Planning and Environment Linkages (PEL): Streamlining Transportation Decisionmaking

Design-Build Final Rule Outlines New Contracting Procedures to Streamline Project Development

Rebuilding the I-35W bridge over the Mississippi River in Minneapolis
will be the first project developed under the new Design-Build Rules

Section 1503 of the 2005 Safe, Accountable, Flexible and Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) requires the Federal Highway Administration (FHWA) to modify its rules regarding design-build contracts issued by state departments of transportation (DOT). The provision requires that the FHWA allow state DOT projects conducted under design-build contracts to proceed through the preliminary design stage before the National Environmental Policy Act (NEPA) process is complete. The Final Rule for Design-Build Contracting was issued August 14, 2007 and is effective September 13, 2007. This Rule streamlines the project development process for design-build projects by allowing state DOTs to conduct the NEPA process in parallel with entering into a design-build contract for the project and proceeding through the preliminary design stage. Previously, completion of the NEPA process was required before the state DOT could issue design-build request-for-proposal documents. As directed in Section 1503, the Rule forbids starting the final design before the NEPA assessment is complete.

The Final Rule allows state DOTs to conduct the following processes before completing the NEPA process:

• Issue a request-for-proposals (FHWA concurrence required)
• Award design-build contract (FHWA concurrence required)
• Issue notice to proceed for preliminary design services (FHWA concurrence required)

Protecting the Environmental Review Process

In addition to streamlining the project development process, the Design-Build Rule has several provisions to protect the integrity of the NEPA process. Any work done prior to the NEPA process must not materially affect the objective consideration of alternatives in the NEPA review process (FR72, 156, 636.103). All design-build contracts must contain a termination clause in the event of a no-build environmental decision. To avoid conflicts of interest, the design-build contractor is precluded from preparing either the NEPA decision document or NEPA analysis documents. Additionally, the Rule states that FHWA cannot obligate funds for final design or construction until the NEPA process is complete.

Listening to Stakeholders during the Rulemaking Process

The Final Rule was developed after comments received on the Notice of Proposed Rulemaking (NPRM) (published in the Federal Register on May 25, 2006) were evaluated and incorporated, as appropriate. FHWA received comments from 36 different entities including state DOTs, industry organizations, contractors, and others. The most important change made as a result of the comments received was expanding the definition of the term "preliminary design." Most commenters felt that the original definition was too narrow since it limited the preliminary design activities to only those that are necessary to properly conduct a NEPA alternatives analysis and review process. The Final Rule defines preliminary design more broadly as activities undertaken to define the general project location and design concepts and provides examples of preliminary design activities.

Other changes made to the Final Rule as a result of comments received include:

• Clarified the definition of "final design" to include any design activities undertaken after preliminary design is complete
• Deleted provisions on procurement in public-private partnerships; deferred issue for future rulemaking
• Removed the definition of the word "developer" to avoid confusion with the term "design-builder"
• Added that price evaluation and reasonableness requirements apply when the contracting agency is using Federal-aid highway funds for the project

Permissible Project Development Process under New Design-Build Rule

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