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55 APPENDIX C Research Results Results for the E-mail Interview Form Factors Used to Determine If I/D Provisions Should Be Used Types of Time-Related I/D Provisions in Use E-mail interview responses show that RUCs are the most Complete-by-date and A+B I/D provisions are used by important factor considered for determining if a project war- more than 90% of the STAs that responded to the e-mail rants the use of an I/D provision. On average, STA respon- interview form. Lane rental provisions are used by 59% of dents felt that RUCs were approximately 60% more important the respondents. Incentives and disincentives associated with than special events, anticipated feedback, and public/political interim milestones (A+B1+B2+Bn) are used by nearly one- input as a decision making factor in the use of I/D provisions third of the states represented in the data set. Liquidated (Figure C.3). savings provisions are far less common than the other types A note regarding the graphical presentations of data collected of I/D provisions. Figure C.1 illustrates the percentage of during Phase I: states using different types of I/D provisions. These data do The average of interview responses or ranking values is not show the frequency at which each type of provision is shown. Each bar in a graph represents the calculated average used; rather they reveal which types of provisions are more of the corresponding data set. For example in Figure C.3, widespread among the STAs that responded to the e-mail respondents were asked to rank the importance of four (4) interview form. factors affecting the use of I/D provisions; the average of One additional type of I/D provision was discovered in the 32 responses for "User Cost" is 2.2. Some of the graphs also literature search. ADOT used a travel time I/D specification show the upper and lower quartiles as an indication of the on a design-build project. This provision used the average travel variability within the data set. Using Figure C.3 as an example, time through the project as the measurement criteria for the lower quartile for "User Cost" is equal to 1.7 and the upper awarding incentive or assessing disincentive. quartile is equal to 3.0; meaning that 25% of the rankings were less than 1.7, 50% of the rankings were between 1.7 and 3.0 and the remaining 25% of the rankings were greater than 3.0. Plans to Use Time-Related I/D Provisions in the Future Agency Methods Used for Estimating The majority of the STAs that responded to the e-mail inter- Contract Duration view form appear to be comfortable with their use of I/D The primary method used by STAs to estimate project provisions, as 69% of them plan to keep using I/D provisions durations is nearly evenly split between historical experience at about the same frequency as they have in the past. Only (54%) and critical path method (46%) (Figure C.4). Written two of the STAs indicated that they would not use time-related comments provided in the e-mail interview forms regarding I/D provisions in the future. Additionally, two more STAs the primary method used to estimate contract duration include plan to use I/Ds less frequently than they have in the past the following: (Figure C.2). The responses indicate that STAs are heeding FHWA's · California--"Although CPMs are utilized during project suggested guidance that "I/D provisions should not be used development to estimate project duration in many cases, it routinely." is not standard practice for all projects. In any case, some
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56 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Complete By A+B Lane Rental A+B1+B2+Bn Liquidated Date Savings Figure C.1. Use of I/D provision types by STAs responding to the e-mail Interview form. 80% Percent of Respondents 70% 60% 50% 40% 30% 20% 10% 0% Will Not Use in The Less Frequently About the Same More Frequently Future Frequency Figure C.2. STA plans to use I/D provisions in the future (n 31). User Cost Special Events Anticipated Feedback Public/Political Input 0.0 1.0 2.0 3.0 4.0 Least Important Most Important Figure C.3. Relative importance of factors affecting the use of I/D provision (n 32).
