Pavement Marking Warranty Specifications (2010)

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17 CHARACTERISTICS OF PAVEMENT MARKING WARRANTIES Basis for Reporting Survey Results The descriptions of pavement marking warranty specifica- tions throughout this section are based primarily on question- naire responses from the 23 U.S. and Canadian agencies that now use these warranties (refer to Table 1 and Figure 1). The example warranty specifications from 15 of these 23 agencies (web-only Appendix D) were obtained as adjuncts to the proj- ect survey. Information from these specifications likewise informs the discussion that follows. For a number of survey questions, agencies were allowed to include more than one type of warranty in their responses. The reason is that agen- cies may manage several pavement marking warranty speci- fications, each with different terms and requirements that reflect differences among highway classifications, types of markings, marking materials, and the duration of warranty periods; percentage responses to certain questions may there- fore sum to more than 100%. Types of Specifications As an introduction to the scope, terms, and variability among U.S. and Canadian pavement marking warranties, Table 2 summarizes the characteristics of the example warranties from 15 transportation agencies that are included in Appen- dix D. The table compiles information on the duration of the warranty period, warranty type or coverage [expressed either by the warranted pavement marking material(s) or by a characterization as a “performance” warranty, with no spe- cific material specified], and the types of markings to which the warranty applies (e.g., longitudinal or transverse mark- ings, symbols, legends, etc.). • The variability of current practice is evident in terms of the range of warranted materials in Table 2, ways of structuring warranties around different performance periods (referring to the examples in Figures 2 through 5), and the types of pavement markings encompassed by the warranties. Warranty durations generally follow the materials categories, with relatively short periods (1 year or less) corresponding to paint and raised pavement markings, moderate-range durations (e.g., 1 to 4 years) corresponding to thermoplastic and methyl methacry- late among other materials, and 4 to 6 years for durable materials such as high-performance tape, in several cases backed by a manufacturer’s warranty. • Other factors also affect the duration of the warranty period. For example, for a given material warranty peri- ods may be shorter for transverse markings than for lon- gitudinal markings (e.g., refer to Arizona, Delaware, and Oregon in Table 2). Review of the specific technical requirements in each warranty in Appendix D shows other construction or performance distinctions between longitudinal and other markings; for example, different depths of grooving for inlaid markings and different minimum acceptable retroreflectivity levels. Further comparisons among these example warranties are given in subsequent sections. Additional information is also presented in the cover sheets in Appendix D that precede each agency’s set of specifications. • The warranty samples in Appendix D represent a blend of methods-based and performance-based thinking. It is therefore not unexpected that the survey conducted for this synthesis study yielded the responses shown in Figure 6. These results demonstrate a strong identifica- tion by agency respondents with both methods-based (i.e., Materials and Workmanship) and performance- based concepts. Table 2 points out that three agencies— Idaho Transportation Department, Missouri DOT, and West Virginia DOT—use warranties based solely on performance and do not call for any particular pavement marking material. These “pure performance” specifica- tions describe required performance levels through the length of the warranty period and leave it to the contrac- tor to select materials and installation techniques that satisfy these criteria. The pavement marking materials that are listed for Idaho in Table 2 are those that have already been used by contractors working under these performance specifications—they are not proposed or required in the specifications themselves. The Indiana DOT, which now applies a Materials and Workmanship warranty to pavement markings, reported that they are considering a performance specification. Additional comments by agencies reporting survey results included the following: • Agencies discern specific responsibilities in their warranties. Several states refer to manufacturer’s rec- ommendations within their own specifications and require a manufacturer’s representative to be on site CHAPTER THREE CURRENT PERSPECTIVES ON PAVEMENT MARKING WARRANTIES

18 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Materials and Workmanship Performance Type of Warranty Pe rc en t o f R es po nd en ts Us in g W ar ra nt ie s FIGURE 6 Claimed characteristics of warranties. State, Province, Territory Materials or Performance Covered Warranty Period Examples of Types of Markings Covered Alaska Methyl methacrylate pavement markings (MMA) 2 years Longitudinal and transverse markings, symbols, markings at roundabouts and gores Arizona 3M 380 Tape 4 years 2 years Longitudinal markings Symbols and legends Retroreflective raised pavement markers (RRPM) 1 year Longitudinal markings* Arkansas Option 1: Inverted profile thermoplastic Option 2: High-performance marking tape (or, for center and skip lines on portland cement concrete pavements, high-performance contrast marking tape) 4 years 4 years Longitudinal markings only British Columbia Paint with glass beads Calendar- based following application Longitudinal markings only Delaware Retroreflective preformed patterned pavement marking 1-year performance period + 4-year warranty Longitudinal markings 1-year performance period + 2-year warranty Symbols and legends Idaho Performance of recessed durable pavement markings Materials submitted to date under the 2-year performance specification include polyurea, epoxy, and Hi-Build Waterborne paint 2 years Longitudinal markings only, including curves and tapers, edge lines, skip lines, centerlines, interchange gore lines, intersection channeling, and bicycle lane lines Performance of recessed durable pavement markings Materials submitted to date under the 4-year performance specification include inlaid high- performance tape and MMA 4 years Same as above TABLE 2 CHARACTERISTICS OF EXAMPLE WARRANTIES IN APPENDIX D (continued on next page)

19 State, Province, Territory Materials or Performance Covered Warranty Period Examples of Types of Markings Covered Nevada General warranty requirement covering specified materials 2 years General—for pavement markings specified in a project Northwest Territories Paint with reflecting beads 1 year Longitudinal single and double lines, solid and broken directional dividing lines, edge lines, lane lines, continuity lines, arrows, gore areas, stop lines, crosswalk areas, railroad crossings, and lines and legends at ferry approaches Oregon Durable marking materials: Surface-mounted thermoplastic Other materials and methods including various types and applications of thermoplastic, MMA, and pavement marking tape (refer to Appendix D for greater detail) 3 years 4 years Long lines High-performance marking materials: Modified urethane, sprayed (25 mils) or protected inlaid 1 year Long lines Durable marking materials: Liquid, hot-laid thermoplastic; preformed, fused thermoplastic film; cold-applied plastic film (tape); and MMA 18 months Legends, stop bars, and crosswalk bars Texas Longitudinal prefabricated pavement markings Multipolymer pavement markings Raised pavement markers 6 years 3 years 1 year Longitudinal markings only Longitudinal markings only Longitudinal markings* West Virginia Performance of medium-life pavement marking system 1 year Longitudinal markings only *Specifications do not explicitly mention a particular type of pavement marking, but longitudinal markings are a reasonable presumption and likely the dominant if not the only use. Note: Table is intended as a summary comparison only. Refer to specifications in Appendix D for actual wording and details of warranty requirements. Illinois Thermoplastic, paint, preformed plastic, epoxy, preformed thermoplastic, and compatible glass beads 180 days through a winter Longitudinal and transverse markings, words, and symbols Indiana Durable pavement marking materials: Thermoplastic, preformed plastic, and epoxy 180 days through a winter Longitudinal, transverse, and intersection markings Maryland Inlaid pavement striping tape 180-day observation Longitudinal markings only period + 5-yr warranty period Missouri Retroreflective pavement marking tape Performance of durable permanent pavement markings 4 years 4 years Longitudinal markings only Mainline and ramp markings, mainline turn lanes, and crossovers and signalized intersections on the mainline (i.e., all long-line markings within and approaching an intersection, but excluding any markings on the side street approaches, and excluding intersection markings such as stop bars, turn arrows, and hash marks) TABLE 2 (continued)

