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Project Selection: Picking the Best Option

• By: Frank Ulbrich
• Publisher: SAGE Publications: SAGE Business Cases Originals
• Series: Sustainability
• Publication year: 2020
• Online pub date: January 15, 2020
• Discipline: Project Management , Sustainability
• DOI: https:// doi. org/10.4135/9781529726893
• Contains: Supplementary Resources | Teaching Notes Length: 3,515 words Region: Northern America Country: Canada Industry: Education Type: Experience case info Organization: fictional/disguised Organization Size: Small info Online ISBN: 9781529726893 Copyright: © Frank Ulbrich 2020 More information Less information

Teaching Notes

For the past five years, Swotting School of Business had tried different ways to raise awareness among its students for the United Nations’ Principle for Responsible Management Education (PRME) initiative and the 17 Sustainable Development Goals (SDGs). In June 2019 the director of the school, Michael Wilson, met with his assistant, Lisa Brown, to discuss which project the school should favor to raise awareness during the next academic year.

The two started the project selection process by reviewing previous projects and considering promising novel ones. Identifying critical traits should help Wilson and Brown assess how well each project would meet Swotting School of Business objectives.

Wilson asked Brown to evaluate all possible projects in detail, using appropriate criteria and a weighted factor scoring method, and then to prepare a recommendation for him to select the most promising project.

Learning Outcomes

By the end of this case study, students should be able to:

• develop measurable criteria for scoring projects;
• assign values to project traits;
• prioritize among project alternatives, using a weighted factor scoring method; and
• identify ethical dilemmas in quantitative scoring models and decision-making.

There is a secondary learning outcome related to the Principle for Responsible Management Education (PRME) initiative. Debating the case, students will develop an appreciation for the PRME. They will better comprehend the commitment of their own institution to the PRME and will recognize what activities their institution should implement and perform to support the PRME.

Introduction

It was June 17, 2019, and a sunny and quiet afternoon. Sitting at her desk and glancing out of the window, Lisa Brown let her eyes wander over the lush campus greens. Reflecting on the beauty of nature, she was fully committed to preserving it and being responsible in the way natural resources were used.

She went back to thinking about her latest assignment.

Brown, the assistant to the director at Swotting School of Business, Michael Wilson, had just met with Wilson to start a conversation about what the school should engage in during the next academic year to sensitize its students to more sustainable practices and becoming responsible leaders of tomorrow.

Since 2013, when Swotting School of Business became a signatory of the PRME initiative, the school had organized at least one major event each year to promote awareness among its students. Considering which project to favor, Brown and Wilson had just revisited some of the school’s previous projects. They had agreed that Brown would review all of them in more detail during the next week or two, and for her to also devise at least one additional alternative they could consider when selecting among the different options.

Wilson wanted to meet again within two weeks to decide which alternative to select. Prior to that meeting, Brown needed to collect and structure data with regard to previous projects and potential new ones, prepare her analysis, and develop a recommendation for Wilson regarding which project he should select.

Swotting School of Business and the PRME

Swotting School of Business is a small business school located in Western Canada. Being a special-purpose teaching university, the school is mostly focused on providing applied undergraduate education. Its four-year Bachelor of Business Administration degree program had the largest enrolment in the school at about 900 students. In addition, the school also offered a variety of diploma and certificate programs, with a total enrolment of about 1,800 students, mostly serving the educational needs of the local region.

Swotting School of Business became a signatory of the United Nations’ PRME initiative in 2013. The PRME was ‘developed in 2007 by an international task force of sixty deans, university presidents and official representatives of leading business schools and academic institutions’ (United Nations, 2007), and focused on six principles ( https://www.unprme.org/about-prme/the-six-principles.php ). Committed to supporting the PRME, Swotting School of Business pledged, among others things, to ‘develop the capabilities of students to be future generators of sustainable value for business and society at large and to work for an inclusive and sustainable global economy’ (United Nations, 2007). The school further pledged to ‘facilitate and support dialog and debate among educators, students, business, government, consumers, media, civil society organizations and other interested groups and stakeholders on critical issues related to global social responsibility and sustainability’ (United Nations, 2007).

