Business Center

Every Day Counts: Have you considered bundling your projects to save time and money while creating value?

#EveryDayCounts #LeanEverydayIdeas #ProjectBundling #Innovation

By: KeKe Kosse, , Process Improvement Intern

January 7, 2020

Safe Crossing

Dr. Ermias Weldemicheal (pictured) and Matthew Pacheco of the Colorado Department of Transportation (CDOT) designed an Excel matrix to help agencies decide whether it's a good idea to bundle projects to increase their appeal to contractors, to manage multiple projects at the same time, and to create value for CDOT and its customers. Project bundling helps CDOT deliver more effective customer service by reducing the administrative friction that delays improvement. Rather than managing individual bids for multiple projects, project bundles allow projects of different sizes to be undertaken together so that each project is finished faster. This tool helps agencies to decide if project bundling would create value, by saving time and money, for CDOT and its customers or if the projects might be better completed individually.

What is project bundling?

Project bundling is the practice of combining projects to accelerate delivery, reduce costs, and increase efficiency by combining multiple projects into a single contract. Project bundling streamlines design, contracting, and construction; creating value for the agency, contractors, and customers. The Federal Highway Administration promotes project bundling as part of its Every Day Counts initiative to save time, money, and resources to deliver more projects.

Why bundle projects?

Project Bundles create opportunities for agencies to benefit from economies of scale: while the overall number of projects increase over time, individual smaller projects become too costly for agencies and not valuable enough for contractors. Bundling projects into a single contract improves the chances for competitive bidding among contractors, resulting in better deals for agencies and more opportunities for collaboration between the agency and contractors. While the contract size determines economies of scale, project bundles that become too large or too costly may deter bidders and have an adverse effect on the agency.

The tools:

CDOT employees, Dr. Ermias Weldemichael and Matthew Pacheco, developed the Project Bundling Matrix to help agencies determine if a project bundling is recommended based on a set of seven criteria: Geographic Proximity, Types of Work, Contract Size, Construction Schedule, Traffic Control/Mobilization, Delivery Method, and Funding Type. Based on the responses to the evaluation criteria—and other considerations—the user can decide whether the proposed project bundle is worth pursuing and provide further rationale to support their decision.

While several states have employed project bundling successfully, the Project Bundling Matrix is the first tool of its kind to help to establish guidelines and criteria for project bundling. The Matrix is designed to help agencies save time and resources to create value for both the agency and its customers. The Matrix is currently in the “Demonstration” period of its implementation within CDOT and is waiting to be assessed and institutionalized throughout the agency. After institutionalization within the agency, the developers hope to share the tool with other agencies.

Want to find out more about this project? Check out the Every Day Counts page on Project Bundling.