Can a State DOT (and Federal funds) pay for the development costs of VECPs?
It is FHWA’s position that contractors should not be reimbursed for VECP development costs because the VECP process must involve a shared risk between a contractor and the State DOT. Without a shared risk, the process is unbalanced. A contractor benefiting from both the VECP dollar savings and reimbursement for his/her development and implementation cost has no risk. Having no risk would allow a contractor to flood a State with all types of cost saving ideas that may or may not benefit a project instead of only legitimate, supportable VECPs that benefit a project. AASHTO’s VE Guide also indicates this cost should be paid by the contractor by stating “a contractor’s participation in a VECP program involves a certain amount of risk. It costs money to search for realistic savings that will be shared by the State.” While the policy of not reimbursing VECP development costs is the best practice, FHWA should not prohibit a State DOT from choosing to reimburse these costs. If a State chooses
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- Can a State DOT (and Federal funds) pay for the development costs of VECPs?