During the past years, as part of its commitment to the PRME, Swotting School of Business had run various projects to develop its students into responsible leaders and to engage them in dialogue and debate around sustainability topics. For example, sustainable mornings was introduced as a place where the Swotting community could assemble to exchange ideas about how the university could become more sustainable. In 2016 and 2017 the school organized PRME essay competitions , encouraging students to review best practices related to the United Nations’ 17 Sustainable Development Goals (SDGs) ( https://www.un.org/sustainabledevelopment/sustainable-development-goals ). In 2017, Swotting School of Business added a sustainability symposium to further encourage dialogue between various community members. The sustainable case competition followed in 2018, in which teams of students had the opportunity to compete with each other, focusing on developing sustainable solutions to real-world problems.

For the 2019–2020 academic year, Wilson was open to retrying one of the previous projects or to exploring new alternatives. He explained to Brown that ultimately he would base his selection on how well a project aligned with the school’s goals.

Basis for Judging Projects

Brown quickly sensed that she needed to better grasp what Wilson meant by the ‘school’s goals’. As those goals would form the basis for his decision, Brown felt that she had to define criteria that she could use to evaluate all projects.

While clarifying what he meant, Wilson pointed out that, when assessing potential projects, Brown should focus on faculty commitment , student engagement , the time to develop and execute a project, as well as PRME alignment and impact.

Faculty Commitment

One point that had always proven difficult when running projects in the past was to get faculty members committed. Faculty members are important resources for most projects to make sure that an academic format is chosen and for their expertise in various areas. For faculty, however, it was normally difficult to commit to particular projects and particular dates, especially when project planning started so early that they would not yet know their full teaching schedule. As many would be restricted by teaching or other commitments during the teaching semesters, it was also normally difficult to find dates on which faculty members could meet to plan. Moreover, dates to carry out activities for which faculty members would have to be present were also difficult to agree on in advance. Wilson thus emphasized that projects that only used a few faculty resources were easier to manage. Therefore, he preferred projects that only needed a few faculty members and for which their time commitment would be relatively straightforward and limited. In other words, the fewer faculty resources a project required, the better it would fare in comparison with other projects.

Student Engagement

The likelihood of attracting students to participate in activities was very important to Wilson. On the one hand, he certainly did not want to see faculty and staff being disappointed at the end of a long project-planning phase, only seeing a few students participating in an activity. Not only would it be disappointing for them, but he also feared that low participation could be counterproductive to getting faculty to volunteer for such projects in the future as they might not see the benefit of planning and executing a project. Low participation could also have a negative bearing on future projects – if it was generally known that only a few students participated, negative word-of-mouth could further reduce the number of participants in future years. And the fewer students who participated in activities, the more limited the opportunity of each project to create visibility and to raise awareness for the PRME and SDGs. Wilson therefore pointed out that a project that would attract many students would be ideal. Brown added that, based on previous experience, she had found that projects that required little to no preparation from students had resulted in higher levels of student attendance.

Time to Develop and Execute

Wilson also considered the time it would take to develop and execute a project as important. In recent years projects had tended to be very time consuming – both to develop and to execute. Due to the small size of the school, Wilson felt that it would be vital to select a project that would not demand too much time to develop and execute. A second reason to favor projects that would not take too much time to plan and run was that it would normally be easier to gain buy-in from faculty and staff because the effort needed would be clearly defined from the outset. Thus, he considered projects that took little time to develop and execute as better than those with long development and execution timelines.

PRME Alignment and Impact

To Wilson it was very important that students learn about the PRME and SDGs. Creating that kind of awareness would clearly align with the PRME commitment the school had signed up for. Wilson argued that a project that focused explicitly on the SDGs or responsible management practices would have more impact on creating awareness than a project with an insipid theme. Likewise, a project that would address two or several SDGs would be better than one that only touched on one. In addition, projects with active learning components he considered would better meet the school’s goals than those that only focused on passive learning. He explained that students who actively participated projects were exposed to deeper learning, which had more long-term impacts. Especially when students spent significant time on a specific topic, they could immerse themselves in relevant material. Superficial activities, on the other hand, were less likely to make a lasting impact. Hence, projects that clearly focused on making an impact would rank higher than those for which an impact would be non-essential.

