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Performance Contracting for Construction on M-115 in Clare County, MI
The new I–85 interchange project in Troup County, GA, was selected as a recipient of a $1 million Highways for LIFE grant. The entire project covers the new interchange, a second bridge over Long Cane Creek, more than 10 mi (16 km) of four-lane frontage and access roadways, plus all the lighting, signals, and drainage improvements necessary to construct such a large–scale development. The overall project construction cost is about $81 million, of which the I–85 interchange is just over $4.3 million.
The 2005 average daily traffic (ADT) for this section was 5,940 with 14 percent commercial traffic. The 200 High Hour Report showed peak traffic on the northwest-bound lane on Fridays and Saturdays and on the southeast-bound lane on Sundays and Mondays, mostly during the summer and fall. This roadway is the primary connection for summer tourists and cottage owners traveling over the weekends from the Detroit metropolitan region to northwest Michigan.
The pavement was in poor condition, with a 2006 RSL of 1 year, a PASER rating of 3 (needs structural improvement), and an SR of 4.5 (very poor). The two bridges were also in extremely poor condition and needed significant rehabilitation. Figures 2 through 7 show the condition of the pavement and bridges in October 2007.
The M-115 construction project included profile cold-milling, substructure repair, HMA resurfacing, joint repair, intersection improvements, bridge approach work, bridge superstructure replacement, drainage installation, and upgrading of all guardrails. The pavement mix design for this section consisted of 1.5 in (38 mm) of 5E3 (top course), 2 in (51 mm) of 4E3 (leveling course), and 3 in (76 mm) of ASCRL. The traffic was to be maintained at all times during the project using lane and shoulder closures as described in the Special Provision for Maintaining Traffic. A typical cross-section of the existing pavement section is shown in figure 8. The proposed staging of the bridge superstructure replacement is shown in figure 9.
The key innovation on this project was the use of performance contracting for construction (PCfC). PCfC is an innovative contracting technique in which the contract between an agency and the paving contractor defines what to achieve through a set of performance goals, but not necessarily how to achieve it. The key to PCfC is the flexibility it provides the paving contractor to innovate and take some control of the construction process, but also to bear some of the associated risks through incentives and disincentives. In PCfC, the highway agency specifies performance goals rather than construction methods and awards the contract on the basis of best value rather than the lowest cost bid.
The pros of PCfC are that it encourages contractors to innovate and defines the outcomes expected from the contractor. This results in contractor flexibility and a sharing of the risks and rewards between the agency and contractor. The cons of PCfC are that it is a new approach to contracting and requires a cultural shift for both the agency and the contractor. The agency has to give up some control over the construction process while the contractor has to take on some additional responsibility and risk, which means PCfC may not be applicable to all projects.
M-115 Request for Proposal and Project Goals
The construction project was advertised in October 2007 and a mandatory prebid meeting was held November 5, 2007, at MDOT's Mt. Pleasant Transportation Service Center. All prospective bidders had to attend the prebid meeting to be considered eligible to bid. Contractor proposal and bid sheets were due December 14, 2007, and the contract would be awarded to the contractor whose proposal represented the best value to MDOT based on price, goals, and disincentives.
Special provisions related to PCfC were included in the request for proposal (RFP). The special provisions related to the minimum performance goals established for this project. The performance goals focused on what the agency wanted the project to achieve and were established with stakeholder group input. Each goal included a measurement method and incentive and/or disincentive. Each goal was scored as part of the prescribed best-value factor in the overall selection of the contractor:
The RFP stated a set baseline for some goals. A contractor could elect to either meet or exceed the set baseline, in which case the baseline submitted in the contractor's proposal would become the baseline.
Open to Traffic
The set baseline date was August 2, 2008, for full opening of all travel lanes to traffic (no flag control, lane closures, or signal operations). Pavement-marking operations and daytime shoulder closures would be allowed after the open-to-traffic date. The measurement for pay purposes would be the actual open-to-traffic date.
