Public–Private Partnership Project Performance Analysis Compared to Design-Build in Highway Projects
Publication: Journal of Construction Engineering and Management
Volume 148, Issue 11
Abstract
While public-private partnership (PPP) is not an entirely new development in US procurement, the public and private sectors have adopted and applied it slowly, placing the United States behind the PPP global transportation market. Despite research efforts made in different aspects of the PPP delivery method, it is not yet clear whether the PPP delivery method can lead to better performance compared to the widely used design-build (DB) delivery method, particularly when applied to US highway projects. For this paper, the cost and schedule performance of 22 PPP and 122 DB highway projects were statistically compared to determine whether the performance of PPP highway projects was significantly better than DB highway projects. For comparison purposes, two scenarios were created based on the project’s completion date. The first included highway projects completed between 1995 and 2020 (22 PPPs and 122 DBs), and the second included all PPP projects and DB projects completed by 2007 (22 PPPs and 25 DBs). For the first scenario, the study shows that the mean construction intensity of PPP projects was significantly higher (about fivefold) than that of the DB projects ($1,300,000/day versus $267,000/day). This finding also applies to the second scenario; however, the difference was found to be reduced to threefold. In addition, the cost growth of PPP highway projects was significantly lower than DB highway projects in the second scenario ( versus 2.84%). Regarding schedule performance, no significant difference was found in either scenario. This study seeks to determine that the PPP delivery method fast tracks the design and construction of highway projects, as well as saves the overall project costs compared to the DB method. The main contribution of this study to the body of knowledge is that the PPP delivery method outperforms DB in terms of construction intensity and cost growth. This study will also assist US highway agencies and industry practitioners in better selecting an appropriate delivery method based on their key objectives and priorities for future projects.
Get full access to this article
View all available purchase options and get full access to this article.
Data Availability Statement
Some or all data, models, or code that support the findings of this study are available from the corresponding authors upon reasonable request.
Acknowledgments
This research could not be conducted without the help of the project and procurement engineers of state DOTs, who were particularly involved in acquiring the available performance data.
References
AASHTO. 2007. Transportation, invest in our future: Accelerating project delivery. Washington, DC: AASHTO.
AECOM Consultants. 2007. Case studies of transportation public–private partnerships around the World. Washington, DC: Federal Highway Administration.
ASCE. 2021. Report card for America’s infrastructure. Reston, VA: ASCE.
Bain, R. 2010. “Construction risk—What risk?” In Project finance international, 46–50. New York: Thomas Reuters.
Bridge, P. D., and S. S. Sawilowsky. 1999. “Increasing physicians’ awareness of the impact of statistics on research outcomes: Comparative power of the t-test and Wilcoxon rank-sum test in small samples applied research.” J. Clin. Epidemiol. 52 (3): 229–235. https://doi.org/10.1016/S0895-4356(98)00168-1.
BTS (Bureau of Transportation Statistics). 2022. “National highway construction cost index.” Accessed January 10, 2022. https://www.bts.gov/content/national-highway-construction-cost-index-nhcci.
Chasey, A. D., W. E. Maddex, and A. Bansal. 2012. “Comparison of public–private partnerships and traditional procurement methods in North American highway construction.” Transp. Res. Rec. 2268 (1): 26–32. https://doi.org/10.3141/2268-04.
Cramer, D. 2003. Fundamental statistics for social research: Step-by-step calculations and computer techniques using SPSS for windows. London: Routledge.
Cramer, D., and D. L. Howitt. 2004. The SAGE dictionary of statistics: A practical resource for students in the social sciences. Thousand Oaks, CA: SAGE.
Crewson, P. 2006. Applied statistics handbook, 103–123. Bangalore, India: Indian Statistical Institute.
Cui, C., Y. Liu, A. Hope, and J. Wang. 2018. “Review of studies on the public–private partnerships for infrastructure projects.” Int. J. Project Manage. 36 (5): 773–794. https://doi.org/10.1016/j.ijproman.2018.03.004.
