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Highways for LIFE

Arrow Michigan Demonstration Project: Performance Contracting for Construction on M-115 in Clare County, MI

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Final Report September 2009

Final Report September 2009

Table of Contents

List of Figures



The purpose of the Highways for LIFE (HfL) pilot program is to accelerate the use of innovations that improve highway safety and quality while reducing congestion caused by construction. LIFE is an acronym for Longer–lasting highway infrastructure using Innovations to accomplish the Fast construction of Efficient and safe highways and bridges.

Specifically, HfL focuses on speeding up the widespread adoption of proven innovations in the highway community. "Innovations" is an inclusive term used by HfL to encompass technologies, materials, tools, equipment, procedures, specifications, methodologies, processes, and practices used to finance, design, or construct highways. HfL is based on the recognition that innovations are available that, if widely and rapidly implemented, would result in significant benefits to road users and highway agencies.

Although innovations themselves are important, HfL is as much about changing the highway community's culture from one that considers innovation something that only adds to the workload, delays projects, raises costs, or increases risk to one that sees it as an opportunity to provide better highway transportation service. HfL is also an effort to change the way highway community decisionmakers and participants perceive their jobs and the service they provide.

The HfL pilot program, described in Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA–LU) Section 1502, includes funding for demonstration construction projects. By providing incentives for projects, HfL promotes improvements in safety, construction–related congestion, and quality that can be achieved through the use of performance goals and innovations. This report documents one such HfL demonstration project.

Additional information on the HfL program is at


This document is disseminated under the sponsorship of the U.S. Department of Transportation in the interest of information exchange. The U.S. Government assumes no liability for its contents or use thereof. This report does not constitute a standard, specification, or regulation.

The U.S. Government does not endorse products or manufacturers. Trade and manufacturers' names appear in this report only because they are considered essential to the object of the document.

1. Report No. 2. Government Accession No. 3. Recipient's Catalog No.
4. Title and Subtitle
Michigan Demonstration Project: Performance Contracting for Construction on M-115 in Clare County, MI
5. Report Date
September 2009
6. Performing Organization Code
7. Author(s)
Shreenath Rao, Ph.D., P.E., Jagannath Mallela, Gary Hoffman, P.E., R.L.S.
8. Performing Organization Report No.
9. Performing Organization Name and Address
Applied Research Associates, Inc.
100 Trade Centre Drive, Suite 200
Champaign, IL 61820
10. Work Unit No.(TRAIS) C6B
11. Contract or Grant No.
12. Sponsoring Agency Name and Address
Office of Infrastructure
Federal Highway Administration
1200 New Jersey Avenue, SE
Washington, DC 20590
13. Type of Report and Period Covered
Final Report
14. Sponsoring Agency Code
15. Supplementary Notes
Contracting Officers Technical Representatives: Byron Lord, Mary Huie
16. Abstract

As part of a national initiative sponsored by the Federal Highway Administration under the Highways for LIFE program, the Michigan Department of Transportation (MDOT) was awarded a $1 million grant to demonstrate the use of innovative technologies for construction contracting using performance contracting for construction (PCfC). This report documents the contracting methods used to encourage and reward contractor innovation on construction of M-115, a two-lane rural highway in Clare County near Mt. Pleasant, MI.

This report includes contracting details of the construction project with specifics on the incentives and disincentives MDOT offered to encourage the contractor to meet or exceed MDOT requirements for performance measures such as early opening to traffic, early construction and cleanup completion, pavement performance, ride quality, worker safety during construction, reduced work zone crashes, and reduced motorist delays. The report also describes the project construction and steps the contractor took to earn incentives. Details of the experiences of MDOT and the contractor are also included.

