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The Virginia Department of Transportation (VDOT) occasionally includes an incentive/ disincentive for early completion (I/D) in its construction contracts. This report presents the results of a project to identify procedures that would (1) enhance the effectiveness and enforceability of the I/D provision and (2) reduce the staff time and effort necessary to determine the need for an I/D and to calculate an appropriate per-day dollar amount. The researcher first reviewed the relevant literature pertaining to construction contracts and to road user cost calculation, and then evaluated the available user cost methodologies, especially computer software. Next, the researcher surveyed the current use of I/D provisions in Virginia and other states, and described VDOT's current project development process, with special emphasis on the user cost data that are typically generated during that process. The report makes five conclusions. First, various forms of I/D, though known by a variety of names, are fundamentally similar. Second, use of an incentive rather than a disincentive alone enhances the enforceability of the disincentive clause, though it may increase the final cost of the contract. Third, cost-plus-time bidding enhances the effectiveness of the incentive clause and the enforceability of the disincentive clause. Fourth, the end of the design public hearing is a logical point for VDOT to judge the need for an I/D. Fifth, road user cost savings calculated from the output of the Highway Capacity Software already in common use in VDOT forms a legally sound justification for a per-day dollar I/D amount.
This report will be of interest to state and local highway agency construction managers and contractors with regard to learning about best practices of time-related incentive and disincentive contract provisions and their effect on staffing levels, productivity, project cost, quality, contract administration, and the contractor's operations and innovations. The report also presents a decision process guide to use as a template for crafting the incentive/disincentive provisions.
Incentive/disincentive clauses (I/D) are designed to award payments to contractors if they complete work ahead of schedule and to deduct payments if they exceed the completion time. A previously unanswered question is, "Did the costs of the actual work zone impacts that were avoided justify the incentives paid?" This paper answers that question affirmatively based on an evaluation of 20 I/D projects in Missouri from 2008 to 2011. Road user costs (RUC) were used to quantify work zone impacts and included travel delays, vehicle operating costs, and crash costs. These were computed using work zone traffic conditions for partial-closure projects and detour volumes and routes for full-closure projects. Conditions during construction were compared to after construction. Crash costs were computed using Highway Safety Manual methodology. Safety Performance Functions produced annual crash frequencies that were translated into crash cost savings. In considering an average project, the percentage of RUC savings was around 13% of the total contract amount, or $444,389 of $3,464,620. I/D provisions were very successful in saving RUC for projects with full-closure, projects in urban areas, and emergency projects. Rural, non-emergency projects successfully saved RUC but not at the same level as other projects. The I/D contracts were also compared to all Missouri Department of Transportation contracts for the same time period. The results show that I/D projects had a higher on-time completion percentage and a higher number of bids per call than average projects. But I/D projects resulted in 4.52% higher deviation from the project budget and possibly more changes made after the award. A survey of state transportation departments and contractors showed that both agreed to the same issues that contribute to the success of I/D contracts. Overall, in terms of work zone impact mitigation, I/D contracts are very beneficial at a relatively low cost.
Special edition of the Federal Register, containing a codification of documents of general applicability and future effect ... with ancillaries.
This Interim Technical Bulletin recommends procedures for conducting Life-Cycle Cost Analysis (LCCA) of pavements, provides detailed procedures to determine work zone user costs, and introduces a probabilistic approach to account for the uncertainty associated with LCCA inputs.
The Code of Federal Regulations is the codification of the general and permanent rules published in the Federal Register by the executive departments and agencies of the Federal Government.
Special edition of the Federal register, containing a codification of documents of general applicability and future effect as of April 1 ... with ancillaries.
This synthesis presents a review of the current practices associated with the techniques and policies employed by state and local transportation agencies to address the many project development issues required for the reconstruction of existing urban and suburban freeways and expressways. This topic is of special interest because there is a need to reconstruct many highway facilities that have been in existence for over 40 years. The need arises both from the deterioration of the infrastructure and from changes in capacity requirements. This synthesis will be of interest to state and local highway design engineers, traffic engineers, finance and contracting specialists, and contracting personnel in these agencies. It will also be of interest to consultants who are engaged in freeway/expressway reconstruction projects. While many of the project development methodologies in practice for reconstruction of urban and suburban freeways and expressways are similar to those used for new construction, there are unique differences that apply primarily to the reconstruction of major urban highway facilities. This report of the Transportation Research Board highlights the similarities and differences in the planning and management of projects as well as in contracting and financing innovations. Methods for effectively managing traffic during the reconstruction process are important to the process, as are traffic control procedures in the work zone. Public participation and public information dissemination related to traffic changes are vitally important to the effective completion of a reconstruction project. Other aspects, such as the design process, including the use of 3-D and 4-D visualization, pavement renewal procedures, environmental impact mitigation and enhancement activities, that are considered in the process are also addressed.