National Academies Press: OpenBook

Microsurfacing (2010)

Chapter: Chapter Four - Contracting Procedures

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Suggested Citation:"Chapter Four - Contracting Procedures." National Academies of Sciences, Engineering, and Medicine. 2010. Microsurfacing. Washington, DC: The National Academies Press. doi: 10.17226/14464.
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Suggested Citation:"Chapter Four - Contracting Procedures." National Academies of Sciences, Engineering, and Medicine. 2010. Microsurfacing. Washington, DC: The National Academies Press. doi: 10.17226/14464.
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Suggested Citation:"Chapter Four - Contracting Procedures." National Academies of Sciences, Engineering, and Medicine. 2010. Microsurfacing. Washington, DC: The National Academies Press. doi: 10.17226/14464.
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Suggested Citation:"Chapter Four - Contracting Procedures." National Academies of Sciences, Engineering, and Medicine. 2010. Microsurfacing. Washington, DC: The National Academies Press. doi: 10.17226/14464.
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Suggested Citation:"Chapter Four - Contracting Procedures." National Academies of Sciences, Engineering, and Medicine. 2010. Microsurfacing. Washington, DC: The National Academies Press. doi: 10.17226/14464.
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Suggested Citation:"Chapter Four - Contracting Procedures." National Academies of Sciences, Engineering, and Medicine. 2010. Microsurfacing. Washington, DC: The National Academies Press. doi: 10.17226/14464.
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Suggested Citation:"Chapter Four - Contracting Procedures." National Academies of Sciences, Engineering, and Medicine. 2010. Microsurfacing. Washington, DC: The National Academies Press. doi: 10.17226/14464.
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Suggested Citation:"Chapter Four - Contracting Procedures." National Academies of Sciences, Engineering, and Medicine. 2010. Microsurfacing. Washington, DC: The National Academies Press. doi: 10.17226/14464.
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29 INTRODUCTION The highway industry is based on construction contracting. Microsurfacing is no different than any other technology when it comes to the regulation of how public highway agencies can procure these services. Previous research has shown that con- tract policies, procedures, and regulations directly affect con- struction costs (Ohio DOT 2007; Erwin and Tighe 2008). Because contracts are used to allocate risk among the parties to a contract, understanding how design, construction, and performance risk is treated in microsurfacing contracts it is necessary to understand its market pricing and the depth of the pool of qualified contractors. Finally, competition affects con- struction costs and the lack thereof can put a pavement preser- vation and maintenance treatment that is economical in one market out of monetary reach in another. This chapter will review findings as they relate to the poli- cies, principles, and guidelines currently being followed by state transportation agencies to contract for microsurfacing. It will deal with the various contracting procedures that are used by the various agencies that responded to the questionnaire. The distribution of performance risk will also be discussed in this chapter. Additionally, those contractual mechanisms to ensure responsibility will be identified and discussed as they are found both in the literature and in the questionnaire responses. It will include the following: • Contract types, • Microsurfacing programs and their impact on com- petition, • Training and certification programs for contractors and inspectors, • Warranties, and • Microsurfacing contract provisions. CONTRACT TYPES Transportation infrastructure contracts have traditionally been awarded using a low bid process that is often required by leg- islation at the state and local level. The survey identified two primary types of low bid contracts being used: unit price and indefinite delivery indefinite quantity (IDIQ). Although they also use unit price, the Missouri and New York DOTs both indicated using IDIQ contracts. IDIQ contracts are pre-priced contracts bid without knowing the exact project locations or amounts (North Atlantic Division 2006). These lend them- selves well to maintenance contracting and are often called capacity contracts because the owner has a given capacity to satisfy microsurfacing requirements without having to prepare individual sets of biddable construction documents for each new project (North Atlantic Division 2006). These have a long history of use in the federal sector, but are rarely used by state and provincial DOTs. CONTRACT ADMINISTRATION The survey contained a specific section devoted to contract administration procedures. The output is shown in Table 22. The first few questions were designed to gauge the impact on competition