Legal Problems Arising out of Highway Programs. Topic 25-06. Legal Aspects of Best-Value Procurement for Highway Construction (Update)

While the low bid procurement system has a long-standing legal precedence and has promoted open competition, a system based strictly on the lowest price provides contractors with an incentive to concentrate on cutting costs to the maximum extent possible, even when a higher cost product would be in the owner’s best interest. Additionally, a low bid procurement limits project innovation and potentially extends the overall project schedule. As a result, the low bid system may not result in the “best-value” for dollars expended or the best performance during and after construction. State transportation highway agencies have increasingly introduced enabling legislation, rulemaking, and policy and implementation guidelines allowing for the greater use of best-value procurement in conjunction with alternative contracting methods including design-build (DB), construction manager/general contractor (CM/GC), and public-private partnerships (P3) for highway construction projects. Best-value incorporates factors in the selection process, in addition to price, to better ensure that an offeror will provide the greatest overall value to the agency at optimal performance. Prior research addressing best-value procurement considered the range of best-value procurement systems used for highway projects and recommended that best-value systems should allow for flexibility in terms of selection criteria, rating systems, and award algorithms. Further, projects should be screened to select candidate projects that would benefit most from best-value and implement them using a step-by-step process to select the most appropriate parameters, criteria, and award algorithms based on specific project objectives, characteristics, and risks. From a legal perspective, issues have arisen in best-value procurements regarding confidentiality during one-on-one meetings and best and final offer (BAFO) discussions with proposers, lack of transparency in selection decisions, subjectivity in selection decisions, and other fairness issues leading to bid protests. There is not much case law among transportation agencies regarding best-value bid protests or disputes as most of these are settled before being litigated. However, sunshine laws in some states allow for freedom of information access to public records revealing the causes of best value protests and their resolution. The Government Accountability Office (GAO) also keeps statistics on federal bid protests for best-value or source selection procurements. Examples of GAO or U.S. Court of Federal Claims decisions upholding bid protests included issues related to biased or unequal treatment of proposers, failure of selection committees to strictly follow evaluation criteria, unsupported evaluation and selection decisions, trade-offs that ignored lower priced acceptable offers, failure to adequately document selection decisions, and ambiguous instructions to proposers. The objective of this research is to produce a legal research digest that includes the following: (1) An analysis of fairness issues in the best-value procurement process that may have resulted in formal bid protests or questions regarding reduced competition. These could relate to alternate technical concepts (ATC) or practical designs (PD) introduced during confidential pre-proposal discussions or during BAFO negotiations that may give an unfair advantage to a proposer. It also may relate to use of evaluation criteria or weightings that bias the evaluation and selection process towards one proposer over another, the improper make-up and conduct of the selection committee (i.e., organizational conflicts of interest or violations of non-disclosure agreements), rules relating to communications, and the lack of transparency or clarity in justifying and documenting the best-value selection decision. (2) A review and analysis of the existing federal, state, and local legislation focused on best-value procurement to determine whether the enabling legislation (i.e., degree of statutory prescription or other requirements) has resulted in bid protests, affected the level of competition, increased the cost of procurement, or resulted in other perceived procurement or project execution issues. Note that state legislatures have taken a range of approaches in their enabling legislation to implement best-value. One approach is to establish broad guidelines that empower a state highway agency to determine the specific best-value procurement processes. This would allow an agency to implement different best-value procurement processes depending on the project characteristics. The other approach is to define prescriptive rules and processes to address key aspects of procurement based on state law, policy, or local industry influence. For example, enabling legislation may define specific requirements related to project selection criteria, qualification of potential proposers, proposal evaluation procedures, makeup of the technical review committee, and the award process (i.e., two step best-value based on adjusted score or low bid). (3) A summary of how best-value should be effectively implemented through law, contract provisions, and policy to minimize protests and preserve the integrity of the procurement process.


  • English


  • Status: Proposed
  • Funding: $100000
  • Contract Numbers:

    Project 20-06, Topic 25-06

  • Sponsor Organizations:

    National Cooperative Highway Research Program

    Transportation Research Board
    500 Fifth Street, NW
    Washington, DC  United States  20001

    Federal Highway Administration

    1200 New Jersey Avenue, SE
    Washington, DC  United States  20590

    American Association of State Highway and Transportation Officials (AASHTO)

    444 North Capitol Street, NW
    Washington, DC  United States  20001
  • Project Managers:

    Chisholm-Smith, Gwen

  • Start Date: 20200115
  • Expected Completion Date: 0
  • Actual Completion Date: 0

Subject/Index Terms

Filing Info

  • Accession Number: 01713237
  • Record Type: Research project
  • Source Agency: Transportation Research Board
  • Contract Numbers: Project 20-06, Topic 25-06
  • Files: TRB, RiP
  • Created Date: Aug 5 2019 3:23PM