Innovative Contracting / Highways for Life Tom Ravn, Acting State Construction Engineer TH 36 Through North St. Paul 12 th Annual Minnesota Pavement Conference Thursday, February 14 th, 2008

Presentation Overview Constructability Review Constructability Review A+B Bidding A+B Bidding Lane Rental Lane Rental Locked Incentive Date Locked Incentive Date

Constructability Review One-on-One Meetings One-on-One Meetings Worked with AGC to identify list of contractorsWorked with AGC to identify list of contractors Open to other contractorsOpen to other contractors Informal information sharing meetings Informal information sharing meetings Industry input on: Industry input on: How Fast Can You Build It?How Fast Can You Build It? How Should Construction be Staged?How Should Construction be Staged? What are the cost impacts with acceleration?What are the cost impacts with acceleration?

Acceleration Techniques A+B Bidding A+B Bidding Factors Cost (A) + Time (B) into the bid Factors Cost (A) + Time (B) into the bid Lane Rental Lane Rental Minimizes disruptions to trafficMinimizes disruptions to traffic Effective scheduling of resourcesEffective scheduling of resources Incentives Incentives Monetary Incentives for Early CompletionMonetary Incentives for Early Completion

A+B Bidding Lowest Combination of Cost + Time Lowest Combination of Cost + Time A = Cost of the Project A = Cost of the Project B = Time Component B = Time Component Days of Construction * Road User CostDays of Construction * Road User Cost History with A+B Bidding History with A+B Bidding 15% Time Savings at Bidding15% Time Savings at Bidding 35% Time Savings with Incentive Clauses35% Time Savings with Incentive Clauses

TH 36 A+B Bidding Time Factors Time Factors Road User Cost (RUC) = $15,000 per DayRoad User Cost (RUC) = $15,000 per Day Allowable Times = 145 to 210 DaysAllowable Times = 145 to 210 Days Bid Results – Cost Bid Results – Cost 6 Bidders6 Bidders $27.6 to $32.7 Million$27.6 to $32.7 Million Bid Result - Time Bid Result - Time Time Ranged from 145 Days to 195 DaysTime Ranged from 145 Days to 195 Days

Innovative Strategies A+B BiddingA+B Bidding 145 Max 145 Max 100 Bid 100 Bid 104 Actual 104 Actual Lane RentalsLane Rentals Minimized Impacts on I-494 Minimized Impacts on I-494 IncentivesIncentives $100,000 Max $100,000 Max Valley Creek Road Interchange

Other A + B Projects TH 10 at Hanson Road Bid #1Bid #1 A = $16.95 million A = $16.95 million B = 135 Days B = 135 Days Bid #2Bid #2 A = $16.98 million A = $16.98 million B = 100 Days B = 100 Days TH 10 in Detroit Lakes Allowable Bid Range (534 to 869 Days)Allowable Bid Range (534 to 869 Days) 3 Bids Near Minimum3 Bids Near Minimum 3 Bids Near Maximum3 Bids Near Maximum Winning Bid – Lowest A and Lowest BWinning Bid – Lowest A and Lowest B

Lane Rental How Does It Work? How Does It Work? Hourly Charge to Temporary Lane Closures ($400 per hour)Hourly Charge to Temporary Lane Closures ($400 per hour) Hourly Charge for Ramp Closures ($300 per hour)Hourly Charge for Ramp Closures ($300 per hour) Bidding Lane Rental Bidding Lane Rental Contractors Bid Estimated Number of Hours for ClosureContractors Bid Estimated Number of Hours for Closure Lane Rental Working Fund Lane Rental Working Fund Dollars subtracted from Lane Rental Working FundDollars subtracted from Lane Rental Working Fund Excess $ at end = Incentive ($30,000 max) Excess $ at end = Incentive ($30,000 max) Overrun = Disincentive Overrun = Disincentive

Lane Rental Why Lane Rental? Why Lane Rental? Minimize Traffic Impacts Prior to Full ClosureMinimize Traffic Impacts Prior to Full Closure Minimize Traffic Impacts After Full ClosureMinimize Traffic Impacts After Full Closure Public PerceptionPublic Perception Why is there a lane closure up, but nothing is happening Why is there a lane closure up, but nothing is happening Better Subcontractor CoordinationBetter Subcontractor Coordination

Lane Rental Projects 2006 Projects Valley Creek RoadValley Creek Road Metro Pavement MarkingMetro Pavement Marking I-35 District 1I-35 District Projects TH 10 Detroit Lakes (Detour Method)TH 10 Detroit Lakes (Detour Method) TH 36 (Full Closure)TH 36 (Full Closure) I-394 / I-94 Bridge RehabilitationI-394 / I-94 Bridge Rehabilitation

Locked Incentive Dates a.k.a No Excuse Bonus How is it Different? Time extensions allow normal incentives to be paid past the anticipated date Time extensions allow normal incentives to be paid past the anticipated date LID – If you want the incentive, you must meet the date. LID – If you want the incentive, you must meet the date. LID – Waive all claims LID – Waive all claims

Locked Incentive Date TH 36 – Metro 145 Day Closure 145 Day Closure $350,0000 for completing work within 145 Days $350,0000 for completing work within 145 Days Additional $75,000 for every 5 days early Additional $75,000 for every 5 days early $650,000 max $650,000 max TH 10 – D4 Obligation - Open TH 59 by June 29, 2008 Obligation - Open TH 59 by June 29, 2008 LID - $300,000 if work is completed on or before December 1, LID - $300,000 if work is completed on or before December 1, I-35W Bridge, Metro A+B - $7,000,000 lump sum A+B - $7,000,000 lump sum Additional $2M for every 10 days early Additional $2M for every 10 days early $27,000,000 max (100 days) $27,000,000 max (100 days)

Questions? Thank You