CHAPTER 2

Literature Review

The information gathered in the literature review included the following:

• Components of direct costs,
• Detailed development of unit costs for self-performed work,
• Subcontract and material supply details,
• Components of the construction services fee,
• Development of project contingency,
• Identification and allocation of specific risks,
• Roles and responsibilities of an ICE, and
• Off-ramp triggers and procedures.

2.1 Background

A key differentiator in the procurement of CM/GC and PDB contracts is that the construction cost is not fixed when the contract is awarded as in traditional DBB and lump sum DB contracts (Loulakis 2013; Clark 2015). Once the design has advanced to a point at which costs can be estimated, the open-book process begins when the first OPCC is provided by the contractor, which is then compared with the project’s budget, resulting in a refinement of scope if necessary. As the detailed design is developed, several additional OPCCs are provided and negotiated until the final design is complete. The final contract amount is negotiated after the selection of the CM/GC contractor or progressive design-builder, which permits risk to be negotiated along with the cost and results in the joint setting of the project’s final risk profile (Alleman and Tran 2020). As a result, CM/GC and/or PDB project delivery is often utilized in complex projects in which it is difficult or impossible to quantify the risk until the design has advanced to a point at which design decisions can be informed by site investigation results, environmental constraints, availability of right of way (ROW), and utility identification, and agreements. In addition, CM/GC and/or PDB project delivery is often utilized in complex projects in which it is difficult or impossible to quantify the risk until other third-party impacts to the final project’s configuration are known [Loulakis 2013; Design-Build Institute of America (DBIA) 2017].

To put it differently, a collaborative approach to planning, design, and construction is required to achieve key project success factors. Barutha et al. (2021) found that creating an environment of trust and transparency was essential to enabling the collaborative delivery of a complex project. Open-book estimating and negotiations are the essence of transparency. When done well, the change from closed-book pricing to open-book pricing indeed turns “contractors into advocates for project success” (Bagwell and Henley 2020).

Thus, this synthesis focuses on the mechanics of open-book estimating practices currently used by state DOTs. The study will not attempt to delve into the other practices found in CM/GC

and PDB but rather collect, categorize, and synthesize the elements of the process for assembling a final negotiated construction cost in a manner that permits determining different DOT approaches and captures any observed experience gained. The synthesis comprises a comprehensive state of the practice on open-book estimating and negotiations within state DOTs. Before the mechanics of open-book pricing can be explored, a brief description of the CM/GC and PDB project delivery methods is needed.

2.1.1 CM/GC Basics

According to West et al. (2012), “CMGC has been widely used in the private sector since the early 1980s and, more recently, in the public sector.” CM/GC’s core delivery structure is based on early contractor involvement to provide construction advisory service. The initial phase is termed the preconstruction phase and involves assisting the DOT and designer by providing cost estimating, scheduling, value engineering, constructability reviews, subcontractor bid packages, and other services (Park 2011). As the design advances, the CM/GC will offer the owner a proposal to perform the actual construction. Upon mutual agreement on the price, terms, and conditions for the construction, the CM/GC contractor will transition to the role of a general contractor and build the project in accordance with the construction documents developed by the designer (Clark 2015). This structure is shown in Figure 1.

CM/GC is distinguished by the negotiated pricing used to set the construction contract amount during the preconstruction phase. Thus, the owner can award a CM/GC contract “without the need to produce a biddable set of construction documents as in DBB or a biddable scope of work as in lump sum DB” (West et al. 2012). CM/GC enjoys a level of scope flexibility not found in DBB and lump sum DB (Dongo 2020). The owner can have the CM/GC develop priced alternatives as a way to inform major design decisions. The use of open-book estimating for construction costs during negotiations makes it possible to mitigate and manage risks so that they are included in the final price (Shrestha et al. 2022).

2.1.2 PDB Basics

According to the DBIA (2023), PDB is not a separate delivery method, but rather merely an option for delivering DB projects, as are lump sum DBs and bridging DBs. Lump sum DB requires a biddable scope of work (approximately 15–30%) used by competing design-builders to

bid a lump sum price for completing the design and project (DBIA 2023). Bridging DB involves a prescriptive design (roughly 60–90%) completed by a preliminary design consultant for which most of the major design decisions have been made and are not expected to change (DBIA 2023). The design-builder’s designer merely advances the bridging design to completion.