Doane, D. P., and L. E. Seward. 2011. “Measuring skewness: A forgotten statistic?” J. Stat. Educ. 19 (2): 1–18. https://doi.org/10.1080/10691898.2011.11889611.
Ellis, R. D., Z. J. Herbsman, and A. Kumar. 1991. “Evaluation of the FDOT Design/Build program.” In Florida Department of Transportation. Project No. 99700-7443-010. Gainesville, FL: Univ. of Florida.
El Wardani, M. A., J. I. Messner, and M. J. Horman. 2006. “Comparing procurement methods for design-build projects.” J. Constr. Eng. Manage. 132 (3): 230–238. https://doi.org/10.1061/(ASCE)0733-9364(2006)132:3(230).
ENR (Engineering News-Record). 2022. “Construction cost index.” Accessed January 10, 2022. https://www.enr.com/economics/historical_indices.
European Commission. 2003. “Guidelines for successful public-private partnerships.” Accessed August 15, 2021. https://ec.europa.eu/regional_policy/sources/docgener/guides/ppp_en.pdf.
Fathi, M., and P. P. Shrestha. 2018. “Performance comparison of design-build projects for highways and buildings.” In Proc., Construction Research Congress 2018, 139–149. Reston, VA: ASCE. https://doi.org/10.1061/9780784481295.015.
Fathi, M., and P. P. Shrestha. 2019a. “Review of previous studies on public-private partnership infrastructure transportation and success factors.” In Proc., Int. Road Federation (IRF) Global R2T Conf., 282–293. Geneva: International Road Federation.
Fathi, M., and P. P. Shrestha. 2019b. “Review of public-private partnerships and the current status of PPP highway projects in the United States.” In Proc., Int. Road Federation (IRF) Global R2T Conf., 271–281. Geneva: International Road Federation.
Fathi, M., and P. P. Shrestha. 2020. “Design-build project performance: Comparison between commercial building and health care building projects.” In Proc., Construction Research Congress 2018: Project management and controls, materials, and contracts, 1091–1100. Reston, VA: ASCE. https://doi.org/10.1061/9780784482889.116.
Fathi, M., P. P. Shrestha, and B. Shakya. 2020. “Change orders and schedule performance of design-build infrastructure projects: Comparison between highway and water and wastewater projects.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 12 (1): 04519043. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000353.
FHWA (Federal Highway Administration). 2017. “Center for innovative finance support: Public private partnerships (P3s).” Accessed August 2, 2021. https://www.fhwa.dot.gov/ipd/p3/default.aspx.
Garvin, M. J. 2010. “Enabling development of the transportation public-private partnership market in the United States.” J. Constr. Eng. Manage. 136 (4): 402–411. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000122.
Gransberg, D. D., D. F. Runde, and S. James. 2000. “The effect of innovative highway construction contract methods.” Accessed May 11, 2020. https://www.proquest.com/docview/208187304/fulltextPDF/CCD6DEFE0AC64DC2PQ/1?accountid=12258.
Infrastructure Partnerships Australia 2007. “Performance of PPPs and traditional procurement in Australia.” Accessed July 1, 2021. https://infrastructure.org.au/wp-content/uploads/2016/12/IPA_PPP_FINAL.pdf.
Iossa, E. 2015. “Contract and procurement design for PPPs in highways: The road ahead.” Economia e Politica Industriale 42 (3): 245–276. https://doi.org/10.1007/s40812-015-0014-5.
Li, S., D. Abraham, and H. Cai. 2017. “Infrastructure financing with project bond and credit default swap under public-private partnerships.” Int. J. Project Manage. 35 (3): 406–419. https://doi.org/10.1016/j.ijproman.2017.01.005.
Liyanage, C., and F. Villalba-Romero. 2015. “Measuring success of PPP transport projects: A cross-case analysis of toll roads.” Transp. Rev. 35 (2): 140–161. https://doi.org/10.1080/01441647.2014.994583.
MacDonald, M. 2002. Review of large public procurement in the UK. London: HM Treasury.
