Transcript Innovative Contracting Techniques

Innovative Contracting
Techniques
“Partnering with Industry to Create a
Better Roadway”
Presented by
Doyt Bolling
Director Utah Technology Transfer Center
Innovative Contracting
Techniques
•
•
•
•
•
Design-Build
Lane Rental
A+B Bidding
Warranty
Job Order Contracting
Premise for the Implementation
of Innovative Contracting
Techniques
• Traditionally highway projects are designed,
bid, and built with the contract awarded to
the lowest bidder.
• Innovative contracting allows for other
factors such as time, quality, and innovation
to be considered, in addition to low bid.
General Warrants and Objectives
• Projects suitable for any innovative
contracting technique are:
– Projects in which right-of-way, utility,
environmental, and other socio-political issues
have been resolved.
– Projects where the potential exists for
increasing quality, decreasing costs, decreasing
time, reducing administration costs, and
reducing the possibility for legal claims and
change orders.
Design-Build
• Definition: When a single entity provides
both the design and construction through a
single contract between the owner and the
Design-Build firm.
Why Pursue Design-Build
• Primary Objective
– Time Savings
• Other Objectives
–
–
–
–
–
Singular responsibility.
Reduce administrative costs.
Allow for contractor innovation and flexibility.
Provide additional expertise not available in house.
Allow contractor to pursue new technologies and
approaches that will facilitate design, construction, and
improve final product quality.
Framework of Design-Build
• There are three principal project categories
for which Design-Build procurement has
been effective:
– Emergency repair and rehabilitation projects.
– Specialty type projects (I.e. ITS, Ferry Boats,
and etc.).
– Mega-reconstruction projects.
Emergency Repair and
Rehabilitation Projects
• Design-Build is used for these projects to
decrease project delivery time and road user
costs.
Specialty Type Projects
• Design-Build is used because there is:
– Limited expertise in house.
– Opportunity for innovation, alternative designs,
and innovative construction approaches.
Mega-Reconstruction Projects
• Design-Build is used to:
– Shorten delivery time for the project by
allowing construction to proceed before design
is completed.
– Allow for contractor innovation and flexibility
to be incorporated in the design and
construction of the project.
– Save time and reduce road user costs.
– Meet specific delivery dates.
Utah Example “Reasons for
Pursuing Design-Build”
• Time
– The Olympics and increasing traffic congestion called for early
completion.
• For example- A project that under traditional methods would have
taken10 years to complete will now take just 4.5 years to finish under
Design-Build.
• Innovation
– The contractor can provide early insight to the design to facilitate
construction.
• Administration and Legal Issues
– Single source responsibility for both design and construction
reduces legal issues and facilitates administration of the project.
States Using Design-Build
•
•
•
•
•
•
•
•
•
•
Arizona
Colorado
California
Florida
Hawaii
Kentucky
Alaska
Michigan
Minnesota
Missouri
•
•
•
•
•
•
•
•
•
•
•
New Jersey
Virginia
North Carolina
North Dakota
New Mexico
Ohio
Pennsylvania
South Carolina
Utah
Maine
Oregon
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
New York’s A+B Bidding
• New York has completed 33 projects since 1994.
• 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 20.32 million dollars in road user costs were
saved.
• 4.75 million dollars were paid for incentives.
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:
• 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.
• 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
New York’s Lane Rental
• New York has completed 6 projects since 1995.
• 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
• 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
Job Order Contracting/
Indefinite Delivery
• Definition: The combining of like projects
into one contract that is administered by the
owner/agency.
• These projects are competitively bid with
indefinite quantity and indefinite delivery at
fixed unit construction prices.
How is Job Order Contracting
Different from Traditional
Contracts?
• Two Ways
– Job Order Contracts cover a variety of similar types of
construction including: maintenance, repair, renovation,
and traffic control projects that are combined under a
single contract at fixed unit prices.
– The contracts are in place before the owner identifies
where and when the work is to be done. These
contracts are based on a minimum yearly amount of
work as long as the contractor performs acceptable
work.
Advantages of Job Order
Contracting
• Lower costs
– Quantities are larger by combining similar projects, therefore
resulting in lower unit bid prices.
• Incentives for quality
– The contractor is motivated by the fact that they will continue to
receive work so long as their performance is satisfactory.
• Less owner time and administration cost required
– Several projects can be accomplished under one contract.
• Opportunities for small disadvantaged businesses
– Small firms that can’t compete for larger construction projects can
provide services required by individual job orders.
States Using JOC
• Armed Forces
• Illinois
• California
Innovative Contracting Website Access
Accessing WebSite
Connect to www.utaht2.usu.edu
Click on the Innovative Contracting Link.
Or
Go directly to the Innovative Contracting Page by entering
http://www.utaht2.usu.edu/IC/Default.html
Viewing Documents
Click on the Link “Search for Innovative Contracting Documents”.
Then use the pull-down menus to select a “state” and a “contracting procedure”.
NOTE: to view all leave the pull-down menus blank.
Click Run Query
After the query loads click on the title of the document you wish to view.
A full description of the document will load.
Click on “View Full Document” at the bottom of the page.
If you have Adobe Acrobat Reader the document will load.
Or
If you do not have Adobe Acrobat Reader, click on the icon, or visit
www.adobe.com/prodindex/acrobat/readstep.html to download a free copy.
Also, utilize the website for other information on innovative contracting practices. It includes links, basic
definitions, and the draft of “Best Practices Management Guidelines for Innovative Contracting.
Questions?