All DB delivery systems share one thing in common: a single point of responsibility for both design and construction (Friedlander 2003). The owner awards the project to a single entity for the design and construction tasks. In PDB, the owner can negotiate risk, if it chooses, and jointly allocate responsibilities with the design-builder. Figure 2 is the DB delivery model’s contract structure.

PDB provides a response to estimating a reasonable and realistic price for work that will be detailed after the contract is awarded. In PDB, the design-builder is selected either on qualifications alone or on a best-value basis with limited pricing (Loulakis 2013). The PDB team interacts with the owner during the design process, with the value of each design package being negotiated when all fundamental design decisions have been made and the risk of scope changes has passed. Hence, the contingencies are generally limited to those typically found in a DBB bid price to account for material escalation, inclement weather, and so forth.

2.1.3 Summary of Enabling Legislation Requirements

The question of whether specific enabling legislation is required to authorize a delivery method for which the construction cost is negotiated after the contract is awarded rather than fixed before the contract is awarded is important to this discussion. Often, the answer is found in the specifics of the language contained in the existing enabling legislation, which establishes alternative project delivery authority. In some states, the DOT can take advantage of language granting broad authorization for state and municipal agencies. Using language that provides authorization by statute, such as a development agreement whose authorization is already provided in statutes, may allow for the implementation of CM/GC or PDB without the need to seek explicit authorization (Gransberg 2023). The requirements for CM/GC- and/or PDB-enabling legislation occupy a spectrum, running from explicit authorization to negotiated pricing not explicitly forbidden. Thus, no single answer to the requirement for enabling legislation exists, and the synthesis found that a number of DOTs have implemented CM/GC and/or PDB without seeking explicit authority. Utah DOT (UDOT) is perhaps the clearest example. When

it wanted to implement DB for the infrastructure upgrades required to support the 2002 Winter Olympics, it sought authority to utilize best-value contracting rather than DB (Loulakis et al. 2015). As a result, UDOT has used that same authority to implement CM/GC and PDB without the need to return to the legislative process. Ohio DOT (ODOT) is a recent example: Its current DB authorization was interpreted to include PDB (ODOT 2023). Virginia DOT (VDOT) merely added GMP as an authorized payment method to its administrative rules and implemented PDB (Gransberg 2023).

A review and content analysis of relevant state statutes was conducted by the authors in a recent study for GDOT (GDOT 2023). To definitively interpret state statutes requires a professional attorney from the state in question. However, the GDOT study addressed this issue by validating the review of CM/GC and PDB statutes with the DBIA State Statute Report (DBIA 2021) and the Associated General Contractors of America/American Bar Association (AGC/ABA) Construction State Law Matrix (2022).

Next, the context of each statute was categorized as shown in Table 1 as follows:

• “Specifically Authorized (SA): The subject statute either addresses CMGC and/or PDB specifically or it permits DB projects to be awarded on the basis of qualifications and/or negotiation” (Gransberg 2023).
  • – Example: Connecticut: CGSA §§ 13a-95: “The Commissioner of Transportation may, as an alternative to using a design-bid-build contract, designate specific projects to be completed using a construction-manager-at-risk contract with a guaranteed maximum price.”
• “Not Specifically Authorized but in Use (NSAU): The statute does not contain CMGC and/or PDB terminology, but the DOT is currently using CMGC or PDB on known projects. This includes DOTs where the agency is permitted to establish its own project delivery procedures and those that are allowed to use any method that is approved by FHWA on federally funded projects” (Gransberg 2023).
  • – Example: Ohio PDB: Under Ohio Rev. Code § 5517.011, the Ohio DOT may use design-build contracts in order to expedite the sale and construction of highway and bridge projects, and Ohio Rev. Code §§ 125.071, 153.693 (design-build) authorizes “negotiation as a delivery vehicle for public construction.”

Table 1. Categorization of enabling legislative restrictions as of August 2024.

• “Maybe Authorized depending on Interpretation (MAI): CMGC and/or PDB is not expressly forbidden, and a reading of the statute would indicate that projects could potentially be awarded on a basis that permitted the negotiation of construction price after award. This category also covered DOTs who were authorized to use P3, Comprehensive Development Agreements (CDA), and Integrated Project Delivery (IPD), which generally include a negotiated agreement of commercial terms and conditions” (Gransberg 2023).
  • – Example: Indiana PDB: Certain project delivery methods allow the public owner to negotiate contract terms. For example, see I.C. § 5-32-4-1 (negotiating of final terms and conditions of the contract with Construction Manager as Contractor) and I.C. § 5-30-7-8 (negotiating contract terms with Design-Build Contractor).
• “Not Authorized (NA): The statute expressly forbids awarding CMGC or DB without a lump sum price or expressly forbids negotiated contract awards” (Gransberg 2023).
  • – Example: New York: CMGC: N.Y. Highway Law § 38 “Highway contracts require competitive bidding with few exceptions.”
• “Unable to determine (UD): It was impossible to judge based on reading the statutes, or the statutes are so complicated that an MAI categorization was impossible to assign” (Gransberg 2023).

