Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
40 Activity: A specific action performed by the highway agency or the con- tractor, such as initial construction or major rehabilitation. An activity is defined by its physical costs, its service life, and its effects on highway users. An activity is a component of an alternative. Administrative Costs: Costs incurred in contract management adminis- tration overhead expenses. Agency: A government organization responsible for initiating and car- rying forward a highway program for the general public. May refer to a federal highway agency, state transportation department, met- ropolitan planning organization, local government organization, and so forth. Agency Costs: Monies spent by a highway agency for construction or rehabilitation activities. Alternative Contracting: Type of contract that is executed in ways other than traditional design-bid-build type. Alternative-Preference Screening Matrix: A decision support tool that provides a structured approach for setting objectives, exploring the strengths and weaknesses of alternatives, prioritizing alternatives, and making the final âbest possibleâ choice(s). Alternatives: The complete set of initial and future activities that will satisfy the established pavement performance objectives of a proj- ect. In pavement-type selection, all alternatives being considered for a single project will equally meet the projectâs performance requirements. Analysis Period: The time period used for comparing pavement-type alternatives. An analysis period may contain several maintenance and rehabilitation activities during the life cycle of the pavement being evaluated. The analysis period should not be confused with the pavement design or service life. Award of Contract: The acceptance of a contractorâs bid proposal by the agency. Bidder: An individual, partnership, firm or corporation formally submit- ting a proposal for the advertised work or materials. Commodity Price Adjustment: Adjustments made by the public agency to the contract unit prices of specific materials and supplies under conditions of price volatility. Competitive Bidding: The process in which the procuring agency is required to advertise and award contracts to the lowest responsible and responsive bidder through open bidding, unless the use of the agencyâs own labor forces and equipment is more cost-effective. Construction Contingency Cost: An additional markup cost applied to an estimate to account for undefined, unknown, and uncertain requirements. Contractor: Private entity that provides design, construction and/or maintenance services to a highway agency. May refer to the design- builder or a concessionaire. Corrective Maintenance: Activity performed to correct deficiencies that negatively impact the safe, efficient operations of the facility, and future integrity of the pavement section. Corrective maintenance generally is reactive to unforeseen conditions to restore a pavement to an acceptable level of service. Correlation Analysis: A statistical technique that is used to study the rela- tionship among variables. Correlation Coefficient: A statistical measure that indicates the strength of the linear association between two variables. A correlation coef- ficient of +1 indicates that two variables are perfectly related in a positive linear sense, while a value of â1 indicates perfect negative correlation. Values closer to zero indicate poor or no correlation, and other intermediate values indicate partial correlation. Cost-Based Estimating: A method to estimate the bid cost of a work item by estimating the cost of resources (time, equipment, labor, and materials) for each component task necessary to complete the work item, and then adding a reasonable amount for contractorâs overhead and profit. Depreciation: Loss in the value of an asset. Design-Bid-Build: A project delivery method in which the public agency provides the design and solicits bids for the construction of the specified design. Design-Build: A project delivery method in which the public agency combines procurement for both design and construction services into a single contract and from the same private-sector entity. Design Life: The length of time for which a pavement structure is being designed based on structural distresses and traffic loadings. Deterministic Analysis: Approach that uses single-point estimates in calculations without regard for the variability of the inputs. The single-point estimates usually are selected based on statistical aver- ages, the most likely scenario, historical evidence, or professional experience. Discount Rate: The time value of money used as the means of com- paring the alternative uses for funds by reducing the future expected costs or benefits to present-day terms. Discount rates are used to reduce various costs or benefits to their present value or to uniform annual costs so that the economics of the various alternatives can be compared (approximately equal to interest minus inflation). Downside Financial Risk: A chance for cost overrun or financial loss. Glossary
Economic Analysis Technique: The approach used in the planning process to analyze the relative costs and benefits of a potential invest- ment. The most common economic analysis techniques include net present value (NPV), benefit/cost (B/C) ratios, internal rate of return (IRR), modified internal rate of return (MIRR) and equivalent uni- form annual costs (EUAC). End-Result Specification: A type of specification in which the agency specifies the final characteristics of the product and provides flexibil- ity to the contractor in achieving it. Engineering Costs: Costs incurred with design of pavement alternatives, construction engineering, construction supervision, materials test- ing, and analysis of the pavement. Equivalent Alternatives: Pavement types that are designed to perform equally, provide the same level of service, over the same performance period, and have similar life-cycle costs. Expenditure-Stream Diagram: The graphical depiction of expenditures over time associated with various activities in a pavement life cycle. The upward arrows indicate expenditures, whereas the downward arrows indicate benefits. Family of Pavements: A group of pavements that share similar charac- teristics such as the pavement type, design features, materials, traffic volume, functional classification, and so on. Functional Classification: The process by which highways and streets are grouped into classes, or systems, according to the type of service they are intended to provide. Functional Performance: Ability of the pavement to provide a smooth, comfortable, and safe ride to the road user, as measured by smoothness. Functional Treatments: Activity to extend the functional performance of an in-service pavement. Historical Bid-Based Estimating: A method of estimating current unit prices using historical bid data of similar projects from recently awarded contracts. Incentive/Disincentive: Pay adjustments awarded to the contractor as reward/penalty based on the quality or performance of the finished product. International Roughness Index: A pavement roughness index computed from a longitudinal profile measurement using a quarter-car simu- lation at a simulation speed of 50 mph (80 km/h). Life-Cycle Cost Analysis: An economic assessment of an item, area, system, or facility and competing design alternatives considering all significant costs of ownership over the economic life, expressed in equivalent