Open-Book Pricing Practices for Construction Manager/General Contractor and Progressive Design-Build Projects

By: Transportation Research Board and National Academies of Sciences, Engineering, and Medicine and Douglas D. Gransberg and National Cooperative Highway Research Program and Marko Pala

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Synopsis: Open-book negotiations for determining construction pricing for transportation agencies can enhance cost certainty, optimize risk allocation, and ultimately lead to more efficient project delivery. In a survey of 42 state departments of transportation (DOTs), key insights arise in how agencies negotiate construction costs post-award, collaborate with independent cost estimators, and manage project contingencies. Additionally, case examples reveal the critical role of trust and transparency in ensuring fair and reasonable guaranteed maximum prices. NCHRP Synthesis 653: Open-Book Pricing Practices for Construction Manager/General Contractor and Progressive Design-Build Projects, from TRB’s National Cooperative Highway Research Program, explores the complexities of alternative project delivery methods for state DOTs, with a focus on transparency, risk management, and cost negotiation.