Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter.
Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.
OCR for page 34
34
Table 11. Factors suggested for risk analysis.
Design-Build Design-Build with O&M Performance Warranty
· Initial costs · Agency's pool of alternatives · Agency's pool of alternatives
· Supplementary · Performance criteria · Performance criteria
costs · Service life of initial pavement · Service life of initial pavement
· Work zone costs · Service life of structural · Service life of structural
· Noneconomic rehabilitation rehabilitation
factors · Type and timing of maintenance · Type and timing of maintenance
and functional rehabilitation and functional rehabilitation
· Initial costs · Initial costs
· Commodity price inflation · Commodity price inflation
· Supplementary costs · Supplementary costs
· Future maintenance costs · Future maintenance costs
· Future costs for rehabilitation · Future costs for rehabilitation
· Future operational costs · Future operational costs
· Work zone costs · Work zone costs
· Noneconomic factors · Noneconomic factors
· Inflation, discount factors, and · Inflation, discount factors, and
macroeconomic risks macroeconomic risks
· Projected traffic volume · Projected traffic volume
· Projected revenue · Additional costs for warranty
requirements (for surety bonds as
in additional bid price, $/sq. yd)
Note: In design-build scenarios, where the contractor is not responsible for O&M or long-term performance
warranties, the contractor would follow the agency-specified process in developing life-cycle strategies.
The contractor's risk assessment process includes careful Just as for agency risk assessment, contractors may ana-
reviewing of the project criteria specified in the RFP or bid doc- lyze the factors listed in Table 11 to assess their own risk.
uments, identifying potential risks, categorizing the probabil- The contractor should take a holistic view of the contract
ity of occurrence, determining how significant the impact provisions, results of risk assessment, and the available risk-
would be if the risk occurred, and developing strategies to mit- sharing mechanisms into consideration in customizing the
igate the risks. inputs.
The contractor risk assessment can be utilized in establish-
ing statistical distribution of risk factors to characterize their
7.3 Developing Inputs
variability or uncertainty. For example, the inflationary risks of
for Contractor-Based
commodity prices may help to set the standard deviation of
Selection Process
future costs, while the assessment of incentives/disincentives
While the overall framework of the agency-based pavement- for measured pavement performance may prompt the con-
type selection process is applicable to contractor-based tractor to focus more on maintenance strategies and less on
pavement-type selection, contractor-based pavement-type rehabilitation.
selection also needs to incorporate the impact of increased risks Statistical characterization of risk factors may be unfeasible
in determining the inputs for the process. These factors can be if sufficient data are unavailable. In such cases, the contractor
incorporated in the proposed framework of contractor-based can make adjustments based on the results of sensitivity analy-
selection under the evaluation of feasible alternatives using sis and Monte Carlo simulation. Contractors should make use
economic and noneconomic factors. of probabilistic risk assessment for determining inputs, which
When identifying inputs for the selection process, the con- is similar to the probabilistic LCCA process.
tractor may find it advantageous to begin by reviewing the
agency's pavement-type selection practices, pavement design
7.4 Agency's Evaluation of
methodology, and pavement management data. The agency-
Contractor-Based Selection
based pavement-type selection process can provide a solid
starting point. The agency-based selection process reflects The agency evaluates the contractor's proposed pavement
local practices on inputs such as M&R and future impacts to type for its conformance to contract provisions of the project,
traffic, and the agency is likely to evaluate contractors' techni- as illustrated in Figure 18. The agency can validate the assump-
cal proposals based on how well they address local condi- tions and analysis criteria used in the contractor's selection
tions. In some alternate contracting projects, the agency process, as well as whether the contractor's selection meets the
may provide specific guidance in the RFP on pavement-type overall project goals. Once the contractor submits the pre-
selection criteria, such as pavement life-cycle strategies and ferred pavement type, the agency should check for compliance
design methodology. with its economic and noneconomic goals.