during pavement marking application. The Delaware DOT noted that the materials supplier will usually cover the cost of replacing defective materials. The DOT would be responsible if the deficiency was the result of inadequate design or materials specifications. The Mary- land SHA reports that the contractor takes responsibility for materials and workmanship for the first six months (the Observation Period as defined in Figure 4), after which the materials manufacturer warrants performance for 5 additional years. In addition to materials properties, manufacturer’s recommendations are cited with respect to installation method; for example, advisability of a grooved installation and recommended depth of groove. • Delivery mechanisms vary. For example, Indiana uses state forces to apply paint, but contracts for durable mark- ings under its warranty provisions. A contractor may apply pavement markings on its own or employ subcon- tractors to do this work. Some states impose participation requirements on a general contractor. A materials manu- facturer is allowed to serve as a general contractor so long as it meets a state’s participation requirements. Materials manufacturers may themselves impose requirements on a contractor installing their products in terms of training, certification, and onsite presence by the manufacturer’s representative during installation. • Initial quality control is important in reducing risk under a performance-based warranty. Crediting a very capable inspection staff at work during application of pavement markings, the Delaware DOT noted a history of very few failures. The parties held responsible for ensuring warranty compli- ance and correcting deficiencies differ among agencies as shown in Table 3. An agency’s practices may be influenced by events in its history with warranties. For example, an experi- ence where one party (either a materials vendor or a contractor) has defaulted on a previous warranty requirement may influ- ence the agency to change its policy and hold the other party responsible in future warranties. Also note that responsibilities of individual parties may be limited to particular performance periods. In the example shown for Texas, the warranty specifi- cation is written to hold the materials manufacturer responsible for posting a warranty bond; however, the contractor may assume those responsibilities by posting a bond that satisfies all the requirements of the specification. Duration of Warranty Responding agencies reported warranty durations as shown in Figure 7. The “Less Than One Year” category encompasses warranty specifications for either nondurable markings, such as paint, or markings in harsh climates (conforming to Figure 3). Every attempt has been made to exclude unintended survey responses that may have referred to observation or perfor- mance periods (refer to Figures 4 and 5) rather than a true warranty period. Warranties of longer duration cover more durable materials, and in selected cases also reflect use on 20 Interstate and other major highway classifications. The prom- inence of the “Up to 6 Years” selection is the result of war- ranties on durable markings such as high-performance tape. Such warranties may be backed by the materials manufac- turer, who may serve as a general contractor as well. These warranties typically extend for 4, 5, or 6 years. No pavement marking warranty specifications that were reported in this study exceeded a six-year performance period. These synthesis survey findings are consistent with results of the earlier study by Bayraktar et al. (2004, 2006). The Bayraktar et al. study found that average warranty periods for different categories of construction work ranged from 2 to 7 years (as determined from its own survey results) and 1 to 8 years (as identified in its literature review). The duration of pavement marking warranties specifically ranged from 0.5 to 5 years (based on its interviews) and 2 to 6 years (from its literature review). The durations of pavement marking warranties are in flux as agencies transition from experimental to operational war- ranty specifications: • Idaho has experimented with performance warranties that leave material selection to the contractor and has recently instituted 2-year and 4-year pavement marking warranties. • Alaska has been using 2-year warranties and is now considering specifications with a 5-year duration. • Kansas has been using 180-day warranties, but is tran- sitioning to a 1-year warranty and is considering a 5-year warranty period. Cost Impacts of Warranties As part of the synthesis survey, agencies were also asked about their perceptions of the effect of warranties on initial and life- cycle cost. The general finding is that warranty effects on pavement marking costs are still uncertain, with most agencies responding in ambiguous and sometimes contradictory ways. Some ventured a perception or supposition, but with little sup- porting data; for example, a higher initial cost but “reduced,” “optimal,” or “increased” life-cycle cost. Other agencies admitted that no formal analysis of this question had been per- formed or that the answer was unknown. Yet others did not respond to the question or indicated “not applicable.” The one instance where actual experience informed the response involved a case where longer-term performance of tape was warranted by the manufacturer: the Maryland SHA reported that the warranty had “no effect so far” on initial cost. By comparison, an earlier study of general highway con- struction warranties also found varying opinions regarding warranty effects on initial and life-cycle costs (Bayraktar et al. 2004, 2006). Regarding initial costs, agencies and con- tractors differed somewhat in their assessments of cost increases owing to warranties. Of 10 responding agencies, four

21 State, Province, Territory Contractor Materials Manufacturer Remarks Alaska Arizona Manufacturer warranty is for tape only. Contractor warrants other applicable pave me nt ma rking materials. Arkansas British Columbia Delaware Idaho Illinois Indian a Maryland Observation period only Warranty period only 180-day observation period and 5-year warranty period apply to inlaid pavem ent stripi ng tape only. Missouri Contracts provided by Missouri DOT are written with mate rials manufacturer acting as the general contractor (applies to both of the specifications in Appendi x D). Nevada Northwest Territories Oregon Oregon specifications require warranties only for durable or high perform ance materials. These are all manufacturerís warranties. Texas Specifications call for a manufacturer’s warranty bond, but allow substitution of a contractor-provided warranty bond that meets all requirements. West Virginia Notes : Source : Appendix D. Table is intended as a summary comparison only. Refer to specifications in Appendix D for actual wording and details of warranty requirements. = Primary or predominant res ponsibility. = Partial, contingent, or secondary responsibility. TABLE 3 PARTY RESPONSIBLE FOR MEETING WARRANTY REQUIREMENTS estimated a cost increase of less than 5%; four agencies, a 5% to 10% increase; one agency, 10% to 20%; and one agency, 20% to 50%. By contrast, 65% of contractors estimated an increase in bid price of 5% to 15%; 20%, less than 5% bid- price increase; and 15%, 15% to 20% bid price increase. No contractors estimated a bid price increase greater than 20%. Regarding life-cycle costs, 23% of responding agencies believed that there was no effect of warranties on life-cycle costs. Another 23% reported little savings, and 8% substantial savings. Forty-six percent perceived a small increase in life- cycle costs. Again, these outside survey data applied to road construction warranties generally, not necessarily to pavement marking projects. Pavement Marking Performance Criteria Agencies reported a number of criteria of acceptability for pavement marking performance under warranty. A summary of usage of each type of technical criterion is given in Figure 8. These data refer to warranty specifications, not to initial accep- tance following construction. Warranty period performance is judged by most respond- ing agencies on the basis of durability and retroreflectivity, and almost half specify a requirement for maintaining proper color; for example, through comparisons with color chips. Less than 10% of responding agencies reported more specific

22 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Less Than One Year One Year Up to 2 Years Up to 10 YearsUp to 6 Years More Than 10 YearsDuration of Warranty Pe rc en t o f R es po nd en ts Us in g W ar ra nt ie s FIGURE 7 Pavement marking warranty duration. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Other (Listing of Chromaticity Limits) Discoloration or Pigment Loss Color Contrast and Stability Color Reflectance Color White and Yellow Retroreflectivity Durability, Presence, Adhesion Percent of Respondents Using Warranties FIGURE 8 Warranty criteria for technical acceptability of pavement markings.

23 color-related criteria such as measures dealing with color reflectance, color contrast and stability, and chromaticity. These survey findings are consistent with the example specifications in Appendix D (web only). Most of the Appendix D examples include provisions governing dura- bility and retroreflectivity, often calling for a combination of visual inspection with supporting quantitative measurement if needed. Color retention, or avoidance of discoloration, is evaluated in several ways in the Appendix D specifications, including visual comparison to color chips and color toler- ance charts, daytime reflectivity, and chromaticity limits (four agencies). Corrective Actions Actions to correct deficient performance under warranty spec- ifications are identified from survey responses in Figure 9. All reporting agencies require repair or replacement of defec- tive markings. Some agencies also assess monetary charges of the various types shown. “Other” potential actions indi- cated in Figure 9 include relinquishing the bond covering the work, assessing damages if work deficiencies exceed a certain threshold (e.g., Kansas specifies damages if more than 2% of the project must be replaced), and reimbursing the department if repair or replacement must be done by agency forces or another contractor. Minnesota noted that problems are discussed with the contractor to identify a course of action depending on the observed condition of the line markings. Responsibility for Inspections The responsibility for inspecting pavement markings to deter- mine whether they are meeting warranty performance criteria is summarized in Figure 10. Most reporting agencies inspect pavement markings using their own forces. A smaller per- centage of agencies engage the contractor or a third party. A few agencies responded with more than one method, explaining that different parties might be involved at different points during the life of the pavement markings. There is little unanimity among agencies in the frequency of performance inspections for warranties. The frequencies of Other Refund Total Price of Installation as Bid Refund A Prorated Amount of Installation Price as Bid Pay Penalty Charge for Delay in Completing Work Pay Penalty Charge for Delay in Beginning Work Pay Lane Rental Charge During Work Performance Remove, Repair, or Replace Defective Material 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent of Respondents Using Warranties FIGURE 9 Corrective actions.

