Alternative Project Delivery Methods: Assessing and Allocating Risk to Increase Competition (2025)
Chapter: Front Matter
TRANSPORTATION RESEARCH BOARD 2025 EXECUTIVE COMMITTEE*
OFFICERS
Chair: Leslie S. Richards, Professor of Practice, University of Pennsylvania, Philadelphia
Vice Chair: Joel M. Jundt, Secretary of Transportation, South Dakota Department of Transportation, Pierre
Executive Director: Victoria Sheehan, Transportation Research Board, Washington, DC
MEMBERS
James F. Albaugh,President and CEO, The Boeing Company (retired), Scottsdale, AZ
Carlos M. Braceras,Executive Director, Utah Department of Transportation, Salt Lake City
Douglas C. Ceva,Vice President, Customer Lead Solutions, Prologis, Inc., Jupiter, FL
Nancy Daubenberger,Commissioner of Transportation, Minnesota Department of Transportation, St. Paul
Marie Therese Dominguez,Commissioner, New York State Department of Transportation, Albany
Garrett Eucalitto,Commissioner, Connecticut Department of Transportation, Newington
Andrew Fremier,Executive Director, Metropolitan Transportation Commission, San Francisco, CA
Martha Grabowski,Professor Emerita, Information Systems, Le Moyne College, Madden College of Business and Economics, Cazenovia, NY
Randell Iwasaki,President and CEO, Iwasaki Consulting Services, Walnut Creek, CA
Carol A. Lewis,Professor, Transportation Studies, Texas Southern University, Houston
Scott C. Marler,Director, Iowa Department of Transportation, Ames
Ricardo Martinez,Adjunct Professor of Emergency Medicine, Emory University School of Medicine, Decatur, GA
Russell McMurry,Commissioner, Georgia Department of Transportation, Atlanta
Craig E. Philip,Research Professor and Director, VECTOR, Department of Civil and Environmental Engineering, Vanderbilt University, Nashville, TN
Steward T.A. Pickett,Distinguished Senior Scientist, Cary Institute of Ecosystem Studies, Millbrook, NY
Susan A. Shaheen,Professor and Co-Director, Transportation Sustainability Research Center, University of California, Berkeley
Marc Williams,Executive Director, Texas Department of Transportation, Austin
EX OFFICIO MEMBERS
Derek Barrs,Administrator, Federal Motor Carrier Safety Administration, Washington, DC
Bryan Bedford,Administrator, Federal Aviation Administration, Washington, DC
Michael R. Berube,Deputy Assistant Secretary for Sustainable Transportation, U.S. Department of Energy, Washington, DC
Steven G. Bradbury,Deputy Secretary, U.S. Department of Transportation, Washington, DC
Steven Cliff,Executive Officer, California Air Resources Board, Sacramento
Drew Feeley,Acting Administrator, Federal Railroad Administration, Washington, DC
David Fink,Administrator, Federal Railroad Administration, Washington, DC
LeRoy Gishi,Chief, Division of Transportation, Bureau of Indian Affairs, U.S. Department of the Interior, Germantown, MD
Firas Ibrahim,Director, Office of Research, Development, and Technology, Office of the Assistant Secretary for Research and Technology (OST-R), Washington, DC
Jason Kelly,Deputy Commanding General for Civil Works and Emergency Operations, U.S. Army Corps of Engineers, Washington, DC
Sandra Knight,President, WaterWonks, LLC, Washington, DC
Sean McMaster,Administrator, Federal Highway Administration, Washington, DC
Marcus J. Molinaro,Administrator, Federal Transit Administration, Washington, DC
Jonathan Morrison,Administrator, National Highway Traffic Safety Administration, Washington, DC
Niloo Parvinashtiani,Engineer, Mobility Consultant Solutions, Iteris Inc., Fairfax, VA, and Chair, TRB Young Participants Council
Paul Roberti,Administrator, Pipeline and Hazardous Materials Safety Administration, Washington, DC
Karl Simon,Director, Transportation and Climate Division, U.S. Environmental Protection Agency, Washington, DC
Paul P. Skoutelas,President and CEO, American Public Transportation Association, Washington, DC
Jim Tymon,Executive Director, American Association of State Highway and Transportation Officials, Washington, DC
Sang Yi,Acting Administrator, U.S. Maritime Administration, Washington, DC
________________________
*Membership as of August 2025.
NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM
NCHRP RESEARCH REPORT 1160
Alternative Project Delivery Methods
ASSESSING AND ALLOCATING RISK TO INCREASE COMPETITION
Sidney Scott III
Linda Konrath
HKA
Philadelphia, PA
Michael Garvin
Virginia Tech
Blacksburg, VA
Daniel Tran
University of Kansas
Lawrence, KS
Steven DeWitt
Transportation Infrastructure Solutions PLLC
Raleigh, NC
Douglas Gransberg
Gransberg and Associates, Inc.
