Fuel Usage Factors in Highway and Bridge Construction (2013)

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N A T I O N A L C O O P E R A T I V E H I G H W A Y R E S E A R C H P R O G R A M NCHRP REPORT 744 Fuel Usage Factors in Highway and Bridge Construction Jonathan Skolnik Mike Brooks Jack Faucett associates, inc. Bethesda, MD John Oman oman systems, inc. Nashville, TN Subscriber Categories Construction  •  Highways TRANSPORTAT ION RESEARCH BOARD WASHINGTON, D.C. 2013 www.TRB.org  Research sponsored by the American Association of State Highway and Transportation Officials in cooperation with the Federal Highway Administration

NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM Systematic, well-designed research provides the most effective approach to the solution of many problems facing highway administrators and engineers. Often, highway problems are of local interest and can best be studied by highway departments individually or in cooperation with their state universities and others. However, the accelerating growth of highway transportation develops increasingly complex problems of wide interest to highway authorities. These problems are best studied through a coordinated program of cooperative research. In recognition of these needs, the highway administrators of the American Association of State Highway and Transportation Officials initiated in 1962 an objective national highway research program employing modern scientific techniques. This program is supported on a continuing basis by funds from participating member states of the Association and it receives the full cooperation and support of the Federal Highway Administration, United States Department of Transportation. The Transportation Research Board of the National Academies was requested by the Association to administer the research program because of the Board’s recognized objectivity and understanding of modern research practices. The Board is uniquely suited for this purpose as it maintains an extensive committee structure from which authorities on any highway transportation subject may be drawn; it possesses avenues of communications and cooperation with federal, state and local governmental agencies, universities, and industry; its relationship to the National Research Council is an insurance of objectivity; it maintains a full-time research correlation staff of specialists in highway transportation matters to bring the findings of research directly to those who are in a position to use them. The program is developed on the basis of research needs identified by chief administrators of the highway and transportation departments and by committees of AASHTO. Each year, specific areas of research needs to be included in the program are proposed to the National Research Council and the Board by the American Association of State Highway and Transportation Officials. Research projects to fulfill these needs are defined by the Board, and qualified research agencies are selected from those that have submitted proposals. Administration and surveillance of research contracts are the responsibilities of the National Research Council and the Transportation Research Board. The needs for highway research are many, and the National Cooperative Highway Research Program can make significant contributions to the solution of highway transportation problems of mutual concern to many responsible groups. The program, however, is intended to complement rather than to substitute for or duplicate other highway research programs. Published reports of the NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM are available from: Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet at: http://www.national-academies.org/trb/bookstore Printed in the United States of America NCHRP REPORT 744 Project 10-81 ISSN 0077-5614 ISBN 978-0-309-25894-4 Library of Congress Control Number 2013932994 © 2013 National Academy of Sciences. All rights reserved. COPYRIGHT INFORMATION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, FMCSA, FTA, or Transit Development Corporation endorsement of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. NOTICE The project that is the subject of this report was a part of the National Cooperative Highway Research Program, conducted by the Transportation Research Board with the approval of the Governing Board of the National Research Council. The members of the technical panel selected to monitor this project and to review this report were chosen for their special competencies and with regard for appropriate balance. The report was reviewed by the technical panel and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the Governing Board of the National Research Council. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transportation Research Board, the National Research Council, or the program sponsors. The Transportation Research Board of the National Academies, the National Research Council, and the sponsors of the National Cooperative Highway Research Program do not endorse products or manufacturers. Trade or manufacturers’ names appear herein solely because they are considered essential to the object of the report.

The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. On the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Charles M. Vest is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, on its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Charles M. Vest are chair and vice chair, respectively, of the National Research Council. The Transportation Research Board is one of six major divisions of the National Research Council. The mission of the Transporta- tion Research Board is to provide leadership in transportation innovation and progress through research and information exchange, conducted within a setting that is objective, interdisciplinary, and multimodal. The Board’s varied activities annually engage about 7,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individu- als interested in the development of transportation. www.TRB.org www.national-academies.org