The incentive to open to traffic before the baseline date would be $7,000 per calendar day, and the disincentive to open to traffic after the baseline date would be $7,000 per calendar day. The maximum incentive would be $98,000 (14 calendar days), and the maximum disincentive would be unlimited
Construction and Cleanup Completion
All construction and cleanup of roadway and bridges was to be completed on or before the set baseline of 15 calendar days after the actual open-to-traffic date. The measurement for pay would be the actual final acceptance date as defined in the Definitions and Project Requirements section of the RFP.
The incentive for construction and cleanup before the baseline number of calendar days would be $2,650 per calendar day, and the disincentive for construction and cleanup after the baseline number of calendar days would be $2,650 per calendar day. The maximum incentive would be $37,100 (14 calendar days) and the maximum disincentive would be unlimited.
Meeting the goal of pavement performance was divided into three areas:
The initial pavement acceptance criteria were specified in the special provisions included in the RFP.
As part of this special provision, bidders were to provide a pavement performance warranty that consisted of a warranty bond defined by the terms of the special provision. The contractor would be required to warrant the HMA pavement for performance deficiencies for the duration of the warranty period. The minimum baseline warranty period was 5 years, beginning on the construction acceptance date. The contractor's maximum cumulative liability for warranty work would be 80 percent of the project pavement cost. The maximum liability would be reduced over the warranty period if no previous performance deficiencies had occurred for which the contractor was responsible. The length of the performance warranty period proposed by a bidder would be one of the criteria used to determine the best-value bid for the project, so contractors were encouraged to offer longer warranty periods.
MDOT would conduct pavement evaluations by dividing the project into 528-ft (0.1-mi or 161- m) lane segments for measuring and quantifying the condition parameters. Warranty work would be required when the threshold limit for a condition parameter was exceeded and the maximum allowable number of defective segments was exceeded for one or more condition parameters of a driving lane. These criteria, defined in the RFP for individual performance-related distresses and the corresponding recommended warranty corrective actions, are shown in tables 1 and 2.
Following construction of the entire length of the project, ride quality measurements would be calculated and reported as a ride quality index (RQI) in accordance with Michigan Test Method (MTM) 726 for each 0.5-mi (0.8-km) segment and for the entire length of each lane. Reported values would be the average of the left and right wheel path values and rounded to the nearest whole number following ASTM E 29. Segments less than 0.5-mi (0.8-km) long would be reported as partial segments and the RQI calculation would account for the shorter length by using weighted averaging. The required ride quality values as defined in the RFP are shown in table 3.
The contractor would be eligible for an incentive for each 0.5-mi (0.8-km) segment and for a separate incentive for the entire project as shown below:
To receive the incentive for the entire project, the contractor had to be in the incentive range for all individual segments and would not be allowed to grind the pavement to obtain the incentive except in specified areas. There were no ride quality disincentives because the measured ride had to meet an RQI of 30 or less for the total length of the lane and for each 0.5–mi (0.8–km) segment.
Worker Safety During Construction
A worker injury rate (total recordable case rate) less than the rate of 4.0 based on the OSHA 300 rate was the specified goal for this project. The measurement method was use of the OSHA 300A form. An incentive of $5,000 was specified if the actual rate was less than the goal for the duration of the project, and a disincentive of $5,000 was specified if the actual rate was greater than the goal.
Work Zone Crashes
The stated goal was to maintain the preconstruction crash rate of no more than 1.0 crash per month on the entire length of the roadway for the duration of the project. The measurement method would be the Transportation Management System crash data from the statewide database of actual police crash reports. The data used for measurement would be from the period between actual construction start date and project final acceptance date, and all crashes during this period would be used regardless of whether there was active construction. An incentive of $20,000 was specified if the actual rate was equal to or less than 1.0 crash per month, and a disincentive of $5,000 was specified if the actual rate was equal to or greater than 2.0 crashes per month.