MDOT's overall conclusion was that the project was successful and the agency would use performance-based contracting on future projects when appropriate. The as-constructed roadway added $1,369,072 to the initial cost of the project. The incremental initial costs after considered user-costs was $690,226. However, the warranty resulted in the contractor constructing a roadway with potentially improved long-term performance as compared to that specified in the request for proposal (RFP). The life-cycle cost analysis (LCCA) showed that the baseline project will cost MDOT and the users of the roadway $7,801,876 in terms of net present value (NPV) based on a 20-year analysis period. By comparison, the as-constructed project will cost $6,150,201 in terms of NPV, for a total savings of $1,651,675. Through the use of PCfC, the project was completed with minimal disruption to the traveling public, and provided MDOT with a safer, smoother pavement with a 5-year warranty, and lower life-cycle costs.

17. Key Words
disincentives, economic analysis, goal-oriented contracting, Highways for LIFE, incentives, innovation deployment, performance contracting, performance metrics, result-oriented contracting
18. Distribution Statement

No restriction. This document is available to the public through

19. Security Classif. (of this page)
20. No. of Pages
21. Price  

Form DOT F 1700.7 (8–72) Reproduction of completed page authorized

Approximate Conversions to SI UnitsApproximate Conversions from SI Units
When you knowMultiply byTo findWhen you knowMultiply byTo find
(a) Length
(b) Area
square inches645.2square millimeterssquare millimeters0.0016square inches
square feet0.093square meterssquare meters10.764square feet
square miles2.59square kilometerssquare kilometers0.386square miles
(c) Volume
fluid ounces29.57millilitersmilliliters0.034fluid ounces
cubic feet0.028cubic meterscubic meters35.32cubic feet
cubic yards0.765cubic meterscubic meters1.308cubic yards
(d) Mass
short tons (2000 lb)0.907megagrams (tonne)megagrams (tonne)1.102short tons (2000 lb)
(e) Force
(f) Pressure, Stress, Modulus of Elasticity
pounds per square foot47.88PascalsPascals0.021pounds per square foot
pounds per square inch6.895kiloPascalskiloPascals0.145pounds per square inch
(g) Density
pounds per cubic foot16.019kilograms per cubic meterkilograms per cubic meter0.0624pounds per cubic feet
(h) Temperature
Fahrenheit temperature(°F)5/9(°F– 32)Celsius temperature(°C)Celsius temperature(°C)9/5(°C)+ 32Fahrenheit temperature(°F)
  1. The primary metric (SI) units used in civil engineering are meter (m), kilogram (kg), second(s), newton (N) and pascal (Pa=N/m2).
  2. In a "soft" conversion, an English measurement is mathematically converted to its exact metric equivalent.
  3. In a "hard" conversion, a new rounded metric number is created that is convenient to work with and remember.


The project team would like to acknowledge the invaluable insights and guidance of Federal Highway Administration (FHWA) Highways for LIFE Team Leader Byron Lord and Program Coordinators Mary Huie and Kathleen Bergeron, who served as the technical panel on this demonstration project. Their vast knowledge and experience with the various aspects of construction, technology deployment, and technology transfer helped immensely in developing both the approach and the technical matter for this document. The team is also indebted to Michigan Department of Transportation Engineers Jack Hofweber, Bill Mayhew, and Tony Kratofil and FHWA Division Administrator Jim Steele and Engineering and Operations Manager Tom Fudaly for their advice, assistance, and coordination during this project.

Abbreviations and Symbols

AASHTO American Association of State Highway and Transportation Officials
AC asphalt cement
ADT average daily traffic
ASCRL asphalt stabilized crack relief layer
dB(A) A-weighted decibel
DOT Department of Transportation
FHWA Federal Highway Administration
FY Fiscal Year
Hfl Highways for LIFE
HMA Hot-mix asphalt
IRI International Roughness Index
LCCA Life-cycle cost analysis
MDOT Michigan Department of Transportation
NPV Net present value
OBSI Onboard sound intensity
OSHA Occupational Safety and Health Administration
PASER Pavement Surface and Evaluation Rating
PCfC Performance contracting for construction
RFP Request for proposal
RQI Ride quality index
RSL Remaining service life
SAFETEA-LU Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users
SI Sound intensity
SR Sufficiency rating
SRTT Standard reference test tire
VOC Vehicle operating cost
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Mary Huie
Center for Accelerating Innovation

Updated: 04/04/2011

United States Department of Transportation - Federal Highway Administration