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57 CPM, 46% · Virginia--"unknowns not within the contractor's control" Historical · Michigan--"Fixed completion date with special provision Experience, 54% for payment to accelerate but no additional time is allowed." · Minnesota--"We are going to try a Locked Incentive Date Figure C.4. Primary method used to estimate contract duration (n 28). specification based on Florida's No Excuse Bonus on one of our Metro projects next year." · North Dakota--"The incentive date is a no-excuse date. type of schedule (e.g., bar chart) is prepared during project We do allow the disincentive date to be moved for certain development." factors." · Tennessee--"A combination of a less detailed CPM of major items combined with historical experience." The manner in which time extensions are handled has a · Minnesota--"We have used CPM on our larger complex direct impact on the effectiveness of I/D provisions. This issue projects." is related to what type of I/D provision is used and the specific · Texas--"Historical experience and Bar Chart (CPM)." language of a provision. STAs and contractors both need to understand how different elements or variables of common Based on the feedback from the e-mail interview form, STAs I/D provision types work together or, in some cases, do not are not fully using CPM scheduling techniques. Accuracy of work together. contract duration estimates has a significant impact on the California DOT and NYSDOT have documented compar- effectiveness of I/D provisions. Implementing CPM schedul- isons between time extensions granted on I/D and non-I/D ing entails more than just software training. Construction projects. NYSDOT's experience reveals that approximately experience must be integrated with calculating durations and 50% of all contracts grant time extensions while 42% of A+B assigning logic. Sequencing schedule activities to avoid conflicts contracts have adjustments to the B time. The most common that are inherent in the plans requires a complete understand- reasons for time extensions were revisions to bridge related ing of highway construction. components (25%), utilities and drainage redesign (24%), overrun of pavement repair quantities (17%), added or revised lane closure restrictions (9%), additional pile quantities or Contract Time Extensions revised piling design (6%) and delayed award (5%). California Almost one-third of the STA respondents indicated that DOT's results are similar: 48% of A+B projects experienced contract time is not subject to adjustment for any reason. time growth compared with 43% of non-I/D projects. Contract time extensions for weather or utilities are allowed Cost growth was also examined by NYSDOT and California by over 40% of the STAs (Figure C.5). This e-mail interview DOT. When adjusted for two outliers, NYSDOT's comparison question generated many comments in the "other" category. between 98 A+B contracts and 2,636 normal contracts showed Some of these comments follow: the average cost growth of A+B contracts to be within 1/2% of the other contracts. Again, California DOT's results are · California--"Our contracts generally provide for excusable similar for cost growth. Average cost growth for A+B projects and compensable delays to the contract completion date." was 24% and non-I/D project average cost growth was 26%. 50% 45% Percent of STA Respondents 40% 35% 30% 25% 20% 15% 10% 5% 0% Utilities Weather Other None Figure C.5. Allowable causes for contract time extensions on I/D projects (n 28).
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58 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% AR MN NV ID NY LA MD CA MO MI PA IA NE DE GA OR RI Figure C.6. Percent of projects earning maximum incentive by state (last 2 fiscal years) (n 17). Incentives Earned to eliminate funding transfers. This will help stabilize our program delivery." Three-fourths of the respondents indicated that I/D projects · Delaware--"It's been overlooked." typically resulted in the contractor earning significant incen- · Ontario, Canada--"Budgeting for incentives is inconsistent." tives. None of the STAs indicated that I/D projects typically resulted in disincentive charges to the contractor nor did they Projects that will include I/D provisions should be iden- indicate that projects finished late with reduced disincentive tified early in the project development phase. This is not charges. only a best practice with respect to budgeting needs, but This response is further validated by Figure C.6 and the fact it also allows project design to accommodate accelerated that 13 of 17 STAs stated that at least 75% of all I/D projects construction. in their state over the last 2 fiscal years had resulted in the contractor earning the maximum incentive allowed. I/D Impacts on Quality Budgeting for I/Ds Based on the perceptions and experiences of the e-mail interview respondents, time-related I/D provisions do not The majority of STAs budget for I/Ds in some manner, with negatively impact the project quality to any great degree. only one-fourth of the responding STAs indicating they do Only 5 of the 32 STAs have experienced quality deficiencies not specifically budget for I/Ds (Figure C.7). This budgeting that they attribute to project acceleration from I/D provisions question also generated some comments worth noting: (Figure C.8). MNDOT reports anecdotal evidence from some of its field · California--"Included in estimate as Supplemental Work." staff who believed that the quality of work was reduced on · Michigan--"A determination to use an I/D provision A+B and lane rental projects. According to a study performed is usually made at the later stages of the design process. by the Kentucky Transportation Center, quality is not nega- Therefore, the cost is usually budgeted for at that time. tively impacted by time-related I/D provisions. This study MDOT is presently in the process of trying to identify these I/D projects during the scoping phase and to include the amount in the original programmed project amount so as yes, 16% Included in Non-Project Original Budget, Specific Annual 61% Account, 14% Not Budgeted no, 84% For, 25% Figure C.8. I/D impacts on quality Figure C.7. I/D budgeting (n 28). (n 32).