C O O P E R A T I V E R E S E A R C H P R O G R A M S CRP STAFF FOR NCHRP REPORT 744 Christopher W. Jenks, Director, Cooperative Research Programs Crawford F. Jencks, Deputy Director, Cooperative Research Programs Edward T. Harrigan, Senior Program Officer Anthony P. Avery, Senior Program Assistant Eileen P. Delaney, Director of Publications Hilary Freer, Senior Editor NCHRP PROJECT 10-81 PANEL Field of Materials and Construction—Area of Specifications, Procedures, and Practices James Selywn Gillespie, Virginia DOT, Charlottesville, VA (Chair) John T. Brizzell, HNTB Corporation, Albany, NY Kevin J. Brophy, Oregon DOT, Salem, OR Frank Corrao, III, Rhode Island DOT, Providence, RI Leslie Ann McCarthy, Villanova University, Villanova, PA Jennifer Balis, FHWA Liaison Frederick Hejl, TRB Liaison AUTHOR ACkNOWLEDGMENTS The research reported herein was performed under NCHRP Project 10-81 by the consulting team of Jack Faucett Associates, Inc. (JFA) and Oman Systems, Inc. (OSI). JFA is a transportation and economics consulting firm founded in 1963 that has completed over 750 research projects for federal, regional, state, and other clients. OSI was founded as a heavy construction contracting firm and is now an estimating software provider and preeminent source for information on the heavy construction industry. The principal authors of this report are Jonathan Skolnik, JFA vice president and senior policy analyst, Mike Brooks, research analyst at JFA, and John Oman, president of OSI. Dr. Harry Chmelynski, senior statistician at JFA, conducted the BidTabs statistical analysis. Devon Cartwright-Smith, economist at JFA, constructed the Excel-based Contractor Fuel Usage Survey (CFUS) and the Price Adjustment Calculator Tool (PACT).

F O R E W O R D By Edward T. Harrigan Staff Officer Transportation Research Board This report provides updated fuel usage factors for work items in the construction and maintenance of highways and bridges. The Price Adjustment Calculator Tool, a Microsoft Excel® spreadsheet that will assist in the calculation of payment adjustments for construc- tion projects using fuel price indices or fuel prices, is also available for download from the TRB website by searching for NCHRP Report 744. The report and spreadsheet tool will be of immediate interest to engineers in state departments of transportation and industry who request and respond to bids for these activities. NCHRP Project 10-81, “Fuel Usage Factors in Highway and Bridge Construction,” was conducted by Jack Faucett Associates, Inc., Bethesda, Maryland, with participation by Oman Systems, Inc., Nashville, Tennessee. The objectives of the project were to (1) identify present highway construction contract activities that are major consumers of fuel; (2) prepare fuel usage factors for these activities, including those items of work presented in Attachment 1 of FHWA Technical Advisory T5080.3, for base year 2012; and (3) develop a recommended practice for state DOTs to implement use of fuel adjustment factors and adjust them for both state-specific conditions and changes in construction costs, methods, and equipment. Price adjustments of selected commodities in highway construction are used in con- struction contracting as a way of limiting risks to the contractor arising from price fluctuations of these commodities over the life of a contract. Fuel usage factors are commonly applied by state and local agencies in calculating fuel cost price adjustments in a contract specification that permits cost escalation and de-escalation. The current federal factors, originally developed for Highway Research Board (HRB) Circular 158 in 1974, are presented in the 1980 Federal Highway Administration (FHWA) Technical Advisory T5080.3. The research team used three methods to examine this issue and develop the updated fuel usage factors in Technical Advisory T5080.3. The first method was a nationwide survey of highway construction contractors. The second method was an engineering estimation of fuel usage per unit for numerous highway construction work items, which was undertaken by a team of veteran construction estimators. The third method was a statistical analysis of a comprehensive industry database to determine if historical bid prices of construction pay items can be modeled and correlated to historical fuel prices. The three methods complemented one another, provided a level of redundancy in the research effort, and resulted in a well-founded update and expansion of the fuel usage factors in the technical advisory.

The report fully documents the research, presents the updated fuel usage factors, and includes Appendix A, Recommended Practice and Model Specification. In addition, the following appendixes are available for download from the NCHRP Project 10-81 web page at http://apps.trb.org/cmsfeed/TRBNetProjectDisplay.asp?ProjectID=2712: • Appendix B, Outreach Plan • Appendix C, PowerPoint® Presentation and Speaker Notes, and • Appendix D, News Brief. Finally, the web page provides a link to download the Price Adjustment Calculator Tool, a Microsoft Excel® spreadsheet that will assist in the calculation of payment adjustments for construction projects using fuel price indices or fuel prices.

C O N T E N T S Note: Many of the photographs, figures, and tables in this report have been converted from color to grayscale for printing. The electronic version of the report (posted on the Web at www.trb.org) retains the color versions.   1  Summary 11 Chapter 1  Background 11 1.1 Introduction 11 1.2 Purpose 12 1.3 Literature Review 18 Chapter 2  Initial Research and Research Approach 18 2.1 DOT Needs and Perceptions 31 2.2 Contractor Needs and Perceptions 41 2.3 Initial Engineering Estimation of Fuel Intensity 44 2.4 Initial Statistical Analysis of Fuel Intensity 47 2.5 The Three-Pronged Research Methodology 53 Chapter 3  Findings and Applications 53 3.1 Contractor Fuel Usage Surveys 61 3.2 Engineering Analysis of Fuel Usage 79 3.3 Statistical Analysis of Fuel Usage 89 Chapter 4  Conclusions, Recommendations, and Future Research 89 4.1 Comparison of Fuel Usage Estimates 103 4.2 Other Potential Applications of Fuel Use Data 110 References 112 Appendix A  Recommended Practice and Model Specification