Reduction and fair allocation of risk are of tantamount importance to procurement reform. Risk-taking can be characterized as follows.
Legal, administrative, and institutional risks are inherent in using a non-traditional contracting method, and are generally assumed by the owner, who must be convinced of his interests.
Technical risks in using innovative construction methods and products whose performance histories are as not as long as typical methods and products are a reality and must be overcome to establish credibility.
Personal risks taken by government project officers and contract project managers when they decide to carry out a project using innovative products and processes are not encouraged.
The first two types of risk are often discussed explicitly, but personal risks are also nettlesome because they are often not clearly articulated and because individual tolerances for risk vary widely from person to person. Civil engineers tend to be risk-averse on the whole - and rightfully so, since the structures they design, build, and maintain must be safe for everyday use by millions of people. Project officers and managers may risk their job approval, or even their jobs, when they use non-traditional construction materials or methods during a project. For instance, conference attendees reported seeing failures of highway pavements and bricks used in low-rise building construction because project specifications were changed to allow the contractors to use local aggregate, which was believed to be of inferior quality. When the failures occurred, those responsible for changing the project specifications lost their jobs. This sends a very strong message to designers and contractors that those who innovate and fail - or even those who innovate and do not achieve wild success -- face dire consequences.
If both outcomes and the willingness to take risks were rewarded by public and private organizations, the transportation community could use successful projects as models to be followed. "Lessons learned" from less successful endeavors would help improve future projects and advance the state of the practice.
While administrators have the power to change outdated ways of doing business, to recruit key personnel, and to create more opportunities for educating both government staff and contractors on how innovations should be incorporated into infrastructure projects, conversations during the workshop suggested that another, more subtle force is at work to maintain the status quo. Risk and change are perceived solely in the negative, rather than as opportunities to advance the state of the practice State DOTs repeatedly stated during the workshop that local field offices of FHWA and other agencies, which carry out the policies developed in Washington, did not support state-level reform efforts, despite numerous national policies which support these efforts in word if not deed. This came as a surprise to the national DOT leadership, who had assumed that their policies were naturally "trickling down" to the local level. As mentioned previously, the reasons for this may be that risk-taking and innovation are not rewarded and in fact are often discouraged in
transportation projects.
A shift in this perception of risk-taking, formalized by partnering agreements and more cooperation among all parties involved in the transportation community, would go a long way toward creating an atmosphere conducive for reforming procurement to encourage innovation in materials use. To bring about this attitudinal shift, the creation of new and streamlined procedures to ensure that all parties are more comfortable using innovative procurement strategies is necessary.
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