Norman, OK
Michael Loulakis
Capital Project Strategies, LLC
Reston, VA
Dan Dawood
The Transtec Group
Harrisburg, PA
Subscriber Categories
Administration and Management • Construction • Finance
Research sponsored by the American Association of State Highway and Transportation Officials in cooperation with the Federal Highway Administration
2025
NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM
Systematic, well-designed, and implementable research is the most effective way to solve many problems facing state department of transportation (DOT) administrators and engineers. Often, highway problems are of local or regional interest and can best be studied by state DOTs individually or in cooperation with their state universities and others. However, the accelerating growth of highway transportation results in increasingly complex problems of wide interest to highway authorities. These problems are best studied through a coordinated program of cooperative research.
Recognizing this need, the leadership of the American Association of State Highway and Transportation Officials (AASHTO) in 1962 initiated an objective national highway research program using modern scientific techniques—the National Cooperative Highway Research Program (NCHRP). NCHRP is supported on a continuing basis by funds from participating member states of AASHTO and receives the full cooperation and support of the Federal Highway Administration (FHWA), United States Department of Transportation.
The Transportation Research Board (TRB) of the National Academies of Sciences, Engineering, and Medicine was requested by AASHTO to administer the research program because of TRBʼs recognized objectivity and understanding of modern research practices. TRB is uniquely suited for this purpose for many reasons: TRB maintains an extensive committee structure from which authorities on any highway transportation subject may be drawn; TRB possesses avenues of communications and cooperation with federal, state, and local governmental agencies, universities, and industry; TRBʼs relationship to the National Academies is an insurance of objectivity; and TRB maintains a full-time staff of specialists in highway transportation matters to bring the findings of research directly to those in a position to use them.
The program is developed on the basis of research needs identified by chief administrators and other staff of the highway and transportation departments, by committees of AASHTO, and by the FHWA. Topics of the highest merit are selected by the AASHTO Special Committee on Research and Innovation (R&I), and each year R&Iʼs recommendations are proposed to the AASHTO Board of Directors, the FHWA, and the National Academies. Research projects to address these topics are defined by NCHRP, and qualified research agencies are selected from submitted proposals. Administration and oversight of research contracts are the responsibilities of NCHRP.
The needs for highway research are many, and NCHRP can make significant contributions to solving highway transportation problems of mutual concern to many responsible groups. The program, however, is intended to complement, rather than to substitute for or duplicate, other highway research programs.
NCHRP RESEARCH REPORT 1160
Project 23-22
ISSN 2572-3766 (Print)
ISSN 2572-3774 (Online)
ISBN 978-0-309-60091-0
Library of Congress Control Number 2025951183
© 2025 by the National Academy of Sciences. National Academies of Sciences, Engineering, and Medicine and the graphical logo are trademarks of the National Academy of Sciences. All rights reserved.
COPYRIGHT INFORMATION
Authors herein are responsible for the originality and accuracy of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein.
The National Academy of Sciences (NAS) grants permission to reproduce written material in this publication for classroom and non-commercial purposes subject to the rights of any third parties and appropriate attribution. Permission is given with the understanding that none of the material will be used to imply NAS, TRB, AASHTO, APTA, FAA, FHWA, FTA, GHSA, or NHTSA endorsement of a particular product, method, or practice. For other uses of the written material, users must request permission from the National Academies Press.
NOTICE
The research report was reviewed by the technical panel and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the National Academies of Sciences, Engineering, and Medicine.
This material is based upon work supported by the FHWA under Agreement No. 693JJ32350025. Any opinions, findings, and conclusions or recommendations expressed or implied in this document are those of the researchers who performed the research and are not necessarily those of the Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; the FHWA; or the program sponsors.
The Transportation Research Board does not develop, issue, or publish standards or specifications. The Transportation Research Board manages applied research projects which provide the scientific foundation that may be used by Transportation Research Board sponsors, industry associations, or other organizations as the basis for revised practices, procedures, or specifications.
The Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; and the sponsors of the National Cooperative Highway Research Program do not endorse products or manufacturers. Trade or manufacturersʼ names or logos appear herein solely because they are considered essential to the object of the report.
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NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM
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The National Academy of Sciences was established in 1863 by an Act of Congress, signed by President Lincoln, as a private, nongovernmental institution to advise the nation on issues related to science and technology. Members are elected by their peers for outstanding contributions to research. Dr. Marcia McNutt is president.
The National Academy of Engineering was established in 1964 under the charter of the National Academy of Sciences to bring the practices of engineering to advising the nation. Members are elected by their peers for extraordinary contributions to engineering. Dr. Tsu-Jae Liu is president.
The National Academy of Medicine (formerly the Institute of Medicine) was established in 1970 under the charter of the National Academy of Sciences to advise the nation on medical and health issues. Members are elected by their peers for distinguished contributions to medicine and health. Dr. Victor J. Dzau is president.