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59 100% Percent of STA Respondents 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% No Impact Less Than 10% 10% to 25% Greater Than 25% Figure C.9. I/D provision impacts on cost (n 25). compared asphalt pavement characteristics for 26 I/D projects A comparison of contractor bid prices by Strong et al. (16) and 25 non-I/D projects. Material quality incentives were shows that the average initial bid for A+B projects is 7.5% earned on 80% of the I/D projects while 56% of the non-I/D higher per mile than for non-I/D projects. projects earned a material quality incentive. I/D Impacts on Agency Staffing I/D Impacts on Cost Impacts on agency human resources during the project In contrast to the subject of I/D impacts on quality, a development phase appear to be negligible, because only large majority of STA respondents believe that I/D provi- two STAs indicated that this was a concern. However, this sions impact the cost of a project. Over 80% felt that project is not the case for impacts on agency human resources dur- costs increased as a result of time-related I/D provisions. Of ing the construction phase of the project. Seventy percent those who indicated that costs were increased, two-thirds of the respondents feel that agency staff requirements are felt that the cost increase was less than 10%. The remaining impacted by time-related I/D provisions. The most common one-third felt that costs were increased from 10% to 25%. strategies for coping with this impact are represented in The cost impacts of time-related I/D provisions are sum- Figure C.10. marized by the following statements and are also illustrated Recommendations for agency staffing issues on I/D projects in Figure C.9: identified by Petring and Helgeson include the following: · 19% of the STAs felt that cost was not impacted · Limit project managers to oversight of one A+B project at a · 55% of the STAs felt that cost increased less than 10% time and avoiding consecutive assignments on A+B projects. · 26% of the STAs felt that cost increased between 10% · Train project managers regarding limitations on agency and 25% personnel work hour limitations. Percent of STA Respondents 40% 35% 30% 25% 20% 15% 10% 5% 0% No Impact on Overtime Increased Consultants Staffing Staffing Figure C.10. Strategies for addressing impacts on agency staffing (n 32).
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60 · Staff A+B projects with a resident engineer and two project I/D provisions with non-I/D projects and rate their level of managers (day shift and night shift). agreement or disagreement with a specific statement. Rankings · Provide team building training. for these statements were given on a scale from 1 through 5 · Empower project personnel to encourage "ownership" of as shown in Table C.1. the project. This section of the ranking form included 19 statements to rate. The average ranking for all statements was calcu- lated and then sorted in ascending order. An initial analysis Results of In-Depth Interviews of the results looks at the four statements that generated the Findings of the in-depth investigations are based on results lowest level of agreement (respondents disagree with the of the ranking forms that were completed by 42 construction interview statement) and the four statements that resulted professionals. The purpose of the ranking form is to have in the highest level of agreement. Segregating the average some way to quantify the experiences and perceptions of the results this way gives an indication of what issues the inter- interviewee experts. viewees feel most strongly about, either in agreement or disagreement. Figure C.13 shows the results of this analysis graphically. In-Depth Investigation Ranking Forms From Figure C.13, it can be inferred that on average, the interviewees felt most strongly about the following items: Ranking forms were completed by 42 interviewees. The interviewees are classified into four groups: agency adminis- tration, agency field, contractor administration, and contractor 1. The contractor works longer hours on I/D projects. field. The distribution of interviewees is shown in Figure C.11. 2. Contractors schedule their work better on I/D projects. These on-site in-depth interviews took place in six different 3. Staffing of I/D projects requires experienced personnel. states. The experience level with different types of I/D pro- 4. Innovation occurs more often on I/D projects. visions varies by group. Interview participants had the most 5. Safety compromises do not occur more often on I/D projects. experience with A+B and complete-by-date I/D provisions. 