Research: Are Alternative Technical Concepts Working?

Public Works Financing: ATCs can be a valuable tool for engaging bidders early in the procurement process to propose cost-saving ideas. A recent study done in July for Texas DOT’s Strategic Projects Division found $210 million in ATC savings on six of its design-build and P3 procurements, which together have a project value of $10.8 billion.

However, research done this year by Michael Garvin and Noah Jolley at Virginia Tech, quoted one stakeholder on a large P3 project saying that “the proposer-specific approach to ATCs creates challenges that may not outweigh the potential benefits,” and that “clients [state DOTs] are still getting 90% percent of the value through general addenda process” and that “it’s probably not worth taking that procurement risk to glean what might be a fairly small residual benefit.”

Proposition: ATCs have been used by state DOTs for over 15 years, yet are not universally seen as an effective way to promote innovation in P3 projects.

Discussion leader Nancy Smith, Nossaman

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About Bill Reinhardt

Editor of Public Works Financing newsletter
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