Having contemplated the criteria to judge all projects, Brown and Wilson wondered how important each criterion was in selecting a project. They both felt that student engagement was most important. After all, the whole idea was to create more awareness. Thus, they decided student engagement would be at least twice as important as any other criterion. Faculty commitment and time to develop and execute would be about equally important. Furthermore, PRME alignment and impact would be approximately 50% more important than faculty commitment and time to develop and execute.

Projects to Consider

Brown and Wilson still needed to decide which projects to consider for the 2019–2020 academic year. Both felt that it would certainly be nice to have a new idea. Wilson, who was pressured for time, however, did not want to spend another hour or so discussing the pros and cons of several new ideas. Instead, he asked Brown to give it some thought and to present one or more ideas in her analysis the next time they met.

Although new project ideas would certainly be nice to have, Wilson had pointed out that one of the old projects could still be a valid option. Thus, Brown would have to consider the main projects from the past when preparing her analysis. Projects from the past included: (a) a PRME essay competition, (b) a sustainability symposium, (c) sustainable mornings, and (d) sustainable case competitions.

PRME Essay Competition

The PRME essay competition allowed students to elaborate on sustainable practices and how best practices could be implemented at the university or within the wider community. The aim was to have students engage with topics that contributed to a socially responsible and sustainable development of the region. Developing the essay competition was not a very time-consuming task. In the past, one faculty member volunteered to select a suitable theme, formed a panel of judges consisting of several faculty members, and together with a staff member took care of practical aspects such as advertising the competition. Panel members did not have to meet in person but could provide their assessment of all essays in writing, using a rubric and criteria that were developed for the competition. For students, the time commitment was rather extensive. Students had to commit to write a 5,000-word essay, which involved a considerable amount of time. To attract students to participate, cash prizes were considered and extensive advertising for the competition was carried out too. Yet, the number of participating students was consistently low. Students complained that it was too much work and that they could not receive academic credits for their essays. For those students who participated, however, writing an essay was a very high-impact exercise. Those students completely immersed themselves into relevant topics, developed their own thoughts around the PRME and responsible management practices, and captured their studies in the form of academic essays.

Sustainability Symposium

The sustainability symposium was put into place to foster a dialogue between students, educators, businesses, and the local community. From a PRME perspective, the project was very interesting because it did not only cater to students but created a platform for different stakeholders to assemble and exchange ideas on the topic of sustainability. The event featured, for example, student work, First Nations initiatives, and sustainable business practices – both for-profit and not-for-profit organizations. Various presentations focused on several different SDGs-related topics. Many practical solutions and ideas that could be implemented in the near future were brought to the attention of the audience. For that reason, the event was very attractive from an impact point of view. It was, however, very time consuming to plan. Many external and internal speakers needed to be secured and coordinated. Some faculty members were secured as speakers too. For those faculty members, preparation and participation time was moderate as they could partially draw on existing presentations and research findings. Coordinating all speakers made it difficult to schedule the event during the teaching period. Hence, it took place after the teaching and exam period. It was envisioned that students would show up in large numbers, as the topics were very timely and interesting. Further, the students’ time commitment was minimal as they only had to show up, listen, and engage. Showing up, however, turned out to be a challenge as the late date after exams caused students not to attend the event. For the few students that did show up, engaging in the event was not easy because most speakers chose a lecture-style format that did not encourage much active participation. Some of the shortcomings could potentially be eliminated in the future through different timings and more engaging interaction.