for microsurfacing projects. It has been reported that some U.S. and Canadian agencies do not employ certain treatments in their pavement preservation programs because of a dearth of qualified contractors (Erwin and Tighe 2008; FHWA 2010a). Thus, being able to generate an adequate level of competition is one parameter in the pavement treatment selection process. Microsurfacing Competition The first noticeable trend is in the volatility of the agencies’ microsurfacing programs. To be able to bid on a microsurfac- ing contract, the contractor has to have the appropriate equip- ment and personnel with enough experience to be able to achieve the production rates necessary to submit a competitive bid. The business case that is to be made for the investment in capital equipment and training has to be offset by a reason- able expectation to be able to recoup that investment with a profit using it on agency microsurfacing jobs (Small Business Administration 2009). Thus, more agencies answered “we rarely know how much microsurfacing we will use from year to year” than any other possible answer combined with the “no knowledge” answers (to total 10 of 36 replies) suggests that developing the capability to bid on microsurfacing contracts from those agencies is speculative at best. The uncertainty in how much microsurfacing will be let from year to year will have a chilling effect on competition (Small Business Administration 2009). This phenomenon is validated by the fact that 33 of 36 total responses indicated they normally had 3 or fewer bidders and 22 of those responses indicated that they did not receive an “adequate number of qualified bidders.” Adding to that is that virtually CHAPTER FOUR CONTRACTING PROCEDURES

all responding agencies outsource their microsurfacing work, which leads to the conclusion that most of the U.S. and Cana- dian agencies do not believe they have adequate competition among qualified microsurfacing contractors for their pro- grams. The survey responses from those agencies that indi- cated satisfaction with the current level of competition came from agencies that also reported no more than a 20% fluctua- tion in their annual programs. This suggests that a possible remedy is for each agency to set aside a specific minimum amount of microsurfacing inside its annual pavement preser- vation and maintenance program to create an incentive for highway contractors to invest in the equipment and training necessary to increase the level of competition in this impor- tant sector. Microsurfacing Qualifications Table 22 also contains the survey results regarding required types of qualifications and/or training that would make a contractor eligible to be awarded a microsurfacing project. Finally, information on agency personnel microsurfacing qualifications, if any, was also sought. The rationale for these two sets of questions was to provide current information in support of the FHWA’s Pavement Preservation Expert Task Group’s strategic plan in which one goal was to develop a pavement preservation certification program for both con- tractor and agency personnel (FHWA 2010a). The idea of contractor and agency workforce development specifically in pavement preservation and maintenance has been around for at least a decade. One paper stated that: “Highway profes- 30 sionals need a better understanding of pavement preservation and maintenance benefits and the different maintenance cat- egories” (Zaniewski and Mamlouk 1999). Microsurfacing Training and Certification The majority of the respondents answered the question regard- ing a prequalified microsurfacing bidders list in the negative. Comparing that response with the response reporting gen- eral agency dissatisfaction with the average number of bidders leads to a concern that perhaps the small number of poten- tial bidders makes developing a microsurfacing prequalifi- cation program moot. Additionally, only two agencies require specific microsurfacing training or certification for their con- tractors. The Virginia DOT has its own slurry seal contractor certification program that applies to microsurfacing contrac- tors. It consists of a 4-h class covering materials, equipment, proper placement procedures, and specifications, and it fin- ishes with an examination. Manitoba has a general paving contractor certification program. These programs consist of a series of learning modules that cover the quality management requirements for each program. A slight increase is noted for training and certification of agency personnel, with six agen- cies answering positively to that question. Kansas, Nevada, Saskatchewan, Virginia, and Wyoming use in-house training programs and Missouri combines their in-house training with the web-based National Highway Institute pavement preser- vation course (NHI Course Number FHWA-NHI-131110A) for its microsurfacing personnel. TABLE 22 SUMMARY OF SURVEY GENERAL CONTRACTING INFORMATION Question U.S. Canada Total Change in Annual Microsurfacing Program Volume? Virtually the Same Amount 5 3 8 Fluctuates +20% Each Year 6 1 7 Fluctuates +50% Each Year 1 1 2 Rarely Know How Much Each Year 9 1 10 No Knowledge 7 2 9 Typical Number of Bidders? 1 to 3 25 7 32 4 to 6 2 1 3 7 to 9 1 0 1 Adequate Number of Qualified Bidders? Yes 12 2 14 No 14 6 20 No Opinion 2 0 2 Prequalified List of Eligible Bidders? Yes 11 0 11 No 14 8 22 Do Not Know 3 0 3 Required Training/Certification of Contractor Personnel? Yes 1 1 2 No 19 7 26 Do Not Know 8 0 8 Required Training/Certification of Agency Personnel? Yes 5 1 6 No 20 6 26 Do Not Know 3 1 4