The three Academies work together as the National Academies of Sciences, Engineering, and Medicine to provide independent, objective analysis and advice to the nation and conduct other activities to solve complex problems and inform public policy decisions. The National Academies also encourage education and research, recognize outstanding contributions to knowledge, and increase public understanding in matters of science, engineering, and medicine.
Learn more about the National Academies of Sciences, Engineering, and Medicine at www.nationalacademies.org.
The Transportation Research Board is one of four centers of the National Academies of Sciences, Engineering, and Medicine. The mission of the Transportation Research Board is to mobilize expertise, experience, and knowledge to anticipate and solve complex transportation-related challenges. The Boardʼs varied activities annually engage more than 5,500 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state departments of transportation, federal agencies including component administrations of the U.S. Department of Transportation, and other organizations and individuals interested in the development of transportation.
Learn more about the Transportation Research Board at www.TRB.org.
COOPERATIVE RESEARCH PROGRAMS
CRP STAFF FOR NCHRP RESEARCH REPORT 1160
Monique R. Evans,Director, Cooperative Research Programs
Waseem Dekelbab,Deputy Director, Cooperative Research Programs, and Manager, National Cooperative Highway Research Program
David M. Jared,Senior Program Officer
Dajaih Bias-Johnson,Senior Program Assistant
Natalie Barnes,Director of Publications
Brendan Foht,Senior Editor
NCHRP PROJECT 23-22 PANEL
Field of Administration—Area of Agency Administration
Carmen Swanwick,Utah Department of Transportation, Salt Lake City, UT (Chair)
Sam Beydoun,Washington, DC
Debra R. Brisk,DRB Consulting, LLC, Buffalo, MN
Lisa Choplin,Whitman, Requardt and Associates, LLP, Baltimore, MD
Jay J. Hietpas,Minnesota Department of Transportation, St. Paul, MN
Mohab Hussein,New Jersey Department of Transportation, Ewing Township, NJ
Suril Shah,Virginia Department of Transportation, Richmond, VA
Matthew Corrigan,FHWA Liaison
FOREWORD
By David M. Jared
Staff Officer
Transportation Research Board
NCHRP Research Report 1160: Alternative Project Delivery Methods: Assessing and Allocating Risk to Increase Competition presents a guide to help state departments of transportation (DOTs) and other project owners integrate risk analysis into their project development processes to determine the optimal risk allocation for projects using alternative project delivery (APD) methods and incorporate risk allocation into procurement documents in a manner that attracts competition and minimizes risk premiums. The guide includes tools and techniques that project owners can use to apply its methodologies and effectively manage risks post-award. The guide should be of value to project owners seeking to understand inherent risks in projects and identify ways to mitigate or manage those risks, including allocating some degree of risk to contractors.
State DOTs have increased their use of APD methods such as design-build and public-private partnerships to deliver construction projects. The assessment and assignment of financial risk to the selected contractor is a critical element in the development of a solicitation by the state DOT or other project owner. How risk is allocated and the degree to which risk is transferred from the state DOT/owner to the contractor influences potential biddersʼ decisions to propose on projects and how to structure and price their proposals. APD is typically used for large construction projects, but only a limited number of engineering and construction companies can assume significant financial risk. Assigning increasing levels of financial risk to the contractor, accompanied by commensurate increases in bid prices, can be expected to reduce the number of competitive bids and may also attract unqualified and/or unresponsive bidders. Research was needed to develop guidelines for state DOTs/owners on how to (1) assess project risk and apportion that risk between the owner and the contractor, and (2) effectively convey risk within the procurement documents to attract responsive and competitive bids when APD is used.
Under NCHRP Project 23-22, “Alternative Project Delivery Methods: Assessing and Allocating Risk to Increase Competition,” HKA was asked to (1) develop a methodology to identify, assess, and quantify risk within completed and active projects delivered with APD methods, integrating processes that consider the perspectives of state DOTs, other project owners, and potential bidders; and (2) produce a guide for state DOTs and other project owners on how to integrate risk analyses within their project development processes and effectively incorporate risk allocation in procurement documents. The guide was to include tools and techniques to aid end users in applying the methodology and effectively managing risk post-award. The methodology was developed with significant input from state DOTs and pertinent industry representatives in both phases of the research.
In addition to NCHRP Research Report 1160, the following deliverables can be found on the National Academies Press website (nationalacademies.org/publications) by searching for NCHRP Research Report 1160: Alternative Project Delivery Methods: Assessing and Allocating Risk to Increase Competition:
- A conduct of research report summarizing the entire effort, available as NCHRP Web-Only Document 434: Defining Contractual Risk Profiles to Increase Competition on Alternative Project Delivery Methods.
- A plan that identifies mechanisms and channels for implementing and communicating this research.
CONTENTS
Chapter 2 Risk Management Across the Project Lifecycle
Chapter 3 Risk Allocation Strategies
3.1 Typical Project Risks and Allocation Strategies
3.2 Project Readiness Framework
Appendix A Potential Tools for Fixed-Price APDs
Appendix B Additional Tools for Progressive APD Methods
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