INNOVATIVE CONTRACTING PRACTICES - THE NEW WAY TO UNDERTAKE PUBLIC WORKS PROJECTS

This article discusses the application of some new and old concepts and principles to produce innovation in public works contracting practices. These concepts are based on the work of the Transportation Research Board Task Force on Innovative Contracting Practices. It is noted that within the traditional concepts of "lowest responsible bidder," certain modifications can be advanced with a fairly high degree of probability that they will improve the public works contracting process. The rationale for the lowest bidder concept is discsussed. The importance of specifications is discussed, and it is pointed out that in innovative contracting there may be considerable modifications of risk assignments and therefore the roles played by both the public and private sectors in the process. The time is money concept is discussed, as well as the use of warranties and guarantees. The use of contractor responsibility determinations is also discussed. World Bank experiences with innovative bidding are described. The need for identifying and rewarding good performance is noted. Other areas discussed include the use of end result specifications, the design concept, and the use of privatization. Comments are also made on the disputed work processes, the no claims clauses and exculpatory contract language, and negotiated competitive bidding.