Mangu, S., T. R. Annamalai, and A. Deep. 2021. “Comparison of toll and annuity PPPs: A case study of highway projects in India.” Built Environ. Project Asset Manage. 11 (1): 103–120. https://doi.org/10.1108/BEPAM-12-2019-0138.
Martin, W. E., and K. D. Bridgmon. 2012. Vol. 42 of Quantitative and statistical research methods: From hypothesis to results. San Francisco: Wiley.
Maslak, K., and B. Franz. 2018. “Exploring the growth of public-private partnerships by examining enabling legislation.” In Proc., Construction Research Congress 2018, 95–104. Reston, VA: ASCE. https://doi.org/10.1061/9780784481271.010.
Migliaccio, G. C., S. M. Bogus, and A. Chen. 2010. “Effect of duration of design–build procurement on performance of transportation projects.” Transp. Res. Rec. 2151 (1): 67–73. https://doi.org/10.3141/2151-09.
Minchin, R. E., Jr., X. Li, R. R. Issa, and G. G. Vargas. 2013. “Comparison of cost and time performance of design-build and design-bid-build delivery systems in Florida.” J. Constr. Eng. Manage. 139 (10): 04013007. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000746.
Molenaar, K. R., A. D. Songer, and M. Barash. 1999. “Public-sector design/build evolution and performance.” J. Manage. Eng. 15 (2): 54–62. https://doi.org/10.1061/(ASCE)0742-597X(1999)15:2(54).
O’Connor, J. T., G. E. Gibson Jr., P. P. Shrestha, and G. C. Migliaccio. 2006. Plan for performance benchmarking of SH 130. Austin, TX: Center for Transportation Research, Univ. of Texas at Austin.
Park, H. S., D. Lee, S. Kim, and J. L. Kim. 2015. “Comparing project performance of design-build and design-bid-build methods for large-sized public apartment housing projects in Korea.” J. Asian Archit. Build. Eng. 14 (2): 323–330. https://doi.org/10.3130/jaabe.14.323.
Park, J., and Y. H. Kwak. 2017. “Design-bid-build (DBB) vs. design-build (DB) in the US public transportation projects: The choice and consequences.” Int. J. Project Manage. 35 (3): 280–295. https://doi.org/10.1016/j.ijproman.2016.10.013.
PWF (Public Works Financing). 2016. “Reports.” Accessed March 5, 2020. https://azdot.gov/sites/default/files/2019/08/p3-pwf-feb-2016.pdf.
Qiao, L., S. Q. Wang, R. L. Tiong, and T. S. Chan. 2001. “Framework for critical success factors of BOT projects in China.” J. Struct. Finance 7 (1): 53–61. https://doi.org/10.3905/jsf.2001.320244.
Raisbeck, P., C. Duffield, and M. Xu. 2010. “Comparative performance of PPPs and traditional procurement in Australia.” Construct. Manage. Econ. 28 (4): 345–359. https://doi.org/10.1080/01446190903582731.
Ramsey, D. W., and M. El Asmar. 2015. “Cost and schedule performance benchmarks of US transportation public-private partnership projects: Preliminary results.” Transp. Res. Rec. 2504 (1): 58–65. https://doi.org/10.3141/2504-07.
Razali, N. M., and Y. B. Wah. 2011. “Power comparisons of Shapiro-Wilk, Kolmogorov-Smirnov, Lilliefors and Anderson-darling tests.” J Stat. Model. Anal. 2 (1): 21–33.
Roman, A. V., and C. A. San Bernardino. 2015. A guide to public-private partnerships (PPPs): What public procurement specialists need to know. Herndon, VA: National Institute of Governmental Purchasing (NIGP) Business Council.
Sawilowsky, S. S. 1990. “Nonparametric tests of interaction in experimental design.” Rev. Educ. Res. 60 (1): 91–126. https://doi.org/10.3102/00346543060001091.
Shapiro, S. S., and M. B. Wilk. 1965. “An analysis of variance test for normality (complete samples).” Biometrika 52 (3–4): 591–611. https://doi.org/10.1093/biomet/52.3-4.591.