Sustainable Mornings

Sustainable mornings were introduced as a place for the Swotting community to exchange ideas about how the university could become more sustainable. Pop-up stands were used around campus at different times to engage passers-by in conversations around actions the university could take to become more sustainable. The pop-up-stand format allowed for great flexibility with regard to event timing. A faculty or staff member, for example, could quickly set up a stand and spend as much time as they had available. Most arranged pop-up stands overlapped with breaks between lectures, when there was significant movement on campus. This approach proved to be very effective. Students – as well as some faculty – asked questions, shared ideas, and engaged in conversations at the pop-up stands. There was no preparation for students at all, but the ones who stopped by and engaged appeared to show some genuine interest in sustainability and, thus, some good discussions took place. However, many students were also rushing between classes and often did not have time to fully engage. Based on this, one could conclude that engagement was moderate and the created impact was also best described as moderate. That is, students heard somewhat about PRME and SDGs-related topics, but it remained unclear if they actually learned something. Organizing sustainable mornings required very little effort. No particular topic needed to be prepared, the pop-up stands – once obtained – were up and running in no time. Moreover, scheduling was so flexible that whoever had time to run a discussion on campus could do it whenever they wanted.

Sustainable Case Competition

The sustainable case competition aimed at getting students together for a day to solve a real-world sustainability challenge and to present their innovative solutions to a panel of academics and influential business leaders in the community. As a one-day event, students would not have to commit too much time to the event. They would be at the university from early morning to early evening. As they would not get access to the case prior to the event, no preparation was necessary for the students and their time commitment was clearly limited to about 10 hours in which they formed groups, analyzed the case, prepared solutions, and presented their solutions to a panel of judges. Students could sign up as teams or find team members on the spot. Thus, everyone who was interested could simply attend. The only restriction was the number of teams the competition could feature. As it turned out, student interest and participation in the competition was high. Students were attracted by the format and by the opportunities to win cash prizes, meet business leaders, and deal with real-world problems. Cases usually addressed several SDGs, such as SDG 1 (End poverty in all its forms everywhere), SDG 2 (End hunger, achieve food security and improved nutrition and promote sustainable agriculture), and SDG 11 (Make cities and human settlements inclusive, safe, resilient, and sustainable). From a planning perspective, the initial investment was high. Student competitions of this format were new at Swotting School of Business. Although faculty had some experience taking students to competitions elsewhere, developing rules, promotional material, and composing a challenging case turned out to be very time consuming. Only a few faculty members were willing to invest the time to create the content needed in the competition. The second time the case competition was offered, most time was spent on developing a new case, as much of the other material could be adapted without too much effort. Faculty who participated in the panel of judges only needed to invest limited time as they only needed to attend a short briefing session on how to judge proposals and then attend the presentations, which were up to three hours long. The presentations showed that the students had fully immersed into their topics. They had focused on the problem – the SDGs – and created sustainable solutions. Having been involved at such a level was a clear indication that the sustainability case competition would fare as a high-impact practice.

Alternative Projects

Finally, yet importantly, Wilson mentioned to Brown that he was also open to new ideas. In fact, Wilson encouraged Brown to look for alternative projects that could fit the school’s goals.

To get Brown started, Wilson suggested she look at some of the PRME Champions to see what approach they had taken. One school he mentioned was Copenhagen Business School (CBS). He had seen that CBS had promoted a few activities on their website ( https://www.cbs.dk/en/knowledge-society/strategic-areas/principles-responsible-management-education/activities ), some of which were rather interesting.

Wilson, however, stressed that he was not looking to copy a particular project. He rather wanted Brown to broaden her horizons by looking at what others were doing in order to generate some new ideas that might suit the Swotting School of Business.

The Decision

Having experimented with different formats on how to raise awareness among students for the PRME and SDGs, Wilson wanted a more formal analysis of which project to select for the next academic year. To make a decision, Wilson wanted to meet with Brown again in the next week or two. He wished to receive a recommendation on which project to select. For this, Brown needed to review former projects, collect additional information about at least one alternative project, create criteria to score project traits, and prepare a quantitative analysis of the various options, using a weighted factor scoring method – allowing Wilson to make an informed decision and select one project in the next meeting.

Discussion Questions

• 1. As Lisa Brown, establish criteria for evaluation and assign scores or values for project traits, and define weightings for all criteria.
• 2. Assign values to all criteria for the four projects.
• 3. Devise an alternative project to raise awareness for sustainability and/or developing responsible leaders. You might use a project from your own institution or be inspired by another PRME signatory. For your alternative project, assign values to all criteria.
• 4. Using the weighted factor scoring method, compute total scores for each project and make a recommendation on which project to select for the next academic year.

