful DB teams in consideration of
the effort and expense involved in creating a viable design and construction proposal
package. Stipends represent more than compensation for the proposer's effort. DBIA con-
siders stipends a DB best practice because they enhance competition and proposal qual-
ity. Another advantage of stipends is that the owner gains the right to use the ideas and
concepts that are presented by the unsuccessful proposers (Ryan 2007).
Chartered municipalities have had broad discretion to use DB project delivery. This
is particularly important to municipalities interested in using DB for water and wastewater
projects, which are delivered primarily by local governments.
The provisions of Section 3 of Article XXIII of the Ohio Constitution allow cities
to exercise home rule in regard to project procurement methods if they adopt or amend
their charters to exercise all powers of local self-government (Ohio Constitution Article
1912). Municipal charters must expressly state areas in which the municipality intends to
supersede or override a state statute. If a municipality adopts a charter that authorizes
DB or allows discretion in choosing project delivery methods, then it may engage in DB
project delivery.
Municipal DB authority has been challenged in Ohio on several fronts. In the case
of the Greater Cincinnati Plumbing Contractors Association vs. the City of Blue Ash (1995),
the plaintiff argued that the city of Blue Ash did not have the authority to use DB. The
court, however, ruled in favor of the city holding that the city had home-rule authority
and that the bidding process was an exercise of that city's local self-government; therefore,
they were not required to conform to the bidding process contained in the Ohio Revised
Code. Further, the conformed bidding process for the city charter's competitive bidding
mandate required the city to select the “most responsive proposal.”
The last attempt to address Ohio's restrictive design and construction procurement
policies and procedures, started when Governor Strickland established the Ohio Con-
struction Reform Panel in 2008. The panel was composed of stakeholders from both
the public and private sectors and they finished their work in 2009 (Ohio Construction
Reform Panel 2009). The much anticipated Report of the Ohio Construction Reform Panel
produced several recommendations, including authorization of the DB and construction
management at risk project delivery methods.
Unfortunately, the panel failed to address many of the problems that limit DB in Ohio.
For example, the panel proposed incorporating the multiple-prime system into the DB
process and, moreover, required award of separate mechanical, electrical, and plumbing
contracts prior to selection of the design-builder. Not surprisingly, Ohio design-builders
were extremely disappointed by the panel's recommendations and rightfully contended
that the proposal was both unworkable and counter to the DB process and methodology
(DBIA 20 09).
Because DB project delivery shifts significant risk from the owner to the design-
builder, Ohio design-builders immediately recognized that the panel's recommendations
allocated an unacceptable level of risk to them. Requiring a DB team to submit a pro-
posal without knowing their key team members (i.e., mechanical, electrical, and plumbing
contractors) is an unreasonable risk that strips DB of its most valuable asset—an inte-
grated team. The cost and time savings gained by compressing schedules and engaging