1 Cost Escalation Mitigation Florida DOT Approach Greg Davis State Estimates Engineer State Estimates Engineer October 20, 2006
2 Reasons for Cost Escalation Material Prices Bidder Competition Saturated Construction Market Labor Shortages Hurricanes
3 MATERIAL PRICES
4 Earthwork - Statewide $4.96 $ % $ % $ % NOTE: Lump Sum, Design/Build Contracts not included in this graph
5 Earthwork Borrow Pit Availability Hauling Cost Real Estate Pressures
6 Asphalt – Statewide $53.93$ % $ % $ % NOTE: Lump Sum, Design/Build Contracts not included in this graph
7 Asphalt Oil prices Bitumen Prices Aggregates
8 Structural Concrete – Statewide $ $ % $ % $ % NOTE: Lump Sum, Design/Build Contracts not included in this graph
9 Structural Concrete Global Demand Aggregates
10 Structural Steel – Statewide $1.06 $ % $ % $ % NOTE: Lump Sum, Design/Build Contracts not included in this graph
11 Structural Steel Global Demand for Steel Fabrication Backlog Transportation Cost
12 Reinforcing Steel - Statewide $0.52 $ % $ % $ % NOTE: Lump Sum, Design/Build Contracts not included in this graph
13 Reinforcing Steel Global Demand for Steel Production Backlog Transportation Costs
14 Summary Statewide Weighted Average Prices Pay Item Group Unit Change2005Change2006(Jan-Sept)Change EarthworkCY$4.96$ %$ %$ % AsphaltTN$53.93$ %$ %$ % Structural Concrete CY$549.82$ %$ %$ % Structural Steel LB$1.06$ %$ %$ % Reinforcing Steel LB$0.52$ %$ %$ %
15 BID COMPETITION
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20 FDOT STRATEGIES Deferred Projects –$1.0 Billion in projects (over 3-years) Refine Awards Criteria –Normal Criteria –Additional Criteria –Rejected Contracts
21 FDOT STRATEGIES Revised Inflation Rates YearCurrent Past – 1 7.0%4.5% – 2 4.5%4.0% – 3 4.0%3.5% – 4 3.5%3.3% – 5 3.5%3.3%
22 FDOT STRATEGIES Alternative Contracting Methods –Bid Alternates –Bid Options Bid Maximum Specification
23 FDOT STRATEGIES Comprehensive Price Index DOT Borrow Pits Temporary/Portable Asphalt Plants
24 Questions/Comments
25 CONTACT INFORMATION Phillip “Greg” Davis, P.E. State Estimates Engineer (850)
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