Dr. Frank Ulbrich prepared this case for class discussion. There is no intention to illustrate either effective or ineffective handling of a project management situation. Although based on a real situation, names and other identifying information have been changed.

Further Reading

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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• Project Selection Case

A PROJECT SELECTION CASE

Published: 2014-03-27 Last updated: 2022-03-18

The following project selection case puts the rather theoretical introduction given in sub-section Project Selection into the context of a realistic situation. It is based on a question that reached us for our Q & A section. A quick scan encouraged us to create this sub-section.

We explain the selection procedure step by step, using some basic mathematics, which you can transfer to other, similar situations.

Starting point

Our company is considering to invest into one of three projects, X, Y and Z, with the following key figures:

Project X Project Y Project Z As cash outflow for each project, we have only the initial investment at the beginning of each project 10.000 10.000 10.000 Project revenue, or Future Value of the project, FV 11.770 28.750 17.939 Project Duration, in number of accounting periods (in this case, in years), n 1.0 3.0 1.2 Interest Rate, r, in % per year 0.1 = 10% 0.1 = 10% 0.1 = 10%

We can only choose one project, due to limited resources.

Step 1: Calculation of the net present value

The present values refer to the beginning of the project, the point in time of the investment. Cash outflow is 10 Mill. USD for each project, paid at the beginning of the project. Therefore, the present value of cash outflow, PVout is 10 Mill. USD for each project.

In order to calculate the respective present value of cash inflow, PVin, of each project, we use the formula

In this formula we use the future value or revenue of each project in order to calculate PVin.

For the calculation of the respective net present value (NPV) of each project, we then use

Here are the results for our project selection case:

Project X Project Y Project Z Present Value of cash outflow, PVout 10.000 10.000 10.000 Future Value, FV 11.770 28.750 17.939 Present Value of cash inflow, PVin 10.700 21.600 16.000 Net Present Value, NPV 0.700 11.600 6.000

Thus, we might choose project Y because it has the highest net present value, NPV = 11.6 Mill. USD.

Step 2: Calculation of the internal rate of return

The internal rate of return (IRR) of a project is a theoretical interest rate which we calculate based on the assumption, NPV = 0.

This means PVin – Pvout = 0, or consequently PVin = PVout.

With the formula for PVin above, but now with the IRR instead of the real interest rate r, we obtain

(For the mathematics behind this formula, please refer to the annex below.)

Inserting all the figures of our project selection case, we get

Project X Project Y Project Z FV 11.770 28.750 17.939 PVout 10.000 10.000 10.000 n 1.0 3.0 1.2 Internal rate of return, IRR 17.7% 42.2% 62.7%

With these results, we should choose project Z – and we are in a dilemma: Shall we make our decision based on the highest net present value, NPV, or the highest internal rate of return, IRR?

Step 3: Benefit cost ratio, payback period and other aspects

For the calculation of the respective benefit cost ratio (BCR) and the payback period (PP) of each project, we use

In our project selection case, we get these results

Project X Project Y Project Z Total cash outflow, PVout 10.000 10.000 10.000 Total cash inflow, FV 11.770 28.750 17.939 Present Value, PVin 10.700 21.600 16.000 n 1.0 3.0 1.2 Average per period cash inflow 11.770 9.583 14.949 Benefit Cost Ratio, BCR 1.07 2.16 1.60 Payback Period, PP 0.850 1.043 0.669

Project Y has the greatest benefit cost ratio, the project with the shortest payback period is project Z, which leads us to the same dilemma as with the comparison of net present value and internal rate of return. This should not surprise us: NPV and BCR both relate to PVin and PVout, where PVin is the total cash inflow discounted by the interest rate r over the project duration n. In contrast, IRR and PP are based on the non-discounted future value FV, only “averaged” by the project duration n (in different ways though, n-th root and simple average).