6. Time extensions that impact incentive payments are not The groups had less experience with lane rental, multiple I/D granted too often. for interim milestones, and liquidated savings I/D provisions. 7. The quality of the design (plan errors/omissions) is not Figure C.12 shows the number of projects by I/D provision better on I/D projects. type, and interview group. Except for liquidated savings, every 8. The process of calculating time charges does not favor the group had experience with each I/D provision types identified contractor more than the agency. in the ranking form. The one exception was the contractor field group, which indicated that none of them had actually com- This same set of 19 rankings was further analyzed to reveal pleted a project under a liquidated savings I/D provision. which four statements had the highest level of relative differ- One section of the ranking form asked interviewees to con- ence when comparing the rankings of agency personnel with trast projects of similar scope and size that used time-related contractor personnel (Figure C.14). agency field, 18, 43% agency admin., 11, 26% contractor admin., 9, contractor field, 4, 21% 10% Figure C.11. Distribution of on-site interviewees by group (n 42).
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61 35 30 Respondent Experience (# of projects) 8 25 20 12 3 15 3 2 1 3 0 8 2 10 4 1 8 9 7 8 6 8 4 8 1 7 5 2 2 5 5 6 4 2 2 1 3 3 4 4 2 4 3 1 2 4 2 2 4 3 1 3 1 1 2 2 2 2 2 0 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 1 to 5 6 to 15 more than 15 1 to 5 6 to 15 more than 15 1 to 5 6 to 15 more than 15 1 to 5 6 to 15 more than 15 1 to 5 6 to 15 more than 15 0 0 0 0 0 A+ B A+ B1 +B 2 +B n Complete By Lane Rental Liquidated agency admin. Date Savings agency field contractor admin. contractor field Number of Projects by I/D Provision Type Figure C.12. Interviewees' experience by I/D type and group (n 42). As shown in Figure C.14, items that had the largest relative 2. Both agencies and contractors agree that I/D projects difference between average contractor and average agency require experienced personnel, but the contractors agree rankings are provided as follows: at a higher level. 3. Contractors and agencies both agree that innovation occurs 1. Contractors believe that the decision making process more often on I/D projects, but the contractors agree at a regarding contract changes is handled differently on I/D higher level. projects, while agency personnel believe that this process 4. Agencies and contractors also agree that time extensions is similar for I/D and non-I/D projects. affecting incentive payments are granted too often, however the agencies agree to a higher level. Table C.1. Ranking form scale (compare and contrast I/D I/D Provision Impacts on Project Factors projects with non-I/D projects). In-depth Interviewees were asked to rank the degree to which Ranking Description time-related I/D provisions impact seven different project 1 strongly disagree factors. The project factors considered were construction time, 2 moderately disagree 3 neutral project cost, project quality, safety, innovation, contract admin- 4 moderately agree istration and project staffing. Nine ranking levels were used 5 strongly agree in this section of the ranking form (Table C.2).
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62 Safety is compromised more often on I/D projects Time extensions that impact incentive payments are granted Ranking of I/D Impacts by Respondents too often The quality of the design (plan errors/omissions) is better on I/D projects The process of calculating time charges favors the contractor more than the agency Innovation occurs more often on I/D projects Staffing of I/D projects requires experienced personnel Contractors schedule their work better on I/D projects The contractor works longer hours on I/D projects 1 - strongly disagree 2 - moderately disagree 3 - neutral 4 - moderately agree 5 - strongly agree Figure C.13. Items with the lowest or highest level of agreement (I/D provision impacts): average and upper and lower quartiles (n 42). Innovation occurs more often on I/D projects Ranking of I/D Impacts by Respondents Time extensions that impact incentive payments are granted too often Staffing of I/D projects requires experienced personnel The decision making process regarding contract changes on I/D projects is handled in a similar manner to non-I/D projects 1 - strongly disagree 2 - moderately disagree 3 - neutral 4 - moderately agree 5 - strongly agree agency contractor Figure C.14. Differences between contractor and agency perceptions: I/D projects contrasted with non-I/D projects (n 42).