The performance goal related to motorist delay was that no vehicle should be delayed by contractor operations more than 10 minutes beyond its normal travel time. The method of evaluation was to perform onsite total travel time measurements from Dover Road to 13 Mile Road. The random onsite delay measurements would be taken four times per week, twice during the weekdays (Monday through Thursday) and twice on the weekend (Friday through Sunday). Each measurement would include both directions of travel. The measurement for the direction with the highest delay would be used for determining the incentive or disincentive. The measurement would occur from 10 a.m. to 1 p.m. and 3 p.m. to 6 p.m., with a variance of plus or minus 30 minutes. The normal travel time at 55 miles per hour (mi/h) (88.5 kilometers per hour (km/h)) for 11 mi (17.7 km) was estimated at 12 minutes. The following are the incentives/disincentives per measurement:
The maximum total or overall incentive would be $50,000. In addition, if there were no more than three measured occurrences exceeding 10 minutes and less than or equal to 15 minutes' delay for the duration of the project, the contractor would be eligible for the overall incentive of $50,000. Any one measurement exceeding 15 minutes would void the overall incentive.
Best–Value Contractor Selection
The best–value contractor selection was done by a team of MDOT engineers, including two members from the Mt. Pleasant Transportation Service Center, one from the Bay Region Office, one from the Lansing Central Office, one from the Central Selection Review Team, and one bridge engineer. The contractors submitted technical proposals and lump–sum bids in separate sealed envelopes. After the letting date, the selection team evaluated each contractor's technical proposal package in accordance with the selection criteria, but the team members did not see the contractor's lump–sum bid. The prescribed evaluation process had potential scores for various evaluation factors that ranged from 5 to 50, with a total possible score of 150. The evaluation factors and a sample score sheet are shown in table 4.
The selection team members individually determined each contractor's total score from the information the contractor provided in its technical proposal package and completed the score sheet in table 4. Based on the total score computed, a cost multiplier was calculated for each contractor. The cost multiplier, ranging from 0.80 to 1.00, was computed through linear interpolation of the contractor score between the maximum score of 150 and the minimum score of 0, with 150 points corresponding to a cost multiplier of 0.80 and 0 points corresponding to a cost multiplier of 1.00.
The selection team provided scores and the sealed bid from each contractor along with its associated cost multiplier to MDOT's Bureau of Finance and Administration, which applied each contractor's cost multiplier to each contractor's respective bid to determine the best value. Three bids were received for the M–115 construction, with bid amounts ranging from $4.19 million to $5.76 million. The contractor scores, cost multipliers, bid amounts, and best values are shown in table 5. The best value was proposed by Pyramid Paving and Contracting Company Inc. However, the company was unable to secure the single–term 6–year warranty bond it had proposed, so it withdrew its bid. The contract was awarded to the second–ranked contractor, Central Asphalt Inc.
The following summarizes the evaluations of the three bids received and the innovations proposed by the contractors:
The construction was originally scheduled to start April 1, 2008, and end August 15, 2008. However, the withdrawal of the bid by Pyramid Paving and Contracting Company Inc. resulted in a delay in awarding the contract to Central Asphalt Inc. A new schedule was developed in which all bridgework had to be completed by July 12, 2008. No construction was to be done between July 12 and August 18, 2008, the peak tourist season. Roadwork could begin on August 18 and paving had to be completed on the open–to–traffic date of November 3, 2008. Cleanup was to be completed by November 18, 2008.
Because of the flexibility provided to the contractor through the PCfC process, Central Asphalt Inc. used a number of innovations throughout the construction process. These innovations include the following:
While the original RFP specified only replacing the bridge superstructure as shown in figure 9, Central Asphalt Inc. proposed rapid bridge construction using Hyspan–type design. The first step was removal of a portion of the old bridge (figure 10), allowing for one–lane traffic on the remaining portion of the bridge. The one–lane traffic was controlled using temporary traffic signals as shown in figure 11. Following the removal of the old bridge, prefabricated bridge elements (Hyspan–type design) were placed over the creek as shown in figures 12 through 15. The bridge was set to grade (figure 16) and covered with subbase material in preparation for HMA overlay (figure 17). This process was repeated for the other half of the bridge and was performed for the bridges over both the Doc and Tom Creek and the Norway Creek. The completed bridge with AC shoulder before application of HMA surface layers is shown in figure 18.
