A method to determine minimum contract bids for incentive highway projects
Abstract An increasing number of state highway agencies (SHAs) are using Incentive/Disincentive (I/D) bidding for highway construction. The I/D bidding concept is designed to shorten the total contract time by allowing the contractor to obtain incentives for early completion and pay disincentives for late completion of a project. Contractors are then presented with the problem of determining a better strategy to develop their bid estimate, including construction cost, construction time, and I/D. This research offers a quantifying model to determine an optimum low bid to submit for both linear I/D and escalating I/D type projects. A functional relationship between the construction cost and time duration is developed from the Florida Department of Transportation (FDOT) projects. The equation is then combined with the I/D to determine the optimum low bid price and time. Finally, several projects completed by the FDOT will be utilized to illustrate the validity of this model.
Quantitative model for determining incentive/disincentive amounts through schedule simulations
One groundbreaking way of expediting any construction is to offer contractors a monetary incentive. To be effective, the incentive amount should be larger than the contractor's additional cost (CAC) for expediting construction time. Yet, estimating the CAC poses a major challenge because contractors are reluctant to disclose their profit information. This study introduces a quantitative model that estimates realistic CACs through schedule simulations on four different resource usage levels. An innovative and reliable tool called Construction Analysis for Pavement Rehabilitation Strategies (CA4PRS) was used for the simulation. Using CA4PRS, a set of contractors' time-cost tradeoff data was created and a linear regression analysis was performed to predict the CAC growth rate and to analyze how this interacts with the agency's specified schedule goal. The robustness of the proposed model was also validated through a case study. This model can assist decision-makers to make better decisions when estimating optimal incentive amounts.
Lane rental contracting
This paper deals with the principal Lane Rental systems operated in the UK and describes the merits and disadvantages of each. Issues relating to contractual arrangements, management style, contract finish times, working conditions and arrangements are covered. Comparisons are drawn with conventional contracts.