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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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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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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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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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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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· 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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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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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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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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-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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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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-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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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).