scheduled inspections ranged from monthly to quarterly and annually. A sampling of other agencies’ comments follows: • There is no set schedule—nothing is done unless a fail- ure is very noticeable. A variant of this type of response was: As needed, based on concerns or complaints by agency personnel or the public. • Visual inspections [are conducted] at any time during the warranty period. Variation 1: The Highway Mainte- nance Supervisor inspects road conditions daily and reports on all aspects of the highway. Variation 2: Only one inspection is done, at the end of the warranty period. Variation 3: There are now not enough inspections and the agency is working to improve this. • All districts have retroreflectometers and can test mark- ings at any time. A variation: Inspections are performed by state forces following application and at any time within the 4-year warranty period (typically it might occur at 36 to 42 months). Effects of Climate and Winter Maintenance Seventy percent of the responding agencies that use pavement marking warranties reported that winter maintenance does not affect their warranty (with a number of other respondents leaving the answer blank). A tabulation of how the example warranties in Appendix D treat winter maintenance is given in Table 4. Very few agencies explicitly exclude winter mainte- nance from the provisions of the warranty, meaning that con- 24 tractors are nominally responsible for replacing markings with winter-related damage. With reference to Table 4, sev- eral of the specifications in Appendix D are silent on the issue. Of those that discuss winter maintenance explicitly, Arizona excludes high-altitude regions that are subject to snowfall from its warranties, and Texas gives the TxDOT project engi- neer the authority to determine winter maintenance as an “outside cause” that is excluded from its warranty replace- ment requirements. Other agencies listed in Table 4 either include winter damage as part of “normal wear and tear” that is subject to replacement under their warranty (Delaware, Missouri performance spec, and West Virginia), or employ a calendar-based warranty that includes a winter season in its period of performance (British Columbia, Illinois, Indiana, and Northwest Territories). Additional points of note: • Table 4 is compiled from the as-written provisions of the warranty specifications. Interviews with three agen- cies that do not exclude winter maintenance damage from their warranty requirements revealed that they may exercise discretion in how winter-related damage is treated. For example, in the case of an unusually severe winter, an agency may not hold the contractor responsi- ble for replacing damaged markings. Another agency, which has a 180-day warranty period through the win- ter season, indicated that it may consider, on a case-by- base basis, a contractor’s request to apply temporary markings in the Fall, following up with the specified markings in the Spring. Inspections by Agency Personnel Only Inspections by Agency with Contractor Participation Inspection by Contractor Inspection by Third Party Other Inspection Approach 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent of Respondents Using Warranties FIGURE 10 Responsibility for inspection of pavement markings under warranty.

25 • In their standard product warranties, materials manufac- turers may exclude damage resulting from winter main- tenance equipment. • The contractors and materials manufacturers who were interviewed—most of whom were used to dealing with winter weather—did not focus solely on winter mainte- nance damage in their discussions. Their comments encompassed weather effects more broadly; for example, regarding conditions at high altitudes, coastal humidity, weather-imposed restrictions on the working season, and temperature effects on asphalt, in addition to winter- related damage. • In one instance, problems with winter maintenance dam- age affected the continuation of a state’s pavement mark- ing warranty program. The North Dakota DOT used a warranty specification for epoxy paint pavement mark- ings from 2002 to 2005. This performance specification required the contractor to achieve specified minimum retroreflectivity levels initially (following construction) and after one winter. The DOT experienced a number of warranty administration issues related primarily to reduced retroreflectivity after one winter. Factors such as mechanical damage (snow plow damage, deicing materials, sand abrasion, etc.) affected retroreflectivity levels and were considered outside the contractor’s control. These subjective factors made it too difficult to administer the warranty objectively. A second round of warranty testing was therefore discontinued, and the North Dakota DOT no longer uses pavement marking warranties. Mechanisms to Assure Quality Survey respondents identified a number of mechanisms they employ to help assure quality in pavement marking work performance, in addition to the warranty itself. The follow- ing examples were obtained from agency questionnaire responses and the example specifications that agencies pro- vided (Appendix D). • Procedural and administrative mechanisms that agencies build into their pavement marking process to promote quality include the following: – A pre-placement (pre-operational, pre-construction) meetingamongagency,contractor,andmaterials manu- facturer’s representative before the start of work. – Contractor submittal of a Work Plan before the start of work, with periodic updates of progress during con- struction and of markings performance through the warranty period. Is Winter-related Damage Excluded from Warranty Provisions? State, Province, Territory Yes No Warranty Period = Calendar Interval That Includes Winter Season Alaska — — — Arizona Arkansas — — — British Columbia Delaware Idaho — — — Illinois Indiana Maryland — — — Missouri (Tape) (Perf. Spec.) — — — Nevada — — — Northwest Territory Oregon — — — Texas West Virginia Notes: Data from Appendix D. “—” = winter conditions are not explicitly addressed in warranty specifications. = partial exclusion in mountainous, heavy-snow regions at altitudes greater than 5,000 ft. Winter damage is not excluded from warranty requirements in other regions. “Perf. Spec.” = performance specification. TABLE 4 TREATMENT OF WINTER MAINTENANCE IN EXAMPLE WARRANTIES

– Contractor submittal of a Spill Recovery Plan. – Manufacturer’s certification of installation/application (sub)contractors and materials to be used, onsite obser- vation by the manufacturer’s representative of mark- ings installation/application, and approval of equip- ment to be used in installation/application. – Reliance on standards and test protocols of industry- recognized authorities [e.g., ASTM, AASHTO, NTPEP, Manual of Uniform Traffic Control Devices (MUTCD), federal or state versions], and standard- ized state/provincial materials testing procedures. – Contractor provision of test grinding strips if inlaid markings are to be used, and test stripes for pavement markings. – Daily or weekly reporting of work accomplished and data from specified measurements. – Periodic inspection according to stated procedures and criteria by agency personnel, contractor, or inde- pendent third party. • Several agencies use lists of prior-approved materials; for example, Alaska, British Columbia, Florida, Mary- land, Minnesota, Northwest Territories, Oregon, Texas, and West Virginia. These lists are referred to by differ- ent names across agencies; for example, Qualified Products List, Recognized Products List, Approved Paint Materials, Material Producers List, and Approved Product Listing. • Among the 15 agencies with example specifications in Appendix D, Illinois and Indiana employ a list of Approved Contractors for pavement marking projects. Kansas also prequalifies contractors. • A materials manufacturer may fulfill multiple roles on a pavement marking project: (1) to provide a product that meets or exceeds specifications; (2) to back prod- uct performance with a warranty that conforms to client requirements; (3) to provide technical services to clients and their contractors; for example, recommendation of the proper method of application/installation, technical advice on correction of problems, and contractor train- ing and certification; (4) through product sheets, manu- facturer recommendations, and other technical data, to support and supplement client specifications; and (5) to serve as a general contractor where allowed and appro- priate on pavement marking projects. In several states the manufacturer’s responsibilities are formalized explicitly within the warranty specifications. Additional manufacturer responsibilities that are stated in specifi- cations include approving equipment used in marking application/installation and approving related materials to be used by the contractor; for example, adhesives for pavement markers. • Payments and monetary penalties to contractors can reinforce the objective of quality work. The Missouri DOT performance specification illustrates payment adjustments based on the performance of individual 1.0-mile segments covered by the contract. If more than 10% of pavement markings are failed in any one evalu- 26 ation period, the contractor is regarded as in default and required to submit for Missouri DOT approval a remedial plan to correct these failures. The specifica- tion of the West Virginia DOT provides an example of liquidated damages applied to pavement marking projects. • The matter of how to structure a payment schedule for multi-year warranties will likely grow in importance as more states undertake warranty work and as the length of warranty periods increases. Such a payment schedule ide- ally would encourage satisfactory long-term pavement marking performance while providing fair and timely payment to contractors. Among the example specifica- tions in Appendix D, most agencies today specify pay- ment following initial acceptance or at successful com- pletion of a performance period or observation period. Three agencies—the Idaho Transportation Department, Missouri DOT in its performance specification, and Texas DOT—include a multi-year schedule of payments in connection with their pavement marking warranties. The Kansas DOT also uses a warranty payment schedule, which was described in its survey response, and Alaska is considering step payments through the duration of a planned 5-year warranty. In the examples that follow, all percentages are based on total contract price: – Idaho’s 2-year warranty: Initial payment, 60%; end of year 1, 5%; end of year 2, 35%. (Lane rental charges are also employed; refer to Appendix D.) – Idaho’s 4-year warranty: Initial payment, 60%; pay- ments at end of years 1, 2, and 3, 5% respectively; end of year 4, 25%. (Lane rental charges are also employed; refer to Appendix D.) – Missouri’s 4-year performance specification was orig- inally advertised with the following payment sched- ule: Initial payment, 12%; payments in each of years 1 through 4 of the warranty period, maximum of 22% annually subject to adjustment for noncomplying 1.0-mile highway segments. A revised payment schedule was submitted and accepted as part of the successful contractor’s value engineering proposal, as follows: Initial payment, 60%; payments in each of years 1 through 4 of the warranty period, maximum 10% annually. – Texas’ 1-year warranty for RPMs: Initial payment, 80% following written acceptance; at end of perfor- mance period including satisfactory replacement of deficient markers, 20%. – Kansas’ 180-day warranty: Initial payment, 90% following initial acceptance; 10% at successful com- pletion of the warranty period. – Kansas was scheduled in 2009 to increase the dura- tion of its warranty period to 1 year, and is now working on a 5-year warranty. It is considering step payments through the 5-year duration, with specific yearly percentages yet to be decided. – Alaska is now using 2-year warranties, but is consid- ering a 5-year warranty period with step payments.