dollars. Life-Cycle Cost: The total cost of ownership of a pavement section com- puted over the analysis period. Life-Cycle Cost Adjustment Factor: The difference in future costs of two pavement alternatives. Maintenance: The preservation of the entire roadway, including surface, shoulders, roadsides, structures, and such traffic control devices as are necessary for its safe and efficient utilization. Maintenance Treatments: Treatment activities intended to correct or preserve a roadway pavement for its safe and efficient utilization. Materials and Workmanship Type Warranty: A warranty that requires contractors to correct defects in the pavement caused by elements within their control and assumes no contractor responsibility for the design. MechanisticâEmpirical: A design approach that incorporates the princi- ples of mechanics of solids with empirically derived performance relationships to accomplish the design objectives. Monte Carlo Simulation: A computational algorithm based on repeated random sampling that often is used in simulating a distribution of likely results. Net Present Value: The net value of all present and future costs and ben- efits converted to a single point in time using a discount rate factor. Pavement Condition: A quantitative representation of pavement distress at a given point in time. Pavement Life-Cycle Model: A combination of strategies to achieve the desired functional and structural performance level of the pave- ment over the chosen analysis period. Strategies include the initial construction, structural and functional rehabilitation, preventive maintenance, and corrective maintenance activities. Performance Specifications: A type of specification that defines the performance characteristics of the final product and links them to construction, materials, and other items under contractor control. Performance-Trend Analysis: Statistical analysis to determine the longevity of a pavement structure or a rehabilitation strategy using historical data. Performance Warranty: A contract that requires the contractor to assume full responsibility for repairing or replacing defects in pave- ments during a prespecified period. Preventive Maintenance: A planned strategy of cost-effective treat- ments to an existing roadway system and its appurtenances that preserves the system, retards future deterioration, and maintains or improves the functional condition of the system (without signifi- cantly increasing the structural capacity). Plans, Specifications, and Estimates (PS&E): A project document con- taining contract drawings, project cost estimates, contract provi- sions, and requirements for facilitating construction and contract control. Preliminary Engineering: The project development phase involving activities such as environmental review, preparation of construc- tion documents, work zone impacts, development of geometric design, utilities discovery and verification, geotechnical studies for foundation and pavement design, preliminary drainage work, and cost estimates. PublicâPrivate Partnership (P3): A contractual agreement formed between a public agency and a private-sector entity that allows for greater private-sector participation in the delivery and financing of transportation projects. Probabilistic Analysis: Approach that considers the inherent variability of inputs in addition to single-point estimates. Rehabilitation: The act of restoring a pavement to a former condition. Remaining Service Life: Structural life remaining in the pavement at the end of analysis period. Request for Proposals: A document issued by the procuring agency to potential bidders detailing the requirements of a specific service or commodity sought on a particular project and soliciting detailed proposals from them. In P3 projects, the request for proposal is often part of a two-step procurement process, where the invitation is issued only to potential bidders meeting desired minimum qual- ifications in the preliminary process. Residual Value: Value of the in-place pavement materials less the cost to remove and process the materials for reuse. Responsive Bid: A bid submittal that meets all the requirements of the advertisement and proposal. Risk: The potential impact of an uncertain condition or action on proj- ect objectives and outcomes. Risk Allocation: The process of allocating contractual obligations and risks between parties. The fundamental tenets of risk allocation include allocating risks to the party best able to manage them, allo- cating risks in alignment with project goals, and allocating risks to promote team alignment with customer-oriented performance goals. 41
Risk Assessment: The systematic process of identifying and determin- ing the qualitative or quantitative impact of risks associated with an activity. Salvage Value: The value (positive if a residual economic value is realized and negative if demolition costs are accrued) of competing alterna- tives at the end of the life cycle or analysis period. Typically consists of remaining service life and residual value. Sensitivity Analysis: The study in which the inputs of a model are changed systematically to assess their effects on the final outcome. Service Life: The period of time from completion of construction until the structural integrity of the pavement is determined to be un- acceptable and rehabilitation/replacement is required. Stakeholder: Stakeholders in a construction project typically include the owners and users of facilities, government agencies, project man- agers, contractors, subcontractors, material and equipment suppli- ers, designers, financial service providers, funding agencies, road users, neighbors, and the general public. Structural Performance: Ability of the pavement to support anticipated traffic loadings and withstand environmental effects to resist the occurrence of physical distress. Survival Analysis: A technique that analyzes the probability of nonoccur- rence of failure with time or traffic loadings for a family of pavements. Tornado Plot: Describes how sensitive the value of an output variable is to the input variables of the model. Traffic Control Costs: Costs incurred in managing vehicular and pedes- trian traffic around a construction work zone to ensure safety. Costs include traffic control setup and communications. Unit Price: The fixed price (including materials, labor, equipment, overhead, and profit) paid by the agency for a specific unit of work described in a contract. Upside Financial Risk: A chance for cost underrun or financial gain. User Costs: Costs incurred by highway users traveling on a facility, as well as the costs incurred by those who cannot use the facility because of either agency or self-imposed detour requirements. User costs typically consist of vehicle operating costs, accident costs, and user delay costs. In LCCA, user costs could take the form of delay costs or of changes in vehicle operating costs associated with vari- ous alternatives. Warranty: A written assurance that a product or service provided by a contractor will meet certain specifications and provide desired per- formance over a specified period of time, as well as the responsibil- ity of the contractor (or a subcontractor or supplier) for the repair or replacement of the deficiencies. Warranty Ceiling: A contractual ceiling clause that specifies the limits on the warranty terms offered by the contractor, such as a cap on the total project expenditure or the expiration of warranty after Xnum- ber of heavy trucks. 42