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63 Table C.2. Ranking levels for I/D impacts Even though there is not a majority among the contractor field on project factors. group regarding the impact of I/Ds on construction time, there is an overwhelming consensus from the other groups Rank I/D Degree of Impact on Project Factors that time-related I/Ds are beneficial at reducing construction 5 significant beneficial impact 4 considerable beneficial impact durations. 3 moderate beneficial impact 2 slight beneficial impact 1 or -1 neutral impact Time-Related I/D Provision Impacts -2 slight detrimental impact on Project Cost -3 moderate detrimental impact -4 considerable detrimental impact Based on the rankings of 41 construction professionals -5 significant detrimental impact having considerable experience with time-related I/D provi- sions, the impact on project cost is negligible (Figure C.16). Time-Related I/D Provision Impacts Time-Related I/D Provision Impacts on Construction Time on Project Quality On average the rankings from the expert interviewees Overall rankings reveal that project quality is unaffected by indicate that time-related I/D provisions have a moderate I/Ds (Figure C.17). However, the contractor field group had beneficial impact on construction time (Figure C.15). The a majority that ranked I/D impacts on project quality as slightly contractor field group results were evenly split between ben- detrimental. One probable explanation for the difference eficial impact and detrimental impact. Of the 41 rankings, between this group's ranking and the other group's is the 37 indicated a beneficial impact, 1 ranked the impact of I/Ds manner in which quality is defined. Agency and contractor on construction time as neutral, and 3 ranked it as detrimental. administration personnel measure quality almost exclusively Of the 3 detrimental rankings, 2 came from the contractor from a specification perspective; however, contractor field field group and the other came from the agency field group. personnel have a personal connection to the construction agency admin. agency field contractor admin. contractor field all Neutral -5 - significant detrimental impact -4 - considerable detrimental impact -3 - moderate detrimental impact -2 - slight detrimental impact 2 - slight beneficial impact 3 - moderate beneficial impact 4 - considerable beneficial impact 5 - significant beneficial impact Figure C.15. I/D impact on construction time: average and upper and lower quartiles (n 41).
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64 -5 - significant detrimental impact -5 - significant detrimental impact -4 - considerable detrimental impact -4 - considerable detrimental impact -3 - moderate detrimental impact -3 - moderate detrimental impact contractor field -2 - slight detrimental impact -2 - slight detrimental impact contractor field contractor admin. agency admin. all agency field all Neutral Neutral agency field agency admin. contractor admin. 2 - slight beneficial impact 2 - slight beneficial impact 3 - moderate beneficial impact 3 - moderate beneficial impact 4 - considerable beneficial impact 4 - considerable beneficial impact 5 - significant beneficial impact 5 - significant beneficial impact Figure C.16. I/D impact on project cost: average and upper and lower quartiles (n 41). Figure C.17. I/D impacts on project quality: average and upper and lower quartiles (n 41).