In order to come to a conclusion in our project selection case, we have to analyze other aspects as well:

• Creation of value: NPV or BCR measure the expected value created by a project, the company’s or shareholders’ benefit. IRR or PP are financial figures only, which are not suitable to predict the actual value creation.
• Project content and results: Are the project results and processes for creating those results innovative and, thus, worthwhile to undertake the project and make the investment? Do we need the project results in order to secure the technological future of our company?
• Project risk: Every project contains risk which we need to evaluate and hold against the expected profit. By definition, calculations of NPV, BCR, IRR and PP do not contain risk estimates. Risk values should rather be evaluated independently.

Without further information about the project results and processes and corresponding project risk values, our recommendation in this project selection case is to select the project with the highest expected value creation, that is project Y with NPV = 11.6 Mill. USD or BCR = 2.16, predicting the highest benefit for our company or shareholders.

Annex: Derivation of the formula for IRR

We mentioned above that IRR is the interest rate that corresponds to

We also know:

Therefore, we have

We convert this equation

Finally, we obtain

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Guidebooks for Post-Award Contract Administration for Highway Projects Delivered Using Alternative Contracting Methods, Volume 3: Research Overview (2020)

Chapter: chapter 5 - case study project selection.

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

24 C H A P T E R 5 5.1 Introduction Task 4 of this research project involved a case study approach to gather information about state agency tools and methods. The team applied a methodologically rigorous approach to select a diverse set of 30 projects representing a variety of project sizes for CM-GC and D-B. The final distribution of case studies is shown in Table 5.1. This chapter will explain the research team’s case study project selection process. 5.2 Data Collection Process As an initial step for data collection, the research team developed and administered an online survey to request project names and details for potential case studies. The research team contacted 56 ACM experts in 56 agencies nationwide, in Canada, and in Puerto Rico, including the 50 states; the District of Columbia; Ontario, Canada; Colorado Bridge Enter- prise; and the FHWA Central and Western Federal Lands Highway Divisions. The experts’ names and contact information were presented to the NCHRP project panel for review. The panel provided valuable feedback with regard to the best individuals to contact in their respec- tive states. The survey questionnaire asked 12 distinct questions to gather the following information: • State or agency name, • Project name, • Project or contract number, • Contract type, • Primary facility type, • Project type, • Estimated dollar value of construction, • Approximate construction start date, • Construction stage in summer of 2017, • Approximate or estimated project finish date, • Project contact (name, email address, and phone number), and • Additional comments. The survey was administered using the Qualtrics online survey software platform. It allowed the research team to identify 70 projects that fit the project selection criteria developed for this research. The responses represent 32 agencies distributed across the United States, which indi- cates a response rate of 57 percent. Figure 5.1 shows the geographical distribution of the agencies Case Study Project Selection

Case Study Project Selection 25 that was used for the final list of case studies (i.e., states that responded to the research team’s case study requests and had projects that fit the team’s desired size and delivery method). 5.3 Project Selection Initially, the research team wanted to select 30 case studies with the distribution shown in Figure 5.2. For both CM-GC and D-B, the research team attempted to select five projects from each size category, ranging from less than $10 million to greater than $50 million. However, no CM-GC projects of less than $10 million in size were found. This category was removed, and the team distributed five more projects between the remaining categories to reach the desired total of 30 projects. The final distribution is shown in Table 5.1. Most projects selected were complete or nearing completion, allowing agency teams to more accurately gauge project success and access project team members with recent knowledge. Post- award contract administration practices were examined in retrospect for the earlier phases of these projects. A complete list of the case studies can be seen in Tables 5.2 and 5.3. Figure 5.1. Geographical distribution of case studies. Size Delivery Method <$10 million >$50 million D-B 6 Projects 6 Projects 7 Projects CM-GC 0 Projects 6 Projects 5 Projects ≥ $10 million–≤ $50 million Table 5.1. Distribution of selected projects.