31 Caltrans has an on-going program called “Just In Time” (JIT) training that it associates with a number of construc- tion means and methods. It requires existing certifications for selected construction processes as part of its general specifi- cations. The following example for concrete could be applied to microsurfacing as a programmatic system to enhance both contractor and agency personnel qualifications. Mandatory training is part of the Caltrans specification. Caltrans requires Just-In-Time Training for the rapid-setting concrete pave- ment projects. Contractors and engineering personnel directly involved with these projects are required to attend. Once the train- ing is completed, a one-year certificate is given to each participant (Feldman and Feldman 2007). The responses to the three questions discussed previously coincide with the Pavement Preservation Expert Task Group initiative to develop a certification program at the national level found in the literature (FHWA 2010a) and allows one to conclude that a microsurfacing training and/or certification program is needed. Once implemented, certification would benefit the construction community by giving certified con- tractors a competitive advantage. Requiring DOT personnel to be certified would not only enhance agency quality control/ quality assurance (QC/QA) programs but also provide a com- mon base of knowledge from which quality issues could be discussed between the contractor and the agency inspector. WARRANTIES Pavement warranties are controversial for at least two reasons. First, they are often proposed for projects where the contractor furnishing the warranty did not construct the pavement struc- ture upon which the new pavement or surface treatment is con- structed (Ohio DOT 2007). Second, the contractor normally has no input to the structural design process and therefore is asked to guarantee the risk that the design was adequate with- out any control over the magnitude of that risk (Austroads 2003a). Figure 12 illustrates the continuum of microsurfacing contract risk and relates the four categories to the type of con- tract risk that is inherent to each point on the continuum. Note that the three examples that are shown in the figure are not the only possibilities that can be observed. However, they do rep- resent the majority of this study’s findings in both the literature and the content analysis. Owner agencies that require construction warranties may expect to pay a premium for that privilege (Ohio DOT 2007). However, this study found that 21 of 28 U.S. DOTs and 7 of 8 Canadian MOTs require the microsurfacing contractor to develop the job mix formula. As discussed in chapter three, this also involves characterizing the existing substrate. There- fore, the risk of warranting another’s design disappears, and the risk associated with the existing conditions can be miti- gated by merely examining the project site and deciding whether microsurfacing is an appropriate treatment. If it is not, the contractor makes a “no-bid” decision. Thus, because the classic level of uncertainty is reduced, a microsurfacing project shows the potential to be a better candidate for a war- ranty provision than other pavement preservation and main- tenance treatments. Critical Warranty Details The survey asked each respondent to indicate whether or not they used warranties in their program and, if they did, to dis- close the details of that warranty. Table 23 contains a summary of those responses, as well as each agency’s rating of their microsurfacing performance. The results can be broken into two groups. The first are agencies that require a standard con- struction warranty of materials and workmanship (usually for 12 months) on all their contracts and the second are those that have written separate microsurfacing warranty provisions. Table 24 is an example of the supplementary specification that the Ohio DOT (2008) uses for its microsurfacing projects. A copy of this specification is contained in Appendix C to fur- nish all the details for the interested reader. Looking at the table, one can see that 8 in 28 U.S. and 7 of 8 Canadian agen- cies couple microsurfacing with warranties. Table 24 shows measurable threshold criteria developed by the agency to permit an objective evaluation of microsurfacing performance dur- ing the period of the warranty. Finally, because microsurfac- ing is most often used to extend the underlying pavement’s life, the warranty creates a mechanism to ensure that purpose is accomplished. Therefore, it appears