Determining Innovative Contracting Methods to Reduce User Costs Stuart Thompson Utah Technology Transfer Center

FHWA Road User Survey 32% dissatisfied with work zones Travelers rated highway improvements that would most help overcome delays. Of more than 20, the top 3 relate to work zones and how we build roads

FHWA Road User Survey Growth in reconstruction Growth in congestion Growth in crashes

Innovative Contracting The primary goal of Innovative Contracting is to provide timely delivery of a quality project or facility with limited User & Social Impacts. User & Social Impacts- Costs incurred by the road user or public that are not directly accounted for in Traditional Contracts.

Road User Impacts High Accident Rates Travel Delay Costs Additional Fuel Consumption

Product Quality Smoothness Extended Service Life Maintenance Objectives Improved Serviceability

Contracting Procedures Traditional Contract (Design-Bid-Build) Design-Build A+B Bidding Lane Rental Warranty

Traditional Contracts Projects with Third Party Conflicts Cookie Cutter Projects Projects with Negligible Impacts to the Road User, Public, & Environment Projects with Potential Risks

Design-Build Decrease Time (Emergency/Event) Complex Design Complex Construction Technical Integration Limited In-house Resources Projects Procured Just-In-Time

Design/Build Questionnaire Results

A+B Bidding Decrease Time (Emergency/Event) Potential for High Road User Cost Potential Impact to Local Businesses Public Perception Vital Corridor

A+B Bidding Definition: A cost plus time bidding procedure that selects the low bidder based on a monetary combination of the contract bid items (A) and the time (B) needed to complete the critical portion of the project.

Benefits of A+B Bidding A+B Bidding is used to motivate the contractor to minimize the delivery time for high priority and highly trafficked roadways. This encourages contractors to finish early by: Offering bonuses for early completion. Assessing disincentives for late completion.

Criteria for Selection of A+B Bidding as a Contracting Procedure Traffic restrictions, lane closures, or detours result in high road user costs. Safety concerns, or significant impacts to the local community or economy during construction warrant expediting the project. Traffic control phasing can be structured to maximize a contractor’s ability to reduce the duration of construction. The project is relatively free of third party conflicts. It is in the public interest to complete the project as soon as possible.

States Using A+B Bidding Maryland Colorado California Virginia Texas North Carolina Wisconsin Washington New York North Dakota Iowa New Jersey Missouri Idaho Indiana Kansas Maine

Multi-Parameter Bidding (A + B) Questionnaire Results

Lessons Learned – A + B

New York’s A+B Bidding New York has completed 33 projects since Projects were completed an average of 19 days earlier than bid and an average of 87 days earlier than the engineer’s estimate. An average of 9 days were added for change orders. Only one project took more days to complete than engineer’s estimate and only two took more days than bid. An estimated million dollars in road user costs were saved million dollars were paid for incentives.

Lane Rental Decrease Time (Emergency/Event) Potential for High Road User Cost Potential Impact to Local Businesses No Alternative Routes High ADT

Lane Rental Definition: An innovative contracting technique by which a contractor is charged a fee for occupying lanes or shoulders to do the work.

Why Pursue Lane Rental? Primary Objective To motivate the contractor to minimize the time that a lane, a shoulder, or a combination of lanes and shoulders are out of service so there is minimized traffic delay to highway users.

Lane Rental Uses Lane Rental has been used for projects that contain one or more of the following:

Lane Rental Uses Traffic restrictions or lane closures result in high road user costs. The use of alternate routes or off-site detours is impractical. The traffic control plan allows the contractor flexibility in scheduling work to minimize the impact of lane closures.

Lane Rental Uses The agency seeks contractor expertise to minimize the time that lanes are out of service. The project is relatively free of third party conflicts (I.e. right-way issues, utilities, etc.). The benefit in terms of reduced impact to the highway user is greater than the additional cost to minimize lane closures.

How are Lane Charges Calculated? Charges for lanes or shoulders can be on either an hourly or daily basis. Charges per lane can vary depending on time of day, amount of traffic, and other road user costs.

Oregon Example Traditionally the State of Oregon specified times at which lane closures were not allowed. State law did not permit the use of road user costs in the determination of liquidated damage amounts. Therefore: no disincentive for closures or incentive to keep lanes open.

Oregon DOT US 26 Reconstruction Lane Rental Project Major reconstruction of a 2.08 mile stretch of a primary commuter route from the west suburbs to downtown Portland. ADT ranges from about 100,000 to 130,000 vpd, with less than 2% trucks. Rates for every 15 minutes ranged from $0 to $21,000 for lane use.

States Using Lane Rental Colorado New York North Carolina Utah Oklahoma Oregon Washington

Lane Rental Questionnaire Results

Lessons Learned – Lane Rental

New York’s Lane Rental New York has completed 6 projects since Total project costs were 3.6 million dollars below the engineer’s estimate. Three projects were above and three projects were below the engineer’s estimate.

Warranty Projects in which Performance can be Measured Minimize Overall Life-Cycle Costs Project Conditions are Well-Defined Incorporation of New Technology in Materials, Equipment, and Construction Processes

Warranty Definition: “A guarantee of the integrity of a product and of the makers responsibility for the replacement or repair of deficiencies.”

Advantages of Warranty Contracting Less owner risk. Eliminates cost of owner QA/QC by transferring this responsibility to the contractor. Creates an incentive for overall project quality. Assures acceptable level of service or performance for a work item and/or major project element.

States Using Warranties Wisconsin Michigan North Carolina California Missouri Ohio Montana New Hampshire

Warranty Questionnaire Results

Lessons Learned - Warranty

Innovative Contracting Methods – Selection Flow Chart

Questions?