Practices for Establishing Contract Completion Dates for Highway Projects (2017)

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3 BACKGROUND A necessary step when preparing for highway project procurement is estimating and setting the contract time. Among many factors, contract time constraints will affect impacts to the public, costs of the proj- ect, and resource utilization and allocation. There are multiple strategies and methods for estimating contract time and with the recent increase in alternative contracting methods, estimates of contract time are becoming increasingly more complicated to develop. This synthesis report is aimed at gathering and amalgamating the approaches used by state transportation agencies (STAs) to illustrate trends, most effective practices, and capture the state of the practice. FHWA guidelines for setting contract time are described in the FHWA Guide for Construction Con- tract Time Determination Procedures (FHWA 2002). This overview resource relays the importance and difficulties in estimating contract time for STA projects. In addition, it complements FHWA policy on setting contract time as codified in the Code of Federal Regulations. The Federal Code states, “The STD [State Transportation Department] should have adequate written procedures for the determination of contract time” (23 CFR 635.121). Suggestions to assist in implementing the procedures are provided in the FHWA Guide for Construction Contract Time Determination Procedures. The guide specifies that the essential steps in determining contract time should include: “(1) establishing production rates for each controlling item; (2) adopting production rates to a particular project; (3) understanding poten- tial factors such as business closures and environmental constraints; and (4) computation of contract time with a progress schedule” (FHWA 2002). Although these policies and guidance may be straightforward there are many complexities and challenges in setting contract time. A sound list of considerations can be found in the FHWA Guide for Construction Contract Time Determination Procedures including: • “Effects of maintenance of traffic requirements on scheduling and the sequence of operations; • Curing time and waiting periods between successive paving courses or between concrete place- ment operations, as well as specified embankment settlement periods; • Seasonal limitations for certain items when determining both the number of days the contractor will be able to work as well as production rates; • Conflicting operations of adjacent projects, both public and private; • Time for reviewing false-work plans, shop drawings, post-tensioning plans, mix designs, etc.; • Time for fabrication of structural steel and other specialty items; • Coordination with utilities; • Time to obtain necessary permits; • The effect of permitting conditions and/or restrictions; • Restrictions for nighttime and weekend operations; • Time of the year of the letting as well as duration of the project; • Additional time for obtaining specialty items or materials with long-lead requirements” (FHWA 2002). Reviewing the state of the practice regarding STA determination of contract time and the associ- ated positive and negative experiences in specific methods is the goal of this synthesis. Reviewing a cross section of the practices of STAs in setting contract time and identifying effective practices identified by survey respondents especially associated with the recent challenges of setting time for chapter one INTRODUCTION

4 projects procured using alternative delivery methods is needed. Capturing the state of the practice and effective practices will indicate where future research is needed to assist in the development and advancement of the most effective approaches to estimating and setting contract time at STAs. It is important to note the relation of “accurate” and “effective” contract time estimation proce- dures as used in this report. Accuracy refers to the specific accuracy of the contract time estimation procedure when compared with the actual construction duration. Effective is used more broadly and refers not only to the accuracy of the system but also the ease of use of the system, the level of effort required to produce estimates, and the adaptability of the system for different delivery methods. PROJECT SCOPE, GOALS, AND OBJECTIVES The scope of this synthesis is to use information collected from survey respondents, literature reviews, and case-based interviews to establish the state of the practice with regard to approaches to estimating and setting contract time for STA projects. This also encompasses alternative delivery methods including design-build and construction manager/general contractor (CM/GC). The objective of the synthesis is to document the procedures used by STAs to estimate contract time for various delivery methods and explore the effectiveness of these methods in predicting con- tract time. The information gathered included: • Methods and processes for setting and revising contract time for design-bid-build, design- build, and CM/GC contracts; • Criteria and factors used for calculating contract time (e.g., weather days, long lead time materials, permit restrictions, and market conditions); • STA experiences with calendar day, completion date, and working day contracts; • Tools used [e.g., Critical Path Method (CPM), historic data, and production rates]; • Performance measures (e.g., percent of projects on schedule, increase in individual contract time, and incentives paid); • Impacts of special contract provisions (e.g., incentives/disincentives or disincentives only, price-plus-time bidding, and lane rental); and • Lessons learned and areas for improvement. This information can be made available to STAs for the benefit of adopting new practices, affirm- ing the effectiveness of practices being used, or moving into new directions of setting and estimating contract time; the goal being the establishment of a current knowledge base regarding setting and estimating contract time, as well as the identification of future needs and ways for improvement. RESEARCH METHODOLOGY The central aspect of the study methodology is the use of a survey of STAs to establish a state of the practice for estimating and setting contract durations for highway construction projects and approaches for alternative delivery methods. The survey was sent to the AASHTO Subcommittee on Design and individualized follow-up bolstered the response rate to 82% (41 states, Figure 1). In addition, supporting literature was reviewed to assist in the survey development and the compilation of this report. The following describes the lines of questioning within each survey. The full questionnaire can be found in Appendix A. • Accuracy of their current procedures. • Procedures available for alternative delivery methods. • Frequency of using calendar day, working day, or completion date contract types. • Factors considered within their procedures. • Background of their procedure development. • Contract provisions used with setting their contract duration. • Areas for future investigation.

5 Concurrently, STAs were identified for follow-up interviews through the literature review and the survey responses. Specific details collected were: • Procedures and approach to estimating and setting contract duration, • Use of procedures for alternative delivery methods, • Use of contract provisions and contract types related to contract time, and • Effectiveness or performance evaluation of approach to setting contract durations. The interviews will serve as case examples to other STAs for developing or enhancing their pro- cedures for estimating and setting contract durations. REPORT STRUCTURE This report synthesizes the findings with regard to the state of the practice for estimating and setting contract durations for highway construction projects and approaches for alternative delivery meth- ods. Where opinions are expressed in the presentation of the detailed case examples, they are those of the professionals and should be viewed as such. The report organization is as follows: • Literature Review (chapter two) • Synthesis of Survey Results (chapter three) • Synthesis of Interview Case Examples (chapter four) • Conclusion (chapter five) • Appendix A is the survey questionnaire. • Appendix B presents the aggregated survey results. • Appendix C contains the interview questions. • Appendix D provides a selection of the duration estimation tools. FIGURE 1 States responding to the survey.