that warranting micro- surfacing projects for which the contractor has furnished the job mix formula is not problematic to the same degree as other types of road construction. Because warranties are often used to create an incentive for quality work (Thompson et al. 2002), comparing the agency’s microsurfacing performance evaluation is instructive. Table 23 shows that 3 of the 4 “fair” ratings came from agencies with warranties. Therefore, the question of whether the warranty is an attempt to enhance the quality of the agencies’ micro- FIGURE 12 Contract risk continuum (Scott et al. 2006). Input Driven Output Driven Performance Driven Owner Designed Owner or Contractor Designed Contractor Designed Prescriptive Specification Prescriptive Specification Performance Specification Ownerís Construction Methods Contractor’s Construction Method Contractor’s Construction Method Construction Unwarrantable Construction Warrantable Long-Term Warranties

surfacing program or if the increased performance monitoring demanded by a warranted pavement surface has made the agency more aware of the defects that form in newly applied microsurfacing. The Ohio DOT’s guidance for selecting micro- surfacing projects on which a warranty can be required high- lights the need to carefully evaluate the pavement’s existing condition before adding a warranty. This Item [warranty specification] can be used on minor reha- bilitation projects which do not require a structural overlay . . . Projects which do not qualify for preventive maintenance nor have been designed in accordance with the minor rehabilitation require- ments are not eligible for a warranty. High stress locations are not candidates for micro-surfacing . . . With warranty, however, it is more important that proper pavements be selected and the existing pavement is properly prepared, otherwise the warranty could be voided (Ohio DOT 2008). Warranty Cost Experience In 2007, the Ohio DOT published a cost analysis study of its warranty program that disproved that notion. It found over a three-year period that microsurfacing projects with a warranty 32 had unit prices that were only 0.18% more than those without (Ohio DOT 2007). The same report contained information on the perceptions of the change in microsurfacing quality by Ohio DOT personnel, which showed that 69% believed the impact to be an improvement. Contractors were also surveyed as to what changed from their perspective and it showed that the top three contractor-perceived warranty-induced improvements were: 1. Quality conscious construction 2. Better workmanship 3. More design input (Ohio DOT 2007). This connects with the notion introduced at the beginning of this section regarding risk exposure. The risk allocation changes when the contractor is allowed to have input to the design and that unit prices in Ohio did not skyrocket when warranties were introduced confirms the assertion that micro- surfacing projects are good candidates for warranties because the contractor has more control over the design and construc- tion process. This confirms the Ohio DOT warranty guidance directing engineers to carefully select “proper pavements” for warranted microsurfacing projects. Agency (state or province) Warranty Length Nature of Microsurfacing Warranty Microsurfacing Performance Rating from Survey Indiana 3 years Friction, raveling, rutting Fair Louisiana 1 year Materials and workmanship Good New Hampshire 1 year Surface defects Excellent Nevada 2 years Standard construction warranty Good New York 1 year Delamination, snowplow damage, flushing, and raveling > 2.0 SY Good Ohio 2 years See Table 24 for details Good Oklahoma 1 year Standard construction warranty Fair Texas 2 years Rutting, flushing, and raveling Fair Alberta 1 year Adhesion (raveling) Good British Columbia 1 year Standard construction warranty Good Manitoba 2 years Performance specification includes warranty provision Excellent Nova Scotia 2 years Standard construction warranty Good Ontario 2 years Flushing, raveling Good Quebec 1 year Standard construction warranty Good Saskatchewan 1 year Standard construction warranty Good TABLE 23 SUMMARY OF WARRANTIES REPORTED IN THE SURVEY TABLE 24 SUMMARY OF OHIO DOT MICROSURFACING WARRANTY SPECIFICATION Distress Type Threshold Level (per 500 SF of surface area) Description Bleeding/ Flushing 300 SF (28 SM) Excess asphalt binder that creates a shiny, reflective condition that becomes tacky to the touch at higher temperatures. Surface Loss 120 SF (11 SM) Loss of surface interlock by traffic wear, debonding, or delamination. Raveling 300 SF (28 SM) “Moderate” level raveling as defined in the Strategic Highway Research Program (SHRP) “Distress Identification Manual for the Long-Term Pavement Performance Project” (SHRP-P-338). Rutting 0.25 in. (6.5 mm) continuous in any segment Measure the wheel path with a 4 ft (1.2 m) straight edge. Only applies during the first 120 days after the Form C-85 is issued. Maintenance Bond 2 years 75% of the amount bid for the microsurfacing pay item. Source: Ohio DOT (2008).

