Be More Like Projects Downtown

The push

For the last few years I watched the contracting side of the military push a new way of buying construction. It is called progressive design-build. The traditional method is design-bid-build. The government finishes a design, contractors bid on it, and the low qualified bid wins. In progressive design-build the government picks one team early, based on qualifications. That team designs the project and negotiates the price as the design firms up. The goal I kept hearing in briefings was plain. Be more like projects downtown.

Congress just made it official. The defense policy bill signed 18 Dec 25 authorized progressive design-build for military construction for the first time. The same law went further. It created a new authority for construction agreements written outside the Federal Acquisition Regulation (FAR), the rulebook for how the government buys things. Lawyers reviewing the new authority note those agreements carry no dollar cap and no end date. Congress gets a notice 14 days before one is signed. That is the oversight.

What the rulebook does

The problem everybody names is delay, and the delay is real. The FAR adds months to a project, and I have sat through my share of them. But often those regulations are what keeps the playing field level for competing contractors. The FAR forces the government to advertise the work where every qualified shop can see it. It forces an award decision that a losing bidder can protest to the Government Accountability Office (GAO), the federal office that hears those complaints. Under the new agreements those protections do not automatically apply, and the GAO generally declines to review those awards at all. Lose one and there is nowhere to take it.

Downtown runs different, and I mean that as a warning. Downtown firms choose their favorite contractors and stick with them. Nobody advertises the work and nobody protests the award. The same names get it for twenty years.

Downtown firms choose their favorite contractors and stick with them. That is what building without a rulebook looks like.

We all know what happens when you start to drop regulations. It opens the door for blatant abuse.

Five projects, one prime

Here is where it stops being theory. The Army Corps of Engineers is the federal agency that builds for the military. The Corps was talking about combining 5 huge multi-million-dollar projects into 1 award going to one prime contractor. A prime on a job that size has to post bonding and carry financing that only a handful of giant companies can manage. Every small and mid-size shop in the region drops from competitor to subcontractor on that day, and the prime decides who gets to sub. The government loses the price pressure that a full field of bidders provides.

The damage compounds too. Federal work goes to shops with federal past performance on the books. A small firm locked out for five years loses the project history that wins the next bid. The field never grows back to what it was.

Ask the question first

I just reviewed a book about this exact failure. Richard Rumelt spent decades teaching strategy, and his book is Good Strategy Bad Strategy. His rule is that a real plan starts with a diagnosis, a plain statement of the problem, before anybody reaches for a fix. Skip the diagnosis and the fix ends up serving whoever wrote the goal.

Nobody briefed a diagnosis here. Nobody showed which steps in the process actually cost the days, or what the red tape protects while it slows things down. They named a goal, be like downtown, and reached for the fix that happens to favor the biggest players in the industry. If delay is the real problem, prove it. Find the slow steps and fix them. Dropping the whole rulebook because the paperwork is slow hands the work to the giants and calls it speed.

Next: the full review of Good Strategy Bad Strategy, for the kernel and the cases.