27 Further discussion of multi-year payment schedules is given in the Contractor Perspectives section in the discussion of Financial Risk and Risk Mitigation. • Bonding is specified by agencies in the following ways: – Warranty bonds are required in the amount of 100% of the contract price for the duration of the warranty (Delaware, Idaho, Missouri performance specifica- tion, Nevada, West Virginia). – (Illinois): At its option, the pavement marking contrac- tor may request a third-party performance bond from the installation (sub)contractor at the completion of pavement marking work, but before final inspection and acceptance following the warranty performance period. This bond, which names the DOT as obligee for the full amount of the pavement marking price, avoids delay in paying the pavement marking contractor. – (Texas): A warranty bond is required of the materials manufacturer for the duration of the warranty period. At its option, the contractor may provide a warranty bond that meets all requirements, in which case the contractor becomes the warrantor. Working with Industry When asked whether discussions were held with industry rep- resentatives (contractors and materials manufacturers) before instituting warranties, agencies that have used such warranties replied as shown in Figure 11. Examples of items discussed at these meetings are as follows: • Arkansas noted that every item in the specification was thoroughly discussed over a long period of time. Some agencies focused explicitly on technical requirements; for example, the mil thickness and pounds of glass beads per gallon of paint (Delaware), and issues of retroreflec- tivity, durability, and color (Virginia). • Missouri and Alberta noted that the main items discussed at their meetings were agency expectations for pavement markings and their reasonableness. • The Associated General Contractors and manufacturers have been involved in the development of all Oregon DOT construction specifications (primarily to review and provide comments), including the warranty specifi- cations for pavement markings. Texas also noted that its proposed specifications are routed through their local Associated General Contractors office before they can be approved and used. The benefits of these industry interactions focus on keep- ing industry informed of agency intentions and expectations, and obtaining industry reactions to pending change in agency policy and project requirements. Examples of public–private interactions within a different institutional setting are given later in the section on European warranty practice. The role of industry in those examples—in which transportation agencies and private sector contractors collaborate within a framework favoring performance, quality, and innovation—extend more widely and systematically into activities such as: • Participation in specification development; • New product identification, development, certification, and use; • Negotiation of warranty periods for new, potentially riskier products; and • Training and certification of installation contractors. YES - Worked with Industry Prior to Implementing Warranty Initiative 69% NO - Did Not Work with Industry Prior to Implementing Warranty Initiative 19% No Response 12% FIGURE 11 Agency experience in meeting with industry on warranties. Results based on responses from a reduced sample of 16 agencies.

Warranty Interactions with Other Requirements Possible interactions between pavement marking warranties and other state and federal commitments were cited by some agencies as factors discouraging warranty use. These interac- tions could occur with other existing warranties or bonds (e.g., for pavement construction), or with administrative requirements and closeout procedures of federal-aid projects. Although these issues need to be resolved with knowledge of the details of each case, it appeared that other agencies had been able to circumvent these issues by taking appropriate administrative steps. Examples drawn from the survey find- ings of this synthesis study are listed here; additional research could organize a more comprehensive identification of ques- tions, answers, and example solutions. • Issue: use of sole-source procurements in connection with warranties on federal-aid projects. Example solution: Arizona DOT was able to justify use of a single proprietary product on specific highway segments by submitting a finding in the public interest for FHWA approval. • Issue: Maintaining a multi-year warranty in force on an otherwise completed federal-aid construction project. Example solution: The Idaho Transportation Depart- ment has reached an agreement with the FHWA on han- dling multi-year warranties on federal-aid projects. The solution has been to organize the contractor’s warranty effort as an active work program, with annual contrac- tor payments as the federal-aid project remains open. • Issue: Potential interactions between a new 5-year pavement marking warranty with bond and an existing 28 asphalt pavement performance bond, also for 5 years. Problems may include contractor bonding capacity and conflicts between respective warranty requirements for pavements versus pavement markings. Discussion: These issues were not discussed by other agencies or contractors and may require further research to target the specific conflicts and recommended ways to resolve them. The earlier study by Bayraktar et al. (2004) reported that in its survey of contractors (who had expe- rience in highway construction warranties generally, not focused on pavement markings), three-quarters of these contractors claimed that they were not constrained by their bonding capacity in bidding and performing war- ranted work; 25% reported that they were. Agency Satisfaction with Pavement Marking Warranties The 23 responding agencies that currently use pavement marking warranties were asked to rate their overall degree of satisfaction on the following scale: Very Satisfied, Generally Satisfied, Mixed Results, Problematic, and Very Dissatisfied. Results of this self-rating are shown in Figure 12. Almost three- quarters of the responding agencies now using warranty specifications expressed satisfaction with them. Three agen- cies reported Mixed Results, whereas one characterized them as Problematic. None said that they were Very Dissatisfied with the experience. • One agency that is Generally Satisfied noted that there had been communication issues regarding agency expec- Problematic 4% Very Dissatisfied 0% No Response9% Very Satisfied 13% Generally Satisfied 61% Mixed Results 13% FIGURE 12 Degree of satisfaction with pavement marking warranties.

29 tations under its warranty, but that these had been worked out and pavement marking performance is better today than it was 4 years ago. Another Generally Satisfied agency also observed that sometimes “they had to argue with the contractor” to get them to comply. A third agency that recorded Mixed Results with warranties also cited problems in getting timely responses by the con- tractor to perform needed repair work. • Only one of the responding agencies characterized its experience with pavement marking warranties as Prob- lematic. Further inquiry revealed that this response was not a characterization of agency experience per se. Rather, it was rooted in the philosophical belief of the responding individual that before agencies engage in such warranties they would first establish a pavement marking management system. Such a system could track marking performance as well as the effectiveness of the warranties in a systematic and consistent way, based on periodic field inspections and measurements. (An appli- cation used by the Iowa DOT was cited as an example of such a management system; this responding state was not Iowa.) Once such a management system is established and applied effectively by an agency, warranty specifica- tions become more meaningful. The Problematic rating was intended to communicate this perspective. Although Figure 12 illustrates a degree of satisfaction only among those 23 reporting agencies that are now using war- ranties, all surveyed agencies were asked to judge what they believed were the advantages or disadvantages of pavement marking warranties according to the following procedure: • Those agencies that have had a positive experience were asked to identify their primary motivations for using pavement marking warranties and the benefits of their use. • Those agencies that have not used pavement marking warranties, have had a negative experience when they tried them, or are predisposed not to consider them in the future were asked to identify what they see as impedi- ments, risks, or drawbacks in their use. • Those agencies that characterized their experience with pavement marking warranties as having “Mixed Results” were asked to identify both the perceived motivations/ benefits and the perceived impediments/risks/drawbacks of warranty use. • Those agencies that have not used pavement marking warranties but are potentially interested in their appli- cation were asked to identify what types of information would be most helpful in their future consideration. It turns out that this question was also answered by three agencies that have already had positive experience with warranties (particularly those backed by materials man- ufacturers) plus two agencies that had a negative stance toward them. The overall responses to these three “perception” ques- tions—to identify motivations and benefits; to identify impediments, risks, and drawbacks; and to identify useful information—are summarized in Figures 13 through 15 respec- tively in terms of number of responses received. Perceived Motivations and Benefits The perceived motivations for, and benefits of, pavement marking warranties are shown in Figure 13. The main drivers for these warranties are expectations of improved performance and quality, and avoidance of premature failure, with attendant benefits in reduced lane occupancy for repairs or re-application. An additional important benefit is anticipated cost savings in both maintenance and life-cycle costs (including road-user cost savings resulting from reduced lane occupancy through the warranty period). Most of the other benefits options each received 1 to 5 responses. No agency cited a legislative mandate as a reason for using warranties. The “Other” ben- efits that were suggested were consistent with the themes of improved performance and reduced cost. Specific bene- fits identified in these responses included: (1) the generation of performance measurement data associated with enforcing the warranty, which can also be used for product performance comparisons; and (2) the encouragement given to contractors to install quality products correctly, thus enhancing perfor- mance and reducing the need for road occupancy to do annual restriping. By comparison, the Bayraktar et al. study found that a majority of agencies saw the benefits of warranties in several areas; for example, improved quality, reduced need for site inspection, and less record keeping, although these perceptions were not unanimous. A relatively small percentage of respon- dents offered counter-perceptions for certain benefits; that is, 8% believed inspection requirements had increased, and 15% perceived greater record keeping (Bayraktar et al. 2004, 2006). Perceived Impediments, Risks, and Drawbacks The perceived downsides of using pavement marking war- ranties are indicated in Figure 14. The most frequent responses focused on the administrative burden, potentially higher bid prices, and possible increases in disputes or litigation with contractors as the main reasons for not using pavement mark- ing warranties. Three agencies also cited departmental policy or guidelines as discouraging warranty use (more on this point follows later in this section). The “Other” problems that were cited included: (1) administrative difficulties associated with using U.S. federal-aid funding if sole sourcing pavement marking work, (2) keeping contracts open on federal-aid proj- ects while the warranty remains in force, and (3) the percep- tion that an agency’s management philosophy and culture dis- courage greater use of warranties. Some of these items will be discussed further here. Calls to the three agencies that had checked the question- naire response, “Warranties are prohibited or discouraged by

