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6 with the timing and type of future maintenance and rehabilita- If the results of the alternative-preference screening matrix tion activities. The pavement life-cycle model is a conceptual do not indicate a clear preference, all alternatives qualify as representation depicting the proposed strategies on a time candidates for alternate pavement-type bidding. The suitabil- scale. Chapter 3 provides details on developing life-cycle strate- ity of the alternate bidding procedure for the project should be gies for alternatives. evaluated. If suitable, a cost adjustment factor should be deter- mined from the difference in the discounted future costs of the alternatives. If the project is unsuitable for alternate bidding, 2.5 Life-Cycle Cost Analysis any of the preferred alternatives can be selected as the final The direct agency costs for initial construction and future pavement type. Chapter 6 presents a detailed discussion of the M&R activities of each proposed alternative are estimated and alternate pavement-type bidding method. converted into a single discounted life-cycle cost (net present value, NPV). Similarly, the NPV of work zone user costs asso- 2.8 Contractor-Based Pavement- ciated with these activities is estimated for each alternative. The Type Selection alternatives are then compared for their cost-effectiveness by evaluating the agency costs and user costs independently. A Contractor-based type selection takes several forms and is detailed discussion of LCCA is presented in Chapter 4. controlled largely by the contract provisions specified in the RFP. The agency typically communicates the project require- ments to the contractor using contract provisions. These 2.6 Evaluation of Economic provisions often are unique to an agency, contract type, and and Noneconomic Factors project-specific goals. Therefore, the contractor's involvement Upon completion of the LCCA, the alternatives are evalu- is related to project-specific contract obligations, the risks ated using economic and noneconomic factors that reflect an undertaken by the contractor, and the agency's level of control. agency's goals, operational policies, and individual project In design-build projects (where the contractor assumes no needs. A list of such factors is provided in Chapter 5. The alter- operational responsibilities and provides no long-term war- natives that are not feasible from a cost perspective are elimi- ranty), the agency is responsible for risks associated with future nated from future consideration. All alternatives found to performance. In such cases, the agency can stipulate the pre- be cost-effective are evaluated using noneconomic factors to ferred pavement type(s) or allow the contractor to select a pave- determine whether a specific alternative has overriding factors ment type based on the agency-specified criteria (e.g., design that make it a preferred alternative (or not desirable such that inputs and life-cycle strategies). In either case, the contractor it should be eliminated). can follow the agency's selection process or any other similar When an alternative meets economic needs and there are no process accepted by the agency. noneconomic risks to outweigh its inclusion, the alternative is In projects involving O&M responsibilities and long-term considered as qualified for further evaluation. If there are performance warranty, the contractor assumes the risks associ- two or more qualified alternatives, they are compared using the ated with post-construction for an extended period of time. In alternative-preference screening matrix. Chapter 5 presents a such cases, the contractor selection process is stipulated largely detailed discussion on the steps involved in using a screening by the performance criteria specified in the RFP. Therefore, it is matrix, and Appendix A illustrates its application with an imperative that bidders review the contract provisions, under- example. stand agency practices, and evaluate risks before undertaking the selection process. For pavement-type selection, the contrac- tor can follow the overall framework described in this chapter, 2.7 Agency-Based Selection of with the discretion to use customized inputs as deemed neces- Most-Preferred Pavement Type sary. Upon selection, the agency validates the assumptions and In the final step of the selection process, the agency selects criteria used in the contractor-based selection process. the most-preferred pavement type(s) for the project. If one Based on the agency's validation and independent evalua- alternative is considerably more preferred over other alterna- tion, the agency may accept (assign a high score to the pave- tives, then the alternative can be selected as the most-preferred ment component of the contractor's proposal), reject (assign a alternative for use in traditional design-bid-build projects. If low score), or initiate negotiations for further modifications. several months have elapsed between the original pavement- Chapter 7 presents a detailed discussion of contractor-based type selection and a call for bids, the selection should be pavement-type selection and the steps involved in various con- reviewed to ensure that conditions have not changed. tracting scenarios.