Fuel Usage Factors in Highway and Bridge Construction (2013) / Chapter Skim
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18 Chapter 2 of this report details the initial research and the research approach undertaken by the study team. Specifically, this chapter provides an overview of the initial efforts conducted using the three study methodologies: statistical analysis, engineering estimation analysis, and DOT and contractor surveys of fuel usage.
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Initial research and research approach 19 2.1.2 Extent of Fuel Factor Implementation The first survey question asked the respondents whether or not their state uses fuel usage factors to determine price adjustments for fuel. Among the 50 state DOTs, 38 states employ fuel usage factors while 12 do not.
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20 Fuel Usage Factors in highway and Bridge Construction In a related question, the survey queried respondents as to when the states' factors were last updated. The survey provided a set of responses ranging from within the past year to over 10 years ago.
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Initial research and research approach 21 The age of the fuel factors is highly correlated with data source. For example, only 25 percent of DOTs using the 1980 Attachment 1 data and 36 percent of those using internal DOT data stated that their factors had been updated within the past 6 years (the North Carolina DOT conducted a review of the 1980 data and found that they were still acceptable for contracting in North Carolina)
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22 Fuel Usage Factors in highway and Bridge Construction Approximately half of the states (23) use Excel spreadsheets and custom applications to calculate price adjustment clause payments.
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Initial research and research approach 23 practices, perceptions, and future improvements. The first question in this section asked state DOTs if they use fuel factors in bridge/structure contracting.
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24 Fuel Usage Factors in highway and Bridge Construction Exhibit 2-9 provides the responses concerning perceived flaws associated with fuel factors for bridges/structures. The two largest areas of concern are changes in construction methods and fuel intensity and inaccuracies due to differing structure types, sizes, and complexities.
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Initial research and research approach 25 or not important. The methods varied widely across states.
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26 Fuel Usage Factors in highway and Bridge Construction Grading/excavation and asphalt paving dominate the top of the list, securing 100 percent of the first-place selections and slightly less than 70 percent of the second-place selections between them. Both activities require heavy machinery and equipment with high fuel consumption.
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Initial research and research approach 27 When asked how to account for fuel use on pay items not already included in their state's adjustment programs, a majority of 33 out of 48 states (68 percent) stated that additional factors were not necessary because the fuel use on additional items is limited.
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28 Fuel Usage Factors in highway and Bridge Construction Units of measure for pay items often vary from state to state. When asked if the ability to convert units would be a helpful component of the new system, 26 states said it would, while 20 said it would not.
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Initial research and research approach 29 may signal satisfaction with the current timing of fuel factor updates among the states, although it does not measure the qualitative aspects of their fuel factor programs. For those DOTs who answered "Unknown," three wanted the factors updated every 2–3 years, three preferred every 4–5 years, and two chose no less than every 10 years.
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30 Fuel Usage Factors in highway and Bridge Construction Several DOTs offered recommendations on items for which they would be interested in new or updated fuel factors. Exhibit 2-19 provides these responses.
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Initial research and research approach 31 The use of fuel factors in bridge/structure contracting is common, but several flaws act as a hindrance to their effectiveness. Fuels factors for bridges/structures were present in 20 states, 40 percent of the total surveyed.
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32 Fuel Usage Factors in highway and Bridge Construction was to determine methods to maximize the visibility and effectiveness of the later survey. The findings of the initial survey are presented in Section 2.2.
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Initial research and research approach 33 The questionnaire queried respondents as to the primary and secondary types of work their firms perform. The responding firms conduct varied operations.
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34 Fuel Usage Factors in highway and Bridge Construction 2.2.3 Estimating Methods This section of the contractor survey investigated the estimating methods used by contractors. The responding contractors utilize several different methods to calculate fuel cost.
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Initial research and research approach 35 When asked when their fuel consumption rates or factors had last been updated, 23 out of 46 contractors indicated within the last year. Overall, 39 out of 46 respondents (more than 84 percent)
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36 Fuel Usage Factors in highway and Bridge Construction with grading/excavation receiving 23 first-place selections. Exhibit 2-28 displays relative fuel intensity perceptions.
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Initial research and research approach 37 other pay items is limited and fuel factors should not be extended. Two contractors recommended eliminating fuel factors altogether, as follows: • Eliminate fuel use factors and use a more equitable and accurate method of accounting for the risk of fuel cost escalations.
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38 Fuel Usage Factors in highway and Bridge Construction Approximately half of the responding contractors (25 out of 51) pass along fuel price adjustments to their subcontractors, while 14 do not.
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Initial research and research approach 39 subcontractors for 40 percent or less of their DOT project dollars, and 31 out of 51 did so 20 percent of the time or less. The final question of this survey was designed to gauge contractor satisfaction (or lack thereof)
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40 Fuel Usage Factors in highway and Bridge Construction and hauling to be added. Two contractors support the addition of bridge/structure pay items.
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Initial research and research approach 41 also popular. Eighty-seven percent of responding contractors employ a software application or estimating tool, with commercial estimating services being the most popular option.
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42 Fuel Usage Factors in highway and Bridge Construction construction industry as an estimator, project manager, division manager, operations manager, and vice president. • Expert Panel Member B has nearly 35 years of experience with the Georgia Department of Transportation, has estimated or supervised estimation for over 8,000 DOT projects, is a threetime chairperson of the Transportation Estimators Association, and has been elected to the FHWA's Peer Team Review.
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Initial research and research approach 43 2.3.4 Ranking of Fuel Intensity Once the pay item list was created and the ranking method determined, each member of the expert estimating panel assigned a value to each pay item. In addition, each team member assigned a ranking to each of the 31 summary pay items.
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44 Fuel Usage Factors in highway and Bridge Construction Several pay item categories in the high group have been removed from this list. These categories and the reasons for their exclusion are presented in Exhibit 2-39.
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Initial research and research approach 45 not have the same definition or units from one project/bid to another. Therefore, there is no price per unit of work.
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46 Fuel Usage Factors in highway and Bridge Construction such as asphalt, paint, and sealers. In addition, many other inputs to highway construction such as concrete and steel have high fuel-use input requirements and high transportation costs to the work site.
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Initial research and research approach 47 bid dates for the pay item includes the critical 2008 time period. Pay items receiving less than 100 bids were also removed.
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48 Fuel Usage Factors in highway and Bridge Construction 2.5.1 Issues in Developing Fuel Usage Factors This subsection discusses several issues that the study team encountered during the first phase of the project. The first is a discussion of the economic production function of construction activities and how it relates to the observed fuel intensity rankings.
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Initial research and research approach 49 For example, most observers would characterize asphalt paving as a fuel intensive activity and pavement marking as a non-fuel intensive activity. In the case of asphalt paving, the equipment used is much heavier and has a higher fuel consumption rate.
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50 Fuel Usage Factors in highway and Bridge Construction Shortcomings of the Survey Approach Similar to the engineering estimation approach, a contractor survey has the potential to be influenced by responder biases. Contractors may allow their own experiences with fuel factors and fuel costs, whether they are positive or negative, to influence their responses.
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Initial research and research approach 51 engineering estimation of fuel use was also subject to this limitation. Updating the entire set of engineering estimates requires new estimates of equipment consumption rates and work rates, a medium cost activity that is also relatively time consuming.
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52 Fuel Usage Factors in highway and Bridge Construction as well as areas where the methodologies intersected with, and complemented, each other. The survey approach provided much of the data used in formulating the new factors.
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