agency administrative policy or bidding and procurement guidelines,” provided a further elaboration of what was meant by this answer. The agencies’ comments all reflected more a tendency rooted in organizational experience, cul- ture, and practice rather than an explicit policy. The net effect was to seek other methods of assuring quality in project delivery, bypassing the issue of pavement marking warranties. • One agency reported that its prior experience with war- ranties on other highway items had encountered prob- lems in monitoring, tracking, and resolving performance issues with the contractor or the materials vendor. This situation was aggravated by a shortage of construction office personnel. A preferred approach evolved: to develop the best construction specifications possible and then enforce them. Because its geographical location did not require winter maintenance, the agency could use durable markings. The agency also noted that a warranty might reduce competition if it allowed proprietary mate- rials and processes. The agency did allow for possible use of warranties in the case of RPMs. There have been some issues with marker performance; agency staff believed 30 that a warranty might help identify replacement needs and ensure completion of needed work. • Another agency reported that it was moving toward performance-based specifications and had considered warranties, even trying them in one case. However, agency field personnel had had significant experience in applying pavement markings themselves. They would therefore want to consider warranties carefully and understand them better before moving ahead—they did not want to go too far too fast. They also had questions about who should be the warrantor—the contractor or the materials vendor. • A third agency reported that, as a matter of practice, their construction personnel preferred to close out construc- tion contracts expeditiously and not have any remaining work obligations. Desired Additional Information The additional information on pavement marking warranties that is desired by survey respondents is identified in Figure 15. Several agencies identified “All Listed Categories” of infor- 0 42 6 8 10 12 14 16 18 20 Other Perceived Benefit or Motivation Positive Experience of Other Agencies Reduced Administrative Burden for Agency Logical Component of Total or Comprehensive Contracting Reduced Need for Field Inspections Agency Staff Reductions Encourage Use of Warranty Contracting Agency's Policies Encourage Warranty Use Protection Against Premature Failures Potential for Greater Contractor Innovation Perceived Performance-Improvement Benefit Perceived Life-Cycle Cost-Saving Benefit Perceived Maintenance Cost-Saving Benefit Perceived Risk-Sharing or Risk-Transfer Benefit Legislative - Statutory Requirement Number of Respondents FIGURE 13 Perceived motivations and benefits of warranty use.

31 mation as helpful; these responses are incorporated within each affected item in Figure 15. Among “Other” information of interest were the following topics: • Conflicts with existing pavement or other warranties or bonds, • How to deal with multi-year warranties in the context of desired closeout of federal-aid projects, and • How to allocate responsibility between contractor and manufacturer. PERSPECTIVES OF PRIVATE INDUSTRY Overview Telephone interviews were held with seven pavement mark- ing contractors and two marking materials manufacturers to obtain private sector perspectives on pavement marking war- ranties. These entities are identified in Appendix C. To keep this discussion focused on the issues at hand, general desig- nations such as “Contractor A” and manufacturer “Company M1” are used. Characteristics of the interviewed firms are noted in Table 5. Most of these firms have been engaged in work involving warranties; all are familiar with performance- based specifications and speak from experience. Although the contractors work in different geographic regions and deal with a range of pavement marking materials, their willing par- ticipation in the project interviews may reflect a self-selected sample. Attempts to identify a wider range of views from firms of different characteristics (e.g., small-sized firms or firms not as familiar with performance-based specifications) were not successful. Supplementary findings from other studies are cited to fill this gap. The interviews, together with the responsibilities called for in the specifications in Appendix D (web only), demonstrate that pavement marking materials manufacturers potentially can fulfill several roles in serving state DOTs and other clients and their contractors: (1) to provide a product that meets or exceeds specifications; (2) to back product performance with a warranty that conforms to client requirements; (3) to provide technical services to clients and their contractors; for example, recommendation of proper method of application/installation, technical advice on correction of problems, and contractor 0 42 6 8 10 12 14 16 18 20 Other Too Burdensome Administratively Possible Increase in Disputes or Litigation with Contractors Negative Experience of Other Agencies Perceived Negative Impact on Competition Bonding Problems, Bonding Company Resistance Local Contractor Resistance (Other Than Bonding) Potentially Higher Bid Prices Prohibited or Discouraged by Agency Policy or Guidelines Prohibited or Discouraged by State Law Number of Respondents FIGURE 14 Perceived impediments, risks, and drawbacks of warranty use.

training and certification; (4) through product sheets, manu- facturer recommendations, and other technical data to support and supplement client specifications; and (5) to serve as a gen- eral contractor where allowed and appropriate on pavement marking projects. General Positions on Warranties All interviewed firms believed in providing a quality pave- ment marking job, and their comments supported the notion that quality-oriented firms perform their projects to the same high standards and levels of commitment regardless of whether or not the projects involve a warranty. One contrac- tor pointed out that although two-thirds of pavement marking job cost is for materials, using better (i.e., longer life) mate- rials will yield life-cycle cost savings with attendant benefits to all parties: the agency, motoring public, and the contractor itself. The firms supported warranties that are structured fairly and enforced. This approach promotes use of quality prod- ucts and proper installation procedures that yield brighter, more durable, more consistently performing markings with attendant benefits to the highway agency and the motoring 32 public. The manufacturers related quality to their ability to manage the several aspects of jobs they are involved in. One- source accountability avoids finger-pointing and yields sav- ings in life-cycle costs with benefits to agency and the pub- lic. Several firms saw warranties as a wave of the future and believed strongly in their value and benefit, notwithstanding risks and drawbacks that are discussed here. Another contractor likewise saw a role for warranties, but spoke about them more in terms of one approach among sev- eral options to provide quality performance cost-effectively. In this view, warranties were one way of achieving a guaran- teed level of performance at a price or additional cost. The additional cost will be borne either by the agency in paying a higher bid price or by the contractor if the cost of additional work to maintain the specified performance was not included in the bid. However, agencies need not rely solely on war- ranties if high-quality materials, strong and effective (but reasonable and achievable, not onerous) specifications, and correct installation methods are called for and provided. Good techniques and products that are available today can readily achieve longer, higher-performance service lives; for No Additional Information Needed by This Agency Other Desired Information Other Aspects of Warranty Administration and Use Discussions with Industry to Familiarize Them with Warranties Ways to Align Agency Policies and Procedures to Promote Warranty Use Specific Cost Savings and Benefits of Warranties Specific Additional Costs of Warranties Methods to Enforce Acceptable Performance Values of Performance Thresholds That Are Used Types of Performance Measures That Are Used Duration of Warranty Agency Experience with Different Types of Warranties 0 42 6 8 10 12 14 16 18 20 Number of Respondents FIGURE 15 Additional information desired.