It must also be noted that the results shown in Table 1 can and will change. A recently published paper by Gransberg (2023) on PDB-enabling legislation found that the implementation of PDB without specific authorization comprised a lot more flexibility. The bottom line is the risk tolerance of a given DOT’s upper management of potential scrutiny for implementing negotiated open-book pricing of construction contracts without explicit legislative authority. Further analysis of the results shown in Table 1 is beyond the scope of this synthesis. Nevertheless, it is included to provide a baseline for understanding the differences between states regarding the open-book negotiating of CM/GC and PDB projects.

2.2 Summary of Literature

Table 2 summarizes the results of the literature content analysis regarding the benefits, opportunities, and challenges related to CM/GC and PDB. Its intent is to provide the background of the findings presented in Chapter 5. The sample was restricted to peer-reviewed research and professional papers from 2007 to 2024 found on the Transport Research International Documentation and Google Scholar search engines. The CM/GC and PDB populations included 32 and 14 papers, respectively. A quotation for each factor is provided to furnish a typical explanation.

2.3 Open-Book Methods

Given the variation found across the United States, attempting to objectively categorize DOT open-book negotiating methods is difficult. However, sharing the contractor’s, the engineer’s, and, if appropriate, the ICE’s estimates at each pricing milestone was a way to further differentiate between different DOT approaches. Each has its own rules for which members of the project team will be allowed to see the estimates prepared by other entities:

1. Open, side-by-side comparison of the engineer’s, the contractor’s, and the ICE’s estimates during negotiations. All parties are cognizant of the details of all three estimates.
2. Closed, side-by-side comparison of the engineer’s, the contractor’s, and the ICE’s estimates during negotiations. The agency is the only entity with access to the details of all three estimates.
3. Blind bidding. The contractor’s and ICE’s estimates are submitted in a manner that does not identify the source; the agency then compares the two “bids” to the engineer’s estimate. Details are disclosed to the other parties at the discretion of the agency.

Table 2. CM/GC and PDB benefits, opportunities, and challenges content analysis.

Figure 3 summarizes the approaches found in the content analysis. The trend is clear: A majority of agencies choose the more collaborative open approach and allow each entity to discuss the various aspects of each other’s output during price negotiations. Each agency has its own internal rules that control the level and depth of the discussions. This fact leads one to infer that the open side-by-side approach complements the open-book negotiations process by keeping all aspects of the cost negotiations completely transparent.

Whether an ICE should be required as a component of DOT open-book policy is a matter of the specific DOT’s perception of the value of the money received from the additional cost of the ICE’s fee. Schierholz and Gransberg (2013) found that ICE fees range from 0.15% to 2.5% of estimated construction based on the number of additional preconstruction services assigned to the ICE. Alleman et al. (2017) found an average ICE fee of 0.88%. A 2010 study found that five DOTs had used CM/GC (Alaska, Arizona, Florida, Oregon, and Utah) (Gransberg and Shane 2010). UDOT was the most experienced and the only DOT to include an ICE. In 2013, the number of DOTs with CM/GC experience had increased to 17 and 10 of them required an ICE (Gransberg and Shane 2013). A recent 2022 review (Gransberg 2023) found that 26 DOTs can use CM/GC, of which 19 engage an ICE. The percentage of agencies that implemented CM/GC with ICE has increased from 20% to 73% between 2010 and 2022. Therefore, the state DOTs evaluated found that value was added to the CM/GC project by investing in an ICE.

The final issue was the influence of ICE’s and engineer’s estimates on the decision to accept the contractor’s proposed GMP. Arkansas DOT (ARDOT), Connecticut DOT (CTDOT), MnDOT, Tennessee (TDOT), UDOT, and others will consider the contractor’s estimate as validated if it falls within 10% of the ICE’s and/or the engineer’s estimates, awarding the construction contract at the contractor’s bid price. Delaware DOT (DelDOT) uses 5% as its metric. If the cited metric

is not met, factors that may affect the price of the project are discussed, and an attempt to resolve the discrepancies is made (West et al. 2012).