33 MICROSURFACING CONTRACT PROVISIONS Often contracting provisions can have a large impact on pave- ment preservation and maintenance treatment performance. For example, a Texas study found that agencies that paid for crack sealing by the linear lane-mile rather than by the pound of sealant had fewer flushing issues in their seal coat programs because the unit price by weight created an incentive for the crack sealing contractor to use as much crack seal as possible to boost the total amount paid (Senadheera et al. 2001), whereas paying by the lane-mile had the opposite effect, but required a higher level of quality assurance to make sure all cracks were sealed. Another example from that study was the finding that seals installed early in the season had less early raveling than the ones placed late in the season because early seals had more high surface temperature traffic compaction, which kept the binder softer (Senadheera et al. 2001). There- fore, it is important to evaluate key contract provisions to look for similar trends in microsurfacing. This section will look at the following contract provisions: • Seasonal restrictions • Pay units • Incentive/disincentive clauses Seasonal Considerations Microsurfacing is an asphalt-based product and as a result is sensitive to ambient air temperature, humidity, wet conditions, and surface temperature. “The basic prerequisite for success is that the emulsion needs to properly break and cure. As a result, humidity, wind conditions, and temperature (both surface and air) are important and need to be considered” (ISSA 2010a). Therefore, the microsurfacing contract needs to account for the restrictions that the material places on the environment in which it can be applied with good results. The specification content analysis accumulated weather-related provisions. Table 25 shows the most typical climate-related contract provisions regarding temperature limits within which micro- surfacing can be applied. Most revolve around the typical tem- perature for hot-mix paving operations: 50°F (10°C) and rising. The three that were lower than that limit were the Ohio DOT at 40°F (4°C) and Michigan DOT and FLHD at 45°F (7°C). Kansas and Wyoming DOTs require the temperature to be above 60°F (16°C) and Louisiana uses 70°F (21°C). The functional effect of lower temperature requirements is to extend the microsurfacing season, which is necessary for agen- cies in northern climes such as the three mentioned. Louisiana is the only southern agency that does not use that specifica- tion. No explanation could be found for the reason that the Louisiana Department of Transportation and Development uses 70°F (21°C). Wyoming’s use of a higher than standard temperature (60°F; 16°C) stems from the concept that it is the Rocky Mountain state where temperature gradients are much steeper than those found in northern states in the Midwest and farther east. In the Rockies, the temperature can vary ±40°F (±4.4°C) in mid-summer and more if the road is at a high alti- tude. Therefore, the Wyoming DOT is building a safety factor into its specifications to meet the demands of local climate. Research has found the surface temperature affects the rate at which an emulsion breaks (Moulthrop 2007). Figure 13 shows the relationship between temperature and emulsion breaking time. One report indicated that it would be necessary that surface temperatures be within a range of 50°F (10°C) and 140°F (60°C) to ensure a proper break (Gransberg and James 2005). When the emulsion breaks too fast, wash-boarding can occur, and if it breaks too slow, the product becomes suscepti- ble to raveling (Moulthrop 2007; ISSA 2010a). All the specifi- cations reviewed also contained a further requirement to the effect that the minimum temperatures needed to occur in conjunction with a period of no fog, rain, drizzle, or forecast of freezing temperatures within the next 24 h. Therefore, it is important the microsurfacing contract include air and surface temperature requirements that match both the materials to be used and the climatic conditions in which they will be applied. The other common climatic constraint found in the speci- fications was a definition of the microsurfacing season. Most run from May to September, with the season being shortened as the location of the agency moved north. The survey asked the respondents to identify the months in which they authorize microsurfacing operations. Figure 14 is a histogram show- ing the frequency of response for the United States, Canada, and the total population. When the combined population is summed, 63% of all microsurfacing occurs in June, July, and August, with 100% being completed from April to October. None of the responding agencies applied microsurfacing from November through March. TABLE 25 SUMMARY OF CONTENT ANALYSIS SPECIFICATION TEMPERATURE LIMITS Specification Limit States Using Specified Air Temperature Limit States Using Specified Surface Temperature Limit None No states AL, KS, NE, NM, PA >45° (7.2°C) FLHD, MI FLHD, MI >50° (10°C) AL, GA, MN, MO, NE, NM, OH, OK, PA, TN, TX, UT, VA AL, GA, MN, MO, OK, OH, TN, TX, UT, VA >60° (15.6°C) KS, WY No states >70° (21.1°C) LA LA

