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PAVEMENT MARKING WARRANTY SPECIFICATIONS SUMMARY This synthesis study updates information on the use of pavement marking warranties by U.S. state departments of transportation (DOTs) and Canadian provincial/territorial transportation agencies. It also reviews road construction warranty experience in Europe for comparison. Pavement markings provide information, guidance, and warnings to road users. Interest in applying warranty specifications to pavement markings is driven by their importance to traffic mobility and safety, and the resulting desire for better pavement marking performance, greater cost-effectiveness, and other potential benefits. Data for this synthesis were obtained from a literature review, a survey of U.S. and Cana- dian transportation agencies, and interviews with U.S. and Canadian pavement marking con- tractors and materials manufacturers. Forty state DOTs and eight Canadian transportation agencies responded to the synthesis survey. Respondents were divided almost equally between those that now use pavement marking warranties (23 agencies, or 48% of the survey popula- tion) and those that do not (25 agencies, or 52%). Fifteen of the 23 agencies that now use pave- ment marking warranties provided one or more examples of current specifications, which are compiled in Appendix D (provided as a web-only portion of the report) and are a rich source of information on the various approaches and specific contract provisions now in use. The experience and assessments of the 23 agencies that now use pavement marking war- ranties are the basis of several findings on current North American warranty use: Warranty Structure and Timeline. Most agencies start the warranty evaluation period after installation or after initial acceptance of the marking application. Typical warranty durations are 1 to 6 years, although some agencies apply warranties of 180 days that are timed to encompass one winter season. Variations in Evaluation Periods. Other agencies impose additional time periods-- referred to respectively as observation periods and performance periods--to evaluate pavement marking performance through a lengthier period before initial acceptance or to serve as a further evaluation after initial acceptance but before onset of a multi-year warranty. Warranty Concepts. Based on the examples provided by the 15 U.S. and Canadian agencies, pavement marking warranty specifications now in use represent a blend of methods-based and performance-based thinking. Only three agencies are now using true performance specifications, in which contractors are given full latitude to select pave- ment marking materials and installation techniques to meet agency requirements for pavement marking performance. Pavement Marking Performance. The performance criteria specified in warranties typically include durability or presence, retroreflectivity, and color retention. The min- imum acceptable threshold values of these measures through the warranty performance period differ among agencies. Responsible Party. Within the warranty sample, two-thirds of the agencies (10 of 15) regard the contractor as the warrantor; that is, the party responsible for fulfilling the requirements of the warranty specification. Other agencies either hold the materials man- ufacturer responsible or employ a dual or discretionary assignment of responsibility.

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2 Cost Impacts. The impacts of pavement marking warranties on costs (whether initial, annual, or life-cycle) are still not well researched. Most assessments of costs are based on subjective judgments or perceptions by parties engaged in the warranty process, with little supporting quantitative information. Issues in Administration. Several issues in administering pavement marking war- ranties were identified by the road agencies and the contractors and materials manufac- turers. One topic on which the interests of the two groups converged is the scheduling of partial payments through a multi-year warranty period, with questions of what is a reasonable amount for initial payment and what should be the amounts of subsequent annual payments through the duration of the warranty. Comments by the engaged par- ties suggested that a balanced approach is needed to ensure that agency expectations of quality and performance are met, while providing contractors and materials manufac- turers with fair, timely payment for work accomplished in initial installation of mark- ings. This issue will likely grow in importance as more agencies begin to use pavement marking warranties and as the durations of warranty performance periods increase. Almost 70% of agencies now using pavement marking warranties expressed satisfaction with their warranty program. About 13% reported mixed results, with concerns primarily about timely response by contractors to concerns about observed performance. One agency that cited a "problematic" experience explained its response as actually a concern with the current state of knowledge of warranty performance and the need for stronger capabilities in pavement marking management systems, rather than an issue with the warranties themselves. Most agencies that use pavement marking warranties viewed their benefits in terms of improved pavement marking performance and quality, protection against premature failure, reduced lane occupancy for repairs or re-application, and attendant savings in annual (or recur- ring) costs and life-cycle costs (including road-user cost savings resulting from reduced lane occupancy through the warranty period). Agencies use several mechanisms to promote quality in their warranty specifications; for example, stipulated meetings among all parties; required contractor submittals; materials manufacturer's training, certification, onsite representation dur- ing installation, and technical assistance; contractor provision of test stripes or sections; use of qualified products lists; and several other measures. Other benefits that were cited included the potential for greater contractor innovation, warranties as a logical component of comprehensive departmental outsourcing, reduced administrative and staffing burden for the agency, a mech- anism for generating performance measurement data for pavement markings (which could also be used for product performance comparisons), and a perceived benefit of risk sharing. The major impediments or drawbacks to pavement marking warranties as reported by agencies that do not use them were the perceived greater administrative burden, potentially higher bid prices, and possible increases in disputes or litigation with contractors. Agencies also mentioned an internal culture and practice that encouraged closing out construction proj- ects as expeditiously as possible. These agencies currently favored effective enforcement of project specifications in lieu of warranties as the preferred approach to managing performance- related risk. Although they might entertain using pavement marking warranties in the future, they would carefully consider the implications before proceeding further. Other problems that were cited included perceived interactions between pavement marking warranties and federal- aid project requirements, requirements of concurrent warranties on other highway assets, and other bonding commitments. Interviews with seven U.S. and Canadian pavement marking contractors and two marking materials manufacturers provided private sector perspectives on pavement marking warranties. All interviewed firms believed in providing a quality pavement marking job regardless of whether or not the projects involved a warranty. They believed, however, that warranties helped impose a level playing field for bidding among all participating contractors and pro- vided an understood expectation of quality through the warranty performance-evaluation

