Comparison of Qualifications-Based Selection and Best-Value Procurement for Construction Manager–General Contractor Highway Construction

Abstract

Faster project delivery and the infusion of contractor knowledge into design are the primary drivers for choosing construction manager–general contractor (CM-GC) project delivery. This study focuses on the use of qualifications-based selection (QBS) and best-value (BV) procurement approaches, how and why agencies use each approach, and their associated opportunities and obstacles. Data for this study were obtained from a majority of federally funded CM-GC projects completed between 2004 and 2015. It was found that the use of BV procurement versus QBS procurement had no statistically significant difference in project characteristics or in performance of the projects in the data set. The choice of BV or QBS procurement coincided with an agency’s CM-GC stage of organizational development and influences of nonagency stakeholders on the CM-GC process. When agencies and the local industry were new to CM-GC, they were found to use BV procurement because it is closer to the traditional procurement culture and is perceived to result in a fair market project price. Alternatively, agencies and local industry partners with an established history of using CM-GC projects were found to choose QBS procurement. Because of the low level of design at the time of procurement, assumptions relating to risk, production rates, materials sources, and other aspects may be too preliminary to secure a reliable price. The use of BV procurement was found to pose a risk to innovation and to increase negotiation efforts. Qualitative trends from the project data, interviews, and the literature point to agencies using QBS procurement for the majority of CM-GC projects and BV procurement for CM-GC projects with lesser complexity or more highly developed designs at the time of selection.