Figure 15 shows the distribution if the respondents are split between northern and southern climates. It reveals that microsurfacing is more intense in the shorter northern season, whereas the southern states are able to spread their program out over a several more months. This puts the issue of qualified microsurfacing contractor availability into a time context. The northern agencies complete their annual programs between mid-May and mid-September; therefore, it is essential that the number of new lane-miles of microsurfacing be placed at a faster rate in the north, creating a seasonally higher demand for qualified contractors in the north than in the south. Taking the location of those agencies in North America that require microsurfacing warranties shown in Table 23 into account, one finds that 12 of 15 are northern states or Canadian provinces. The common trend in these three sources leads to two identified effective practices: 34 1. Agencies in northern climates can mitigate potential quality issues induced by a short microsurfacing season by requiring a warranty. 2. Scheduling microsurfacing project letting as early as possible will permit their completion as early in the sea- son as possible and mitigate the risk that poor weather at the end of the season will adversely impact micro- surfacing quality. Contract Payment Provisions “Unit price contracts are used for work where it is not possi- ble to calculate the exact quantity of materials that will be required. Unit price contracts are commonly used for heavy/ highway work” (Schexnayder and Mayo 2004). When an owner selects unit price contracting, it is doing so to share the 0 20 40 60 80 100 120 140 60 80 100 120 140 160 180 Aggregate at 85 degrees F Aggregate at 70 degrees F Emulsion Temperature (degrees F) B re ak ti m e (m in) FIGURE 13 Relationship between temperature and emulsion breaking time (ISSA 2010a). FIGURE 14 U.S. and Canadian microsurfacing season comparison.

35 risk of the final quantities of work with the contractor to reduce the price. This happens because the contractor does not have to bid the worst possible case if the quantities of work are not finite as it would be driven to do in a lump sum con- tract where it bore the entire quantity risk (Schexnayder and Mayo 2004). The owner assumes the risk of quantity over- runs by agreeing to pay for the actual units applied, rather than paying a premium for transferring the risk of quantity over- runs to the contractor through a lump sum price. Given that microsurfacing projects usually are limited to a defined area of pavement, quantity surveys are fairly straightforward and not highly variable. Thus, lump sum contracts, including the total cost of the project with mobilization and traffic control, could be used without the agency incurring a substantial cost increase. For instance, the British Columbia MOT reported getting excellent results since the mid-1980s from lump sum microsurfacing contracts (Miquel and Condron 1991). That being said, no survey respondents indicated that they pro- cured microsurfacing with lump sum contracts. The survey found an almost even split between specifying pay units by area and by weight (see Table 26). Most respon- dents added a note to the effect that they do not differenti- ate between the binder and the aggregate, but rather use a single pay measure for microsurfacing. It also found that these were used because of perceived fairness and the ability to accurately measure pay quantities. The literature shows that the pay unit follows the type of specification used for the pay item (Schexnayder and Mayo 2004). Microsurfacing that is delivered using a performance specification can then be paid for by the area, because the amount of material installed to meet the performance requirements is left to the contractor (Erwin and Tighe 2008), whereas an agency using a method specification would pay by the ton, because the agency has taken control of the specified application rates (Price 2010). Based on the literature and survey results, the following effec- tive practice is identified: Microsurfacing is to be paid for by the ton if the agency is not using a performance specification. The second parameter that affects unit prices is the quantity of work on the project being bid. As the amount of work that is packaged in a single contract increases, its unit price decreases because the contractor is able to spread the fixed costs, such as mobilization and traffic control across more units (Schexnayder and Mayo 2004). The survey found that the average U.S. microsurfacing project was 7.4 lane-miles (11.9 lane-km), with the low of 2 lane-miles (3.2 lane-km) and a high of 17 lane-miles (27.4 lane-km). In Canada, the average microsurfacing project was roughly the same at 6.8 lane-miles (11 lane-km), with the low of 3.7 lane-miles (6 lane-km) and a high of 17 lane-miles (12.4 lane-km). The point made here is that pavement managers can stretch microsurfacing budgets FIGURE 15 Northern and southern agency microsurfacing season comparison. TABLE 26 SUMMARY OF MICROSURFACING UNITS OF MEASURE AND THEIR RATIONALE Pay Item Unit of Measure Reduces the Cost Fairest to the Contractor Easier to Accurately Estimate Do Not Know Why We Use Them Binder U.S. Canada U.S. Canada U.S. Canada U.S. Canada Units of Area (SY/SM) 1 0 3 2 4 3 3 0 Units of Weight (ton/tonne/MG) 2 0 4 0 4 2 2 0 Aggregate U.S. Canada U.S. Canada U.S. Canada U.S. Canada Units of Area (SY/SM) 2 0 2 1 4 4 3 0 Units of Weight (ton/tonne/MG) 1 0 7 0 7 2 1 0