33 example, use of recessed markings in Northern climates; high- quality, durable marking materials; correct placement and application of materials (e.g., glass beads in paint); and increased specification and measurement of wet retroreflec- tivity. A strong relationship between materials supplier and contractor is very helpful toward these ends. All of these methods can help to avoid, where appropriate, the need to occupy the road annually to redo pavement markings. Beyond this positive stance toward pavement marking warranties the interviewed firms presented a range of views regarding the use of warranties and their role in future high- way construction, risks and risk mitigation, and suggestions for ways to get greater value added from warranty projects. Within the geographic areas in which the interviewed firms work, highway agencies vary in their level of experience and sophistication regarding pavement marking warranties. The comments here therefore represent a blend of very basic con- cerns and suggestions, combined with observations and pro- posals for improvement at a more advanced level. These findings generally agree with earlier findings in a contractor survey and interviews by Bayraktar et al. regard- ing warranties generally, not just for pavement markings. Although there were some indications of contractor innova- tion owing to warranties (e.g., use of better equipment, new materials, and innovative technologies and methods), only 2 or 3 of 16 responding contractors identified with these types of innovations. Most contractors (10 of 16) noted, rather, a greater consciousness of quality in construction, and 5 of 16 reported applying better workmanship and the opportunity to provide greater design input (Bayraktar et al. 2004, 2006). Designation in Report U.S. or Canadian Description and Rem arks Contractor A U.S. Works with primarily waterborne paint under a warranty in several states. Contractor B U.S. Works with various mate rials (e.g., paint, therm oplastic, polyurea, and tape) in a state under delayed acceptance warra nties (i.e., after one winter); no mu lti-year warranties. Contractor C U.S. Works in a single state applying waterborne paint, tape, therm oplastic, and RPMs. Jobs are with state agency (for new highway construction) and cities and counties (for maintenance). One year is longest warranty period the firm has undertaken. Contractor D U.S. Works worldwide applying waterborne paint for airfield ma rkings. Has worked to produce handbook on airfield pave me nt ma rkings, but warranties are not yet used in aviation practice. Contractor E Canadian Works in three provinces on highway line painting, and therm oplastic and MMA markings in urban areas. Manufactures own durable marking materials (not epoxy), primarily for urban areas. Performance-based specifications at provincial level are calendar or seasonally based, with duration typically 1 year or less. Warranties for m unicipal governm ents are 2 to 5 years for durable ma terials; mo re a ma terials and work ma nship warranty. Contractor F Canadian Works for provincial and m unicipal governments applying paint and therm oplastic. Perform ance-based specifications are calendar or seasonally based, with duration typically 1 year or less for provincial work. Contractor G Canadian Applies paint and therm oplastic pavem ent markings and inlaid markers for several provincial, territorial, and local governm ents. Performance-based specifications are calendar or seasonally based, with ma xi mu m duration of 1 year for provincial work. Manufacturer: Company M1 U.S. Products include durable preform ed tape, wet-reflective paint, RPMs, and wet reflective therm oplastic. A standard warranty is provided on the high- perform ance tape, but the manufacturer will work with agencies and contractors on individual project arrangem ents and warranties of other products. Manufacturer: Company M2 U.S. Products include durable pavement marking materials: epoxy, polyurea, uret hane, and—for warranty work—a speci alized multi-polymer based on prem ium raw materials. RPM = raised pavement markers, MMA = methyl methacrylate. TABLE 5 PRIVATE SECTOR FIRMS INTERVIEWED FOR THIS STUDY

Risk and Risk Mitigation Notwithstanding general support for warranties, the firms col- lectively identified a number of risks that contractors and materials manufacturers may face on a project. Although these risks have been organized into four major categories here for ease in explanation, the risks are interconnected, and bidders and materials vendors must deal with the total situation when deciding whether and how to bid the job. The four major cate- gories are technical, administrative, financial, and business- reputation risk. As an example of interconnectedness, prob- lems in the technical or administrative aspects of a warranty specification may lead to associated risks in the financial and business-related arenas. Risks associated with project bonding requirements and miscellaneous other topics are also covered. Technical Risks and Risk Mitigation Technical risks arise with the failure to use the right material and installation method (including preparation) for a given project. Dealing with this risk involves several tasks; for example, understanding road operating conditions, the pave- ment surface, and geographical and environmental site con- ditions; knowing the correct installation method and per- forming it correctly with a trained crew; and maintaining good communication among all parties. Both manufacturers referred to this basic risk, and contractors elaborated with several examples. • The failure to match materials properties (e.g., correct bead application in paint) to site and environmental con- ditions is a risk (Contractor A). Contractor C believes that some state specifications are outdated and therefore do not call for the best material. All material used on a job must have a certificate of compliance; where materi- als options are allowed, all would meet specifications fully. Contractor E interpreted this type of risk as cor- rectly identifying pavement surface and environmental conditions that can affect performance. For example, with respect to asphalt, there are 12 types of surfacing they deal with (e.g., chip seal, hot-mix asphalt resurfac- ing, rubber-based asphalt, and recycled asphalt). One must understand the implications of each type for adhe- sion, cracking, compatibility (particularly with chip seals) with respect to bonding and bleeding, and need for proper preparation and cleaning. Contractor F noted that paint is affected by humidity in coastal regions, a factor that has not been addressed by a client agency that has set very tight completion dates for pavement marking work. (An adjacent jurisdiction has not been able to achieve these more restrictive specifications.) • Lack of good performance data and/or technical specifications on pavement markings are a risk. Not enough research and testing have been done to define performance reliably. Regarding paint, Contractor A believes that test strips do not give a true indication of performance. 34 • Warranty provisions and administration are potentially risk factors and may need to be evaluated in the bid deci- sion (and if bid and won, dealt with further during project performance). Following are examples of administrative risk related to the technical performance of pavement markings. Other examples of risk related to more general warranty administration are given in a following section. – The degree of control allowed the materials sup- plier and contractor during installation strongly influences perception of risk (Companies M1 and M2). Company M2 referred to the key role of mate- rials providers in managing this type of risk as one- source accountability. – Too high a required performance level (i.e., one that might lead to any proposed product to fail and/or require restriping more than once annually) would be a risk.  Performance requirements need to be looked at in the context of site conditions, as mentioned earlier. The presence of heavy truck traffic, a need for tight turning maneuvers by these heavy vehicles, or other causes of encroachment that would shear the pave- ment markings all increase risk (Company M1).  Performance requirements also need to be consis- tent with reasonable expectations of specified materials. For example, setting minimum retro- reflectivity levels too high for paint is unrealistic and will virtually guarantee failed performance (Contractor F). – Pavement marking installation is better performed in daytime, but this is not always possible. Contrac- tors must work with agencies to accommodate project requirements and possible nighttime work (Company M2). • On roadways with high traffic volume, Company M2 will use a specialized subcontractor for traffic control, overseen by a supervisor certified by the American Traf- fic Safety Services Association (ATSSA), who is famil- iar with MUTCD requirements. This specialized traffic subcontractor, together with the trained and certified installation subcontractor, forms a Quality and Safety “A” Team for the project. • According to Contractor E, there are still issues with variability of readings on retroreflectivity devices and the need for correct calibration. This contractor believes the best result is obtained by driving at night and observing the visibility of markings by eye. Also, “wet” retroreflectivity pavement marking products are still in their infancy and are now being evaluated by agencies. Another area of technical risk has to do with disruption of the “level playing field” that is presumed to exist among competing bidders on a project. Well-specified warranties promote higher quality workmanship and materials. The interviewed firms believe that in the absence of warranties some competitors may attempt to cheat on quality require- ments, particularly if the highway agency lacks sufficient