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3 period. The firms supported warranties that are structured fairly with strong but reasonable spec- ifications that are enforced effectively, for reasons of both quality of result and fair competition. The materials manufacturers related quality to their ability to exercise appropriate management and control of the several facets of jobs they were involved in, believing that one-source accountability was the best approach to achieve project objectives, avoid finger-pointing, and yield the desired savings in life-cycle costs with benefits to the agency and the public. Notwith- standing their general support for warranties, the firms collectively identified a number of risks that contractors and materials manufacturers face on a project under warranty specifications, and ways to mitigate these risks. The risks are categorized in the report as technical, adminis- trative, financial, and business-reputation risks, although these categories are interconnected and somewhat overlapping. Proposers reviewing the project requirements, including the war- ranty specifications, must therefore deal with the total project context when deciding whether and how to bid on the job. This study has reviewed several specific aspects of pavement marking warranty provisions and how they are administered. Agencies with successful warranty programs have often refined their individual practices based on past experience, incorporating lessons learned into longer- term, more ambitious pavement marking contracts. One advantage of this very focused agency engagement of the problem is the identification of pavement marking materials and techniques that work well given local pavements, weather, altitude, traffic, and available construction industry capabilities. A more general result, however, is the overall variability among state DOT and Canadian agency practices. Several examples of this variability include the different approaches to warranty formulation (i.e., the particular mix of methods-based vs. performance- based requirements included), the particular performance measures and ranges of values in minimum acceptable performance thresholds, and varying allocations of risk between agency and contractor. For instance, agencies differ in how they treat winter maintenance dam- age in their warranties; that is, whether or not they hold contractors responsible for repairing pavement marking damage owing to snowplowing, anti-icing and deicing, studded tires, winter chains, and so forth. Some exclude winter damage from warranty requirements (i.e., the con- tractor is not responsible for repair), whereas others explicitly include it as a warranty require- ment and thus a contractor responsibility. Four reporting agencies--all of which are located in regions subject to snow and ice in the United States or Canada--structure their warranty periods on a calendar basis that explicitly includes a winter season. The literature review provided comparative information on European warranty experience to complement the U.S. and Canadian findings. Two international scans of European high- way agencies that were organized by the FHWA and AASHTO observed a different legal and institutional framework that influenced the success of warranty use. European experience in road construction warranties has a long history: Materials and workmanship warranties of various durations have been used for 30 to 40 years. European countries are continuing to move toward performance warranties and other methods to engage the contractor more fully in assuring the quality of asset performance. Institutional differences between Europe (and to some degree Canada) and the United States include a less litigious relationship between agen- cies and contractors, and greater European use of bid alternatives, contractor testing, and end- result (or performance-based) specifications rather than method-based (or prescriptive) spec- ifications. Several European countries use best-value rather than low-bid procurement and emphasize its importance to successful warranty implementation, because it promotes trust and confidence among the parties. These findings led to several recommendations for improving U.S. practice, including steps to create stronger teamwork between public and pri- vate sector firms, a staged approach leading to greater use of long-term performance war- ranties, and federal establishment of a warranty resource center for use by federal, state, and local governments. Another recommendation, now under consideration by U.S. industry rep- resentatives who are engaged in pavement markings, concerned the possible application of a European-style turntable for accelerated identification, evaluation, approval, acceptance, and specification of new pavement marking products.

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4 The study's findings identified several gaps in current knowledge and state of practice that suggest needs for future research. Among the recommended research topics are the following: A broader, more strategic, and more quantitative understanding of the role and value of pavement marking warranties. This research could develop more comprehensive knowl- edge and strengthened analytic techniques in several topic areas; for example, factors affecting the performance of pavement marking materials, the relationship of pavement marking performance to highway mobility and safety, the appropriate distribution of contractor payments through a multi-year warranty period to ensure quality in pavement marking performance while providing fair and timely reimbursement of contractor costs, the potential use of contract incentives to gain superior pavement marking per- formance beyond warranty requirements, and better quantification of the relative costs and benefits of warranty use. These research findings could help agencies to formulate a more strategic view of warranties; that is, as one method in a range of options to achieve the desired goals of a longer pavement marking life, improve performance dur- ing this life, lower life-cycle costs, and reduce the need for road occupancy to repair or replace deficient markings. Only 3 of the 15 agencies that submitted samples of warranty specifications employ true performance specifications. A stronger understanding is needed of the advantages and disadvantages of performance specifications for pavement markings, lessons learned from agencies that have used them, and opportunities for wider use. Basic improvements in communication and dispute resolution could be researched and discussed for implementation where they do not now exist; for example, wider use of qualified product lists tailored to local conditions, liaison committees between the high- way agency and industry representatives to maintain communication on current issues, and formation of a panel to clarify and resolve disagreements where such mechanisms are not now formalized. Several agencies that do not now use pavement marking warranties alluded to interac- tions between pavement marking warranties and other contractual or bonding commit- ments, including federal-aid project agreements, that they believed impeded use of the warranties. Although it is not clear whether these concerns represent an actual need for research (other agencies had apparently addressed these types of concerns in their own warranty programs), at least wider communication of acceptable procedures--perhaps through roundtable discussions or peer exchanges--could promote wider and more con- fident use of warranties if these agency concerns were allayed.