Stipends in Highway Design–Build Projects

Abstract

Considering that little guidance exists for determining the appropriate stipend amount in design–build projects, the goal of this study is to benchmark the current practices regarding stipends and determine the relative importance of their impact on project outcomes in highway projects across the United States. Analyzing 125 requests for proposals (RFPs) across 15 states showed that the average stipends provided by DOTs were 0.5% of the total project value. While the actual stipend provided varies significantly among states and even for projects delivered within a state, there was a statistically significant negative correlation between contract value and percent of stipend (−0.483). Furthermore, a Kruskal-Wallis test revealed a significant difference between the percent of stipend provided for different groups of contract values. Significantly, this finding implies that the stipend amount should vary for projects with smaller contract values (e.g., less than $20 million). Finally, the results of the questionnaire distributed to state DOTs showed that owners benefit by providing stipends because they increase competition, attract more bidders, enhance proposal quality, and receive a good rate of return on investment (e.g., higher competition resulting in lower project costs). To ensure these benefits, the results of this study encourage providing stipends for proposals related to projects with high complexity and projects with a high level of design effort.