An Evaluation of Public Construction Contracting Methods for the Public Building Sector in Oregon using Data Envelopment Analysis

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Since 1976 public agencies in Oregon have been allowed to select construction contractors using a "qualification" based competition instead of the more typical lowest responsible bid or Design-Bid-Build (DBB) basis. Since 1985, at least 136 such selections, commonly known as CM/GC for Construction Manager/General Contractor, have been made. The results of this policy have not previously been analyzed. This research compares these selection methods, seeking to answer the following questions: Does the CMl/GC method result in projects that differ from DBB projects regarding cost and schedule control? Are CMl/GC projects more efficient than DBB projects, where efficiency is defined as the data envelopment analysis (DEA) technical efficiency score? Does efficiency depend on an interaction between project type and the selection method? How do project stakeholders evaluate the benefits and drawbacks of the two selection methods? How do projects compare when the only apparent difference between them is the selection method? To answer these questions, we identified 407 Oregon public building construction projects and obtained a variety of data, including cost and schedule results, for 215 jobs (111 CMl/GC and 104 DBB). We analyzed the data several ways, including statistical analysis, DEA, and various qualitative methods. Results: There was no statistically significant difference between the CMl/GC and DBB projects regarding cost and schedule control. The DEA technical efficiency scores showed that CMl/GC projects outperformed the DBB projects. There was no interaction effect between project type and selection method. Project stakeholders stated that reduction of risk is the principal benefit of using CMl/GC; however, architects and subcontractors are less enthusiastic than owners and general contractors. Data on two nearly identical projects indicated that the DBB project was less costly than the comparable CMlGC project and also incurred less cost growth; both projects were completed on time. To summarize, this research fails to find support for the current Oregon law that exempts certain projects from competitive bidding based on the presumption that CMl/GC will lead to substantial cost savings but does indicate that the CMl/GC projects may be better able to accommodate accelerated project schedules.