Assessing the rise of Design-Build-Finance Delivery in Transportation Infrastructure

Abstract

While other alternative project delivery methods have emerged to address the limitations of Design-Bid-Build, Design-Build-Finance (DBF) has surfaced more recently. Although DBF has gained prominence in the past decade, research pertaining to this method is limited. Consequently, this research investigated the use of DBF for the delivery of transportation infrastructure by five State DOTs: Florida, North Carolina, Georgia, Michigan and Texas through a combination of interviews with DOT personnel and investigation of completed or on-going DBF projects. To complement this, subject matter experts (SMEs) were interviewed to obtain a more general market perspective of DBF. As a result, two variants of DBF, DBF – Receivables and DBF – Risk Transfer, were identified; the DOTs investigated and the US more broadly, primarily use the DBF - Receivables variant where the contractor is entitled to payments for the activities completed irrespective of the project's completion. Whereas in the DBF – Risk Transfer variant, the contractor's payments are linked to the completion of the project. Further, DBF is employed on projects that are (i) in need of acceleration, which generates (ii) social and economic benefits such as congestion relief and safety enhancements; such projects are also (iii) subjected to short-term budgetary restrictions, but they typically have (iv) funds programmed in the future. The distinction found in the variants of DBF provides a better understanding of the drivers of DBF, which were validated through interviews. In practice, this distinction also aids public agencies in better identification of the appropriate project delivery method for a given project.