26 Guidebooks for Post-Award Contract Administration for Highway Projects Delivered Using Alternative Contracting Methods Case Study No. Agency Project Name Contract Type Primary Facility Type Project Type Dollar Value Con. Start Date 1 Pennsylvania DOT West 4th Street Bridge Design– Build Bridge Rehabilitation/ Reconstruction $3M Spring 2016 2 Florida DOT SR 90 Traffic Signal Update Design– Build ITS Rehabilitation/ Reconstruction $4M Feb 2016 3 Florida DOT I-75(SR 93A) Design–Build ITS Rehabilitation/ Reconstruction $3M Jan 2017 4 Virginia DOT Braddock and Pleasant Valley Intersection Improvements Design– Build Road Rehabilitation/ Reconstruction $6M Apr 2015 5 Georgia DOT SR-299 Bridge over I-24 Design– Build Bridge Rehabilitation/ Reconstruction $7M Aug 2016 6 Michigan DOT US-2 Iron Mountain Design– Build Road Rehabilitation/ Reconstruction $2M March 2017 7 FHWA Central Federal Lands Highway Division Lahaina Bypass 1B-2 Design–Build Road, Bridge, Drainage New Construction/ Expansion $39M Jan 2017 8 Arizona DOT Grand–Bell Traffic Interchange Design– Build Road, Bridge, Other New Construction $42M Jan 2016 9 ConnecticutDOT Route 8 Design–Build Design– Build Road, Bridge, Drainage Rehab/Recon $36M Jun 2015 10 Missouri DOT St. Louis District Safety Design–Build Road, Bridge, Drainage, ITS New Construction/ Expansion $24M Jul 2017 11 New York State DOT Wellwood Bridge Design– Build Bridge Reconstruction $20M Spring 2016 12 Vermont Agency of Transportation I-89 in Milton Design–Build Bridge Reconstruction $23M Fall 2013 13 Colorado DOT I-25–Cimarron Design–Build Design– Build Road, Bridge, Drainage, ITS Rehab/Recon $72M Mar 2015 14 North Carolina DOT Business 40 (Salem Parkway) Design– Build Road, Bridge New Construction $99M Fall 2017 15 Maryland DOT State Highway Administration MD 404–US 50 to East of Holly Road Design– Build Road, Bridge New Construction/ Expansion $105M Jun 2016 16 Caltrans Devore Interchange Design–Build Road, Bridge Reconstruction $208M Dec 2012 17 Florida DOT E2U46 I-95 @ I-295Interchange Design– Build Road Reconstruction $177M July 2016 18 Georgia DOT Northwest Corridor Project Design– Build Road, Bridge, Drainage, ITS New Construction/ Expansion $600M Oct2014 19 Washington State DOT I-405, NE 6th Street to I-5–NB Hard Shoulder Running and ETL Improvement Design– Build Road, Drainage, ITS Rehabilitation/ Reconstruction $155M Feb 2012 Note: Con. = construction; SR = state route; ITS = intelligent transportation system; NB = northbound; ETL = express toll lane. Design–Build <$10 million Design–Build $10 million to $50 million Design–Build >$50 million Table 5.2. Design–build case studies. Figure 5.2. Initial case study distribution.