by packaging projects with as much lane-mileage as is prac- tical (Erwin and Tighe 2008). This agreement between the literature and the survey provides an effective practice: Make microsurfacing contract packages as large as is practical to reduce the unit price and increase the number of lane-miles that can be treated each year. This practice links with the finding in the previous section regarding a perceived lack of competition in the industry. Agencies that responded to having a reasonably consistent annual microsurfacing program generally were satisfied with the level of competition. Therefore, increasing the size of microsurfacing projects would also serve to enhance the con- sistency within a given program by permitting the agency to more effectively utilize its pavement preservation and main- tenance budget. Incentive/Disincentive and Quality Price Adjustment Clauses One means to create a contractual mechanism that pro- motes early completion or quality is the use of an incentive/ disincentive (I/D) provision or a quality price adjustment (QPA) provision in the measurement and payment clause of the microsurfacing contract (Laungrungrong et al. 2007). The I/D provision would normally apply to the project schedule and pay a bonus for finishing early or a penalty for being late. The QPA provision operates on the theory that the agency is willing to pay the contractor on a basis that is commensurate with the actual quality of the delivered product. Therefore, if the final product exceeds the performance criteria, the contractor will be paid an additional amount. The provision works in the other direction as well. “However, negative price adjustments can provide a basis for accepting and paying for work that does not fully meet specifications and removal and replacement is not justified. They are not to penalize a con- tractor, but rather to pay an equitable amount for the value of the product delivered” (FHWA 2006). Because state and provincial microsurfacing projects are usually installed on active highways where minimizing dis- ruption is one of the objectives to the contract, I/D provisions are appropriate (Gao 2010). The Michigan DOT “found that the average net reduction in contract days was 19% in com- parison with similar projects that were let with an expe- dited schedule clause requiring the contractor to work a six calendar-day work week, but without the use of an I/D provi- sion” (FHWA 2006). Microsurfacing is also a product that has a number of material quality and performance features that can be measured. The same physical parameters that are shown in Table 23 for warranties could also be used as crite- ria in QPA provisions. The survey and the content analysis looked for evidence of I/D or QPA provisions in microsurfacing practice. The survey 36 had three responses, Michigan, Utah, and Wyoming, that indi- cated that they used QPA provisions. The pay formula was based on the job mix formula and the percent within limits found during QC/QA testing. Because those three states’ microsurfacing specifications were included in the content analysis, it was able to validate the survey response. SUMMARY This chapter has summarized the salient aspects of microsur- facing contract formation and administration. The conclusions and effective practices are discussed here. Conclusions The following conclusions were reached: • Most of the U.S. and Canadian agencies do not have an adequate level of competition among qualified micro- surfacing contractors for their programs. This may be because most microsurfacing programs do not advertise a consistent amount of work each, making it difficult for interested contractors to develop the technical capacity and equipment necessary to competitively bid on these contracts. • The concept of requiring warranties on microsurfacing projects was found to be less onerous than for other pave- ment work because most agencies require the contractor to furnish the job mix formula. • Few agencies require microsurfacing contractors and agency personnel to complete microsurfacing training and/or a certification program. This indicates a need for such a program and, therefore, the FHWA Pavement Preservation Expert Task Group initiative to develop a microsurfacing certification program at the national level is both timely and valuable. Effective Practices The following effective practices were identified: • Agencies in northern climates can mitigate potential quality issues induced by a short microsurfacing season by requiring a warranty. • Scheduling microsurfacing project letting as early as pos- sible will permit its completion as early in the season as possible and mitigate the risk that unstable weather at the end of the season will adversely impact microsurfacing quality. • Microsurfacing is to be paid for by the ton if the agency is not using a performance specification. • Make microsurfacing contract packages as large as is practical to reduce the unit price and increase the number of lane-miles that can be treated each year.

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