2.3.1 Open-Book Estimating and Negotiation

Open-book negotiations in CM/GC and PDB contracts require a transparent and collaborative approach to scope quantification, cost estimation, and pricing (Alder 2007; DBIA 2017; Barutha et al. 2021; GDOT 2023). Much of the business and legal literature on open-book contracts discusses the use of time and materials (T&M) reimbursement (Pelletier et al. 2019; Berenguel-Felices et al. 2020). However, that is not the objective of the open-book pricing used for CM/GC and PDB projects. The alternative delivery literature summarizes the key aspects of open-book estimating as follows:

• Transparency (Brown and Caldwell, Co. 2017; DBIA 2017; Bagwell and Henley 2020): Both parties share relevant cost information as agreed in the contract, including detailed breakdowns of costs, such as labor, materials, and overhead.
• Collaborative Decision-Making (Barutha et al. 2021; Salih et al. 2024): Joint decisions are made on the project scope, design changes, and other factors. The owner and contractor work together to find cost-effective solutions.
• Cost Estimation (Alder 2007; Dongo 2020): Detailed cost estimates using agreed-upon cost models are populated using actual expenses and projected costs. The owner is given insight into how costs are calculated.
• Risk Management (Jeong et al. 2022; Friedlander 2003): Risks and uncertainties are discussed openly, and strategies to mitigate them are identified. Contingencies are identified to address risks.
• Flexibility (DBIA 2017; Pelletier et al. 2019): The contract permits adjustments for changes in scope or for unforeseen circumstances. Both parties work together to accommodate changes without compromising transparency.

• Communication (Steinkamp 2017; Finnie et al. 2018): Routine communication and reporting ensure that both parties are current on project progress and financial matters. Issues are addressed promptly through open dialogue.
• Auditability (Mesa et al. 2019; Barutha et al. 2021): Financial records are kept up to date to permit audits and verification of costs.

Transparency and collaboration are the key facets to the ultimate establishment of a price that the owner believes is fair and reasonable (Alpert 2007). The overarching principle of negotiations in the engineering and construction industry is the Good Faith and Fair Dealing Doctrine (Pinto-Nunez et al. 2019). “The duty of good faith and fair dealing is well established in most American jurisdictions” (MacMahon 2014). It is intended to protect a party assigned to a contract from being damaged by the actions of the other party in the contract that are either unfair or done in bad faith. In layman’s terms, the doctrine is “a general assumption of the law of contracts, that people will act in good faith and deal fairly without breaking their word, using shifty means to avoid obligations or denying what the other party obviously understood” (Hill and Hill 2007). In the context of open-book pricing, a well-defined procedure for how the final contract amount contained in the contract will be assembled creates the basis from which good faith can be measured. The development of a joint cost model to be used in negotiations greatly enhances the sense of fair dealing for both parties (West et al. 2012). The second tool to promote successful negotiation is agreement on how markups on costs will be computed. Often, these markups for overhead and profit are established in the CM/GC or PDB solicitation and are evaluated as part of the contract award procedure. If this is not the case, then good practice has found that these markups should be discussed and agreed upon at an early point in the negotiations to allow the focus of the remaining iterations to be on direct costs and quantities of work (Gransberg and Molenaar 2019).

2.3.2 Open-Book Risk Basics

A key difference between CM/GC and PDB from DBB and lump sum DB is the ability to jointly establish the project’s risk profile during both scope development and price negotiations. Public works contracts in the U.S. construction industry have been predicated on risk shedding regardless of the project delivery method (Lopez del Puerto et al. 2016). This predication is primarily due to the preference for fixed-price contract awards. As a result, contractors and design-builders must build contingencies into their bid prices to cover the risk transfer from the owner. The ultimate result is that if those risks are not realized (e.g., no weather delays or differing site conditions during construction), the owner must still pay for the unrealized risks since the contingencies are buried in the bid unit prices and lump sum contract amounts (Castro-Nova et al. 2017). In CM/GC and PDB, the final contract price is unknown when the contract is signed. An initial budget or target price is typically disclosed during procurement. As the scope of work becomes better defined, the value of the technical scope of work and the value of the risk can be mutually agreed upon. Risk sharing is usually less costly than risk shedding (Shrestha et al. 2022). Hence, CM/GC and PDB furnish a method for the owner and contractor to jointly agree on the final risk profile and provide the owner with the estimated costs for risk allocation and mitigation alternatives (Mesa et al. 2019).