Shrestha, B., P. P. Shrestha, R. Maharjan, and D. Gransberg. 2022. “Cost, change order, and schedule performance of highway projects.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 14 (1): 04521044. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000523.
Shrestha, P. P. 2007. Performance benchmarking of large highway projects. Austin, TX: Univ. of Texas at Austin.
Shrestha, P. P., and M. Fathi. 2019. “Impacts of change orders on cost and schedule performance and the correlation with project size of DB building projects.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 11 (3): 04519010. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000311.
Shrestha, P. P., and R. Maharjan. 2018. “Effects of change orders on cost growth, schedule growth, and construction intensity of large highway projects.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 10 (3): 04518012. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000264.
Shrestha, P. P., G. C. Migliaccio, J. T. O’Connor, and G. E. Gibson Jr. 2007. “Benchmarking of large design–build highway projects: One-to-one comparison and comparison with design–bid–build projects.” Transp. Res. Rec. 1994 (1): 17–25. https://doi.org/10.3141/1994-03.
Shrestha, P. P., J. T. O’Connor, and G. E. Gibson Jr. 2012. “Performance comparison of large design-build and design-bid-build highway projects.” J. Constr. Eng. Manage. 138 (1): 1–13. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000390.
Shrestha, P. P., K. K. Shrestha, and T. K. Kandie. 2017. “Effects of change orders on the cost and schedule of rural road maintenance projects.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 9 (3): 04517010. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000227.
Skovlund, E., and G. U. Fenstad. 2001. “Should we always choose a nonparametric test when comparing two apparently non-normal distributions?” J. Clin. Epidemiol. 54 (1): 86–92. https://doi.org/10.1016/S0895-4356(00)00264-X.
Songer, A. D., and K. R. Molenaar. 1996. “Selecting design-build: Public and private sector owner attitudes.” J. Manage. Eng. 12 (6): 47–53. https://doi.org/10.1061/(ASCE)0742-597X(1996)12:6(47).
Statology. 2022. “The four assumptions made in a t-test.” Accessed January 8, 2022. https://www.statology.org/t-test-assumptions/.
Tiong, R. L. K. 1996. “CSFs in competitive tendering and negotiation model for BOT projects.” J. Constr. Eng. Manage. 122 (3): 205–211. https://doi.org/10.1061/(ASCE)0733-9364(1996)122:3(205).
Tran, D., J. C. Lampe, S. Bypaneni, and K. Molenaar. 2016. “An empirical comparison of cost growth between highway design-bid-build and design-build projects by project size.” In Proc., Construction Research Congress 2016, 2029–2038. Reston, VA: ASCE. https://doi.org/10.1061/9780784479827.202.
Warne, T. R. 2005. Design build contracting for highway projects: A performance assessment. South Jordan, UT: Tom Warne & Associates, LLC.
World Bank. 2003. World Bank group private sector development strategy implementation progress report. Washington, DC: World Bank.
Information & Authors
Information
Published In
Journal of Construction Engineering and Management
Volume 148 • Issue 11 • November 2022
Copyright
© 2022 American Society of Civil Engineers.
History
Received: Sep 23, 2021
Accepted: Jun 16, 2022
Published online: Aug 26, 2022
Published in print: Nov 1, 2022
Discussion open until: Jan 26, 2023
ASCE Technical Topics:
- Business management
- Comparative studies
- Construction costs
- Construction engineering
- Construction management
- Construction methods
- Design (by type)
- Design-build
- Engineering fundamentals
- Highway and road design
- Infrastructure
- Methodology (by type)
- Practice and Profession
- Project management
- Public private partnership
- Research methods (by type)
- Traffic engineering
- Traffic management
- Traffic signs
- Transportation engineering
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.
Cited by
- Ramy Khalef, Islam H. El-adaway, Advancing Airport Project Delivery: A Comparison of Design–Build and Traditional Methods in Terms of Schedule and Cost Performance, Journal of Management in Engineering, 10.1061/JMENEA.MEENG-5490, 39, 6, (2023).