35 resources to conduct proper inspection and jobsite monitor- ing. There is also a question as to who will monitor in-place markings and how deficient materials and lengths will be determined (e.g., the particular inspection or test method) to identify the degree of repair or replacement needed. Contractor D is involved in airfield pavement markings, and has developed a handbook on the subject for the Innova- tive Pavement Research Foundation (IPRF) (Airfield Marking Handbook 2008). Much of the technical information that informs airfield practice comes from the highway industry and, in some areas, airfield practice is not as advanced as that for highways. Examples of areas where airfield pavement marking specifications could be strengthened include con- tractor training and certification, greater use of enforceable criteria within civilian and military specifications, and institu- tion of more regular, formalized, and comprehensive inspec- tion programs (operations personnel do observe the pavement markings, but may miss a gradual degradation in visibility and retroreflectivity). Comments based on the contractor’s expe- rience in developing the airfield pavement markings hand- book echoed opinions of highway practitioners; for example, the importance of minimum retroreflectivity values at instal- lation and during the expected service life, a belief that good specifications with enforceable requirements leads to a better pavement marking product, and the desirability of moving toward performance specifications and certification pro- grams. It is important that airport design consultants under- stand the characteristics of both pavements and paints (e.g., to specify materials that resist the staining of white paint). Administrative Risks and Risk Mitigation: Specifications The interviewees supported clear, strong, effective specifica- tions and proper, ongoing agency inspection and enforcement of work requirements. In reviewing the comments by different contractors here, it is important to recognize that their client agencies represent varying levels of experience and degree of comfort with warranties and performance-based contracting generally. Some comments thus may refer to agencies that are relatively new to warranties and performance-based specifica- tions, whereas other comments reflect experience with agencies that have more mature warranty programs and well-developed performance specifications. • The contractors did not favor projects with “easy” or “cookbook” specifications, particularly those that were not sufficiently performance-based; that is, specifica- tions that did not clearly identify required technical per- formance levels for measures such as retroreflectivity, nor other performance criteria that would define failure. • Contractors noted that slack specifications could also lead to unrealistically low bid pricing, which could drive a lower installed quality of pavement markings. Con- tractors seeking to maintain proper quality might sense a competitive disadvantage and not bid the job. • At the other extreme, it is important that specifications not be too stringent for the specified pavement marking material; for example, minimum retroreflectivity levels that are set too high in a paint specification so as to be unrealistic. • Performance requirements, scheduling of the work sea- son, and priorities should accommodate differences in climate, geography, and altitude. • One contractor reported projects where safety-related provisions were included contractually but not able to be fully enforced because of DOT personnel reductions. The contractor preferred that all bidding competitors realize that safety provisions will be enforced. Other contractors observed that safety and traffic control, as well as inspec- tions for quality control, were tasks that they or third parties could perform on behalf of the agency. Administrative Risks and Risk Mitigation: Project Bonding The issue of performance bonds for pavement marking work drew several different comments. One company was able to obtain bonding for a 5-year period with no issues, although it admitted that smaller, nonspecific contractors (i.e., those that do not work regularly on particular categories of pavement markings such as longitudinal striping) might have a problem. Another company found it difficult to get warranty bonding for more than a 2-year period. A third firm mentioned that it generally does not need a warranty bond, although it has had a few jobs that required one, and there were no problems in obtaining one. A fourth firm had considered a job with a 5-year warranty. The bonding company would not grant a bond and the contractor did not bid on the job. The bonding company would have granted one for 2 years, and would have considered a 3-year bond, but not one of 5-year duration. The contractor’s relative inexperience with long-line work may have been a factor in the bonding decision. The earlier study by Bayraktar et al. provided further insights into the impact of bonding requirements. These find- ings related to highway warranty projects in general, not nec- essarily pavement marking projects. Surety companies that responded to the Bayraktar et al. survey were unanimous in their perception that small firms would likely be eliminated on warranty projects. Although the risk evaluation methods used on warranty projects are the same as those used on nonwar- ranty projects, the risk assessments are not adequate to deal with the longer-term obligations that warranties entail. Lack- ing appropriate risk evaluation methods, the surety companies prefer to deal with larger contractors, which tend to have larger amounts of working capital. Responding to contractor diffi- culties in obtaining bonds, the Florida DOT has implemented another assurance approach based on the prequalification of contractors as a condition of bidding, and has eliminated war- ranty requirements. Failure to correct problems after project completion in accordance with the contract can result in a con- tractor being removed from the prequalification list. Most of

the state DOTs reported that the warranty bond is required when the contract is signed (surety companies would prefer to issue the bond after the completion of project work), and all DOTs noted that the face value of the bond is not reduced. Three-quarters of the contractors claimed that they are not con- strained by their bonding capacity in bidding and performing work; 25% reported that they are (Bayraktar et al. 2004, 2006). Administrative Risks and Risk Mitigation: Other Topics Contractors raised other topics in warranty administration. Calendar-based performance periods (refer to Figure 3) are potentially a problem where geography and climate may reduce the available work time. For example, a mid-May start of the work season may not be realistic at high altitudes, where mountain passes are still subject to snow. It is impor- tant that the timing of the working season be coordinated between agency and contractors. Another contractor believed that a performance evaluation period from April through November was too stringent. For materials such as thermo- plastic, durability requirements actually were more a materi- als warranty than a performance warranty. Contractors differed somewhat in their reactions to vary- ing methods and styles of warranty contract administration among agency districts. Some believed that more uniform and consistent practices would be desirable. Another observed, however, that administrative differences do not affect their work performance. This company recognized that agencies are facing a paradigm shift, and the company tries to be open in helping them deal with the transition to warranties. An agency’s approach to administering a warranty con- tract was seen by several firms as a potential opportunity for a win-win result. The materials manufacturers both voiced the opinion that the degree of control of a job is an important determinant of quality. Company M2 described its role as providing one-source accountability in fulfilling warranty specifications. One-source accountability avoids finger-point- ing by recognizing and dealing with risks in several areas. Good planning, work execution, and keeping on top of things help ensure that the pavement marking product performs well. Both vendors manufacture premium pavement marking mate- rials having standard 4-year warranties, with variations possi- ble case-by-case. The firms prefer to be involved in inspec- tions—they perform their own inspections and are also on site when the agency performs its inspection. Company M2 voiced the belief that inspections at 1-year intervals are sufficient for warranty enforcement, but more frequent inspections—for example, 2 to 3 times per year—are preferred for internal quality control. A contractor favored longer-term contracts as a way of promoting a good relationship with the owner and achieving greater client satisfaction. Prequalification of contractors and materials was believed to be a good idea, as is a scorecard or evaluation process on job 36 performance. Repetitive violations on projects might be cause for a contractor to “sit it out” for a period on future work. Con- tractors reported that some agencies have provisions for con- tractor evaluation, but do not apply them, and not every agency prequalifies contractors. The interviewees expressed frustration when other contractors won a “warranty” project strictly on the basis of a low bid and then took advantage of the situation. Financial Risks and Risk Mitigation The interviewed firms discussed two types of financial risk: (1) having insufficient reserves to fund warranty repairs, and (2) having a situation where agency payments to contractors through the warranty period are not in step with the pace at which project costs are incurred. With regard to the first type of financial risk, interviewed contractors and materials manufacturers plan for a certain amount of repair work and maintain the funding to accomplish that target if needed. It was believed that some agencies use warranties as a scare tactic, which stresses the relationship with the contractor. A balance is needed in relating time to money through liquidated damages. An incentive program is preferred, in which the contractor is awarded additional money for premium performance—that is, performance exceeding warranty requirements. Combining incentives with measured penalties would keep contractors honest and instill the appro- priate negative consequences for those contractors thinking of not fully complying with the performance warranty. With regard to the second category of financial risk, dif- ferent approaches that agencies use to pay contractors for work under warranty—and staged payments or step payments in particular—were presented earlier in the section on agency perspectives. Company M2 mentioned that it has discussed the subject of financial modeling with agencies—that is, how should payments for a project under multi-year warranty be distributed through the term of the warranty: • What is the rationale in scheduling partial payments in the out-years as opposed to paying the contractor fully in year 1? Conversely, what are the financial and other implications of paying 100% up front in year 1 as opposed to lesser amounts (e.g., 60%, 40%, or 30%)? • What is the limit in first-year payment that an agency would be willing to pay given demonstrated performance on the part of the contractor? • How could payments be staged to be fair to both agency and contractor? (Contractor A cited an example of a multi-year warranty in which payments extended to out- years, even though most of the contractor’s costs occurred in Year 1. The contractor decided not to bid the job.) This matter of staged payments (or step payments) is an emerging issue that will likely take on increasing significance and attract greater industry awareness as more states begin to use pavement marking warranties and as the durations of war- ranty periods lengthen.

