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.
Survey on Construction Contractor Incentive Mechanism Design
The research status of the construction contractor incentive mechanism design have been reviewed and commented from several aspects such as progress incentive, cost incentive, quality and safety incentive, coordinate multi-objective incentive, as well as the implicit incentive. Some disadvantages in the current study, such as the incentive method mainly focusing on network optimization, incentive contract type mainly focusing on cost plus incentive fee or fixed price incentive contract, little attention to the incentive to more than one contractor which work for the same owner and insufficient implicit incentives and so on, are pointed out. Further, the future research and development trend of construction project field is prospected. The systematic research of the construction contractor incentive mechanism design which can be based on the incentive theory and principal-agent theory is put forward.
Lane rental ― The DTp view
The concept of lane rental, introduced to minimise delays to road traffic, is explained. Rental amounts are based on 'cost to the nation' figures assessed by the dtp's quadro (queues and delays at roadworks) program. The bonus/rental charge introduced in 1984 provided for a bonus payment to the contractor if he finished ahead of schedule and a rental payment if he overran. Continuous site rental involved the contractor being charged on a daily basis for occupation of the site and lane-by-lane rental related payment to the number and configuration of lanes occupied. Studies carried out between 1984 and 1987 found that compared with conventional contracts time savings of up to 50% were achieved and delays worth up to 14 million saved. During the period studied there was an additional contract cost of 3 million but 23 million worth of delays were avoided. The different types of lane rental working are examined and the most controversial difference found to be the weather clause. Contractors are on the whole found to be in favour of this method of working. Disadvantages include difficulties in the supply and testing of materials during 24 hour working. An examination of the pressure under which staff in lane rental work are put shows a need for making quick decisions and producing accurate contract documents. (TRRL)