Both CM/GC and PDB afford the owner an off-ramp to terminate the contract if a mutually agreed-upon price cannot be achieved. The off-ramp is more problematic in PDB than in CM/GC because the owner does not hold the design contract (Gransberg et al. 2006). The design has typically advanced to a fairly high degree of detail for which the owner has paid in progress payments. Thus, the owner wants to retain the benefit of the work to date, and terminating the entire DB team creates an issue of design liability for partial design products. VDOT uses two

off-ramps in its PDB process, the first of which relates to validating the project’s budget. If the first off-ramp is exercised, the contract permits VDOT to retain the designer of record to complete the design if desired (Roby 2019, VDOT 2022). Lastly, the ability to package the design and construction as well as negotiate progressive package prices and the timing of release for construction (RFC) of completed design packages is completely within the owner’s discretion in both delivery methods.

2.4 GMP Components

Figure 4 is a generic model of the various components of a typical GMP for a CM/GC contract. In PDB, the design-builder would also be compensated for the design fee. The owner’s contingency and the CM/GC’s risk are unique to each agency and should not be construed to be representative of all possible options. The components shown in the figure are defined as follows:

• CM/GC Preconstruction Fee: The amount paid to the CM/GC for services provided during the preconstruction phase, which includes negotiating the open-book GMP.
• Design Fee: The amount paid to the designer of record for the services provided during the design and preconstruction phases.
• Owner’s Contingency: A pool of funds set aside to cover the unknown costs that will arise during the project’s execution.
• CM/GC’s Risk: An amount of money agreed upon to be the value of the risks the CM/GC will be exposed to during construction.
• Construction Services Fee: The agreed-upon value of allowable indirect costs and profit that the CM/GC will be paid in addition to the direct construction costs.
• CM/GC Self-Performed Work Package Costs: The direct costs of the work that the CM/GC will undertake with its own forces.
• Early Work Package/Material Costs: The cost of labor, equipment, and materials for severable work packages that will be released for construction before the design is 100% complete.
• Subcontract Work Package Costs: The direct costs of the work the CM/GC will subcontract.

A major component of the GMP is the project’s direct costs, which have the least uncertainty. Direct costs depend on three factors: level of design development, amount of work outsourced, and allowable amount of self-performed work. According to Clark (2018), “All of these document-able expenditures are set forth without any add-ons—with all the assumptions underlying them clearly stated—to equal a project cost estimate.” A partial list of typical direct costs is as follows:

• Labor hours and rates,
• Units and estimated quantities,
• Unit costs,
• Equipment estimates,
• Production rate estimates,
• Material costs, and
• Subcontractor costs.

The markups on the direct cost are carried into the construction services fee. They generally include profit and indirect costs. Again, each agency has its own rules for what allowable costs are included in the home office overhead, general conditions, and other indirect costs. In addition, every DOT has its own structure for identifying reimbursable cost items in this category. Federal aid projects should follow the federal model as expressed in the AASHTO Guide for Consultant Contracting (2008), which provides definitions of three criteria for these items to be reimbursable. These criteria are as follows:

• Allowable: “a normal cost that a firm would incur in the normal operation of that type of business.”
• Allocable: “a cost that would be normally charged for the service to be received and benefits the contract.”
• Reasonable: “a cost that does not exceed that which would be incurred by a prudent person in the conduct of competitive business.”

Regardless of local preferences and definitions, it is important to remember that non-direct costs are incurred by the contractor and must be compensated before the project becomes profitable. This fact leads one to infer that the earlier allowable indirect costs are quantified, the less controversy they will cause during open-book negotiations. The obvious solution is for the DOT to define exactly how and where each allowable indirect cost will be accounted. In many cases, it is expedient to classify certain costs as direct costs and exclude them from the negotiation of markups. In other cases, DOTs have mandated a specific amount or percentage of estimated construction costs in the CM/GC or PDB solicitation. Communicating the details of how these GMP elements will be accounted before a contract is awarded can lead to benefits. Pelletier et al. (2019) summarized the benefits of clearly defining the elements of the GMP:

[S]pending time to lock-in the variables can help to align estimator opinions on cost and ultimately control budget overruns. Many of these variables can be defined or agreed upon as part of the process when selecting a CM/GC – the owner should opt to define as many of these variables as practical prior to selecting a CM/GC in order to take advantage of market competition. For the variables that can only be established after selection of a CM/GC contractor, these should be negotiated during early days of the project to avoid disagreements later as the process is advanced. This greater level of definition provides benefit to both owner and contractor by reducing subjectivity in how the work should be priced and allowing the parties to concentrate energy on other important facets of the work.