37 Business-Reputation Risk and Risk Mitigation Business-reputation risk concerns damage to a firm’s reputa- tion if a pavement marking project does not turn out well. Con- tractors and materials manufacturers agreed: business reputa- tion is important for maintaining good standing among current and future clients. Although some firms cited specific exam- ples of mishaps that could lead to damaged reputations (e.g., asphalt-related problems discussed under technical risks), it is reasonable to generalize that any of the sources of risk dis- cussed earlier can have negative impacts on business reputa- tion. The way to avoid harm to reputation is therefore to man- age the various categories of risk. Suggestions for Enhancing Benefits The interviewed firms offered several suggestions for improv- ing the value and benefit of warranties: • Consider the wider use of incentives tied to superior pave- ment marking performance above the warranted level. This approach would provide an additional payment of a certain percent if actual retroreflectivity in a given year is at a level higher than that specified as the minimum acceptable in the warranty. An incentive would encourage even better visibility and longer life than that envisioned by the warranty. It is a “do more, get more” proposition in terms of lower life-cycle costs (Contractor A). (Incentive provisions are much preferred to disincentives or penal- ties.) Contractor E believed in incentives to select the correct material and apply it correctly. Company M2 believed in incentives to promote good performance beyond the warranty period (which saves dollars, for example, in years 5 to 6 of a 4-year warranty). • View warranties as one method in a range of options to achieve the desired goals of a longer pavement mark- ing life, improved performance during this life, lower life-cycle costs, and reduced need for road occupancy to repair or replace deficient markings (Contractor B, Company M2). • Company M2: the ideal situation is to have complete control of the project—ultimately a warranty is about performance, not materials. Tailored materials that they are able to produce are able to provide required perfor- mance at a very competitive price. They are open to broader warranty provisions, but the response would likely differ by state when climate, traffic volume and composition, customer expectations, and geography are factored in (e.g., mountainous terrain versus the plains). Company M2 envisioned itself becoming more flexible and innovative to deal with these opportunities. • Engage contractors more in the pavement marking pro- gram; for example, consider their potential to perform the data collection needed to monitor the warranty. If desired, the data could also be posted on an agency’s web system for network-level review and assessment, becoming a part of an agency’s overall asset manage- ment (Company M1, Contractor A). • The firms made several suggestions for basic improve- ments in communication and dispute resolution where they do not exist now. For example, in one state a liaison committee has been established between the local chap- ter of ATSSA and the state agency to maintain commu- nication on current issues. Formation of a panel to clar- ify and resolve disagreements was also proposed where such mechanisms are not now formalized. (The support- ing rationale was that a relatively small infraction would not disqualify a contractor from future work.) • The concept of qualified product lists (or their equiva- lents) was widely supported, together with the idea of matching recognized materials to local weather, geog- raphy, and paving materials and practices. • The firms recognized the implications of a changing population, the need for wider and brighter markings, and the greater use of contrast markings where helpful. EUROPEAN WARRANTY EXPERIENCE European experience in road construction warranties has a long history. This experience has been addressed in several studies and international scans by U.S. agencies. Although many of these fact-finding missions are not focused on pavement marking warranties specifically, they do estab- lish differences in legal and institutional approaches between European and U.S. practice that likely influence the success of warranty use. Following is a summary of relevant Euro- pean practices; a more detailed description is provided in Appendix E (web only). An international scan team organized through the FHWA and AASHTO in November 2002 visited five European nations—Denmark, Germany, Spain, Sweden, and the United Kingdom—to review short- and long-term warranties for asphalt paving projects (D’Angelo et al. 2003). A number of topics were investigated, including a general review of cur- rent and proposed approaches to road construction contracts with warranties, risk assessment for agencies and contractors, and administration of warranty contracts. Findings and rec- ommendations of the scan team’s report addressed material and workmanship warranties, performance warranties, best- value procurement, and alternative contracting methods. A summary of the scan team’s assessments and recommenda- tions follows (D’Angelo et al. 2003): • Materials and workmanship warranties of various dura- tions have been used for 30 to 40 years. The five countries are continuing to move toward pavement performance warranties and other methods to engage the contractor more fully in assuring the quality of pavement perfor- mance through its full life cycle. • Among these quality-oriented practices are the devel- opment of partnership relationships among agencies and industry participants, the use of best-value procure- ment techniques, and the application of alternative con- tract methods to conventional DBB.

• All of the countries visited use materials and workman- ship warranties of up to 4 years on their traditional road construction projects. Denmark and Sweden use 5-year performance warranties in their traditional contracts, while the United Kingdom employs 5-year performance warranties in DB contracts, which have become its pre- ferred method of pavement construction contracting. • All five countries visited use best-value rather than low- bid procurement. Among the factors considered in best- value contractor selection are safety, innovation, environ- mental impact, the additional years of warranty protection proposed by the contractor, and contractor prequalifica- tion. All countries reinforced the importance of a best- value approach to the warranty approach, because it pro- motes trust and confidence among the parties. • Much longer warranty periods (e.g., up to 35 years) are being explored in alternative types of contracts such as Design-Build-Finance-Operate and Pavement Perfor- mance Contracts, which have warranty periods of 11 to 20 years among the host countries. These longer war- ranty periods reflect the concept that contractors have responsibility for pavement design, construction, and maintenance according to performance criteria estab- lished by the owner agency. These alternative arrange- ments are developed in collaboration with industry. The scan report recommended actions at the federal, state, and local governmental levels in the United States to promote greater use of warranties, including short-term (e.g., up to 5 years) materials and workmanship warranties that are intended to lead to long-term performance warranties in the future. Legislation enabling wider use of best-value procure- ment processes and contractor prequalification would be sought where needed. The report also recommended that the federal government take the lead in establishing a warranty resource center for use by the federal, state, and local gov- ernments. It is important that state and local governments take practical steps toward developing and implementing materials and workmanship warranties and, when it is appro- priate to engage contractors in design, short-term perfor- mance warranties. Best-value and contractor-prequalification processes could also be implemented. The report recom- mended roles for industry in education, participation in roundtable discussions and pilot projects, and strengthening of its knowledge and capabilities regarding construction and maintenance methods and products to support warranty use. A second international scan team on Superior Materials, Advanced Test Methods, and Specifications toured four Euro- pean countries—the United Kingdom, Denmark, Germany, and the Netherlands—in July 2003 to learn about European practices in the subject topics. A particular focus concerned ways to accelerate identification, evaluation, approval, and acceptance of new products, and to incorporate the products within project specifications. The investigation also included 38 processes that yielded superior materials—that is, materials that could improve facility performance significantly, cost- effectively, with improved safety or reduced construction time. A recommendation by the scan team that is relevant to this synthesis concerns procedures for accelerated testing of new pavement marking materials and for product acceptance. Ger- many has built a laboratory turntable on which to conduct accel- erated performance tests of selected pavement markings: tape, temporary paint, and permanent paint. Spain has a similar facil- ity, although it was not visited during this scan tour. The scan team believed that this turntable concept could be considered for application in the United States by AASHTO’s NTPEP. In response to this latter recommendation, the ATSSA prepared a white paper regarding consideration of a U.S. pavement marking test facility. The paper considered the implications of an accelerated testing turntable for pavement markings, raising the following issues (“Pavement Marking Material . . .” n.d.): • The need to validate laboratory test data versus actual conditions and performance in the field. • The ability of the turntable to represent climatic and topographic variability throughout the United States. • The need to better define the goals of the laboratory facility and proposed use of the test results. • The need to address four areas of technical concern in which the paper’s authors believed that a laboratory turntable would not yield valid results: – Lack of exposure to ultraviolet light; – Laboratory preparation of pavement marking sam- ples that did not mimic actual installation or applica- tion methods in the field; – Standardized, constant laboratory environmental con- ditions that reflect neither the full degree of variabil- ity in conditions throughout the United States nor the short-term cycles of fluctuation that stress highways in the field; and – Differences between the substrate material on the turntable plates that are used to simulate the pavement surface versus the actual pavement substrate proper- ties in the field, including variability in materials (e.g., asphalt vs. concrete) and variations in these material properties among states. • The much different institutional framework and con- struction industry and culture in the United States as compared with those in Europe, which raises questions as to whether the effective use of test results from the turntable can be successfully transferred to the U.S. legal and business environment. These issues remain under discussion. Further information on European warranty practices and ATSSA’s response to the 2003 international scan report is given in web-only Appendix E.