Case Study Project Selection 27 5.4 Summary The case study approach to this research project resulted in analysis of 30 projects from 18 state agencies. These construction projects were executed using D-B or CM-GC contract- ing methods, and sizes ranged from $2 million to $600 million. The diversity in project size, contracting method, and state agencies allowed the research team to conduct a thorough investigation and identify a variety of contract administration tools and methods used to deliver the projects. Case Study No. Agency Project Name Contract Type Primary Facility Type Project Type Dollar Value Con. Start Date Construction Manager–General Contractor $10 million to $50 million 20 Colorado DOT I-70 Vail Underpass CM-GC Road, Bridge New Construction/ Expansion $31M Oct2015 21 Colorado DOT US 6 and 19th Interchange CM-GC Road, Bridge, Drainage New Construction/ Expansion $25M Feb 2016 22 Colorado DOT I-25/Arapahoe CM-GC CM-GC Road, Bridge, Drainage, ITS Rehabilitation/ Reconstruction $50M May 2016 23 FHWA Central Federal Lands Highway Division South Fork Smith River Road CM-GC Bridge Rehabilitation/ Reconstruction $15M Aug 2013 24 Caltrans I-215/Barton Road Interchange CM-GC Road, Bridge Reconstruction $47M Nov 2017 25 Utah DOT SR-108; SR-127 to SR-107 CM-GC Road Reconstruction/Expansion $50M Mar 2017 Construction Manager–General Contractor >$50 million 26 Minnesota DOT Winona Bridge CM-GC Bridge New Construction/ Expansion, Rehabilitation/ Reconstruction $147M Aug 2014 27 Arizona DOT Ina Road Traffic Interchange–GMP 1 CM-GC Road New Construction/ Expansion, Rehabilitation/ Reconstruction $124M July 2016 28 Colorado DOT SH 82/Grand Avenue Bridge CM-GC Road, Bridge New Construction/ Expansion $75M Jan 2016 29 Minnesota DOT TH 53 CM-GC Road, Bridge New Construction/ Expansion $156M Nov 2015 30 Colorado DOT E-470 Widening–Parker to Quincy CM-GC Road, Bridge, Drainage New Construction/ Expansion $90M Spring 2016 Note: SH = state highway; TH = trunk highway. Table 5.3. Construction manager–general contractor case studies.

The use of alternative contracting methods (ACMs) has accelerated the delivery of highway design and construction projects. These changes came about through efforts of the Federal Highway Administration (FHWA) and state agencies over the last 30 years.

The TRB National Cooperative Highway Research Program's NCHRP Research Report 939: Guidebooks for Post-Award Contract Administration for Highway Projects Delivered Using Alternative Contracting Methods, Volume 3: Research Overview provides the necessary methods and tools to help state agencies better administer Design–Build (D-B) and construction manager–general contractor (CM-GC) contracts on highway construction projects.

This Research Report documents the rigorous process followed to produce these two Guidebooks.

Vol. 1, on design-build delivery , and Vol. 2, on construction manager–general contractor delivery , are also available.

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Case Studies

Chapter 1: Case Study

Aerospace canada corporation project selection .

You work as a Human Resources Manager for Aerospace Canada Corporation (ACC).  Your company is a Canadian nonprofit corporation that operates federally funded research and development.  You provide technical advice on space missions to the Canadian military. You work closely with the ARC Space Force and the National Space Office.  You provide technical analysis and assessments for space programs that serves Canada’s interests.

The company has 5 Chief Executive Officers, 10 Board of Trustees,  8 Research and Development employees, 20 Space Systems employees, 15 Performance Engineers, 20 Classified IT Design Engineers,  10 Electrical engineers, 7 Information Systems Security Officers, 5 Technical Software Engineers, 14 Cyber Systems Engineers, 10 Buyers, 5 Systems Directors, 12 Program Assistants, 8 Quality Assurance Engineers, 4 Remote Sensing Scientists, 20 Project Leaders, 12 Human Resources Specialists, 5 Administrative Accounting Specialists, 32 Administrative Support employees.

ACC has over 400 projects that are funding each year.  They have used several models in the past for project selection to meet their goals and respecting their budgets and resource constraints, and minimizing risk. The business development and research team are responsible for reviewing all the projects and selecting the optimal portfolio for the upcoming year. In the past, the focus has always been on maximum returns on the budget and to remain at or above the market norms.   These decisions reflected a priority based on sales only.

ACC is looking to implement a new strategy for project selection. It has been discussed that the business development and research team should not be involved with the project selection.  However, no one knows exactly who should be involved, how to set up a new system, or who should be making these important decisions for ACC.

You are the Human Resources Manager of ACC.  You have been privy to the information that has been shared at the executive level.  You believe that you can have an impact on the project selection that will support the goals of honouring sales, while providing growth, reducing risk, and maximizing profits.

• Who would you speak to at ACC to show your interest?
• How would you go about marketing your HR department to help with this task?
• What would be included in your proposal to spear head this plan?
• Who would you involve in the project selection process?

Chapter 1: Case Study Copyright © 2022 by Debra Patterson. All Rights Reserved.

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