The previous quote applies to PDB and CM/GC. TDOT follows the practice of specifically defining which costs can and cannot be included in the CM/GC construction services fee in its solicitations. Figure 5 is an extract from a TDOT CM/GC request for proposal (RFP) (TDOT 2016) and provides an example of the level of detail necessary to properly define what is contained in the construction services fee and what will be accounted for elsewhere.

2.4.1 Contingency Development

The term contingency does not have a single definition across the United States (Le et al. 2023). NCHRP Research Report 1025: Contingency Factors to Account for Risk in Early Construction Cost Estimates for Transportation Infrastructure Projects (Jeong et al. 2022) determined that virtually every DOT had its own detailed definition. It must also be understood that in DBB and lump sum DB, the contractor’s contingencies are buried in the bid prices and are impossible to identify after the contract is awarded (Dongo 2020). This synthesis will not replicate the work published in NCHRP Research Report 1025. It will use the term contingency to denote the quantified value of the risk identified during negotiations. It is incumbent on the individual DOT to define how contingencies will be computed, allocated, and accessed when risks are realized during the design

Table 3. Contingency estimating methods used by DOTs (Jeong et al. 2022).

or construction phases. Table 3 is drawn from NCHRP Research Report 1025. It shows that state DOTs use four different methods, which are used at 21 state DOTs. It is important to note that some DOTs use more than one method depending on the scale and complexity of a given project. The expected value and Monte Carlo simulation methods provide values for line-item contingencies, whereas the fixed percentage and sliding scale methods are applied to the total estimated project cost. Line-item contingencies permit the agency to reallocate contingency funds as specific risks are retired, which is usually not the case in the percentage methods. Exactly how an agency will compute contingencies and allow access to those funds is an individual DOT business decision that must be described in the CM/GC or PDB project solicitation.

2.5 Literature Takeaways

The following quotations can be described as a summary of the literature:

• “Agencies should have a project delivery “toolbox” that includes different delivery methods so that the agency can choose the right contracting method for each project to deliver the best possible outcomes.” (Balis 2011)
• “Involving the contractors in the planning process is key. It is good if the contractor can get on site with the owner and both perspectives can be heard.” (Finerty 2011)
• “Soon after the award, the owner, designer, and contractor should all meet to define the preconstruction deliverables and agree on expectations. In the preconstruction phase, the owner leads the process. Communication is critical during this phase. The contractor is heavily involved in this phase and can help with innovations and reducing construction costs. During this phase, the team should test and confirm the budget and schedule so that there are no surprises down the road.” (Rowley 2011)
• “Flexibility is also possible with CMGC as the method accommodates changes to the scope during design.” (Alder 2011)
• “The consultant benefits from CMGC through construction phasing, maintenance, and reconciliation of quantities and costs during design.” (Alvarez 2011)

• “CMGC provides maximum opportunity for risk reduction through teamwork and collaboration.” (Park 2011)
• “This delivery method [PDB] is most valuable when owners believe they can lower cost or otherwise improve the outcome by participating directly in design decisions.” (MDEQ 2015)
• “It is not critical for an owner to align scope, budget, and funding before selecting a team for progressive design build. The method allows the owner and selected design-build team to work together to align the project parameters.” [Capital Projects Advisory Review Board (CPARB) 2017]
• “By assigning [the price evaluation factor] relatively little weight in the proposal evaluation process, it allows the overall process to approach QBS. Minimizing the influence of the price-related factor on the selection process is appropriate for PDB.” (Shang and Migliaccio 2020)

The literature sets the stage for the remaining analysis. An emphasis on collaboration seemed to be a theme across most of what the authors reviewed. Collaboration fosters an environment of trust, which in turn creates the ability to discuss difficult issues when the contractors’ numbers are out of line with the owner’s expectations. The open-book process is successful when the dialogue on risk, current market pricing, and schedule assumes a pragmatic slant in which the contractor is allowed to explain where it acquired its pricing and why it is truly reflective of the current construction market.