Following installation of the bridges, which was completed in July 2008, no work was performed until August 18, 2008, as specified by MDOT. For the paving portion of the contract, Central Asphalt Inc. widened the existing shoulder (figure 19) to provide two-way temporary traffic lanes (figure 20), eliminating most flagging operations and reducing delay times. Central Asphalt Inc. also provided emergency traffic pulloff areas (figure 21) to improve worker safety, reduce crash rates, and reduce delay times resulting from disabled vehicles. The existing HMA overlay was milled (figure 22) and the portland cement concrete (PCC) pavement was rubblized (figure 23). This was another innovation proposed by the contractor to eliminate joint repair work, improve performance, and reduce construction time. The rubblized pavement was seated (figure 24) before the application of the 3-in (76-mm) ASCRL (figure 25). This was followed by the application of the 2-in (51-mm) 4E3 leveling course (figure 26). The final HMA application was the 1.5-in (38-mm) 5E3 top course.
Contractor Performance and Awarded Incentives/Disincentives
Open to Traffic
The original open-to-traffic date proposed by Central Asphalt Inc. was July 2, 2008. However, as described earlier, because of the delay in awarding the contract, the adjusted baseline open-to-traffic date was set as November 3, 2008. The actual open-to-traffic date was October 14, 2008, 20 days ahead of schedule. The incentive to open before the baseline date was $7,000 per calendar day with a maximum incentive of $98,000 (14 calendar days). The total incentive granted to Central Asphalt Inc. was $98,000.
Construction and Cleanup Completion
All construction and cleanup of roadway and bridges was to be completed on or before the set baseline of 15 calendar days after the actual open-to-traffic date. The punch list was issued and completed on October 16, 2008. The incentive for construction and cleanup before the baseline number of calendar days was $2,650 per calendar day with a maximum incentive of $37,100 (14 calendar days). Although cleanup completion was only 13 days ahead of schedule (compared to the new baseline), Central Asphalt Inc. asked the Mt. Pleasant Transportation Service Center to consider that the open-to-traffic date was 20 days early and it could have delayed this for 6 days and still received the full open-to-traffic incentive. Central Asphalt Inc. opened the roadway early, which provided a great benefit to the traveling public. The Center agreed that Central Asphalt Inc. should not be penalized and was granted the full incentive of $37,100.
Central Asphalt Inc. was eligible for an incentive for each 0.5-mi (0.8-km) segment and a separate incentive for the entire project as shown below:
Central Asphalt Inc. had to be in the incentive range for all individual segments to receive the incentive for the entire project and would not be allowed to grind the pavement to obtain the incentive except in specified areas. Twenty units measured in the RQI range of 0 to 20, resulting in an incentive of $100,000. Two units measured in the RQI range of 20 to 30, resulting in an incentive of $5,000. All segments on the project measured an RQI of less than 30, resulting in the bonus incentive of $25,000, so Central Asphalt Inc. received the maximum ride quality bonus of $130,000.
Worker Safety During Construction
An incentive of $5,000 was specified if the actual worker injury rate was less than the goal (4.0 based on the OSHA 300 rate) for the duration of the project. No workers were injured during construction, so Central Asphalt Inc. received the maximum incentive of $5,000.
An incentive of $20,000 was specified if the actual work zone crash rate was equal to or less than 1.0 crash per month. Only two animal crashes were recorded during the 3.5-month project, so Central Asphalt Inc. received the maximum incentive of $20,000.
Work Zone Crashes
As described earlier, random onsite delay measurements were taken four times per week, twice during the weekdays (Monday through Thursday) and twice on the weekend (Friday through Sunday). Fifty-two measurements were under 5 minutes, which earned Central Asphalt Inc. the $50,000 maximum incentive for motorist delay. However, one measurement on October 6, 2008, was over 15 minutes and, based on a mutual group agreement, there was no factual evidence that the delay was completely outside of Central Asphalt Inc. control. This resulted in Central Asphalt Inc. not being awarded the $50,000 overall incentive. Central Asphalt Inc. requested a MDOT region-level claim meeting on the overall incentive decision by the Mt. Pleasant Transportation Service Center. The region's decision was to support the Center's outcome.
Therefore, Central Asphalt Inc. received incentives totaling $340,100 out of a possible total of $390,000.
This page last modified on 04/04/11