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Highway Quality Compendium
Pavement Warranties: Learning from the European Experience
Does your road come with a warranty? Traditional U.S. construction contracts have typically required contractors to provide a project warranty for just 1 year following construction completion. Highway agencies are now increasingly requesting longer term warranty contracts on large asphalt paving projects, with the goal of improving pavement performance and reducing life-cycle costs. Four- and 5-year warranties are already common in Europe, where some highway agencies have been using them for more than 40 years. To learn more from Europe's experiences, a U.S. panel of Federal, State, and local government and industry representatives traveled to Spain, Germany, Denmark, Sweden, and Great Britain in September 2002 for a "European Asphalt Pavement Warranties Scan." The Federal Highway Administration (FHWA) and the American Association of State Highway and Transportation Officials (AASHTO) jointly sponsored the scanning tour, under the guidance of the FHWA Office of International Programs and the National Cooperative Highway Research Program.
The scan was designed to review and document the policies and strategies used in Europe to determine risk assessment and administer warranty contracts. As the participants learned, all of the countries visited believe that warranties have improved the quality of their highway systems. "They're achieving a better quality product and a better relation with contractors," says scan co-chair John D'Angelo of FHWA. Specific items studied were:
- Methodologies used to determine risk assessment for the government agency and contractor;
- Methodologies for administration of warranty contracts;
- Methodologies to select criteria to account for traditional performance indicators of rutting, fatigue cracking, and low temperature cracking;
- Practices to maintain prescribed levels of smoothness and skid resistance;
- Criteria used in successful asphalt pavement warranties; and
- Pavement performance prediction tools.
Meetings were held with government agencies, academia, and private sector organizations. Participants also had the opportunity to visit sites where innovative asphalt warranty contracting techniques were being applied. "I found particularly interesting Europe's long standing experience with materials and performance warranties," says Steve Bower of the Michigan Department of Transportation. "These materials and workmanship warranties cover all types of road construction work, including pavements, bridges, roadway embankments, seeding and sodding, and pavement marking."
The scanning tour panel meets with the government in Denmark, as well as industry representatives from Denmark and Sweden.
All of the countries visited use materials and workmanship warranties, which ensure that the contractor will build the pavement as specified by the owner and fix any defects resulting from the use of improper materials or inferior installation. Warranty periods vary, with Spain employing a 1-year warranty period, for example, and Germany using a 4-year warranty.
Three of the countries, Denmark, Sweden, and Great Britain, use performance warranties. This type of warranty covers the performance of the complete asphalt pavement, in addition to materials and workmanship, and allows for contractor innovation in mix design and/or material installation. All three countries have a 5-year warranty period. In addition to rutting, cracking, and durability, smoothness and friction are often measured as well.
All of the countries use a best-value procurement process instead of a low bid one. Under this procurement process, the contract is awarded based on technical and/or performance items, not just cost. The best-value criteria include safety features, innovation, and environmental impact. Denmark also considers the bidding of additional years of warranty as a best-value criterion. The host countries consider this best-value criteria to be critical to their warranty programs, as highway agencies must have greater confidence in contractors' ability to get the job done.
The scanning tour panel in Germany.
The European countries are also looking at alternative contracting as a way to increase innovation without creating a burden for highway agencies, which are increasingly short-handed. Two of these alternative contracting methods are pavement performance contracts (PPCs) and design-build-finance-operate (DBFO) contracts. PPCs extend performance warranties to cover a warranty period that is closer to the design life of the pavement. The contractor is responsible for designing, constructing, and maintaining the performance of the pavement at pre-specified levels. Maintenance can include anything from filling potholes to a complete mill and overlay of a section of pavement. All five countries are using or experimenting with some form of PPCs, which have warranty periods of 11 to 20 years. The PPCs are being developed in close collaboration with industry.
Both Spain and Great Britain are using DBFOs to turn a small fraction of their highway network over to the private sector for long-term financing, operation, and maintenance. These DBFO contracts range from 25 to 30 years. Several factors are contributing to the use of the contracts, including a lack of public funding and the belief that private financing and maintenance can sometimes deliver a higher quality product.
Following its observation of the successful European warranty programs, the scan team's recommendations include:
- The Federal Government should consider requiring short-term material and workmanship warranties on all federally-funded projects.
- The Federal Government should also assist with enabling legislation to allow contract awards based upon technical and quality factors in addition to cost.
- State and local highway agencies should work to enable legislation allowing contract awards based upon technical and quality factors in addition to cost.
- Industry partners should develop an awareness and understanding of warranty issues and risks.
- State and local highway agencies should develop material and workmanship warranty programs through internal education and industry participation, and should implement short-term performance warranties when it is appropriate.
For more information about the scan or to obtain an Executive Summary of the trip's findings, contact John D'Angelo at FHWA, 202-366-0121 (fax: 202-493-2070; email: firstname.lastname@example.org). A detailed report on the scan will be published this summer.
Reprinted from Focus, January/February 2003.
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