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65 project. Their reputation is attached to that project. There are Time-Related I/D Provision Impacts perceived levels of quality beyond a specified pass or fail level. on Innovation Contractor field personnel are intimately aware of all the hidden All interview groups concur that I/Ds impact innovation in blemishes on a project that go unnoticed by the untrained eye. a beneficial manner (Figure C.19). The contractor adminis- Even though these blemishes meet or exceed specification, tration group views the impact as slightly beneficial, and the the contractor field group may perceive that time-related I/Ds contractor field group ranks the impact as considerable. On increase the frequency of these aesthetic or less than perfect average the impact of time-related I/D provisions on innova- project features. tion is moderately beneficial. Time-Related I/D Provision Impacts Time-Related I/D Provision Impacts on Safety on Contract Administration According to the average ranking, safety is not compromised The average ranking of the interview groups indicates that to a measurable degree by I/Ds (Figure C.18). Although all I/Ds do not affect contract administration in any appreciable four contractor field responses were technically on the detri- way (Figure C.20). However, this is another area where the mental side of the scale, the difference between neutral on the contractor field group ranked the impact differently than detrimental side of the scale and neutral on the beneficial the other groups. Based on feedback that was received during side of the scale cannot be discerned. In hindsight, it would the Q&A interview sessions, it is likely that the contractor field have been preferable to designate zero as the only choice for group identifies the agencies prompt resolution of issues on ranking an I/D impact as neutral. A review of the ranking data I/D projects as a beneficial impact with respect to contract of all 41 responses shows that the median and mode ranking administration. values are both equal to one. A publication from 1987 on I/D contracting reported an Time-Related I/D Provision Impacts eight-fold increase in work-related accidents compared with on Project Staffing a non-I/D project. However, the fact that I/D provision use has continued and grown suggests that accident rates of this Contractor administration and field group rankings indi- magnitude are not the norm. cate that these groups perceive a slight to moderate beneficial agency admin. agency field contractor admin. contractor field all Neutral -5 - significant detrimental impact -4 - considerable detrimental impact -3 - moderate detrimental impact -2 - slight detrimental impact 2 - slight beneficial impact 3 - moderate beneficial impact 4 - considerable beneficial impact 5 - significant beneficial impact Figure C.18. I/D impacts on safety: average and upper and lower quartiles (n 41).
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66 -5 - significant detrimental impact (n 41). -5 - significant detrimental impact -4 - considerable detrimental impact -4 - considerable detrimental impact -3 - moderate detrimental impact -3 - moderate detrimental impact -2 - slight detrimental impact -2 - slight detrimental impact agency admin. agency field all Neutral Neutral all agency field contractor field agency admin. contractor field contractor admin. 2 - slight beneficial impact 2 - slight beneficial impact contractor admin. 3 - moderate beneficial impact 3 - moderate beneficial impact 4 - considerable beneficial impact 4 - considerable beneficial impact 5 - significant beneficial impact 5 - significant beneficial impact Figure C.19. I/D impacts on innovation: average and upper and lower quartiles (n 41). Figure C.20. I/D impacts on contract administration: average and upper and lower quartiles
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67 agency admin. agency field contractor admin. contractor field all Neutral -5 - significant detrimental impact -4 - considerable detrimental impact -3 - moderate detrimental impact -2 - slight detrimental impact 2 - slight beneficial impact 3 - moderate beneficial impact 4 - considerable beneficial impact 5 - significant beneficial impact Figure C.21. I/D impacts on project staffing: average and upper and lower quartiles (n 41). impact on project staffing (Figure C.21). This is in contrast to the agency groups, which perceived a neutral impact on project Lane Rental staffing. Based on the notes from in-depth Q&A sessions and the research team's experience, this difference between the Liquidated Savings contractor and agency perceptions is a factor of (1) contractors placing their most experienced people on the jobs where there Complete-By-Date is higher exposure to risk and (2) the agencies not having the same flexibility in shifting personnel assignments. A+B Overall Effectiveness of I/D Provisions by Type A+B1+B2+Bn In the last section of the in-depth ranking form, the interviewees were asked to rate the different types of I/D 1 - highly ineffective 2 - ineffective 3 - neutral 4 - effective 5 - highly effective provisions with respect to their effectiveness at reducing con- struction time (Figure C.22). The scale ranged from 1 (highly ineffective) through 5 (highly effective). According to the in-depth interviewee's experiences, A+B with multiple mile- stones (A+B1+B2+Bn) is the most effective at reducing con- struction time. A+B, complete-by-date and liquidated savings I/D provisions are also considered effective at accelerating Figure C.22. Effectiveness of I/D provision types construction. Lane Rental provisions were not deemed effective for reducing construction time: average and for reducing construction time. upper and lower quartiles (n 42).